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Bureaucracy:
namegiven to a large organization that has a structure hierarchy to carry outspecific functions
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Bureaucracy Theories:
- Max Weber
- Monopolistic
- ModelGarbage Can Model
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Max Weber:
- empathized the structure & procedure of government
- 1. Chain of command: hierarchical structure and labor
- 2. Division of Labor: work divided among many specialized workers
- 3. Impersonal rules: all persons treated based on"merit"
- 4. Specification of authority: clear lines of responsibility
- 5. Goal orientation: determines structure, authority, and rules
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Monopolistic Model:
- Describes bureaucracy asthe sole provider of a service
- 1. There is seldom competition-leads toinefficient and costly operations
- 2. There are no incentive to save costs or use resources more productively
- 3. Red tape & government waste
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Article of Confederation:
- Foreign Affairs
- War
- Treasury
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Characteristics of growth
- Base on implements; the development of procedures and activities to carry out polices
- 1. Regulatory - rule making located in the federal registry
- 2. Distributive - distribution of benefits
- 3. Redistributive – adjudication
- 4. Constituent - general program development
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Factors that led to growth of the Federal Bureaucracy:
- In 1789 Washington headed few bureaucracies
- 1. There was the department of Foreign affairs which is now State, War, Justice and Treasury
- 2. The most expansion occurred during times of war, social crisis or
- economic emergency
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The basic unit of a bureaucrat:
is the department and cabinet
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The executive branch has 4 major types of bureaucratic structure
- 1. Cabinet
- 2. Independent Executive agency
- 3. Independent Regulatory Agency
- 4. Government Corporations
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Cabinet:
major administrative unit that have responsibility for conducting abroad area of government operations
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Independent Executive agency:
- has a single function
- 1. Created as needed, appointed by the president, and confirmed by the Senate
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Independent Regulatory agency
- Typically responsible for a specific type of public policy.
- 1. Created as needed, appointed by the president, and confirmed by the Senate.
- 2. Headed by a commissioner and serve fixed and staggered terms Cannot be removed by President or Congress without "cause"
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Mini-Legislatures:
- 1. Legislative: make rules
- 2. Executive: provide for enforcement
- 3. Judicial: decide disputes
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Government Corporations:
- an agency of government that administers a quasi-business enterprise
- The organizations include
- 1. Government Sponsored enterprise
- Fannie Mae and Freddie Mac
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The current bureaucracy has over 2.5 million
employees
Largest numbers of employees are found in the postal services [25%] and defense (33%)
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Political appointee:
- occupy position for a comparatively brief time "to victor belong the spoils"
- 1. Spoils system: based on patronage; rewarding those who supported the administration
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Civil servants:
- Civil Service Reform Act/Pendleton Act 1883
- 1. Created civil service commission to administration the personnel service
- Hatch Act of 1939/ political Activities Act
- 1. Civil service employees cannot take an active
- part in the political management of campaigns
- The Hatch Act Reform Amendments of 1993
- 1. Permit most Federal employees to take an active
- part in partisan political management and partisan political campaigns.
- 2. Federal employees are still prohibited from
- seeking public office in partisan elections
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Sunshine Law:
1976 requires that all multi-headed federal agencies conduct their business regulation in public session.
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Sunset Laws:
1976 requires an existing program be regularly reviewed for its effectiveness & terminated unless specifically extended as a result of this review.
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Civil Service Reform Act 1978:
Office of personal Management, Merit System Board, Privatization, and Devolution.
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Office of personal Management 9 (OPM):
1. Empowered to recruit, interview & test potential government workers & determine who should be hired
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Merit System Board:
- 1. Evaluates charges of wrongdoing, hears
- employee’s appeals from agency decisions & can order corrective action against employees & agencies.
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Whistleblowers:
some who blows the whistle by their on gross government inefficiency or illegal action.
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Whistleblower Protection Act 1989
establish an independent agency to guarantee whistle blowers protection against unjust dismissal, transfer, or demotion
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Privatization:
replacement of government services with contracted services provided by private firms.
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Devolution:
a policy to remove a program from one level of government by delegating it or passing it down to a lower level of government.
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Equality of opportunity:
2nd paragraph of Declaration of Independence
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The history of the Welfare system:
- Distinguishing between 2 classes of poverty
- 1. Deserving poor:
- 2. Undeserving poor:
- Able bodied individuals unwilling to work.
- Transients new to the community
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Foundation of Welfare state
- Social security act 1935: 2 categories
- 1. contributory
- 2. noncontributory
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Contributory [forced savings]
- Social
- Unemployment
- Medicare
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Social Security
- Social Security - redistributes wealth
- Individual: 7.65% tax rate
- Self – employed: 15.30% tax rate in 2009 & 12.4% tax in 2010
- ·OASDI – old age survive disability insurance
- 6.20% on 1st $106,800
- ·Cost of Living Adjustment [COLA]- set by legislature until 1975
- 2009 was 5.8% but there is none for 2010 so the amounts remain until 1975
- ·Medicare: No maximum pay set/table earnings
- 1.45% on individuals
- 2.90% on self – employed individuals
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Unemployment Compensation
- ·Unemployed though no fault of their own
- ·Dept. of labor oversees this part but it is administered by the state
- · State sets the tax rate
- Texas: min-.72% and max 8.20% on the first $9000 of each employee earnings annually
- · National average is #275 per week up to 26/39 weeks
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Medicare
- (1965) substantial medical services to elderly persons who are already eligible to receive old age 65, survivor and disability insurance under the original security system.
