INTRODUCTION
Just one look at the tags on your clothes or the labels on things for sale at our favorite stores and we can see that very few of the things we buy are made in the United States. Instead, countries like China, Taiwan, Japan, Vietnam, India, and Bangladesh are the names we mostly see. Why is this? What happened to the big factories of the Midwest and Northeast that were the heart of the industrial revolution of the late 1800s? What happened to the workers who made the United States the Arsenal of Democracy during World War II?
Some might say that this is good for our country. We have more choices. We can look at American cars and also Japanese, Korean, and European cars and buy the one that is best. But when did these other carmakers start selling their cars in the United States to begin with? And why didn’t the Detroit carmakers do something to stop them? What about our presidents and people in Congress? Why didn’t they do something to help American companies and workers?
Then, there is the question of America’s wealth. What’s happening to the money we spend when we go to the store? Is it leaving the country to pay workers far away?
What do you think? Is it bad for America that so few of the things we buy are made here?
THE NIXON SHOCK
In 1944 in Bretton Woods, New Hampshire, leaders from 44 countries met to make a new plan for how money would be exchanged around the world. The new plan was called the Bretton Woods system. The leaders at the meeting hoped to find a way to avoid depressions and help all countries grow their economies. In the Bretton Woods system, countries agreed to use American dollars when they had to pay debts to another country. For example, France used American dollars to pay its debts to West Germany instead of using French Francs or German Marks. Everyone agreed that the dollar would always be worth 35 per ounce of gold. This is called the gold standard, and it meant that the United States promised to have 35 ounces of gold for every dollar they printed. Other countries set the value of their money by comparing them to American dollars.
For the first years after World War II, the Bretton Woods system worked well. Countries in Western Europe and other capitalist countries did well. With the Marshall Plan, Japan and Europe rebuilt from the war, and countries outside the United States wanted dollars to spend on things made in America. Because the United States owned over half the world’s official gold, the system seemed like it would work well for many years.
Secondary Source: Chart
This chart shows the number of banking crisis each year beginning in 1800. While the Bretton Woods System was in place, there were almost no incidents.
But there was a problem. From 1950 to 1969, Germany and Japan recovered from the war and rebuilt their factories. America wasn’t the only strong nation anymore. Other countries started making more of the world’s things. Also, Americans began spending more money on things made in other places than they earned selling things made in America. Money started moving out of the United States.
By the end of the 1960s, other countries stopped liking the Bretton Woods system. A big problem was that the American government could print money easily, but other nations had to pay to get them.
By 1966, the United States did not have enough gold on hand to back up all the dollars other countries were using. In May 1971, West German leaders decided that the Bretton Woods system was hurting more than it was helping. Leaders in the West German decided that their money was not going to be matched to the dollar. In the next three months, the West German economy improved. At the same time, the dollar fell 7.5% against the Deutsche Mark. Other countries asked the American government to give them gold in exchange for their dollars. Switzerland traded in $50 million for gold. France got $191 million in gold. Under the Bretton Woods system, the American dollar was always worth $35 per ounce of gold. As the European countries left the system, the dollar lost value.
To fix the problem, President Nixon decided to end the Bretton Woods by giving up the gold standard. Americans would stop exchanging dollars for gold. This stopped the run on American gold. He also said that no one could change prices, or the amount people were getting paid at their jobs for 90-days. This was to stop people from overreacting to the changes.
The Nixon Shock, as his plan is now called, helped people through the transition, but was not that good for the world’s economy. The dollar fell in value by a third during the 1970s. Today, our money only has value because we believe it does. There is no gold to backup dollars. Above all, the Federal Reserve can print as much money as it wants. This is useful when there are problems in the economy because the Fed can help banks get the money they need to make it through hard times. This system can be good, but it also can be bad. For example, with no gold to back up our dollars, no one can ever really be sure how much our money is worth. This can make it hard for traders and investors to make good decisions.
But the biggest change that happened right away after the Nixon Shock was stagflation.
STAGFLATION
Americans were used to the economy being good. It had been ever since World War II. But in the 1970s, for the first time since the Great Depression, Americans worried that their children might not be able to have as much as their parents. The problem was a bad mix of three things.
