Fault Lines Read online

  Network proved to be a popular film and a critical success. In March 1977, the film won four Academy Awards, including best actor for Peter Finch and best original screenplay for Paddy Chayefsky. (Meanwhile, the Oscar for the best adapted screenplay went to All the President’s Men.) Leaders at the real television networks recoiled from the movie’s satirical depiction, especially its claim that news programs were becoming little more than entertainment. “There’ll never be that kind of show-biz approach to the news,” ABC anchorwoman Barbara Walters insisted. “The entertainment side of television is more respectful of the news side now than at any time in the past.” Still, Chayefsky insisted the criticism was rooted in real truth. Networks were focused on ad revenue, and therefore on ratings above all else, even in the news divisions. “Television is democracy at its ugliest,” he noted quietly in an interview. “Give the people what they want.” 32

  By the late 1970s, the damage from Watergate and its various aftershocks was readily apparent. The scandal itself had shattered the nation’s faith in its government, and what little reform legislation had been tried in an attempt to repair the trust had itself been weakened or undone. The media forces that had uncovered the truth, meanwhile, first seemed to flourish in the aftermath of the scandal, but steadily succumbed to problems of their own as they moved from embracing prophets like the real Woodward and Bernstein, or the fictional Beale, to chasing profits instead. Despite Gerald Ford’s assurances that the “long national nightmare” was over, for too many Americans it seemed that it had only just begun.

  CHAPTER 2

  A Crisis of Confidence

  AS AMERICANS LOST FAITH IN GOVERNMENT, THEIR CONFIDENCE in the economy shattered, too.

  Perhaps even more so than the federal government, the industrial economy of the postwar era had served as a pillar of American prosperity. Steadied by the economic restructuring of the New Deal and spurred to new levels of production by the military mobilization of World War II, the nation’s manufacturing-based economy boomed during the postwar decades. As the United States entered a new era of profit and production, ordinary Americans basked in the consumer culture of a new “affluent society” characterized by high wages, high standards of living, and high hopes for the future. The growth of unions offered economic protection to workers who could count on steady wages and good jobs. Poverty remained an intractable problem throughout the nation, most notably in rural areas and inner cities, yet the steady growth of the suburban middle class greatly diminished the kinds of inequality that routinely take form in capitalist economies.

  But much like trust in government, Americans’ trust in the Cold War economy began to falter in the 1960s. Deindustrialization began to weaken the manufacturing sector and worries about inflation and unemployment swept through the electorate. As the 1970s wore on, Americans’ faith in capitalism wore thin.

  Stagflation

  The decades after World War II, in the words of historian James Patterson, had been an era of “Grand Expectations,” a time of remarkable economic growth in which the possibilities for progress and profit in America seemed limitless for many white middle-class families. Upward mobility defined the national character, as incomes kept rising and more and more Americans found their way into the middle class. Homeownership rates, buoyed by government mortgage plans, jumped from over 40 percent in 1940 to almost 64 percent by 1965. Harsh discriminatory practices such as red-lining prohibited many parts of the population, such as African Americans, from enjoying these changes, but for a significant portion of the country the gains were stunning. By 1955 one out of every twenty-two homes had air conditioning, and one out of ten in the South, a development that allowed for massive growth in residential population in booming Sunbelt cities like Houston and Atlanta. Access to higher education, retirement benefits, and health care continued to expand as well. Productivity also showed huge gains, with key sectors of American industry, such as automobiles, dominating international markets. Inflation, meanwhile, remained extremely low by historical standards, averaging 2.2 percent between 1950 and the mid-1960s. Unemployment rates remained low as well, still under 4 percent at the end of the 1960s.1

  These economic conditions changed dramatically during the next decade, as the era of growth and grand expectations gave way to a period of diminished hopes and decline. The economic crisis of the 1970s stemmed from a number of factors, none of which bore sole responsibility. Inflation, triggered by high levels of government spending on the Vietnam War in the late 1960s, proved difficult to contain. President Lyndon B. Johnson, fearing the political repercussions, had refused to raise taxes to fund the war until it was much too late and, as he delayed, an inflationary spiral began. In the private sector, meanwhile, poor managerial decisions downplayed long-term investment in pursuit of short-term profits, preventing major companies from innovating new products, such as fuel-efficient cars that foreign competitors would soon use to dominate the auto market. In the long run, the 1970s turned out to be a transition period, when newer sources of economic vitality emerged, such as the service sector and computing industry; but at the time, these developments remained on the margins of the economy, distant bright spots on the horizon that could not compensate for the massive problems plaguing the older manufacturing sector.

