Political Science 100
Introduction to
American Government
Class Number/Section
Class Number: 2157
Section: 4
The Value of POSC 100 - 1
Government and Politics Impact
almost Every Area of Our Lives
We will examine about as important a
group of questions as possible:
The Value of POSC 100 - 2
1 – Why Have Government?
2 – How Representative of the Views of
Americans are Governmental Policies
and Actions?
The Value of POSC 100 - 3
3 – How Fair are the Policies American
Governments Produce?
4 – How do Governmental Policies and Actions
Affect the Degree of Freedom
Americans Possess?
NOTE: Goals May Clash! What’s Good for
Fairness May Not Be Good for Freedom
Content of POSC 100 - 1
Three Sections of the Course:
1. The Need, Purpose, Structure and
Performance of Government
2. Mass Politics and Un-Elected
Policymakers
Content of POSC 100 - 2
3. Elected Policy-Makers and Public
Policy
Approach the material in each of these
three sections from the standpoint of
REPRESENTATION, FAIRNESS
and FREEDOM
CONDUCT!!!
If you stay in this class you are agreeing
to the following rules: (1) Come on Time
- if you’re late you must sit on the end in a
back row; (2) Stay the Whole Time - if
you must leave early (e.g., doctor’s
appointment) you need to let me know at
the beginning of class; (3) No Talking
Unless You are Responding to Me or
Another Student’s Comments.
CONDUCT!!!
The previous rules are all mentioned in the
syllabus. You’ll be sanctioned if you don’t
follow them. Beginning with the second
class meeting and omitting exam days,
each student will receive 1 bonus point on
their next exam for each class period I
don’t have to call someone out for talking
in class, leaving class early or arriving late
and trying to sit in other than the last
couple rows.
CONDUCT!!!
Either every student receives the possible bonus
point for that class meeting or no student
receives it. For example, Exam #1 is on the 9th
class meeting. Therefore, there are a maximum
of 7 bonus points each student could receive on
Exam #1 (i.e., 1 point for each class meeting
between meetings 2 and 8). If class is cancelled
the bonus point will be awarded. There are no
bonus points for the final exam or the quizzes.
POSC 100 – Grading - 1
As the syllabus, which is in the coursepack
[and is available at my website:
http://web.csulb.edu/~cdennis/
(click on “Courses”)] discusses, your
grade is based upon four equally
weighted components:
POSC 100 – Grading - 2
Your best two performances on Exams 13. Thus, you poorest performance on
Exams 1-3 is dropped. Which of the
following is your worst test?
(your score/lowest A)
90/88
91/93
88/85
POSC 100 – Grading - 3
The Final Exam counts the same as each
of Exams 1-3, however, the Final Exam
CANNOT be dropped.
The last component of your grade is your
total score on a series of
UNANNOUNCED QUIZZES. Your
lowest two scores are dropped.
POSC 100 – Grading - 4
Missed Exams and Quizzes: If you miss
one of Exams 1-3, for ANY REASON,
that is AUTOMATICALLY the exam you
drop.
The first two missed quizzes (regardless of
the reason you missed) are
AUTOMATICALLY dropped.
POSC 100 – Grading - 5
Thus, to qualify for a makeup exam you
would have to miss two of the first three
exams and have a valid excuse posted
with me within one week of the second
missed exam. To qualify for a makeup
quiz you would have to miss three
quizzes and have a valid excuse posted
with me within one week of the third
missed quiz.
POSC 100 – Grading - 6
Grades in this section will be like the
typical POSC 100 class – about 2.6 on a
4 point scale
POSC 100 – Course Materials- 1
You Will Need the Following Materials
from:
http://web.csulb.edu/~cdennis/
(CLICK ON “COURSES”)
1. The Coursepack – Contains the Syllabus,
Study Guides and Reading Material Used
Later in the Course;
2. Introductory Email/Textbook Information
3. PowerPoint slides
POSC 100 – Course Materials- 2
Textbooks:
1. Thomas Patterson, The American
Democracy, 9-11th alternate edition
(note it’s the “alternate” edition)
2. Lawrence L. Giventer, Governing
California, 2nd edition
Both are bound together in the CSULB
Bookstore. Buying earlier editions can
cause you to miss exam questions.
POSC 100 – Course Materials- 3
By the beginning of next week you will need to
read the first of a series of weekly newspaper
columns. Each column will state the days quiz
questions could come from that column. No
questions on the exams will be taken from the
newspaper columns. All the newspaper
columns are currently available at my website
under POSC 100 - “Newspaper Columns.”
Newspaper Columns
The Newspaper Columns file is password
protected. Since the password is not
available in any of the material you can
download you need to write it down.
POSC 100 – Course Materials- 3
For each newspaper column be able to do
the following: (1) summarize the column
in two sentences; and (2) explain why
the column was important enough that I
assigned it. If you can do these two
things you should be able to answer any
question I’ll ask from the newspaper
columns.
Make Use of Me!
I. Office Hours: M, W 9:00-9:30, 10:4511:00, 1:50-2:20 in SPA-241
II. Phone: See Email I Sent Containing My
Phone Number (which isn’t available
in downloadable material) - call times:
3:00-4:00 Tuesday, Thursday, Friday,
Saturday and Sunday (No Messages
- I Don’t Return Phone Calls) Call –
Email Isn’t Good for Questions
Make Use of Me!
III. The Phone is a Method of Helping You
Understand the Lectures. It’s NOT a
Method of Avoiding Class or NOT
taking Notes when You’re in Class.
When You Call, I Will Typically Ask,
“What Do Your Notes Say?” I’m
Here to Help People Who are Making
the Effort to Attend Class and Take
Notes.
Make Use of Me!
You can download ALL of the PowerPoint
slides for this course at my website (look
under the appropriate course). However,
knowing these slides is NOT NEARLY
sufficient. The slides are outlines and
DO NOT contain much of the lecture
material that is on the quizzes and tests.
I’m glad to help you but for that to
happen you’ll need to take notes in
class.
Need for Government - 1
I. NEED FOR GOVERNMENT
A. Free Market: voluntary exchanges
between mutually consenting
individuals
B. Capitalism: private ownership of
production and distribution
C. THE FREE MARKET/CAPITALISM
NEEDS GOVERNMENT!!!
Need for Government - 2
1. Without the government DEFINING
what constitutes private property
(e.g., the air waves), the SCOPE
of private property (e.g., the
sidewalk on your property is not
under your control) and
PROTECTING private property
rights (e.g., by the police)
the free market/capitalism
COULDN’T function.
Need for Government - 3
2. To Provide Public Goods –
Characteristics of Public Goods:
a. No one is excluded
Need for Government - 4
b. One person’s consumption of the
good does not reduce the amount
available for someone else.
Need for Government - 5
1. Examples: (a) Clean Air – Why would
one individual, or group, provide it if
everyone else could benefit for
free?
(b) National Defense – Would you
want private individuals to control
nuclear weapons?
(c) Tennessee Valley Authority
(d) Some Medical Research
Need for Government – 6A
3. Economic Regulation
a. Natural Monopolies - Government
regulation to counteract price
gouging by monopolies
b. Where harm is caused by agents
who don’t bear the true cost of
their action – e.g., individuals
and firms that pollute justify a
carbon tax
Need for Government – 6B
c. Government Regulation can help
the free market perform better.
1. One of the assumptions of the
free market is that both
buyers and sellers have
perfect market knowledge.
Need for Government – 6C
2. Government regulations requiring
restaurants to list the fat and
calorie content of their meals on
menus means that customers
have better information upon
which to base their decisions.
3. While restaurant owners may not
like the requirement it fits
perfectly with the assumptions of
a free market.
Need for Government - 7
4. Macroeconomic Management
a. Countercyclical spending to offset
a recession
1. Balancing the federal budget
during a recession would
be a disaster!
Need for Government - 8
b. Employer of Last Resort
1. The goal of a business is profit
NOT providing jobs.
2. Because government is NOT profit
driven, it can create jobs when it
is NOT economically profitable
for the private sector to do so.
Need for Government - 9
3. It’s well documented that persistent
unemployment results in a
permanent loss of output and labor
productivity.
4. The U.S. had successful government
employment programs during the
Great Depression of the 1930s. So
have many other nations.
Need for Government - 10
5. Social Values
a. The ingenuity of capitalism’s “creative
destruction” means that business
CANNOT pursue social values/goals
over profitability. Thus, the very
strength of capitalism is a prime
reason why it can be argued that a
strong social safety net is absolutely
necessary.
b. Example: Increasing Income Inequality
Need for Government - 11
Share of Income Going to the Richest 1%
of American Households:
1970 – 9.0%
1990 -14.3%
2012- 21.5%
The above figures are about TWICE as
high as in Europe. Should Government
Reduce this Huge Increase in Inequality?
Need for Government - 12
c. Effects of Globalization or
Internationally Mobile Capital on
the Rich and Poor
1. The internet/advanced
communications permits
emerging nations to rapidly
import new technologies.
Need for Government - 13
2.Opening nations such as China to
international trade greatly increased
the supply of low skill workers which
reduced the income of low
skill/income Americans.
3. Governments have competed for capital
by lowering taxes, labor standards
and government regulation of
business.
Need for Government - 14
4. Lowered labor costs reduce product
prices which much more benefits
high income Americans whose
income aren’t reduced much by
international competition.
5. Thus, a very good case can be made
that the “winners” under this scenario
should compensate the “losers.”
Need for Government - 15
d. In a private market each person’s
“worth” is determined by how
much money they have whereas
in a political market each voter
has one vote. Thus, votes are
distributed more equally than
money.
Need for Government - 16
e. Therefore, the electoral incentives of
government produce a distribution of
goods/services that more favors
middle and low income groups than
occurs in a private market.
f. This is one fundamental reason why
liberals like government more than
conservatives.
Need for Government – 17
6. Lack of Information
Example: Health Care
Need for Government - 18
Comparison of U.S. and Foreign
Health Care Systems (2009-2013)
Per Capita
WHO
Spending
Ranking
U.S.
$8,895
37th
France
$4,690
1st
Canada $5,741
30th
U.K.
$3,647
18th
Need for Government - 19
What incentive do U.S. insurance
companies, pharmaceutical companies,
and physicians have to tell you the
preceding information?
POSC 100 – Course Materials
The Coursepack – Contains the Syllabus,
Study Guides and Reading Material
Used Later in the Course – is available
at: www.csulb.edu/~cdennis
(Click on “Courses”)
Structure of Government - 1
I. Government Under the Articles of
Confederation
A. Unanimous Vote of the States
Needed to Amend
1. Is Unanimity Necessary for
Representation?
Structure of Government - 2
B. National Government Couldn’t
Require States to Pay Taxes
1. If some states don’t pay, is
this fair?
C. No President or Supreme Court
Structure of Government - 3
D. Military Security Needs in the West
and the Recession in the Northeast
Pitted Region against Region.
1. The national government couldn’t
get a unanimous vote. So these
crises weren’t solved.
2. Representation? Fairness?
Structure of Government - 4
II. The Constitutional Convention
A. Philosophy of James Madison
1. Freedom “To” (action – e.g.,
speech) vs. Freedom “From”
(e.g., food stamps - government
protects you from starving)
Structure of Government - 5
2. The Constitution is mainly
concerned with protecting the
“freedom to.”
B. Philosophy of John Rawls
1. Equal right to the most extensive
system of liberties consistent
with the guarantee of the same
liberties for all.
Structure of Government - 6
2. Any social and economic
inequalities should redound to
the benefit of society’s least
advantaged individuals.
C. How would you compare Madison and
Rawls on “fairness” and
“representation”?
Structure of Government - 7
D. For Madison, Government was
the Major Threat to the
"Freedom To“ (e.g., Congress
shall make no law abridging
freedom of speech)
1. Government can be an
extender of the “freedom
to.”
Structure of Government - 8
2. Economic Inequality was not a
major concern of Madison.
3. Compared to the Democracies of
Western Europe, the U.S. is a
low tax, low social service
country.
Structure of Government - 9
Tax rates as a percentage of the economy
are much lower in the U.S. than in most
wealthy democracies:
U.S. – 32.2%, Canada – 38.3%,
Great Britain – 41.2%, Germany – 44.6%,
Italy – 47.8%, Sweden – 50.9%,
France – 52.9% and Denmark – 57.4%.
Source: OECD as reported in NY Times
11/16/14
Structure of Government – 10A
Federal Taxes as a percentage of our
economy are lower today than they have
been in over 60 years.
1951- 16.1 % (before Medicare enacted)
1971 – 17.3%
2001 – 19.5%
2011 – 15.4%
Structure of Government – 10B
Effective Tax Rates on Income of
$100,000 in 2012
Nation
Income Tax Social Security
U.S. – 26.0% 18.7%
7.3%
G. Brit.- 31.4% 24.1%
7.3%
Sweden- 36.3% 36.3%
0%
France – 42.0% 20.0%
22.0%
Germany-43.8% 28.3%
15.5%
Structure of Government – 10C
Government Mandated Paid Annual Leave
and Paid Days of Vacation
U.S.
- 0
Great Britain - 20
Sweden
- 25
German
- 30
France
- 31
Structure of Government - 11
E. Fearing Government, the Founders
Made it Difficult for the Government
to Act.
1. Separation of Powers
a. Parliamentary Systems
combine executive and
legislative power
Structure of Government - 12
b. Parliamentary Systems encourage
more issue oriented voting than
Presidential systems
c. U.S. uses a “winner-take-all”
(candidate with most votes wins)
rather than proportional (a party
receives seats equal to it’s share
of the vote) system to elect
representatives.
Structure of Government - 13
e. States with approximately 11% of the
U.S. population elect a sufficient
number of senators (42) to prevent
legislation.
d. Winner-take-all systems typically produce
less government spending to help the poor
than proportional systems.
1. The closer middle class voters’ incomes
are to the poor, the more the political
power of the poor increases.
Structure of Government - 14
2.Checks and Balances
3. Federalism
Structure of Government - 15
a. Strengths of Federalism
1.Little Centralized Leadership
2.Increases Participation (offers
more offices/chances for
citizens to participate in
holding/selecting offices)
Structure of Government - 16
3. Increases Policy Responsiveness more decisions are made locally
4. Encouraging Policy Innovation-States
are viewed as “laboratories of
democracy”
Structure of Government - 17
b. Weaknesses of Federalism
1. Obstructing National Policies –
e.g., protected slavery (might be
“responsive” to a local area that
desired slavery but definitely not
“fair” to slaves)
Structure of Government - 18
2. Allows Great Inequalities between
States (fairness?)
3. Confusion: In a crisis what level of
government is responsible?
4. Representation: citizens typically are better
informed about national than local issues –
local decisions more favor the advantaged
Structure of Government - 19
F. While Liberty (through Private
Property) was Written into the
Constitution, a Bill of Rights was Not.
Why?
Structure of Government - 20
III. Interpretation and Change Under the
Constitution
A. Flexibility – The Minnesota
Moratorium Act
1. Fairness?
Structure of Government - 21
B. Formal Amendment
C. Judicial Review
1. Marbury v. Madison (1803)
Structure of Government - 22
D. Informal Change – Reinterpreting the
Same Words
1. Heart of Atlanta Motel (1965)
2. Fairness?
Structure of Government – 23
IV. National Supremacy
A. McCulloch v. Maryland (1819)
California Constitution - 1
I. California’s Constitution Contains Over 6
Times as Many Words as the U.S.
Constitution
A. California Constitution is Frequently
Amended
California Constitution - 2
1. U.S. Constitution is Difficult to
Amend whereas the California
Constitution is Easy to Amend
2. Only 8% of California Voters
Need to Sign Petition to put a
Constitutional Amendment on
the Ballot
California Constitution - 3
3. A Constitutional Initiative only Needs a
Majority Vote to Pass
B. Focus of the U.S. Constitution is on the
Structure of Government and the
Fundamental Law
California Constitution - 4
C. By Contrast, the California
Constitution details both Law and
Policy (e.g., K-12 Spending Formula)
D. Constitutional Restrictions have
made it Very Difficult to Enact
a Budget and Raise Taxes
California Constitution - 5
E. Impact on Representation and
Fairness
1. Ease of Amending the California
Constitution Increases the
Likelihood of Discrimination
(e.g., Proposition 8)
California Constitution - 6
2. The Initiative Process itself Makes
it Much Easier for Special
Interests to Skew Public Policy
in their Interests.
a. Monetary Cost of a
Successful Ballot Initiative
California Constitution - 7
b. An Initiative Passed with a
Majority Vote can Require a Future
2/3rds Vote to Override it.
1. Effects raising taxes and fees, and
hence, the California Budget.
