Taking Sides volumes present current controversial issues in a debate-style format designed to stimulate student interest and develop critical thinking skills. Each issue is thoughtfully framed with an issue summary, an issue introduction, and a postscript or challenge questions. Taking Sides readers feature an annotated listing of selected World Wide Web sites. An online Instructors Resource Guide with testing material is available for each volume. Using Taking Sides in the Classroom is also an excellent instructor resource. Visit www.mhhe.com/takingsides for more details.
Preliminary Table of ContentsTAKING SIDES: Clashing Views on Economic Issues, Fifteenth Edition
Table of Contents
Clashing Views on Economic Issues, Fifteenth Edition
Unit 1 Microeconomic Issues
Issue 1. 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 (September 13, 1970)
NO:Robert Almeder, from Morality in the Marketplace: Reflections on the Friedman Doctrine, in Milton Snoeyenbos, Robert Almeder, and James Huber, eds., Business Ethics, rev.ed. (Prometheus Press, 1998)
Free-market economist and Nobel Laureate Milton Friedman contends that the sole responsibility of business is to increase its profits. Philosopher Robert Almeder maintains that if capitalism is to survive, it must act in socially responsible ways that go beyond profit making.
Issue 2. Should the Compensation of Executives Be Subject to Government Regulation?
YES:Joseph Stiglitz, from testimony before the U.S. House of Representatives Committee on Financial Services (January 22, 2010)
NO:Kevin J. Murphy from testimony before the U.S. House of Representatives Committee on Financial Services (June 11, 2009)
Joseph Stiglitz, 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 lead to obvious incentives to take excessive risk. He believes that government imposed regulations are highly unlikely to improve compensation policies of these firms
Issue 3. 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 (February 3, 2010)
NO:Steven M. Simpson, from testimony before the U.S. House of Representatives Committee on House Administration (February 3, 2010)
Mary G. Wilson, president of the League of Women Voters, believes that the Supreme Courts 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, senior attorney at the Institute for Justice, supports the Supreme Courts 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 4. Should The U.S. Stop All New Offshore Drilling for Oil?
YES:Michael F. Hirshfield from testimony before the U.S. House of Representatives Committee on Natural Resources (May 27, 2010)
NO:Michelle Michot Foss from testimony before the U.S. House of Representatives Committee on Natural Resources (May 27, 2010)
Michael F. Hirshfield, Oceana vice president and chief scientist, believes that offshore drilling is a dirty and dangerous business. He argues that the Deepwater Horizon drilling disaster in not a one time occurrence: in 2007 alone there were 39 blowouts world wide. 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, 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 5. Are Health Savings Accounts Working Effectively?
YES:American Benefits Council, Subcommittee on Health of the House Committee on Ways and Means (May 14, 2008)
NO:Linda J. Blumberg, from testimony before the Subcommittee on Health of the House Committee on Ways and Means (May 14, 2008)
The American Benefi ts Council, a national trade association, believes that HSAs are working as intended for the vast majority of the 6.1 million Americans covered by HSA-eligible plans. Linda J. Blumberg, Urban Institute research associate, identifi es a number of problems associated with medical care and argues that HSAs are not the solutions to these pressing national concerns.
Issue 6. Should NBC and Comcast Be Allowed to Merge?
YES:Brian L. Roberts and Jeff Zucker from testimony before the U.S. Senate Judiciary Committee, Subcommittee on Antitrust, Competition Policy, and Consumer Rights (February 4, 2010)
NO:Mark Cooper from testimony before the U.S. Senate Judiciary Committee, Subcommittee on Antitrust, Competition Policy, and Consumer Rights (February 4, 2010)
Company presidents Brian L. Roberts (Comcast) and Jeff Zucker (NBC) support the merger of their companies; they believe the merged firm will benefit consumers and will encourage much needed investment and innovation in the important media sector. Consumer Federation of America research director Mark Cooper opposes the merger because it will give the merging firms the incentive and ability to not only preserve and exploit the worse aspects of the current market, but to extend them to the future market.
Unit 2 Macroeconomics Issues
Issue 7. Is Obamacare a Disaster for the Economy?
YES:Kathryn Nix from Top 10 Disasters of Obamacare, Heritage Foundation WebMemo #2848 (March 30, 2010)
NO:John Holahan from Will Health Care Reform Hurt the Economy and Increase Unemployment? Timely Analysis of Immediate Health Policy Issues, the Urban Institute (August 2010).
Heritage Foundation researcher Kathryn Nix identifies ten 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, discriminates against low-income workers. John Holahan, 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 8. Will Heath Reforms Pilot Programs Lead to the Control of Health Care Costs?
