5 - Bull Moose From the Bully Pulpit

Bully Pulpit

the ability to use the office of the presidency to promote a particular program and/or to influence Congress to accept legislative proposals

Clayton Antitrust Act

1914 act designed to strengthen the Sherman Antitrust Act of 1890; certain activities previously committed by big businesses, such as not allowing unions in factories and not allowing strikes, were declared illegal.

3. What is the bully pulpit and square deal?

"An office or position that provides its occupant with an outstanding opportunity to speak out on any issue" & The philosophy of President Theodore Roosevelt; included in this was the desire to treat both sides fairly in any dispute. In the coal miner's strike of 1902 he treated the United Mine Workers representatives and company bosses as equals; this approach continued during his efforts to regulate the railroads and other businesses during his second term.

2. Explain how federal (national) intervention into the economy was rationalized or justified, constitutionally in the late 19th and early 20th centuries.

"Bully Pulpit", Square Deal, Interstate Commerce Commission, The Federal Reserve, Federal Trade Commission, Gov't regulated trade through tariffs, and Gov't regulated on National level in child labor regulation and anti-monopoly legislation - Commerce Clause- regulation for legal authority over railroads, banks, pipelines and medicine between 1882-1906. - Swift & Co vs United States- regulation of meat industry by allowing meat inspection and trust-busting meat monopolies through government intervention (helped establish commerce clause) - Elkins Act of 1903 and Hepburn Act of 1906- regulated interstate commerce commission and railroad rates - Revenue Act- allowed government to raise revenue

Explain how federal (national) intervention into the economy was rationalized or justified, constitutionally in the late 19th and early 20th centuries.

- Commerce Clause- regulation for legal authority over railroads, banks, pipelines and medicine between 1882-1906.- Swift & Co vs United States- regulation of meat industry by allowing meat inspection and trust-busting meat monopolies through government intervention (helped establish commerce clause)- Elkins Act of 1903 and Hepburn Act of 1906- regulated interstate commerce commission and railroad rates- Revenue Act- allowed government to raise revenue

6. Explain the theory behind the Sherman and Clayton Anti-Trust Acts of 1890 and 1914. Why did/does the government see monopolies as disadvantageous to free markets, even though anti-trust legislation, itself, interferes with free markets?

- The theory behind the anti- trust acts were, to protect competitors from the monopolies. These laws prohibited anti-competitive monopolies. -If a company corners an entire market, they can raise prices to the disadvantage of consumers. Governments hoped to allow more competition and benefit consumers. (a) The Sherman act was the first federal action against monopolies, it was signed into law by Harrison and was extensively used by Theodore Roosevelt for trust-busting, doesn't outright outlaw monopolies, but only those acquired through illegal or unfair practices. The Clayton Act supplemented the Sherman Act by prohibiting any anti-competitive mergers (under Wilson presidency) (b) Breaking up monopolies significantly interferes with the free market but, if left on their own, economies will naturally trend toward concentrations of power; Monopolies can destroy competition even as they bring efficiency and order to industries.

8. Identify Robert La Follette and Teddy Roosevelt and describe their roles in the Progressive movement. How do La Follette and Teddy Roosevelt differ from our modern stereotypical view of politics and the characteristics of today's parties?

-Robert La Follette (Republican) was Wisconsin's governor and US senator. Pioneered government - subsidized mass transit to reduce congestion and pollution. He pioneered the primary system to give voters a greater say in who the respective parties nominated to run in general elections. -Teddy Roosevelt was a republican president (1901-1909) who was neither conservative nor liberal. TR loved strong government and was openly confrontational toward corporate America. TR also advocated foreign Wars. - The two differed because La Follette led the Progressive movement on a state level, and Teddy Roosevelt led the Progressive movement on a national level.

9. Summarize how the terms liberal and liberalism have evolved between the 18th and 21st centuries. How does the term liberalism also change when panning out to an international perspective as opposed to just domestic (within the U.S.). Explain how the term conservative has also changed.

-liberalism has changed from focusing on political freedoms and free market economics, to connecting capitalism and democracy together. Liberals has changed from advocating rights and equality, to redistributing money and government intervention in the economy. -classical Conservatism is based on the belief in a limited role for the federal government,and following traditional values such as religion and morality, while modern conservatism takes the position that critiques corporate power and corruption and advocates increasing America's military strength, as well as restoring traditional political or social orders 18th century liberalism: meant a combination of democratic political freedoms/rights and free market economics & Modern liberals: think the capitalist garden needs tending and economy needs gov't intervention/ Modern liberals: re-distribution of money makes society more equitable and "evens the playing field"

Trust

A group of corporations run by a single board of directors

Square Deal

Economic policy by Roosevelt that favored fair relationships between companies and workers

Trust Busting

Government activities aimed at breaking up monopolies and trusts.

