Title: Sociology
1Sociology
- The Scientific Study of Societies, Social Groups
and Social interactions
2Sociological Imagination
- Teaching yourself to think about how societal
institutions and social interactions are shaped
by the social context. - For instance Will you get married and why?
- Your image of love and marriage and the image of
most of the world are vastly different because of
your culture. - Ideas about love and marriage are socially
constructed. If you had to marry, without every
meeting the person you were to marry, someone of
your parents choice, would it work?
3Use your Sociological Imagination
- Why the Olympics?
- Why do people love/hate Obama?
- Why did George Zimmerman shoot Trayvon Martin?
- Explain 911 attack from Al Qaedas perspective
and/or our response from ours? - Why do all cultures have religion?
- Whats happening in Syria and why? Which theory
explains it best? - Why are you here, right now, in this room?
- Why did you choose that outfit?
- Should they shut Strasburg down?
4From a cultural perspective
5Points of View not mutually exclusive, different
points of view
- Functionalism views social activity and
institutions as evolved to facilitates the smooth
operating of societies. - Conflict Theory views societal institutions as
conservative, in which power elites conflict with
oppressed groups to maintain power. Social
movement form to fight the power.(Think
American Revolution, Protestant reformation, Al
Qaeda, Civil Rights Movement.) - Society is dynamic, constantly evolving.
6Points of View
- Feminist Theory looks at the ways society treats
women. - Symbolic Interactions Looks at social
interactions at the micro level. Language and
symbols are interpreted to facilitate
interactions. (What do your clothes/language tell
others about you?) - Rational Choice Theory People always act in
their own self-interest and try to do whats best
for them.
7Symbolic interaction
8Change?
9Ethnic stuff.
- Ethnic group/ethnicity
- shared cultural values and norms that separate
one group from another. - Shared, distinct awareness of of common cultural
identity. Mormons? - Ethnocentric being centered around ones own
ethnic group, not liking others.
10Race in society
- Race socially constructed belief that biological
difference in skin color, hair and facial
structure proved a difference in other more
complex polygenetic qualities. - Doesnt mean there arent differences, only that
those differences are caused socially, not
biologically. - Eugenics the pseudoscience that supported above.
- Self-fulfilling prophecy when a belief creates
the predicted behaviors of a group. Labeling a
group angry makes them angry. - Stereotype threat when a group that has a belief
held about them then internalizes that belief
themselves, then perform differently on tests
when made aware of their of status. VERY
significant results. - Just World Phenomenon tendency to believe world
is rational, bad things happen to bad people,
makes us feel safe.
11How?
- Experiments
- Cause and Effect
- Butt patting
- Surveys
- Correlations
- poverty and low performance
- Alabama and being Democrat
- Woman and voting for Obama or being Pro Choice.
- Ethnographies actually living among social
groups, recording complex social patterns. - Not generalizable to others.
- Sewar Children.
12What is Culture?
- The Values, Norms and Artifacts of a society.
- Values abstract beliefs of the importance of
different constructs family, caring for others,
the nation-state, religion, yourself. - Norms are unwritten rules a society about
behaviors in specific social situations,
reinforced overtly or subtly. - Artifacts material goods created by societies.
Iphones, chariots, sports stadia. What do they
tell you about the society? - Memes Bits of culture that are passed on virally
through observation and imitation. - thats a clown question, bro
- Knuckle bump
- Hat on backward
- Baggie jeans/skinny jeans/mom jeans
- da bomb
13How do you get your culture?
- Through a process called Socialization.
- Socialization occurs through socialization
agents family, friends, school, nation,
religion, etc. - Socialization occurs as agents reward or punish
you for acting right. May be overt or subtle. - Look how nicely you share
- What were you thinking?
- A sideway glance.
14Social Capital The social knowledge and
connections that enable people to accomplish
their goals and extend their influence.
- This what you get from your family and community
that you use to succeed in your culture. - Money
- Education
- Cultural values
- Good looks
- Ability to get on with people
- Social norms that have been socialized.
15Power
- Power is the ability to force others to do what
you want. - Authority the permission from society to exert
power. - Traditional societies
- Loosely defined borders
- Multiple ethnicities often semi-autonomous
(tributes) - Nation States
- Well-defined, defended borders
- All nations today
- More homogenous
- Central government controls all of civil life.
