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American Public Policy

by: Russel Torp

American Public Policy POLS 2302

Russel Torp
GPA 3.62

Lawrence Clark Mayer

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Lawrence Clark Mayer
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This 26 page Class Notes was uploaded by Russel Torp on Thursday October 22, 2015. The Class Notes belongs to POLS 2302 at Texas Tech University taught by Lawrence Clark Mayer in Fall. Since its upload, it has received 21 views. For similar materials see /class/226522/pols-2302-texas-tech-university in Political Science at Texas Tech University.

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Date Created: 10/22/15
American Public Policy 83010 Introduction to Public Policy 0 Definition a set of governmental actions including but not limited to legislation and defined in terms ofa common purpose Public policy has an evergrowing impact on our lives Policy analysis involves description of policy and alternatives the issues that give rise to policies 0 People on the right ideologically committed to limited gov allow the growth of the public sector People on the left generally have more faith in the ability and duty of gov to provide for basic needs and to seek social justice 0 Technology entails functional specialization and increasing interdependence Reasons for the Failure of Public Policies to Achieve Their Goals 9110 0 A lack of agreement as to what the issues are Are we really having a healthcare crisis Is home ownership an entitlement 0 May not be an agreeable solution Peace settlement in Palestine may not be reached because the minimal Arab position is the extinction of the Jewish state Arabs have rejected 5 formal offers ofa state on up to 97 of the disputed territory Their grievance cannot be accommodated by negotiation o The more compleX and more steps included in a policy the more likely any part ofit may fail causing the end results to fail Models ofPolicy Making Process 0 Democratic Model public spontaneously forms their demands and interests Policy makers take their cue from these public demands and make their policy accordingly or risk being voted out of office It assumes the public can define the issues and understand the alternative choices on these issues 0 Elite Model holds that the public neither is aware of the issues or the alternative choices ofpolicy Public opinion is formed by opinion leaders who come from the same background and generate the same interests to protect White mostly Protestant males who come from same regions northeast or west coast go to the same elite schools 0 The 3ml model holds that policy is not make by a single coherent elite but by an increasingly numerous set of competing elites To counter the previous domination by business ad professionals we now have 9810 consumer groups powerful labor unions There are now a number of organizations representing racial minorities In this model policy is an impersonal outcome of the bargaining process 0 Pluralism In this third model no one group gets all of what they want They must compromise their demands with competing groups The system made up of multiple independent competing elites MICE is called pluralism Pluralism is a system in which it is ok to articulate different interests and to form groups to promote those interests There is no restriction on what interests may be promoted o Populism movement compromised of the nonelite segments of society frequently less formally educated They stress identity with the ordinary folk and as such are suspicious of outgroups who aren t part of the folk eg blacks Iews Muslims etc They distrust major institutions The tea party movement is populist o The classic concept of equality is equality under law This means treating people as individuals rather than as members of social groups and based upon behavior rather than who they are When individuals are so categorized government is under a heavy burden ofproof to show there is a compelling public purpose in doing so 0 Some categorizations are valid for some purposes but not others We reject the idea that women are less able to perform tasks when the main criterion is intelligence but may accept the claim that women are less able to fill certain combat roles where strength is an important factor 0 Even that assumption has been eroded as women now assume most combat roles o Equality under law is sometimes identified with equality of opportunity the ability of each person to realize their human potential Anatole France quotThe laws of Paris are equal in their majesty they forbid rich and poor alike from sleeping under the bridges or begging in the streets 0 Equal laws have unequal effects on unequal persons 0 Violations of equality under law not limited to African Americans Prop ortional Equality o Allocation of values now done on basis of group membership rather than individual performance hence group membership race ethnicity religion etc taken into account in selecting people for valued roles o This logically con icts with the premise of equality under the law 0 Proportional equality implies group gets approx same percent of social values eg income valued professional roles admission to prestigious schools various other honors as its percentage of the population 0 The groups identified to be allocated social values because they are underrepresented are called target groups o The set ofpolicies designed to achieve proportional equality are known as affirmative action Affirmative Action Applications 91010 0 Quotas require that a fixed percentage of Target group members be selected regardless ofwhether target group members have comparable qualifications for the role They are selected from a separate applicant pool Zerosum society means target group people