1. Ap u.s. government & politics
Thursday, March 1, 2018

2. Warm-Up: Chapter 16 Vocab Activity
1) Fiscal Policy
2) Monetary Policy
3) Means Testing
4) Laissez-Faire
5) Policy Formulation
A) Includes issue identification, stakeholder consultation, and choice of policy instruments
B) Government use of the budget to influence the economy
C) Lack of government involvement in a nation’s economy
D) Process for determining whether an individual or family is eligible for government assistance
E) Government manipulation of the supply of money and credit in private hands

3. Chapter 16 Discussion

4. Banking Regulation

5. Glass-Steagall
“Glass-Steagall” typically refers to several specific provisions of the U.S. Banking Act of 1933
The essence of Glass-Steagall was the separation of Commercial Banking and Investment Banking
Purpose was to protect citizens’ deposits and investments with commercial banks from the more risky practices of investment banks

6. Repeal of Glass-Steagall
1999—Congress repeals Glass-Steagall
Repeal was supported by every Republican member of Congress and a majority of Democrats
Signed into law by _____________?
—Financial Crisis leads to the “Great Recession”
Some politicians and economists placed part of the blame for the financial collapse on the repeal of Glass-Steagall
The nation’s largest banks had made bad investments, especially on the secondary mortgage market
These banks were considered “too big to fail,” mainly because if they went bankrupt, a large number of ordinary citizens would have lost their life savings

7. Restore Glass-Steagall?
An obvious response to the financial crisis has been efforts to restore the Glass-Steagall provisions, or enact similar restrictions on banks’ activities
During the 2009/2010 debate on the Dodd-Frank legislation (more on this shortly), a handful of Congressmen and Senators introduced amendments that would have reinstated Glass-Steagall
Senate sponsors: Maria Cantwell (D-WA) and John McCain (R-AZ)
This effort failed

8. Dodd-Frank Passed in 2010, in response to the 2008 financial crisis
Major provisions:
1) Consolidation of financial regulatory agencies, and establishment of an oversight council to evaluate systemic risks
2) Increased transparency requirements for derivatives trading
Derivatives are a risky financial investment that many people feel were central to the 2008 crisis
3) Creation of the Consumer Financial Protection Bureau
Obama first appointed Elizabeth Warren to head the CFPB; her nomination was blocked by Senate Republicans, leading to Obama’s controversial use of his recess appointment power to eventually fill the position
Trump appointed Mick Mulvaney to head the CFPB; he is currently in the process of dismantling the agency

9. Social welfare policy

10. “The other america”
Class Reading and Seminar Discussion

11. Homework Requiem, Chapter 7: Seminar Tomorrow
Textbook, Chapter 17: Reading and Outline due Thursday, 3/8