Writing Assignment
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PA315Module2Chapter3Student.pptPA 315
GOVERNMENT BUSINESS RELATIONS
CHAPTER 3
California State University San Bernardino
College of Business & Public Administration
Professor Sharon Pierce
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HISTORICAL BACKGROUND ON GOVERNMENT
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THE EVOLUTION OF GOVERNMENT’S ROLES
- As American society has changed, so too have the expectations of government.
- Examples of social changes include:
- Need for big defense
- The creation of big business
- The desire for less risk and more stability
- The demand for social architecture – k-12 schools to community colleges and state universities
- Catastrophic Events: Johnstown Flood of 1889 and Hurricane Andrew in 1992
- Hurricane Harvey - Texas
- Hurricane Irma – Florida
- Hurricane Jose - Hurricane Katia - Hurricane Maria
Our founding fathers wanted a limited government as they felt more government led to corruption
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EXPECTATIONS IN JOHNSTOWN FLOOD, 1889
- Federal assistance was not expected
- President Benjamin Harrison organizes a fundraiser
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QUESTION
- The provision of disaster relief has increasingly become a federal responsibility in the last century.
True
False
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HISTORICAL DEVELOPMENT OF GOVERNMENT
- Anti-Central Government (1781-1787)
- Small Government (1787-1887)
- Moderate-Sized Government (1887-1933)
- Big Government (1933-1970s)
- Rightsizing Government (1970s-present)
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Now let’s look at the evolution of government in a slightly different line.
The Anti-Central Government Era coincided with the Articles of Confederation and was relatively short-lived, stretching from 1781 to 1787.
The Small Government Era lasted from 1787 to 1887, during which time the country grew from 13 small colonies to 38 states spanning the continent. During the Small Government Era, the population grew to be 15 times the size it had been; the percentage that was urban versus rural grew from just 3.35 percent to 30 percent in that century.
The Moderate-Sized Government Era is defined as the period from 1887 to 1933, a time during which the economic GDP expanded greatly and which included the “age of invention.”
The Big Government Era, from 1933 to the 1970s, was ushered in by the Great Depression (1929-1939), followed closely by the vast and expensive Second World War, but also included a quarter-century post-war boom.
The Rightsizing Government Era began in the 1970s and presently continues, as the limits of government – to provide the level of services, the number of problems, and degree of governmental protection –began to exceed the expectations that had accumulated and the resources it was likely to get. During this period, GDP growth has slowed, real wages are often stagnant, and tough choices have to be made about addressing old problems, all while envisioning and implementing an ideal for the largely post-industrial society we are becoming.
| Anti-Central Government, 1781—1787 | ||
| Provider of monetary and fiscal structure | Minimal | Mint money, request proportional taxes from the individual states, attempted to pay off debt |
| Provider of infrastructure | Modest | Cities would maintain streets |
| Purchaser | Modest | Cities would purchase some supplies |
| Regulator of Business | Virtually none | By states only (criminal laws) |
| Social architect | Virtually none | By states only (some education) |
| Service provider | Virtually none | By states only |
| Safeguard against (individual) risk | Virtually none | Raise an army for a common cause; Request states to use state militias for a common cause |
| Promoter of business | Virtually none | Appoint ambassadors |
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QUESTION
- Which of the following is true about the Anti-Central government era in the US?
The federal government could only impose tariffs, not income taxes.
The federal government maintained a navy but not an army
The federal government was allowed to pay off the national debt
None of the above
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| Small Government, 1787—1887 | ||
| Provider of monetary and fiscal structure | Modest | Raise money through tariffs, mint money, Treasury Department, National Bank (1791-1836) |
| Provider of infrastructure | Substantial | Created a postal system and accompanying roads, transcontinental railroads States and local: most roads, harbor improvements, support of bridges, drinking water in large cities |
| Purchaser | Modest | Transportation services, military supplies |
| Regulator of Business | Virtually none | |
| Social architect | Modest | Morrill Land Grant College Act of 1862 (funds for higher education), set-asides of “federal” land for educational purposes State and local: primary and secondary education |
| Service provider | Modest | Postal service (communications) State and local: county hospitals, public libraries |
| Safeguard against risk | Virtually none | |
| Promoter of business | Substantial | President Jefferson’s Louisiana Purchase – doubled the size of the United States President Monroe 1823 - Monroe Doctrine foreign policy for the United States Florida purchase, annexation of Texas, Mexican-American War, California, Alaska |
Prior to the MORRILL LAND GRANT College - men in upper class
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THE SMALL GOVERNMENT ERA (1787-1887)
- Provider of
infrastructure
- Promoter of
business
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THE SMALL GOVERNMENT ERA (1787-1887)
- Monetary and fiscal structure
- Purchaser
- Service provider
- Social architect: democratizing higher education
- Regulator of business, safeguard against risk
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QUESTION
- Which of the following was true in the Small Government era?
