{"id":332179,"date":"2026-10-19T07:00:09","date_gmt":"2026-10-19T07:00:09","guid":{"rendered":"https:\/\/www.thetruthseeker.co.uk\/?p=332179"},"modified":"2026-10-19T07:24:38","modified_gmt":"2026-10-19T07:24:38","slug":"1971-a-pivotal-year-and-the-true-turning-point-usa","status":"publish","type":"post","link":"https:\/\/www.thetruthseeker.co.uk\/?p=332179","title":{"rendered":"1971 \u2013 a pivotal year and the true \u201cTurning Point USA\u201d"},"content":{"rendered":"

Hua Bin \u2013 Hua\u2019s Substack Oct 18, 2026<\/strong><\/h1>\n

1971 was a watershed year that split US history into before <\/em>and after<\/em>.<\/p>\n

Two seminal events happened in the year, reinforcing each other and redefining capitalism<\/em> and democracy<\/em> in the US.<\/p>\n

Most people have heard of the famous \u201cNixon Shock\u201d in 1971, when Richard Nixon announced on August 15 that the US dollar would be unpegged from gold \u201ctemporarily\u201d.<\/p>\n

The \u201ctemporary\u201d delink, which was a breach of US sovereign promise to the rest of the world, became permanent and shattered the post-war global economic order.<\/p>\n

Few are aware of an equally momentous event that happened 8 days later.<\/p>\n

On August 23, tobacco lawyer Lewis Powell submitted his confidential \u201cPowell Memo\u201d to the US Chamber of Commerce, outlining the blueprint for the corporate takeover of American institutions.<\/p>\n

This eight-day window represents the dual collapse of the old system.<\/p>\n

As Nixon was fundamentally changing the nature of global money, Powell was finalizing a long-term political manifesto to ensure the capitalist class would control whatever system took its place.<\/p>\n

The two events in August 1971 led to the financialization of the US economy, out of control national debt, deindustrialization, and the rise of corporate rule over every aspect of US society.<\/p>\n

Nixon Shock<\/strong><\/h2>\n

Signed in 1944 before the end of WW2, Bretton Woods Agreement made the US dollar the standard unit of exchange for international business.<\/p>\n

The US promised to keep the dollar equal to 1\/35th of an ounce of gold.<\/p>\n

To finance the Vietnam War and LBJ\u2019s Great Society<\/em> social programs, the US printed far more paper dollars than actual gold in its vault.<\/p>\n

In 1971, the US broke its promise to exchange the dollar with gold.<\/p>\n

The delinking marked the end of the Bretton Woods Agreement and saw the rise of fiat currency, backed by nothing but government printing press.<\/p>\n

Severing the dollar from gold fundamentally changed monetary policy, leading to increased debt, inflation, and wealth concentration.<\/p>\n

In 1971, a new house cost two and a half years annual income of the average American household. Now, it costs more than 10 times the average yearly income.<\/p>\n

Rent cost about 1\/6th of the monthly income in 1971 and today that\u2019s roughly 40%.<\/p>\n

A car cost 35% annual income in the 70s on average and now it costs 60% (median income at $89,000 and average new car price at $49,855).<\/p>\n

College education in the early 70s, when it actually mattered to say you have a college degree to employers, cost $2,600 a year in tuition at a prestigious school such as Harvard. It costs $63,000 now.<\/p>\n

Apart from inflation, from 1971 to 2025 labor productivity increased 100% to 110% while real wage increase for the typical worker was only between 30% and 34%, according to the Bureau of Labor Statistics.<\/p>\n

US national debt went from $398 billion in 1971 to $40.34 trillion today, a staggering 10,000%+ increase.<\/p>\n

The ballooning debt has been managed by artificial expansion of the money supply and low interest rates by the US central bank. In layman\u2019s term, the printing of more paper money.<\/p>\n

This dynamic, in effect, functions as a form of socialized wealth redistribution.<\/p>\n

National debt is a cost to everyone in society while interest payments go to creditors (i.e. the rich).<\/p>\n

As printing money is far easier than making money through labor and industry, deindustrialization and inflation inevitably follow on its heel.<\/p>\n

The US can simply print pieces of green paper to buy goods and services from abroad.<\/p>\n

As a result, its economy has shifted from producing goods and services to prioritizing financial speculation and debt-based assets.<\/p>\n

Such financialization of the economy benefits those with capital while making it harder for the average person to save or get ahead.<\/p>\n

The result is higher cost of living, systemic decay of productive capacity, and rising economic inequality.<\/p>\n

As the Nixon Shock<\/em> set the US on the path of financialization, the Powell Memo<\/em>, essentially a \u201cCapitalist Manifesto\u201d, established the blueprint for the corporate takeover of the American society.<\/p>\n