Inflation is the slow rise of prices over time. Some inflation is normally good for an economy. For example, if things cost about 1% to 3% more each year, things are good. But then in the 1970s, inflation was more than 10%. At the same time, the unemployment rate was nearing the dangerous 10% line. That meant that more than 10% of all people who wanted to work couldn’t find a job. Not since the Great Depression of the 1930s had so many Americans been looking for work. Factories also stopped making as much. This is called stagflation, a mix of high inflation, high unemployment, and low economic growth.
Americans began to worry about the economy. They began to ask themselves what had gone wrong.
Richard Nixon tried to fight inflation first by cutting government spending, but in the end by trying to set rules for prices and how much people could earn at their jobs. President Ford watched inflation go over 11% in 1974. He started a government propaganda program called Whip Inflation Now (WIN). In WIN, Ford asked Americans to not spend as much, to not ask for more money at work, and to nor raise the prices of things they were selling. But after the Watergate Scandal, many Americans didn’t like Ford and when he ran against Jimmy Carter in 1976, he lost.
Many people liked President Carter at first. He went to church, was a peanut farmer, and had been the governor of Georgia. Unlike Nixon, people thought Carter was an honest tell-it-like-it-is person. Carter cut taxes and cut government spending, but the inflation rate went up to 18% 1980. At the same time, the unemployment rate was about 7%.
OIL, CARS, AND CRISIS
Before the 1970s, the most popular cars in America were big, heavy, and powerful. In 1971, the one common car in America only got 15 highway miles per gallon. Detroit’s Big Three: General Motors, Chrysler and Ford had sold most of the cars in America. Without anyone else making cars, they had stopped being creative and were making bigger, heavier cars that wasted gas. Even worse, in the 1970s, Americans fell in love with big, powerful muscle cars that wasted the most gas of all. They might have been fun to drive, but they were about to ruin the economy.
When Israel won the Yom Kippur War of 1973 against its Arab neighbors, Arab countries that produced oil took revenge against Israel’s allies. They led the Organization of Petroleum Exporting Countries (OPEC) and started an embargo. They decided to limit the amount of oil they sold to the United States. Suddenly, America couldn’t get enough oil. Oil and things made from oil suddenly became very expensive. And sometimes, there wasn’t even oil to buy. Cars and drivers sat in long lines at gas stations, and everyone paid more as the price of gasoline quadrupled.
Primary Source: Advertisement
The 1970s Chevelle SS 396, a classic example of the large, fuel-hungry, muscle cars popular in the late 1960s and early 1970s. They were fun to drive but terrible to own when gas prices soared.
With high prices, the much smaller and more efficient Japanese and European cars that used smaller engines and front-wheel drive became very popular with shoppers. American car companies tried to adjust, but the cars they made were still less efficient and less well built than the imports. The Detroit automakers simply could not change fast enough. Some of the worst American cars of the 1970s such as the Chevrolet Nova and Ford Pinto as examples of what can go wrong when people think they know everything and stop thinking critically. It took General Motors, Christer and Ford over 10 years to fix their problems. By that time, Japanese and European cars became common on American roads.
Primary Source: Advertisement
A magazine ad for a Toyota. These smaller, more fuel-efficient imports became popular during the fuel shortages of the 1970s and were a major blow to the Big Three American carmakers.
The government tried to help solve the problems caused by the embargo. A national speed limit of 55 mph was created to try to get people to use less gas. In 1977, the Department of Energy was started. The government created the Strategic Petroleum Reserve. Today the reserve holds about 700 million barrels of oil in tanks in Louisiana and Texas, which is about as much oil as the United States uses in a month.
But with demand high and supply low, gas stations were hurting. In the last week of February 1974, 20% of American gas stations had no gasoline to sell. Thousands of local gasoline stations went out of business and closed during the embargo.
Some state governments started rationing gasoline. Cars with license plates that ended in an odd number could only buy gas on odd-numbered days of the month, while others could buy only on even-numbered days. Americans loved their cars. American cities had been built with cars in mind. Americans drove from the suburbs to shopping malls and into downtowns to work. They took long vacations in their cars. Cars were to the modern American what horses had been to the cowboys. Americans hated rationing. There were even cases of violence when truck drivers went on strike to protest the rationing rules and fought with truck drivers who didn’t go on strike.
