1973 was the first oil crisis. Oil prices went up by 400% and there was a huge spike in inflation.(There's a book waiting to be written about the curiously close relationships between the Saudi and the US oil establishments, and the Saudi influence on US foreign policy since the 70s.)

The oil crisis gave the Right a convenient pretext to blame wage increases for inflation.

This became a standard element of economic orthodoxy, and ever since then increases in wages and salaries - which were a driver of post-war prosperity - have been labelled "inflationary', even though inflation is primarily caused by other factors.[1]

By a remarkable and unexpected coincidence, this was the moment when labour share of GDP and middle class prosperity both started to decline. See e.g.

https://en.wikipedia.org/wiki/Wage_share#/media/File:Adjuste...

[1] The Bank of England always plays on this. About a year ago there was talk of increasing interest rates to "head off inflationary pressure" just in case wages might have started rising in the future. Meanwhile asset inflation in the form of rising property prices is ignored, and more obvious drivers of increasing costs, like consumer energy prices, are downplayed.

No one knows why 1973 was the beginning of a long era of economic sluggishness. Oil prices crashed in the 1980s and again in 1990s and again after 2008, but none of these crashes restarted the post-war boom. Adjusting for inflation, oil achieved new lows in the 1990s, and again in recent years, but the very low prices that we see are not enough to bring back the years when the economy grew at 4% on a regular basis. Nothing has revived productivity growth to the 3% a year seen for most of the era 1945-1973. If the spike in oil prices in 1973 was enough to start an era of sluggish growth, then why didn't growth restart once the oil prices collapsed? There are many theories about this, and many brilliant people have written long books trying to explain the events of the last 40 years, but no one knows for sure, and there is nothing like a consensus on the issue, which is why I wrote "No one really knows why."

Thanks. Just bought the Great Stagnation off of your comment.

Consider reading this literature review from an MIT professor of 21 different texts that tackle the Great Recession and its causes if you're looking for more info on the subject:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1949908

Lo thinks that the Reinhart/Rogoff This Time is Different is among the best-researched texts with the most quantitative support and analysis while still maintaining its readability.