displace someone who would have been selected 0 Racial or group preference Target group members not necessarily selected There is one applicant pool Race should be taken into account as one of several factors 0 Question and modify selection criteria Question whether they are job or performance relevant or if they are attributes of the dominant group eg white middleclass mainline Protestant etc Why is English given preference over Spanish Post modernism argues that attributes of Western Civilization are not objectively better but are quotsocial constructs Multiculturalism Black English or Ebonics Brooklyn College Experiment 0 Programs designed to help target group people more effectively compete such as Head Start EEOC etc Arguments for Affirmative Action 91310 0 Persisting effects ofprevious discrimination Vicious circle ofpoverty o Compensatory justice Whites as a group benefited from not having to compete with suppressed Blacks Need for diversity in student body or work force Question relevance of selection standards Standardized tests are culturally biased Need for target group role models Need to have target group members in power structure to protect target group interests Sociological as opposed to psychological representation Prevent alienation of target groups Upper social mobility is now much harder than it was for 19th and early 20th century European immigrants Lack of entrylevel jobs and it is harder for racial and ethnic minorities to assimilate Arguments Against Affirmative Action 0 It treats people on the basis of group identity and therefore con icts with equality under the law 0 It reintroduces the legitimacy ofusing race and ethnicity in public policy undoing a long struggle to remove the use of race Test moved to Wed 92210 Other groups esp Asians have suffered serious discrimination but do not benefit because they have been successful The policy penalizes success Asians and Jews have themselves been the victim of quotas It may hurt target groups by placing them in situations where they have a diminished chance at success Ward Connerly black While selection criteria may be biased they do predict There is an imperfect relationship between race and being disadvantaged Ecological fallacy It reduces support for other aspects of the Civil Rights struggle Blacks made faster progress before affirmative action Black inequality may be a function of behavior If family stability is controlled Black income is 87 that ofWhites 1946 Average income for Blacks was 45 that ofWhites Legal Status of Racial Equality 91510 The 14th Amendment and the concept of state action Plessy v Ferguson and the Civil rights Cases of1883 Retreat from Plessy Sweat v painter and Brown v the Board of education ofTopeka Civil Rights Act of 1964 access to the public accommodations and the question of quotreverse discrimination Bakke Weber Hopwood and GratzGrutter v Bollinger Connerly and the CRIs Concerned Parents v Seattle ISD Under representation and the applicant pool Black Economic Progress Substantial socioeconomic progress for African Americans between end of WWII and beginnings of affirmative action Their income went from 41 that ofwhites to 67 Since then under affirmative action the gap has not narrowed Why Why has War Connerly a black man led the nationwide struggle against affirmative action African Americans whose scores would have earned them a place in a good state university where they could have succeeded are placed in elite school to fill a quota The now compete against people with SATs and GPAs substantially higher where they fail at a rate of 6 times that of their white and Asian classmates Does the image of affirmative action benefits demean the real achievements of African American individuals Changing the concept of racism symbolic racism and critical race theory Legal Status 2 91710 The Wards Cove question settled by Civil Rights Act of 1991 One of 280 African American applicants would have been admitted by the white standards at UT Law 20 of the African Americans admitted to Law School in 1991 would have been admitted wo racial preference In outlawing state mandated segregation did Brown require engineering intergration Green Swanna and court ordered busing Millikin V Bradley Magnet schools replacing busing Tracking in schools Women s Movement 92010 Overriding goal is to maximize the choices available to women as to the course or direction of their life Thus it should be a woman s choice as to whether to pursue a male dominated role or to be a homemaker and mom There are three categories ofissues to implement that goal market place equality violence against women and control of one s fecundity or reproduction Market place equality involves such things as equal pay for equal work the mommy track in employment with the glass ceiling the private clubs case and comparable worth The idea is that a woman s sex should not be an impediment to realizing whatever goal her talent and desire leads her 0 Violence against women includes rape domestic abuse and the changing concept of sexual harassment Issue can women claim self defense when getting rid of an abuser when he is defenseless The Bobbit and burning bed cases Sexual harassment used to mean a quid pro quo arrangement It now has come to mean the right to not be offended or to not feel uncomfortable in the workplace or learning environment Is this new right to not be offended compatible with the First Amendment Paula Iones case Women s Movement continued 0 Because parenthood is the most all consuming responsibility one can encounter an unplanned pregnancy can severely limit the choices as to the course of one s life 0 Abstinence the choice advocated for young unmarried women to prevent such pregnancies cannot be posed through advocacy and education studies have shown although a growing