Primary Source: Photograph
Lines of cars waiting to purchase gasoline during the oil crisis. Notice the rationing sign indicating even numbered cars only on that day.
THE GREAT MALAISE
In 1979, President Carter left for the presidential vacation house of Camp David. There he met with dozens of important leaders to try to find a solution to the country’s trouble. One advisor told him that the American people just were not confident like they used to be. He thought the problem was because of the Vietnam War and the Watergate Scandal.
When Carter came back to the White House on July 15, 1979, he went on television and told the American people, “I want to talk to you right now about a fundamental threat to American democracy… It is a crisis of confidence. It is a crisis that strikes at the very heart and soul and spirit of our national will. We can see this crisis in the growing doubt about the meaning of our own lives and in the loss of a unity of purpose for our nation”
This came to be known as his Malaise Speech. Malaise is a feeling of being tired, like a person feels when they are about to get sick. Carter never used the word malaise in the speech, but people still use it as the title of his speech because of what he said about America. Carter told people that Americans were losing their spirit and optimism because they were spending too much, and this had led to the energy crisis. At first, people liked the speech, but then things turned around. Some thought that Carter was blaming the American people for having lost a can-do attitude. Carter’s critics said that the president was in a malaise. If he were really a strong leader, they said, he would fix the energy crisis instead of blaming the problem on the people.
Three days after the speech, Carter asked all his top advisors to say they would quit, and five did. Americans didn’t like the Malaise Speech or that Carter fired his advisors. To some Americans it looked like Carter didn’t have a plan to fix the economy.
In the election of 1980, former Hollywood actor and California governor Ronald Reagan easily beat Carter. Americans liked his positive message. One of his campaign ads said that it was “Morning Again in America.” After years of scandal and economic problems, Americans were ready for a new start.
GLOBALIZATION
Since the time before America was a country, people bought things from other countries, and sold things to other countries. But mostly, people bought and sold things to their neighbors. They ate food grown in nearby farms. Americans drove cars made in Detroit. They flew in planes made in Seattle. They toasted their bread, mowed their lawns, washed their clothes and cooked their food with appliances made in America.
All that changed at the end of the 1900s in a process called globalization. Beginning in the 1970s, American factory owners found it harder and harder to sell things because it cost less to pay workers in other countries. Those foreign factory owners could then sell things for less because it cost them less to pay their workers. Sometimes American business leaders had a hard time because of years of bad choices, as was the case of the Detroit automakers who were not making cars that people wanted to buy. In other cases, other things like the Nixon Shock changed the value of American money in the world and gave foreign companies an advantage. Without the Bretton Woods system keeping the value of the dollar high, Japanese electronics companies could sell televisions in the United States and make more money than before. Sony, Panasonic, Sharp, Pioneer, Casio, and Yamaha became common names in American stores.
As the years went on, more and more products that had once been made in the United States were being made in other countries. In the case of the auto industry, people started to buy cars from Japan or Europe instead of American cars. In other cases, American companies closed their factories in America and opened new ones in countries where they didn’t have to pay the workers as much. This is called outsourcing. During the 1970s and 1980s, 95% of the factories making clothing in North Carolina, South Carolina and Georgia shut down. This was very bad for these states. In some towns everyone worked in a textile mill, knew someone who did, or worked in a business that sold things to these workers.
All over America, working class people were being replaced by workers in other countries who would do their same job for less money. Nowhere was this easier to see than in the industrial heartland of the Midwest.
Secondary Source: Chart
This chart shows the balance to trade for the United States beginning in 1895. Until 1970, America sold more products to the world than it purchased. After 1975, Americans have always imported more than exported. This is called the trade deficit.
THE RUST BELT
In the 1800s, the cities of the Midwest grew, and immigrant workers moved in to find work in the Industrial Revolution’s new factories. Carnegie’s steel mills and Henry Ford’s auto factories, Rockefeller’s oil refineries and Pullman’s railroad car company were examples of the creativity that was making America great. The industrial heartland of the United States was at its greatest during World War II when its factories became the Arsenal of Democracy and built the tanks, planes and trucks that won the war.