16Failed States
- Often in regions that HAD traditional states
(Kingdoms, Empires) but are now Nation-states. - Often many ethnicities within Borders drawn for
them by exiting imperialists.
17Word Trend Democracy
- 119 of 192 countries deemed democracies.
- 2.3 Billion still live in countries considered
not free. - Most Western Nations are liberal democracies
- Multiparty elections
- Free market, competitive capitalism
- If winners, then losers?
18U.S. Government
- The U.S. is a representative democracy elected
officials represent the general cultural values
of the voters who elect them. - Voters with similar cultures tend to cluster in
the same areas, developing cultural sub-nations. - Arlington ALWAYS votes Democratic.
19Competing Interests
- U.S. system is one of competing interests
- Businesses, Unions, Single issue groups
Abortion, Womens rights, farm workers, NRA - Left out those without money.
- Internet is widening the Net and reducing the
power of money
20Todays Democracies either have a Multiparty of
Two-Party system
- Parliamentary Systems.
- Members of Parliament elect the Prime Minister.
- Have many political parties that form coalitions
to select the Prime Minister - Multiparty systems creates a wide variety of
political thought within legislature, compromised
required.
21Compare the Two based on Influence from Interest
GroupsA Billion Spent of Presidential PACs
22United States Two party system
- More likely to develop wide schisms between
political parties. - Compromise required for actions. The Wider the
schism, the less likelihood for action. - House of Reps (435) a simple majority of 218
required to pass anything - In Senate (100) a Super Majority of 60 Required
these days. (filibuster) - To override Presidential veto2/3 of each. Party
of the President MATTERS.
23So, Is the U.S. less democratic than
Parliamentary systems?
- Probably not, its system is just different.
- There are many competing interests.
- Unions, Interest Groups like Unions and the NRA,
Lobbyists, and PACs all vie with CASH and
influence to influence the elections and
electorate in local, state and federal offices. - Those without money and who dont vote are left
out poor, homeless, young etc. - The United States has tens of thousands of
elected offices and the combination provides lots
of representations.
24U.S. Democracy Voting Patterns
- Increasing distrust of government and whether or
not your vote matters, reducing vote. - U.S. has an awful turnout 38th in world
- U.S. 48
- Europe 74
- Asia 70
- S. America 62
- Mexico 60
- Africa 55
25In 2008
- Women Obama 54 McCain 46
- Men Obama 43 McCain 57
- 18-49 Obama 2 to 1
- Women vote in larger numbers 55 to 45
- This year Republicans having been working hard to
limit voting of constituencies that traditionaly
vote Democratic. (Immigrants, poor Blacks) - Republicans have been more successful at electing
local politicians and judges.
26Women in the Power Elite?
- U. S. ranks 71st in World in women in power
positions. - Tied with Turkmenistan and Rwanda
- Not offered by two parties as candidates.
- Traditional power elites have been White,
Protestant, Wealthy, Males. - Felt a responsibility of that status.
- Very unrepresentative of population.
- Today as independents have increased, more
economic diversity in candidates.
27Does Money Buy Elections?
28(No Transcript)
29Citizens United vs. Federal Election Board
- In a Supreme Court decision it was ruled that
corporations have the same right of free speech
as individuals. - MoneySpeech. Therefore, corporations can give as
much money as they want to PACs, that fund many
election campaigns. - Obama/Alito
30The Big Sort
- In the U.S., people tend to move into regions and
neighborhoods with similar thinking people - For instance, the Peoples Republic of Arlington
barely even nominates Republicans for office. - Gerrymandering even makes the regional cultures
more pronounced.
31The Supreme Court
- One of the biggest results of this years election
is the possible replacement of 3 judges on the
Court having significant influence on law for the
next 20-30 years. Could be significant in Roe v.
Wade. - Scalia very conservative 76
- Ginsberg very liberal 79
- Kennedy moderately conservative, swing vote in
recent years. 76
32Psychological concepts to Note
- Group Polarization Psychological concept that
the more you are with groups of people with a
specific value, the more like the group you will
become. - Immigrants to a community will become more like
the culture than they were before. - The culture changes the people more than the
people change the culture. - In Group Out Group Bias Once established as an
out group, in groups form negative stereotypes
about the outgroup, confirming biases and
scapegoating - Belief Bias twist logic to make ideas fit you
existing belief. - Confirmation Bias seek information that
confirms, ignore contrary.
