America and the Global Economy

I. Rise of the New Right – built on the ashes of the Goldwater fiasco in 1964, the Republican Party targeted white suburbanites, and particularly those suburbanites living in the South and West

A)   Watergate and Its Aftermath—Although apologists for Nixon point out that—rightly—that Nixon was not the first president to abuse the power of his office to strike back at his enemies. But Nixon was the first to do this in a systematic fashion, and to use the powers of his office to attempt to subvert a criminal investigation into the attempt on the part of his campaign to fix a national election.

1)    The Watergate break-in—the so-called “third-rate burglary” was an attempt to plant illegal listening devices at the headquarters of the Democratic National Committee. This was part of a much larger operation, run by the Committee to Re-elect the President (CREEP) to manipulate the Democratic primary election.

2) Agnew resignation--Vice-President Spiro Agnew resigned as part of  the deal to  avoid  charges of bribery and extortion (settling for the charge of avoiding paying income tax on the money he accepted in bribes and extorted).

3) Nixon resignation--in August 1973 Nixon resigned, after being forced to turn over a tape revealing that he knew of the break-in and the cover-up just after they happened--and lied to his staff, his lawyers, and most importantly, to the American people on this matter.
4) Growing distrust of government--this incident, coupled with the revelations from the release of the Pentagon Papers (that the Johnson administration had lied about the basis for the war in Vietnam), fed a growing distrust of the government--so much so, that political candidates began running as "political outsiders."

B)   Tax revolts – conservatives were able to use the growing distrust against government to feed a movement to choke off funds for the government, namely taxes.

1)    California Proposition 13 – sold the idea that taxes merely funded wasteful government spending, particularly for things like education, welfare, and other social programs

2)    Rise of “code” language – while it became unacceptable to use racial slurs in the 1970s and 1980s, this did not mean that race disappeared as an issue in American politics—only that these references to race were now used in a “code” language, like “welfare queens” and “drug lords.”

C)   Christian coalitions

1)    Southern Christian academies – with the implementation of Brown v. Board of Education, white Christian academies opened as a way for parents to avoid sending their children to integrated schools.  The Carter administration tried to end the tax breaks these led to these various groups organizing to resist this

2)    Southern televangelists – preachers like Jerry Falwell and Pat Robertson used the technology of television to expand the scope (and number of contributors to) their “mission.”

3)    Reactions to gender politics

(a)   Abortion – Roe v. Wade linked control of reproductive rights to a woman’s constitutionally guaranteed rights to privacy.  To social conservatives, this upset gender roles and traditional patriarchy, and was considered an attack on “the right of a husband to protect the life of the child he fathered in his wife’s womb.”

(i)    Opposition of Catholic Church – while the Church may not speak for all of its female members on this issue, it was able to mobilize a great deal of opposition to the decision.

(b)  Opposition to the Equal Rights Ammendent – as the long sought-after ERA got closer to passage by the states, political opposition to the Amendment got more heated; this amendment would have simply recognized legally the changes that had largely already taken place in the United States.  Right-wing politicians like Phyllis Schafly, Jerry Falwell were able to distort its effects and change (by comparing it to the perceived slights whites received under Affirmative Action programs) and sway public opinion about ERA enough to prevent its passage.

(c)   Gay Pride movement – the Stonewall Riot in Greenwhich Village New York signaled that gays would no longer accept the harassment and stigmatization that they had received previously.  As gays “came out of the closet,” however, they met increasing opposition from politicians on the Right.

D)   Right turn of the Democratic Party – after the McGovern disaster of 1972 (who many party members felt was too liberal), and Carter’s victory in 1976 (who was certainly more conservative than many of the voters who voted for him), the Democratic Party became increasingly more conservative in its movement toward “the center.”

