Vocabulary The American Political Economy 1 GDP Gross Domestic Product dollar amount of all the goods and services produced in a country in a given year total price tag on all services in a given year 2 OECD Organization for Economic Cooperation and Development modern industrialized democracies 32 countries 3 Capitalization 4 Capitalism a system in which capital is privately owned and controlled Without regulation it wouldn t survive An inherently undemocratic form of production 5 Communism centralized and authoritarian control of economy Not as productive nor profitable as capitalism 6 Externalities costs that a firm can successfully avoid paying taxes and it does not affect its balance sheet 7 Corporate complex when government shepherds failed private companies into self sustaining health bails 8 Regulatory capture The regulated become the regulators Public policy agencies favor specific interests groups instead of the public Instability systematic inherent and centrally important feature of a capitalist economy 9 10 Recession a fairly negative economic growth for at least two quarters 11 Depression prolonged period of sustained economic stagnation idle production unemployment declining living standards extensive local dislocation 12 Corporate capitalism small group controls the US economy and consequently possess immense political power 13 Separation of powers what balance should be struck between the president the congress and the Supreme them out Court 14 Federalism how much power the federal government should have as compared to the states 15 Globalization 16 Mobilization of bias occurs when the rules of the game tend to favor one group or another When the playing field is tilted to one group s favor 17 Outputs policies that are controlled and made by government 18 Outcomes policies that aren t controlled by government but are affected by it 19 American democracy rights institutions and the procedures that enable individuals and groups to make their views known and fairly select their leaders and public officials civil liberties civil rights like freedom of speech freedom of assembly freedom of the press and the absence of discriminatory barriers to participation It is affected by the persistent patterns of inequality based on disparities in income wealth and life chances Rights promote democracy they don t guarantee it 20 Private government a system that resembles public government in that its policies have a fundamental impact on people s lives and their communities 21 Capitalist class class in which capitalists communicate and cooperate with each other through social clubs corporate interlocks encompasses the interests of corporate capitalism as a whole organizations and peak business associations 22 Labor unions organizations representing workers that typically represent a countervailing force to management 23 Tax expenditure exceptions for the Federal Tax Code 24 Federal Tax Code policy for tax paying 25 Progressive taxation tax rate increases as the taxable base amount increases The more you earn the more you pay because you receive more benefits Supposedly income taxes 26 Regressive taxation tax rate decreases as the amount subject to taxation increases Payroll Sales Taxes I 3 sectors of the American political economy A corporate banking sector Big business a size b concentration 1 Concentration of wealth power economic power the total assets of us corporations have grown remarkably since the late 90 s Big business is BIG Walmart has concentrated economic power and is worth 469 0 billion Saudi Arabia is worth 576 8 billion a store almost as big as a country Theres over 20 million business incorporated in America In 2011 Apple was named 1 in marketing capitalization The US has the largest GDP in the world 15 648 trillion Twice as big as China economically The top 6 banking corporations control 60 of America s entire economy JP Morgan Bank of America Citigroup Inc Wells Fargo and Co Goldman Sachs group and Morgan Stanley 9 630 trillion The Great Recession of 2009 was entirely the banks fault but got bailed out by government because the economy would suffer too much if these big businees companies would go bankrupt The economic power of the corporate banking sector is concentrated 2 Interlocking directorates 3 Consequences Individuals who are members of Board of directors Make decisions and policies and Board of Trustees Run companies of different companies They work and run similar companies Myth Companies compete Reality Companies collide with one another That concentrated economic power gives them the ability to write their own economic laws and reshape American Political Economy Which allows them to basically do whatever they want o They don t get affected by policies or laws because they make them o They can terminate pension plans decide wages lay off workers o They receive tax breaks write offs They don t pay as much taxes as they claim they do o Examples Big Pharmacies Big Business is eager to help states set medication guidelines Isn t government supposed to set guidelines It doesn t matter what doctors want to rescript big pharmacies want them to prescribe new more profitable medication Study Bad drugs trials hidden Big medicine companies hide what doesn t favor their profits They prefer to prescribe drugs that are profitable instead of psychotherapy Ex Prozac Zoloft anti depressives o Wal Mart would be the 27th largest country in the world They control what they sell they step up culture It s the New Washington General Motors President of GM Alfred Sloan in the 1920 s formed the National Citylines front group for several large companies like General Motors Felix petroleum Mac trucks Firestone tires Standard Oil etc They bought the street car companies of each city they started cutting off services to make the people turn into the automobile industry Natinal Citylines controlled 80 city IULRS Got sewed and guilty of conspiracy were fined with ONLY 5 000 each NOTHING NO we don t have that service because private industries wanted to make profits not because government doesn t want to It changes cultures has influence reshapes the nation s rutines and customs had effects in wars to control petroleum and polluction contamination only 1 10 Americans owned a car People think that Big Government is more harmful than Big Business Big business enjoys privileged position over APE they keep facts that could harm us if it doesn t harm profits birth ring companies for