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50 Cards in this Set
- Front
- Back
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Full Employment Act of 1946
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Created Council of Economic Advisers helped Truman maximize national employment, production, purchasing power under a free enterprise system
Act wanted to make it possible for the president to take immediate action Made because concerned with the recession in 1946 Economic Report would state the levels of unemployment and purchasing power; highlight analyzed and interpret trends in the economy; review current economic programs to determine effectiveness Promote free competitive enterprise system to avoid fluctuation |
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Taft-Hartley Act 1947
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amended Wagner Act (1935)
restricts power and activities of unions and that is why it is known as the “slave labor bill” it was passed despite the veto of Truman because of the republican congress restricts strikes picketing and secondary boycotts outlawed closed shops which required employers to hire only union members unions are now liable for damages that are incurred during disputes the government can declare a national emergency when a strike threatened the welfare of the nation gave individuals the right to refuse to join unions overall this act wanted to put employers on an equal position with regards to bargaining with unions Bans communists from certified election leadership Forbids failure to bargain in good faith Bans foremen, managers from organization Requires annual report and registration with Secretary of Labor |
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Economic Bill of Rights 1944
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Roosevelt stated that “Necessitous men are not free men” meaning that the current Bill of Rights did not provide the economic security needed
political rights proved inadequate to assure Americans equality in the pursuit of happiness because the industrial economy has grown in size and stature need security at home in order for a peaceful world because America does play a large role globally Roosevelt did this to bring confidence in the post war period and as part of his presidential campaign people should have not only the right to work but to demand a well paying job have the right to be free of unfair competition such as monopoly, adequate medical care, food, clothing, and education |
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Fair Deal 1948
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Doubled social security benefits and expanded coverage to 10 million Americans
Federal funds allocated to public housing and encouraged construction of housing. It also made mortgages more available especially for war veterans Employers have to provide medical and dental services, federal financial assistance for building hospital, financed medical research Federal aid for public schools |
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Marshall Plan April 1948-December 1951
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Required EU to accept US recommendations on:
How to enlarge EU’s market How to become more price competitive Moved EU away from autarky U.S. sponsored program designed to rehabilitate the economies of 17 western and southern European countries in order to create stable conditions U.S. feared that the poverty, unemployment, and dislocation of the post-World War II period were reinforcing the appeal of communist parties Secretary of State George Marshall advanced the idea of a European self-help program to be financed by the United States $13 billion worth of economic aid, helping to restore industrial and agricultural production, establish financial stability, and expand trade. |
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Dollar Gap- Last fiscal quarter of 1946 through first fiscal quarter of 1950
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Europe could not pay US for goods (demand for US goods expanded) during reconstruction because countries devastated
feared this crisis would lead Europe to economic nationalism lead EU to negotiate with Soviet Union Would ruin Post-war US prosperity Europe lost their “collateral” of colonies (peripheral territories) resulting shortage of dollars= dollar gap $8 billion 1946, $12 billion 1947 |
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Bretton Woods Conference
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Bretton Woods, N.H. (July 1–22, 1944)
during WWII to make financial arrangements for the postwar world after the expected defeat of Germany and Japan Drew up a project for the International Bank for Reconstruction and Development (IBRD) to make long-term capital available to states urgently needing such foreign aid Drew up a project for the International Monetary Fund (IMF) to finance short-term imbalances in international payments in order to stabilize exchange rates |
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Fair Labor Standards Act 1938- Roosevelt
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minimum wages
Maximum work week hours overtime: time and a half Bans child labor who is excluded? Why? part time workers, temporary workers, agricultural workers, minority, transient, children in the fields, domestic labor The south vs. the North? South’s competitive advantage was lower wages but the north already had higher wages → evened out the national economy Gavin Wright? |
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National Labor Relations Act 1935
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Wagner Act, creates NLRB, establishes unionization as positive goalroosevelt saw it radical
NLRB=National labor relations board - determines what constitutes fair and unfair labor practices Sets NLRB to verify cards for representation, then to run elections says firms must bargain (hard to enforce) can’t fire supporters of unions because they are supporters of unions protects the right for attempts to organize one union per work unit, leads to greater industrial unionism and rise of CIO can lead confusion or to industrial unionism industrial unionism: everybody in the firm Says unions are good for society Preamble states that there are inequities in the balance of power because individuals cannot bargain with corporations good for society to encourage and provide a means for collective bargaining between society and corporations |
