Chapter 15Economic and

Environmental Policy

Economy: a system of production and consumption of goods and services that are allocated through a system of exchange

Laissez-faire doctrine: holds that private individuals and firms should be left alone to make their own production and distribution decisions (policymakers often disagree on the amount of government needed)

Government and the Economy

Regulator: US government plays a big parole as regulator of privately-owned businesses

Prevent restraint of Trade Make businesses pay for indirect costs and

externalities Provide for equity when needed Sometimes overregulation exists

Government and Economy

Economic Policy

Progressive Era: when reforms tried to stop the unfair business practices of new monopolies

Great Depression: when policymakers tried to stimulate economic recovery through regulatory policies designed to help and to restrain business

Politics of Economic Policy

New Social Regulations (1960s and 1970s): social goals affected policy which addressed three major areas

1. Environmental Protection2. Consumer Protection3. Worker Safety

Politics of Economic Policy

The Federal Reserve Controlling interest rates to control inflation Deficit spending US Budget

Managing Economy

Rachel Carson wrote the Silent Spring: revealed threat of harmful pesticides and is cited to have helped spark Clean Air Act of 1963 and the Clean Water Act of 1965

Government and the Environment

Oldest role of government with environment National Parks run by National Park Agency US Forest Service manages national forests Dual Use Policy: parks and forests are nature

preserves and natural resources; government permits required to obtain resources

Conservationism

Endangered Species Act of 1973: Directs federal agencies to protect

threatened and endangered species Authorizes programs to preserve natural

habitats Spotted owl debate (Owls vs. Jobs)

Conservation and Politics

1970: Sen. Gaylord Nelson (D-WI) creates the first Earth Day

1970: Environmental Protection Agency created

1980: Congress established Superfund program

New Trends in Environmentalism

2001: The Supreme Court finds that the EPA is to consider only public health and not industry costs in setting air quality standards

2006: Former Vice President Al Gore stars in “An Inconvenient Truth,” bringing debate about global warming to public

Trends in Environmentalism

Greenhouse Effects Politicians disagree strongly on course of

action US largest source of emissions in world US rejected Kyoto agreement Support for policy growing as media and

public interest grows

Global Warming

Gasoline prices have risen dramatically Call by some to explore alternative energy

sources Hearing held in Congress with possible

budgetary links

Energy