Few headlines encapsulate a moment better than the New York Daily News’s front-page banner on October 30, 1975: “Ford to City: Drop Dead.”

In early 1974, fiscally struggling New York City tried to stay afloat by issuing new bonds. New York’s banks refused, demonstrating their power to withhold capital, and thereby setting off a crisis. With the city locked out of the bond market, it unsuccessfully turned to the federal government for help. Under banker supervision, New York then implemented wide-ranging austerity measures, after which President Gerald Ford and Treasury Secretary William Simon agreed to short, very restricted loans, with tight repayment strings. Simon further made clear that if the city gave in to any union demands for wage or benefit increases or failed to extract other savings, any further federal aid would be withheld. While the Daily News headline captured a city’s frustration at the Administration, the broader context was also clear: the unquestioned ascendance of finance capitalism over manufacturing and the democratic state.

Fast forward three decades. In early 2008, worried creditors stopped lending to investment house Bear Stearns and pulled their money out, leading to its collapse. The government then helped JPMorgan Chase acquire it on very favorable terms. In September, Lehman Brothers crashed. By October, the stock prices of Bank of America, Citigroup, Goldman Sachs, Merrill Lynch, Wells Fargo, and JPMorgan had plummeted, their balance sheets were in tatters, and the entire industry’s short-term outlook was grim. Unable to raise money in the private markets, they too went hat in hand to the federal government. But there was no “Bush to Banks: Drop Dead.” Quite the opposite. Treasury Secretary Henry Paulson, a former head of Goldman Sachs, invited them in to collect their cash. As Simon Johnson, a former IMF chief economist, tells us, “Not only did the government choose to rescue the financial system–a decision few would question–but it chose to do so by extending a blank check to the largest, most powerful banks in their moment of greatest need.” We had arrived at the total inverse, the culmination of a process begun in the 1970s.

To understand how we got here, we need to take a look again at the 1970s: not the cultural malaise ’70s, or the backlash ’70s, but the economic ’70s. The 1970s have been viewed through the lens of the 1960s, and thereby defined by the reverberations of its culture wars. But as Judith Stein argues, the 1970s can’t just be seen as the result of a shift in national mood or strictly as a cultural phenomenon. At the heart of Pivotal Decade is a question we should be asking now: “Why did the nation replace the assumptions that capital and labor should prosper together with an ethic claiming that the promotion of capital will eventually benefit labor–trading factories for finance–a very different way of running a nation that produced very different results?” The 1970s were the years in which American investment in the productivity of its enterprises dropped and political leaders and their advisers reoriented policies toward wealth rather than capital formation. And as the financial crash of 2008 and persisting Great Recession have made clear, creating wealth is not the same as creating prosperity.

Stein, a professor of history at City University of New York, offers a story of structural economic change, chronicling a shift in the balance of power that led Democrats as much as Republicans to displace employment-focused New Deal policy with a politics of fighting inflation focused on maximizing investment returns. The inflation and unemployment that began climbing in the early 1970s were not the result of mere cyclical downturns. Manufacturers like General Instrument, Bendix, Caterpillar Tractor, and RCA disinvested from factory towns in the United States and turned to Europe, Mexico, and East Asia; banks invested in shipyards, steel mills, and chemical plants from Brazil to Korea. While American productivity sank, Europe and Japan dramatically increased manufacturing, productivity, and exports. Keeping its market closed and charging high domestic prices, Japan began to sell goods to the American market below their domestic price. For geostrategic reasons, Presidents Nixon and Ford were willing to allow the United States to be the market of first and last resort for the rest of the world, propping up an overvalued dollar to make sure Americans would buy imports. Consequently, American exports became harder to sell, producing the country’s first trade deficit since the 1890s. Yet few seemed concerned about what these policies meant for those who produced goods in the United States–that is, for American workers.

