Chapter 15
Economic and
Environmental Policy
Government and the Economy
 Economy: a system of production and consumption
of goods and services that are allocated through a
system of exchange
 Laissez-faire doctrine: holds that private individuals
and firms should be left alone to make their own
production and distribution decisions (policymakers
often disagree on the amount of government
needed)
Government and Economy
 Regulator: US government plays a big parole as
regulator of privately-owned businesses
 Prevent restraint of Trade
 Make businesses pay for indirect costs and
externalities
 Provide for equity when needed
 Sometimes overregulation exists
Economic Policy
Politics of Economic Policy
 Progressive Era: when reforms tried to stop the unfair
business practices of new monopolies
 Great Depression: when policymakers tried to
stimulate economic recovery through regulatory
policies designed to help and to restrain business
Politics of Economic Policy
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New Social Regulations (1960s and 1970s): social
goals affected policy which addressed three major
areas
1. Environmental Protection
2. Consumer Protection
3. Worker Safety
Managing Economy
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The Federal Reserve
Controlling interest rates to control inflation
Deficit spending
US Budget
Government and the Environment
 Rachel Carson wrote the Silent Spring: revealed
threat of harmful pesticides and is cited to have
helped spark Clean Air Act of 1963 and the Clean
Water Act of 1965
Conservationism
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Oldest role of government with environment
National Parks run by National Park Agency
US Forest Service manages national forests
Dual Use Policy: parks and forests are nature
preserves and natural resources; government permits
required to obtain resources
Conservation and Politics
Endangered Species Act of 1973:
 Directs federal agencies to protect threatened and
endangered species
 Authorizes programs to preserve natural habitats
 Spotted owl debate (Owls vs. Jobs)
New Trends in Environmentalism
 1970: Sen. Gaylord Nelson (D-WI)
creates the first Earth Day
 1970: Environmental Protection
Agency created
1980: Congress established
Superfund program
Trends in Environmentalism
 2001: The Supreme Court finds that the
EPA is to consider only public health
and not industry costs in setting air
quality standards
 2006: Former Vice President Al Gore
stars in “An Inconvenient Truth,”
bringing debate about global warming
to public
Global Warming
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Greenhouse Effects
Politicians disagree strongly on course of action
US largest source of emissions in world
US rejected Kyoto agreement
Support for policy growing as media and public
interest grows
Energy
 Gasoline prices have risen dramatically
 Call by some to explore alternative energy sources
 Hearing held in Congress with possible budgetary
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