numb er of such women have voluntarily made that choice 0 Despite the moral condemnation and the dangers in pursuing the bottom half operation large numbers of unmarried people do so nonetheless Contraception the firstline of defense against such activity leading to pregnancy is less than 100 effective Unwanted pregnancies are hence inevitable Criminalizing abortion does not prevent it from occurring Hundreds of thousands of women desperate to end a pregnancy were killed or maimed by incompetently performed abortions People also were driven to marry someone because ofa pregnancy causing resentment of one s partner and the baby 0 Does legalizing abortion put a stamp of approval on it and does it encourage inappropriate sexual behavior Women s movement contains a wing of emphasizing women as victims Such women want the state to provide protection against potential abuse by males They are more likely to file sexual harassment lawsuits Another wing the equality feminists stress that women ought to convey an image of strength and independence They claim to be able to ward off unwanted advances on their own eg Katie Roithe and Camilia Paglia 0 Larry Summers case and Nancy Hopkins epitomizes victim perspective Gay Rights 0 Compared to racial and sexual equality gays face additional impediments to their goals While the Iudaic Christian tradition regards homosexuality as abnormal and a sin it was favorable to racial and sexual equality 0 As of 2000 there were over 579000 gay couples 0 Fear that gays will pose a threat to the children of straight families Evidence that homosexuality is either permanently acquired very early in life or it may be genetic 0 Oklahoma law barred gays from teaching struck down 0 Boy Scouts ofAmerica v Dale won by Boy Scouts o Gays blamed for AIDS epidemic Civil rights v public health issues Abbot case 0 Don t ask don t tell policy Is there a right to serve o Bowers V Hardvvick overruled Lawrence V TX Homosexuality is protected by privacy rights 0 New gay agenda beyond tolerance To be regarded as a legitimate 92410 equally valid alternative life style The gay marriage vs civil union issue END OF TEST 1 Classic Diplomacy or American Idealism 92710 Classic diplomacy is the style of diplomacy among Western powers for centuries It is sometimes called political Realism Assumes there are no universally recognized principles ofjustice Therefore the first goal of foreign policy is the pursuit and protection of the national interests Since interests con ict con ict is natural Nations use power broadly defined to pursue those interests The ability to achieve national interests is a function of the credible power a nation has in that pursuit Diplomacy involves outcomes based on a bargaining process in which no one gets all ofwhat they want Issues and goals are subject to a costbenefit analysis Is a solution possible and would it be worth the costs Nations in the realist mode try to preserve the quotbalance ofpower No one nation should achieve hegemonic power Balancing powers do not have permanent friends or enemies but just interests Spheres of in uence The interests ofa nation are greater in some places than in others Nations have a strong interest in territory contiguous to its own borders Power involves a relationship where power wielder uses credible rewards and punishments to make the other perceive that they would be better off doing what the power wielder wants and which they would not have otherwise done 0 Nuremburg Principle there are common principles that are universal pertaining to justice Search for a Comprehensive Peace in the Middle East The US has been actively trying to engineer a peace between Israel and the Palestinians since the founding ofIsrael in 1947 The US has an interest in the survival of Israel We face common enemies and share intelligence about them and their weapons vs American ones Israel is the world s umber one creator of advanced 92910 technology including microprocessor for laptops cell phone fiber optic communications to name a few Israel is 2nd only to the US as a purchaser ofAmerican arms Others reject this interpretation ofAmerican interests See Mearsheimer and Wald jimmy Carter and Israel as an quotapartheid state The basis of this engineered peace is the twostate solution involving Israel handing over territory capture in the 1967 war to establish a Palestinian state living side by side with Israel It assumes the lack of such a state is the main grievance of the Arabs The Palestinian Arabs have been directly offered such a state on at least four occasions 1938 Peel Commission Report the 1947 UN partition following the siX day war rejected with the Khartoum resolution the 2000 conference at Camp David and Taba and at the Annapolis Conference of 2007 Each such offer was rejected The Arabs repeatedly say publically and in their charters that they will settle for nothing less than the extermination of the quotZionist entity Iews and Arabs have both continuously lived in Palestine for 3000 years Many of the Arabs migrated following he Zionist importing Western technology Arafat was born and raised in Egypt Israel is only about 810 miles wide at its neck see map 447 hence Israel s 1947 boundaries are indefensible Israel handed Gaza over to the Arabs who proceeded to launch ofa rain ofmissiles and rockets at southern Israeli towns Half of Palestine was given to the new state of Iordan The last Arab political control in Palestine ended in 1099 Subsequently it was a backwater of the Byzantine and then the Ottoman Empire after which it became League and UN mandate Terrorism 10110 Terrorism is violence to obtain a political goal which is perpetrated against random targets usually defenseless civilians in order to create a general state of anxiety in the general population and to disrupt