We’ve heard the story of “deindustrialization” before. Where Stein tells us something new, and where her story intersects with our current predicament, is the role of labor in articulating economic policy. In our current anti-labor culture, we’ve inherited the notion that labor was stuck in a 1950s economy, unwilling to adapt to a new globalized order. This impression has come as much from liberals as from conservatives. But Stein shows us a surprising picture. From 1971 on, labor leaders urged Congress, presidents, and candidates to start thinking more seriously about the changing international economy, its impact on American manufacturing, and trade policy as an economic rather than a purely geostrategic matter. The AFL-CIO and industrial unions like the United Auto Workers offered an astute analysis of the changing situation. Later in the decade, even old-guard labor leaders like Lane Kirkland perceived that the long-run viability of American manufacturing called for more than Keynesian stimulus. The United States needed an industrial policy to shore up the nation’s industrial base, whether that meant modernizing older sectors or creating infrastructure and jobs in new ones–an imperative that only intensified with the end of cheap oil. Contrary to much anti-labor commentary, labor officials of the 1970s were repeatedly willing to discuss productivity, seeking, for example, policies that encouraged investment in new-generation steel plants. What they sought, however, were remedies that addressed declining productivity in non-punitive ways that didn’t foist the entire burden onto workers.

At various moments, whatever Americans were earning in the 1970s was quickly submerged under the waves of inflation of those years. Yet with conservative economists and bankers such as Alan Greenspan and William Simon trafficking in the politics of inflation, they channeled possible responses away from investment in productivity and workers and toward placating financial markets and reducing “inflationary expectations.” What generated such expectations? The welfare state, collective bargaining, and misguided ideas about full employment, they claimed. The scourge of inflation could be stopped only if American workers faced the discipline of the market.

If Republicans didn’t listen to labor, neither did Democrats. We see the very mechanics of dismantling Keynesianism in the late 1970s. Jimmy Carter further entrenched the new politics of inflation. It was none other than Paul Volcker, appointed Federal Reserve chairman in 1979, who opened a door to the new era of financial oligarchy. Volcker chose a strict monetarist policy to send a message to the international bankers who thought the United States had not done enough to fight inflation. The results in the real economy were disastrous: small business choked, consumers were hammered, factories closed, unemployment rose. Yet for all the downward pressure on wages, inflation still rose as food and oil prices kept going up. Financial and commodity speculators and big banks came through fine, especially with access to funds from abroad. What Carter and Volcker began, Reagan completed, with personal and corporate tax cuts, high interest rates, and more corporate giveaways that required little investment in return, and that ultimately led to the highest unemployment rates since the Great Depression.

As Stein writes: “Everybody knew that you could get rid of inflation by producing a steep recession. What was different after 1979 was that the people in power were willing to accept the price.” One of the central legacies of the New Deal and World War II was the belief that unemployment was a fundamental threat to a free society. Now, Republicans and New Democrats had shown they would tolerate high unemployment to bring inflation under control.

Once the Fed and Carter elevated the financial markets’ concern with inflation over the real economy, organized labor and its call for productivity investments were permanently sidelined. Unions also lost fights over labor-law reform and full-employment legislation, while finance capital won on one of Carter’s highest personal priorities: tax reform. The Revenue Act of 1978, argues Stein, gave money to rich individuals who did not invest in productive capacity. The act put reduction of the capital-gains tax at its center, diverting capital into financial instruments. It also created 401(k)s, which channeled employee compensation directly into the financial markets (and let employers off the hook for employee pensions). After 1978, the financial sector was well on its way to becoming one of the wealthiest and most politically powerful industries in American history. From 1980 to 2005, financial sector profits grew by 800 percent, compared to 250 percent in other sectors.

Thus we need to see that the recent crash and the ongoing recession were not solely the result of a housing bubble or any one particular financial instrument. Rather, they were the endpoint of the gradual distortion of our political economy that began with the rise of the financial sector in the 1970s.

This trajectory was certainly not inevitable. Cornell historian Jefferson Cowie, like Stein, aims to pry open the political and social struggle that led to the restructuring of class power. But he gets there by a different route and with very different understandings of historical process.