33Electoral College
- The President is elected by the electoral
college, which is filled by electors that come
from all the states. - Each state gets its number of electors based on
its representatives (population) and Senators (2
each regardless of population) - This system gives states with small population
more weight than they deserve (based on pop.)
because each state gets credit for their two
senators. - Wyoming 3 Electors for 568,000 people
- Kansas get 6 for a population of 3 million
- 6 x more people, 2x the electors.
- So Sometimes(3), Presidents are elected with a
minority of votes George W. Bush, for instance. - Gore 48.33
- Bush 47.8
- Nader 2.75
34Real Debate
- Republicans Private
- Free Market/Limited government
- let markets determine rights and privileges.
- Minimal Regulation on Business activities.
- Small Taxes, Small Benefits, small government
- Limited protections for poor, unemployed.
- Social conservative no Gay marriage, no abortion
(rape/incest). - Limited control of business uses of the
environment. - Strong military
- Democrats Public
- Welfare/Socialist State
- Not communist Social protections.
- Government actively involved in helping
communities/people Public/Private Partnerships. - We built it
- Regulate business to stop abuses.
- Higher taxes for Bigger benefits, more protection
for poor, elderly, unemployed. - Retirement
- Health care
35Electoral College
- It requires 270 Electoral votes to be elected
President. - Real Clear Politics (mid August) About 237 votes
will probably go to Obama (California and New
York always vote Democratic.) - About 191 will go to the Romney (Since the 60s,
Republicans usually get the solid South.) - There are about 110 swing state votes left.
- Romney needs to sweep most to win. (79 out of
100) - Obama can win with Florida only. Or several
combinations of smaller states.
36These Swing States Will determine the 2012
President
37Electoral Votes in Swing Will determine Presidency
Obama needs 23 to Win, Romney 79
- Fla 29
- Ohio 18
- North Car 15
- Virginia 13
- Colorado 9
- Wisconsin 10 (Ryan)
- Iowa 6
- NH 4
- Nevada 6
- Total 110
- Obama Needs 33
- Romney needs 79
38Americas Cultural Nations Colin Woodward
suggests America is made up of 11 cultural
nations with widely different cultural beliefs
established by their histories. These cultural
differences explain why we are so divided
politically. (and always have been)
39American Nations Colin Woodward
40Remember
- These are Broad cultural trends. They say NOTHING
about and individual. Woodward attempts to
explain regional values and voting patterns based
on the cultures of these regions.
41Yankeedom New England, Upper Midwest Mich, N
Ohio, Wisc. N.Ind
-
- Utopian City on the Hill.
- Collectivists
- planned community
- Egalitarian no elites
- Predestined
- Education Imp., literacy for Bible reading,
business Ivy league schools - Progressive use of government to help community
42Yankeedom New England
- Belief in Science, evolution and global warming
- Public Protestants Hoped God would favor
community - Chosen People needs to be reflected by policies.
- Allegorical biblical interpretation
- Became more religiously tolerant over time (UU)
- Womens vote, Abolitionists, Gay Marriage
movement all started here.
43New England Progressive
- American Revolution Began here
- Abolition began here.
- American higher education began here
- Transcendentalists movement began here.
- Utopian Movements began here.
- Womens Suffrage movement began here
- Universal health care began here
- Gay Marriage first legalized here.
44Midlanders Pa, Del, Md, Northern Va some
midwest, Iowa, Missouri
- Established by German Protestant refugees
Pacifists. - Quakers
- Amish
- Mennonites
- Very tolerant of others.
- Strong community values.
- Valued education
- Ben Franklin
- First Library
- Many newspapers
- Public Protestants
- Progressive, Unions.
45New Netherlands New York city and environs
- The business district, whatever is good for
business. - Welcomed all think New York City
- Always been multiethnic (first to welcome Jewish
people) - Supports established Federal power likes
stability and control. Good for business. - Financed and built most of early nations
infrastructure Vanderbilt, Rockefeller, J.P.
Morgan. - Home of the Industrial revolution (at least the
financing) - Progressive Movement Started here and Yankeedom
as a response to Industrial abuse.
46The Left Coast coastal area of California,
Oregon and Washington
- Very similar to Yankeedom, settled by New
Englanders (Progressive) and Borderlanders
(fierce independents) - Proud trendsetters
- Progressive in Politics
- Think U. Berkley, Portland, Seattle.
