vestors and helped stimulate an inflow of interna-
tional capital. Inflation in the United States lowered
not only the internal value of the dollar but also its
external value—its foreign-exchange value. The in-
flation of the 1970’s, for instance, caused the inter-
national value of the dollar to fall by one-eighth be-
tween 1973 and 1980. The slowing of inflation and
the surging inflow of international capital helped
raise the dollar’s value internationally by 40 percent
by 1985, but it then receded to more normal levels.
The higher value of the dollar made imported goods
cheaper, helping bring down the inflation rate but
contributing to a large deficit in the U.S. balance of
international payments.
Impact Anti-inflation sentiment helped strengthen
support for deregulation of significant industries,
begun by President Jimmy Carter and continued
by President Reagan. The successful reduction of in-
flation in the 1980’s helped create goodwill for the
Republican Party, assisting their victories in the pres-
idential elections of 1984 and 1988. The inflation-
reduction experience validated the “monetarist” per-
spective, according to which inflation was viewed as
a response to excessive money growth and high in-
terest rates were perceived as a response to expecta-
tions of high inflation. In this view, monetary policy
exercised by the Federal Reserve was seen as the
principal instrument of government management
of aggregate demand. These lessons became part of
the intellectual capital of Alan Greenspan, who took
over as head of the Federal Reserve in August, 1987.
Under his leadership, the U.S. macroeconomy en-
joyed still lower inflation and interest rates, com-
bined with high employment, during the 1990’s.
Further Reading
Mishkin, Frederick S.The Economics of Money, Bank-
ing, and Financial Markets. 7th ed. New York:
Pearson/Addison Wesley, 2004. This widely used
college text analyzes the relative roles of OPEC
and the Fed in the inflation of 1973 to 1983; also
provides analysis of interest rates and foreign-
exchange rates.
Paul B. Trescott
See also Business and the economy in the United
States; Income and wages in the United States; Rea-
ganomics; Recessions.
Infomercials
Definition Television commercials that mimic the
length and format of conventional programming
The emergence of infomercials in the 1980’s changed the
face of television advertising and muddled distinctions be-
tween commercial and noncommercial programming.
The origins of the infomercial can be traced to the
two-to-four-minute commercials of entrepreneur
Ron Popeil that first aired in the 1950’s and similar
“long-form” advertisements for the Ginsu Knife in
the 1970’s. Federal restrictions upon the time that
television stations could devote to advertising pro-
hibited more extensive, program-length advertise-
ments until 1984, when the administration of U.S.
president Ronald Reagan relaxed these restrictions
as part of a sweeping campaign to deregulate the
broadcast industry. Later that year, the first full-
length infomercial aired in the form of a sixty-minute
advertisement for dietary supplements produced by
the Herbalife company. Infomercials rapidly became
popular as an alternative to conventional program-
ming for broadcast and cable television stations seek-
ing to boost advertising revenue in response to bud-
get constraints, increased competition, and a growth
in demand for twenty-four-hour programming.
Infomercials came over time to follow a standard
format. They were typically thirty-minute broadcasts
designed to mimic news programs, talk shows, or pub-
lic service announcements. These programs, which
usually aired late at night and at other times when air-
time was inexpensive, showcased a specific product or
group of products that was often demonstrated in a
dramatic manner during the broadcast. Members of a
paid “audience” frequently participated in these dem-
onstrations or in staged question-and-answer sessions
about the product. Products featured on infomercials
included tools or appliances, cleaning supplies, and
sources of information about personal fitness, wealth
creation, or dieting. These items were often touted as
“miracle” products, capable of dramatically improving
the lives of consumers. Some products advertised on
infomercials were available for purchase at conven-
tional retail stores, but many could be purchased only
through the contact information (usually a toll-free
telephone number) provided during the broadcast.
Because the formats of infomercials often mim-
icked those of news and public affairs programming,
and because the shows often aired at times previously516 Infomercials The Eighties in America