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Sociology

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Title: Sociology


1
Sociology
  • The Scientific Study of Societies, Social Groups
    and Social interactions

2
Sociological 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?

3
Use 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?

4
From a cultural perspective
5
Points 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.

6
Points 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.

7
Symbolic interaction
8
Change?
9
Ethnic 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.

10
Race 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.

11
How?
  • 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.

12
What 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

13
How 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.

14
Social 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.

15
Power
  • 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.

16
Failed 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.

17
Word 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?

18
U.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.

19
Competing 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

20
Todays 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.

21
Compare the Two based on Influence from Interest
GroupsA Billion Spent of Presidential PACs
  • Ours
  • Britains

22
United 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.

23
So, 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.

24
U.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

25
In 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.

26
Women 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.

27
Does Money Buy Elections?
28
(No Transcript)
29
Citizens 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

30
The 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.

31
The 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

32
Psychological 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.

33
Electoral 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

34
Real 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

35
Electoral 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.

36
These Swing States Will determine the 2012
President
37
Electoral 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

38
Americas 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)
39
American Nations Colin Woodward
40
Remember
  • 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.

41
Yankeedom 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

42
Yankeedom 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.

43
New 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.

44
Midlanders 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.

45
New 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.

46
The 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

47
Tidewater 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

48
Borderlanders 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

49
Borderlanders 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.

50
Borderlanders 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.

51
Deep 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.

52
Deep 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)
  • Gone With the Wind

53
Not that long ago
54
Far 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.

55
El 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)
57
The 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.

58
The 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

59
Swing 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.

60
Red and Blue 2012Obama needs 23-50Romney needs
79
61
Predict based on Cultural NaturesObama needs 23,
Romney 79
62
RCP With Polls
  • Real Clear Politics Map
  • http//www.realclearpolitics.com/epolls/2012/presi
    dent/2012_elections_electoral_college_map.html

63
LA Times
  • LA Times Electoral Map

64
Todays 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.

65
Economic 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.

66
Economic 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.

67
Economic 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

68
If tax rates go up, you eventually get less tax
revenue, as economy shrinks.
69
Gross 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)

70
GDP Comparison industrialized world
71
Just to give you an idea U.S. about 45K
72
2008 Crash/Recession/Depression
73
Monetary 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.

74
Debt how do we stand? By 2030, 200 of GDP
75
Monetary 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.

76
Keynesian
  • 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.

77
Keynesian 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.

78
Hayek (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.

79
Hayek 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?

80
Trickle 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.

81
Trickle down Critics (including David Stockman,
Reagans budget chief)
  • It has never worked.
  • It increases debt, without increasing GDP
  • Only benefits the rich.

82
Ryan 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.

83
Differences 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.

84
PreObamacare 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)

85
What 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.

86
Currently
  • Medicare (65 ) 50 million
  • Insured through employer 150 Million
  • Uninsured 50 million
  • Medicaid (poor) 60 Million

87
Under 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.)

88
Eligibility by State notice cultural trend?
89
Is Race an Issue?
90
Obamacare
  • 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

91
ObamacareThe 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.

92
Obamacare
  • Poor covered by Medicaid.
  • Increase in number by about 20 million expected.

93
Ryan 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.

94
Single 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.

95
Former 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.

96
Major 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

97
Major 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.

98
Heres 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.

99
Ryans 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.

100
As percent of GDP
101
Whats Happening?
102
(No Transcript)
103
http//theincidentaleconomist.com/wordpress/health
-outcomes-report-cards-by-country/
104
The U.S. Econonmy
105
How 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

106
Regular mortgage
  • You, then, repay the bank every month for your
    mortgage.

You make monthly Payments to bank.
107
If 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

108
Mortgage 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.

109
Fannie 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.
110
So
  • The more mortgages a bank places the more money
    in FEES they made

111
And 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.

112
Ultimately
  • 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

113
All 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.
114
In the late 1990s
  • Bill Clinton signed bill getting rid of Glass
    Steagall

115
The 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

116
In 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
117
Some 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.

118
After 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.

119
Wall 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

120
How Subprime Mortgages Differed from Conventional
Ones
  • No Down Payment Required. (Moral Hazard)
  • Bad Credit History OK! More risk, more gain!
  • Unverified Income Liar Loans.

121
ARMS 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.

122
Sub 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.

123
Win 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.

124
But 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.

125
Wall 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)

126
Rating Agencies
  • Rated this Junk AAA

127
In 2008
  • Prices for houses rose so high that even with Sub
    Prime Mortgages, demand went down. (Predictable).
  • When Demand dropped, Prices dropped.
  • Dropped Fast.

128
Owners 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.

129
TARP
  • 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.

130
Recession 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.

131
Liquidity 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.

132
Most Economist wanted to take a Keynesian
Stimulus Course
  • Congress okayed about 800 Billion, about ½ what
    economist believed would be necessary.

133
The 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.

134
This doesnt include Medicaid Plan B, which was a
trillion of it.
135
Should we freak out?Should we raise taxes?
136
The 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.
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