How did you survive the economic turbulance of the 70's & 80's?

May 29, 2010 4:29 PM

If you or someone you know sat in hour-long gas lines in the 70's or graduated without a job in the early 80's, I want to hear your stories. I'm looking for anecdotal information on stagflation, not textbook definitions.

What did stagflation do to your bank account, your job situation, your attempts to purchase a house? Did you wear a Whip Inflation Now button? Was your license plate odd or even?

How does the economy of the 70's & 80's compare with what we're going through now (I know interest rates and fuel costs were staggeringly high, and that we were in an inflationary spiral, but was the outcome different on a personal level for you - how)?

posted by clarkstonian to Society & Culture (21 answers total)

I can give you twenty pages on this, but not in this forum. Do you have a throw-away or permanent email address? Also, it would be good to hear why you are interested in this subject.
posted by Old Geezer at 5:05 PM on May 29, 2010 [1 favorite]

How does the economy of the 70's & 80's compare with what we're going through now

This is way too complicated a question to be answered here, but the brief points are:

1) At some points during this time span, various industries were more highly regulated than they are presently

2) Interest rates were higher overall

3) Tax rates were different then than they are now

4) Tax loopholes were different then than they are now

5) Computers were not as widespread, processors not as powerful, and storage not as abundant as it is now. This has had untold influences on our economy over the forty years since 1970, and is probably the single biggest change. Many, many books could be written about this one point.

But, really, all of these points, plus dozens of others, explain the differences between the economy of the 1970s and 80s and the present.
posted by dfriedman at 5:14 PM on May 29, 2010

Best answer: Gas crisis of early 70s. I had taken on an extra course load and was due to graduate from university a semester early, in January 1974 after finals the first two weeks after the Christmas break.

Instead, when we got back from Thanksgiving, the dean or the president called a big meeting to announce that due to the gas crisis, the school was going to close down for Christmas and not reopen until February. Finals would be happening in one week.

So that was bad. As well as my regular course overload, I'd had an incomplete from the previous semester that needed a term paper and since I was graduating, I had to do it all before Dec 20-ish.

I had my diploma mailed to me. By that time, I was living in the big city having rightly surmised that an entry level position was easier to come by in a large agency with a big staff who also had the time to teach me what I hadn't learned in school (namely, everything) and that's been my advice to recent grads who are finding it difficult to break in the necessarily smaller companies in the small city where I now live.
posted by TWinbrook8 at 5:16 PM on May 29, 2010

Best answer: Got in long gas line way back then at station not far from my house. One car away from pump and radiator began to boil over. Owner pulled me aside and the car behind me took my spot. Owner got annoyed with him, told him he should wait his turn, and told him to get at end of line or just go somewhere else. Despite a bad situation during the shortage, that left me with a good feeling.

Usually places (states, cities)worked system so that if license began odd letter or number you went on certain days to fill up; even numbers or letters the other days...that helped a bit.

Certain stations always seemed to have gas whereas other ran out. In some places, if you were a regular, they always had gas for you and not for those randomly dropping by.
Many drivers noted--true or otherwise--that you burned up a lot of gas with car engine going while waiting to get to the pump. And of course you had to make sure you had some left to look about for a station with (you hoped) gas, and often that meant extra driving around.
posted by Postroad at 5:22 PM on May 29, 2010

Response by poster: I was trying to explain to a college student in concrete terms that most generations face equivalent challenges. Whether the interest rate on your mortgage is 22% or 5%, it doesn't really matter if the economic climate means you can't buy or keep your house. I was too young during the worst of stagflation for it to have directly affected me - didn't own a car or house, only vaguely remember being asked to turn down the heat and put on a sweater - but I remember it as a grim, bad time not unlike what we're facing today.

TWinbrooke8 & Postroad, thanks - that's exactly what I'm looking for.
posted by clarkstonian at 6:39 PM on May 29, 2010

Two quick notes.

1. Sitting in a long gas line in the 1970s means that you are much less likely to complain about $3 per gallon prices. The government though that a law controlling the price of gas was the way to go. We would be happy to pay $3, when the standard price was perhaps 95 cents a gallon, just to ensure that we had gas. (Sound familiar?)

2. Interest rates in the high 10s to low 20s meant that first-time home buyers continued to rent. This was, as I recall, before ARMs were in widespread use, so there were not many who already owned homes who were squeezed out.
posted by yclipse at 6:47 PM on May 29, 2010

It was miserable. Gas was sold on different days, so you had to make sure you got to the gas station on the right day. When you finally got gas, it was exhilarating! We would for a drive since we were stir crazy. We stayed home a lot and luckily had a pool. I don't remember if my license was odd or even. I didn't wear buttons or t-shirts that had slogans on them.

