1. Welcome and Introduction to the Course Policy Advice to the President School of Public Policy & Urban Affairs | Northeastern University Joan Fitzgerald Interim Dean, School of Public Policy & Urban Affairs Setti Warren Mayor, City of Newton Barry Bluestone Founding Dean, School of Public Policy & Urban Affairs Session 1: September 5 th

2. Government: For What? How Much? What do you want government to do? How much do you want to pay for it?

12. Reagan Clinton Bush II Nixon Carter

17. U.S. Government Spending Over Time In Sum: Optimal role of government is a balancing act; neither “big” government nor “small” government is inherently good or bad if that government does what its constituents want at a price they are willing to pay.

18. THE MANY ROLES OF GOVERNMENT

19. Major Functions of Federal Government Provide for the National Defense Establish and Adjudicate Private Property Rights Ensure Compliance with the Constitution and the Bill of Rights Establish a National Currency Provide for National Economic Policy to maintain Economic Growth, Full Employment, and Stable Prices Provide for National Infrastructure to assure Transportation and Communication Assure Public Health Collect Taxes to Pay for Federal Government Operations

20. Major Functions of State Government Provide for Regional Transportation Ensure Public Safety and Security Provide for Higher Education Assure K-12 Equity across Municipalities Promote Economic Development Ensure Public Health Regulate Energy Sector Protect the State Environment Encourage the Production of Affordable Housing Provide Unemployment Insurance Provide Workers Compensation

21. Major Functions of Local Government Ensure Public Safety – Police & Fire Protection Promote K-12 Education Promote Public Health Regulate the Use of Property through Zoning Laws Promote Local Economic Development Provide Water and Sewer Services Regulate Local Private Monopolies (e.g. Cable TV)

22. FEDERAL PROGRAMS

23. Provide for the National Defense Army, Navy, Air Force,, Marine Corps, Coast Guard National Guard Special Forces CIA Missile Defense Agency (MDA) State Department Agency for International Development (USAID) Arms Control and International Security Defense Advanced Research Projects Agency (DARPA) Helsinki Commission (Commission on Security and Cooperation in Europe) National Aeronautics and Space Administration (NASA) National Security Council

24. Assist the Private Economy Establish Rules for Private Property Copyright Office Patent Office Adjudicate property disputes Land, physical assets, intellectual property Commerce Department Federal Reserve System Bureau of the Engraving and Printing (Money) Antitrust Division Federal Trade Commission (FTC) Bankruptcy Courts Court of Federal Claims Economic Development Administration Export-Import Bank of the United States Farm Credit Administration Federal Deposit Insurance Corporation (FDIC) Federal National Mortgage Association (Fannie Mae) Federal Home Loan Mortgage Corporation (Freddie Mac) Government National Mortgage Association Federal Housing Finance Agency Federal Mediation and Conciliation Service

25. Provide for Basic Infrastructure Federal Highway Administration Federal Aviation Administration (FAA) Federal Railroad Administration Federal Transit Administration Maritime Administration AMTRAK Railway Stations Local Mass Transit Commuter Rail U.S. Postal Service Federal Communications Commission (FCC) Army Corps of Engineers Bonneville Power Administration Federal Maritime Commission

26. Enhance Human Capital & Culture Public Schools Office of Elementary and Secondary Education Employment and Training Administration Vocational Training Programs Employment Services Commission on Fine Arts Holocaust Memorial Museum John F. Kennedy Center for the Performing Arts Library of Congress National Science Foundation

27. Provide for Health National Institutes of Health (NIH) Agency for Healthcare Research and Quality (AHRQ) Animal and Plant Health Inspection Service Center for Food Safety and Applied Nutrition Centers for Disease Control and Prevention (CDC) Centers for Medicare & Medicaid Services (CMS) Food and Drug Administration (FDA) Food Safety and Inspection Service Healthy Homes and Lead Hazard Control Office Indian Health Service Nuclear Regulatory Commission

28. Protect the Natural Environment Environmental Protection Agency National Parks National Forests Bureau of Land Management (BLM) Bureau of Reclamation Fish and Wildlife Service Forest Service Migratory Bird Conservation Commission

29. Provide Information to Citizens Food and Drug Administration Vehicle Safety Information Vehicle Efficiency Data Agricultural Research Service Agriculture Department Bureau of Consumer Financial Protection Bureau of Economic Analysis (BEA) Bureau of Labor Statistics Bureau of the Census Bureau of Transportation Statistics Congressional Budget Office (CBO) Consumer Financial Protection Bureau Consumer Product Safety Commission (CPSC) Government Accountability Office (GAO) Government Printing Office (GPO) Legal Services Corporation National Weather Service (NOAA)

30. Provide for Domestic Safety Federal Bureau of Investigation (FBI) Federal Bureau of Prisons Police Firefighters EMTs Building Inspectors Courts Jails Prisons Alcohol, Tobacco, Firearms, and Explosives Bureau Bureau of Prisons Civilian Radioactive Waste Management Federal Emergency Management Agency (FEMA) Federal Law Enforcement Training Center Federal Mine Safety and Health Review Commission Federal Motor Carrier Safety Administration (FMCSA) Federal Marshals Service Mine Safety and Health Administration National Highway Traffic Safety Administration (NHTSA)