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Social Security Act (1935)
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US was last nation to get SS
Keeps elderly consuming, encourages retirement original U.S. legislation establishing a permanent national old-age pension system through employer and employee contributions the system was later extended to include dependents, the disabled, and other groups provided old-age benefits to be financed by a payroll tax on employers and employees has been periodically amended, expanding the types of coverage, bringing progressively more workers into the system, and adjusting both taxes and benefits in an attempt to keep pace with inflation |
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Controlled Materials Plan (late 1942)
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Ferdinand Eberstadt- Vice President of War Production Board
developed this organizational structure Devised to ensure nation’s raw materials are channeled into production for use by the war machine No purchase of controlled materials may be made without an authorized allotted number Steel, Copper, Aluminum Each agency submits an estimate of what required materials it needs to operate submitted to the War Productions Board for approval Agencies must revise themselves to work within the granted allotments by the WPB based on service and need Severe Punishments if there were inaccuracies in numbers by the agencies centralized and decentralized authority, shifted down in “uniquely American system” |
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Wage-Price Controls/Office of Price Administration (WWII 1939-1945)
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1938 Fair Labor Standards Act
Women begin working/return to the workforce at an increasing rate (particularly noticeable among married white women who worked before becoming married) Minimum wage sets the standard for women working while men are overseas Wage equality began in 1942 when National War Labor Board urged employers in 1942 to voluntarily make "adjustments which equalize wage or salary rates paid to females with the rates paid to males for comparable quality and quantity of work on the same or similar operations." Problem with this was that this board had little influence when the war was over and also had no influence outside of war-related production. Equal pay act of 1963 doesn’t come until 20 years later The OPA (1941) was responsible for rationing commodities (tires, cars, metal typewriters, bicycles, stoves and rubber shoes) to people who had demonstrated an especial need for them and limiting the quantity of things people could buy |
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Conglomeration (1960s- onward)
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conglomerate - a corporation that is made up of a number of seemingly unrelated businesses
typically one company owns a controlling stake in smaller companies smaller companies report to bigger company participate in a number of different markets to diversify and bring in more profit Boeing, Berkshire Hathaway, General Motors, etc. RCA is an example - hertz car, banquet foods, coronet carpets |
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Wage/Price Controls (Nixon)
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imposed to combat inflation which was unusually high in the early 1970s
keynesian economics suspended the convertibility of the dollar into gold serious blow against stagflation |
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Truman Doctrine 1947
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declaration that America’s proper sphere was not only in the New World
containment policy for communism British crisis in 1947- British acted as police in the Mediterranean → asked the US to take over responsibility after WWII bc US has funds to do so 3 goals: ease draining of money of America’s most valuable trading partner end the Greek revolution and stabilize Europe so it could buy oil from non-US sources-help lessen dollar gap universalism and anticommunism to help prepare US for dollar gap crisis with the Marshall Plan preparation for revolutionary economic aid program for Europe |
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VideoDisc
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RCA developed this technology that would make it possible for tv viewers to watch programs whenever they wanted to and it would play back recorded films without commercial interruptions
VCRs emerged in mid 1970 but at that time the VideoDisc were not ready but RCA believed that the VideoDisc would sell for much less when it did come out VCR had a distinct advantage by being able to record programs from commercial broadcasting to view at a later time and that is why Japan dominated the sales of videotapes RCA had excessive pride and thought that the VideoDisc would become the industry standard this product demonstrated how researchers in New Jersey and manufacturers in Indianapolis lacked communication |
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David Sarnoff (RCA President 1930-1970)
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one of RCA’s key executives
envisioned a new model manager who had a personal understanding of technology, a good idea of where both it and market forces were headed, and to put the two into business planning saw RCA being at the top no matter what it took RCA never developed techniques of decentralized decision making put too much authority in the hands of Sarnoff Sarnoff began to believe reports of his own infallibility, made too many decisions himself, and stayed too long at the wheel RCA failed because of this |
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Color Television (1950)
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The National Production Authority invoked a ban on the manufacture of color TV sets until 1953
