Political Ideology

Party Ideology

• Refers to a party’s philosophy about the proper role of government and its set of positions on major issues Party identification
• An individual’s attachment to a political party
• Conservatism
  • An ideology favoring more control of social behavior, fewer regulaitons on businesses, and less government intervention in the economy
• Liberalism
  • An ideology supporting less government control over social behavior and more regulation of businesses and of the economy
• Libertarianism
  • Favors very little government regulation
• We are in a political realignment where parties don’t stand for what they have traditionally stood for
  • The party of the country club businessman has always been the republicans, now it is the democrats
  • The republican party is a working class party
    • Trump changed it

Role of Government and Economy

• Republicans
  • Governments that govern least govern best
  • Less regulation of economy
  • Less activist government
  • Fiscal responsibility
    • Taxes, minimum wage, health care
  • State over federal
• Democrats
  • More government action to meet people’s needs
  • Active role in economy
  • Provide government services

Ideologies

Environment

• Repubs are willing to pay an environmental price to keep the economy going
  • If nobody else is doing anything, why would we handcuff ourselves
• Democrats want to save the environment

Foreign Policy

Republicans

• Neo-conservative
  • Interventionist
  • Pro military and defense spending
• Old conservative
  • Isolationist
• Trump as his own camp

Democrats

• Use international organizations, ex Woodrow Wilson
• Less agressive militarily
  • Vietnam War - the new left
  • Iraq War - Barack Obama as candidate, vs his actions as president
    • Once they get into power tend to use the army

Political Economy

Relationship between government and economy

• Laissez Faire - no intervention
  • Never actually true
• Command economy - owned and controlled by government
  • Soviet Union
• Mixed economy - capitalism (private) and socialism (public)
  • Government regulates economic activity
  • United States

Measures of Economic Health

• GDP - measures the total value of goods and services produced by American economic activity
• US 31 trillion, Canada 2.2 trillion
  • Two consecutive quarters of negative GDP growth indicates a recession
    • Effect on american politics
• GDP Per Capita - gdp divided by population, better measure of purchasing power and qualituy of life
  • US 86k, Canada 55k
• Unemployment rate - percentage of people looking for jobs that cannot find work
  • Vs dropped out of the job market - msleading
  • Loss of tax income, pay unemployment
• Inflation - rise in prices of goods and services when demand outpaces supply
  • Measured by Consumer Price Index (CPI)
    • Tracks price of 80k items
    • Tied to Social Security payment amount - cost of living increases
  • Republicans tend to accept higher unemployment for lower rates of inflation, Democrats feel the opposite

Economic Policymaking

• Fiscal policy - use of taxation and spending to maintain economic growth, stability, lower unemployment
• Keynesian Economics - John Maynard Keynes (1930s)
  • Demand side
  • In times of economic contraction, government must spend to offset continued contraction
  • Examples: FDR New Deal, Obama Great Recession
  • Usually gets put in place when economy slows down and stimulus is needed
    • ex covid stimulus checks
      • One downside could be fraud where people create fake businesses in order to take government money
      • Could also increase inflation
• Supply Side Economics - Arthur Laffer in the 1970s
  • Supply Side
  • Lower taxes on individuals and businesses to encourage to combat economic downturns by encouraging businesses to grow and individuals to spend
    • Keeps money in peoples pockets, they spend money, businesses invest and expand
  • Reagonomics, trickle down economics
• Budget deficits and the debt, currently 39 trillion
  • Govt spends more or cuts taxes, less revenue increases deficits
  • Bush tax cuts, obama, increased govt spending, Trump tax cuts, Biden covid relief, Trump tax cuts

Monetary Policy

• Monetary theory - the primary driver of business cycles is the supply of money in the economy including the amount of credit available to people and businesses
  • Too much available money leads to inflation - too much money for too few goods
    • Too much Keynesian policies leads to inflation
      • Biden, infrastructure, and Covid relief
    • Government should match access to money to growth in economic productivity

Federal reserve

• 7 member panel of governers with 14 year nonrenewable terms
  • Appointed by President, confirmed by senate
    • Chair serves 4 year terms
    • independent from rest of government
• Responsible for setting monetary policy to regulate the amount of money in the economy
• Buys and sells treasury securities (T Bills, in which the purchaser lends money to the federal government)
• Sets reserve rates for banks (the amount of money banks have available to loan to customers)
• Influences the interest rate by setting the Federal Funds Rate (FFR), the interest rate for overnight loans
  • Effects on borrowing and inflation
  • Paul Volcker in the 80s, response to Covid, Trump and Powell
  • 2% inflation goal

Ideology and Social Policy

• Medicare - 1965 - amended Social Security Act to provide hospital and medical insurance for 65+
  • Extended to the disabled in 1972
  • Medicare Part D - 2003 - prescription drug benefit
• Medicaid - 1965
• US has the highest medical care costs in the world, more than 2.5x the average in other industrialized nations

The Patient Protection and Affordable Care Act

Obamacare

• Most Americans get health insurance through employers
• 2010 - 48 million uninsured, many underinsured
• Affordable Care Act
  • Employers with more than 50 employees provide health insurance or pay a fine
  • Individuals must obtain health insurance or pay a fine
  • Expeansion of Medicaid to low income Americans
  • Creation of health care exchanges in states, with federal subsidies where health care coverage can be shopped for by businesses and individuals
  • A prohibition against excluding individuals with pre existing conditions in most health care plans
• Web site problems, rising premiums, attemped Republican overturn, 2015 - 16 million Americans covered
• National Federation of Independent Business v Sebelius - individual mandate
• King v Burwell - tax

School Choice

• Competition in public education - funded by taxes
• Vouchers
• Effects
  • Market forces
  • Unions
  • Taxes
  • First Amendment Considerations