Powell Memo<\/strong><\/h2>\n

Lewis Powell was a tobacco lawyer for Philip Morris. He was commissioned to write a confidential document for the US Chamber of Commerce to regain and expand corporate power.<\/p>\n

Big business in the country was threatened by the progressive wave of pro-labor and pro-consumer movements in the 1960s.<\/p>\n

The document, titled \u201cAttack on American Free Enterprise System\u201d<\/em><\/strong> became known as the \u201cPowell Memo\u201d.<\/p>\n

It served as a comprehensive blueprint for the modern, highly organized corporate lobbying and political action movement in the US.<\/p>\n

Powell argued that the American free enterprise system was under systematic assault from universities, the media, intellectuals, and consumer advocates like Ralph Nader.<\/p>\n

He warned that business leaders were passively allowing their own destruction by failing to fight back against regulations and anti-business sentiment.<\/p>\n

Powell called for aggressive corporate political mobilization, laying the ideological groundwork for the modern conservative legal movement and corporate free-speech rights.<\/p>\n

Powell recommended a set of comprehensive action plans to unleash corporate power and acquire unbridled political control, which include:<\/p>\n

– Collective political action<\/em>: Powell urged corporations to stop acting independently and instead combine their financial resources to change public opinion and policy.<\/p>\n

– Campus intervention<\/em>: He advocated buying textbook space, funding pro-market professors, and establishing business-friendly narratives to counter perceived liberal bias in universities.<\/p>\n

– Media dominance<\/em>: The memo called for leveraging corporate advertising budget to demand pro-business coverage on print media and TV.<\/p>\n

– Judicial action<\/em>: Powell further advised Big Business to use the courts as a weapon, filing lawsuits to overturn regulations and advance corporate interests.<\/p>\n

Furthermore, Powell suggested developing a judiciary pipeline such as the Federalist Society to overtly control the courts.<\/p>\n

Powell\u2019s recommendations were fully endorsed by the business community. The roadmap has been systemically executed ever since.<\/p>\n

The Powell Memo permanently altered the relationship between American business and politics. It effectively marked the reversal of the prevailing FDR New Deal<\/em> consensus.<\/p>\n

A side note, Powell was appointed to the Supreme Court by Nixon two months after the memo. He served as a Supreme Court Justice for over 15 years.<\/p>\n

Long-term impact of Powell Memo<\/em><\/strong><\/h2>\n

The memo directly inspired the creation and funding of influential conservative think tanks, including the Heritage Foundation and the Cato Institute.<\/p>\n

Business influence started to permeate education, media, and popular culture.<\/p>\n

Shareholder values took priority over worker benefits and reversed the progressive distribution of income since New Deal.<\/p>\n

The Powell Memo led to a massive surge in corporate lobbying firms and the establishment of groups like the Business Roundtable to influence legislation.<\/p>\n

The cumulative impact culminated in the 2010 Citizens United<\/em> ruling which bestowed corporate entities First Amendment rights, essentially legalizing money in politics and decriminalizing corruption.<\/p>\n

The rise of Reaganomics in the 1980s further solidified the pro-business trend heralded by the Powell Memo.<\/p>\n

Privatization, deregulation, free-market fundamentalism, and erosion of labor replaced the economic policies of the New Deal since the 1930s.<\/p>\n

Lewis Powell would be proud to see the covert takeover of political power over the years. The rise of unaccountable corporate power has positioned the interests of capital <\/em>over the state and the public 50 years later.<\/p>\n

How the Nixon Shock and Powell Memo have shaped capitalism <\/em>and democracy <\/em>in the US<\/strong><\/h2>\n

The alignment of the Powell Memo and the Nixon Shock in 1971 was the structural launchpad for modern US financialization, deindustrialization, and the reversal of the New Deal.<\/p>\n

By simultaneously unshackling money from physical constraints and organizing corporate political power, these twin events fundamentally rewired how the American economy generates wealth.<\/p>\n

Money as a commodity<\/em><\/strong><\/h3>\n

Before 1971, money primarily served to facilitate the trade of physical goods.<\/p>\n

Once the dollar was delinked from gold and floated freely, money itself became a highly speculative commodity, giving birth to massive global currency, futures, and derivatives markets.<\/p>\n

Karl Marx foresaw this in his Das Kapital<\/em> in late 19th<\/sup> century and called the cycle of \u201cmoney produces more money\u201d (M-M^) the \u201cfictitious capital\u201d.<\/p>\n

Since 1971, the US economy started to shift from a manufacturing economy to a financial one.<\/p>\n

