I read this passage from Chapter 2 of The End of Policing by professor of sociology, Alex S. Vitale:
America’s changing economic realities have played a central role in this process as well. Christian Parenti has shown how the federal government crashed the economy in the 1970s to stem the rise of workers’ power, leaving millions out of work and creating a new, mostly African American permanent underclass largely excluded from the formal economy. [39] In response, government mobilized at all levels to manage this new “surplus population” through intensive policing and mass incarceration. The policing of poor and nonwhite communities became much more intense. As unemployment, poverty, and homelessness increased, government, police, and prosecutors worked together to criminalize huge swaths of the population aided by ideologies like the broken-windows theory and the superpredator myth.
[39] Christian Parenti, Lockdown America: Police and Prisons in the Age of Crisis (Brooklyn, NY: Verso Books, 2000).
I couldn't find any other information on the internet about this claim. I've ordered Lockdown America to find out more, but it will take a week to arrive.
I've not heard this claim, and from a brief look at Christian Parenti's CV, he hasn't published any articles on the economy of the 1970s: his focus appears to be on criminal justice and environmental justice, and based on the titles, it looks a lot like political advocacy of the US-centric sort. Which has its place in academia, but does tend to result in people not making cross-country comparisons (there is quite a bit of stuff I read thinking to myself "you know, the NZ government has done some pretty bad stuff too").
The US economy did struggle in the 1970s, but so did that of many other developed countries.Based on World Bank Data, for example, over 1970 to 1980 Canada had unemployment rates higher than the USA's every year except for 1974-1976, and Italy's unemployment rate was higher from 1970 to 1973 and then from 1978 to 1980 (note there's some missing data). US inflation rates (CPI) from 1976 to 1980 were lower than those of Australia or New Zealand. US GDP per capita rates were a bit lower than the OECD average over this period, but then the US did have one of the higher GDPs per capita at the start.
So what the US experienced in the 1970s in terms of economic outcomes was similar to that of many other OECD countries: rising inflation and rising unemployment, known as "stagflation". It affected a variety of countries with different policy regimes, including a number who had Labour governments for at least part of this period (e.g. New Zealand, Australia and the UK), which seem unlikely to have been acting on a desire to curb workers power.
Mainstream economic theories attribute this period's stagflation to a mishandling of monetary and fiscal policy and the political difficulties of acting to bring inflation down (which spiked unemployment up) once inflationary expectations had become entrenched. Some OECD countries did escape, Germany and Switzerland for example had much lower inflation rates than the USA (unfortunately the World Bank database doesn't have unemployment rates for Germany during this period), and those are two countries that adopted a hard-money standard (pdf).
Overall I'm fairly comfortable in saying that this theory should be treated with a high degree of skepticism.