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Political Science
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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 THE USA? 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 power. 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 Policy changes include tax cuts and legislation such as the 1999 Gramm–Leach– Bliley Act that repealed the Depression-era Glass-Steagall Act and allowed the merger of consumer banks, investment banks, and insurance companies.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 going forward... "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
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