As factories started to close in the 1970s and 1980s, the great cities of the Midwest started to fail. When the factories closed, the workers lost their jobs. People moved away to look for work. Business owners lost money when their customers had less to spend or stopped coming to shop after moving away. City governments could not provide basic services like picking up the trash or fixing the streets because there weren’t enough people paying taxes. Schools closed. In some places, everyone in an entire neighborhood moved away. Crime and drug abuse went up. Middle class families who could, moved into better suburbs leaving inner cities empty. In many cities only the poor African American families were left. Maps of cities like Detroit or Cleveland show rings of mostly White suburbs around nearly 100% African American inner cities. Laws, government policies, and racist business practices made sure that neighborhoods stayed mostly all-white or all-African American.
Primary Source: Photograph
One of the many abandoned houses in Detroit, Michigan. These were once thriving neighborhoods of row houses, but are now abandoned.
A new term was created to describe the area of the country full of old, empty factories: the Rust Belt. What had once been something Americans were proud of, the region that had helped the country grow, became a symbol of its failure. Empty factories, boarded up storefronts, and graffiti-covered houses still can be seen in many of these cities. They remind us of how much outsourcing hurt American cities in the Midwest.
From 1970 to 2006, Cleveland, Detroit, Buffalo, and Pittsburgh lost about 45% of their people. The amount of money people in Cleveland and Detroit made went down by about 30%, in Buffalo by 20%, and Pittsburgh by 10%.
Not all American factories closed. Today new factories are being built in America and there are still many people who work at these jobs. The Rust Belt is still one of the world’s most important manufacturing areas. But it is nothing like it used to be.
Secondary Source: Map
This map shows the rate of manufacturing job loss in the past four decades. The darker red the color, the greater number of manufacturing jobs disappeared.
THE FORMAL STRUCTURES OF GLOBALIZATION
After World War II, leaders tried to find ways to make the world more connected and peaceful. The Bretton Woods system and the United Nations are two of the ideas they came up with. They also started the World Trade Organization (WTO), International Monetary Fund (IMF) and World Bank. The WTO is a place where world leaders can work on trade agreements. The goal of the WTO is to find ways to get rid of problems that stop trade between countries. The IMF is a super-bank for the governments of the developing world. They can use the IMF instead of private banks which might fail. The World Bank uses money from rich countries to pay for projects in the Third World like airports, irrigation systems, or programs to fight hunger and disease.
Like most countries, the United States has made many free trade treaties. These treaties end tariffs and other rules that stop trade or make trade more expensive. Most famous of these is the North American Free Trade Agreement (NAFTA). NAFTA is a treaty between the United States, Canada and Mexico and was created in 1994. These three countries agreed to get rid of all tariffs on their products. For example, Canada will not charge a tariff, or tax, on meat brought across the border from American farms and sold to Canadians. The most famous of all such free trade zones is the European Union, which includes most of mainland Europe and many of the United States’ closest friends.
The leaders of the world’s richest countries meet every few years to talk about economic problems. These meetings of the leaders of the United States, Canada, the United Kingdom, France, Germany, Italy and Japan are known as the G7, short for Group of Seven. For a while, it was the G8 while Russia was invited. Interestingly, China’s leaders are not invited, even though China is the world’s second largest economy.
ANTI-GLOBALIZATION
Some people think globalization is bad, and meetings of the IMF, WTO, G7 and NAFTA are their favorite places to protest. Sometimes called the anti-globalization movement, these people have different reasons for disliking globalization. Some think that the large, multinational companies are bad because they are only trying to make money, and don’t care about their workers or protecting the environment. They can see how Third World workers earn much less than American workers and have to work long hours in dangerous factories. For the protestors, this is proof that large corporations are bad for the world.
