The Modern Dance

Cliff Burnstein of Mercury Records found the Street Waves single in a record store late in 1976, told the band Mercury was not the right label, and then said he had put together a label of his own at Mercury, Blank. He financed the sessions. Most of the album was recorded and mixed by Ken Hamann at Suma in November 1977. Non-Alignment Pact was recorded in January 1977 and Street Waves in October 1976, both at Cleveland Recording Company. Release was a month later than planned because the label had to change its name from Dip Records, which an evangelist already used.

A tour with the Suicide Commandos was due to start on 18 February 1978. Krauss left the band for the first of three times, and Anton Fier began rehearsing with them, but two weeks later Krauss asked to come back and Fier stepped aside.

The songs came from several places. Life Stinks was written by Peter Laughner and had been played by Rocket From the Tombs. Chinese Radiation and the cover were inspired by a Cleveland story, probably a myth, that the city had the highest population of Maoists outside China, and by fallout from Chinese bomb tests that came down on it. The title track uses field recordings Ravenstine made in downtown Cleveland. Ravenstine said Sentimental Journey was his take on the 1945 Doris Day song, with the sound of breaking glass bottles as a harsh, angry contrast to the suburban life the original evokes.

Thomas later said that, unlike the albums after it, this one was a set of standalone songs recorded over time rather than a concept. Jon Savage called it "a brilliant debut" and Ian Birch of Melody Maker called it "a devastating debut". Robert Christgau wrote that "the highs are worth it". David Stubbs gave it five stars in Uncut in 2006. It sold poorly. NME ranked it 11th among the albums of 1978, Spin put it 14th in its 50 Most Essential Punk Records, Fact put it 31st among the best albums of the 1970s, and it appears in the book 1001 Albums You Must Hear Before You Die. Fire Records reissued it in 2015.