Civil Rights - 1
VI. Civil Rights
A. The UNELECTED Supreme Court
acted BEFORE Popularly
Elected Officials
1. Representation? Fairness?
Civil Rights - 2
2. Proposition 14 – 1964
3. Proposition 8 – 2008
B. Least “Threatening” Civil Rights
Laws Enacted First.
Civil Rights - 3
C. Civil Rights helped trigger a large
realignment of voters.
Judicial Selection - 1
I. Judicial Appointment
A. Constitutional protections require an
independent (non-elected) judiciary
1. The Constitution and public law
may not be popular but they
must be defended.
B. This is why federal judges are
appointed, NOT ELECTED.
Judicial Selection - 2
C. It is also why federal judges serve for
life
D. Federal judges are appointed not on
the basis of the popularity of their
views, but on the basis of their ability
to think clearly about legal and
Constitutional questions
Judicial Selection – 3
E. DON’T WRITE THE FOLLOWING
STATEMENTS FROM
PRESIDENTIAL CANDIDATES.
JUST READ THEM AND THINK
HOW THEY WOULD CHANGE OUR
COURT SYSTEM.
1. “Appointees to the federal bench
will not receive lifetime
appointment” - Rick Perry
Judicial Selection - 4
2. “Sign a bill tomorrow to eliminate the
9th Circuit” (U.S. Court of Appeals)
- Rick Santorum
3. Newt Gingrich has called for
impeaching judges, abolishing
judgeships and even eliminating
courts whose rulings he dislikes.
(Los Angeles Times – 12/20/11 –
A21)
Judicial Philosophies - 1
I. Judicial Philosophies
A. Preferred Freedoms
1. Court should actively look for
cases where the rights of a
minority may have been
violated.
Judicial Philosophies - 2
2. If there is a conflict, noneconomic
freedoms are “preferred” over
economic freedoms.
3. To restrict a preferred freedom, the
burden of proof is on the
restrictor, who must show a
clear and imminent danger.
Judicial Philosophies - 3
Free Speech Standards
Violent Overthrow of the Government
Clear and Imminent Danger
Clear and Present Danger
Bad Tendency Doctrine
Judicial Philosophies - 4
B. Judicial Self-Restraint
1. The judiciary should “restrain itself”
from declaring many laws
unconstitutional
Judicial Philosophies - 5
2. Since the constitution doesn’t
seem to “prefer” certain
freedoms all freedoms are
equal.
3. No “fixed” standard for cases
involving what some term
“preferred freedoms.”
Judicial Philosophies - 6
C. Democratic justices are typically
closer to the “Preferred Freedoms”
model than Republican Justices.
D. Since cases often involve conflicting
values/points of law, judicial
philosophy inevitably becomes
important.
Judicial Philosophies - 7
E. State Courts: Democratic judges are
more likely to side with the
economically less advantaged party
and find a violation of the rights of the
accused than Republican judges.
1. Exception: Democrats favor the
government in tax cases –
Why?
Civil Liberties - 1
I. Civil Liberties
A. Well-Protected by the Constitution
and the Courts
B. Reduced Somewhat During
Popular National Wars
Civil Liberties - 2
C. Many of the Most Important Cases
Occur During War Periods
D. Free Speech Examples
1. Schenck v. U.S. (1919)
Civil Liberties - 3
2. Dennis v. U.S. (1951)
3. Tinker v. Des Moines (1969)
Civil Liberties - 4
E. Freedom of Press Examples
1. Near v. Minnesota (1931)
2. New York Times v. U.S. (1971)
Civil Liberties - 5
F. Religious Freedom
1. Each religious sect wanted its religion to be
the Established Religion
a. This is still what some American religious
fundamentalists would like
b. It is the basis of the governments of
Saudi Arabia and Iran
Civil Liberties - 6
2. Above all, each sect’s members feared
that if one of the other
denominations got control over the
government that they would have to
obey that other false religion’s laws
(this is why they had emigrated to the
American colonies)
3. Members of other religions increasingly
fear discrimination and loss of rights
Civil Liberties - 7
4. Most large scale civil wars and civil
conflicts today have something to do
with religious disputes
5. The second-best solution = no group’s
religion gets to be the Established
Religion
Civil Liberties - 8
G. Religious Freedom is so Important that
the 1st Amendment Contains Two
Clauses Protecting Religious
Freedom
1. Free Exercise Clause
2. Establishment Clause
Civil Liberties - 9
a. Wall of Separation between
Church and State
1. No connection/relationship
between government and
religion
Civil Liberties - 10
c. No-Preference Standard
1. Government and religion can
have some relationship as
long as all religions are
treated equally.
Civil Liberties - 11
2. Government provided bus rides to
religious schools viewed as an
aid to education, not religion.
3. Can’t have government officials
write prayers or have prayers
spoken in class denominationally neutral prayer
is impossible.
Civil Liberties - 12
What words would the prayer contain?
Whom to pray to?
Are teachers allowed to use sacred objects:
rosaries, prayer rugs?
When to pray?
Individually or in groups?
Silently or aloud?
Civil Liberties - 13
3. Los Angeles County Seal/Christian
Cross Over a Military Cemetary
Juries - 1
I. Legal Standards Juries Use
A. Criminal Cases – Beyond a
Reasonable Doubt
1. If you think there is an 80% the
defendant is guilty you should
vote “not guilty” (20% is NOT
beyond a reasonable doubt).
Juries - 2
B. Civil Cases – A Preponderance of
the Evidence
Juries - 3
II. Decision-Making
A. The Missouri Juror – Show me the
evidence
B. The Neighborhood Watch Juror –
Looks for suspicious activity
Juries - 4
III. Jury Service
A. California uses a “one day or one
trial” system.
B. Don’t be disappointed if your
background disqualifies you
from serving on a particular jury .
Preparing for the Exam - 1
1. Be able to answer the study guide
questions on page 10 of the
coursepack (www.csulb.edu/~cdennis
click on “Courses”)
2. Be able to explain any concept or term
on the slides and why that concept or
term was important enough to be
discussed.
Preparing for the Exam - 2
3. Be able to “compare and contrast”
concepts. For example, what are the
similarities and differences between a
presidential system and a
parliamentary system?
Beginning of Section II
The material for Exam #2 begins with the
next slide.
Political Opinion - 1
I. Public Opinion
A. Economic and Noneconomic
B. Abstract and Specific
Public Opinion - 2
1. Basic rule: People give more tolerant
or “democratic" responses in the
abstract than they do in the specific.
C. Liberal and Conservative
1.Relative not Absolute Definitions
Public Opinion - 3
2. Liberal - greater commitment to
reducing economic inequality
and maintaining economic
security/greater support for the
noneconomic freedom to differ
Public Opinion - 4
3. Conservative – greater individual
free choice-less commitment to
equality in economics/less
commitment to the freedom to
differ in noneconomics
Public Opinion - 5
D. If Asked Their Political Orientation
Conservatives Outnumber Liberals
Two to One.
1. Symbolic Conservatism (they say
they’re “conservative”) but
Operational Liberalism (support
greater government spending on
education, health care, etc.)
Public Opinion - 6
2. Conservatives have, with much
success, attempted to switch the
notion of an “elite” from an economic
elite (which politically hurts
conservatives) to a cultural elite
(which politically helps
conservatives).
a. Sarah Palin/Rick Santorum – the
well-educated are “against us”
Public Opinion - 7
E. Public support for greater government
spending on social welfare programs
moves opposite the partisanship of the
president (e.g., public support for more
government spending on environmental
protection increases under Republican
presidents because the public feels the
Republicans aren’t very environmentally
oriented).
Public Opinion - 8
F. Citizens Often Hold Competing
Values Such as Freedom and
Equality (e.g., desiring both tax cuts
and increased government services)
1. Public opinion can often be easily
manipulated.
Public Opinion - 9
G. Public Opinion is Individually
Irrational but Collectively Rational
1. Most people don’t follow politics
closely and aren’t well-informed.
However, a small group of voters are
well-informed and this means that
overall opinion moves in a rational
manner.
Public Opinion - 10
H. Political Parties and Voters - Specific
Issue Positions – “Four-Celled
Diagram”
The Voters:
Economic - Liberal/
Noneconomic -Conservative
Public Opinion - 11
Democratic Party:
Economic – Liberal/
Noneconomic – Liberal
Public Opinion - 12
Republican Party:
Economic – Conservative/
Noneconomic – Conservative
Public Opinion - 13
Libertarians –
Economic – Conservative/
Noneconomic – Liberal
Since political support is often based
upon intolerance, libertarianism will
have difficulty building much mass
support.
Public Opinion - 14
I. Relationship Between Socioeconomic
Status (SES) and Political Opinions
1. Socioeconomic Status - income,
education and occupational
status
Public Opinion - 15
2. Economic Issues – Negative
Association - As SES increases
support for liberal positions
decreases
Public Opinion - 16
3. Noneconomic Issues - Positive
Association – As SES increases
support for liberal positions increases
Public Opinion - 17
4. Typically, a party will “frame” an issue
as an issue they “own.” Democrats
would frame universal health care as
either security for workers losing
insurance and/or fairness, while the
Republicans would frame universal
health care as either a tax increase
and/or the size and scope of
government (i.e., “big government”).
Public Opinion - 18
a. Republicans are perceived as better
able to handle foreign policy and
defense issues, reducing taxes,
controlling inflation, reducing
government spending, reducing crime
and promoting moral values than
Democrats.
Public Opinion - 19
b. Conversely, Democrats are perceived
as better able to handle social welfare
policies and/or “fairness” issues such
as protecting Social Security,
improving health care, helping the
poor, supporting public schools,
reducing unemployment, solving farm
problems, and protecting the
environment than Republicans.
Public Opinion - 20
J. Public Support for the Bush Tax Cuts
A. 40% of the benefits go to the
wealthiest 1% of households
(annual income above
$370,000) – this is equal to the
amount received by the poorest
70% of households COMBINED!
Public Opinion - 21
1. 75% of households LOSE under the
Bush Tax Cuts
a. Mean Cut - $1,199
Median Cut - $217
2. People Overly Upwardly Identify (19%
thought they were in the top 1%)
Public Opinion - 22
B. Those FAVORING greater government
spending more FAVORED the Bush
Tax Cuts - SEE THE
CONTRADICTION?
1.Similarily half of California voters
think the state’s budget could be
reduced 20% WITHOUT
reducing services.
Public Opinion - 23
C. The MORE One Thinks Their OWN
Tax Burden is Too High the MORE they
SUPPORT the Bush Tax Cuts - SEE THE
CONTRADICTION?
D. The Public Simply Doesn’t Connect
the Bush Tax Cuts to Either Other
Public Policies (services cutbacks,
higher interest rates) or Inequality.
Public Opinion on Income
Inequality - 1
The next several slides show what groups
in the United States, Japan and Sweden
think is the actual and fair degree of
income inequality between an executive
and an auto worker.
Public Opinion on Income
Inequality – 2 – United States
Perceived
Income
Republicans 13.2/1
Democrats
15.4/1
Fair
Income
11.3/1
8.2/1
Public Opinion on Income
Inequality – 3 - Japan
Conservative
Party
Left Parties
Perceived
Income
7.1/1
Fair
Income
5.4/1
10.3/1
3.7/1
Public Opinion on Income
Inequality – 4 - Sweden
Conservative/
Center Party
Left Party
Perceived
Income
Fair
Income
2.2/1
2.1/1
3.2/1
1.9/1
Political Participation - 1
I. Political Participation
A. Types of Political Participation
Political Participation - 2
B. Who Participates?
1. Basic rule: while voting is positively
related to socioeconomic status
(SES) non-voting forms of political
participation are even more strongly
positively related to socioeconomic
status.
Political Participation - 3
C. “60-30-10” Diagram
1. SES Composition of the Highest
Participating One-Fifth of Adult
Americans
Political Participation - 4
Highest 1/3 SES - 60%
Middle 1/3 SES - 30%
Lowest 1/3 SES - 10%
Political Participation - 5
D. Consequences
1.Message Received: Too
Economically Conservative and
Socially Liberal
Political Participation - 6
E. Comparison
1. Only In India was the Relationship
between SES and Participation
as Strong as in the U.S.
Political Participation - 7
F. Why?
1. Relative Absence of Class-Related
Politics in the U.S.
2. Relative Lack of Work
Organizations/Unions in the U.S.
Political Parties - 1
I. Why Political Parties are Important
A. Provide Candidates for Office
1. Importance of opposing candidates
– even in lopsided elections
Political Parties - 2
B. Provide Policy Alternatives
1. Election should provide a
referendum on policy
2. Information Reduction
Device for Voters
Political Parties - 3
2008 Presidential Candidates
L= AFL-CIO (Labor)
E = League of Conservation Voters
(Environment)
Political Parties – 3 (continued)
DON’T WRITE DOWN THE NUMBERS
THAT APPEAR ON THE NEXT
SEVERAL SLIDES. I’M ONLY
INTERESTED IN WHAT THE
NUMBERS MEAN – THE PATTERN OF
THE NUMBERS - NOT THE NUMBERS
THEMSELVES.
Political Parties - 4
Democratic - 2008
Edwards
L
E
Clinton
L
E
Obama
L
E
97% 88%
94% 87%
98% 86%
2004 Democratic Ave. LCV – 85%
Political Parties – 5A
Republican - 2008
McCain
Thompson
L
E
L
E
17%
24%
8%
6%
2004 Republican Ave. LCV – 10%
Note: McCain Changed Virtually Every
Moderate Position to Appease the Republican
base: Bush Tax Cuts, Off Shore Drilling, etc.
Political Parties – 5B
Republican - 2012
Gingrich Santorum Paul
Ryan
L
E
L
10%
29%
L
13%
E
L
E
E
0% 18% 30% 14% 24%
NOTE: Gingrich’s record became consistently
less environmental over time. In 1995 the
LCV called the Gingrich-led legislative agenda
“an environment train wreck.”
Political Parties – 5C
Republican - 2016
Paul
Rubio
Graham
L E
L
E
L
E
4% 9%
6% 9%
16% 11%
Cruz
L
E
0% 11%
Kasich
L
E
0% 13%
Jindal
L
E
21% 6%
Political Parties – 5D
Democratic - 2016
Clinton
Sanders
Warren
L
E
L
E
L
E
94% 87% 98% 95% 100% 94%
Biden
L
E
85% 83%
Warner
L
E
86% 89%
Webb
L
E
95% 81%
Political Parties - 6
C. Accountability
1. G. H. W. Bush–No New Taxes
Pledge
2. Republicans in California after
Republican defections in the
state legislature over 2009
budget
Political Parties - 7
3. Most Party Platform Pledges are
Honored
Political Parties - 8
I. Political Party Systems
Cadre
Where
Found:
U.S.
Mass
Membership
All other Wealthy
Democracies
Political Parties - 9
Goal:
Winning
Greater Emphasis on
Standing for
Something Different
than the Opposition
Traits: Few Dues
Many Dues
Paying Members Paying Members
Political Parties - 10
Little Public
Education
Policy
Flexibility High
Much Public
Education
Low
Political Parties - 11
II. Why the U.S. Developed a Cadre
rather than a Mass Membership
Party System
A. "Absolutist Individualism" – to make the
individual as self-reliant as is
practically possible
B. Little for the Political System to do
Political Parties - 12
III. Why the U. S. Has Such a Strong
Commitment to Absolutist Individualism
A. Great Wealth
Political Parties - 13
B. Frontier Experience
1. Self-Sufficiency
2. Ease of Owning Property
Political Parties - 14
3. Basic rule: government actions to help
the poor often involve some
reduction in property rights
4. Zoning
Political Parties - 15
C. Agrarian Experience
1. Difficult to Organize Farmers
Political Parties - 16
D. Ethnic Diversity
1. Basic Rule: A society strongly divided
on racial, ethnic or religious lines is
more difficult to divide on social class
lines
Political Parties - 17
E. Lateness of the Industrial Revolution
1. Strong Commitment to Absolutist
Individualism Prior to
Industrialization
2. Reliance on “Craft” Unions
Voting Behavior - 1
I. Voting Behavior
A. Realigning Election
B. Current Division between the Parties
is Quite Close
Voting Behavior - 2
II. The Republican Coalition
A. White Evangelicals – Moral Decline
B. Deep South – Civil Rights
Voting Behavior - 3
C. Country Folk – Culture
D. Exurbia – White Flight
Voting Behavior - 4
E. Young Blue Collars Boys – White
Men Without College Degrees
F. Blue Collar Old Men – Social Security
can cause defections
Voting Behavior - 5
G. Privileged Men – Noneconomic
liberalism of this group can cause
defections
Voting Behavior - 6
III. The Democratic Coalition
A. African-Americans – Civil Rights plus
Economic Need
1. Republican support eroded once
Civil Rights involved government
regulation of business
Voting Behavior - 7
B. Hispanics – Similar Calculus to
African-Americans
C. Well-Educated Women – Relatively
Liberal both Economically and
Socially (support Affirmative Action –
Abortion Rights and Gun Control)
Voting Behavior - 8
D. Secular Warriors – Don’t Go to
Church and Don’t Own Guns
E. Cosmopolitan States (large, diverse
populations)
Voting Behavior - 9
F. Union Families
IV. Contested Groups – Typically
Economically Liberal and Socially
Conservative
A. Catholics
Voting Behavior - 10
B. Single Women – Economically
Vulnerable
C. Young Voters – Tend to be Relatively
Liberal but Don’t Vote as Much
Voting Behavior - 11
I. Question – If poor people disproportionately
vote Democratic and richer people
disproportionately vote Republican, why do
Democratic Presidential candidates win the
richer states and Republican Presidential
candidates win the poorer states?