31. Citizenship Services Bureau of Citizenship and Immigration Services (USCIS) Bureau of Indian Affairs (BIA) Citizenship and Immigration Services (USCIS) Commission on Civil Rights Equal Employment Opportunity Commission (EEOC) Fair Housing and Equal Opportunity (FHEO) Federal Election Commission

32. So, What Does Government Do for You? We fail to recognize more than 10% of all the things we ask government to do for us. If citizens understood all the things government does for us, would they be as quick to criticize government and ask to see it shrink? If citizens who argue for “cutting government” were given a choice, which agencies would they overwhelmingly wish to eliminate?

33. ARTHUR OKUN The Godkin Lectures on the essentials of free government and the duties of the citizen Harvard university 1975

34. Political Institutions Provide universally distributed rights and privileges that proclaim the equality of all citizens Acquired at no monetary cost Violate law of comparative advantage – People with great stake in a certain right have no more right to it than others Equal without regard to ability or intelligence Not distributed as incentives Violates equity and freedom – Everyone must pay for right regardless of who uses it Cannot be bought and sold

35. Our rights can be viewed as inefficient, because they: Preclude prices that would promote economizing Since no price for free speech, too many people use it too freely! Violate the law of comparative advantage We academics who are so smart have no more right to free speech than those who have flunked out of elementary school! Incentives that would augment socially productive effort If speech were a market good, people would work harder to obtain it Trades that potentially would benefit buyer and seller alike Starving person cannot trade his vote for a loaf of bread

36. Economic Institutions Rely on market-determined incomes that generate substantial disparities among citizens in material welfare Differentials in income are meant to serve as incentives – rewards and penalties – to promote efficiency in the use of resources and generate growth in output

37. The Big Tradeoff “Equal rights and Unequal Incomes generate tensions between the political principles of democracy and the economic principles of capitalism” “Uneasy compromise rather than a fundamental inconsistency”

38. Reasons for Rights Liberty Protect individuals from encroachment by the state e.g. “Freedom of Speech” Universal and identifiable criteria used rather than discretionary – Bill of Rights Pluralism Rights are a protection against intervention of market in all parts of society … “need to keep the market in its place” … so that everything does not become a market commodity with a price, but no social significance – e.g. Olympic Medals Humanism Stress on human dignity – Mutual respect without a quid pro quo

39. “Rights” vs. “Marketable Commodity” How far should we go in ensuring rights? Free speech? Free public education? Right to pollute? Free housing? Public welfare? Right to a job?

40. Bans on Exchange “By prohibiting your sale of rights, society is encroaching on your freedom, but it is also protecting you from others who might to take your rights away” Child labor laws prohibit some families from making ends meet Minimum wage laws prohibit workers from offering their labor at any wage they choose

41. Transgressions of Dollars on Rights Buy better legal services – receive preferential treatment before the law Buy better political platform – campaign financing Lobbying by means of pecuniary offers

42. Rights/Market Goods Continuum j Incentives Quid pro Quo Inequality No Incentives No Quid pro Quo Equality The “Big Tradeoff”

43. Rights/Market Goods Continuum Freedom of Speech Freedom of Assembly Freedom of Religion X

44. Rights/Market Goods Continuum Diamond Pinky Rings X

45. Rights/Market Goods Continuum Freedom of Speech Freedom of Assembly Freedom of Religion Diamond Pinky Rings X X

46. Rights/Market Goods Continuum Food - 1920 X

47. Rights/Market Goods Continuum Food – 1930 County Welfare Worker – Commodity Distribution X

48. Rights/Market Goods Continuum X Food – 1960 “Food Stamp Program”

49. Rights/Market Goods Continuum Housing X

50. Rights/Market Goods Continuum X Public Housing

51. Rights/Market Goods Continuum Section 8 Housing X

52. Rights/Market Goods Continuum Homeownership X

53. Rights/Market Goods Continuum Homeownership: FHA, VA, Fannie Mae, Freddie Mac Mortgage Interest Deduction X

54. Rights/Market Goods Continuum Homeownership: Diminish Fannie Mae, Freddie Mac? Eliminate Mortgage Interest Deduction? X X

55. Rights/Market Goods Continuum X Health Care: 1950

56. Rights/Market Goods Continuum X Health Care: 1960 Medicare, Medicaid

57. Rights/Market Goods Continuum X Health Care: 2010 “Obamacare”

58. Rights/Market Goods Continuum X Health Care: 2012-2016 ? ?

59. Rights/Market Goods Continuum Job X

60. Rights/Market Goods Continuum Job X ?

61. Rights/Market Goods Continuum X Freedom of Speech

62. Rights/Market Goods Continuum X Freedom of Speech Citizens United Supreme Court Ruling

63. All Political Discourse … Where on the continuum do you place something? Conservatives generally favor keeping as much as possible as “market goods” Liberals generally favor expanding “rights” Today that battle is perhaps more divisive than ever

64. POLARIZATION OF POLITICS