As for graduating from college, I graduated in 1980. I graduated from a very prestigious liberal arts college. There were no jobs, so I went to graduate school. My family kept bugging me to get married, and kept asking what was wrong with me that I was in my early 20s and not married. It was a different time for sure!

Food seems cheaper now, as a percentage of income. So does clothing. Gas seems much higher. My parents had astronomical interest on their mortgage, something like 13%, which was all they could get then.
posted by fifilaru at 6:51 PM on May 29, 2010

Some people think that the current situation in the US is closer to what Japan experienced in the 1990's than to anything that's happened previously in America. With that in mind, you and your students might appreciate this previous AskMe: What were the social impacts of the lost decade?
posted by alms at 7:20 PM on May 29, 2010

My dad was in the Air Force. The USAF bases in the 70s had enough gas to go around so he didn't have to sit in line to fill up.

In 5th grade (1976 I think) the military decided to help save energy that would shut off all power to the residential part of the base between 10 AM and 3 PM, or something like that. It was the middle of winter. In Indiana. We had to wear our coats and gloves in class. Nobody bitched, nobody sued. It was just what we had to do to do our part in getting through the tough times.

And today they shut schools down if the AC breaks. Wimps.
posted by COD at 7:31 PM on May 29, 2010

@COD And today they shut schools down if the AC breaks. Wimps.

Today the windows are sealed shut for energy efficiency and the doors locked while children are in the building to prevent unauthorized access. Without any ventilation you really need A/C when it's hot. Parents get upset when their children end up rushed to the hospital.
posted by Eyebrows McGee at 8:40 PM on May 29, 2010 [1 favorite]

I'm of that generation. The gas crisis hit around the time I was headed into driver's ed.

Inflation was very noticeable. As in prices at, say, the grocery store went up every couple of weeks. There was very little incentive to save money-people went ahead and bought things since they expected if they waited that things would be even pricier.

One reason that Ronald Reagan was such an incredibly popular president is that he did what people thought NO ONE would be able to do and that is to end inflation. I cannot exaggerate just how miraculous that seemed at the time.
posted by St. Alia of the Bunnies at 8:57 PM on May 29, 2010

OH, and yes, housing prices were skyrocketing. And by the time my parents bought their second house, in 1980, home interest rates were like 14 percent.
posted by St. Alia of the Bunnies at 8:59 PM on May 29, 2010

I was just a kid but I remember my dad had a 1971 Ford Mustang Boss 302. It was a big v8 muscle car and he had to sell it because he couldn't keep gas in it.
posted by irisclara at 9:05 PM on May 29, 2010

I was a twelve-year-old girl on summer vacation, and the gas situation that Postroad describes was taking place a few blocks from my house. People were waiting in line for an eternity to get their gas. A captive market! I went up there with a stack of newspapers and a couple of air pots full of coffee and lemonade and worked the line, selling the newspapers at some outrageous markup and shouting coffee orders to my poor cousin, whom I had conscripted into my little profiteering venture. I don't remember how much money we made, but I remember thumbing through a quite thrilling stack of dollar bills on the walk home.
posted by HotToddy at 10:36 PM on May 29, 2010 [3 favorites]

The only thing I really remember about the economy at the time is how hard it was to get a job as a high school student in the late 70s early 80s. I applied to every fast food joint, grocery store and gift shop in town and nobody was hiring. When I finally got a job at a restaurant, which paid less than minimum wage with no tips, I was thrilled.
posted by interplanetjanet at 9:10 AM on May 30, 2010 [1 favorite]

Lindsey (Fleetwood Mac) Buckingham's father died of a heart attack while waiting in a gas line in 1974. He was always very bitter about that, his father dying alone and no one realizing it for a while because all the cars were just sitting there in line not moving.

I remember seeing news reports and film footage of other cities that had long gas lines, but I don't remember ever seeing or having to wait in an extended line in my area (suburban Detroit). The one thing I do remember is a gas station I walked past to get to school was frequently "out of gas" during this time. I looked forward to their different announcement signs every day; one day it said "No Gottem Gas" and another it was "No Gas, No How, No Way, Uh-Uh." My Dad complained daily when he got home from work at the high price of gas: "Fifty-two cents a gallon! I should just ride my bike to work!") (He never did, of course, it was too far.)