Voting Behavior - 12
Voting Behavior - 13
Voting Behavior – 14 - Race is
Half the Story
Voting Behavior - 15
I. Voting and the Culture War
A. The culture war is fought by the
wealthy, in part, because their
economic needs are met.
B. The wealthy have sufficient money
to move to an area that is
culturally suitable for them.
Voting Behavior - 16
I. The Issue Positions/Ideology of Today’s
Voters More Accurately Reflect the
Views of Their Party than during the
1950-1980 period.
A. During the 1960-1980 period the
message from party elites
became more consistent within
each party.
Voting Behavior - 17
B. Two Fundamental Causes
1. Reaction to the Civil Rights
movement – the South becomes
much more Republican
2. Political losses by business cause
it to spend much more on
lobbying for a message of low
taxes and regulation
Voting Behavior - 18
C. As the cues from party officeholders
become more similar within each
party, there are fewer voters whose
issue positions/ideology don’t fit their
political party (i.e., liberal
Republicans and conservative
Democrats).
Voting Behavior - 19
1. Independent voters who “lean” toward a
party typically behave as partisans
(i.e., hold opinions similar to their
party and vote for that party).
2. If faced with a conflict between their
ideology and their party, most voters
change their ideology to fit their
party rather than vice versa.
Voting Behavior - 20
D. All these factors, plus the greater
turnout rate among partisans, have
caused campaigns to increasing
focus on activating their “base” rather
than appealing to independent
voters.
Voting Behavior - 21
E. All of these factors greatly increase
the “cost” to politicians of
compromising with the opposition
party (e.g., you may get a primary
election challenge within your party).
Noneconomic Party Differences1
I. Left (Non-Communist)/Right (NonFascist) on Noneconomic Issues
A. Right
1. Maintain Traditional Social
Relationships/Regime
Maintenance
Noneconomic Party Differences2
2. Freedom of Expression
3. Increase Civil Rights and Liberties
Noneconomic Party Differences3
B. Left
1. Freedom of Expression
2. Increase Civil Rights and Liberties
Noneconomic Party Differences4
3. Maintain Traditional Social
Relationships/Regime Maintenance
Congress/California Legislature 1
I. Congress – Perspectives
A. Executive Dominated
1. President Sets the Agenda
Congress/California Legislature 2
2. Unity
3. Expertise
4. Governor has Line-Item Veto
5. Term Limits for California Legislature
have reduced it’s willingness to
change the governor’s budget
Congress/California Legislature 3
B. High Level of Political Polarization
1.Cohesion within each party has
increased and the distance
between the parties has
widened.
Congress/California Legislature 4
2. 2008-2016 Presidential Contender
Scores on Labor/Environment
3. California Legislature: Support
for the Chamber of Commerce:
All Republicans 80%-100%;
80% of Democrats 0%-40%
Congress/California Legislature 5
4. Compromise can bring a Primary
Challenger
5. Reasons for 1-4
a. Electoral Coalitions of Parties have
become more Dissimilar
Congress/California Legislature 6
b. Increasing Income Inequality
c. Civil Rights Era brings Less Tolerant
Voters into Republican Party
Congress/California Legislature 7
C. “Anticipated” Public Opinion, Not
“Current” Public Opinion Matters Most
1. Traceability
2. Closing Military Bases
Congress/California Legislature 8
3. Incentive: take actions with
immediate positive payoffs (e.g., tax
cuts) and avoid actions which have
negative short-term effects (e.g., gas
tax increases) but positive long-term
effects (cleaner environment).
Congress/California Legislature 9
4. Particular vs. General Benefits
a. Those Who Don’t Get Cancer
because of Reduced
Pollution Won’t Know it
b. Fairness?
Congress/California Legislature 10
D. Responsiveness Without Responsibility
1. Doing what voters want “now” but
without explaining “long-term”
harm.
2. California: term limits shield
legislators from long-term
consequences
Congress/California Legislature 11
E. State Legislators Think Public Opinion
Is More Conservative Than It Is.
1. On average, conservative state
legislators over-estimated
constituency conservatism by 20%
while liberal state legislators
substantially overestimate
constituency conservatism but by a
smaller margin.
Congress/California Legislature 12
F. Congress Often Legitimates
Governmental Decisions.
1. Panama Canal Treaty
Congress/California Legislature 13
G. Incremental Decision-Making
1. Budgets
Congress/California Legislature 14
H. Political Activity and the Popularity of
Congress
1. Public dislikes conflict – which is
the very essence of politics
2. Don’t See Supreme Court Justices
Arguing on T.V.
Congress/California Legislature 15
I. Congressional Elections
1. Referendum on President
2. Unpopular Incumbent leads to
Better Challenger
Congress/California Legislature 16
3. As the issue bases of partisan
attachments have increased
there has been less opportunity
for Congressmen to receive
“personal vote.”
4. Fewer Competitive Districts
Congress/California Legislature 17
5. Less Turnover in Congress
6. Big Republican Win in 2010
Yielded No Republican Gains in
California Legislature
Congress/California Legislature 18
II. Representation and Fairness
A. Since the Primary Election is Often
More Important than the General
Election and Primary Voters are More
Extreme, Representation Can be
Harmed.
Congress/California Legislature 19
2. Politically, it can be Advantageous
for a Legislator to Vote in the
Direction Favored by a Small,
Extreme, But Vocal Minority
Who Cast their Votes on the
Issue rather than Vote in the
Direction of Majority Public
Opinion.
Congress/California Legislature 20
B. Since You Often Need 60 of the 100
Senators to Vote “Yes” and Each
State Receives Two Senators, Small
States Can Have Disproportionate
Influence.
Congress/California Legislature 21
I. Partisan Differences in the U.S.
Congress
A. 95% Direction Rule
B. 40% Difference Rule
Congress/California Legislature 22
C. Policy Areas – least to greatest
partisan difference
1. Civil Liberties
2. International Involvement
Congress/California Legislature 23
3. Agricultural Assistance
4. Social Welfare
5. Government Management of the
Economy
Preparing for the Exam - 1
1. Be able to answer the study guide
questions on page 11 of the
coursepack (www.csulb.edu/~cdennis
click on “Courses”)
2. Be able to explain any concept or term
on the slides and why that concept or
term was important enough to be
discussed.
Preparing for the Exam - 2
3. Be able to “compare and contrast”
concepts or ideas. For example,
compare and contrast cadre and
mass membership political parties.
4. What’s related to what? For example,
as a person’s income increases does
their probability of voting increase or
decrease?
Beginning of Section III
The material for Exam #3 begins with the
next slide.
Political Parties, Income
Inequality and Public Policy – 1A
DON’T WRITE DOWN ANY OF THE
MATERIAL OVER THE NEXT
220 SLIDES. ALL OF IT IS IN
THE COURSEPACK. JUST
LISTEN TO THE DISCUSSION!
Political Parties, Income
Inequality and Public Policy – 1B
I. Policy Orientation of This Discussion
A. Since the U.S. has the weakest
social safety net and highest level of
income inequality of any wealthy
democracy the obvious comparison is
to the other wealthy democracy that
have stronger social safety nets and
less income inequality than we do.
Political Parties, Income
Inequality and Public Policy – 1C
B. I know that isn’t “comforting.” We
naturally want to think of our nation
as “best” on all criteria. Realistically,
this is impossible. A nation that has
the lowest taxes won’t have the least
inequality. The United States ranks
high on some social programs (e.g.,
higher education) but not on income
security and reducing inequality.
Political Parties, Income
Inequality and Public Policy – 1D
C. If I were teaching this class in a nation
with a very strong social safety net
and much less income inequality
(e.g., Sweden), I would compare it to
nations that have less strong social
safety nets and greater income
inequality (e.g., Canada and Great
Britain with moderately strong social
safety nets and the U.S. with a very
social safety net).
Political Parties, Income
Inequality and Public Policy – 1E
D. Therefore, while I will touch on
proposals to weaken the U.S.
safety net, the vast bulk of the
discussion ahead will focus on what
other wealthy democracies do to
reduce income equality, how well
these policies work and what the U.S.
could do in this regard while still
preserving our freedoms and
improving our political system.
Political Parties, Income
Inequality and Public Policy – 2
I. Incentives of the Two Major Political
Parties
A. Unemployment has a large impact
which disproportionately falls on
low and middle-income voters.
1. Nonmonetary costs of
unemployment
Political Parties, Income
Inequality and Public Policy – 3
B. The poorest 80% of American
households are relatively unaffected
by inflation. However, inflation has a
greater adverse impact on the richest
20% of American households.
Political Parties, Income
Inequality and Public Policy – 4
C. Marginal Substitution Rate
Democrats
.90
Independents Republicans
2.0
1.5
Macroeconomic Theory - 1
I. Macroeconomic Theory
A. Neoclassical
1. The free market was assumed to
yield full employment (i.e.,
no/low unemployment) and to
grow without limitation and
to correct any imbalances
that might develop
Macroeconomic Theory - 2
2. Since the higher one’s income the
greater the percentage of their
income they save/invest and the
smaller percentage of their income
they spend, the greater the share of
income the rich possessed the
greater the investment, and hence,
economic innovation/growth.
Macroeconomic Theory - 3
3. By this view, a major goal of
macroeconomic policy was to keep
the costs of production low (e.g., low
wages – through the absence of labor
unions, a low minimum wage, low
taxes, little government regulation of
business, etc.) in order to increase
profits and investment.
4. Couldn’t explain the Great Depression
Macroeconomic Theory - 4
B. Keynesianism
1. If the non-rich lacked sufficient
money to purchase goods, the
economy would not reach its’ full
potential because businessmen
would not open new business, or
expand current ones, if they felt
they could not sell the resulting
products or services.
Macroeconomic Theory - 5
2. This meant that middle and lowerincome groups, who spend a greater
share of their income than upper
income groups, need to have a
significant share of the national
income (through a minimum wage,
labor unions, etc.).
Macroeconomic Theory - 6
3. If economic demand was insufficient,
Keynes argued that the government
should increase its’ spending and be
willing to run large deficits (i.e., spend
more money than it receives in
taxes).
4. If both inflation and unemployment are
high (late 1970s & early 1980s) –
trouble.
Macroeconomic Theory – 7A
C. The aforementioned difficulties of
Keynesian economics, plus the
renewed political strength of a
Republican Party whose ideology
was similar to neoclassical
economics, resulted in a rebirth of
neoclassical economics under
several different names.
Macroeconomic Theory – 7B
D. Corporate profits were 25% to 30%
higher at the official end of the
Great Recession than they were
before it started (2007). Meanwhile,
wages as a share of national income
fell to 58%. That’s the lowest wage
share had been since it began to be
recorded after World War II.
Macroeconomic Theory – 7C
If wages were at their postwar
(World War II) average of 63%, U.S.
workers would earn an extra $740
(billion) this year (2012) or about
$5,000 per worker. That’s a lot of
consuming power.”
Macroeconomic Theory - 8
D. Supply-Side Economics - Ronald
Reagan 1981 & Newt Gingrich 2012
1. Like Neoclassical Economics –
much more concerned with
reducing impediments to supply
(high labor costs, taxes and
regulations) than in stimulating
demand.
Macroeconomic Theory - 9
2. Tax Cuts DON’T pay for
themselves.
3. Gregory Mankiw – supply-side
economics devised by
“charlatans and cranks”
E. Relationship between the
philosophy/self-interest of both major
political parties and the economic
theory they use.
Political Parties, Income
Inequality and Public Policy – 5
D. Recent research by political
scientists shows that all income
groups up through the 95th percentile
(i.e., all but the richest 5% of
households – today those earning
about $200,000, or less, per year)
gain under the Democrats relative to
the Republicans. However, the poor
gain at a greater rate under the
Democrats.
Political Parties, Income
Inequality and Public Policy – 6
E. Our Current Situation
1. Tremendous loss of consumer
demand due to the collapse of
real estate
2. Government needs to replace this
lost demand – i.e., NOT cutback
Political Parties, Income
Inequality and Public Policy – 7
3. 300 billion dollars of stimulus will reduce the
unemployment rate by 1%. The Obama
Stimulus Plan was approximately 775
billion dollars spread over two years.
Given the composition of the Obama
Stimulus Plan (e.g., tax cuts – which have
low stimulative value) it is equivalent to
about 510 billion dollars of stimulus rather
than 775 billion dollars.
Political Parties, Income
Inequality and Public Policy – 8
This means that, due to the Obama
Stimulus Plan, the unemployment rate,
while high, is about 1.7 percentage
points lower that it would have been
without the plan (510/300 = 1.7).
Political Parties, Income
Inequality and Public Policy – 9
4. Many economists think that the federal
government needs to do two things to improve
the economy: (1) provide a larger stimulus
than the Obama Stimulus Plan; and (2) more
strongly regulate the financial markets (to
avoid the bad loans that precipitated our
current problems). This is difficult for the
Republican Party: their ideology conceives of
government as “the problem,” not “the
solution.”
Political Parties, Income
Inequality and Public Policy – 10
Income Inequality in Wealthy Democracies
in the Mid-1980s – Percentage Distribution
Japan
Sweden
U.S.
Richest
20%
37.5%
41.7%
42.0%
Poorest
20%
8.7%
7.4%
5.0%
2009 >>> 3.9%
Political Parties, Income
Inequality and Public Policy: 11A
Year
1920
Richest Richest
10%
1%
39.0% 14.8%
1970
32.6%
9.0%
Richest
½ of 1%
11.1%
6.3%
2008
48.2% 21.0%
16.9%
SHARES FOR THE RICHEST 1% AND ½ OF
1% ARE ABOUT TWICE AS HIGH AS IN
EUROPE
Political Parties, Income
Inequality and Public Policy: 11B
U.C. Berkeley Economist Emmanuel
Saez’s comments on the reasons for
increase income inequality in the U.S.:
“…The changes in income concentration
are just too abrupt and too closely
correlated with policy developments for the
standard story about pay equaling
productivity to hold everywhere.
Political Parties, Income
Inequality and Public Policy: 11C
Between 1971 and 2007, U.S. hourly
wages, adjusted for inflation, rose by 4%.
(That’s not 4% a year; it’s 4% over 36
years!) during those same decades,
productivity increased by 99% - that is, it
nearly doubled. In other words, the
average worker’s productivity rose 25
times more than his pay. Los Angeles
Times, May 14, 2013, page A11).
Political Parties, Income
Inequality and Public Policy: 11D
That is, if pay is equal to productivity, you
would think that deep economic changes
in skills would evolve slowly and make a
gradual difference in the distribution—but
what we see in the data are very abrupt
changes. Basically all western countries
had very high levels of income
concentration up to the first decades of the
20th century
Political Parties, Income
Inequality and Public Policy: 11E
and then income concentration fell
dramatically in most western countries
following the historical narrative of each
country. For example, in the United States
the Great Depression followed by the New
Deal and then World War II. And I could go
on with other countries.
Political Parties, Income
Inequality and Public Policy: 11F
Symmetrically, the reversal—that is, the
surge in income concentration in some but
not all countries—follows political
developments closely. You see the highest
increases in income concentration in
countries such as the United States and
the United Kingdom (Great Britain),
Political Parties, Income
Inequality and Public Policy: 11G
following precisely what has been called
the Reagan (Republican President from
1981-1988) and Thatcher (Conservative
Party Prime Minister of Great Britain from
1979-1990) revolutions: deregulation, cuts
in top tax rates, and policy changes that
favored upper-income brackets.
Political Parties, Income
Inequality and Public Policy: 11H
You don’t see nearly as much of an
increase in income concentration in
countries such as Japan, Germany, or
France, which haven’t gone through such
sharp, drastic policy changes.
Political Parties, Income
Inequality and Public Policy: 11I
Apportioning the 12 percentage Increase
in the Share of Income Going to the Top
1% - 1976-2008 (8.9% to 20.9%)
Tax Reductions –
45%
Political Polarization – 28%
Unexplained 26%
Conservative tax changes and the
increased conservatism of the Republican
Party have had a large impact on
inequality.