  Of all the problems confronting the economy, none equaled the energy crisis, in which America’s dependence on foreign sources of oil was exposed as a major liability. In 1973, the Organization of Petroleum Exporting Countries (OPEC) imposed an oil embargo on Western nations in response to America’s support for Israel in the Yom Kippur War. The embargo had major ripple effects throughout the country, reminding Americans of their economic woes on a daily basis. The oil shortages were felt most powerfully on the East Coast, where dependence on foreign oil was greatest.2 The price of heating homes in the Northeast skyrocketed, leaving some residents struggling to survive the frigid winter of 1974. As gas supplies dwindled, frustration and desperation set in. Most service stations abided by voluntary “Gasless Sundays” to conserve, but owners worried about the cuts. “Our stations’ December allotments have been cut from 10 to 20 percent,” lamented the head of the Long Island Gasoline Retailers Association.3 Drivers were forced to wait in long lines to purchase ever-dwindling amounts of gasoline, leading to short tempers and violent outbursts. In Maryland, for instance, a group of angry drivers grabbed a man from his car after he tried to cut in line, dragged him away and beat him mercilessly, leaving him bruised and bleeding by the road. In Connecticut, one gasoline dealer reported that a woman had offered to sleep with him in exchange for two dollars’ worth of fuel.4 With all of these stories, the news constantly reminded audiences that the once omnipotent United States was being held hostage by a small group of countries that did not possess anything near America’s military power.

  As the energy crisis revealed the limits imposed on the American economy from abroad, the new environmental movement demonstrated a growing awareness among Americans that they might need to place limits on themselves as well. The postwar economy, with its emphasis on industrial growth and consumer abundance, led to ecological consequences that were, by the 1960s, impossible to ignore. Rachel Carson’s Silent Spring, published in 1962, had awakened an entire generation to the kind of immense damage that commercial practices such as the use of pesticides inflicted on the ecosystem. “Only within the moment of time represented by the present century has one species—man—acquired significant power to alter the nature of his world,” she wrote.5 The rapid growth of middle-class suburbia had spread political support for focusing on the “quality of life” and not simply economic goals.6 Meanwhile, ecological disasters focused the nation’s attention on the costs of their economy. A massive oil spill off the coast of Santa Barbara, California, in January 1969 resulted in millions of gallons of oil polluting the ocean, fouling beaches, and killing thousands of birds. Six months later, in June 1969, the Cuyahoga River outside Cleveland—a waterway so polluted Time magazine said i
t “oozes rather than flows”—actually caught fire. Such incidents, coupled with more commonplace concerns like the near-constant “smog alerts” of poor air quality in Los Angeles, prompted action. New laws like the Clean Air Act of 1970 and Clean Water Act of 1972, and new government offices like the Environmental Protection Agency, created in 1970, signaled an end to an era of unfettered industrial output and unquestioned consumer activities. The environmental movement had pushed forward a new set of values in thinking about the overall economy, where the importance of protecting the Earth took precedence over profits and productivity. For many political leaders, however, economic concerns still came first. If there were ever “a flat choice between jobs and smoke,” Nixon told his chief domestic advisor, the nation would always choose jobs.7

  Indeed, despite the new limits on energy use imposed on them from both home and abroad, many ordinary Americans angrily resisted cutting back on their own consumption. In 1974, the federal government installed new guidelines that encouraged the adoption of 55 mph speed limits across the nation as a means of conserving energy. Though the new limits succeeded in reducing oil imports (and reducing the rates of auto fatalities as well), many resisted the restrictions on their car-centered lifestyle. A midwestern trucker spoke for many when he denounced the speed limit as “a noose around the neck of this nation’s economy” and vowed to ignore it. Sales of radar detectors soared as more and more Americans sought ways to skirt the law and avoid a speeding ticket.8 Notably, in 1977, one of the biggest songs on both the country and pop music charts was C. W. McCall’s “Convoy,” an antiauthority song about eighteen-wheel trucks speeding down the highways despite the complaints of environmentalists and the enforcement efforts of the police. The hit song by McCall—a fictional character played by an advertising executive named Bill Fries—sold over two million copies and was even made into a feature film, by the acclaimed director Sam Peckinpah.9

