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1970s Oil Crisis
The Arab nations cut off oil shipments to the West in response to the United States decision to support the Israelis during the Yom Kippur War. As a result, oil prices drastically increased (by about 400%). Additionally, the economy sputtered and there was widespread inflation. -
OPEC Lifts Oil Embargo
The Organization of Petroleum Exporting Countries (OPEC), a cartel of Venezuela, Saudi Arabia, Kuwait, Iraq, and Iran oil companies, lifts the oil embargo on Western oil shipments in exchange for Israel's withdrawal from some territory. However, they learned they could greatly increase profit by limiting production and they had no hesitation to do so. They increased their prices and gasoline prices doubled overnight. -
Stagflation
After the economic crisis in 1973 wages and salaries had continued to rise even with a high unemployment rate. This was after Nixon had already tried to price freeze everything so that things would be affordable. Once Carter was elected into presidency he promised to reduce inflation by balancing the budget better. Inflation continued to grow which meant higher taxes as well, this then lead to the bracket creep which put people in higher tax brackets. People then revolted against the government. -
Reaganomics
President Reagan's policy involving tax cuts, social welfare cuts, and increased military spending. Reaganomics generated huge federal deficits, while promoting reorganization of large corporations. -
The New Merger Movement
Ronald Perelman had taken over Pantry Pride and was soon going to take over Revlon. Pantry pride then borrowed $1.5 billion dollars then used that to buy Revlon. Ronald then started going into debt with Pantry Pride so he then paid it off by using junk bonds by selling parts of the Revlon company. Junk bonds, created by Micheal Milken, were used often throughout the 1980's to help companies with debt. They were risky with high interest rates, but usually saved the company. -
Stock Market Crash (Black Monday)
Economic growth was slowing while inflation was rising. Leading up to Black Monday, stocks began to weaken. When the stock market crashed, hundreds of assets plunged into bankruptcy. After Black Monday installation of circuit breakers, to stop trading when stocks dive too far, were installed by the New York Stock Exchange. -
"Read my lips: no new taxes"
H. W. Bush promises not to raise taxes. He said this while running for office, however, once in office he could not control the deficit. In 1992 it reached $290 billion. Bush had no choice but to raise the top income tax rate (it went from 28% to 31%) and levy heavier taxes on gasoline, liquor, expensive automobiles, and other luxuries. -
Congress Defeats Clinton's Health Care Reform Plan
The health care reform was going to provide health care benefits for all legal residents and American citizens. The reform included health insurance reform, choice of health plan, Medicaid beneficiaries, and competition among health insurance plans. Called for integration of substance abuse services and public mental health. -
NAFTA
NAFTA stands for the North American Free Trade Agreement which is an agreement signed between the United States, Mexico, and Canada. NAFTA created a trilateral trade bloc in North America, reducing and eventually eliminating barriers to trade. -
The Great Recession
The collapse of the U.S. mortgage markets triggered a global financial crisis. Main causes of the recession, are how global investment bankers devise complicated bundles of mortgages and market them globally. Leading to millions of homeowners fell into debt and could not make mortgage payments. The collapse of the mortgage investments then brought down investment banks