their pattern ofliving The word has a negative connotation hence terrorists refer to themselves as freedom fighters martyrs etc It is very difficult to prevent such acts in the perpetrator is not concerned with selfpreservation Israel has achieved success with their wall checkpoints and profiling Accommodating the grievances of terrorists causes them to up their demands The War in Iraq In today s weapons technology damage from a first strike cannot be absorbed hence a preemptive strike may be necessary If Iraq had WMDs give its aggressive behavior in the past would have constituted an unacceptable threat to the West Iraq knew the invasion was coming and had time to get rid ofa stockpile The Israeli Mossad claims it was shipped to Syria a claim supported by the head of Iraq s air force Iraq did have the knowledge to produce chemical weapons and could have had the program restarted in a matter of months Iraw had responded defiantly to numerous UN Resolutions and US demands Would ignoring these created an image ofweakness While there is no evidence Iraq was directly involved in the 2001 attacks on NY some 50 meetings between Iraq intelligence and Al Quada are documented Defense Policy 10410 Three major strategies for protecting a nation s vital interests from those who would threaten them One accommodating the grievances ofpotential foes appeasement and negotiating the renunciation of the use of force and mutual disarmament eg Munich EH Carr and the quotTwenty Year Crisis Deterrence having and willingness to use sufficient force to survive a foe s first strike and in ict unacceptable damage to them Rafsanjani s willingness to sacrifice half his The credibility of the deterrence and massive retaliation Weapons include conventional forces ICBMs with MIRV ULMs WMDs Intermediate range missiles cruise missiles drones Preemptive strike when the damage of a first strike is unacceptable The Six Day War and Iraq Morality Family Values and the Open Society The Mew Right and the Open Society The concept of the Open Society Populism and the New Right Antielitist faith in common sense wisdom of masses Antiintellectualism antimodern and secular Appeals to the marginalized strata roles threatened by modernity Old left strata becomes new right and old right strata becomes new left Family values as code term for traditional morality as defined by evangelical or fundamental Christianity appropriate expressions of human sexuality role of women abortion o The concept of the Open Society legitimacy of different perspectives leading to con icts ofinterest Marketplace ofideas First Amendment as bastion of open society Implies multiculturalism Concept of Community The presumption of constitutionality judicial restraint and the era of quotjudicial laissez faire 10610 Missed 10410 Abortion Rights 0 Based on right ofprivacy from Grimwald o Roe V Wade Trimester ruling 1st if all parties are willing it is none of the state s business 2nd state may regulate to protect health of woman 3rd no right to abortion unless necessary to protect health and life of a woman 0 Sociological jurisprudence Incidence ofillegal abortions o Amniocentesis and 2nd trimester abortions 0 Advances in viability of fetuses o 95 of abortions are 1st trimester Partial birth abortion 0 Other attempts to curb abortions the Casey case Randell Terry s quotoperation rescue Hill V Colorado Harassment and killings 0 Abortion opponents also oppose contraception Why Dr Schiedler s view of the purpose of sexuality Issue Does legalization of abortion and support for contraception promote promiscuity 0 When does life begin and when does life become human 0 British and Irish policy comparisons o Roe V Wade did not grant unrestricted abortion rights see trimester ruling 101310 Free Speech Pornography and Censorship 0 Alternative conceptions of the phrase freedom of speech absence of prior restraint the danger test and discussion v incitement balancing fighting words from Cohen to Skokie o Skokie protects not just discussion but expression 0 The Roth Rule and dissenting opinion the right to offend Idea that speech can only be suppressed ifit affects behavior Data on this Distinction between quotordinary pornography and sadomasochistic material 0 Censorship transfers judgment about material adults can be trusted to see Suppresses quality are and literature Value of sexually explicit material Miller and community standards Jenkins Stanley area ofprivacy to Reidel and 200 foot Reels Case to Paris Adult Theater Does it subsilentio repeal Stanley 0 Sable Communications and indecency standards and Jacob Ellis Political Correctness Religion quot Attempt to suppress speech and conduct offensive to target groups Academe has taken lead in such speech codes Category of what is banned defined not by its content but by perceptions of others Violates principle of quotscienterquot Hate speech laws Is the conduct in question already banned by other laws Is protection against being offended compatible with freedom of speech Only target groups protected by such codes You may offend others Lawrence Summers run out of Harvard Hawkins swoons at his v1ews quot clause issues The literal establishment of religions common in West Does not mean either religiosity or intolerance The No Preference interpretation vs Wall Of Separation principle from Jefferson and the Everson case Court has gravitated to the latter which would band the direct encouragement of religiosity in general over atheism and agnosticism Religion practice in public school McCollum to Zorach released time cases Engle the Regents prayer case Abbington Township Murray the Bible reading cases Devotional exercises no matter how nonsecretarian or how voluntary are banned Children not tolerant of nonconformity Public schools supposed to socialize us into common