  Another problem that weighed heavily on the economy, connected to the rising prices in oil, was the toxic combination of inflation and unemployment known as “stagflation.” In direct contradiction to the economic orthodoxy of the New Deal era, which stipulated that a country could suffer from either inflation or unemployment, but never both at the same time, Americans experienced a double pinch throughout the decade. Inflation, which had started to accelerate in the mid-1960s, doubled between 1969 and 1974, and then increased, albeit at a slower rate, over the remainder of the decade. As the cost of living soared, unionized jobs became scarcer. Unemployment rose from 4.7 percent in 1973 to 7.5 percent two years later.10 Squeezed between soaring prices and a tanking job market, Americans began to experience the most significant economic crisis since the Great Depression.

  The American auto sector, which for much of the twentieth century had symbolized the nation’s economic power, now found itself outpaced by upstarts from Japan and West Germany. The cars that these foreign competitors produced proved to be better built and more fuel-efficient, attributes that, in an era of high maintenance costs and gas shortages, were more attractive to consumers. As a result, the US share of world exports had fallen from 15.9 percent in 1960 down to just 12.2 percent by 1975.11 The sea change had been augured by the 1972 introduction of the Japanese Datsun, with a simple and effective pitch: “Datsun Saves.” The company touted the fact that their cars averaged 37.9 miles per gallon compared to the much lower average for American cars—13.5 miles per gallon.12 By the end of the decade, the number of Japanese cars sold in the United States had climbed from 4 million to 12 million.13 Meanwhile, German corporations introduced an attractive line of cars as well that were equally competitive. In 1975, they exported the Volkswagen Golf, a small hatchback style car that was also more fuel-efficient than most of the American competition. The United Auto Workers launched “Buy American” campaigns to persuade, or intimidate, consumers into spending their money only on American goods. The campaigns, laced with anti-Japanese sentiment, were not very effective. Appeals to patriotism were unable to trump superior products.

  The auto sector was not the only pillar of the old unionized economy to crumble. The New England textile industry, for instance, suffered crippling downturns as more and more companies closed their doors and moved south or abroad for cheaper labor. In March 1975, the Chicopee Manufacturing Company in Manchester, New Hampshire—one of the last standing survivors—finally closed its doors. “People don’t say very much when they’re leaving,” one of the factory workers noted, watching as his friends left jobs that generations of family members had enjoyed. “They’re very sad, and a lot of them cry. It’s a bad thing when there are no jobs to be had.” 14 In New Bedford, Massachusetts, another quintessential textile town, unemployment reached over 12 percent that same year. “We’re in terrible shape,” lamented Arnold Dublin, a local labor organizer, “absolutely horrendous.” 15

  Likewise, the steel industry was suffering. In 1977, Fortune published a report on the ravaged Rust Belt titled “Hard Times Come to Steeltown.” The piece profiled places like Youngstown, Ohio, and Conshohocken, Pennsylvania, to capture in dark detail what happened when “Steeltown, USA” saw the mills close down due to foreign competition. “Steeltown has been shaken literally to its foundations,” author Lee Smith noted. “Steeltown is in danger of losing its reason for being, much as the New England textile mills lost theirs when their mills began to move south. Steeltown seems to be left with only two alternatives: turn to some other useful enterprise, or die.” The images accompanying the piece provided stark illustrations of the steelworkers’ plight. In one, photographer Stephen Shore captured a thirty-two-year-old steelworker from Bethlehem Steel’s Lackawanna Mill, staring numbly at a bottle of beer in Curly’s Bar after being laid off from a job he’d had since high school. In another photo, a protesting ex-worker held up a sign that demanded “Don’t Write Off Youngstown. Fight For Every Job!” 16