YES:Atul Gawande from The health-care bill has no master plan for curbing costs. Is that a bad thing? The New Yorker (December 14, 2009)
NO:Alain C. Entoven from Would Reform Bills Control Costs? A Response to Atul Gawande, Health Affairs Blog — http://healthaffairs.org/blog (December 22, 2009)
Dr. Atul Gawande, a surgeon, Associate Professor in the Department of Health Policy and Management at the Harvard School of Public Health, who served as a senior health policy advisor in the White House from 1992 to 1993, argues that the transformation of American agriculture began with a pilot program and the numerous pilot programs to test ways to curb costs and improve quality contained in the healthcare legislation could similarly transform healthcare. Dr. Alain C. Enthoven, economist and professor emeritus at Stanford Universitys Graduate School of Business who served as a consultant to the Carter administration and researched unsustainable growth in national health expenditures and costs of health insurance and market-based universal health insurance in the U.S. responds that Gawandes analysis is flawed and the agriculture analogy is inapt while farmers wanted better crops and generally welcomed or tolerated pilots to show the better ways, the Medical Industrial Complex does not want such pilots and often strangles them in the crib.
Issue 9. 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 (July 14, 2010)
NO:Veronique de Rugy from testimony before the U.S. House of Representatives Budget Committee (July 14, 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 similar effort is needed. Veronque de Rugy of George Mason University believes that ARRA, in spite of claims made on its behalf, appears to have lost money by destroying growth.
Issue 10. Do American Consumers Need a Financial Protection Agency?
YES:Janis Bowdler from testimony before the U.S. House of Representatives Committee on Financial Services (September 30, 2009)
NO:Bill Himpler from testimony before the U.S. House of Representatives Committee on Financial Services (September 30, 2009)
Janis Bowdler, Deputy Director, Wealth Building Project, National Council of La Raza, supports the creation of a Consumer Financial Protection Agency (CFPA). She identifies three specific ways in which existing regulatory agencies have failed consumers including the failure to create and promote tools that will allow consumers to make true apples-to-apples comparisons of credit products. She and her organization believe a new agency is need to redress these failures, and would be a strong vehicle for improving the way financial markets serve their Latino clients. Bill Himpler, Executive Vice President of the American Financial Services Association, opposes the creation of a CFPA. He argument takes several forms including the fact that finance companies are already heavily regulated at the state level. He also believes that the creation of a CFPA is likely to mean higher prices and reduced product choice for financial services customers.
Issue 11. Should Minimum Wage and Living Wage Laws Be Eliminated?
YES:D.W. MacKenzie, from Mythology of the Minimum Wage, Ludwig von Mises Institute #LINK<http://www.mises.org/story/2130>#(5/3/2006)
NO:Jeannette Wicks-Lim, from Measuring the Full Impact of Minimum and Living Wage Laws, dollars&sense (May/June 2006)
Economics instructor D. W. MacKenzie believes that eliminating minimum wage laws would reduce unemployment and improve the effi ciency of markets for low productivity labor. He also believes that the economic case for a living wage is unfounded. Economist Jeannette Wicks-Lim stresses the ripple effects of minimum and living wage laws; these effects increase the effective ness of minimum and living wage laws as antipoverty strategies.
Issue 12. Do Unskilled Immigrants Hurt the Economy?
YES:Steven Malanga, from How Unskilled Immigrants Hurt Our Economy, City Journal (Summer 2006)
NO:Diana Furchtgott-Roth, from The Case for Immigration, The New York Sun (September 22, 2006)
Columnist Steven Malanga believes the infl ux of unskilled immigrants into the U.S. economy has imposed large costs on the larger society, including job loss by native workers and lower investment in labor-saving technology. More importantly, he argues that this immigration has increased utilization of the vast U.S. welfare and social-services apparatus. Diana Furchtgott-Roth, senior fellow at the Hudson Institute and director of Hudsons Center for Employment Policy, and a former chief economist at the U.S. Department of Labor, observes that annual immigration is a tiny fraction of our labor force, and immigrant laborers are complements, rather than substitutes for native born Americans. She also cites a National Academy of Sciences study that concluded that foreign-born households are no more likely to use welfare than native-born households.
Unit 3 The World Around Us
Issue 13. Is a Fair Trade Policy Superior to a Free Trade Policy?
YES:Joseph E. Stiglitz, from Fair Trade in The National Interest (May/June 2008)
NO:Gary Hufbauer, from Free Trade in The National Interest (May/June 2008)
Former chief economist of the World Bank, Joseph E. Stiglitz, argues that trade liberalization can make everyone worse off when markets are not perfect. Furthermore, free trade agreements protect special interests in the advanced industrial countries. Stiglitz maintains that the United States should move toward fairer trade and should manage trade liberalization better so that the rich and the poor in all countries share the benefi ts of trade. Gary Hufbauer, senior fellow at the Peterson Institute for International Economics, claims that free trade, when properly implemented with market reforms, can lift the lives of hundreds of millions of people. Free trade pays off for the United States and is not some sort of ‘gift to foreign countries. He is critical of political rhetoric in the United States on halting or opting out of trade agreements, including NAFTA.
Issue 14. Is Loan Mitigation the Answer to the Housing Foreclosure Problem?
YES:David G. Kittle, from testimony before the House Committee on Financial Services (July 25, 2008)
NO:Julia Gordon, from testimony before the House Committee on Financial Services (July 25, 2008)
Mortgage Bankers Association offi cial David Kittle, after reviewing the cost of foreclosure and loan mitigation options, presents data to back his assertion that loan mitigation is working. Center for Responsible Lending policy Counsel Julia Gordon stresses both the direct costs and the spillover costs of foreclosures and believes that voluntary loan modifications have done little to stem the overwhelming tide of foreclosures.