sense and belonging Extends ruling to sports venues and graduation Wiseman with social pressure to attend Does not extend to secular Christmas and Easter celebrations Free Exercise Issues Protects religious practices on unconventional groups as in Church of Lukumi Bablu Aye case Problem defining cults 101810 Generally does not grant right to do things in name of religion that would otherwise be prohibited Reynolds polygamy case snake handlers case withholding medical care from one s children Employment Division case peyote RFRA struck down in City of Boerne case Religious advocacy gets more sympathy than other forms of advocacy Cantwell v Connecticut Conscientious Objection The Seeger case differs from Gillette END OF TEST 2 Crime Control and the Rights of the Accused Crime is anything a legitimate legislative body chooses to criminalize Includes very different acts with different causes that require different remedies Crimes against property entail calculations of gains and costs Deterrence feasible Eg larceny burglary mugging etc Crimes against persons or violence entail irrational passions that do not respond well to deterrence Eg homicide assault rape White collar crime such as embezzlement stock fraud Enron insider trading price fixing cost the country far more than all the muggings We lose more to crime in the suites than to crime in the streets Savings amp Loan scandals of 80s Victimless Crime involves consenting adults not that no one is harmed Proscribes conduct for which there is inelastic demand It supports organized crime and diverts resources from other crimes Types and Causes of Crime Crime in the streets Has wider impact than direct victims by in uencing lifestyle out of fear Much of it due to drug addiction Drug addiction due to Vietnam War and elevation of counter culture Crime rose steadily in 20th century until about 1990 dropped a little through the 90s homicide rates climbed again in recent years US leads world in homicide and suicide but not other types Urbanization relates to crime opportunity and anonymity Greening ofUS crime is a young man s activity 102010 Race and crime Crime rates higher among minorities even when control for class and income Minorities also more likely to be victims Alienation and mobilization of sense ofinjustice Rise in financial scandals Postmodern ethics Liberals stress social conditions as causes of crime conservatives stress free will and responsibility Social conditions more amenable to policy cures than character defect Rights of Accused and Deterrence Most important factor in keeping perpetrators out of jail is low rate of arrest 1 in 12 crimes cleared 75 of convictions come through pleabargaining to alleviate the stress on the overburdened system judicial discretion in sentencing Drug addiction and street crime Other Options in Crime Control Controlling drug trade Inderdiction or controlling supply When successful it causes higher prices due to inelastic demand Reducing demand Methadone maintenance Low success rate Does marijuana necessarily lead to hard drugs Rights of the Accused 102510 Expanding interpretation of due process clause of 14th amendment Selective incorporation and Palko rule Three areas of major expansion right to counsel search and seizure and exclusionary rule cruel and unusual punishment Right to counsel Scottsboro or Powell Betts to Gideon Escobedo to Miranda Tainted evidence Wolf to Mapp Nix and Leon Cruel and unusual varies with time and place Furman to Gregg and Iurek Children Thompson v OK Summer v Shuman and mandatory death McCleskey and victim s impact statements Capital punishment and deterrence and retribution Crimes ofViolence and Gun Control 2 1 Amendment argument and the dependent clause 102710 Reasons for gun ownership frontier tradition personal protection sport of hunting rights of collectors Concealed weapons laws and reduced crime rates in TeX And Fla Defense of freedom Nazis used registration lists to disarm Europe Prevalence of gun ownership in US and high homicide rate Guns do not kill but facilitate the process Two thirds of killings by handguns Over 400 children accidentally killed by firearms each year Guns used in selfdefense 100x more likely to result in victim being killed Why Gun control options May distinguish guns normally used for sport and those normally used for crime Assault weapons with large magazine capacity facilitate mass killings Bush Crime Bill of1994 Crime Bill of1994 outlawed 19 kinds of assault ri es but not extended May distinguish high and low risk persons Brady Bill impact inconveniency V saving lives Gun show loophole Bill defeated last week Limits on number of guns purchased per time period dealing with boot sales Types of ammunition Glock plastic pistol with 17round magazine Assault weapons ban Semiautomatic plus large magazine capacity Local controls ineffective Is NRA reasonable They opposed banning Glock banning assault ri es or any type ofweapon or ammunition dumdum bullets or bullets that pierce bulletproof vests because of popularity of such vests among deer and game birds Other Options in Crime Control Controlling drug trade Interdiction or controlling supply When successful it causes higher prices due to inelastic demand Reducing demand Methadone maintenance Low success rate Does marijuana necessarily lead to hard drugs Decriminalization Recividism rate Selective enforcement Study finds no relationship between number of tickets written and traffic safety Suspended or probated sentences More police Depends on how they are used walking beat vs patrol cars 1994 crime bill temporarily financed more police Kansas City experiment NY s zero tolerance policy cracking down on petty crime Stricter sentencing guidelines Penal reform Rendering former inmates employable SelfRegulating Market 102910 American