Dr. Judith Stein points out in Pivotal Decade: The United States Traded Factories for Finance in The Seventies over leveraging-debt, America abandoned rapid growth through virtuous cycle shared-prosperity of upward mobility and improved productivity for slow growth limited-prosperity. In the decade of the ’70’s America experienced double-digit inflation with a New York City subway token going from 20¢ in 1970 to 40¢ by 1980. Some other nations experienced triple-digit inflation. For instance, in 1974 Alan Greenspan joined President Gerald R. Ford’s Council of Economic Advisors. Alan Greenspan remembers explaining to President Ford, the suitability of Mortgage-Backed Securities moving risk from Banks into Capital Markets.                                                                                                      Where upon President Ford asked ‘is this good for the average American?’

Double-digit inflation placed pressure on Banks seeking short-term profits at the expense of long-term gains to search for ways to circumvent usury laws. Banks moved entire credit card divisions to States that had no usury laws. Savings and Loans sought deregulation and were eventually able to invest in High-Yield/Junk Bonds. The world of 1970’s experienced two OPEC oil embargoes, the Three-mile Island nuclear disaster, the rise of Wahhabism, The Iranian Revolution, The Soviet Invasion of Afghanistan and the United States Congress authorized loan guarantees for the Chrysler Motor Company.

In the early 1980’s The Federal Reserve under Paul Volcker played inflation, but executive stock based compensation became popular distorting value creation. For instance, based on Lee Iacocca’s success in repaying Chrysler loan guarantees earl in order to attempt to better align shareholder and executive interests stock based compensation was introduced. However, in his 1985 Berkshire Hathaway letter Warren Buffet warned of possible stock price manipulation at the expense of the long-term gain of the corporation. In        Fixing The Game Roger Martin points out the dark side of market forces in the fantasy expectation game in not creating real sustainable value.

By 1989, The Resolution Trust Corporation saw the elimination of the entire Savings and Loan Industry. The Best Way To Rob A Bank Is To Own One: How Corporate Executives and Politicians Looted The Savings & Loan Industry  William Black regulation encourages honest growth. In other words, there have been consequences to the 1970’s pivotal decade.