Unit 1: Microeconomic Issues Issue: Are Profits the Only Business of Business? Yes: Milton Friedman , from "The Social Responsibility of Business Is to Increase Its Profits," The New York Times Magazine (1970) No: Mindy S. Lubber , from "Corporate Responsibility: Without Outside Pressure, Corporations Will Not Take Meaningful Action on Sustainability," The Economist (2013) Free-market economist and Nobel Laureate Milton Friedman contend that the sole responsibility of business is to increase its profits. Mindy S. Lubber, president of Ceres, argues that activist involvement is necessary for business to take sustainability seriously, but also believes that businesses should be socially responsible and help develop creative solutions. Issue: Should the Compensation of Executives Be Subject to Government Regulation? Yes: Joseph E. Stiglitz , from "Testimony before the U.S. House of Representatives Committee on Financial Services," U.
S. House of Representatives (2010) No: Kevin J. Murphy , from "Testimony before the U.S. House of Representatives Committee on Financial Services," U.S. House of Representatives (2009) Joseph Stiglitz, the winner of the Nobel Prize in economics, argues that flawed incentive compensation systems played an important role in the financial crisis. He believes that better regulation including regulations that affect incentive structures are likely to produce a better alignment of private rewards and social returns and better innovation.
University of Southern California professor Kevin J. Murphy argues that "there is nothing inherent in the current structure of compensation in financial service firms that leads to obvious incentives to take excessive risk." He believes that government-imposed regulations are "highly unlikely" to improve compensation policies of these firms. Issue: Has the Supreme Court Made It Possible for Corporations to Buy Elections? Yes: Mary G. Wilson , from "Testimony before the U.S. House of Representatives Committee on House Administration," U.S.
House of Representatives (2010) No: Steven M. Simpson , from "Testimony before the U.S. House of Representatives Committee on House Administration," U.S. House of Representatives (2010) Mary G. Wilson, the president of the League of Women Voters, believes that the Supreme Court''s decision in Citizens United v. FEC that allows corporations to spend unlimited amounts of money in elections was "fundamentally wrong and a tragic mistake.
" She calls upon Congress to enact legislation that will reverse this decision. Steven M. Simpson, the senior attorney at the Institute for Justice, supports the Supreme Court''s decision. In making his case, he argues that the decision does not reverse 100 years of precedent; the decision does not mean corporations will buy elections; and the decision recognizes that corporations must be protected under the free speech First Amendment. Issue: Should the United States Stop All New Offshore Drilling for Oil? Yes: Michael F. Hirshfield , from "Testimony before the U.S. House of Representatives Committee on Natural Resources," U.
S. House of Representatives, (2010) No: Michelle Michot Foss , from "Testimony before the U.S. House of Representatives Committee on Natural Resources," U U.S. House of Representatives (2010) Michael F. Hirshfield, the Oceana vice president and chief scientist, believes that offshore drilling is a "dirty and dangerous business." He argues that the Deepwater Horizon drilling disaster is not a one-time occurrence: in 2007 alone there were 39 blowouts worldwide.
Among other things, he calls on Congress to "suspend all approvals, activities, and processes--other than current production--related to offshore drilling." Michelle Michot Foss, the University of Texas energy economist, provides estimates of the consequences of stopping oil and gas exploration and production. Among other things, such a ban would increase energy costs to consumers by an annual average rate of 5 percent and lead to a decrease in jobs in energy-intensive industries by 13 million by the year 2030. She believes there are "outstanding and almost immeasurable benefits associated with the discovery and utilization of oil and natural gas resources in our deep water provinces in the U.S. and around the world." Issue: Are Taxes on Soda Effective in Reducing Obesity? Yes: The Economist magazine article, from "Taxing Sugary Drinks: Stopping Slurping," The Economist (2015) No: Ted Boscia , from "Study: Berkeley Soda Tax Falls Flat," Cornell Chronicle (2015) The Economist contends that taxes on soda are effective. Retailers were able to pass on most of the tax to the customer, and customers have switched to healthier alternatives.
Governments have been able to raise revenue and use this money for general funds. The Economist also contends that taxes work better if they distinguish between different degrees of sugariness. Ted Boscia feels that the soda tax is not effective in achieving its goal. He states that if a tax is imposed in a city, the retailers are worried about elastic demand and having their customers go elsewhere. He argues that rather than focusing on soda, there should be studies done on other items that lack nutritional value. Issue: Should Uber Be Heavily Regulated? Yes: Allison Schneider , from "Uber Takes the Passing Lane: Disruptive Competition and Taxi-livery Service Regulations," Elements: Boston College Undergraduate Research Journal (2015) No: Matthew Yglesias , from "When Is a Taxi Not a Taxi?" Slate (2011) Allison Schneider maintains that regulations will be important because policy makers have a responsibility to look after the trust of the public but regulations will need to be changed on an ongoing basis. Uber and companies, in a similar mold, are here to stay, due to the fact that competition requires some industries to disappear, and some other industry to replace it. Matthew Yglesias contends that regulating Uber is a solution to a problem caused by overregulation and cartels.
It is an exciting and innovative company. They can take advantages of inefficiencies in the marketplace. Uber, he feels is able to take advantage of market segmentation, and should be allowed to make as much money as possible, if they can exploit the marketplace and benefit the customer at the same time. Unit 2: Macroeconomic Issues Issue: Is Obamacare a Disaster for the Economy? Yes: Kathryn Nix , from "Top 10 Disasters of Obamacare," Heritage Foundation WebMemo (2010) No: John Holahan , from "Will Health Care Reform Hurt the Economy and Increase Unemployment?" Timely Analysis of Immediate Health Policy Issues (2010) Heritage Foundation Researcher Kathryn Nix identifies 10 major problems with Obamacare (the Patient Protection and Affordable Care Act). Among other things, she argues that the legislation will hinder growth, increase the federal deficit, place new burdens on state governments, and, at the same time, discriminate against low-income workers. John Holahan, the director of the Health Policy Center at the Urban Institute, argues that Obamacare is "not likely to have a significant direct effect on the U.S. economy or on employment.
" More specifically, he states that state and local governments as well as small businesses should benefit from the legislation. Issue: Is Declining Productivity a Concern? Yes: Robert Gordon , from "Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds," NBER (2012) No: Scott Winship , from "The Affluent Economy: Our Misleading Obsession with Growth Rates," Brookings Institution (2013) Robert Gordon looks at economic growth through 2007 and the future path of potential output for the next 20 to 50 years. He has unorthodox ideas about how to increase the growth of the productivity frontier. The frontier is in a process of slowing down further. Many of the inventions that replaced tedious and repetitive labor by computers happened many years ago. He contends that inventions in the current age have given us more capabilities but will not significantly change labor productivity of the standard of living.
Scott Winship argues that we are obsessed with growth rates to our detriment. He contends that we need to appreciate the magnitude of real economic gains that we have continued to experience over the last decade or so. It is harder for economies to maintain high rates of growth, but the implication of a stagnating economy is erroneous. Issue: Did the American Recovery and Reinvestment Act of 2009 Create Jobs? Yes: Josh Bivens , from "Testimony before the U.S. House of Representatives Budget Committee," U.S. House of Representatives (2010) No: Veronique de Rugy , from "Testimony before the U.
S. House of Representatives Budget Committee," U.S. House of Representatives (2010) Josh Bivens of the Economic Policy Institute argues that the American Recovery and Reinvestment Act (ARRA) was badly needed, it worked, it was cheap, and that another.