Political Parties, Income
Inequality and Public Policy – 12
If you include government transfers and subtract
taxes from 1979 to 2006, the richest 1% of
households had a 256% increase income
while middle-income households (40th-60th
percentiles) had a 21% increase and lowincome households (1st-20th percentiles) only
an 11% increase. In the United States today,
the richest 1% of households have over 1.5
times as much income as the entire poorest
40% of households combined.
Changes in California - 1
In California, between 1987 and 2009,
more than 33% of the income gains went
to the richest 1% of Californians, and
almost 75% went to the richest 10%
while the bottom 90% received just over
25% of the growth in incomes. During
the last two decades, the average
income of the richest 1% of Californians
increased by more than 50%,
Changes in California - 2
after adjusting for inflation, while the
average income of the middle fifth (i.e.,
the 40th – 60th percentiles) decreased by
15%. In 2009, the average income of
the richest 1% of Californians was $1.2
million – more than 30 times that of
Californians in the middle fifth.
California’s income gap is wider than
most other states.
Political Parties, Income
Inequality and Public Policy – 13
Americans in the poorest 10% had a living
standard 22% below low-income Finns,
24% below low- income Dutch and 15%
below low-income Italians. However, the
wealthiest 10% of Americans had
incomes 50% higher than the wealthiest
10% in the other OECD nations (Great
Britain, France, Canada, Japan,
Australia and New Zealand).
Political Parties, Income
Inequality and Public Policy -14
One fundamental reason the poor in the
U.S. have a lower standard of living than
in several other nations is that, after
taxes, the U.S. transfers only about onethird the percentage of income to the
poorest 20% of households (1.5%) as
does the average (4.2%) of the world’s
wealthy democracies.
Analysis from the World Bank Publication, “Social Safety
Nets and Target Assistance: Lessons from the European
Experience,” Chris de Neubourg, et. al.
While the average American has a higher living
standard than the average resident in the
other countries, this does not hold for the
entire spectrum of the income distribution.
Despite the higher aggregate and average
standard of living in the United States, people
in the lower deciles of the income distribution
are far worse off in US than poorer persons or
households in Europe, if compared to the
median income of their own country. (p. 5)
Political Parties, Income
Inequality and Public Policy – 15
The median Swedish family has a living standard
roughly comparable with that of the median
U.S. family: wages are, if anything, higher in
Sweden, and a higher tax burden is offset by
public provision of health care and generally
better public services. As you move further
down the income distribution, Swedish living
standards are much higher than in the U.S.: at
the 10th percentile (poorer than 90% of the
population) the Swedish living standard is 60%
higher than in the U.S.
Political Parties, Income
Inequality and Public Policy – 16
In this light it is worth noting that approximately
38% of the benefits from the Bush Tax Cuts go
to the richest 1% of the households (i.e., the
same households who have been receiving a
much higher share of personal income over
the past 40 years). The richest 1% of U.S.
households receive more money from the
Bush Tax Cuts than the entire poorest 70% of
U.S. households combined (roughly
households with annual incomes of about
$90,000 or less).
Political Parties, Income
Inequality and Public Policy – 17
Wealth is a storehouse of assets: trusts, stocks,
bonds, etc. whereas income is what you live
on over a short period – say, a year. As the
following statistics will make clear: Wealth is
even more unequally distributed than income.
In the United States the wealthiest 1% of
households have over 33% of the national
wealth while the poorest 50% of households
have approximately 7% of the national wealth.
Political Parties, Income
Inequality and Public Policy – 18
A rather large amount of research tells us the
following: (1) Americans vastly overestimate
their chances of becoming rich; (2) vastly
underestimate the degree of income inequality
(i.e., do not think the wealthy are as wealthy
as the actually are); and (3) have a difficult
time connecting public policy to economic
outcomes (e.g., not that many see the Bush
Tax Cuts as a tremendous redistribution to the
wealthy).
Political Parties, Income
Inequality and Public Policy – 19
Currently, wealth in America is distributed as
follows: the richest 20% of households
(percentiles 81-100) have approximately 84%
of the wealth, the next richest 20% (i.e.,
percentiles 61-80) have approximately 11%,
the middle quintile (i.e., percentiles 41-60)
have approximately 4%, the next poorest 20%
(i.e., percentiles 21-40) have approximately
.2% (two tenths of 1%) and the poorest quintile
(i.e., percentiles 1-20) have approximately .1%
(one tenth of 1%).
Political Parties, Income
Inequality and Public Policy – 20
Americans do desire a less unequal
distribution of wealth. Recently, two
scholars tried an interesting experiment.
Not being told what nations had what
distribution of wealth, Americans were
offered three choices: (1) the current
American distribution of wealth;
Political Parties, Income
Inequality and Public Policy – 21
(2) perfect equality (i.e., each quintile getting an
equal – 20% - share of the wealth); or (3) the
current Swedish distribution of wealth (the
richest 20% of households approximately 36%
of the wealth, the next richest 20%
approximately 21% of the wealth, the middle
quintile approximately 18% of the wealth, the
next poorest 20% approximately 15% of the
wealth and the poorest quintile approximately
11% of the wealth).
Political Parties, Income
Inequality and Public Policy – 22
The results were as follows: 47% chose
Sweden’s distribution, 43% chose
perfect equality while only 10% chose
the current American distribution.
Additionally, American’s are less
satisfied with their lives than citizens in a
number of European countries that have
less per capita income, but much
stronger safety nets/less income
inequality than the U.S.
Political Parties, Income
Inequality and Public Policy–22A
I.How Should We Measure “Well-Being”?
A. If someone spends $1,000 on diabetes
medicine it counts as part of GDP.
However, wouldn’t the same person have
a better life if they didn’t have diabetes but
spent $750 on a computer? Since $1,000
is greater than $750, in this example GDP
would be higher for diabetes oriented
spending than for buying a computer.
Political Parties, Income
Inequality and Public Policy–22B
B. GDP (Gross Domestic Product) only
measures the monetary value of the
economy. It tells nothing about how
the money is used or any nonmonetary value (national health, the
functioning of the political system, job
security and measures of community
well-being).
Political Parties, Income
Inequality and Public Policy–22C
C. Typically, on such indicators, the
United States ranks lower than the
high tax and strong welfare state
countries of Northern Europe (e.g.,
Norway, Sweden, Denmark, Finland,
and the Netherlands).
Political Parties, Income
Inequality and Public Policy – 23
Mobility is NOT that high in the U.S.
If you compare the eventual income of two
children from different families, on
average, the child from the richer family
receives an annual income that is higher
than the child from the poorer family by
approximately 30%-40% of the
difference in the incomes of their
parents.
Political Parties, Income
Inequality and Public Policy – 24
A child from a family that made $100,000 per
year would, on average, out earn a child from
a family that made $25,000 by approximately
$25,000 per year (the difference in their
parents incomes was $75,000 – i.e., $100,000
- $25,000 = $75,000; 33% of $75,000 =
$25,000). Thus, if later in life the child of the
poorer family was earning $25,000 per year
and the child of the richer family was earning
$50,000 per year, you could say that the
difference was entirely due to background.
Political Parties, Income
Inequality and Public Policy – 25
Put another way: children born into the
poorest 20% of households have
approximately a 42% chance of ending
up in the poorest 20% themselves, a
24% chance of ending up in the next
poorest 20% and only a 6% chance of
ending up in the richest 20%.
Political Parties, Income
Inequality and Public Policy – 26
Father’s and Son’s incomes in the U.S.
correlate at about .43 (correlation ranges
from 0 to 1.0 so this is a moderate
correlation), and is higher in the U.S.
(i.e., less mobility) than in Sweden,
Norway, Finland, France, Spain,
Germany, and Canada.
Political Parties, Income
Inequality and Public Policy – 27
The Bush Tax Cuts reveal a very pertinent fact
about economic policy: there is often a great
difference between programs that help the
non-wealthy acquire wealth versus policies
that protect the wealth of those who already
have it. What is good for one group is not
necessarily good, and often harmful, for the
other group. Approximately 75% of American
household lose under the Bush Tax Cuts.
Political Parties, Income
Inequality and Public Policy – 28
Consider how the Bush Tax Cuts affect mobility
from low to high-income groups. First, by
repealing the estate tax and reducing other
taxes on high-income individuals, the Bush
Tax Cuts give the wealthy more wealth to
leave their heirs. Obviously, this makes it
more difficult for most of you to try to amass
more wealth than the heirs of the currently
very wealthy due to the fact these heirs will be
given such a tremendous head start on you.
Political Parties, Income
Inequality and Public Policy – 29
Second, by reducing the revenue of the
federal government, the Bush Tax Cuts
will all but require reductions in programs
that help low and middle-income people
ascend the economic ladder (e.g., the
Pell Grant Program for poor college
students, health care for the poor, job
training, public transportation, etc.).
Political Parties, Income
Inequality and Public Policy – 30
The Bush Tax Cuts are one of the very least
effective, and most costly, methods of
stimulating the economy and, ultimately,
reducing unemployment. As economic
research indicates: lower-income households
spend a higher percentage of each additional
dollar they receive than higher-income
households.
Political Parties, Income
Inequality and Public Policy – 31
For example, a household with a $40,000 annual
income will spend a higher percentage of each
additional dollar it receives than a household
with a $200,000 annual income. This is
because lower-income households have
greater unmet needs than higher-income
households (e.g., replacing a worn out car).
Political Parties, Income
Inequality and Public Policy – 32
By showering more money on the richest
1% of households (i.e., households with
incomes above $370,000) than on the
entire poorest 70% of households
combined, the Bush Tax Cuts place the
most money in the hands of those least
likely to spend it. Contrast this with the
items on the next slide – favored by
Democrats.
Political Parties, Income
Inequality and Public Policy – 33
The following indicates how much additional
economic activity occurs per dollar spent:
extending unemployment compensation $1.60; payroll tax reduction - $1.09; and
extending the Bush Tax Cuts - $.35 (i.e. for
each dollar given to tax payers through the
Bush Tax Cuts, we only receive 35 cents of
additional economic activity – only a fourth as
much per dollar spent as on unemployment
compensation – i.e., $.35 is about ¼ of $1.60).
Political Parties, Income
Inequality and Public Policy – 34
Since all income groups will save some
percentage of the money they receive
(i.e., lower-income households will save
some money, just not as a great
percentage as higher-income
households), having the government
directly spend money is more stimulative
than tax cuts.
Political Parties, Income
Inequality and Public Policy – 35
If the government both taxes and spends a
large share of the economy won’t we
end up with more equal slices of a
smaller pie (or a pie that isn’t growing as
fast as it otherwise would)? While this is
an important point, the evidence in favor
of it is NOT compelling.
Political Parties, Income
Inequality and Public Policy–36A
Tax rates as a percentage of the economy
are much lower in the U.S. than in most
wealthy democracies:
U.S. – 32.2%, Canada – 38.3%,
Great Britain – 41.2%, Germany – 44.6%,
Italy – 47.8%, Sweden – 50.9%,
France – 52.9% and Denmark – 57.4%.
Source: OECD as reported in NY Times
11/16/14
Political Parties, Income
Inequality and Public Policy–36B
Federal Taxes as a percentage of our
economy are lower today than they have
been in over 60 years.
1951- 16.1 % (before Medicare enacted)
1971 – 17.3%
2001 – 19.5%
2011 – 15.4%
Political Parties, Income
Inequality and Public Policy–36C
Effective Tax Rates on Income of
$100,000 in 2012
Nation
Income Tax Social Security
U.S. – 26.0% 18.7%
7.3%
G. Brit.- 31.4% 24.1%
7.3%
Sweden- 36.3% 36.3%
0%
France – 42.0% 20.0%
22.0%
Germany-43.8% 28.3%
15.5%
Political Parties, Income
Inequality and Public Policy–36D
Government Mandated Paid Annual Leave
and Paid Days of Vacation
U.S.
- 0
Great Britain - 20
Sweden
- 25
German
- 30
France
- 31
Political Parties, Income
Inequality and Public Policy – 37
From 1990-2005 per capita (i.e., per person - to
adjust for differences in population size
between nations) growth rates were as
follows: U.S. - 85%, Netherlands – 86%,
Norway – 134%, France – 60%, Australia –
91%, Canada – 69%, Denmark – 80%, United
Kingdom – 111%. Since 1980, per capita real
G.D.P. (Gross Domestic Product) – which is
what matters most for living standards - has
risen at about the same rate in America and in
the E.U.(U.S. - 1.95%, E.U. - 1.83%).
Political Parties, Income
Inequality and Public Policy – 38
As economist Peter Lindert of the University of California
at Davis put it, “No matter how you torture the data,
there is no negative relationship between a
commitment to the welfare state and the growth rate in
how well off we are.” While taxes may reduce the
willingness of some to work as hard, many of the
purposes for which tax dollars are spent (e.g.,
education, infrastructure, etc.) increase the growth
rate. One of the reasons the Nordic countries
(Norway, Sweden, Denmark and Finland) spend about
TWICE the percentage of GDP (3%-4%) on research
and development as the U.S.
Political Parties, Income
Inequality and Public Policy – 39
In light of the Obama Health Care Plan, let me
mention the following: EVERY nation in the
world rations health care. For example, would
you pay an additional $200 per month for
health care in order to prolong the life of
terminally ill patients an average of 3 months?
If “yes,” how about $400 per month? Once
you say “no” (i.e., refuse to pay), you are
rationing health care.
Political Parties, Income
Inequality and Public Policy – 40
Let me offer the following question: Would
you prefer to have a government panel –
typically headed by physicians – make
the necessary rationing decisions or
would you rather have a for-profit
insurance company make them? That’s
the choice we actually have.
Political Parties, Income
Inequality and Public Policy – 41
Government policies do have important affects
on the rationing decisions that all health care
systems must make. For example, cigarette
taxes reduce cigarette smoking. Economists
have found that a 10% increase in the cost of
cigarettes reduces smoking by about 3%-4%.
Thus, cigarette taxes reduce the amount of
smoking which, in turn, reduces the onset of a
large number of adverse health consequences
(e.g., cancer, heart attack, stroke, etc.).
Political Parties, Income
Inequality and Public Policy – 42
Many of those who claim the Obama Health
Care Plan will lead to government rationing of
health care to the elderly are the same
individuals/groups who oppose government
regulations (e.g., soda taxes, meat taxes,
restaurant menu labeling requiring disclosure
of calories, fat, sodium, etc.) which would
greatly reduce adverse health consequences
(e.g., obesity) which, in turn, would leave more
money for the health care needs of senior
citizens.
Political Parties, Income
Inequality and Public Policy – 43
Broad-based government programs, such as
Medicare (a government health care program
for senior citizens), have two big cost saving
advantages over a completely free market
social insurance system: (1) compulsion – i.e.,
requiring everyone to buy health insurance
lowers the cost because the cost of the
“expensive” individuals (e.g., those likely to be
ill) is spread over a large group (e.g., the
healthy) and;
Political Parties, Income
Inequality and Public Policy – 44
(2) administrative cost (e.g., the typical
private health insurer spends about 10%
of its outlays on administrative costs,
weeding out sick people, etc. whereas
the government run Medicare program
spends between 2%-3% of its budget on
administrative costs).
Political Parties, Income
Inequality and Public Policy – 45
The preceding are two of the major
reasons why the #1 ranked (by the World
Health Organization) French health care
system spends only a little more than
half as much money per person as the
37th ranked U.S. health care system
(France - $4,690, U.S. - $8,895).
Political Parties, Income
Inequality and Public Policy – 46
Government run programs such as
Medicare aren’t the same as government
ownership of productive assets.
Medicare doesn’t own hospitals or
employ doctors, it contracts with privately
owned hospitals and private physicians.
Political Parties, Income
Inequality and Public Policy – 47
I should also mention that government
programs such as Medicare and
Medicaid (a government run health care
program for the poor) currently pay
substantially more of our nation’s health
care costs (approximately 47%) than
private insurance (approximately 35%).
Thus, we can’t “get the government out
of health care.”
Political Parties, Income
Inequality and Public Policy – 48
It should also be mentioned that the
democracies of Western Europe are, in
the main, NOT socialist nations.
Socialism means that the government
owns the modes of production and
distribution. For example, socialism in
the U.S. would mean that the
government would own the major fast
food outlets (e.g., McDonalds, Wendy’s
etc.).
Political Parties, Income
Inequality and Public Policy – 49
Considerations about the size of
government on personal freedom are
complicated. Equating the size of
government with personal freedom often
involves equating private property with
personal freedom. This is difficult.