5. Identify the 16th Amendment and explain what it means that tax brackets are progressive or graduated. Understand that everyone gets charged the same rates up to a certain amount, and only gets charged the higher rate above that cut-off. Explain why wealthy Americans sometimes pay a lower overall effective rate than workers.

It gave the government power to tax income. Everyone gets charged the same rates up to a certain amount, and only gets charged the higher rate above that cut-off, the wealthy derive most of their income from stock market instead of income. -The 16th amendment allows the government to charge an income tax. - Since the wealthy derive most of their income from the stock market rather than income, their overall effective rates can be lower than people in middle classes paying 24-35%, though their totals are higher. -Progressive or graduated tax brackets are any tax in which the rate increases as the amount subject to taxation increases. - regressive taxes are taxes where the rate decreases as the amount taxed increases.

1. Know the basics of the American political spectrum in relation to economics. Identify what's meant by being on the Left or Right. Identify the famous ideological leaders of the left and right.

It originated from France because the aritsorcracy would sit on the right whereas the commoners on the left. The right is to be conservative & Republic; whereas the left is Liberal & Democratic Karl Marx was a famous left leader and Ayn Rand was a famous right leader. -The left believe in more government control, a famous ideological leader of the left was, Karl Marx, he believed in a communist like society with the government in much control of everything. Where political power is determined by wealth and income. -The right believe in less government control, a famous ideological leader of the right was, Ayn Rand and she believed in a libertarian, laissez-faire society that is unchanged by the government or by morals.

4. Identify the Federal Reserve and explain its intended role in the economy. Analyze how well it has operated over the last century based on the examples mentioned in the book.

It was a decentralized private banking system under government control that takes care of currency, stabilizing prices, and control inflation. -Congress created the Federal Reserve in 1913. -The Federal Reserve was intended to manage currency, stabilize prices, and control inflation. As well as expand the economy, control rates, and distribute money to the smaller/regular banks. The Federal Reserve System is the central bank of the United States. It's composed of three key entities, including a Board of Governors, 12 Federal Reserve Banks and the Federal Open Market Committee. -Over the last century, The Federal Reserve has struggled to stabilize the economy the way it did during the 1910s and 1920s, but has started to gain success recently, lowering interest rates after the 2008 recession.

Apply the concept of anti-trust legislation to recent history by finding an anti-trust case from the last 30 years other than Microsoft. Why do/did some people fear the company in question is/was forming a monopoly? What was the nature of the court case, and how was it resolved? This Justice Department Anti-Trust Division site is a good starting point.

United States v. Colgate & Co Created the Colgate doctrine. Under Colgate, the manufacturer can announce its resale prices in advance and refuse to deal with those who fail to comply. It was argued as a "violation of trade and commerce."(Colgate implied to fix the prices whenever they wanted under agreement). This created confusion because price maintenance was not illegal especially if they told retailers in advance. The concept "Colgate doctrine" was created, and perceived as a concept of immunity. The Supreme Court agreed district courts favor in Colgate was correct. Stated that the Sherman Act "does not restrict the long recognized right of a manufacturer to freely exercise independent discretion with who they will deal. As long as a company does not take affirmative action with pricing policy and just announces it, this is lawful.

10. Explain why the 1912 Presidential election was an important one in the history of Progressivism and the Republican Party.

Woodrow Wilson, Theodore Roosevelt, William Taft, Eugene Debs were running; the election was important the liberal and conservative tags weren't associated with the Democrats and Republicans the way they are today. There were conservative and progressive wings in each party. The 1912 Presidential Election occurred during the height of the Progressive era, the 1912 election weakened Progressive wing of Republican Party with Roosevelt's defection and loss, Progressives never dominated in same way. -In this presidential election, Teddy Roosevelt lost. This was at the height of the Progressive Era and from there the Progressives never recovered and died out. The Democratic party ended up winning the election with Wilson as president, this weakened the progressives and the Republicans.

Sherman Antitrust Act

an 1890 law that banned the formation of trusts and monopolies in the United States