It spanned from approximately 1787 to 1887
If the expansion of the country is considered promotion of business, it did a great deal
Service provision was modest by all governments
All of the above
None of the above
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| Moderate-Sized Government (1887-1933) | ||
| Provider of monetary and fiscal structure | Substantial | Federal Reserve, federal income tax (Sixteenth Amendment - 1913) (1861 – Revenue Act but was brief as it was repealed by 1871) (1894 – Congress enacted a flat rate income tax but was ruled unconstitutional the following year) |
| Provider of infrastructure | Great | Federal: postal airports State and local: streets, public transportation, sidewalks, streets, sewage, water and electricity in all urban areas |
| Purchaser | Modest | Transportation services, military supplies |
| Regulator of Business | Substantial | Interstate Commerce Act of 1887 – to regulate business activities of railroads Sherman Act (1890) – anti trust laws to regulate monopolie Clayton Anti-Trust and Federal Trade Commission Act (1914) – strengthened Sherman Act and criminalized unfair trace practices (price fixing) Food and Drug Act (1906) public outrage over unsanitary meat packaging State and local: stronger zoning, comprehensive planning |
| Social architect | Substantial | Growth of 1-12 education, normal schools |
| Service provider | Substantial | Expansion of drinking water, irrigation water for rural areas, other utilities, rudimentary welfare systems |
| Safeguard against risk | Minimal | One time legislation to assist after disasters by state legislatures or Congress |
| Promoter of business | Substantial | Spanish-American War, give away of Western lands (e.g., land rushes in Oklahoma), Hawaii, Panama Canal |
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THE MODERATE-SIZED GOVERNMENT ERA (1887-1933)
- Regulator of business
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Monetary and fiscal
infrastructure
Infrastructure
Social architect
The Moderate-Sized Government Era (1887-1933)
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The Moderate-Sized Government Era (1887-1933)
- Service provider
- Promoter of business
- Safeguard against risk
- Purchaser
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QUESTION
- With the rapid expansion of large corporations after the Civil War, the US federal government responded with anti-monopoly efforts such as the Interstate Commerce Act and the Sherman Anti-Trust Act before the turn of the century.
True
False
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| Big Government, 1933 to 1970s | ||
| Provider of monetary and fiscal structure | Great | Required taxes to support insurance to counterbalance recessions and depressions—Social Security, Medicare, Glass-Steagall (protect deposits) |
| Provider of infrastructure | Great | Federal Highways Act, bailout of Penn Central, continued expansion of all transportation systems |
| Purchaser | Substantial | Large and technologically advanced military, materiel for civilian employees and services |
| Regulator of Business | Substantial | Securities and Exchange Commission in response to the Crash of 1929 National Labor Relations Act – granted workers the right to form unions/collective bargaining Fair Labor Standards Act – set work week to 44 hours (reduced to 40 in 1950) Age Discrimination Act – prohibited age bias Occupational Safety and Health Act (OSHA) assured safe and healthful working condition consumer protection laws (1960s to 1980s) EPA – protects human health and the environment |
| Social architect | Great | National Parks, Work Progress Administration during Great Depression provided massive aid mortgage support (Fannie Mae and Freddie Mac) – expand homeownership |
| Service provider | Substantial | Rural electrification, flood prevention, garbage and other “specialty” services |
| Safeguard against risk | Substantial | Social Security, unemployment insurance, Medicare, Medicaid, FEMA predecessor agencies |
| Promoter of business | Substantial | Tariff war at beginning of Great Depression, informal leader of world economy via international finance institutions; creation of economic development agencies |
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THE BIG GOVERNMENT ERA (1933-1970S)
- Social architect
Social Security 1935, Medicare 1965; Public parks, Works Progress Administration (peak: 3 million); Fannie Mae for mortgages
- Monetary and fiscal infrastructure
- Infrastructure
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THE BIG GOVERNMENT ERA (1933-1970S)
- Regulator of
business
- Service provider
- Promoter of business
- Safeguard against risk
- Purchaser
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QUESTION
- In the era of Big Government, the federal government moved its attention from legislation regarding monopolies to focus on regulating Wall Street, labor, consumer and employee safety, among others.
