Government and the Economy Government and the Economy AN ENCYCLOPEDIA David A. Dieterle and Kathleen C. Simmons, Editors Copyright © 2014 by ABC-CLIO, LLC All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, except for the inclusion of brief quotations in a review, without prior permission in writing from the publisher. Library of Congress Cataloging-in-Publication Data Government and the economy : an encyclopedia / David A. Dieterle and Kathleen C. Simmons, editors. pages cm ISBN 978-1-4408-2903-1 (hardback) — ISBN 978-1-4408-2904-8 (ebook) 1. United States— Economic policy—Encyclopedias. 2. Economic policy—Political aspects. I. Dieterle, David Anthony. II. Simmons, Kathleen C. HC102.G59 2014 330.973—dc23 2014010822 ISBN: 978-1-4408-2903-1 EISBN: 978-1-4408-2904-8 18 17 16 15 14â 1 2 3 4 5 This book is also available on the World Wide Web as an eBook. Visit www.abc-clio.com for details. Greenwood An Imprint of ABC-CLIO, LLC ABC-CLIO, LLC 130 Cremona Drive, P.O. Box 1911 Santa Barbara, California 93116-1911 This book is printed on acid-free paper Manufactured in the United States of America Contents Alphabetical List of Entries vii Entries in Alignment with National Content Standards in Economics xi Entries in Alignment with United States History Content Standards xxxiii Preface xli Introduction: Government and the Economy: The Ultimate Macroeconomic Pair xlv A–Z Encyclopedia Entries 1 Primary Documents: Supreme Court Cases—Opinions of the Court 413 Appendices: The Constitution of the United States 447 Timeline of Supreme Court Cases Aligned with National Content Standards in Economics 469 Legislative Acts with Economic Impact 479 Online Resources for Educators and Researchers 483 Glossary 489 Select Bibliography 515 Contributors 523 About the Editors 525 Index 527 v Alphabetical List of Entries Affordable Health Care Act Cases, 567 Corning Glass Works v. Brennan, 417 U.S. U.S. ___ (2012) 188 (1974) Alaska Dept. of Environmental Crony Capitalism Conservation v. EPA, 540 U.S. 461 (2004) Cyclical Unemployment America Invents Act of 2011 (Leahy- Deflation Smith Act) Demand-Pull Inflation Arrow, Kenneth Democratic Socialism Banking Act of 1933 (Glass-Steagall Act) Department of Commerce Bernanke, Ben Department of Labor Bretton Woods Agreement De Soto, Hernando Buchanan, James Discouraged Workers Bureau of Economic Analysis Economic Growth, Measures of Bureau of Engraving and Printing Economic Rent Bureau of Labor Statistics Economic Systems Burns, Arthur Entitlements Central Banking Environmental Protection Agency Citizens United v. Federal Election (EPA) Commission, 558 U.S. ___ (2010) European (Economic) Community Classical Economics Expansionary Fiscal Policy Clayton Antitrust Act of 1914 Expansionary Monetary Policy Coase, Ronald Externalities Command Economy Fascism Congressional Budget Office Federal Deposit Insurance Contractionary Fiscal Policy Corporation (FDIC) Contractionary Monetary Policy Federal Home Loan Mortgage Contracts (Freddie Mac) vii viii Alphabetical List of Entries Federal National Mortgage Association Kelo v. City of New London, Connecticut, (Fannie Mae) 545 U.S. 469 (2005) Federal Reserve Act of 1913 Keynes, John Maynard Federal Reserve System Keynesian Economics Federal Trade Commission Klein, Lawrence Federal Trade Commission Act of 1914 Kuznets, Simon Financial Reform Act of 2010 Labor Force (Dodd-Frank Act) Laffer, Arthur Fiscal Policy Laffer Curve Free Rider Lechmere, Inc. v. National Labor Friedman, Milton Relations Board, 502 U.S. 527 (1992) Galbraith, John Kenneth Lenin, Vladimir George, Henry Lochner v. New York, 198 U.S. 45 Gibbons v. Ogden, 22 U.S. 1 (1824) (1905) Government Failure Majority Rule Great Depression (1929–1939) Mankiw, Gregory Great Society Market Capitalism Greenspan, Alan Market Failure Gross Domestic Product (GDP) Marx, Karl Group of Eight (G8) Marxism Hayek, Friedrich von McCulloch v. Maryland, 17 U.S. 316 (1819) Heller, Walter MCI Telecommunications Corp. v. Helvering v. Davis, 301 U.S. 619 (1937) American Telephone and Telegraph Co., Immigration Reform and Control 512 U.S. 218 (1994) Act of 1986 Meltzer, Allan Indian Gaming Regulatory Act of 1988 Menominee Tribe v. United States, Inflation 391 U.S. 404 (1968) Inflation, Measures of Mercantilism Internal Revenue Service (IRS) Mirrlees, James International Monetary Fund (IMF) Mises, Ludwig von Interstate Commerce Act of 1887 Monetary Policy Juilliard v. Greenman, 110 U.S. 421 (1884) Money Kahn, Alfred National Bank Act of 1863 Kellogg Co. v. National Biscuit Co., 305 National Bureau of Economic U.S. 111 (1938) Research (NBER) Alphabetical List of Entries ix National Deficit vs. Debt Simons, Henry National Labor Relations Act of 1935 