  These difficult economic conditions generated high levels of insecurity and anxiety. The bleak outlook was captured by a new generation of filmmakers in the 1970s, who painted a dark portrait of the national mood. In movies such as Taxi Driver, Chinatown, and The Exorcist, social decline was prevalent. Martin Scorsese, director of the gritty drama Mean Streets (1973), argued that his films reflected the realities of urban decay and dysfunction. “It’s pretty tough stuff,” he insisted. “It’s not like some movie where everybody’s singing and dancing and drinking bottles of Chianti.” 17 The film’s dark portrayal of New Yorkers driven to desperate measures was repeatedly echoed in other major movies of the decade, such as Death Wish (1974), Dog Day Afternoon (1975), and Saturday Night Fever (1977). More broadly, films now regularly turned their attention to working-class subjects, highlighting their struggles to survive in an increasingly stagnant economy. Blue Collar (1978), starring Richard Pryor, Harvey Keitel, and Yaphet Kotto, covered the complaints Detroit autoworkers had with the leaders of their company and their union. Likewise, Norma Rae (1979) told the story of union organizing at a textile mill in North Carolina, resulting in an Oscar win for best actress for its lead Sally Field. In the same vein, the Oscar-winning documentary Harlan County U.S.A. (1976) chronicled a coal miners’ strike in rural Kentucky.

  Meanwhile, television shows increasingly shifted their attention from the happy, thriving suburban families that had dominated the programming of the 1950s and 1960s, to struggling working-class subjects. Norman Lear’s hit sitcom All in the Family (1971–1979) set the pace, with its portrayal of a blue-collar family in Queens, New York. Fresh from that success, Lear followed up with other programs that put the spotlight on a variety of working-class families: Sanford and Son (1972–1977), about an African American junk dealer in the Watts section of L.A.; One Day at a Time (1975–1984), about a divorced suburbanite who moved with her daughters to Indianapolis to look for work; and, most notably, Good Times (1974–1979), about a working-class African American family living in a housing project in Chicago. Similar sitcoms followed suit: Chico and the Man (1974–1978)
was set in a run-down garage in an East L.A. barrio, while Alice (1976–1985) centered on a widowed mom who found work at a roadside diner outside Phoenix, and Taxi (1978–1983) showcased the employees at a dingy cab company in New York. Though a few sitcoms in the 1970s showed paths of upward mobility—most notably in Lear’s hit All in the Family spinoff, The Jeffersons (1975–1985)—more often than not these shows portrayed families treading water. As always, the uneasy portrayals reflected the popular mood. According to public opinion polls, for the first time in a generation Americans doubted whether it was possible for individuals to move up the economic ladder.18 Indeed, according to a 1975 Gallup Poll, 87 percent of Americans expected the unemployment crisis to continue to get worse, not better.19

  As complaints about the economy grew louder, many business leaders began to worry that the very idea of “free enterprise” was under attack. In 1971, Lewis Powell, a corporate lawyer who would soon become a Supreme Court justice, sent an important memo to the head of the US Chamber of Commerce. “There always have been some who opposed the American system,” Powell wrote. But unlike in the past, when such dissent was confined to a few extremists, “We are not dealing with sporadic or isolated attacks. . . . Rather, the assault on the enterprise system is broadly based and consistently pursued.” Powell encouraged the Chamber and its corporate allies to respond to these complaints with an enormous public relations campaign that would promote the idea of free enterprise. The Chamber, for instance, sent “Economics for Young Americans” kits to 12,000 schools across the country, while Goodyear Tire and Rubber Company employed a traveling representative to visit local teachers and discuss the content of their curricula. Many universities responded by establishing business schools in the 1970s, and by the end of the decade, business had become the fastest-growing major for undergrads.20 Ironically, corporate leaders’ worries about the public image of big business came at a time when their private fortunes were soaring. As average after-tax earnings declined for most wage earners by 13 percent in the 1970s and 1980s, CEOs saw their after-tax compensation grow by almost 400 percent during these same decades, fueling a trend of growing inequality and a shrinking middle class that would characterize the coming decades in American life.21