economic policy has been based on this theory or modifications thereof The key principle of this theory is that the price and allocation of goods and services are determined not by an individual actor but by the impersonal forces of supply and demand All theories start with assumptions A theory will describe reality and yield accurate predictions based on the validity of these assumptions The Key assumptions are rational economic man and the elasticity of supply and demand Market Theory cont d Rational economic man assumes that economic motivations trump all other competing values It also assumes that choices eXist and the actor has the information to make the economically rational choice The theory also assumes the elasticity of demand and supply This means supply and demand is sensitive to price Thus if the price goes up supply will go up and aggregate demand will go down In this theory there is a price at which the amount supplied equals the amount demanded and the market clears Elastic demand demand is dependent on price Keynesian Theory 11110 Business cycle alternation between peaks ofin ation and depths of recession and unemployment In ation prices rise without corresponding rise in quality Classic in ation too many dollars chasing too few goods Exacerbated by printing money that does not generate corresponding investment and economic growth Classic unemployment people who want to work but cannot because economic stagnation reduces opportunities Keynes in his General Theory ofMoney and Unemployment proposed government amelioration of these two bads with fiscal and monetary policy quotUnclassicquot unemployment suppliers oflaborjobs can actually set the price of what they provide without lowering demand within a certain range Fiscal policy taX in order to manage economy Fiscal and Monetary Policy In ation and unemployment are inversely related Shown by Phillip s Curve You alleviate the one by exacerbating the other Fiscal policy tries to control the through taxing and spending such as with the stimulus bill Monetary policy seeks to control them by directly controlling the money supply through the Fed The Federal Reserve System consists of twelve Federal Reserve districts with Federal Reserve banks and member banks Controlling M1 11510 The Fed deals with the member banks not with the public The Fed has three mechanisms to control M1 the reserve requirement the discount rate and open market operations To control classic in ation the Fed takes money out of the economy to control unemployment it puts money in to stimulate investment and consumption The Fed fights stagnation and unemployment by putting money in the economy by lowering the reserve requirement lowering the discount rate and buying in the open market The Fed fights in ation by raising the reserve requirement raising the discount rate and selling in the open market to take oversupply ofmoney out of circulation This Keynesian strategy may not work if the in ation or unemployment are not classical Controlling NonClassic In ation and Stagnation Because of the imperatives ofpostindustrial society many prices are set by the producer and not determined by impersonal forces This can produce a wage price spiral as the double Reagan and Supply Side Economics Laffer Curve shows that higher taxes may reduce revenue by discouraging the economic activity that is taxes Reagan s supply side economics focused taX cuts on the wealthier segments of the population Assumes the propensity to invest in a stagnant market is a function only of the taX rate Obama s Economic Policies Record high deficits and debt now in the billions 3 options of dealing with debt and their consequences raise taxes borrow from the domestic market print money or raise taxes Each choice has consequences Lowering interest rates are more effective in stimulating a stagnant economy than a one time payment of money END OF TEST 3 111210 Health Care Duplication of technology Fee of service without price controls The demand for sick or injury care is not elastic while the demand for preventative medicine is elastic hence people do not detect problems when they are easier to treat Hospital costs Thousands of dollars for the simplest surgeries overpriced pills and dressings Physician s fees High selectivity long costly training great responsibility Average 200000 to 500000 Third party payments removes incentive to economize Malpractice litigation results in defensive medicine Emergency departments must treat patients unable to pay and most make up costs by overcharging those that can pay Numerous hospitals in south Texas closed because ofindigent illegal s About 47 million or 17 ofAmericans are uninsured Policy Options Health Care Obama Care They may be uninsured because they cannot afford it Some may be uninsured as a conscious gamble About 87 do have insurance although only about half have catastrophic insurance Increasingly most people in some form of managed care which means for a fixed monthly fee the system provides health care as needed minus a modest copayment to control frivolous seeking care These systems will not pay for everything Parallel to seeking house insurance while that house is on fire Ifinsurance companies have to take on that expense the cost will have to be borne by other clients of that company The public option would pit government insurance with private insurance that must make a profit Would it drive them out ofbusiness Dropped from final bill Single payer option British NHS redux Health Care cont d Alternative health care systems Socialized medicine Britain has only national system Ideal is health care is available on the basis ofneed without out of pocket costs to all British subjects Britain cannot afford this in the light ofmodern technology Hence rationing becomes necessary QALYs