Both rightly see the period as one of direct class conflict. The opening chapter of Cowie’s Stayin’ Alive offers a panorama of worker discontent turned into collective rebellion: wildcat strikes, such as the Chevy Vega plant strike in Lordstown, Ohio; union democracy dissident movements in mining and steel; new organizing drives with the mass tactics of boycotts and strikes, from farm workers to Latina garment workers; and new forms of worker association, such as 9to5 (among office clerical workers), the Coalition of Black Trade Unionists, and the Coalition of Labor Union Women. Such acts revealed the diversity of the American working class in the 1970s, and showed groups of workers who directed militancy, frustration, and pride at management, union leadership, and corporations.

Nineteen seventy-four was the most strike-prone year since 1946. Indeed, many of these workers were in revolt against labor-management productivity deals of the 1950s and 1960s that had sped up production and reduced autonomy, and, often, safety, in return for higher wages. As American business became less competitive internationally, management drove workers harder; workers ceased to see any gains and fought back.

But Cowie’s opening chapter is the setup for the Great Decline: the end of class-based liberalism, the demise of a politically functional and socially cohesive “working-class identity,” and the restoration of the “pre-New Deal status quo.” The working-class insurgencies of the first part of the decade, Cowie argues, found no expression in national popular culture and failed to become a conscious part of class awareness and identity. By contrast, in the 1930s, the surge of the CIO and its synergy with the New Deal were characterized by a “unique degree of cultural unity in the Great Depression.” Why do so many Americans lack power and live in economic insecurity today? Because of the “psychic meltdown” of the white, male, blue-collar identity, says Cowie.

There are compelling political insights in Stayin’ Alive. The Democrats who emerged around George McGovern’s campaign and then entered Congress in 1974 and 1976 may have been, as Cowie contends, suburban, middle-class-focused, and more interested in public-interest or consumer-lobbying groups than older constituencies like organized labor. But AFL-CIO leader George Meany and industrial unions like the United Steelworkers gave them little reason to act otherwise. Cowie shows in great detail the AFL-CIO leadership at its most cynical, insular, and self-defeating in the early 1970s, actively working in destructive ways, from spewing invective at new Democratic participants (women, gays, and blacks) to collaborating with Richard Nixon and Chuck Colson, who in turn saw their opportunity to implement a “blue-collar strategy” that would draw white ethnics into the Republican Party through a cultural redefinition of workers’ interests. The strategy aimed to break apart the old Roosevelt coalition; Meany played right into it.

Cowie, though, is less interested in the labor movement institutionally–there is little here about changes in the social composition of unions or organizing strategies–than in class as an individual and collective social identity. The heart of his argument is a cultural analysis of music, film, television, and social-realist journalism. He offers wonderful and probing interpretations of familiar 1970s classics like Five Easy Pieces, Saturday Night Fever, Dog Day Afternoon, and Rocky, and those generally less well known, like Joe and Blue Collar, in terms of how they depict a social world structured by class and the identity and choices of working-class characters. There are also engaging discussions of country music, country rock, plus a smattering of disco, punk, and late-1970s rock, demonstrating his thesis of how class identity was transformed from a material to a cultural concept.

While these are often enjoyable and absorbing readings, Cowie’s idea of culture is exclusively male. He ignores cultural works by women, and barely touches on female characters (unless they’re attached to “iconic” male characters like Archie Bunker). He sets up a tautology by arguing that since he’s writing about class, he’s focusing on male artists and characters because popular culture sees class as male. Attention is lavished on characters like Travis Bickle in Taxi Driver; Tony Manero, “the definitive seventies icon,” in Saturday Night Fever; even Dirty Harry. Country music means Merle Haggard, Roy Acuff, Willie Nelson; country rock is Gram Parsons, Neil Young, Lynyrd Skynyrd, Robbie Robertson, and John Fogerty. Punk is the Ramones, and post-industrial art rock is Devo. And, of course, the capstone of it all is Bruce Springsteen, again described as “iconic.”

Nowhere is there discussion of, just to name one female, Loretta Lynn, who expressed class in conflicted ways–sometimes defiant, sometimes nostalgic, and certainly gendered. What did it mean when her many fans listened to tunes like “One’s On the Way” and “The Pill”? There is nothing on Patti Smith, Deborah Harry, Chrissie Hynde, or Joan Jett, who all came from distinctly working-class backgrounds. Black female recording artists? Forget about it–Aretha Franklin or Tina Turner couldn’t possibly have been representing any kind of class perspective. It’s not clear why Travis Bickle is iconic but Mabel Longhetti from John Cassavetes’s 1974 film A Woman Under the Influence is not. And although Barbara Kopple’s Harlan County USA won an Oscar, that landmark documentary is rendered invisible by Cowie.