Other people think that globalization is hurting democracy. They think that more and more of the most important decisions about the world are made by business leaders and the leaders of multinational organizations like the WTO. The protesters point out that no one voted for these leaders, even though they might have more power than presidents. For some, they think this is hurting the idea of who we are. What happens if globalization is making it, so our elected leaders don’t have control over life in our country anymore? In 2010, the Supreme Court said in the case Citizens United v. FCC that companies have an equal right to free speech under the First Amendment. This means that company leaders can spend as much as they want on political advertising. For example, an oil company like Exxon-Mobile can spend billions of dollars on political ads to help the candidate they like win an election. Companies cannot vote, but their leaders can use money to change voters’ minds in ways that regular people cannot. Some of the people who worried about this loss of political control voted for Donald Trump in 2016 with his promises of “America First” and “Drain the Swamp.” The Occupy Wall Street movement that started in New York City in 2011 is an example of people who were upset about big banks, and the power they thought banks had over the lives of regular people.
Another problem with globalization is that local cultures are starting to disappear. If Italians start drinking Starbucks instead of stopping at local cafes, local Italian culture is hurt. If people in the mountains of Bolivia start to wear American jeans and t-shirts, local culture begins to fade. When Mongolian teenagers watch Hollywood movies and listen to American pop music, they are giving up their own culture and replacing it with American culture. Benjamin Barber wrote a famous book about this problem and called it “McWorld.” Now people use the word McWorld to describe how people everywhere are starting to act and think the same.
Many people think globalization is both good and bad. They want leaders to find ways to have trade but also to protect the voice of regular people, human rights, and the environment. For example, these people believe free trade agreements should include rules to make sure workers are treated well and the environment is protected. This group of people is sometimes called the Social Justice Movement.
It seems like globalization is not something anyone can stop. Every year the world gets a little more connected. The question that we still have to answer is: What will the good and bad effects be, and who will win and who will lose?
Primary Source: Photograph
An activist at the Occupy Wall Street movement in New York City in 2011. The 99% rallying cry makes that case that only 1% of the world’s people control most of the world’s wealth. The protestors believed that this situation damages the democratic principle of one person, one vote.
FIGHTING GLOBALIZATION
Some people have marched in the streets to protest against globalization. The most famous protest in America was at a meeting of the World Trade Organization in Seattle, in 1999. Protesters blocked leaders from getting from their hotels to the meetings. Protesters and Seattle police fought in the streets. During the Battle in Seattle, over 600 people were arrested, and thousands were hurt. Some protesters broke the windows of stores owned by the large companies like Nike and many Starbucks that they thought were examples of the bad side of globalization. American leaders were surprised by the protests in Seattle. They didn’t know people were so upset about globalization. People all over America were surprised to see video of the police using tear gas against peaceful protesters. For many, it reminded them of the fighting in the 1960s. Afterward, the city of Seattle had to pay more than $200,000 in settlements of lawsuits filed against the Seattle Police Department for assault and wrongful arrest.
After the Seattle WTO protests, Canadian author Naomi Klein wrote a book called “No Logo: Taking Aim at the Brand Bullies” which became the most popular book of the anti-globalist movement. In her book, Klein said that companies have used their power to hurt workers, make themselves rich, and hide the bad things they are doing.
After the Battle in Seattle, protesters thought they had found a way to get the attention of the news media and world leaders. When the IMF and World Bank had a meeting in Washington, DC in 2000, about 15,000 people protested. DC police arrested more than 1,300 people and after lawsuits, they had to pay $13.7 million to the protesters who had been arrested and hurt. In 2002, about 1,500 people again in Washington DC. Again, hundreds of people were arrested, and just like before, the city had to pay the protesters to end a lawsuit.
Similar protests have been held in cities around the world in Genoa, Berlin, Paris, and Madrid.
Primary Source: Photograph
Seattle police officers in riot gear spray protesters with tear gas during the Battle in Seattle. Police tactics in Seattle and Washington, DC were seen as evidence that governments were siding with corporations against the will of the people.
These protests have gotten a lot of attention, but they don’t seem to have stopped or even slowed down globalization. One thing people who like globalization often point out is that trade restrictions like tariffs usually hurt poor people in Third World countries. The WTO was started to help create free trade. So, these pro-globalists say, if the protestors really wanted to help the poor, they should be fighting for free trade and the WTO, not against it. Actually, most people in Third World countries like globalization. The people who have protested against it are mostly from rich countries.