unofficial criterion Quality Adjusted Life Years Policy Options Obama Care 111510 Therefore quotbean counters override the judgment of the health care provided Sets up the federal government as a provider ofhealth care for the 16 million who do not have health care in the private market Some young healthy people have elected to not purchase health insurance for now and spend the money elsewhere Forbids insurance companies to deny coverage because of pre existing condition Defining Poverty Relative definition based on unequal distribution of wealth and income Gini coefficient Lowest 20 of population receives less than 5 of income Wealth is distributed more unequally than income The top 1 ofAmericans owns a quarter of the privately owned wealth Absolute definitions based on SSA Measure what it takes to feed an urban family of four with minimum food budget Measuring Poverty The poverty line figure is multiplying minimum food budget by three The figure for a family of four in 2006 was 20615 The figure for a family of one is 10000 The eXtent ofpoverty was 22 ofthe pop In 1959 but it declined to about 14 in 1970 It has uctuated around 12 14 since Why is the current 1214 stickier than the first 12 Two kinds ofpoverty Those who fall below poverty line because of a lack ofjobs in a stagnant economy and those who are poor because there are unemployable even in prosperous times Hard core poverty Who are the poor While a given person of color is more likely to be poor than a given Caucasian an absolute majority of the poor are white A majority of the families in poverty have at least one of their number employed often at a low paying job To work 40 hours a week at minimum wage avg 655hr would leave a family of four 7000 below the poverty line and a family of nine would be 2 7964 below the poverty line Feminization ofpoverty Over half of the poverty families are headed by a woman 40 of the poor are younger than 18 Poverty correlates with education Those wo high school diplomas are much more likely to be poor than graduates Causes of Poverty 112210 Economic stagnation and prejudice against people of color reduce the opportunities for them Conservatives point to the behavior of the poor such as greater than 80 rate of illegitimacy in inner city slums The culture ofpoverty argument by Ed Banfield that the poor are present oriented they have a hard time deferring short term gratifications for long run goals Behavioral choices have consequences Social Insurance People are living much longer and thus draw benefits over a longer period of time as the ratio between younger people in an era of declining birth rates who pay in and older who draw out changes toward a graying population COLAs place further strain on the fund Social security is a contract or trust between government and citizen to break the promise would devastate the legitimacy of the state Baby boom generation will strain the system Unemployment compensation is based on paying into the system while one was employed and taxes paid by employer The recipient must accept a suitable job if offered Congress keeps extending the duration of benefits Social Security 0 One proposal for saving the system is to raise the retirement age for those who are not yet retired COLAs need to be made as often Raise FICA taxes especially on those with better earnings and extend them throughout the year Add a need basis for allocating benefits Tighten the definition of disability Need Based Programs Welfare 0 Aid to families with dependent children 0 While the target ofAFDC was the children the benefits went to the parent quotmother s day at the bars 0 AFCD replaced by PRWORA Personal Responsibility and Work Opportunity Reconciliation Act and TANF o TANF placed time limits on receiving benefits no more than 2 years at a time for a maximum of 5 years of your life Social Insurance 0 Eligibility is based on an individual s contribution to a fund over time Need is irrelevant 0 One pays into the social security fund as a portion of one s earnings and is eligible for benefits when one turns 65 regardless of economic circumstances 0 Because the value ofmoney has gone down overt the years one draws far more dollars out then they contributed over years The younger people today are subsidizing the older recipients Welfare Reform and Kind Benefits 0 By putting a time limit on TANF benefits did govt leave needy to go hungry on the streets 0 Welfare rolls were sharply reduced 0 What happened to former recipients is unknown but many suspect extended families took care of their own as before welfare Govt did not offer additional programs to render former recipients employable Kind Benefits 0 Food stamps result of McGovern Commission finding of 23 million hungry Americans 0 Eligibility cut off much higher than with welfare 0 Recipients must work if able at least 20 hoursweek o Recipients must buy the stamps Is it demeaning to recipients to have govt closely regulate what may be purchased with the stamps Other Programs 112910 Earned income taX credit pays money to working poor who receive a check for each dollar earned up to a cutoffpoint in 2002 34000 Unlike AFDC earned income taX credit rewards work Job Corps takes the most at risk adolescents and puts them in a boot camp where they are taught a job skill acceptable behavior patterns and discipline These are those who dropped out of school have issues with the law or with drugs It has a high drop out rate but saves many who finish the program We cut the funding and there are not enough openings Energy and the Environment Energy and the environment are inversely related Policies designed to maximize one of these values will detract from the other one Oil exploration may mar a pristine wilderness as in Anwar or off shore oil wells off CA beaches Hence neither value can