Political Parties, Income
Inequality and Public Policy – 50
For example, would most Californians
have more freedom if the beaches were
sold to private individuals or if the State
of California operates them? Additionally,
if state taxes were reduced taxpayers
would have a greater freedom of choice
in spending their money.
Political Parties, Income
Inequality and Public Policy – 51
However, if these state tax cuts resulted in
higher fees for U.C. and CSU students fewer
students would attend college. Not attending
college would reduce both the future incomes
and occupational choices of the individuals
who did not attend college due to the budget
reductions resulting from the state tax cuts. In
short, it would reduce their future freedom.
So, would such a state tax cut result in a “net”
gain or loss in freedom?
Political Parties, Income
Inequality and Public Policy – 52
A relatively small loss in freedom for a large
group of people (requiring each person to
purchase health insurance) will provide a
much larger amount of freedom (to make all
the decisions living people can make) for a
smaller group of people (the unhealthy). If so,
has the amount of freedom either increased or
decreased? It’s not so easy to answer! You
would have to balance the loss of many small
amounts of freedom against a fewer large
gains in freedom.
Political Parties, Income
Inequality and Public Policy – 53
People in the democracies of Western Europe
are typically as “free” as Americans. For
example, free speech in Great Britain is as
great as it is in the United States. Additionally,
some Western European nations actually have
higher scores on some measures of
democracy than the United States. Typically,
this occurs because of lower voter turnout and
fewer major political parties in the United
States.
Political Parties, Income
Inequality and Public Policy – 54
The “big picture” is that, if we wanted to,
our nation could reduce economic
inequality significantly and still have an
equally vibrant, growing economy with
the same level of freedom we currently
enjoy. This is really a question of values
(i.e., Do we want to?) rather than
possibilities (i.e., Could we?)
Political Parties, Income
Inequality and Public Policy–55A
Increased redistribution of income and wealth
might well improve the functioning of
democracy in the United States. What some
refer to as “the Debilitating Cycle” is a very
important problem: greater income inequality
leads to a greater reliance of politicians on
campaign contributions from the wealthy,
which, can easily cause these same politicians
to adopt policies that even more favor the
wealthy, which starts the same cycle again.
Political Parties, Income
Inequality and Public Policy–55B
Relative to the average American, the very
wealthy (net worth of $40 million or more) are:
(1) much more concerned about budget
deficits; (2) much more favorable to cutting
social welfare programs, especially Social
Security and health care; (3) are considerably
less supportive of an above-poverty-level
minimum wage, or having the federal
government “see to” or provide jobs for the
unemployed;
Political Parties, Income
Inequality and Public Policy–55C
(4) much less supportive of providing
broad educational opportunities; (5)
much less willing to redistributive income
to those poorer than themselves; (6) less
willing to raise taxes on high income
groups (e.g., less supportive of having
an estate tax); and (7) are less willing to
regulate either the stock market or
businesses.
Political Parties, Income
Inequality and Public Policy – 56
Proposals of the Political Parties
President George W. Bush proposed a series of
policies to deal with our nation’s economic
future that were collectively referred to as “The
Ownership Society.” The idea is that each
individual citizen would “own” items that had
previously been provided by the government.
For example, if each individual citizen can
choose how to invest their money in a
personal Social Security Account you could
say that person “owned” their retirement.
Political Parties, Income
Inequality and Public Policy – 57
Let’s see how “The Ownership Society” would
have changed American health care policy
and the degree of health care security
American’s have. Former President George
W. Bush did not favor requiring all Americans
to purchase health insurance. He did favor
(and at his urging Congress did pass)
legislation setting up Health Savings Accounts
in 2003.
Political Parties, Income
Inequality and Public Policy – 58
In 2008, an individual could contribute up to
$2,400 per year to such an account ($5,800
for a family). The gains from this investment
are not taxed and the money could be
withdrawn to pay the deductable under a
health insurance policy. This is a tax free
method of investing for those fortunate enough
to have the money to participate. Not
surprisingly, those most likely to contribute to
Health Savings Accounts are much richer than
average.
Political Parties, Income
Inequality and Public Policy – 59
Look at the relationships between
wealth/education and health: (1) more welleducated and higher-income individuals are
more likely to value delayed gratification – i.e.,
foregoing something today for a greater future
gain - in this case eating healthier food,
maintaining a healthier weight, not smoking,
etc. than less well-educated and lower-income
individuals; thus,
Political Parties, Income
Inequality and Public Policy – 60
(2) more well-educated and higher-income
individuals are less likely to need medical
attention than less well-educated and lowerincome individuals; and (3) more welleducated and higher-income individuals are
more likely to contribute to Health Savings
Accounts than less well-educated and lowerincome individuals.
Political Parties, Income
Inequality and Public Policy – 61
By not requiring people to buy insurance and by
allowing people to put money into Health
Savings Accounts, higher-income people, who
are typically more healthy, are able to remove
money that would’ve gone into an insurance
pool from which the unhealthy could benefit.
Thus, the practical effect of Health Savings
Accounts is to reduce the ability to spread
medical costs over a larger, healthier,
population.
Political Parties, Income
Inequality and Public Policy – 62
Withdrawing money that a healthier population
would have put into an insurance pool and,
instead, placing it in the hands of higherincome households means that the costs of
health insurance to the less healthy
population, disproportionately drawn from
middle and low-income households, will
increase. All of this works to the advantage of
higher- income individuals.
Political Parties, Income
Inequality and Public Policy – 63
The Ownership Society proposal for education
(another tax-free savings plan) has a similar
effect to the Health Savings Accounts. Here’s
why: (1) higher-income individuals are much
more likely to have the necessary money to
put into such an account; (2) citizens are more
likely to vote in favor of increased taxes for
education when they have children in the
public education system; and
Political Parties, Income
Inequality and Public Policy – 64
(3) the money from an Educational Savings
Account will either allow more students to
afford a private college and/or reduce their
need for more funding for state run colleges.
For example, the money from the account
means they are less likely to need financial aid
than other students. Points 1-3 mean that the
educational “gap” between students from
lower and higher-income households will
increase.
Political Parties, Income
Inequality and Public Policy – 65
Republican Congressman Paul Ryan calls his
plan, “The Roadmap for America’s Future.”
His plan would: (1) cut federal taxes of the
richest 1% of households by 50% (i.e., in half
– this is in addition to the tax cuts this group
would receive by making the Bush Tax Cuts
permanent);
Political Parties, Income
Inequality and Public Policy – 66
(2) replace some of the lost revenue from
the tax cuts for the richest 1% of
households with a much more regressive
consumption tax on most goods and
services (i.e., paid much more by middle
and low-income households – families
with incomes between $50,000 and
$75,000 would face a tax increase of
around $900 per year);
Political Parties, Income
Inequality and Public Policy – 67
(3) freeze discretionary domestic spending
(keep in mind that, that after adjusting for
inflation and population growth, this
would mean a 25% reduction over 10
years in such items as public
transportation, etc.); (4) privatize Social
Security (i.e., individual accounts) and;
Political Parties, Income
Inequality and Public Policy – 68
(5) replace Medicare for senior citizens with a
voucher (i.e., an amount of money to buy
health insurance). Since the Ryan plan
doesn’t require all citizens to buy health
insurance and includes Health Savings
Accounts, health care costs will increase (see
previous discussion). These increases would
occur at the same time that Ryan wants to
reduce Medicare spending. Thus, senior
citizens would have much poorer health care
under the Ryan plan than currently.
Political Parties, Income
Inequality and Public Policy – 69
The Ryan plan proposes large cuts in
Social Security benefits — roughly 16
percent for the average new retiree in
2050 and 28 percent in 2080 from price
indexing alone — and initially diverts
most of these savings to help fund
private accounts rather than to restore
Social Security solvency.”
Political Parties, Income
Inequality and Public Policy – 70
This is very similar to former President
George W. Bush’s proposal for Social
Security. Unlike Bush’s Social Security
Proposal, the Ryan Plan protects those
whose investments result in less income
than under the traditional Social Security
program. Ryan’s guarantee would
encourage seniors to make more risky
investments.
Political Parties, Income
Inequality and Public Policy – 71
Why not gamble on an investment with
large possible gain (but also large
possible loss) when the federal
government insures you against loss?
Political Parties, Income
Inequality and Public Policy – 72
While the Ryan Plan does include a protection
for senior citizen’s whose investments yielded
a return lower than what they would have
received under traditional Social Security, it is
extremely unlikely that this guarantee would
be paid in full. Here’s why: Ryan would use
government revenues to replace the lost
income to senior citizens whose investments
performed poorly.
Political Parties, Income
Inequality and Public Policy–73A
The cost of this guarantee would be very
high. Given the reductions in other
programs that would be required to fully
fund this guarantee (e.g., in defense,
education, environmental protection,
etc.) it would be extremely unlikely to be
fully realized. The “big picture” is that the
current Republican plans, including Mitt
Romney’s, are very similar to former
President Bush’s plans.
Political Parties, Income
Inequality and Public Policy–73B
Regardless of whether one agrees or disagrees
with the philosophy of the Republican party,
the following conclusion is inescapable: the
Republican proposals would make what is
already, by far, the weakest social safety net
of any wealthy democracy in the world much
weaker still while simultaneously increasing
the degree of after-tax income inequality in
what is already the most economically unequal
wealthy democracy in the world.
Political Parties, Income
Inequality and Public Policy – 74
Which of the following seems more
appropriate: (1) As personal economic
risk increases, you need the government
less? (2) As personal economic risk
increases, you need the government
more?
Political Parties, Income
Inequality and Public Policy – 75
The two parties differ widely. The Republican
Party approach (i.e., “The Ownership Society”
and “The Roadmap for America’s Future”) is to
load increased personal economic risk back
on the individual (i.e., less governmental
guarantees – privatization of Social Security
rather than guaranteed benefit levels, giving
senior citizens a voucher rather guaranteed
Medicare – same with health care for the poor;
Political Parties, Income
Inequality and Public Policy – 76
reducing taxes on high income earners that can
be applied to public services for middle and
low-income earners) while the Democratic
Party approach is more in favor of using the
government to offset increased personal
financial risk (e.g., the Obama Health Care
Plan – making health care more affordable for
middle and low-income earners, increasing the
Pell Grant program for low-income college
students,
Political Parties, Income
Inequality and Public Policy – 77
reducing the Bush Tax Cuts, increasing
government deficit spending and
increasing regulation of financial
markets).
Political Parties, Income
Inequality and Public Policy – 78
Tax rates are NOT highly progressive in the
United States. The rich pay a higher
percentage of their income in taxes than the
poor, but not greatly so. All federal taxes
together (i.e., income taxes, Social Security
taxes, etc.) take approximately 9.4% of the
income of households making $16,000 per
year, approximately 20.5% of the income of
households making $52,000,
Political Parties, Income
Inequality and Public Policy – 79
approximately 27.2% of the income of
households making $200,000 per year
and approximately 34% of households
making $18,000,000 per year.
Political Parties, Income
Inequality and Public Policy – 80
It is very important to mention that federal taxes
have been made much LESS progressive over
time. To demonstrate the impact of reduced
federal tax progressivity consider the following:
“In 2000, the richest 1 household in 1,000 (i.e.,
.1 of 1%) had about 7.3% of total national
after-tax income. If the effect of taxes on their
income had remained what it was in 1970,
they would have had about 4.5% of after-tax
national income.
Political Parties, Income
Inequality and Public Policy – 81
This would be a reduction of approximately
38% in their after-tax income (7.3% 4.5% = 2.8 and 2.8 is approximately 38%
of 7.3). This decrease in federal tax
progressivity was prior to the Bush Tax
Cuts (which, as previously discussed,
overwhelmingly benefit households with
very high incomes).
Tax Rates Over Time
Political Parties, Income
Inequality and Public Policy – 82
State and local taxes are even LESS progressive
than federal taxes. Thus, if you add state and
local taxes to federal taxes (i.e., to obtain “total
taxes”) the tax burden is less favorable to the
poor (i.e., less progressive) than for federal
taxes alone. State and Local Taxes are a
greater percentage of personal income for the
poorest 20% of a state’s households than for
the wealthiest 1% of a state’s households in
virtually every state (all but one).
Political Parties, Income
Inequality and Public Policy – 83
In California state and local taxes take
approximately 11.3% of the income of
the poorest 20% of households while
taking only 7.2% of the income of the
richest 1% of households.
Political Parties, Income
Inequality and Public Policy – 84
For example, in California, the wealthiest 10% of
the taxpayers pay approximately 75% of the
state income tax. While true, this argument is
misleading for two reasons: (1) the most
important consideration is taxes as a
percentage of income and not the percentage
of a tax borne by a particular income group –
thus, if California’s state income tax was only
to raise $1 and Steven Spielberg paid that $1
he would have borne 100% of the state
income tax burden –
Political Parties, Income
Inequality and Public Policy – 85
however, $1 would be virtually 0% of his income
– thus it’s the percentage of income paid in a
tax and not the percentage of a tax that a
particular income group pays that is the
important consideration; (2) this calculation
excludes all taxes except the income tax (e.g.,
state sales taxes, property taxes, etc.) – when
we include all state and local taxes and fees,
state and local taxes are a higher percentage
of income for the very poor than the very rich.
Political Parties, Income
Inequality and Public Policy – 86
As a share of personal income, California
typically ranks about 18th (out of 50
states) in state and local tax burden with
state and local revenues equal to
approximately 17% of personal income.
Political Parties, Income
Inequality and Public Policy – 87
One often hears candidates for state office
talking about “runaway” state spending.
Adjusting for population growth and inflation,
to maintain the same level of service in 2009
that the state of California provided in 1999
state spending would have had to increase by
53%. Over the 1999-2009 period spending by
the State of California only increased by 29%
(i.e., a 24% REDUCTION in real per capita
spending).
Political Parties, Income
Inequality and Public Policy – 88
Another way of looking at the question of
state spending is to take account of both
need (i.e., what type of population we
have) and state wealth (i.e., our “ability
to pay”). By such a measure, California
ranked 37th out of the 50 states.
Political Parties, Income
Inequality and Public Policy – 89
Some state tax increase would IMPROVE the
functioning of California’s economy:
(1) tax internet purchases – not taxing
them discriminates against bricks and
mortar stores;
(2) change business property taxes annually
(i.e., not only when the property is sold) current practice favors those who hold a
property longer – harms new
businesses;
Political Parties, Income
Inequality and Public Policy – 90
(3) tax carbon, pollution and oil - from an
economic standpoint, the cost of
pollution should be taxed to provide the
appropriate disincentives to reduce
pollution. Currently, California is the only
oil producing state that does not have a
severance tax on oil.
Political Parties, Income
Inequality and Public Policy – 91
One factor that would greatly help California’s
business climate is a more highly educated
workforce. To meet employment needs, the
percentage of California’s workforce with at
least a bachelor’s degree needs to roughly
double over the next 15 years (from
approximately 21% to approximately 41%).
Tax cuts that result in reduced funding for
higher education will not help us meet this
critical need.
Political Parties, Income
Inequality and Public Policy–92A
A final point, California does NOT have a
“big bureaucracy.” State and local
employees constitute a SMALLER share
of California’s population than in
approximately 45 of the 50 states.
Political Parties, Income
Inequality and Public Policy–92B
HOMELESSNESS:
In 2005, Utah calculated the annual cost of E.R.
visits and jail stays for an average homeless
person was $16,670, while the cost of
providing an apartment and social worker
would be $11,000. Each participant works with
a caseworker to become self-sufficient, but if
they fail, they still get to keep their apartment.”
Due to drug and alcohol use shelters are much
less beneficial than individual apartments.
Political Parties, Income
Inequality and Public Policy–92C
Will poor people make better decisions if
they have greater economic security
(e.g., guaranteed housing, food, medical
care, etc.) or less economic security?
The evidence we have is lopsidedly on
the side that says poor people will make
better decisions (e.g., decisions
concerning employment, health, etc. that
involve current sacrifice but have greater
Political Parties, Income
Inequality and Public Policy–92D
long-term benefits) under conditions of
greater rather than lesser security. In
reviewing a recent study by an
economist and psychologist, Tina
Rosenberg notes, “Worrying about
money when it is tight captures our
brains. It reduces our cognitive capacity
— especially our abstract intelligence,
Political Parties, Income
Inequality and Public Policy–92E
which we use for problem-solving. It also
reduces our executive control, which
governs planning, impulses and
willpower. The bad decisions of the poor,
say the authors, are not a product of bad
character or low native intelligence. They
are a product of poverty itself. Your
natural capability doesn’t decrease when
you experience scarcity.
Political Parties, Income
Inequality and Public Policy–92F
But less of that capacity is available for
use. If you put a middle-class person into
a situation of scarcity, she will behave
like a poor person.”