Sarnoff expected surge in production and marketing of colored tv which caused the stock price to rise 44% but it ended up taking 15 years to make the transition from black and white tvs to colored tv because they needed to replace cameras facilities needed to be upgraded. Overall the introduction of the color tv was premature 1954 the price of a colored tv was $1000($7800 in 2009) but the price was too high considering that the colors bleed together and black and white programs appeared fuzzy 1956 forced to half the price of the colored tv set because they produced too many units and this price cut triggered and antitrust lawsuit for unreasonably low prices 1958 RCA paid off Philco and made their patents available to domestic competitors but sold to foreign competitors-->1970 $100 in royalties by 1960s is when colored tv took off and by 1965 had 5 million sets sold |
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System technology
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collection of technologies that deal specifically with processing, storing, and communicating information one system
TV was a systems innovation which meant it required a regular schedule of programming, mass sales of sets, industry wide standards for broadcasting and equipment, and facilities for repairing and adjusting the many things that could go wrong with reception color TV is a system technology that’s why it took awhile for tv to go from black and white to color |
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Civil Rights Act of 1964
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outlawed major forms of discrimination against racial, ethnic, national and religious minorities, and women
put in women so that the act would not pass but it passed regardless JFK ended unequal application of voter registration requirements and racial segregation in schools, at the workplace and by facilities that served the general public (public accommodations) reversed a Supreme Court decision of 1883. |
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EEOC (1965)
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equal employment opportunity commission
Created under Title IV of the Civil Rights Act of 1964 made to implement and enforce this new law settles disputes within the workplace based on discrimination originally covered race, was expanded to gender/sexual identity/preference Established and pushed for affirmative action as a viable way to fight discriminatory acts |
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President’s Commission on Women (1961)
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created to advise the president on status of women, lead to 1962 Equal Pay Act
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Kerner Commission 1967
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11 member committee with the intent to investigate the causes of 1967 race riots
Established by President Lyndon Johnson Otto Kerner headed the committee “moving towards two societies, black and white, separate but equal” white racism is noted as main cause, commission recommended government programs to create jobs for blacks and housing programs to break up residential segregation |
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NSC-68 (April 1958) formulated by Acheson and Nitze
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document that demanded for massive military spending
soviets were driven to world domination only way to stop them was having a superior military called for increase spending through.. tax increases greater internal security media recognition to build public opinion propaganda and psychological warfare as used in eastern europe against USSR only way spending can happen and to pass it by the congress was for an international emergency to occur |
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Gender Gap
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Gender Gap increased from 1930-1960
Reasonable causes for the gender gap: Tradition, low number of women in workplace, deskilled labor, chauvinistic beliefs of male power/strength Percentage of management about the share of workforce, but female ghettos Gap between married women of color and white women in workforce shrinking. 10x in 1900 but in 1930 only 3x much closer than black men and white men |
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Military-Industrial Complex
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Refers to policy and monetary relationships between executives, legislators, business, and the armed forces--term coined in the 1960s
Sometimes formal agreement such as approval for military spending Other are more informal/unwritten such as government being lax about military activities or highly encouraging industries to support the nation before their own profits Examples: Reagan increasing military spending w/o increasing taxes to maintain America’s superpower status, the government placing restrictions on certain industries in order to encourage their support of war efforts or war activities [RCA, GM, Boeing], private companies working on government initiatives Benefits both parties: government gets what they want/need, businesses get the funding for R&D efforts that they otherwise wouldn’t have |
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2007/8 bailout
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comparable to the stagflation of the 1980s, but all in all the crash was due to collapse of the “American Dream” housing market. in the 1980s the recession was due to banking primarily and investing secondarily
loans were given out that could never be paid back and many believed the answer was to “go shopping” (George W. Bush 2006) which deepened the issue bailing out banks afforded the opportunity to provide financial stability. failing to keep the banks open would not only place many people into unemployment, but more noticeably the financial markets would not remain afloat and other businesses would fail. if banks were to close their doors, the dollar would also drop in value. |
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SEC
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Securities and Exchange Commission was created through the Securities Act of 1933
Created during the 100 days [of FDR’s first presidency] because there were no regulatory controls over financial markets Corporations become responsible to the federal government in new ways Have to have portfolios, follow accounting principles, etc. Also monitor corporate takeovers [mergers] SEC and other regulatory agencies were created to combat the lack of transparency in business Protects public investors Depression can be attributed to this lack of control--if there was control, there would be federally insured deposits and the bank run on the day the market crashed wouldn’t have occurred which would have made everything a lot better etc. |