By not dealing with women–either as musicians, writers, artists, or characters–Cowie cuts off his cultural story from social shifts that would eventually make the working class majority female. It’s hard to see how the 1970s brought “the last days of the working class,” when as historian Dorothy Sue Cobble says, a vast “new army of pink-collar clericals, salesclerks, cashiers, typists, and waitresses” plus maids, janitors, and laundry workers mushroomed at the same moment. Women’s collective organizing, briefly mentioned here, was in fact on the rise throughout the 1970s. During the decade, the health-care sector became one of the largest employers of women, with millions of new jobs in hospitals, nursing homes, community health centers, home health agencies, and non-profits. African Americans, women, and Latinos flooded into unions like the American Federation of State, County, and Municipal Employees (AFSCME), the Service Employees International Union (SEIU), and the Hotel Employees & Restaurant Employees union. The American Federation of Teachers (AFT) organized not just middle-class teachers but classroom aides, bus drivers, and other school personnel. The predominantly female, immigrant, and African-American working class and labor movement of today has its roots in the 1970s.

These movements could have grown more rapidly had labor-law reform passed in the late 1970s, which would have made it easier to win union organizing drives, collective bargaining rights, and actual contracts. Cowie argues that the AFL-CIO hoped reform would shore up labor’s Southern flank. Stein notes that Carter and the New Democrats didn’t grasp that it would help the party build up a Southern political base. Reform’s failure meant a lost chance to organize the new working class in the service sector more extensively. Three decades later, even though Barack Obama’s election owed much to this new, broadly defined working class, he and his advisers still don’t get it. They continue to believe that there’s not enough of a constituency to put up a real fight for the Employee Free Choice Act, instead of recognizing that if they pass it and open the way to new unionization, they would build the mobilized constituency for a broader political and economic agenda.

So why did the Democrats become so unresponsive to labor, workers, and industrial production? Did labor lose its economic and political power because the white, working-class male became so devalued culturally? Cowie can offer his declension narrative rooted in pop culture representations because he downplays the sectors where the union movement was growing. But it doesn’t enable him to deal fully with the politics. For expanding unions like SEIU, AFSCME, and AFT, collective bargaining was linked to public budgets. How much could they get the Democrats to keep listening to them as public budgets became more constrained for both political and economic reasons during the 1970s and 1980s?

Here we have to come back to Stein’s structural story. First, Democratic politicians put themselves at the mercy of the bond market and bet that they could restrain the social welfare budget and labor demands. By the late 1970s, Democrats ended up pitting their key constituent groups–middle-class homeowners and public workers–against each other. Second, Democrats’ unwillingness to use interventionist microeconomic policy to make private-sector industrial capacity stronger meant the further erosion of a strong, long-term tax base–thus leading to greater borrowing from the financial markets, and finally driving cities and counties to gamble on new high-risk derivatives, collateralized debt obligations, and credit default swaps. As strong as service-sector and public-sector bargaining became over the last quarter of the twentieth century, its Achilles’ heel was always the strained public budget. And after all the havoc of the last two years, it’s still vulnerable to the bankers’ attacks.

The question that remains is what would actually tip the balance of power again in labor’s favor. To answer this question, both Stein’s structural approach and Cowie’s cultural one are essential. Workers have been legally disempowered in myriad ways and structurally blocked from acting collectively. Yet rethinking the meaning of work and democracy in the workplace is hard to do when there’s so little of it in the culture around us. As Cowie eloquently writes, workers’ prospects have been profoundly affected by “the shrinking outlets” and “diminished civic space” where issues of labor and collective action can be discussed. Reimagining economic security and national prosperity won’t come just through labor spokesmen at the top. We need new ways of seeing individual experience in political and social terms, and promoting action where those connections are most tangible.