- Education very important
- Environmentalist, Hollywood limousine liberals
47Tidewater Coastal Va. No. Carolina
- Old Virginny
- Hierarchal status like English nobility.
- Hierarchy
- White tobacco farmers.
- freed indentured, poor whites
- African-Americans.
- Education for Aristocrats only (UVA, Private
colleges) not much spending on public education. - No federal involvement Thomas Jefferson/antifeder
alists. - Little spending on infrastructure well into the
1960s
48Borderlanders Greater Appalachia W.Va, West Va.
W. Carolina, W. Ga, Ozarks, Kentucky, So Ohio, S.
Indiana, Tenn
- Scots Irish escaping English abuse.
- Highly Clannish
- Belief Local Control by elders.
- Warrior Class, VERY INDEPENDENT
- Education less imp. Know your letters.
- Frontiersman cities not planned, random, no
schools - Think Guns, God and Nascar
49Borderlanders Appalachia, W. Ga. Kentucky,
Tennesee, Arkansas, S. Missouri.
- Fought as much against Tidewater elite in
Revolution as British. - Used Whiskey as currency Whisky Rebellion,
Bootleggers. - NOT slave owners, generally. Fought equally North
and South in CW. - Area ecology raped by New York Industrialists
need for timber, then coal, fueled anti Yankee
sentiments. (and Civil War, reconstruction) - Been impoverished since the beginning.
50Borderlanders Greater Appalachia
- Private Protestant,
- Personal redemption
- Emotional,
- Literal interpretation of Bible
- Belief in rapture, return to Jerusalem for 2nd
coming. - Question scientific theories like evolution and
global warming - Social conservatives Guns, Gods and NASCAR, anti
Gay Marriage, Pro Life - States Rights. Resent interference from
carbetbaggers
- Creation Museum
- Petersburg, Ky.
51Deep South Ga. S. Carolina, Ala., Mississippi,
Louisiana, Texas
- Plantation Cotton chattel slavery from sugar
islands and Ga. - Deeply hierarchal social order
- Aristocratic whites,
- poor whites,
- blacks.
- More radical than Tidewater
- South shall rise again! Civil War war of Yankee
aggression. - States Rights.
- Feds are carpetbaggers
- Blacks and poor whites in direct economic
competition sharecroppers - No education for blacks and poor whites. No need.
No Money for schools - Under economic stress since Civil War.
52Deep South
- Emotional, private Protestants. Personal
redemption. - Literal interpretation of Bible
- Belief in Rapture return to Jerusalem for 2nd
coming. - Question scientific theories Evolution, global
warming. Pro Gun, Pro Life (one abortion clinic
surviving in Mississippi, home of Roe.V Wade.
Texas v. NY)
53Not that long ago
54Far West Nevada, Wyoming, Idaho, Dakotas,
Montana, Utah, Colorado
- Sparsely populated.
- Not overly religious compared with Dixie (except
Utah) - Controlled politically Mining, corporate
interests and mega ranchers - Much land owned by Feds, resented.
- Formed out of Railroad tracts sold to farmers
from East. - Can go either direction some battlegrounds
states, differ with Dixie and Borderlanders on
some issues. - EPA is a pain vs. Environmentalists.
- Belief in individualism. Pro Gun.
55El Norte Parts of Texas, Nevada, Ariz. New
Mexico, Colorado, Calif.
- Here before English, left over from Spanish
Conquest. - Closer culturally to Northern Mexicans than
whites or So. Mexicans. - Never had much political power thats changing.
Areas they live, controlled by whites.
- Caesar Chaves United Farm Workers.
56(No Transcript)
57The Republican Coalition historically
conservative
- Tidewater hierarchal
- Greater Appalachia/Borderlanders fiercly
independent, clannish. - Deep South VERY anti Yankee, hierarchal.
- (Mostly) Far West independent. Guns. Federal
Lands. - Consistently votes anti-federal, States and
local rights. - Small Government
- Against Obamacare
- Suspicious of welfare
- Less regulation of industry (right to work
states) - Socially conservative
- anti-Gay marriage,
- pro Life,
- Anti-immigrant.
- Question Science evolution, global warming.
- Strong supporters of Israeli control of
Jerusalem, Holy Land.