Wall Street over Main Street<\/em><\/strong><\/h3>\n

Under the gold standard, banks grew by lending to domestic businesses that built physical things.<\/p>\n

Post-1971, growth shifted to financial engineering, debt creation, and asset speculation, making the financial sector vastly more profitable than manufacturing.<\/p>\n

The rise of predatory finance sector also raised the Jewish usury class to prominence in US economic and political life with lasting damage to this day.<\/p>\n

Explosion of debt<\/em><\/strong><\/h3>\n

Without gold constraints, the Federal Reserve gained the power to rapidly expand the money supply.<\/p>\n

This fueled a permanent reliance on cheap credit and skyrocketing corporate, sovereign, and consumer debt to sustain economic growth.<\/p>\n

Debt has become the main tool for the capitalist class to extract wealth from the working class.<\/p>\n

Dismantling the post-war New Deal consensus<\/em><\/strong><\/h3>\n

The \u201cNew Deal Order\u201d, put in place in the 1930s to rectify the excesses of unbridled capitalism, relied on a balance of power between strong labor unions, government regulation, and corporate management.<\/p>\n

Powell\u2019s memo weaponized corporate capital to systematically break this tripartite consensus.<\/p>\n

The organized corporate lobbying network envisioned by Powell helped popularize neoliberal economic doctrines, particularly Milton Friedman\u2019s view that a corporation\u2019s only<\/em> duty is to maximize profits for shareholders, rather than supporting workers or communities.<\/p>\n

Milton Friedman was a Jew economics professor at the University of Chicago who was the grand champion of the primacy of capital over everything else. See my critique of the University of Chicago here. https:\/\/huabinoliver.substack.com\/p\/has-the-university-of-chicago-ruined?utm_source=publication-search<\/a><\/p>\n

Corporate-backed think tanks and lobbying groups successfully pushed for anti-union legislation and judicial appointments.<\/p>\n

As unions cratered, the historical link between rising worker productivity and rising wages was severed, leading to the wealth inequality seen today.<\/p>\n

Deindustrialization became an inevitable choice<\/em><\/strong><\/h3>\n

The newly deregulated financial system, combined with free-trade policies championed by corporate lobbies, penalized companies that kept expensive American manufacturing jobs.<\/p>\n

Wall Street pressured firms to outsource factories to regions with cheaper labor and fewer regulations to maximize quarterly earnings.<\/p>\n

Because the floating dollar remained the world\u2019s primary reserve currency, global demand kept the dollar artificially strong.<\/p>\n

While this made foreign consumer imports cheap for Americans, it made US-manufactured exports prohibitively expensive abroad, systematically hollowing out the Rust Belt.<\/p>\n

Financialization altered corporate behavior. Instead of reinvesting profits into domestic factories, equipment, or worker training, companies increasingly used their cash to buy back their own stock, artificially boosting share prices to enrich executives and Wall Street investors.<\/p>\n

The 1971 Legacy<\/strong><\/h2>\n

Together, the Nixon Shock and the Powell Memo shifted the US from a production-based economy<\/em> (focused on manufacturing goods, raising wages, and heavy regulation) to a financial-speculation economy<\/em> (focused on asset bubbles, capital market, and deregulation).<\/p>\n

Because money was no longer tied to gold, capital could grow exponentially with no constraints.<\/p>\n

Capital moves globally at the speed of a keystroke to chase highest return anywhere in the world.<\/p>\n

The corporate lobbies organized by the Powell Memo successfully decoupled wages from output.<\/p>\n

The wealth generated by American worker productivity no longer went into paychecks; instead, it was funneled directly into corporate profits, Wall Street asset bubbles, and skyrocketing executive bonuses.<\/p>\n

The contemporary crises of inflation, deindustrialization, and a shrinking middle class are the direct results of this 1971 pivot.<\/p>\n

Looking back over half a century later, 1971 was the true turning point USA.<\/p>\n

 <\/p>\n

Upgrade to paid<\/strong><\/span><\/a><\/p>\n

 <\/p>\n

Source\u00a0<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Two events in August 1971 led to the out of control US national debt, deindustrialization, and the rise of corporate rule over every aspect of US society. Hua Bin explains<\/p>\n","protected":false},"author":39262,"featured_media":332181,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[77],"tags":[],"class_list":["post-332179","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-feature-posts"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/332179","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/users\/39262"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=332179"}],"version-history":[{"count":1,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/332179\/revisions"}],"predecessor-version":[{"id":332180,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/332179\/revisions\/332180"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=\/wp\/v2\/media\/332181"}],"wp:attachment":[{"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=332179"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=332179"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thetruthseeker.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=332179"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}