Political Parties, Income
Inequality and Public Policy – 93
Why Not Policies that Would More Help
Middle and Low-Income Households?
While both our strong commitment to absolutist
individualism and the framework of our political
system (e.g., the separation of powers), make
it difficult for the government to pass laws,
there are important changes in the balance of
domestic political power that have taken place
over the past 40 years that make it even more
difficult for the federal government to act on
Political Parties, Income
Inequality and Public Policy – 94
behalf of the interests of middle and lowincome citizens.
In a “nutshell,” here’s what happened: (1) after
suffering a large number of political defeats
through the 1960s under both political parties,
during the mid-1970s business groups (the
U.S. Chamber of Commerce, the National of
Manufacturers, the National Federation of
Independent Business, etc.)
Political Parties, Income
Inequality and Public Policy – 95
decided to invest tremendous amounts of money
both in lobbying members of Congress and
contributing to political campaigns; (2) the
relative strength of the counter-weight to
business, labor unions, declined precipitously
(in 1954 – 32% of the workforce was unionized
- today only 13%), and with it a tremendous
loss in both political information supplied to
middle and low- income households and
political participation by these citizens
Political Parties, Income
Inequality and Public Policy – 96
(i.e., unions contacting their membership with
information on political issues, the
membership then contacting elected officials);
(3) the interest groups that have formed on the
political left have dealt more with the
concerns/interests of well-educated higher
income voters rather than the working class
(i.e., environmentalism, women’s rights and
gay rights do not deal with the distribution of
the tax burden,
Political Parties, Income
Inequality and Public Policy – 97
subsidies for low-wage workers or extending
governmental provided health care); (4) due to
the increased share of income going to the
rich and greatly increased campaign costs –
Democrats have had to turn more to business
and upper-income groups for campaign
contributions; and (5) due to factors 1-4, the
political position of business has become
much more advantaged relative to labor.
Political Parties, Income
Inequality and Public Policy – 98
Think of the political consequences of policy
philosophies such as The Bush Tax Cuts, The
Ownership Society and The Roadmap for
America’s Future. All of these policies
accomplish three goals of many (but not all)
conservative leaders: (1) they shift the
distribution of the tax burden away from taxing
investments (i.e., money made with money –
income sources primarily of very high-income
households)
Political Parties, Income
Inequality and Public Policy – 99
toward higher taxes on labor (i.e., taxes more
paid by income from wages and salaries – the
principle sources of income for the poorest
90%, or more, of households - by relying on
consumption taxes); (2) reduce the amount of
money redistributed to middle and low-income
groups through public programs (e.g., mass
transit, job retraining, guarantees for Social
Security, Medicare, etc.); and
Political Parties, Income
Inequality and Public Policy –100
(3) increase the size of the federal deficit to the
point that future Democratic Administrations
will have difficulty in undertaking programs
primarily benefitting middle and low-income
households. For example, notice how difficult it
is for Obama to get the necessary funding to
implement his health care plan due to the size
of the federal deficit (greatly swelled by the
Bush Tax Cuts).
Political Parties, Income
Inequality and Public Policy –101
The political consequences of the above
mentioned policies significantly reduce the
incentive for low and middle-income people to
participate in the political process (e.g., vote)
because they will perceive that government is
not that helpful to them (i.e., their taxes will
increase and the value of their government
benefits will decrease). So, why invest time
and effort in politics?
Political Parties, Income
Inequality and Public Policy –102
This protects high-income households
from future adverse political events.
Thus, if increasing income inequality
might cause low and middle-income
people to desire income redistribution,
make it difficult for the government to
accomplish this and reduce the
incentives for low and middle-income
people to get involved in the political
process.
Political Parties, Income
Inequality and Public Policy –103
What could we do? The basic answer is to undo
the changes of the past 40 years. While any
proposed “reforms” would spark opposition
from those who do well under the current
system, I’ll mention two possible changes that
would greatly alter the political landscape in a
direction much more favorable to middle and
low-income groups. First, make it easier for
workers to unionize.
Political Parties, Income
Inequality and Public Policy –104
Canada offers a compelling lesson. According
to the survey evidence, American workers are
as favorable to unionization as Canadian
workers. However, over the past 40 years, the
gap between the percentage of the Canadian
workforce that is unionized and the percentage
of the U.S. workforce that is unionized has
steadily increased (Canada: 1960 - 32%, 2000
– 32%| U.S.: 1960 - 31%, 2000 – 13%).
Political Parties, Income
Inequality and Public Policy –105
Without a lengthy discussion, the
differences over time are mostly
attributable to differences in public
policies governing the unionization
process. Not surprisingly, this was one
of the earliest results of increased
business political strength: make it more
difficult for workers to unionize.
Political Parties, Income
Inequality and Public Policy –106
The second change would be to enact Yale Law
Professor Bruce Ackerman’s “Patriot Dollars”
proposal for campaign financing: have the
federal government give each voter an ATM
valued at $50 for each federal election cycle
(i.e., every two years). This money could only
be used for campaign contributions (i.e., all
unused money would be returned to the
federal government – “yes” it could be done –
i.e., the technology to ensure this does exist).
Political Parties, Income
Inequality and Public Policy –107
A voter could give their contribution to one, or a
series, of candidates. By not limiting how
much individuals, businesses or unions
contribute, this policy would not be invalidated
by the Supreme Court. The Supreme Court
has ruled that restricting how much an
individual, or group, can contribute violates
their free speech (i.e., money equals speech).
Since Professor Ackerman’s proposal does
not limit speech, it is constitutional.
Political Parties, Income
Inequality and Public Policy –108
By greatly increasing the amount of
campaign money available, Professor
Ackerman’s proposed policy would
reduce the tremendous monetary
advantage of both business and the
wealthy.
Lessons from Canada - 1
Currently, the federal deficit (i.e., the
difference between what the federal
government receives in taxes and what it
spends) is approximately 10% of GDP.
Rather than the painful cuts to the poor
(food programs, medical care, job
training, etc.) and education, we could
eliminate the ENTIRE deficit by
Lessons from Canada - 2
having U.S. taxes as a percentage of GDP equal
Canadian taxes as a percentage of GDP (U.S.
taxes would increase from 27% of GDP to
37%). Next to the United States, Canada has
one the VERY WEAKEST social safety nets of
the wealthy democracies. Thus, Canada is
NOT a “high tax, big welfare state” nation.
However, Canadian taxes represent 10%
more of GDP than in the United States. We
are a very LOW tax nation.
Rationale for Budget Austerity
In voting in favor the Ryan Budget,
Representative Tim Walberg (R-Michigan)
said, “They understand in my district: We’re
broke. If we don’t deal with this, we lose the
social safety net.” One could ask, “Why can’t
the wealthiest democracy in the world
guarantee to it’s citizens the same social
welfare protections (universal health care,
greater income support, etc.) that all other
wealthy democracies guarantee their
citizens”?
U.S. & Canada – Taxes and
Spending as a Percent of GDP
U.S.
Canada
Taxes
27%
37%
Health Care
16%
10%
W. Health Org. Rank 37th
30th
Defense
4.7%
1.1%
It’s not that we “can’t afford” to provide a better
social safety net but rather we tax much less
and spend much more on health care and
defense. Defense spending in Great Britain
and France is approx. 2.5% of GDP.
Areas to Reduce Spending
If you’re thinking of areas to reduce federal
spending consider defense. U.S. military
spending is about 4.7% of GDP. U.S. military
spending is approximately 46.5% of the
military expenditures of the ENTIRE WORLD.
To put this in perspective the second highest
spending nation, China, spends about 6.6% of
the military expenditures of the entire world.
The next largest spenders are France (4.2%),
Great Britain (3.8%) and Russia (3.5%).
The Social Safety Net - 1
Even the comparatively weak U.S. safety
net still helps. In the current recession,
the U.S. Census Bureau estimates that
the combination of unemployment
insurance, food stamps and tax credits
for the working poor lifted the incomes of
between 3 to 5 MILLION U.S.
households above the poverty line. Now
think of the human cost of reducing the
funding for these programs.
The Social Safety Net - 2
The most important fundamental change is
to realize that a more activist
government will be necessary. If
present economic trends continue (e.g.,
small increases in hourly wages for most
middle and low-income workers, reduced
employer provided health care and less
generous and secure private sector
retirement benefits),
The Social Safety Net - 3
the obvious “solution” is to have the federal
government provide the benefits that the
private sector use to provide. This means
having the federal government supplement
wages (i.e., to provide cash payments to those
who work but earn little), provide a health care
benefits package to all citizens similar to
Canada and Western Europe, provide child
care/day care to working mothers and
increase the amount of money Social Security
provides to retirees.
The Social Safety Net - 4
Concerning Social Security remember:
1.It Is LESS GENEROUS than similar
programs in other wealthy democracies;
2. For TWO-THIRDS of the retired
population it provides OVER HALF of
their income and for ONE-THIRD of the
retired population over 90% of their
income;
The Social Safety Net - 5
3. Is an “INSURANCE” against poverty for
the elderly and income loss due to
disability – to do this it MUST have
GUARANTEED benefits;
4. As “INSURANCE” against poverty and
disability it is NOT comparable to a
risk-laden 401k plan;
The Social Safety Net - 6
5. Future shortfalls in necessary
revenues can EASILY be
accomplished by having ALL income
subject to the Social Security tax;
6. Future support for Social Security
would be GREATLY weakened if ALL
elderly did NOT receive benefits.
The Social Safety Net - 7
One of the primary difficulties the United
States faces in confronting growing
inequality and poverty “head on” is the
following core set of beliefs about
poverty: (1) poverty is the fault of the
victim; (2) economic growth will greatly
reduce poverty; (3) government
intervention will increase poverty. Each
of these beliefs, at best, is “suspect. ”
The Social Safety Net - 8
Greater economic growth does reduce the
poverty rate in the U.S. However, what this
means is that the U.S. poverty rate (typically
around 17% of households - Great Britain and
Canada around 12%, and the Scandinavian
countries – Norway, Sweden and Denmark –
around 6.5%) fluctuates around a much higher
average than in other wealthy democracies
and even at it’s lowest level, is much higher
than most all other wealthy democracies.
The Social Safety Net - 9
The “big picture”: the main reason that the U.S.
has a much higher poverty rate than the vast
bulk of wealthy democracies is that we don’t
spend nearly as much of our economy in the
following programs as do other wealthy
democracies on income transfers (i.e., direct
cash payments to either the unemployed or
the working poor and the elderly) and do not
providing comprehensive health insurance and
childcare to all.
The Social Safety Net - 10
Wage Subsidy: Assuming a minimum wage of
$8 per hour, here’s how such a plan might
operate: a worker earning the minimum wage
of $8 per hour would receive a $4 per hour
subsidy from the federal government (i.e., their
“total wage” would be $12 per hour - $8 per
hour from their employer plus $4 per hour from
the federal government = $12 per hour) with
the subsidy decreasing by 10% for each
additional dollar per hour they earned.
The Social Safety Net - 11
This plan does NOT increase unemployment
because employers are NOT required to pay
their employees more. Far from discouraging
work and rewording laziness, the wage
subsidy plan encourages work by making work
pay more (i.e., the normal wage plus the value
of the wage subsidy). The more work “pays”,
the more leisure “costs” (i.e., each hour you
don’t work costs you more when income per
hour is higher than when it is lower). Since
you have to work, this isn’t “welfare.”
The Social Safety Net - 12
Furthermore, by making work pay more, and
increasing the cost of not working in a
legitimate occupation (e.g., selling drugs), the
wage subsidy plan will reduce government
expenditures by reducing the occurrence of
two circumstances which increase government
costs: (1) crime (by offering more money for
being employed in non-criminal employment)
and; (2) teen pregnancy (by increasing the
cost of not working – having children typically
reduces the hours a mother can or will work).
Reaction to the Wage Subsidy
Plan
When a senior economic advisor to former
President George W. Bush was asked
about the wage plan he replied, “that’s
the type of thing we’d do if we were
serious.”
Value of Education
It is very important to mention the tremendous
impact education has on earnings. In 1975
those with a bachelor’s degree out earned
those with a high school diploma by
approximately 60%. By 2008 this differential
rose to approximately 100%. Unfortunately,
the United States ranks 12th in the percentage
of 25 to 34 year olds with at least an
associate’s degree.
The Social Safety Net - 11
In addition to the wage subsidy, other
programs that would greatly benefit low
and middle-income earners are:
universal childcare, fully funding the
Obama Health Care plan and the “Patriot
Dollars” campaign finance plan.
The Social Safety Net - 12
In all high-income countries, the parents’
socioeconomic status shapes a child’s
educational and earnings prospects, but
much less so in Sweden than elsewhere
and much more so in the United States.
In Sweden, even a child growing up in
relative poverty has almost the same
education and earnings prospects as a
child growing up at the top on the income
curve.
The Social Safety Net - 13
Sweden’s distinction lies not in its support
for public education, which is roughly
matched by other countries, but in its
public support for families and their
children from the earliest age, even
before formal schooling. All of Sweden’s
families have access to affordable highquality day care, which is publicly
provided.
The Social Safety Net - 14
This enables mothers to work without leaving
their children behind in an unsafe
environment. Female heads of household, a
group marked by a high rate of poverty in the
United States, are not poor in Sweden.
Remarkable, their poverty in Sweden, is only 4
percent, compared with the United States,
where the Census Bureau recorded a 30
percent poverty rate in 2009. Similarly, all of
Sweden’s children are afforded high-quality
preschooling.
The Social Safety Net - 15
The annual costs of these programs are:
1. wage subsidy ($150 billion)
2. universal childcare ($150 billion)
3. Obama Health Care Plan ($96 billion)
4. Patriot Dollars ($4 billion)_______
Total Annual Cost: $400 billion
Note: wage subsidy costs over time are
likely to be much lower than listed above
The Social Safety Net - 16
Paying for the these programs:
1. Allowing the Bush Tax Cuts to expire
will bring in approximately $363 billion
per year.
2. Ackerman and Alstott’s Wealth Tax - a 2%
annual wealth tax on households owning
more than $7.2 million in assets (the
richest ½ of 1% of households) would bring
in at least $70 billion dollars per year –
France, Norway and Switzerland have this
The Social Safety Net - 17
If repealing the Bush Tax Cuts and instituting
Ackerman and Alstott’s wealth tax seems “too
hard” on the wealthy, consider the following:
(1) the wealthy did very well, as did the
economy as a whole, under the tax rates that
would be in effect if the Bush Tax Cuts were
allowed to expire (i.e., economic growth was
greater under the higher tax rates of the
Clinton Administration than during the Bush
Administration);
The Social Safety Net - 18
(2) over the 1980-2008 period 98% of the
income gains went to the richest 10% of
American households (i.e., exactly those
that gained, by far, the most under the
Bush Tax Cuts); (3) the share of income
going to the richest 1% of American
income earners more than doubled
between 1970 and 2010 (from about 7%
to over 18% of personal income);
The Social Safety Net - 19
(4) reducing the concentration of income and
wealth at the top of the income distribution
would likely improve the performance of our
democracy by reducing the previously
discussed “debilitating cycle” (i.e., where the
increasingly concentration of income and
wealth among the very rich increases the
reliance of politicians on campaign
contributions from the very rich which, in turn,
leads politicians to enact policies which further
advantage the very rich);
The Social Safety Net - 20
(5) many of the very rich inherited their wealth
which rewards “luck” (you can’t pick your
parents/grandparents) not “merit”; and
The Social Safety Net - 21
(6) much of the income of very wealthy citizens
was made possible by taxpayers. For
example, while Henry Ford made a fortune
from developing the Ford automobile, he
wouldn’t have been successful unless
taxpayers and/or government provided
roads/highways, street lights, a public
education system to provide an educated
workforce to design, build and sell Ford cars,
and a highway patrol to keep the highways
safe.
The Social Safety Net - 22
Similarly, would Bill Gates and Steve Jobs have
been able to amass vast fortunes without the
research and development provided by the
National Science Foundation (an agency of
the federal government which provided many
of the protocols used for the internet) and the
public school system to train the designers
and builders of computers?
The Social Safety Net - 23
In all of these cases, it is misleading to say
that these individuals achieved their
success “alone”, or without government
help. Since taxpayers provided much of
the requirements for their success,
doesn’t it seem reasonable to suggest
that taxpayers were investors in these
projects and, as such, should reap the
rewards of their investment (through tax
payments)?
The Social Safety Net - 24
Even if all of the preceding policy and tax
changes were adopted, by comparison
to the other wealthy democracies of the
world the U.S. Social Safety net would
still be “weak” and taxes would still be
“very low.” It’s not “big government.”
The Social Safety Net - 25
We could more than save the annual $400
billion cost of these programs by
switching to a Canadian or European
style health care system.