58The Democratic Coalition consistently Progressive
- Yankeedom most progressive, communal.
- New Netherlands business and finance.
- Midlanders toleration, communal.
- Left Coast progressive, new ideas.
- Have voted progressive, regardless of Political
Party of time. (yesterdays Republicans, todays
Democrats) - Pro Gay Marriage
- Pro Choice
- Pro Obamacare or Single Payer.
- Pro Science.
- Dream Act
- For Government regulation of industry.
- Federal government seen as ally
59Swing States are often split culturally
- Virginia
- Northern Virginia is more midlander culturally.
Arlington/Alexandria should be in New England.
Fairfax Moderate/conservative. - Everything South is more Tidewater.
- West is Borderlander.
60Red and Blue 2012Obama needs 23-50Romney needs
79
61Predict based on Cultural NaturesObama needs 23,
Romney 79
62RCP With Polls
- Real Clear Politics Map
- http//www.realclearpolitics.com/epolls/2012/presi
dent/2012_elections_electoral_college_map.html
63LA Times
64Todays Economic/Government Theory
- Market Oriented States
- Free markets work, Government stay out Tea Party
Republicans. - Welfare States/Socialism
- Peoples needs are a social right
- Unemployment insurance, health care and
retirement guaranteed. Democrats - State Centered
- The government should control, help and guide
economy China. - Usually Single Party.
65Economic Systems
- Free Market Capitalism
- unregulated, investment and return system.
- Winners get rich, losers try again.
- Creative Destruction, some get wiped out to make
way for innovation - Adam Smith Wealth of Nation (1776), suggested
this is the best system. - Forced on South American countries in 1980s and
was very effective.
66Economic System
- Socialism
- System of market capitalism, where the government
makes sure the losers have economic protections
through unemployment insurance, health care,
guaranteed retirement, etc. - Embraced by all the industrialized European
countries - Supported by high tax rates.
- Question of sustainablility.
67Economic Theories in the Election and beyond
- John Maynard Keynes Keynesian economics.
Economist from Depression. - Democratic vision
- Stimulus and Tarp were good ideas.
- Friederich Hayek/Chicago school/Austrian school.
- Tea Party Republicans.
- Stimulus Bad tax cuts Good
- Lowering the budget deficits and National debt
most important. - Trickle-down Reagan era,(Laffer curve).
- Current Republican vision.
- Reduced taxes on wealth and money will trickle
down through the economy. - Economy will grow so big that tax revenues will
incresase. - http//www.youtube.com/watch?vd0nERTFo-Sk
68If tax rates go up, you eventually get less tax
revenue, as economy shrinks.
69Gross Domestic Product
- All the money (value) generated by our whole
economy in a year. - U.S. Approximately 15 Trillion, largest in
world, by far. - About the same as whole European Union.
- China about 7 Trillion
- Per Capita (ppp) 45,000 U.S. (China 8400)
70GDP Comparison industrialized world
71Just to give you an idea U.S. about 45K
72 2008 Crash/Recession/Depression
73Monetary vs. Fiscal
- Fiscal Policy Spending is what the government
spends its money on defense and domestic. - Right now
- Approximately 15 Trillion in debt.
- Running trillion dollar yearly deficits.
74Debt how do we stand? By 2030, 200 of GDP
75Monetary Policy
- Is how much money flows into the economy and how
fast it flows. - Quantitative Easing paying bills with printed
money - Controlled by the Federal Reserve, an independent
board. - Sets interest rates (prime)
- Prints money
- About 40 of the money we borrow we borrow from
the Fed, they print it. - Watch for inflation, very low now.
76Keynesian
- The Economy can be controlled manipulating fiscal
and monetary policy. - A recession is when the GDP shrinks.
- Fixes
- Fiscal policy spend more money (Obama)
- Monetary policy lower interest rates and print
money. - If prices go up (inflation), raise interest rates.
77Keynesian Critics (Tea Party Republicans)
- Say that Keynesian practices distort the free
markets, creating booms and busts, picking
winners and losers. - Left to itself, the Free Markets will create the
best, most efficient economy. - There will be business cycles, but they will be
moderate. - Worked in South America.
