Copyright © 2009 Pearson Education, Inc. Publishing as Longman. THE AGENDA-SETTING PROCESS WHAT’S...

Copyright © 2009 Pearson Education, Inc. Publishing as Longman.

THE AGENDA-SETTING PROCESS

WHAT’S ON THE AGENDA IS…MOST IMPORTANTALWAYS CHANGING


SHARED POLITICAL VALUES

TRADITION AND CUSTOMS

SPECIFIC EVENTS

ELITE OPINION

WHAT DETERMINES THE

AGENDA?


REASONS WHY...PUBLIC DEMANDS

SPECIFIC GROUPSGENERAL OPINIONCHANGE IN VALUESCHANGE IN PRIORITIES

SCOPE OF GOVERNMENT INVOLVEMENT IS

INCREASING


(MORE REASONS WHY)

INSTITUTIONAL DEMANDSCOURTSBUREAUCRACYLEGISLATIVE BRANCH

ESPECIALLY THE SENATEMEDIA PUBLICIZES…

NEW IDEAS NEW EVENTS

SCOPE OF GOVERNMENT INVOLVEMENT IS

INCREASING


THEME B - MAKING A DECISION

NATURE OF ISSUEGROUPS AFFECTEDINTENSITY CONFLICT

POTENTIAL COSTS / BENEFITSHOW MUCH?TO WHO?

15-2


MAJORITARIAN POLITICS

COSTS TO LARGE # OF PEOPLE

BENEFITS TO LARGE # OF PEOPLE

AFFECTS ON BLOCS OF VOTERS


SOCIAL SECURITY IS A MAJORITARIAN POLICY


INTEREST GROUP POLITICS

CONCENTRATED COSTS

CONCENTRATED BENEFITS

EFFECTS VERY FEW PEOPLE


CLIENT POLITICS

LARGE BENEFITS TO A FEW

LOW COSTS TO MANY


ENTREPRENEURIAL POLITICS

BENEFITS TO MANY

COSTS TO ONLY A FEW


PUBLIC POLICY POLITICS

MAJORITARIAN CLIENT

ENTREPRENEURIAL INTEREST GROUP


THEME C = BUSINESS REGULATION

DIFFERENT VIEWS ON WEALTH AND POWERWEALTH IS GOOD, IT’S AN INCENTIVE, REWARDWEALTH CAN BE BAD, B/C IT GIVES POWER

1 - WEALTH = POWER

2 - POWER THREATENS MARKET ECONOMY POWER THREATENS DEMOCRACY

15-3


LAISSEZ FAIRE

NO GOV’T INVOLVEMENT

DOMINATED EARLYIN U.S. HISTORY

(1776-1890’S) or(1776-1929, 1932 [Grt

Dep])


BUSINESS-CUSTOMER REGULATION

PEOPLE WANTED GOV’T REGULATION(RAILROADS, “BIG BUSINESS)

SHERMAN ANTI-TRUST ACT(1890)

“PROGRESSIVE ERA”


LABOR-MANAGEMENT REGULATION

LEGAL RIGHT TO UNIONIZE& COLLECTIVE BARGAINING

LEGAL RIGHT TO STRIKE


LICENSING(ATTORNEYS, TEACHERS, BARBERS)

LIMITS PROFESSIONMAINTAINS STANDARDSHIGHER WAGES

( QUALITY & COSTS)Client Politics

USUALLY SUPPORTED BY THE PUBLIC


Educator Details:

Name:BROWN, MARK

District Last Employed:

Brookville Local School District

Building: Brookville High School

Credentials

Type Class Teaching Area(s)

High School (7-12) StandardComprehensive Social Studies

4 Year Certificate $48.008 Year Certificate 96.00

Permanent Certificate 120.001 Year Temporary 12.00

Pupil Activity Supervisor Validation 21.00Alternative Educator License 24.00


PRODUCTION LIMITS

(MILK, SUGAR, SHIPPING)

KEEPS PRICES HIGHERLESS COMPETITIONKEEPS SUPPLY LOWER

PUBLIC USUALLY UNAWARE


PAC Contributionsfrom Sugar-Related Interests(1/1/89-11/28/04)

Beet$5,174,10

1

Cane$3,005,73

8 CornSweeteners

$1,990,639

U.S. FARM POLICY – PRICE SUPPRTS FOR SUGAR PRODUCERS.U.S. FARM POLICY – HIGH TARIFFS ON IMPORTED SUGAR.U.S.SUGAR PRICES ABOUT 20% HIGHER THAN WORLD PRICE.27 COMPANIES PRODUCE 57% OF ALL U.S. SUGAR.