In the past few years, anti-globalization activists have some politicians in Europe and the United States who will listen to what they have to say, mostly about free trade deals. In the United States, President Trump won in 2016 partly by saying that NAFTA was bad for America. When he was president, he signed the United States-Mexico-Canada Agreement (USMCA) which is a new version of NAFTA. As a candidate Trump also said that the Trans-Pacific Partnership (TPP) would be bad for America. The TPP was a free trade deal that included 12 countries around the Pacific Ocean. President Obama had said the United States would join the TPP, but Trump decided not to join. Around the same time that Trump was tapping into people’s fears about free trade in the United States, a movement started in the United Kingdom to leave the European Union. A vote held in 2016 ended with a tiny victory for those who wanted to leave and over the next four years British and European leaders had to figure out the legal details of separating European and British trade law. The event, nicknamed Brexit by putting the words British and exit together, has shown how hard trade agreements can be to make, and that not everyone likes them.
THE CASE FOR GLOBALIZATION
Globalization has led to some good things for the United States. Because things can be made for less in other countries, Americans have to pay less when we go shopping. Televisions, clothing, cell phones, fruit, and many of the things for sale in America cost less because of globalization.
Globalization has also made it possible for American businesses to make more money selling to people in other countries. Coca-Cola, Pepsi, McDonalds, Starbucks, Microsoft, Apple, Google, Amazon, Visa, Nike, Levi’s and many more have made money around the world.
New inventions in communications that make global trade possible also mean that journalism is now global. Social media networks are global as well. Email, online messaging, voice and video calls from one side of the world to another are now common. Only a few years ago, having a video call with someone in another country communication was only possible in books and movies.
Even though there have been bad effects of globalization, many people in the developing world are now able to live a better life than they did before. People in the Third World have found jobs working in factories making the things people in rich countries want to buy. And Third World shoppers now are able to buy the same things Americans can buy. Overall, a smaller percentage of people in the world are poor.
Primary Source: Photograph
A McDonald’s in Thailand. Anti-globalists point to these as evidence of the destruction multinational corporations have on local culture. Globalists argue that corporations such as these increase the standard of living in Third World nations.
CONCLUSION
The world is more connected now than it was just ten years ago, and far more connected than it was at the end of World War II. Great countries have worked hard to make sure that the world’s economy stays strong. Even though the Bretton Woods system and the gold standard are gone, groups like the WTO, IMF and agreements like NAFTA have led to more trade, lower prices, new jobs, and on average, less poverty.
But the cost of this change is big in some places. The Rust Belt is clear, ugly, proof that some Americans are the losers in globalization. American presidents, from Nixon, Ford and Carter in the 1970s up through Trump, have all tried to stop Americans from getting hurt but have often failed. Even though anti-globalization activists have had big protests, it seems that globalization is not something anyone can stop.
What do you think? Is it bad for America that so few of the things we buy are made here?
CONTINUE READING
SUMMARY
BIG IDEA: Beginning in the 1970s, American manufacturing started to move overseas as businesses looked for ways to lower production costs. Although globalization has been good for many, it has not been good for all Americans and has major critics.
The 1970s are remembered as a decade of difficult economic times. The United States abandoned the Bretton Woods system of international monetary policy and the gold standard.
An oil embargo forced Americans to pay higher prices for gasoline and other goods. A combination of high unemployment, low growth and high inflation ensued. Called stagflation, American political and financial leaders were unable to turn things around.
Imported cars that were more fuel-efficient made a significant impact on the American automobile industry and imported products became familiar sights on store shelves.
Global trade was increasing and in response, some Americans looked to their government for protection. These anti-globalists oppose trade for a variety of reasons and have sometimes mobilized huge rallies and during the Trump presidency, found some success in changing trade policy.
Globalization has hurt some Americans, especially in the Rust Belt of the Northeast and Midwest where manufacturing dried up and workers lost their jobs. On the other hand, globalization has resulted in lower prices and a higher overall standard of living.
VOCABULARY
PEOPLE AND GROUPS
Jimmy Carter: Democratic governor of Georgia who was elected president in 1976. He served only one term and was defeated by Ronald Reagan in 1980.
Big Three: The three large American automakers based in Detroit, Michigan. Ford, Chrysler and General Motors.
Ronald Reagan: Republican former governor of California who won the presidency in 1980, defeating Jimmy Carter. Reagan was seen as a confidant, optimist who could turn around the nation’s struggling economy.