The Social Safety Net – 26
If we adopted a European Health Care system
taxes would increase, but this would be more
than offset by the savings. For example, if
your taxes increase by $100 per month, but
your take-home pay increases by $200 per
month (due to either less money deducted by
your employer for health insurance) or your
medical expenses decrease by $200 per
month (by reducing the amount you have to
pay out of your own pocket for health
expenses), your standard of living would
increase by $100 per month.
Size of Government - 1
There are good reasons to think that the
government budget is too small in a
democracy. First, consider the power of
advertising. Isn’t the purpose of the
tremendous amount of advertising
private companies buy to get you to
spend money on their product rather on
an alternative use of the same money
(e.g., higher taxes to provide government
benefits)?
Size of Government - 2
Second, there is ample evidence that the
public does not have a good sense of not
only the benefits other citizens derive
from government programs, but of the
value they themselves derive from
government programs. The percentage
of people who (a) benefit from various
government programs, and
Size of Government - 3
(b) claim in response to a government
survey that they 'have not used a
government social program’ are as
follows: Home Mortgage Interest
Deduction (a huge benefit for home
owners) – 60%, Student Loans – 53.3%,
Child and Dependent Tax Credit –
51.7%, Earned Income Tax Credit –
47.1%, Pell Grants – 43.1%, Medicare –
39.8% and Food Stamps – 25.4%.
Size of Government - 4
Third, many of those who most benefit
from government programs vote the
least frequently. As discussed in both
class and the readings, lower income
citizens disproportionately benefit from
government social welfare programs.
Additionally, lower income citizens vote
less frequently than middle and upper
income citizens.
Size of Government - 5
Fourth, many upper income individuals might
prefer a greater government effort to help the
poor if they thought they might be poor in the
future. It doesn’t take much “courage” to favor
low taxes and oppose government spending to
help the poor when the person in question,
either by their current economic position
(upper income) or a realistic assessment of
their future economic position (e.g., being born
into a wealthy family, being close to
completing medical school, etc.)
Size of Government - 6
strongly suggests that they aren’t likely to
become poor. Would this same
individual be as likely to oppose
government programs for the poor if they
did NOT know (or have a pretty good
idea) of their future economic position?
Size of Government - 7
So, wouldn’t the obvious political incentive
be for politicians to provide lower
government benefits to the poor than
would be provided if the poor voted in
proportion to their strength in the
population?
Size of Government - 8
A person’s political philosophy is likely to
their willingness to spend money to
reduce income inequality. If you are
political liberal, you probably viewed the
programs I mentioned previously (the
wage subsidy, universal child care, the
Obama Health Care Plan and the Patriot
Dollars campaign finance reform)
favorably.
Size of Government - 9
However, if you are liberal you have to
face the question of how far you would
go (i.e., how much of your money would
you spend) to reduce income inequality?
Size of Government - 10
If you are politically conservative, a reasonable
question to ask is: What are you trying to
“conserve”? On the one hand you could
answer that you were trying to conserve
freedom and since taxes reduce a person’s
freedom to spend their money as they please,
then the government should be very small and
taxes very low and, hence, you would probably
not support the programs I mentioned
previously.
Size of Government - 11
That’s certainly a philosophically
defensible position. It could be useful,
however, to consider the following two
questions: (1) Is freedom the only value
that matters? (i.e., inequality, poverty,
the performance of democracy – think
back to the discussion of the “debilitating
cycle” - don’t matter much);
Size of Government - 12
(2) Does a small government actually
deliver the most freedom? For example,
would increase if: (1) the State of
California sold off public beaches to
private citizens and; (2) if taxes were
reduced but fewer students could go to
college and hence suffer a reduction in
career choices later in life?
Size of Government - 13
A second answer to the question of what you are
trying to conserve might be as follows: an
America where the benefits of economic
growth and technological change are widely
shared, such as occurred between the end of
World War II (1945) and the early 1970s (i.e.,
where economic growth was high and the
share of income going to very high income
groups decreased substantially). If this is
what you are trying to conserve, then the
programs previously mentioned could be quite
beneficial to your goal.
Thiessen’s Comments - 1
Mitt Romney, the 2012 Republican
Presidential nominee, said the following:
“We have a very ample safety net, and
we can talk about whether it needs to be
strengthened or whether there are holes
in it. But we have food stamps, we have
Medicaid, we have housing vouchers, we
have programs to help the poor.”
Thiessen’s Comments - 2
Now the reaction to Romney’s comments from
Washington Post editorial writer Marc
Thiessen. “So Romney is fine with an entire
class of Americans being permanently on food
stamps, Medicaid, housing vouchers and other
government welfare programs? His solution
for our fellow citizens trapped in poverty and
dependency is to find holes in the safety net
and repair them? That is not conservatism.
Thiessen’s Comments - 3
That is liberalism. The left judges
compassion by how much money we
spend, which is why the liberal project is
to strengthen the safety net and grow the
nanny state. The conservative project is
to help people escape the safety net.
Conservatives seek to create an
opportunity society where we can lift
people out of lives of dependency.
Thiessen’s Comments - 4
That is liberalism. The left judges
compassion by how much money we
spend, which is why the liberal project is
to strengthen the safety net and grow the
nanny state. The conservative project is
to help people escape the safety net.
Conservatives seek to create an
opportunity society where we can lift
people out of lives of dependency.
Thiessen’s Comments - 5
We are not okay with having millions of
Americans trapped in poverty and living
on the dole. We are not okay with
multiple generations trapped in
government welfare. We believe in a
society where the poor have
opportunities for advancement.
Thiessen’s Comments - 6
We want them to have the education and
skills they need to find good jobs, get off
public assistance and to move up to the
middle class and beyond-as far as their
ambition and ability will take them.”
Thiessen’s Comments - 7
First, our economy does not, and will not,
generate sufficient jobs to employ all of
the poor who want to work. The Great
Recession, which began in late 2007,
caused the economy to lose 8 million
jobs. According to the nonpartisan
Congressional Budget Office, the
unemployment rate is NOT expected to
get as low as even 5% by 2016.
Thiessen’s Comments - 8
Put another way, for the nine year period
from 2007 through 2016, the
unemployment rate would be high
enough to leave several million job
seekers without employment. How could
these people be expected to work over
this period when the jobs simply aren’t
available?
Thiessen’s Comments - 9
Furthermore, as explained very early in
this writing, Republican/Conservative
Administrations and politics weight
reducing inflation more highly than
Democratic/Liberal Administrations.
Think back to the Obama Stimulus plan’s
effect: unemployment was 1.7% lower
than it otherwise would have been.
Thiessen’s Comments - 10
As much research by political scientists and
economists has found, more liberal
administrations typically produce lower
unemployment and higher inflation than
conservative administrations (see earlier
discussion and sources cited therein). So, the
policies of the very philosophy Thiessen favors
actually produces less employment, and
hence, less opportunity for the poor than more
liberal administrations/politicians.
Thiessen’s Comments - 11
If the growth rate in the economy appeared to be
high enough to actually employ all those who
wanted to work, the inflation rate would move
into, as policymakers see it, a danger zone.
What would happen is that as economic
growth exceed about 4% per year the federal
reserve would raise interest rates, making
borrowing more costly and, thus, ultimately
reducing the economic growth rate and
employment.
Thiessen’s Comments - 12
Since the Great Recession started,
millions of Americans cannot find work
and the economy will not likely grow
sufficiently to employ them for many
years, if ever.
Thiessen’s Comments - 13
Second, many jobs simply do not provide
the level of compensation necessary to
provide workers with a standard of living
that Americans would consider “decent.”
Working 40 hours per week, 50 weeks
per year, at $9 per hour translates into
an income of $18,000 per year. Most
such jobs do not come with either health
care or retirement benefits.
Thiessen’s Comments - 14
Think of your family living on such an
income. Is this how you want low wage
workers to live? The very government
programs Thiessen refers to are the only
bulwark such low workers have against
living on an income that does not
adequately provide even the “essentials”
of life. Think back to the discussion of
the wage subsidy program.
Thiessen’s Comments - 15
Take the food stamp program. Food
stamps only provide approximately 70%
of the money necessary to provide what
the U.S. Department of Agriculture says
is a nutritionally adequate diet Over three
times as many households that receive
food stamps had at least one worker
than relied solely on government
assistance.
Thiessen’s Comments - 16
Finally, each $1 spent on the food stamp
program generates $1.72 in economic
activity. Think back to the previous
discussion of how much economic
activity per dollar spent was generated
by other programs that benefit the poor
(e.g., extending unemployment
compensation - $1.60; payroll tax
reduction - $1.09 or the wage subsidy
program) versus
Thiessen’s Comments - 17
the economic stimulation per dollar of the
Bush Tax Cuts ($.35). Thus, the food
stamp program helps generate the very
economic activity that helps reduce the
unemployment rate.
Thiessen’s Comments - 18
Generations of the same family could not
be on cash welfare for entire lifetimes
because each person is restricted to 5
years. Second, Mitt Romney supports
the previously discussed Ryan Budget,
which will require large reductions in
what is, by far, the weakest social safety
net of any wealthy democracy in the
world.
Thiessen’s Comments - 19
No other wealthy democracy has pursued
the type of system Thiessen desires.
Third, the Ryan Budget, will require large
spending reductions in exactly the types
of programs (e.g., education) that would
make the poor/unemployed more
competitive in today’s labor market.
Thiessen’s Comments - 20
Fourth, the previously discussed wage
subsidy plan increases the incentive for
people to work because it “makes work
pay more” for low-income workers than it
current does. Thus, if we adopted such
a plan, it would use government
programs to increase, not decrease,
work effort.
Thiessen’s Comments - 21
Wage Subsidy: Assuming a minimum wage of
$8 per hour, here’s how such a plan might
operate: a worker earning the minimum wage
of $8 per hour would receive a $4 per hour
subsidy from the federal government (i.e., their
“total wage” would be $12 per hour - $8 per
hour from their employer plus $4 per hour from
the federal government = $12 per hour) with
the subsidy decreasing by 10% for each
additional dollar per hour they earned.
Conclusions - 1
Budget Waste/Fraud: One of the most important
findings from the study of citizen attitudes
toward government programs is this: people
typically think that unpopular spending
programs (e.g., welfare and foreign aid)
makeup a much larger share of the budget
than they actually do. In studies I read many
Americans think that welfare and foreign aid
each account for 10%, or more, of federal
spending. Actually, welfare and foreign aid
each account for less than 1% of federal
spending.
Conclusions - 2
The error rate in the food stamp program is
2% (92% of the money goes to the
beneficiaries). Since one-third of those
eligible for food stamps do not receive
them, we spend much less on food
stamps than we would if fraud were
completely eliminated and everyone who
was eligible for foods stamps
participated.
Conclusions - 3
Eliminating politicians “pet projects” (e.g.,
“earmarks” – the famous “bridge to
nowhere”) are .1% of GDP (i.e., one
tenth of one percent). The “big picture”
is that we will not meaningfully reduce
the budget deficit by eliminating “waste,
fraud and abuse.” Waste, fraud and
abuse simply aren’t large enough to
have a discernible impact on budgets.
Conclusions - 4
The ingenuity of capitalism’s “creative
destruction” means that business
CANNOT pursue social goals/values
over profitability. Thus, the very strength
of capitalism is a prime reason why it can
be argued that a strong social safety net
is absolutely necessary.
Conclusions - 5
None of this is to say that our current policies are
“wrong” or that the conservative vision of low
taxes, high levels of inequality and a low
degree of economic security are “wrong.”
However, if we want to provide greater
economic security and reduce income
inequality in America, there are very viable
options to both our current policies and
conservative proposals.
Health Care - 1
I. Partisan Difference on Health Care
A. Medicare – 1965
1. Presidential History
a. Truman
Health Care - 2
1. Due to absolutist
individualism, Truman
shifts from universal plan to
Medicare
b. Eisenhower
c. Kennedy
Health Care - 3
d. Johnson
1. 1964 election aids passage
2. Fewer than 30% of
congressional Repubicans
vote for Medicare
Health Care - 4
2. Interest Groups – Medicare
For
Against
AFL-CIO
AMA
NFU
AFBF
(small farmers) (large farmers)
Health Care - 5
For
Against
CCUS
(business)
NAM
(business)
Blue Cross
Health Care - 6
Note: (1) the relative wealth difference
between the “for” and “against”
groups; (2) “for” groups support
Democrats while “against” groups
support Republicans
Health Care - 7
3. Ramifications
a. Virtually impossible to repeal
b. America lags well behind other
wealthy democracies in both the
time of adoption and the scope
of coverage
Health Care - 8
c. Incremental attempts to increase
coverage can make it difficult to
eventually cover everyone
B. Clinton – 1994
1. Expansion of coverage again
attempted by Democrats
opposed by Republicans
Health Care - 9
2. Almost identical interest group
alignment as on Medicare
C. Obama – 2009
1. Democrats try to expand coverage
while Republicans oppose
Health Care - 10
2. If fully implemented, would reduce
uninsured rate from about 17%
to about 3%.
Health Care - 11
Rudy Giuliani: “The American way is not
single-payer, government controlled
anything. That’s a European way of
doing something; that’s frankly a socialist
way of doing something.” “That’s why
when you hear Democrats in particular
talk about single-mandated health care,
universal health care, what they’re
talking about is socialized medicine.”
Health Care - 12
“That is where Hillary Clinton, Barack
Obama and John Edwards are taking
you,” he said, “You have got to see the
trap. Otherwise we are in for a disaster.
We are in for Canadian health care,
French health care, British health care.”
(“Giuliani Seeks to Transform U.S.
Health Care Coverage,” Marc Santora,
New York Times, August 1, 2007)
Health Care - 13
II. Comparison of U.S. and Foreign
Health Care Systems
Per Capita
WHO
Spending
Ranking
U.S.
$5,711
37th
France
$3,048
1st
Canada $2,998
30th
U.K.
$2,317
18th
Health Care - 14
A. Why do the others do better at lower
cost?
1.Require Everyone to Buy Insurance
a. adverse selection if people
aren’t required to buy
insurance
Health Care - 15
b. Need a strong minimum
benefits package-must
shift costs to the healthy
2. Single-Payer Plans have much Lower
Administrative Costs
3. Government Bulk Buying of Medicine
Health Care - 16
4. Pay Doctors Less
Question: If we are measuring “wait times” for
a procedure should we start when your
physician recommends the procedure or
when it is medically advisable? Remember
18% of Americans don’t have a physician
and Americans see doctors less frequently
than in Europe/Canada. U.S. “wait times”
are longer than frequently stated.
Health Care - 17
A thought: Isn’t there a tension between
opposing government regulation of behavior
with health consequences (e.g., cigarette
taxes, soda taxes, meat taxes, etc.) and
believing in personal responsibility? The least
regulatory, or “smallest government,” may not
be the government that most fosters personal
responsibility. Especially when personal
irresponsibility imposes costs on others (i.e.,
people whom my costly actions shouldn’t
harm).
Health Care - 18
Not only do all other wealthy democracies in the
world cover all their citizens for health care,
even poorer nations are moving in this
direction: (1) China has a 3-year initiative that
will cover 90% of it’s population; (2) Mexico
just completed an 8-year drive for universal
coverage; and (3) in Thailand, where per
capita GDP is one-fifth of America’s, 99% of
the population has health insurance.
Health Care - 19
Dr. Julio Frenk, Dean of the Harvard School of
Public Health: “As countries advance, they are
realizing that creating universal healthcare
systems is a necessity for long-term economic
development.” This is leaving America behind.
“We are really an outlier,” said David
DeFerranti, a former World Bank vide
president. (source for last two slides, Los
Angeles Times, May 12, 2012)
California Budget - 1
I. Why it is Difficult for the California
Legislature to Adopt a Budget
A. Public Expectations
California Budget - 2
1. 50% of California Voters thought
that State Spending Could be
Reduced 20% Without
Reducing Services
California Budget - 3
2. Voter Backed Initiatives Mandate
Spending and Reduce the
Options of the Legislature
a. Among the 24 states that
permit initiatives, California
is the only one that does
NOT permit the legislature
to amend or repeal them.
California Budget - 4
B. Two-Thirds Vote of Both Houses of
the California Legislature is Required
to Raise Taxes and Many Fees
1. Only 7 States Require This
California Budget - 5
2. The Majority Party Typically Holds
Less Than 2/3rds of the Legislature
3. Very Different Party Coalitions
Reduce Chance of Republican
Support for Tax/Fee Increases
California Budget - 6
C. Most Legislative Districts are Not
Politically Competitive
1. Greater Socioeconomic Difference
Between Counties Over Time
California Budget - 7
2. Real Election is Often in the Primary
3. Compromising with the Opposition
Party Could Lead to a Primary
Challenger
California Budget - 8
D. As the Distribution of Income has
Become Much Less Equal in
California, the Policy Differences
Between the Two Major Political
Parties have Noticeably Increased.
