- They are organized to carry out most common tasks according to regular processes. Its advantage is efficiency. The disadvantage of it is that they can't operate outside of the rules. If you ask them to do something else, they couldn't do it.
James Q. Wilson and his view on public and private bureaucracies
The government is very different from private agencies. He compared Mcdonalds and the DMV. Government agencies are big spenders. They have too much red tape, and they hire way too many people. There is a retention from benefits to earnings, and control over the factors of production is different You can't run gov. agencies like a business..
Jonathan Hacker: Government better than a business?
He thought that social insurance was a clear example of where the public sector does btetter than the private sector could. -Private income is not adequate to cover social needs. - Provate market for social isnuracne is also not transparent, leading to adverse selection and moral hazard.
How does Jonathan Hacker say Public insurance solves moral hazard and adverse selection problems?
Compulsive power: spreads risks widely, lowers costs. - Size of the program gives government negotiating leverage (Medicaid). - Equity - Quality control/improvement
What questions does the growth of bureaucracy raise?
accountability, political responsiveness, Congress and the president battle for control.
Ideally, we want a bureaucracy that is:
Neutral (no explicit political role of its own) - Competent (effective in carrying out assigned tasks) - Responsive (remains accountable to public and political changes).
Problems of Public organizations and what we want:
Public organizations cannot do everything at once: - Increased responsiveness means decreased nurtality and competence - INcreased nutrality means decreased responsiveness, and acocuntability - Who should the bureaucracy be accountable to? congress or the president? or the public directly?
How do you carry out the laws? you need a government agency to enforce a law
What is one way to evaluate policy?
Compare the costs of a policy against the benefits
Example: flu shots
How do you handle complicated policy to implement?
Have a comprehensive assessment of all the goals, tools, outcomes, and strategies... this isn't feasible. It is impossible to know everything. - Maximize by thinking of the ideal image of what you want - Satisfice by choosing something that fits the general idea of what you are looking for
What are some administrative controls?
- Civil Service - Political appointees (loyal to president) - Congressional oversight/budget - Administrative process controls (public comment, judicial review standards) - Ongoing tension between nutrality and responsiveness.
What is the relationship between economic policies and the economic interests of different constituencies?
When the government imposes taxes, the people usually haev to pay.
Composition of the federal budget, details of tax policy. This mostly involves the activites of the government.
Interest rates, supply of currency. How much money is available?
Conditions (rules) imposed on private economic entities. Government does not bear costs in the private sectors.
Example: pollution control, the minimum wage.
Federal Reserve Act (1913)
Effort to centralize government authority between the banks and the government.
Beginnings of a regulatory state. Cities began to grow, and complex economic arrangements began to arise. Regulatory institutions emerged then
Insterstate commerce commission, sherman antitrust act, and the pure food and drug act
Rise of the welfare state. Expansion of government involvement in economic affairs. Keynesianism began to be a model of government economic intervention. The idea to use gov. spending to smooth out the highs and lows of the economy
the Era of Regulation. Rise of institutions such as the EPA, the OSHA, The CPSC, NRC, NHTSA
Conservative view on economic policy
Place more emphasis on market forces and limited government intervention. They oppose regulation
Liberal view of economic policy
Place less emphasis on market forces, and supports broader governemnt involvemnt to produce socially desirable outcomes.
Origins of subprime mortgage crisis
A combination of loose lending practices, which provided mortgages to people who couldn't afford them
Inaccurate rating of mortgage backed securaties, which disguised the level of risk
Declining home prices, which means forclosures rather than flips.
The Federal Reserve
Created in 1913 to serve as a central bank. It also serves as the source of borrowing money on behalf of the government.
it controls the amount of currency in circulation and the reserves of banks, through bying and selling of governmernt securities. It also determines interest rates.
Arguments against the tax cut arguement
Tax cuts gives benefits largely to the wealthy. This creates a bias. It will also make it harder to pay for medicare drug plan, or protect social security/medicare
Arguements for the tax cut arguement
Tax cuts will foster economic growth, offsetting reductions in short term. Plus, the wealthy already pay a disproportionate share.
to protect and meet the social welfare needs of the population.
what are three tools of economic policy?
