EXPLAIN IN SOME OF THE WAYS IN WHICH THE INSTITUTIONAL STRUCTURE
OF AMERICAN GOVERNMENT (INCLUDING, BUT NOT LIMITED TO, THE
"RULES" ESTABLISHED BY THE CONSTITUTION) ENABLE THE POWER OF
ORGANIZED INTERESTS. DO YOU THINK THAT HACK AND PIERSON HAVE
REFUTED ALTERNATIVE EXPLANATIONS FOR THE SCOPE OF INEQUALITY IN
H&P = political action that has "abandoned the middle class" in the US in favor of
making "the rich richer" in the last 30+ years as being the work of "modern,
efficient organizations operating in a much less modern efficient political system."
Those organizations strove successfully to cut taxes (estate and capital gains taxes)
and tax rates for the wealthy, and to eliminate or prevent of any countervailing
The action in financial markets, corporate governance, industrial relations, and
taxation, came from both changing policy and preventing it from being changed.
Policy changes include tax cuts and legislation such as the 1999 Gramm–Leach–
Bliley Act that repealed the Depression-era Glass-Steagall Act and allowed the
merger of consumer banks, investment banks, and insurance companies.
Drift, or preventing policy changes to keep "pace with changing economic
conditions," included not updating labor laws in response to new corporate anti-
union tactics, not enacting stock option regulations in response to changing
executive pay packages, and not updating securities regulations in response to the
growth of dangerously risky but profitable Wall Street speculation. One example is
an attempt in 1993 by Financial Accounting Standards Board (FASB) to "moderate
the explosion of CEO pay, not through burdensome interference but through the
simple enforcement of honest, transparent accounting" by through requiring the
expensing of stock options by corporations. They were prevented by "legions of
businesspeople" and intervention by congress, led by Senator Joe Lieberman.
Another is the "carried-interest" loophole (costing tax payers about $4 billion/year)
which allows hedge fund managers — some of the richest people in the US — to pay
only 15% tax (the capital gains rate) on income they receive from investors, though
the money is a paycheck received for services, not investment income.
REFUTING ALTERNATIVE EXPLANATIONS....
why inequality in the US?
globalization is referred to as a culprit.
"knowledge based economy" - education is the best way to get better jobs, etc...
however, the concentration of wealth has been more in the hands of the top 1%
since the 1970s. Education didn't bring up the 30% of people that received a higher
education. They looked at those with college degrees to see if they had reached higher income
brackets. They found that all a college degree achieved was a guarantee that
people wouldn't hit rock bottom.
another culprit: US style policy. inequalities raising over time in other countries like
canada, england, because they began to follow US style policy.
what caused the staggering inequalities?
government policy and deregulation of financial policy
this hard to deal with because america is so divided.. divisions within government..
executive branch has two houses.. people veto each other preventing things from
"Most economic experts" agree that the 30-year trend in America of greater
inequality is a natural economic/historical trend of economic rewards for those with
educational achievements and workplace skills. The authors do not. The income
distribution hasn't followed a pattern of "the 30% of Americans with college degrees
pulling away" from those who have less education. It's the top 1% that have pulled
away from the top 20%, and most especially "the top 0.1% or even 0.01%" that has
grown richer than the rest of the population.
Two areas related to income distribution where the US differs quite a bit from other
developed countries are executive pay and unionization. Unions as a whole have
been a force for raising pay and benefits for those with lower income. The
percentage of workers belonging to unions has had a marked decline in the US not
mirrored in other affluent countries such as America's neighbor Canada.
WHY ARE FEDERAL COURTS PARTICULARLY POWERFUL WITHIN THE
AMERICAN POLITICAL SYSTEM?
3 branches - executive, legislative, judicial.. all branches act on their own
judiciary becomes more powerful than the other branches.. instances where the
judiciary can strike down decisions - checks and balances - they have their own
sphere of power. they are very influential over the american system.. power to
strike down law..
WHAT IS REGULATORY CAPTURE AND WHAT MAKES IT POSSIBLE? WHY IS
REGULATORY MORE LIKELY IN SOME SITUATIONS AS OPPOSED TO OTHERS?
Regulatory capture occurs when a regulator