GOVERNMENT SUBSIDIES

(COTTON, RICE, TOBACCO)

PROMOTION OF AN INDUSTRYNOW LIMITED TO EXPORTS


Tobacco Subsidies by year, U.S. TotalYear

Tobacco Subsidies

1995 $0

1996 $0

1997 $0

1998 $0

1999 $0

2000

$345,123,312

2001 $129,247,286

2002 $4,990,960

2003 $51,121,183

2004 $5,281

2005 $0

2006 $0

Total $530,488,022


Economic Policymaking

Chapter 17

Edwards, Wattenberg, and LineberryGovernment in America: People, Politics, and

PolicyFourteenth Edition


MAJOR TYPES OF WORLD ECONOMIES


POLITICS AND ECONOMICS

PEOPLE HOLD THE PRESIDENT ACCOUTABLE FOR THE ECONOMY...

BUT THE PRESIDENT CAN’T CONTROL THE ECONOMY.


“Pocketbook Issues”aka

“People vote with their wallets”

Personal economics(most studies say this #1)

or National economics (Wilson says that is

#1)


Roots of Economic Involvement

Regulation was limited in the nineteenth century.

Prevailing attitude was laissez-faire.

As business cycles changed, need for intervention

grew.

Growth in tariffs.

Railroads required interstate regulation.

Sherman Anti-Trust Act of 1890.


Progressive Era

Increased regulation of railroads, business,

and banking.

Growth in regulation of food industry.

Creation of the Federal Reserve System.

Establishment of Federal Trade

Commission.


Depression and the New Deal

Laissez-faire state becomes interventionist.

Creation of Federal Deposit Insurance Corporation.

Founding of Securities and Exchange Commission.

Passing Agricultural Adjustment Acts.

Ratification of new labor and industrial regulations.


Social Regulation Era

Economic regulation controls business and industry.

Social regulation sets quality and safety standards.

Social regulation emerges in 1960s and 1970s.

Agencies like EPA, OSHA, NTSA.

Brings new businesses into governmental regulation.


Government, Politics, and the Economy

IntroductionCapitalism:

An economic system in which individuals and corporations, not the government, own the principal means of productions and seek profits

Mixed Economy:An economic system in which the government is deeply

involved in economic decisions through its role as regulator, consumer, subsidizer, taxer, employer and borrower

Multinational Corporations:Businesses with vast holdings in many countries



Economic Policy at Work: An IllustrationGovernment Regulation and Business Practices

Securities and Exchange Commission regulates stock fraud

Minimum wage: the legal minimum hourly wage for large employers

Labor union: an organization of workers intended to engage in collective bargaining

Collective bargaining: negotiations between labor unions and management to determine pay and working conditions



Wal-Mart and the World EconomyWal-Mart (the largest company in the world)

epitomizes America’s imbedding in the world economy.

The proportion of U.S. GDP accounted for by international trade is 30 percent.

Wal-Mart takes full advantage of “comparative advantage.”

Offshore outsourcing is a key concern of the new global economy.



“It’s the Economy, Stupid”: Voters, Politicians, and Economic

Policy

Economic trends affect who voters vote for.

Economic conditions are the best predictor of voters’ evaluation of the president.

Republicans worry about inflation.

Democrats stress importance of

unemployment.



Two Major Worries: Unemployment & Inflation

Unemployment Rate: measured by the Bureau of Labor Statistics (BLS), the proportion of the labor force actively seeking work, but unable to find jobs

Inflation: the rise in prices for consumer goods

Consumer Price Index: the key measure of inflation that relates the rise in prices over time.