- · Part A: Health Maintenance Organization: helps pay the cost of hospital inpatient and skilled nursing care for up to 100 days (Hospital Care)
- ·Part B: supplemental medical insurance and optional add-on taken by virtually all those covered by Part A. It pays 80% of doctors and outpatient charges (Medical Care)
- · Part C: Preferred provider Organization combines A & B with private insurance companies: may have a monthly premium because of extra benefits (Advantage Plan)
- Part D: prescription drug coverage
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Noncontributory Programs:
- also know as “public assistance” or “welfare”
- 1. Family Assistance: AFDC replaced in 1996 w/ TANF through block grants
- ·Medicaid: Program provides comprehensive health care, including hospitalization, physician services, prescription drugs, and long-term nursing home care to all
- who qualifies as needy under TANF and SSI
- ·Who qualifies Medicaid: pregnant women
- and children in low-families whose total earnings were less than 133 percent of
- the official poverty level
- ·Supplemental Security Income [SSI].
- ·Food stamps
- Goldberg v. Kelley (1970)
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How do we pay for the welfare state?
- Federal income taxes
- 1. Personal Income
- 2. Corporate Income
- 3. Social security
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Who actually bears the heaviest burden of a tax?
- 1. Progressive
- 2. Regressive
- 3. Flat
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Managing the Economy
Employment Act 1946
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Protecting the Welfare & Property of Individuals
- 1. Maintenance of law and order
- 2. Regulating competition to level playing field
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Regulating Competition to level playing field
- 1. Stop monopolies
- 2. Uniform regulations
- 3. Externalities:
- 4. Financial reforms: FDIC, Securities Act
- 5. Agriculture Adjustment Act – farm income by restricting agriculture production in order to bring it into better balance with demand.
- 6. Labor: national labor relations act, fair labor standards act
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Should government be involved in the Economy
- A. Classical/Laissez-faire capitalism
- B. Keynesian Theory
- C. Monetarists Theory
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Economic decision making
- A. Fiscal policy: congress & president
- B. Federal reserve system
- C. Monetary policy – a form of government regulation in which the nation’s money supply and interest rates are controlled
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Protection the Welfare & Property of Individuals
- Maintenance of law and order
- Regulation competition to level playing field
- Uniform regulations
- Externalities
- Financial reforms
- Labor
- Agriculture adjustment Act 1938
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Maintenance of law and order
- Federal racketeering laws aimed at ending criminal efforts to control business thru extortion/kickbacks:
- Influence and Corrupt Organizations Act RICO
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Regulationcompetition to level playing field
- Stop monopolies
- Sherman Anti-Trust Act (1890) to prevent all
- restrains on trade, including price-fixing, bid-rigging, and market allocation agreements
- Deregulation: Carters administration transportation
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Uniform regulations: to remove inconsistence among state
- Motor Carrier Act 1935
- Federal Communications Commission [FCC] 1934
- 1. Charged with regulation interstate and
- international communications by radio, television, wire, satellite and cable.
- 2. Has jurisdiction covers the 50 states, the District of Columbia, and U.S. possessions.
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Externalities:
- Burden that society incurs when firms fail to pay the full costs of production
- EPS created to monitor and regulate air-and water qualities
- 1. Superfund 1980 clean up waste sites
- OSHA
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Financial reforms:
- Federal Deposit and Insurance Corporation [FDIC] 1933 to insure deposits in banks [up to $250,000 per depositor]
- 60 minutes: FDIC
- Securities Act: 1933 requires investors be given full and accurate information about the stocks/securities being offered to them
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Agriculture adjustment Act 1938
- Provides subsidies/payments to farmers who grew no more than their allotted acreage
- Controlled supply of 7 basic crops; corn, wheat, cotton, rice, peanuts, tobacco and milk
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Labor
- National labor relations Act/ Wagner Act 1935 guaranteed workers’ rights to organize and bargain collectively thru unions of their own choosing
- Fair labor standards Act 1938: protect interest of low paid workers $7.25
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Classical/Laissez-faire capitalism
- o Adam Smith, “Wealth of Nation” 1776
- o Invisible hand of market
- o Government should focus on”
- 1. National defense
- 2. Establish law & order (including protecting private property)
- 3. Provide basic public good by maintaining roads
- that facilitates commerce
- Keynesian Theory
- 1. John Maynard Keyes
- 2. Instability was product of fluctuation DEMAND
- o Monetary Theory
- o Milton Friedman
- o Regulating the supply of $ Federal Reserve System
- o Control Inflation
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Economic decision making
- o Fiscal policy (taxing spending)
- 1. Economy policies involving taxing, spending and
- deficit levels
- 2. Congress: Article 1 sec, 8: lay collect taxes, to borrow $ on the credit of U.S. [CBO]
- 3. President: recommends to Congress OMB, CEA
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Federalreserve system
- central bank of bankers
- 1. Regulate supply of $, both currency in circulation and bank deposits
- 2. 7 members, serve 16 years term
- 3. Oversee the 12 reserves” of banks
- 4. Lend $ to banks @discounts rates
- 5. Buy and sell U.S. government Treasury bonds on
- the open market
- 6. Loose monetary policy: supply of credit increases and its cost falls
- 7. Tight monetary police: supply credit falls and its cost increases to control inflation
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