A Disintegrating Economy.

The constant context for American politics in the 1970s was the disintegration of the economy. Since the end of World War II the American economy had been the most dynamic in the world, growing more or less continuously at a rate between 3 and 4 percent and enjoying huge trade surpluses as the economies of Europe and Asia recovered from the devastation of World War II. By the 1970s, however, the period of prosperity was at an end. A host of economic problems arrived simultaneously. Foreign competition had begun to seize large parts of the U.S. domestic market; in 1971 the United States posted its first trade deficit in eighty years. Johnson's attempt to finance the Vietnam War by borrowing and printing money created large governmental deficits and sparked runaway inflation. The consumer dollar was worth less; households found...