Running Out of Gas
The Economic Downturn and Social Change
Even more than Watergate and Vietnam, the economy was the factor that gave the seventies its distinctive character. After the great run of postwar prosperity, the state of the economy slid into stagnation for much of the period between 1973 and 1982. This downturn differed from other postwar recessions that had featured business slowdowns and temporary layoffs. Although those things occurred in the seventies, they happened in a more sustained and deeper way and with the added twist of inflation accompanying the slowdowns. It looked at the time as though a crucial climacteric had been reached and that the great streak of economic growth that characterized the postwar period was over for good. It became fashionable to predict that Americans would no longer be able to enjoy the luxuries to which they had become accustomed, such as fast and powerful cars fueled by inexpensive gasoline, houses heated and cooled to perfection, and diets that were heavy on beefsteak rather than macaroni and cheese.
Poor economic performance eroded the respect that Americans had for their political leaders. It was an accepted part of the post-New Deal order that the president managed the economy so that it grew without wrenching changes in the business cycle. Indeed, economic scholars who had studied the business cycle in minute detail in the thirties and forties focused their attention on governmental policy in the postwar era. In particular, economists examined the things that the president could do to adjust the economy, fine-tuning, in the idiom of the sixties, so that it continued to hum. The government's performance became more important than the activities of individual businesses.