An Overheated Dollar: How the Framing of the 1970s Inflation Led to the Swapping of Social Spending with Finance, and the Consequences for Our Wellbeing

Abstract

This dissertation performs longitudinal textual analysis of twelve Economic Reports of the President- the premier American federal economic policy planning document published annually by the President and the Council of Economic Advisors- from the 1960s to the 1990s to propose that starting in the late 1970s, both Democratic and Republican US administrations deliberately and dramatically turned to promoting financial investment for citizen wellbeing over social spending as a response to shifting framings and consensus that government spending on social programs was the primary cause of rising economic inflation. Social programs had been lauded in the 1960s and early 1970s as necessary to achieve maximum economic growth and ensure citizen wellbeing, and were building off Keynesian-oriented economic ideology from the 1940s which proposed that full employment would optimize economic production. These beliefs were embedded in the initial purpose for the publication of the Economic Reports of the President which was mandated by the Full Employment Act of 1946. This dissertation proposes that with the shifting perceptions of social programs, inflation and finance in the 1970s, the Economic Reports of the President assumed a role of posturing responsibility for citizen wellbeing and economic productivity while shifting the deliverance to investment, which yielded widening inequality.

The analysis of the Economic Reports of the President in this dissertation illustrates specific policies adopted by presidential administrations in the 1970s to promote investment, including: Gerald Ford’s administration criticizing social spending policy and the Jimmy Carter administration implementing pro-investment policy such as reducing the capital gains tax, approving of housing inflation, creating the 401(k) pension system and rebranding social spending as charity. As this dissertation shows, presidential administrations through the 1980s and 1990s continued to actively promote financial investment for citizen wellbeing instead of social spending. This dissertation uses a biopolitical framework to trace the evolving commitments to citizen wellbeing of government from the 1960s to the 1990s and the overlap with governance and economic growth strategies. It suggests that governments of the 1960s and early 1970s viewed citizen wellbeing as central to high productive economic growth while later governments do not view citizen wellbeing as central to economic growth, and instead as a secondary strategy to be achieved via financial investment. The dissertation also proposes that the Economic Reports of the President analyzed produce economic rhetoric and expectations for wellbeing as much as they reflect political discourse. As such, the turn to consistent promotion of investment to achieve citizen wellbeing in the Economic Reports of the President has created consequences wherein citizen precarity is normalized and accepted as the authentic limits of government provision, and not as a fabrication based on bipartisan framing of a historic economic crisis that was produced and narrated in the Reports themselves. The final chapter of the dissertation focuses on contemporary impacts of the turn to financialization of citizen wellbeing in the Economic Reports of the President, suggesting that the renewed use of the term “American Dream” to connote financial achievement in Economic Reports of President in the twenty-first century indicates attempts to create collective ideology around economic inequity while the deliberately anti-inflation themes of names of recent social spending bills and their limited range reflect the hauntings of the framings of the 1970s inflation. The dissertation proposes that there is a need to de-financialize economies and provision of citizen wellbeing, to achieve greater future equity and shared wellness.