Issue 15. Are Biofuels Like Ethanol the Answer to U.S. Energy Problems?
YES:Bob Dinneen, from Statement before the Subcommittee on Energy and Air Quality of the House Energy and Commerce Committee (May 6, 2008). Also in Congressional Digest (June, 2008)
NO:Charles T. Drevna, from Statement before the Subcommittee on Energy and Air Quality of the House Energy and Commerce Committee (May 6, 2008). Also in Congressional Digest (June, 2008)
Bob Dinneen, president and chief executive offi cer of the Renewable Fuels Association, states that Americas ethanol producers are providing signifi cant economic, environmental, and energy security benefi ts today. Expansion of the domestic biofuels industry will reduce Americas dependence on imported oil. Charles T. Drevna, president of the National Petrochemical and Refi ners Association (NPRA), argues that the biofuels mandate has increased food prices and contributed to food shortages around the world and stressed the ethanol transportation infrastructure.
Issue 16. Can U.S. Deficit and Debt Problems Be Solved Without Increases in Taxes?
YES:Chris Edwards from Statement before the National Commission on Fiscal Responsibility and Reform (June 30, 2010)
NO:Robert Greenstein and Jim Horney from testimony before the Commission on Fiscal Responsibility and Reform (June 30, 2010)
Chris Edwards, director of tax policy at the Cato Institute believes that unless massive deficit spending is reduced, the nation is headed for fiscal calamity. He proposes four types of reform that will make significant cuts in government spending. These include the restructuring of entitlements and the elimination of unneeded programs. Robert Greenstein, executive director of the Center on Budget and Policy Priorities, and Jim Horney director of federal fiscal policy at the Center on Budget and Policy Priorities, believe that deficits need to be reduced and this requires tax increases as well as spending cuts. They support increases in corporate taxes and taxes on high-income taxpayers. They suggest that tax increases on taxpayers with incomes less than $250,000 per year will also be necessary.
Issue 17. Is Chinas Currency Undervalued and Should the U.S. Take Action to Correct this Undervaluation?
YES:Jack W. Shilling from testimony before the U.S. Senate Banking, Housing, and Urban Affairs Committee, Subcommittee on Economic Policy (April 22, 2010)
NO:Daniel J. Ikenson from testimony before the U.S. Senate Banking, Housing, and Urban Affairs Committee, Subcommittee on Economic Policy (April 22, 2010)
Executive Vice President and Chief Technical Officer, Alleghany Technologies and Chairman, Specialty Steel Industry of North America, Dr. Jack W. Shilling argues that China has intervened in foreign exchange markets to keep its currency undervalued. Since this is undermining U.S. competitiveness, he believes the U.S. should impose countervailing or antidumping duties on imports from China. Daniel J. Ikenson, Associate Director of Cato Institutes Center for Trade Policy Studies claims that there is only a weak relationship between Chinas undervalued currency and the U.S. trade deficit with China, on the one hand, and between the trade deficit and U.S. job losses on the other. Rather than threatening China with sanctions, the U.S. should allow China to appreciate its currency at its own pace.
Issue 18. Do the Testing and Accountability Elements of the No Child Left Behind Act Prevent a Proper Cost-Benefit Evaluation?
YES:George Miller from a speech at the National Press Club in Washington, D. C. (July 30, 2007). Also in Congressional Digest (May, 2008)
NO:Raymond Simon, from No Child Left Behind—Partnership for Learning in the United States, keynote address at the Royal Society for the Encouragement of Arts, Manufactures, & Commerce Edge Lecture (February 27, 2008). Also in Congressional Digest (May, 2008)
Chairman of the Education and Labor Committee of the United States House of Representatives, California Democrat George Miller states that schools and students are not making enough progress and signifi cant changes must be made to the law so that its goals may be achieved. America needs and must have an educational law that insists on accountability with high expectations and high-quality assessments; that closes the achievement gap; and helps all children to learn. Deputy Secretary, U.S. Department of Education, Raymond Simon states that NCLB is working for students. Simon believes that there is consensus for a limited number of changes. He claims that NCLBs insistence on scientifically based research and the gathering and using of reliable data has been one of its major successes.
Issue 19. Is the Inequality in U.S. Income Distribution Surging?
YES: James M. Cypher, from Slicing Up at the Long Barbeque, dollars & sense (January/February 2007)
NO:Diana Furchtgott-Roth, from testimony before the Subcommittee on Workforce Protections of the House Committee on Education and Labor (July 31, 2008)
Economist James M. Cypher believes that the U.S. economy is currently experiencing the largest shift in the distribution of income and wealth since the late nineteenth century with the share of income of the poorest 90 percent of the population falling from 67 percent in 1970 to 52 percent in 2000. Hudson Institute Scholar Diana Furchtgott-Roth does not deny that income inequality is rising but argues that by considering alternative measures of income and recognizing demographic changes, the shifts in income distribution are not a cause for alarm.
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