1)    Disenchantment of the poor – rather than mobilize voters who had historically made up their voter base (minorities, blue collar workers, and the poor), Democrats began to compete for the same suburban voters that Republican candidates were pursuing—white suburbanites

(a)   Decline of trade unions and urban machines – unions and machine politics had traditionally mobilized Democratic voters, and as these institutions declined, so did their effectiveness

(b) Capital flight--Although industry had been fleeing cities--and the increased power of labor unions there--since the Second World War, the economic malaise of the early 1970s, combined with the scrutiny the "urban problem" promoted, finally brought attention to the fact that the economy in the United States was undergoing a period of de-industrialization; by the  middle of the decade, many cities in the Midwest were transformed from the Manufacturing Belt to the Rust Belt.

E)    Election of Ronald Reagan – two bit actor, former president of the Screen Actors Guild, became spokesman for the vehemently anti-union General Electric Company in the 1950s, and began a rapid rightward descent.

1)    Presidential policies

(a)   Cut taxes – for the rich, anyway; Reagan got Congress to cut taxes for the rich from 73% to 28%,  but taxes for the poor actually went up, because they were hit with an increase in state and local taxes to make up for the shortfall as a result from the decline in federal tax revenue

(b)  Cut social programs – Reagan cut much spending on social programs, like welfare

(c)   Increase defense spending – corporate welfare for selected industries, fed boom on the West and East coasts (see below)

(d)  Results – federal tax revenues plummeted  by $750 billion, and generated staggering federal deficits of $150 billion and $200 billion, which kept the prime interest rate in double digits.

F)    Reagan boom – the Reagan years were beneficial for a small, select group of people, but the era was one of increasing disparity between the few rich, and the increasing number of poor

1)    Growing disparity – between 1977 and 1990, the income of the richest fifth of the population grew by one-third, and that of the top one percent almost doubled; but the total income of the bottom 60 percent of Americans actually fell, and the incomes of the poorest Americans fell most sharply.

II)   Reaganomics the War on Working People

A)   Undermining of Unions – perhaps the greatest effect of Reaganomics was that it undermined the financial security of working-class people, by undermining the unions that represented their unions.

1)    The Reagan Recession (1981-1983) – one of the first effects of supply-side economics, or “Reaganonimics,” as it came to be called, was one of the worst recessions of the post-war era.

(a)   Demand from corporations for give-backs – corporations in financial trouble went to unions and its workers, and demanded concessions to remain in business.  Competitors then went to their unions and workers, to demand concessions to remain competitive.  The cumulative effect of this was at best to freeze the wages of working-class, and at worst to undermine the wage structure.

B)   Workers in Decatur, Illinois – Decatur is a small town in central Illinois, rising out of the prairie, which had a diversified (for the Midwest) manufacturing base, but which witnessed the full aftereffects (or aftershock, to use a nuclear analogy) of Reaganomics.

1)    A.E. Staley – locally-owned agricultural goods manufacturer, manufactured corn starch, corn syrup, soy products.  This company resisted buyouts through the early 1980s, but by the end of the decade was bought out by a London-based food processor.

(a)   Demand for 12 hour, rotating shifts – in order to more “efficiently” use its workers, management wants its workers to work twelve hour shifts, and do away with shift pay differentials; it also wants workers to move from one shift to another every other month (describe havoc this plays with lives of workers with families)

2)    Firestone – the tire industry was one of the largest casualties of the merger-mania of the 1980s, and Firestone was bought by Japanese manufacturer Bridgestone.

(a)   Demand for twelve-hour, rotating shifts; do away with annual pay increases—instead, have cost of living increases and productivity incentives.

(b)  Provoked strike – this strike proved costly not only to many workers (who lost their jobs, some temporarily, to strikebreakers), but ultimately to the company, as well—the replacement workers manufactured the AT Wilderness tires that went on Ford Explorers.

3)    Caterpillar – the industry leader in the production of heavy equipment at the time it provoked a strike by UAW members over concessions that it wanted in its contract—namely, a six-year contract, complete control over production decisions.  In the end, this company handed the UAW the worst defeat in its history.

III) The Reagan Hangover – is suffered by working people in this country, of course.