California Budget - 9
1. This Reduces the Ability to Achieve
Compromise
E. About the Only Policy Area
Californians are Willing to Cut is
Prisons
1. Don’t Want to Cut Education –
Which is a Big Budget Item
California Budget - 10
1. Voter Backed Initiatives Require
Long Prison Sentences
2. Think of the Public Outrage if We
Released Prisoners Early Who
Then Committed Crimes.
California Budget - 11
II. California’s Structural Budget Deficit is
Approximately 15 Billion Dollars.
A. The Structural Deficit is about
10%-15% of the Size of the
Budget
California Budget - 12
B. Solutions: Short-Term
1. Formula from the Past: Temporary
Tax Increases and Spending
Cuts
California Budget - 13
C. Long-Term
1. Spending Cuts Alone Won’t
Work
a. Firing ALL State Workers Paid
from the General Fund
would save about
9.2 billion
California Budget - 14
(California Currently Ranks 46th in
State Employees as a Percentage of
the Population – Not “Big
Government!)
b. Eliminating ALL funding for CSU and
UC would only save 5.4 billion.
California Budget - 15
c. Eliminating the ENTIRE Cal Works
Welfare Program would save 3 billion.
d. Closing ALL Prisons would save
9 billion.
California Budget - 16
D. Public Employees
1. Government typically pays LESS
than the private sector for
comparable work.
2. Top Government Officials are paid
MUCH less than Private Sector.
California Budget - 17
3. State Workers in California are
Typically Paid More than in Most
States.
a. However, 50% of the difference is
due to the higher cost of living in
California.
California Budget - 18
4. Pensions
a. Few State Workers can Retire at
age 50!
b. Pensions were one of the few
politically accepted ways of
increasing compensation.
California Budget - 19
c. Thus, if we reduce pensions, then we
owe state workers the pay they gave
up in order to get better pension
benefits.
California Budget - 20
E. Revenue Increases Will be Needed
1. Overturn the 2/3rds Vote
Needed to Raise Taxes and
Fees
a. Representation/Fairness –
majority vote needed
California Budget - 21
2. Taxes are NOT High or Very Progressive in
either the United States as a whole or in
California
a. Tax rates as a percentage of the
economy are much lower in the
U.S. than in most wealthy
democracies: U.S. - 27%, Canada –
34%, Germany – 35%, Great Britain
– 37%, Italy – 41%, France – 44%
and Sweden - 51%.
California Budget - 22
b. Federal Taxes - All federal taxes
together (i.e., income taxes, Social
Security taxes, etc.) take approximately
9.4% of the income of households making
$16,000 per year, approximately 20.5% of
the income of households making $52,000,
approximately 27.2% of the income of
households making $200,000 per year and
approximately 34% of households making
$18,000,000 per year.
California Budget - 23
It is very important to mention that federal
taxes have been made much LESS
progressive over time. To demonstrate the
impact of reduced federal tax progressivity
consider the following: In 2000, the richest 1
household in 1,000 (i.e., .1 of 1%) had about
7.3% of total national after-tax income. If the
effect of taxes on their income had remained
what it was in 1970, they would have had
about 4.5% of after-tax national income.
California Budget - 24
C. State and local taxes are even LESS
progressive than federal taxes. Thus, if you
add state and local taxes to federal taxes
(i.e., to obtain “total taxes”) the tax burden
is less favorable to the poor (i.e., less
progressive) than for federal taxes alone.
State and Local Taxes are a greater
percentage of personal income for the
poorest 20% of a state’s households than
for the wealthiest 1% of a state’s
households in virtually every state.
California Budget - 25
In California state and local taxes take
approximately 11.3% of the income of
the poorest 20% of households while
taking only 7.2% of the income of the
richest 1% of households.
California Budget - 26
In California, the wealthiest 10% of the
taxpayers pay approximately 75% of the state
income tax. While true, this argument is
misleading for two reasons: (1) the most
important consideration is taxes as a
percentage of income and not the percentage
of a tax borne by a particular income group –
thus, if California’s state income tax was only
to raise $1 and Steven Spielberg paid that $1
he would have borne 100% of the state
income tax burden –
California Budget - 27
however, $1 would be virtually 0% of his income
– thus it’s the percentage of income paid in a
tax and not the percentage of a tax that a
particular income group pays that is the
important consideration; (2) this calculation
excludes all taxes except the income tax (e.g.,
state sales taxes, property taxes, etc.) – when
we include all state and local taxes and fees,
state and local taxes are a higher percentage
of income for the very poor than the very rich.
California Budget - 28
F. Some state tax increases would
IMPROVE the functioning of
California’s economy and raise
revenue:
a. tax services – no economic
rationale for not taxing them
California Budget - 29
b. change business property taxes
annually (i.e., not only when the
property is sold) - current practice
favors those who hold a property
longer – harms new businesses;
California Budget - 30
c. tax carbon, pollution and oil - from an
economic standpoint, the cost of
pollution should be taxed to provide
the appropriate disincentives to
reduce pollution. Currently, California
is the only oil producing state that
does not have a severance tax on oil.
1. New “Cap and Trade” System.
California Budget - 31
G. State Spending Has NOT kept pace
with either Inflation/Population or
Personal Income
1. Adjusting for population growth and
inflation, to maintain the SAME level
of service in 2009 that the state of
California provided in 1999 state
spending would have had to increase
by 53%. It only increased by 29%.
California Budget - 32
2. In 1980 California General Fund
Expenditures (i.e., state spending)
was 7.4% of personal income. For
2009-2010, this figure had dropped to
only 5.5%.
California Budget - 33
3. As a share of personal income,
California typically ranks about 18th
(out of 50 states) in state and local
tax burden with state and local
revenues equal to approximately 17%
of personal income.
Libertarianism - 1
I. Libertarianism
A. World View – Most Everything
flows from selfishness
B. Goal - Maximizes the "Freedom
To“ in both economic and
noneconomic situations
Libertarianism - 2
B. Method – The Free Market
1. Definition – voluntary exchanges
between mutually consenting
individuals
C. Economic freedom (the free market) is
part of total Freedom and a
precondition of political freedom
Libertarianism - 3
1. In this view political freedom
depends upon economic
freedom – not the other
way around.
2. When the Soviet Union
collapsed the opposite
happened: political freedom
preceded economic
freedom.
Libertarianism - 4
D. An individual must be able to
earn a living in order to use
political freedom.
E. The Free Market accomplishes this
by two methods:
Libertarianism - 5
1. It increases the number of decisions
necessary to restrict, or eliminate,
someone’s livelihood.
2. It encourages economic decisions
(buy/sell decisions) to be made on
the basis of production factors (e.g.,
quality or price) as opposed to nonproduction factors (e.g., the race or
political views of the workforce).
Libertarianism - 6
3. Since government can only
institute one set of priorities
libertarians see governmental
action as a restriction of
individual free choice.
4. Therefore, libertarians largely
reduce the government to
umpire like functions (e.g., antitrust, police, military)
Libertarianism - 7
II. Critique of Libertarianism
A. Goals – Doesn’t any goal other
than free choice matter (e.g.,
political and economic
inequality, mobility, security or
stability)?
Libertarianism - 8
B. Methods – Is an extremely strong
reliance on the free market the
best way to maximize freedom?
C. Libertarians assume that at any
one point in time the number of
free decisions is fixed – thus if
government makes more of
them individuals will make
fewer of them.
Libertarianism - 9
1. The number of decisions isn’t fixed.
For example, consider public
transportation: while the taxes paid
to build it may reduce personal
freedom the public transportation
system increases personal freedom.
2. How much freedom to use the beach
would we have if the beaches were
privately, rather than governmentally,
owned?
Libertarianism - 10
3. By not having universal health care
in the U.S. we have
approximately 18,000 additional
deaths per year. You can’t
make many free decisions after
you’re dead!
Libertarianism - 11
4. Even if you accept the goal of maximizing
individual free choice: Is the “freedom to"
maximized by (1) removing force (e.g., not
having to pay Social Security taxes) - with
the possibility of economic hardship, or
(2) reducing economic hardship - with the
possibility of political restraints (e.g., not
protesting government policy because you
fear the loss of government benefits) ?
5. Libertarians must opt for option #1 above.
Libertarianism - 12
6. Think of the reductions in personal
freedom through laws/political actions
that have resulted from economic
hardship (e.g., Hilter, Proposition 187
in California, etc.).
7. There is little evidence that citizens in
democracies with extensive social
safety nets (e.g., Sweden) are afraid
to speak out against government
policy.
Final Exam Essay - 1
DON’T WRITE DOWN ANY OF THE
MATERIAL OVER THE NEXT
GROUP OF SLIDES. ALL OF IT
IS IN THE LAST 6 PAGES OF
THE COURSEPACK. JUST
LISTEN TO THE DISCUSSION!
Final Exam Essay - 2
THE FINAL EXAM ESSAY IS TO BE
DONE OUTSIDE OF CLASS AND
SUBMITTED AT THE TIME OF THE
FINAL EXAMINATION. YOU NEED TO
SUBMIT A “HARD COPY” OF THE
ESSAY WHEN YOU TAKE THE FINAL
EXAM. DO NOT EMAIL A COPY TO
ME.
Final Exam Essay - 3
Since you will be a voter, a critical topic in this
class concerns the choices the political parties
offer voters. To examine this in Congress,
select an issue that was voted on by either the
House of Representatives or the Senate. The
vote you choose can be either recent, or from
the distant past. Since political party
differences can only occur where there is
controversy, select a vote where at least 20%
of those voting voted on the losing side.
Final Exam Essay - 4
For example, if the vote in the House of
Representative is 70 "yes" and 330 "no"
the vote was not sufficiently conflictual.
However, had the vote been 80-320,
320-80 (or closer) it would have been
“okay.” Similarly, if a Senate vote is 8218, you could not use it. It makes NO
difference if the legislation was “passed”
or “defeated.”
Final Exam Essay - 5
The source you are required to use is
Congressional Quarterly Weekly. You
will find instructions for accessing CQ
Weekly in the coursepack. If for any
reason you cannot access CQ Weekly,
there is an alternative website mentioned
on the very last page of the coursepack.
“Google” your topic (e.g., U.S. Senate
voting on health care) to find the date of
a vote.
Final Exam Essay - 6
When examining a vote make sure you do
not confuse voting "yes" or "no" with
supporting the concept. Let me explain.
If the legislature is voting on a motion to
"table" or "recommit" the legislation,
voting "yes" on such a motion is to
oppose the actual bill (if the legislature
votes to "table" a bill then the bill will not
be voted on).
Final Exam Essay - 7
If the bill is not voted on it could not be
passed. Therefore, voting "yes" on a
motion to "table" the bill has the same
effect as voting "no" on the bill itself.
Additionally, the word "strike" means to
remove (i.e., take out or delete). Finally,
“substitute” means to replace part of the
legislation (e.g., “substitute” 6 months for
3 months).
Final Exam Essay - 8
You may want to use a vote on an
"amendment" to the proposed legislation.
Amendments modify (i.e., change) the
legislation. Much of the most interesting
legislative "action" is on amendments.
Final Exam Essay - 9
This assignment is worth 30 points and a
“hard copy” is due (typed) at the time of
the final examination. Scores are
lowered 10 points per day late (later on
the day of the final exam also counts as
one day late). NO excuses (e.g., my
printer ran out of ink) will be accepted.
That’s why you should start EARLY!
Assume there will be problems.
Final Exam Essay - 10
Additionally, you CANNOT use a computer
malfunction as an excuse to take the
final exam later. If you can’t bring a
printed copy of the essay at the time of
the final exam, your best approach is to
email the paper and pay the “10 point
penalty.”
Final Exam Essay - 11
The following information is from the two
page sample essay that appears in the
coursepack. The discussion of “how” to
obtain the congressional vote you will
use is placed AFTER the sample term
paper. Thus, don’t “panic” when you see
a sample term in the coursepack and
don’t yet have your vote. It’s all
explained. Just read the 6 pages!!
Final Exam Essay - 12
Issue and Importance (<<use headings)
In order to provide the funds for
governmental projects, citizens pay
taxes. Since taxes can be a sizeable
expenditure for many families and
individuals, the question of who bears
the tax burden becomes important.
Final Exam Essay - 13
Several years ago the U.S. Senate voted on an
amendment offered by Senator Gore (DTennessee) that would have raised income
taxes on high income groups and reduced
proposed increases in taxes that would
primarily fall on middle and low income groups
(CQ Weekly Report, October 27, 1990, page
3655 – if you are using the internet version
you will not have a page number).
Final Exam Essay - 14
The purpose of this paper is to examine
how Democratic and Republican
senators voted on the Gore Amendment.
We shall now develop a hypothesis
concerning how we would expect
Democratic and Republican senators to
vote on the Gore Amendment.
Final Exam Essay - 15
Hypothesis
As discussed in class, political issues
can typically be thought of as primarily
either economic or noneconomic (lecture
of 3/30/10 - if you do not "date" your
notes, estimate the date). Taxation
would clearly be an economic issue.
Final Exam Essay - 16
Furthermore, liberal and conservative
political ideologies take very different
positions on economic issues. Liberals
tend to think the government should try
to minimize economic inequality and
maintain economic security whereas
conservatives value freedom of choice
most highly with economic equality being
much less important (lecture of 3/30/10).
Final Exam Essay - 17
Additionally, class lecture has stressed that
Democratic officeholders are typically more
liberal (or less conservative) than Republican
officeholders (lecture of 3/30/10). Since the
Gore Amendment would raise taxes on high
income groups and reduce proposed tax
increases on middle and low-income groups, it
is probably best classified as a liberal
proposal.
Final Exam Essay - 18
As Democratic senators are likely to be more
liberal than Republican senators the following
hypothesis seems reasonable:
H1 Democratic senators are more
likely to vote in favor of the Gore
Amendment than Republican
senators. (Note: phrased in
probabalistic – i.e., “more likely” and
not “certain” terms)
Final Exam Essay - 19
Findings
The Gore Amendment was voted on
by the United States Senate on October
18, 1990. The amendment was
defeated by a vote of 45 to 55 (i.e., 45
senators voted "yes" while 55 senators
voted "no" - CQ Weekly Report, October
27, 1990, page 3655).
Final Exam Essay - 20
Therefore, the Gore Amendment meets
the criteria that at least 20% of those
voting voted on the losing side (i.e., 45
out of 100 = 45% and 45% is equal to or
greater than 20%).
Final Exam Essay - 21
Among Democratic senators, 67%
voted in favor (i.e., "yes") on the Gore
Amendment [37-18 and 37/(37+18) =
37/55 = .67]. By contrast, only 18% of
the Republican senators voted in favor of
the Gore Amendment [8-37 and 8/(8+37)
= 8/45 = .18]. (NOTE: you need to
calculate percentages and NOT say the
vote was “37-18” to “8-37”)
Final Exam Essay - 22
Since Democratic senators were much
more likely to vote in favor of the Gore
Amendment than Republican senators
(67% vs. 18%) the results offer strong
support for the hypothesis.
Final Exam Essay - 23
Implications
In this section of the paper you need to put
your findings in a wider perspective. Thus, are
the differences between Democratic and
Republican officeholders on the Gore
Amendment similar to their differences on
other economic issues? If so, what does this
tell you about American politics? If not, why?
Final Exam Essay - 24
In the implications section you need
to cite pages from the assigned
readings. The sample essay contains
page numbers from the assigned
readings that deal with party differences.
Remember!
1. Do NOT advocate a particular policy or
make “value judgments.” Remember,
you’re an analyst, NOT an advocate.
2. Do NOT make statements that imply there is
only one correct viewpoint (e.g., do NOT
say something such as “any rational
educated mind …”).
3. Do NOT use the first person or offer opinions
(i.e., do NOT say “I think that …” or “I feel
that”).
Final Exam Essay - 25
In addition to substance, grammar, and
neatness, points will be subtracted from
your score for each of the following:
(1) Not calculating the percentage (i.e., NOT
the number but the percentage) of
Democratic legislators and the
percentage of Republican legislators
who voted "yes" on the proposal (5 points).
Final Exam Essay - 26
(2) Not citing specific pages from the
textbook in the "Implications" section
of the paper (5 points).
(3) Not stapling a copy of your vote (i.e.,
printout a copy of the vote) to your
paper (5 points).
Final Exam Essay - 27
(4) Untyped papers will not be accepted.
(5) You need to STAPLE your paper (i.e,.
NO “DOG EARED” PAPERS – this
will cost 5 points).
Late papers lose 10 points per day.
Essays turned in after the final exam
period are counted as one day late.