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How The United States Traded Factories For Finance In The Seventies

Henry James

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Published in Pivotal Decade: How The United States Traded Factories For Finance In The Seventies

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In the 1970s, the United States economy underwent a profound transformation. The nation's manufacturing sector, which had been the bedrock of the economy for centuries, began to decline. At the same time, the financial sector grew rapidly, becoming the dominant force in the economy.

This shift from manufacturing to finance had a number of causes. One factor was the rising cost of labor in the United States. As wages increased, it became more expensive for American companies to manufacture goods domestically. Another factor was the increasing globalization of the economy. American companies could now source goods from cheaper producers in other countries, such as China and Mexico.

Pivotal Decade: How the United States Traded Factories for Finance in the Seventies

by Judith Stein

4.2 out of 5

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The decline of manufacturing and the rise of finance had a number of consequences for the United States economy. One consequence was the loss of jobs. Millions of Americans lost their jobs in the manufacturing sector, and many of them were never able to find new jobs that paid as well.

Another consequence was the widening of the gap between rich and poor. The financial sector is a much more lucrative industry than manufacturing, and the people who work in finance tend to earn much higher salaries than those who work in manufacturing. This has led to a growing gap between the incomes of the wealthy and the incomes of the poor.

The shift from manufacturing to finance also had a number of consequences for the American economy as a whole. The decline of manufacturing led to a decrease in the nation's GDP. The growth of the financial sector led to a number of financial crises, such as the subprime mortgage crisis of 2008.

The shift from manufacturing to finance in the 1970s was a turning point in the history of the United States economy. It had a number of profound consequences, both positive and negative. It is a complex issue that continues to be debated today.

Causes of the Shift from Manufacturing to Finance

There were a number of factors that contributed to the shift from manufacturing to finance in the 1970s. These factors included:

The rising cost of labor in the United States
The increasing globalization of the economy
The deregulation of the financial sector
The government's policies

The rising cost of labor in the United States was a major factor in the decline of manufacturing. As wages increased, it became more expensive for American companies to manufacture goods domestically. This made it more attractive for companies to outsource production to cheaper producers in other countries.

The increasing globalization of the economy also contributed to the decline of manufacturing in the United States. American companies could now source goods from cheaper producers in other countries, such as China and Mexico. This made it difficult for American manufacturers to compete.

The deregulation of the financial sector in the 1970s also played a role in the shift from manufacturing to finance. The deregulation of the financial sector made it easier for banks to lend money, which led to a boom in the stock market and a number of other financial bubbles.

The government's policies also contributed to the shift from manufacturing to finance. The government's policies, such as the tax cuts for the wealthy and the deregulation of the financial sector, favored the financial sector over the manufacturing sector.

Consequences of the Shift from Manufacturing to Finance

The shift from manufacturing to finance in the 1970s had a number of consequences for the United States economy. These consequences included:

The loss of jobs
The widening of the gap between rich and poor
A decrease in the nation's GDP
A number of financial crises

The loss of jobs was one of the most significant consequences of the shift from manufacturing to finance. Millions of Americans lost their jobs in the manufacturing sector, and many of them were never able to find new jobs that paid as well.

The widening of the gap between rich and poor was another consequence of the shift from manufacturing to finance. The financial sector is a much more lucrative industry than manufacturing, and the people who work in finance tend to earn much higher salaries than those who work in manufacturing. This has led to a growing gap between the incomes of the wealthy and the incomes of the poor.

The shift from manufacturing to finance also led to a decrease in the nation's GDP. The manufacturing sector is a major contributor to the nation's GDP, and the decline of manufacturing has led to a decrease in the nation's overall economic growth.

Finally, the shift from manufacturing to finance led to a number of financial crises. The deregulation of the financial sector and the government's policies created a number of financial bubbles, which eventually burst and caused financial crises, such as the subprime mortgage crisis of 2008.

Pivotal Decade: How the United States Traded Factories for Finance in the Seventies

by Judith Stein

4.2 out of 5