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National Industrial Recovery Act/NRA
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NRA: National Recovery Administration
NIRA: National Industrial Recovery Act note the difference between the two...acronyms are very similar NRA was created by the NIRA, both 1933 NIRA: Sets minimum wage Maximum hours Lets workers form unions Allowed for the prices of goods in the entire nation to be the same Ruled unconstitutional because it prevented free trade (price fixing) |
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AAA 1938
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agricultural adjustment act, part of New Deal
government pays people to grow less to drive up prices conflict being the landowner gets the check and they did not pay the sharecroppers → leads to sharecroppers union in the South After 2nd AAA, sharecroppers began receiving compensation by late 1930 declared unconstitutional 1933 Temporarily reset production quotas for farm commodities, including corn, wheat, rice, milk, cotton, and livestock 1938 Focused primarily on commercial producers, sustained the policies of acreage limitation and price supports in the form of government loans, helped convert marginal croplands to grass for livestock |
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Franchises
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McDonalds founded in 1948 by McDonald’s brothers as a popular burger joint
Ray Kroc 1955 introduces franchising, recognized at the reason for the company’s success Kroc also becomes known for his specific plans and for requiring franchisees to adhere to policies, specifically his policy of Coca Cola over Pepsi products franchisees must buy from specific farms to maintain consistent food quality french fry cooking scientifically calculated by Lou Martino Henry Sonneborn (“the numbers guy”) encourages Kroc to begin purchasing property and makes McDonalds into a real estate company rather than a food service company use of stock options and feelings of entrepreneurship to lure franchisees and investors alike marketed to children, noting that kids would bring mom/dad/grandpa and the chain would increase its customer base as a result 1950s-1980s perfect timing for the rise of McDonalds due to economic hardship and the growth of families in the baby boomer generation |
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Stagflation
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Stagflation: high unemployment and inflation
Inflation encourages spending and debt: feed off itself, private debt up from 83% of GNP to 103% by 1978. No big deal to be in debt because you can pay it off with inflated money. Get creep in tax levels so taxed more as earn more but in inflated dollars so try to adjust with deductions, talk of inducing categories. Tax cuts in 1960s, guns and butter slow increase of inflation from 2% in early 1960s to 4.2% by 1969, 5.5% 1970 evokes growing concern 1971 wage price controls attempted but evasion massive on prices, job reclassification. Beginning of workers wage decline In response, Fed raises interest rates, 4% early 1972, 8% early-1973 (after election), 10% 1974, slowed economy, but inflation and oil shocks hurt, lower rates (election of 1974) Stimulation means lower interest, but induces inflation and pre-1974 war keeps pumping along with butter |
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OPEC Oil Crisis
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OPEC = organization of petroleum exporting countries
Originally led by Saudi Arabia and Venezuela Decade sees dramatic slowdown from 2.5%/year growth to less than 1% Deindustrialized, “rust belt”: Detroit, Cleveland, Pittsburgh Oil prices rise 1200%--reverberate throughout economy Shocks 1973, 1979: raise prices across the economy 1973 shock was planned but coordinated with Arab-Israeli War and US support for Israel OPEC control real but unstable, by late 1980s, down to real levels of pre-1973 prices 1979 Iranian Revolution sees cutbacks and huge increases again |
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PATCO Strike 1981
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Professional Air Traffic Controllers Organization
Roughly 40,000 went on strike, shuts down the aircraft industry in 1981. Demand better wages and more time off so they don’t make as many mistakes Reagan denies PATCO despite the fact that PATCO was one of 2 unions that supported Reagan. Workers don’t go back to work, so Reagan brings in military air traffic controller. Reagan trains enough civilian air traffic controllers to continue aircraft activities. |
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Harry Sonneborn
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The “financial wizard” behind the success of McDonalds
Put the firm into the real estate business First through leasing, then through land ownership By the 1980s McD was the largest owner of retail real estate in the world Sonneborn proposed that McD Corp get into real estate itself by becoming the middle element in a “sandwich lease” Company would take out long-term leases, then sublease the properties to franchisees at a fixed dollar markup Add to annual franchise fee, franchisees had to pay all taxes and property insurance costs so McD Corp got out of those aspects of being landowners Established a threshold for how much an individual unit made ($) and would shift the expenditure of the franchisee being on the land from a percentage of the lease fee to a percentage of the unit’s gross sales profitable in the long run! Sonneborn helped take the company public Sonneborn is often forgotten in American business history but he was almost equal importance w/ Ray Kroc as the architect |
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S&L Crisis
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Savings and Loans crisis
New types of financial instruments like money market mutual funds that offer depositors higher interest rates hurts thrifts. They were forced to compete more vigorously for funds in financial market Tried to sell brain dead firms to private investors Known as the Southwest Plan People buying them used them to gain access to deposits and assets to collateralize loans to themselves. (this is the incentive for the investors to buy the dead thrifts) Plan failed miserably and it created another 40 billion dollars of debt 1989 Congress finally reacts and tries to control the bailout process.. We are still working on paying off these notes since they were 30 year loans |