Dec 2011

http://www.policymap.com/LandingPages/unemployment.html?gclid=CNXdh_yuia4CFQsBQAodrFgH7A

http://data.bls.gov/cgi-bin/surveymost


THE FEDERAL RESERVE SYSTEM(THE FED)

DETERMINES…–MONEY SUPPLY–INTEREST RATES–RESERVE RATE FOR BANKS


Policies for Controlling the Economy

Monetary Policy and “the Fed”Monetary Policy: the manipulation of the supply

of money in private hands–too much cash and credit produces inflation

Money supply affects the rate of interest paid.

Main policymaker is the Board of Governors of the Federal Reserve System – the “Fed”.

Created in 1913 to regulate lending practices of banks and thus they money supply.


Figure 18.1- Federal Reserve System

Back



Fiscal Policy of Presidents and PartiesFiscal Policy: the policy that describes the

impact of the federal budget on the economy.

Keynesian Economic Theory: government spending and deficits help the economy weather its normal ups and downs.

Government’s job is to increase demand of goods.



Fiscal Policy of Presidents and PartiesSupply-Side Economics: the policy that

says there is too much taxation and not enough money to purchase goods and services.

Reduce taxation and government regulation then people will work harder, and thus create a greater supply of goods


Why It Is Hard to Control the Economy

Some think politicians manipulate the economy to win reelection.

Problems with that theory:1-Things like the budget are prepared in

advance of when they go into effect2-Government makes economic policy

slowly3-Some benefits are indexed4-Capitalism can also affect the economy5-Federal government spends 20-25

percent of GDP


Figure 18.3- Federal Revenues

Back


Figure 18.4- Discretionary Spending

Back


Politics and the International Economy

ProtectionismThe economic policy of shielding an

economy from imports. Use of tariffs common.

World Trade Organization (WTO)The international organization that

regulates international trade.

Free trade is controversialJobs have increasingly been outsourced.But short-term pain equals long-term

gain.


Arenas of Economic Policymaking

Business and Public PolicyCorporate Corruption and Concentration

Increased incidence of bankruptcy and scandals

Increased number of corporate mergers

Antitrust policy: a policy designed to ensure competition and prevent monopoly, which is the control of a market by one company



Regulating and Benefiting BusinessNew wave of regulation

2002 tougher penalties for stock fraudCreation of Accounting Oversight Board

Regulate accounting industry

Businesses benefit from regulation, tooCopyrights, inventions, and patents.Government may loan businesses money.

Government collects data that business use.



Consumer Policy - Consumer LobbyingConsumers had little gov’t protection.

Food and Drug Administration (FDA): Created in 1913; approves foods and drugs sold in the U.S.

Federal Trade Commission (FTC): Responsible for regulating false and misleading trade practices.



Labor and GovernmentGovernment historically sided with business.

National Labor Relations Board (NLRB): Created in 1935 by the Wagner ActRegulates labor-management relations

The Taft-Hartley Act (1947) The right of collective bargaining

Prohibited various unfair practices by unions.

Government now provides unemployment insurance and a minimum wage.


Figure 18.2- Minimum Wage Growth

Back


Understanding Economic Policymaking

Democracy and Economic Policymaking

Voters expect what politicians can’t controlEg: Stop outsourcing, control oil/gas

prices

Sometimes economic theory and democratic theory may be at cross purposes.

It is politically difficult to make decisions that hurt groups or involve short-term pain for long-term gain.


Understanding Economic Policymaking

Economic Policymaking & the Scope of Government

Liberals (generally Dems) tend to favor more government involvement in the economy.

Conservatives (generally Reps) favor less government involvement in the economy.


Summary

Political and economic sectors are closely intermingled.Voters expect a lot from politicians, more than they can deliver on the economy.Two major instruments available to government for managing the economy— monetary and fiscal policies

Copyright © 2009 Pearson Education, Inc. Publishing as Longman. THE AGENDA-SETTING PROCESS WHAT’S...

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Transcript of Copyright © 2009 Pearson Education, Inc. Publishing as Longman. THE AGENDA-SETTING PROCESS WHAT’S...