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Unformatted text preview: October 27, 2007 Geo 360 Midterm Essay A Very Brief History Of The American Economy Over The Past Forty Years The history of the American economy over the past forty years is also in large part the history of the world economy, as globalization has integrated the United States into the world economic system throughout the 1990s and beyond. The story begins in the turbulent 1960s and 1970s, as the country moved further and further and away from the relatively complacent 1950s. The nation was in the throes of the Vietnam War and the economic productivity that dominated the late 60s slowed down in the early 70s. The energy crisis dominated national headlines and stagflation, combining the words in flation and stag nation, gripped the country. America’s trade deficit soared as the country was invaded by lower- priced, higher-valued imports encompassing everything from appliances to electronics. Economic competitors such as Japan saturated the American marketplace with their goods and lured corporations overseas in a bid to gain a hold in the high-stakes cutthroat realm of international big business. Against this backdrop, other economic forces were beginning to take shape, largely in the forms of deindustrialization and recession. Deindustrialization spread across the land as community after community was impacted by manufacturing plant closings and the resulting loss of jobs cast many ordinary citizens into financial and social freefall. The country was largely dependent upon secondary economic activities at this time, as the service sector was still in its infancy; as the American manufacturing industries suffered and declined, so did the nation’s overall economic wellbeing. In contrast to this grim reality sweeping the nation, other countries were reaping the benefits of the American economic shortfall as corporations moved their business to foreign soil. On the microeconomic level, firms diversified into multinational and transnational companies; corporations transformed themselves into conglomerates and expanded into subcontracting as well. Outsourcing reduced manufacturing costs and as a result of the intensive nature and high costs of American labor, coupled with competition, and as many firms relocated their factories to fast-growing countries where the labor was...
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This note was uploaded on 05/07/2008 for the course POLI SCI 360 taught by Professor Cornwell during the Spring '08 term at UMass (Amherst).
- Spring '08