Anti-Globalization Movement: A movement of protesters opposed to many of the aspects of globalization, including the growth of large corporations, environmental impacts, worker safety and pay, cultural degradation, etc.
Social Justice Movement: An aspect of the anti-globalization movement that focuses on human rights, fair trade, worker pay and good government rather than opposing globalization in general.
KEY IDEAS
Bretton Woods System: An agreement between the leading nations of the world after World War II designed to stabilize the global economy. The US Dollar was set at $35/oz. of gold and the all nations set a fixed exchange rate for their currencies.
Gold Standard: When a currency is backed by the government in gold. The currency is always worth a certain amount of gold.
Inflation: The slow rise in prices over time.
Staglfation: I situation in which there is high inflation, high unemployment, and low economic growth.
Globalization: The process of increasing connections around the world of communication and trade.
Outsource: When a company attempts to save money by moving a factory to another location where labor is cheaper, or by firing workers and hiring an outside company to do the work for less. Ford building cars in Mexico, or a store hiring a cleaning company instead of their own janitors are examples.
McWorld: Nickname for the aspect of globalization in which certain brands, such as McDonald’s become common around the world and supplant local culture with American culture.
BOOKS
No Logo: Taking Aim at the Brand Bullies: Book by Naomi Klein arguing that major corporate brands are bad for the world. It is the unofficial manifesto of the anti-globalization movement.
SPEECHES
Malaise Speech: Speech by President Carter on July 15, 1979 in which he discussed the energy crisis and blamed the problem on a loss of spirit. He was criticized for being overly negative.
LOCATIONS
Rust Belt: The region of the country across the Northeast and Midwest that includes the industrial centers of Detroit, Pittsburg, Cleveland, etc. They thrived during the Industrial Revolution of the late 1800s and early 1900s, but have struggled as manufacturing moved overseas.
EVENTS
Nixon Shock: The decision by Richard Nixon to abandon the gold standard and the Bretton Woods System.
1973 Oil Embargo: OPEC agreed to limit oil shipments to the United States in 1973. This caused a crisis as fuel prices increased dramatically.
Battle in Seattle: Clash between anti-globalization protesters and police in Seattle, Washington in 1999 during the meeting of the World Trade Organization. It was the first large-scale protest against globalization.
Washington DC Protests: Anti-globalization protests in Washington, DC in 2000 and 2002 that included clashes between protesters and police.
Brexit: Nickname for the referendum and legal negotiations between 2016 and 2020 in which the United Kingdom left the European Union.
COURT CASES
Citizens United v. FCC: Supreme court case in 2010 in which the Court decided that corporations have the right to free speech and that laws cannot be passed that restrict corporations from political advertising.
GOVERNMENT AGENCIES, INTERNATIONAL ORGANIZATIONS AND AGREEMENTS
World Trade Organization (WTO): International organization developed to promote free trade agreements and to serve as a judge for trade disputes between nations.
International Monetary Fund (IMF): A super-bank for the governments of the developing world to help them access funds when private banks were too weak, thus ensuring stability in global markets.
World Bank: A bank that governments in the Third World can use to finance development projects such as constructions of airports, irrigation systems or programs to fight hunger and disease.
Group of Seven (G7): The United States, Canada, United Kingdom, France, Germany, Italy and Japan. With the exception of China, they are the eight largest economies in the world.
Organization of Petroleum Exporting Countries (OPEC): A cartel of the major oil producing nations. They attempt to work together to set production rates and the price of oil on the world market.
Whip Inflation Now (WIN): President Ford’s campaign to encourage Americans to voluntarily control spending, wage demands and price increases in order to end the stagflation of the 1970s.
Strategic Petroleum Reserve: Government owned oil located in huge tanks in Louisiana and Texas. The reserve was created in 1977 in case of emergency and could supply the nation with oil for about one month.
North American Free Trade Agreement (NAFTA): An agreement signed in 1994 between the United States, Canada and Mexico to eliminate tariffs.
United States-Mexico-Canada Agreement (USMCA): A free trade agreement signed in 2020 that updated and replaced the former NAFTA trade deal.