78Hayek (Tea Party)
- The government should stay out of the economics
business, sound policies arent sexy but they
work. - Keep government debt low, money will build up in
banks, lowering interest rates naturally. - If inflation starts, interest rates naturally
will go up, through market forces. - Regulations also distort market, let the market
control what businesses do. If they mess up,
people wont by their products, and theyll go
bankrupt. That fear will keep them in line.
79Hayek Critics (Democrats)
- We tried this unregulated economy and got the
Great Depression. - Do you want to wait until we have a mass die off
from tainted food before the business that
produced it goes out of business?
80Trickle Down (Republicans)
- Reagan Era scheme. (George H.W. Bush called
voodoo economics). - Reduce taxes on rich. The will then invest money
and hire people and increase the size of the GDP
until the economy grows so much, the government
will acutally bring in more money in taxes. - Sort of a Keynesian plan, where government uses
fiscal and monetary policy to control the economy.
81Trickle down Critics (including David Stockman,
Reagans budget chief)
- It has never worked.
- It increases debt, without increasing GDP
- Only benefits the rich.
82Ryan Budget
- Large cuts in domestic spending to reduce debt
and bend the curve. - Large Tax cuts for rich and middle class.
- Change Medicare and Social Security to a more
private, market-based plan. - Give seniors vouchers so that they can buy their
health insurance on private market. - Reduce regulations on businesses.
83Differences in Economic Plans.
- Obama
- Cut taxes on Middle Class to stimulate growth.
- Economic growth will increase revenue enough to
slow debt - Cut some spending but leave entitlements largely
uncut - Cut defense
- AFA (Obamacare) bend curve of Heath Care costs.
- Romney
- Cut Taxes on Wealthy and Middle Class
- Leave Defense
- Get rid of AFA (Obamacare)
- Dramatically cut spending on Entitlements
- Social Security
- Medicaid
- Medicare (Ryan)
- Unemployment
- Welfare.
84PreObamacare Health Care
- Seniors covered by Medicare (government
insurance.) - Well-employed covered in combination with
employers. - Typically 2/3 employer 1/3 Employee
- If you lose your job, you lose insurance.
- Working poor uninsured, use emergency room.
- Poor covered by Medicaid (government insurance)
85What to Do?
- Attempts to take the 50 million uninsured and put
them in a subsidized private market for health
insurance, so they dont have to use the
emergency room as their primary health provider. - About 70 of bankruptcy are caused by health
related problems. Average bill for hospital care
over 20,000. (includes those who dont have
insurance and those who do, but cant afford out
of pocket costs.
86Currently
- Medicare (65 ) 50 million
- Insured through employer 150 Million
- Uninsured 50 million
- Medicaid (poor) 60 Million
87Under Affordable Care ActObamacare
- Medicare 50 Million
- Insured 200 Million
- Uninsured small number paying taxes/penalty.
- Medicaid expanded to 80 million or so. (Many Red
states saying they will not accept the Federal
money designed to help.)
88Eligibility by State notice cultural trend?
89Is Race an Issue?
90Obamacare
- Seniors Medicare No Change.
- Well-employed No Change, except
- Can take insurance with you
- Cant be denied prexisting conditions.
- Kids can stay until 27
- No lifetime cap
- Free well care, womens care
- No discrimination for sex
91ObamacareThe Mandate
- Working poor/not insured (young and fearless)
- Must buy health insurance from exchanges.
- If cant afford, government pays/helps.
- If can afford, you have to buy or pay a tax
(Mandate) - No more emergency room tax on the rest of us.
- Currently, unpaid bills are passed on to
government or rest of us in higher prices 60
aspirins, etc.
92Obamacare
- Poor covered by Medicaid.
- Increase in number by about 20 million expected.
93Ryan Plan designed to bend the curve in 10 years.
- Seniors given vouchers to pay for health
insurance. - If not enough, burden shifts to them.
- Vouchers indexed to inflation currently health
insurance goes up twice that rate. - Ryan assumes increases will decreast because of
competition. - Well-employed no change
- Working Poor
- back to emergency room, cost passed on.
- charity
- Poor Medicaid reduced numbers qualify.
94Single Payer (Liberal position)
- Health Care is right, not a commodity.
- Everyone gets Medicare coverage.
- Done everywhere but here.
- Very expensive, but government control means
government control of prices - See Japan, Britain, France.
- Aint gonna happen, too many interest groups
aligned against it. - Obama didnt even try, angered liberal base.