Smith, Adam (Wagner Act) Social Security Act of 1935 National Labor Relations Board Sowell, Thomas (NLRB) Stalin, Joseph New Deal Standard Oil Co. of New Jersey v. North American Free Trade Agreement United States, 221 U.S. 1 (1911) (NAFTA) State Capitalism Office of Management and Budget Steelworkers Strike of 1919 (OMB) Summers, Lawrence Okun, Arthur Supply-Side Economics Olson, Mancur Supreme Court Ostrom, Elinor Tariff Act of 1930 (Smoot-Hawley Phillips, A. W. H. Tariff Act) Pollock v. Farmers’ Loan & Trust Taxes Company, 157 U.S. 429 (1895) Telecommunications Reform Act Private Property of 1996 Prohibition Tennessee Valley Authority (TVA) Protectionism Thatcher, Margaret Public Goods Theory of Public Choice Reagan, Ronald Tobin, James Regulated Monopolies Trade-Offs Reich, Robert Transaction Costs Rivlin, Alice Tullock, Gordon Romer, Christina Tyson, Laura Roosevelt, Franklin Delano Unemployment Samuelson, Paul United States Census Bureau Schwartz, Anna United States Mint Securities and Exchange Commission United States Treasury (SEC) United States v. South-Eastern Seminole Tribe of Florida v. Florida, 517 Underwriters Association, 322 U.S. 44 (1996) U.S. 533 (1944) Servicemen’s Readjustment Act of 1944 U.S. Treasury Bills, Notes, and Bonds (GI Bill) Vickrey, William Sherman Antitrust Act of 1890 Volcker, Paul Shultz, George x Alphabetical List of Entries Voluntary Exchange World Bank Welfare State World Trade Organization (WTO) West Coast Hotel Co. v. Parrish, Yellen, Janet 300 U.S. 379 (1937) Youngstown Sheet & Tube Co. v. Sawyer, Williams, Walter 343 U.S. 579 (1952) Entries in Alignment with National Content Standards in Economics Council for Economic Education, “Voluntary National Content Standards in Economics, 2nd Edition,” http://www.councilforeconed.org/wp/wp-content/uploads/2012/03/voluntary-national-content- standards-2010.pdf. Standard 1: Scarcity Productive resources are limited. Therefore, people cannot have all the goods and services they want; when they choose some things they must give up others. Arrow, Kenneth Buchanan, James Democratic Socialism Economic Rent Federal Home Loan Mortgage (Freddie Mac) Immigration Reform and Control Act of 1986 Interstate Commerce Act of 1887 Kelo v. City of New London, Connecticut, 545 U.S. 469 (2005) Lochner v. New York, 198 U.S. 45 (1905) Mankiw, Gregory Market Capitalism Market Failure Mercantilism National Deficit vs. Debt Okun, Arthur Private Property Protectionism Public Goods Samuelson, Paul xi xii Entries in Alignment with National Content Standards in Economics Smith, Adam Sowell, Thomas Taxes Theory of Public Choice Trade-Offs Tullock, Gordon Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952) Standard 2: Decision Making Effective decision making requires comparing the additional costs of alternatives with the additional benefits. Many choices involve doing a little more or a little less of something; few choices are “all or nothing” decisions. Arrow, Kenneth Buchanan, James Coase, Ronald Command Economy Contracts Crony Capitalism Deflation Demand-Pull Inflation Democratic Socialism Economic Rent Expansionary Fiscal Policy Expansionary Monetary Policy Externalities Fascism Federal Home Loan Mortgage (Freddie Mac) Inflation Kelo v. City of New London, Connecticut, 545 U.S. 469 (2005) Keynesian Economics Majority Rule Mankiw, Gregory Market Capitalism Menominee Tribe v. United States, 391 U.S. 404 (1968) National Deficit vs. Debt Entries in Alignment with National Content Standards in Economics xiii Okun, Arthur Olson, Mancur Private Property Protectionism Samuelson, Paul Smith, Adam Sowell, Thomas Taxes Theory of Public Choice Trade-Offs Tullock, Gordon Voluntary Exchange Williams, Walter Standard 3: Allocation Different methods can be used to allocate goods and services. People acting individually or collectively must choose which methods to use to allocate different kinds of goods and services. Affordable Health Care Act Cases, 567 U.S. ___ (2012) Arrow, Kenneth Buchanan, James Coase, Ronald Command Economy Contracts Crony Capitalism Democratic Socialism Economic Rent Externalities Fascism Federal Home Loan Mortgage (Freddie Mac) Federal National Mortgage Association (Fannie Mae) Federal Trade Commission Financial Reform Act of 2010 (Dodd-Frank Act) Fiscal Policy Great Society xiv Entries in Alignment with National Content Standards in Economics Helvering v. Davis, 301 U.S. 619 (1937) International Monetary Fund (IMF) Interstate Commerce Act of 1887 Kellogg Co. v. National Biscuit Co., 305 U.S. 111 (1938) Kelo v. City of New London, Connecticut, 545 U.S. 469 (2005) Keynesian Economics Laffer Curve Lochner v. New York, 198 U.S. 45 (1905) Mankiw, Gregory Market Capitalism