Monetary policy, Fiscal Policy, Regulatory Policy
True or False: Government have limited authority to affect economy, especially in the short term
What held back Federal control?
Judicial interpretation and the Commerce Clause.
What assures Independence in the Federal Reserve?
7 Directors, each of which serves 14 year terms, Persoident cannot remove the directors of except for the cause, and the Fed is self financed, and doesn't require congressional appropriations.
How much National Debt are we in?
Why are deficits considered bad?
Increase interest rates, Borrow against future income, The government has to pay interest
What did Bush do in 2001 to reduce the overall tax burden by 1.4 trillion?
Reduced marginal income taxes, repealed the estate tax, increased deductions.
What are some examples of Social Welfare?
Income maintainence (welfare, social security), Healthcare (medicare and medicaid), food stamps, housing programs
Deserving vs. Undeserving poor
The public is much more supportive in providing for the more deserving. The question of whether people of higher need help is still being asked.
True False: the constitution spoke of welfare programs
False. The framers didn't say much about social policy
What are some options for welfare reform?
Trust fund payments (current strategy), partial privatization (PRAs), and Cuts in benefits, means testing, and increasing the retirement age.
Andrew G. Biggs
believes that the market?s recent performance should not effect the market?s feasibility. Allowing people to have control over their own accounts in a pay as you go fashion would lower costs, increase savings, and give individuals a much higher rate in return on their contributions.
believes that most people lack the skills and knowledge necessary to ;make good investment decisions. The central problem, in her opinion, is ?information asymmetries?, which sellers have more information than the buyers. Groups of conservative investors, such as women and minorties will tend to make more conservative investments, which will leave them with less profit in the long run. She thinks that this could further income inequalities.
she believes that the alarming growth of wealth inequality is going to do much harm to economic growth. Tax cuts only favor the elites, and the wealthiest 10% are getting richer. Income has effects on health, work effort, and corruption.
believes that the income has increased among all segments of the population. He thinks that inequality is the result of choices that are for the most part freely made by individuals.
do not believe that inequality is inherently wrong. As long as society is getting richer, and there is support for the poorest, it?s fine. These editors think that meritocracy (the talented and hard working to get skills) is a legitimate reason for inequality, and that if this is the case, and then this is ok. They feel that the government should award risk takers, but there should be a healthcare and retirement reform. They also believe in the improvement in education.
protocol to the international Framework Convention on Climate Change with the objective of reducing Greenhouse gases that cause climate change
set of treaties evolved over decades, over the rules of welfare. Talks of the treatment of enemy combatants. It helps end conflict.
What is one main reason why Congress cannot overturn the president the majority of times?
Congress faces the collective action problem. The incentives that individual members face can make it hard for them to persuade congress to counteract the president
Security in the Post Cold war/Cold War paradigm
-National security was seen as a function of military strength.-there was active U.S intervention/international presence.-The world was bi-polar:they were either with the soviets ore the U.S.-There was a clear view of our security interests, and what the threat was.- There were state centered threats.- Nuclear parity lowered the likelyhood that conflicts would escalate.
What is our justification for war with Iraq?
WMD, Connection to terrorism, regional democratication/liberalization, defiance of UN resolutions.
What were some of our post war mistakes with Iraq?
Numbers of troops, De-Baathification
Dissolved and discharged hundreds and thousands of the Baath party, part of Hussein's regime.
What are some of the transformations that has occurred in our domestic security institutions?
Intelligence reform, bureaucratic reform (Department of Homeland Security), and Relationship between law enforcement and intelligence.
Department of Homeland Security
Created January 2003. Consolidated a lot of security and law enforcement agencies. Coordination with state and local offices (first responders).
The threat is vastly overblown. He believes that we are chasing phantoms with all of this extra security. -Lack of terrorists since 9/11 show that threat has been overestimated. - Terrorist attacts are counterproductive for sponsoring groups. - massive Effort "defending against an enemy that barely exists"
Podhoretz (writing in 2002)
- 9/11 is only the latest move in a series of attacks, to which the U.S. failed to respond. - Decades of attacks linked to radical ideology, with broad public support in the region. - Victory requires fundamental reform.
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