95Former Vs. Obamacare (ACA, 2014)
- Formerly
- Seniors Medicare (50m)
- Well-employed employer based(120m)
- Uninsured (50m)
- go to emergency room,
- pay out of pocket,
- deficits passed along
- Poor Medicaid (50m)
- VARIES BY STATE
- Obamacare
- Seniors Medicare
- Well-employed employer based. Protecton laws.
- Uninsured Must buy, government help working
poor. - Poor Medicaid.
- Expanded
- Paid by fed.
96Major Complaints
- Government forcing people to buy a product.
Health Care NOT a right! - Government will be able regulate industry,
distorting economics, inefficient. - Death Panels!
- Profit based health care
- More effective
- cheaper
97Major supports
- Health care currently doesnt cover everyone,
its a right in an industrialized economy. - Health Insurance companies
- work to maximize profits,
- kick off sick, exclude those who are potentially
more expensive, - charge whatever the market will bear.
- If government controls prices, it can reduce
costs for nation. - If people want more, they can still buy it.
98Heres the Problem and Ryans Point
- Medicare WILL bankrupt the country, probably by
2030. - Hes right, but what to do?
- We spend 16-18 of GDP on Health Care. Next
closest about 12 and they cover everyone. - Opponents to nationalized believe ours is
better, not supported by statistics.
99Ryans Medicare
- Indexed to Inflation
- Offers option to stay on current Medicare or Buy
Privately - Assumes cost decline because of competition.
- Higher cost for those who can afford, lower for
those who cant. - Doesnt start for 10 years.
100As percent of GDP
101Whats Happening?
102(No Transcript)
103http//theincidentaleconomist.com/wordpress/health
-outcomes-report-cards-by-country/
104The U.S. Econonmy
105How To Buy a House
- Normally, when you buy a house you must -bring
some of your own money (5) -borrow money from
the bank the repayment of which is called a
mortgage.
Your money
Mortgage Loan from
PLUS
You buy House
106Regular mortgage
- You, then, repay the bank every month for your
mortgage.
You make monthly Payments to bank.
107If you dont pay the bank, the bank forecloses on
you and takes your house and sells it to someone
else to get their Mortgage money back.
- And you lose the money you put in
108Mortgage Back Securities
- If enough people buy houses, the Banks would run
out of money to lend as mortgages, so there needs
to be a way for banks to get more money, so they
can make more loans. - So, the bank sells all their mortgages in big
bundles of mortgages called Mortgage Backed
Securities - They take fees for their effort, those are their
profits. - More mortgages, more fees, more profits.
109Fannie and Freddie
- Fannie and Freddie are called Secondary lenders.
- They buy the Mortgaged Back Securities from the
banks.
Mortgage Back Securities
gtgt
----?
ltltltltltltltltltltltltltltltltltltltltltltltltltltltltltltltlt
Banks get their money back, to make new mortgages.
110So
- The more mortgages a bank places the more money
in FEES they made
111And So Does Freddie and Fanniebecause they sell
their Mortgage Back Securities
- Fannie and Freddie Sold the Mortgage Back
Securities they bought from Banks to
INSTITUTIONAL INVESTORS like big Insurance
Companies, Pension Funds, Oil Rich Nations, OTHER
nations, and Billionaires and - Fannie and Freddie Make Fees and they get richer
and richer.
112Ultimately
- The money for House Mortgages comes from these
Institutional Investors who need long term return
on their money - Institutional investorsgtgtgtgtgtFannie and
FreddiegtgtgtTo Mortgage Bankergtgtgtgtto house
buyergtgtgtgtgtHouse Seller
113All in all, pretty safe system. Most people repay
because regulations required
Buyers required to use some of their own money.
No moral Hazard. The Bank Checked the borrowers
credit history. The Bank Made sure the borrower
had a job that pays enough to make the mortgage
payment.
114In the late 1990s
- Bill Clinton signed bill getting rid of Glass
Steagall
115The Depression
- Because of the Great Depression the
Glass-Steagall Act was passed, to prevent
commercial banks from making risky investments. - Commercial Banks take money from depositors and
lend it to homeowners and consumers at interest. - Deposits are insured by government.
- Wall Street Banks take money from big money
investors and invest it into business at high
risk/high reward. - If you lose tough
116In 2000
- George W. Bush is elected,
- Hes a free market capitalist and hates
regulations, - So doesnt strickly enforce regulations against
Wall Street Bankers.