From 1979 to about 1982, the company I worked at would not allow its employees to park their car in the company lot if it was a foreign make - this was before they were building Mazdas in Flat Rock, Michigan, or Hondas in Ohio. This was a pretty big company, too, something like 1800 employees just in the main office building/plant. So all the Toyota drivers had to either find a place at the curb somewhere or use someone else's parking lot and hope they didn't get towed. Our company also matched and doubled any rebates offered by the Big 3 on the purchase of a new car during that time. (We were a Tier 1 supplier to the automotive industry and were trying to keep our customers in business so we could stay in business.) Nevertheless, the economy continued to tank and I was laid off in 1982. One other lasting memory of that economic era is my time on unemployment - it seemed like my benefits kept getting extended. I know that one of the reasons for multiple extensions was the TRA, or trade readjustment allowance, a benefit extended to workers who'd lost their jobs due to "competition from imports."
posted by Oriole Adams at 10:28 AM on May 30, 2010

I was in grade school during the energy crisis and I do remember waiting in gas lines with parents but the gas stations always had free toys, so going there was fun.
posted by krikany at 1:39 PM on May 30, 2010

It wasn't known as the Gas Crisis, but the Energy Crisis. One aspect was little signs appearing on thermostats which suggested austere settings too cold in winter and too hot in summer, and stickers on lighting switchplates encouraging you to switch off when not in use. Big institutions like universities and office buildings removed every other fluorescent tube in the light fixtures, resulting in dark corridors and dim areas. And after the first wave of shortages, the lines at filling stations weren't so bad, people adapted. The stations also adapted a marking system, with crude red flags appearing when they'd depleted the day's quota and a green flag showing when they were open for business.

And on a personal, nihilistic note, those times eliminated any optimism I had for the future (I was then an undergraduuate). My post-hippie friends and I'd become confinced the American Dream was no longer sustainable, and after seeing "Soylent Green" we developed an apocalyptic slogan, Party Till the End, as crippling environmental or economic crises seemed inevitable and joining the rat race seemed like a pointless waste of time. The Big Crash has happily been delayed until almost our retirement, and could possibly have been averted completely had the rabble heeded Jimmy Carter's and the counterculture's warnings, but instead they elected Ronald Reagan, who swiftly had Jimmy's solar panels removed from the White House roof.
posted by Rash at 4:35 PM on May 30, 2010

Stagflation kicked off in the very early 70's (even before the war ended) two years before the first energy crisis of 1973. My family was unaffected by the rising unemployment, but I remember fathers of kids I went to school with losing their jobs in Defense engineering. Even with that, no one lost their house and everyone assumed that healthcare would sort itself out and didn't worry about pensions..

This job loss was solved the same way that budgeting for inflated prices was: by mothers going to work.

In Northern California the gas lines probably had slightly less effect than in other parts of the country because by 1973 gas saving imports had already been making strong inroads due to California's stricter pollution laws making domestic cars less appealing.

I bought my first car in 74. I don't remember gas lines or rationing at that time. I've never considered owning a Detroit-designed car.

It's the changes wrought by 2-income families and the sacrifices made for the Energy Crisis that define the first energy crisis for me. (I remember Halloween ruined for little kids by giving up daylight savings time to save oil).

In the 60s and early 70s every house on the block put up Christmas lights. After not doing it one year for the energy crisis under government request many families never bothered again. To me even back then, that seemed like a cultural shift.

The solutions to food price inflation seemed to be generic labeling ("beer" in stencil font on white labeled cans) and eating a lot more poultry than beef.

I think one of the basic differences between those times and now is the debt level. After college I came into a tough job market in 1980, but I had no college debt. In Silicon Valley it was somewhat difficult for a couple of years, but not like in the rest of the country.

Double-digit interest rates meant waiting to buy a house, pulling together a larger down payment, and a little of the "buy it now" attitude that St. Alia mentions.

Prop 13's passage in 1978 resulted in the sort of housing price hyper-inflation that the rest of the country saw in say 2003 through 2007 in California from 1978 through till today.

This meant that you saved for your down payment while waiting for the interest rates to fall as the prices increased by 20 to 30% every year.

We had to jump to buy a house once the rates dropped to an acceptable level (10.75) in 1987. Soon after it was back up to 13%.

I don't remember gas prices really having that big an effect on me throughout the 80's.

On a personal level now compared to then there's now a sense that when a job in Silicon Valley is lost, it's gone forever - that every job lost in California is a huge gain for the companies as they ship it overseas.

Even at the worst parts of the 80s and 90s, people felt here that the next big invention would have things booming again. I don't see that optimism now.
posted by aninom at 6:37 PM on May 30, 2010

Response by poster: These are all great answers. Thank you so much - a lot of food for thought. Then, as now, the economic crisis hit different people differently, but it hit everyone in some manner. I'd completely forgotten about the advent of generic foods.
posted by clarkstonian at 6:53 PM on May 30, 2010

My college switched to a trimester system during the crisis, to save on transportation costs (stay home between Thanksgiving and Christmas). This was such a popular decision that they made the change permanent. I can't imagine faculty consenting to such a drastic curriculum change today without a similar economic crisis.
posted by shii at 10:32 PM on May 30, 2010