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Week 4: Political Theories and Institutions


Democratic Party Platform. Protecting the Middle Class. Cutting taxes ... Democratic Party Platform ... Republican Party Platform. Protecting Rights of Workers ... – PowerPoint PPT presentation

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Title: Week 4: Political Theories and Institutions

Week 4 Political Theories and Institutions
  • BA 107

Section Outline, 9-24-04
  • Administrative Matters
  • Email list
  • Grading for Section Participation
  • Review
  • Conditions fostering the rise of big business in
    late 19th century America
  • Rise of big government in response to the rise of
    big business

Todays Agenda
  • Identify key policies that affect business in the
    Democratic and Republican Party Platforms
  • Identify common grounds in both platforms
  • Identify primary differences in the two platforms
  • Implications for business
  • How these policies affect a companys bottom line
  • But also consider non-market issues, such as
    legitimacy and effect on stakeholders
  • For both perspectives, maybe advantageous to
    divide into long-term, medium-term, and
    short-term effects

What are the key policies that affect business?
  • Democratic Party Platform

Democratic Party Platform
  • Job Creation
  • Tax Reform
  • Close tax loopholes for big corporations tax
    cuts for small and medium-sized businesses
  • New investment corporations
  • to extend capital to SMB
  • Uphold trade agreements
  • protection of international workers rights and
    environmental standards
  • Invest in technology
  • Enhance transportation system
  • Promote Small business
  • (double funding to use technology to grow)
  • Reduce health care costs to companies

Democratic Party Platform
  • Protecting the Middle Class
  • Cutting taxes for the middle class
  • More federal assistance (economic downturn
    retirement benefits)
  • Raise minimum wage
  • Tax incentives for home ownership
  • Fiscal discipline (pay as you go)
  • End corporate welfare

Democratic Party Platform
  • Protecting the Environment
  • Clean air, water
  • Reject false choice between healthy economy and
    healthy environment
  • Tax credits for private sector investments in
    clean, renewable sources of energy
  • Improving fuel standards
  • (Cf. Republican market-based approach)

GM Is Getting Sick of High Health-Care Costs
  • LAS VEGAS National health-care coverage should
    be an issue in this year's presidential campaign,
    says Gary Cowger, president of General Motors
    Corp.'s North American operations.
  • We need to start a discussion on it now, he
    tells a J.D. Power Associates' International
    Automotive Roundtable held in conjunction with
    the 2004 National Automobile Dealers Assn.
    convention here.
  • Cowger says GM, the nation's largest purchaser of
    health-care insurance, is suffering from the
    burden of spending 4.5 billion annually covering
    1.2 million workers, retirees and their spouses.
  • --keepmedia.com

Democratic Party Platform
  • American businesses pay more than competitors for
    health care, reducing competitiveness
  • Bush policies favor HMO, drug companies
  • How to cut health care costs? Lift burden on
    families, businesses, and the self-employed by
    picking up tab for highest-cost medical cases.
  • Use technological know-how to reduce
    administrative costs
  • Cut prescription costs
  • Invest in science to combat disease
  • Expanded coverage for all but where will money
    come from?

What are the policies that affect business?
  • Republican Party Platform

Republican Party Platform
  • Economic Growth
  • Lower taxes panacea GDP would have been lower
    had it not been for tax cuts
  • Tax Reform make tax cuts permanent
  • Simplify tax code
  • Reindex Alternative Minimum Tax
  • Fiscal Discipline

Republican Party Platform
  • Fiscal Discipline
  • How to justify largest deficit in US history?2000
    downturn, terrorism, war on terror at fault.
    Also, view deficit in terms of relative size to
    GDP. Well within historical ranges. Fiscal
    discipline in right direction
  • Proposed methods
  • Pay-as-you-go
  • Cap on discretionary spending
  • Line item veto
  • Sunset commission
  • Management agenda
  • Corporate Accountability
  • Making CEO, CFO vouch for truth and fairness of
  • Independent Board to oversee accounting
  • New tools to root out corporate fraud
  • Enhanced penalties against corporate misfeasor

Republican Party Platform
  • Reform Litigation System
  • Frivolous law suits driving up costs of doing
    business in America by forcing companies to pay
    excessive legal expenses to fight off or settle
    baseless lawsuits
  • Meaningful Tort Reform
  • Medical Tort Liability Reform
  • OB/GYNs unable to practice because of high costs

Republican Party Platform
  • Health Care
  • Shifting costs to federal government will not
    solve problem, will just increase taxes.
  • Aid small businesses in offering health care to
    employees empower self-employed through access
    to affordable coverage putting patients and
    doctors in charge of medical decisions (this will
    increase cost), reducing law suits and punitive
    damages (will not discourage malpractice) AHPs
    (small businesses pool together to offer health
  • No government-run universal health care

Republican Party Platform
  • Protecting Rights of Workers
  • Right-to-Work laws protect workers who do not
    wish to join unions (Issue framing)
  • Workplace safety, overtime protection, protection
    of pensions
  • Environment
  • Market-based approach

Remarkable Similarity
  • Private sector, not government, as engine of
    growth. Governments role is to create
    environment that will promote private sector
    investment, foster competition, and strengthen
    the foundations of an innovative economy
  • -- Democratic Party Platform
  • Small businesses are the most potent force of
    economic growth and job creation in America
  • --Republican Party Platform
  • To varying degrees, both parties have accepted
    the role of government intervention in the market

What are the Primary Differences between the
Democrats and the Republicans?
Primary Differences
  • Republicans
  • Tax cut as primary tool
  • More likely to adopt market, or quasi-market
  • Tort reform
  • Democrats
  • Greater willingness to tax
  • Apparent favor for SMB over larger corporations
  • Greater emphasis on protecting the little guys
  • Greater emphasis on protecting the environment
  • Greater willingness to intervene when markets

How to reconcile
  • The apparent aberrations of some industries,
    voting against their interest
  • The enigma that pro-business Republican
    presidents tend to perform worst economically
    than Democratic presidents
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