Wall Street Banker
117Some Terms
- GDP all the goods and services a country
produces its WEALTH. - Fiscal Policy How much money the government
taxes and spends. - Monetary Policy set by the Federal Reserve Bank
- How much money is in the Economy.
- How high or low interest rates will be.
118After 911 Fear of Recession (shrinking of GDP)
- So, Bush wants to STIMULATE the economy by
increasing Real Estate purchasing. (Irony alert
Keynesian) - The FED lowers interest rates, making a new home
owners payment to bank less - Monthly payment Amount of mortgage and interest.
119Wall Street Gets in the Game
- Wall Street wanted to get into the lucrative
housing Mortgage game. - Created something called a SUB Prime Mortgage.
- No pesky regulations of banking
120How Subprime Mortgages Differed from Conventional
Ones
- No Down Payment Required. (Moral Hazard)
- Bad Credit History OK! More risk, more gain!
- Unverified Income Liar Loans.
121ARMS Adjustable Rate, Sub Prime Mortgages
- In the first few years, these mortgages had VERY
low payments. (Anyone could afford) - After the first few years, the Payments went WAY
up. (Almost no one could afford). - The Gimmick After the first few years, you could
borrow another mortgage with a low payment and
pay off the first one.
122Sub Prime Mortgages
- Original Mortgage 500,000-payment low for two
years, then goes way up. - Go to bank create another mortgage for 500,000
with a low payment first few years use money to
pay off Original one. - People often borrowed 550,000, paid off original
one, and kept the leftover 50,000 to buy things
with.
123Win Win Win
- Everybody Wins
- Sellers have more buyers to buy their house
(demand skyrockets) - Buyers with no way to pay back loan, gets the
American Dream. - Mortgage Bankers make fees everytime a loan is
made or refinanced. - The High, newly created demand, makes home prices
for everyone go way up.
124But who would buy Mortgage Back Securities based
on these shady loans?
- Wall Street, thats who.
- They funneled Trillions into the Amerian housing
market. - The only way they could lose is if housing prices
quit going up, or horrors, went down.
125Wall Street Would sell these subprime mortgage
backed securities.
- To Insitutional investors
- Insurance Companies (AIG)
- Pension funds (Va Teachers retirement plan)
- Nation States (Iceland, etc)
- Mutual Funds (IRAs)
126Rating Agencies
127In 2008
- Prices for houses rose so high that even with Sub
Prime Mortgages, demand went down. (Predictable). - When Demand dropped, Prices dropped.
- Dropped Fast.
128Owners with Sub primes
- Walked away, leaving a glut of houses on the
Market. (moral hazard) - Prices dropped further 9 Trillion dollars
evaporated from economy. - Anyone who made money from housing, was laid off.
Unemployment rates skyrocketed. - Obama elected Preident.
129TARP
- Banks lost So much money that we were endanger of
the entire banking system collapsing, wore that
the Great Depression. - U.S. Government (and European govts) bail out the
banks to save the economy.
130Recession Reocurs because of out of work workers.
- What to do?
- Stimulate spend money to keep the economy moving
and raise taxes on wealthy. or - Cut spending making everything Worse.
131Liquidity Trap
- Businesses had money, but no one to buy their
goods. Money stopped flowing through economy. - People with Money were scared to spend so paid of
debt and saved. Lowered demand further. - So, the spender of last resort is the government.
132Most Economist wanted to take a Keynesian
Stimulus Course
- Congress okayed about 800 Billion, about ½ what
economist believed would be necessary.
133The national debt Ballooned because of
- Bush Tax cuts to EVERYONE, including wealthy.
- Bush Drugs for seniors.
- Two Wars Afghanistan and Iraq.
- The lose of Tax Revenue because of Recession.
- The Stimulus package and Tarp (the least
expensive) to save the economy.
134This doesnt include Medicaid Plan B, which was a
trillion of it.
135Should we freak out?Should we raise taxes?
136The Debate
- Do you keep spending and cut taxes on the middle
class spenders to get out of the Recession? - Increases debt in the short term
- Increases size of economy increasing tax revenues
and shrinking relative size of debt. - Do you cut the budget and slow spending from the
government and CUT taxes further? - If we get debt down and Lower taxes on Wealthy
investors they will hirer workers to stimulate
the economy.