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Deregulation movement
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Leveraged Buyouts
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1980s and beyond
“using the acquired firm’s own assets as partial collateral for the issuance of junk bonds that were sold to raise the sum needed to buy a controlling interest” (McCraw 195) purchasing another company through junk bonds? entire companies can change hands overnight usually provide large profits for head management- these financiers called “corporate raiders” |
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Junk Bonds
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1980s and beyond
high risk (because they are low-grade), high yield bonds (because of high risk) investment-grade bonds were issued by well-established companies- wealthy individuals usually bought these at little risk and little return as mutual funds, pension funds, and other money pools grew, “the sum of available capital began to exceed the total amount that could be invested under the old pattern of small risk and small return” (McCraw 195) financiers innovated and created junk bonds with high risk and high return |
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Monetary Policy
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regulation of the money supply to influence economy wide variables such as inflation, employment, and economic growth
major monetary policy actions/legislation from the period we've studied so far: Bimetallism and the gold standard (late 19th century) is considered monetary policy, Establishment of the Fed (1913 by the Federal Reserve Act) after the Panic of 1907 is a major legislation for monetary policy, Abandonment of the gold standard after the deflation caused by the Depression, Gold Reserve Act (1934)—all gold and gold certificates held by the Fed to be surrendered to the US Dept. of Treasury |
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Derivatives
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Adjustable Mortgage Rates
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Glass-Steagall Act 1933
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Created by the FDIC
Separates commercial banking and investment banking |
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Paul Volcker
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Capitalist economies displayed stop-go symptoms- first enjoying some respite from inflation only to encounter rising unemployment; then easing the unemployment situation only to come up against a renewed burst of inflation
Jimmy Carter (D) elected in 1976, determined that inflation required a vigorous and tough-minded policy of monetary austerity, and he appointed Paul Volcker to be Chairman of the Fed to bring the growth of the money supply under tighter control. Volcker refused to allow bank reserves to expand as rapidly as in the past, pushing interest rates steadily higher. By 1980, the prime rate was 15% and the Consumer Price Index was soaring at an annual rate of 18.2%, the highest in U.S. history With tight money, businesses (esp. small & medium) were unable to finance their inventories or their normal borrowings and began contracting their activities Unemployment grew from 5.8% in 1979 to 7.1% in 1980, people earned 5% less real income in 1980 than 1970 |
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Ferdinand Eberstadt
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Roosevelt Recession
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Supply Side Economics
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practiced with Reagan 1981
focuses on increasing the supply of goods available rather than decreasing demand helps to deal with stagflation which includes unemployment and inflation favors tax cuts to stimulate investment- will produce more goods SSE favors more increased tax cuts on the rich because they have more to invest- their investments will trickle down to the poorer people through job creation and bigger incomes less government intervention- increases production of goods as well Reagan lowered tax revenues but increased military spending which led the government to hold the largest deficit up to that point in time |
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System 360
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IBM introduced its revolutionary system/360 series in the 1960s
New computers would serve all purposes from scientific to defense to business uses Made IBM so strong that for almost 3 decades the company name was almost synonymous with IT Achieved compatibility by devising a common operating system for all of its computers Before 360, computers could not communicate with one another Came right before mini computers |
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Silicon Valley System
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McCraw cites an article from The Economist which said, Silicon Valley’s “most important contribution may well be organizational, not technological.”
key characteristics= relentless change high-risk taking patience with temporary failure acceptance of job-hopping meritocracy firm cooperation flexible organization The Silicon Valley firms also benefitted from being clustered geographical. This made it easier for the firms to collaborate, make deal, and use each other’s ideas, which allowed the technological process to accelerate much faster than firms outside the cluster. |
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Venture Capital
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Often key to startups
Funded privatized digital revolution Control and power of standards: Microsoft vs. auto Dot com bubble Decapitalize manufactuers, permits offshoring, outsourcing, globalize (aided via tax policies on profits) Eugene Kleiner co founded the venture capital firm Kleiner Perkins Became model for other venture capital firms Together took very prominent roles in the spinoff-start-up-shakeup process that became the essence of doing business in Silicon Valley |