be promoted absolutely Compromises must be negotiated The nation was energy independent until the mid 1940s Nation became dependent on petroleum because it was much cleaner burning than coal and it was cheap less than 3barrel in 1970 Seven major corporations controlled 90 ofproduction in 1950s PreOil Embargo Era Policies based on economic security Abundance in fossil fuels Past generations had little worry for the future of energy conservation policy Mineral Leasing Act of 192 0 WWI until 1973 Commitment to private sector market operations In order for the private sector to have the ability to produce energy energy policy remained very decentralized This lack of regulatory actors Coal primary source of energy up until the 1920s Coal was very abundant Quotas Coal companies rapidly fell PreEmbargo Era Oil Prorationing Due to fear of oil reserves in the US running out Congress enacted policy that allowed oil companies to deduct 275 of their gross income from taxable income so long as the total amount did not exceed 50 ofthe company s net income This was done in order to help out the oil companies Oil Depletion Allowance PreEmbargo Era Natural Gas Long history with regulations Three Major Activities Production in the field distribution through pipelines and a specialized distribution network to consumers 1938 Natural Gas Act They regulated pipeline construction and the price ofnatural gas in the interstate market They maintained low cost natural gas Regulations also led to less profits for producers which led to less exploration for natural gas This increased demand but lowered production s rates PreOil Embargo Era Nuclear Power Looked to have a lot ofpotential for future energy during the 1950s and 1960s Atomic Energy Commission AEC Construction of reactors was assigned to the private sector 1973 Arab Oil Embargo Yom Kippur War between Israel and the Arab states They gave a 5 reduction in exports to nations that supported Israel The US had other means of obtaining oil 1974 the embargo was lifted against the US Increase in price put strain on US economy Barrel Pricing Imports in PostEmbargo era Current Energy Era Fossil Fuels Natural gas demands exceed reserves making imports much more important Nuclear Power Three Mile Island disaster in 1979 Policy has shifted from this energy source since the 1980s Coal fossil fuels Dependence on oil has stayed dominant worldwide US now imports over 23 ofits oil The amount ofimports from Islamic countries means that oil imports depend on political stability in those regions Energy 19741980 Nixon wanted to be energy selfsufficient by the year 1980 National Energy Act of 1978 The act utilized tax incentives and taX credits to try and do this The Corporate Average Fuel Economy required cars to average 275 MPG by 1985 The act didn t create long term help for energy consumption and therefore the US kept relying on oil imports Exploration steadily declined as well Energy 19802000 Reagan presidency halted efforts of the 1970s US believed that energy supplies was in abundance and therefore rejected energy regulation and conservation efforts Market operations instead of government actions would secure energy supply By 1982 federal support for solar energy declined by 70 Energy 2000Present Energy Policy Act of 2005 gave a lot of taX credits Four primary goals include promotion of energy conservation increasing domestic energy production diversification of energy supply and modernization of the infrastructure Although this act seemed to show a lot ofpull for renewable energy sources it only had a marginal support compared to the rest of energy production It actually maintained traditional methods such as oil gas coal and nuclear energy Environmental Policies General Reduced public concern because the impact of environmental issues somewhat abstract and indirect eg the greenhouse effect The cost ofprotecting the environment is immediate and direct We would have to sharply reduce energy consumption Copenhagen conference will demand great transfer ofwealth from West to LDCs This will con ict with life style concerns The evidence is unclear and con icting on global warming Global Warming Energy 4 The CRU e mail scandal in which climate change alarmists Phil Jones and Michael Mann plot to suppress research and data that con icts with their putative consensus Climate Research Unit at Univ East Anglia The editor was fired for printing an article by a global warming skeptic Environmental quality is a public good that may not square with individual rationality The 1970s OPEC embargo forced the price of crude oil to over 20 a barrel in a few months Related to the issue of Israel The US now imports 60 ofits oil consumption but it comes not much from the Middle East but from Canada Mexico and Venezuela Europe and Japan are dependent on Arab petroleum The US gets 1012 ofits crude from Muslim nations including Nigeria We went from 25year proven reserve supply to 10 to 12 year s supply ofpetroleum We have enough coal reserves to last 500 years In 1900 coal accounted for 71 of energy use By 1950 coal dropped to 37 and oil jumped to 36 By 1972 oil supplied 44 of energy and coal 22 Easy to find and eXtract oil has largely run out These are higher costs of drilling more deeply in less accessible places Environmental Policy Air SIKE TA told me individually that he was out of material to cover so the neXt two weeks will be devoted to answering every question on the Review sheet I say we take turns going and filling in answers Beginning of class was course evaluations he was ying though slides that I didn t know if we had or not I just typed feverishly lol I didn t have enough time on the energy 13 slides to read the first sentence But all the slides here are complete


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