True
False
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| Rightsized Government, 1970s to the present | ||
| Provider of monetary and fiscal structure | Great but shifting | Use of interest rates by Fed; repeal of Glass-Steagall but addition of new regulations in 2010 (Dodd-Frank); bailouts of Wall Street (banks and AIG) and main street (automakers) |
| Provider of infrastructure | Reduced | |
| Purchaser | Substantial | Military and basic material |
| Regulator of Business | Reduced and shifting | Deregulation of transportation, airlines, banking, finances Regulation of some banking and finance; Sarbanes Oxley 2002 |
| Social architect | Reduced and shifting | Reform of welfare (limitations); defunding of public higher education as well as K-12 |
| Service provider | Reduced and shifting | Expansion of privatization in some areas, but expansion in healthcare ; postal reorganization |
| Safeguard against risk | Substantial | Affordable Care Act (2010), occasional extensions of unemployment insurance from 26 week base |
| Promoter of business | Substantial but shifting | CA makes it more difficult to have local economic development agencies |
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THE RIGHTSIZING GOVERNMENT ERA (1970S-PRESENT)
- Regulator of business
- Social architect
- Infrastructure
- Service provider
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- Monetary and fiscal infrastructure
- Promoter of business
- Safeguard against risk
- Purchaser
THE RIGHTSIZING GOVERNMENT ERA (1970S-PRESENT)
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QUESTION
- As a promoter of business, California is seen as a supporter of economic development agencies?
True
False
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SUMMARY OF GOVERNMENT’S ROLES INTERACTING WITH AND SUPPORTING BUSINESS
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In summary, historically despite the reference for small government, the US government have gradually adopted many roles that interact and support business.
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|
Anti-Central Government, 1781—1787 |
Small Government, 1787—1887 |
Moderate-Sized Government, 1887—1933 |
Big Government, 1933—1970s |
Rightsizing Government, 1970s—present |
|
Provider of monetary and fiscal structure |
Minimal
|
Modest |
Substantial |
Great |
Great but shifting |
|
Provider of infrastructure |
Modest |
Substantial |
Great |
Great |
Reduced |
|
Purchaser |
Modest |
Modest |
Modest |
Substantial |
Substantial |
|
Regulator of Business |
Virtually none |
Virtually none |
Substantial |
Substantial |
Reduced and shifting |
|
Social architect |
Virtually none |
Modest |
Substantial |
Great |
Reduced and shifting |
|
Service provider |
Virtually none |
Modest |
Substantial |
Substantial |
Reduced and shifting |
|
Safeguard against risk |
Virtually none |
Virtually none |
Minimal |
Substantial |
Substantial |
|
Promoter of business |
Virtually none |
Substantial |
Substantial |
Substantial |
Substantial but shifting |
QUESTION
- Despite the historical preference for small government, American governments’ roles and responsibilities are constantly expanding.
- Why did this happen?
- What are the factors that lead to government expansion?
- What do you think are the effective ways of rightsizing or shrinking government?
The roles and responsibilities change over time including expanding and decreasing because of people, culture, and time. As America expands the roles and regulations of the government must expand as well.
Factors that lead to expansion was war, western expansion, industrial revolution
Effective ways to address the dilemmas are through regulation and privatization
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Anti-Central
Government,
1781—1787
Small
Government,
1787—1887
Moderate-Sized
Government,
1887—1933
Big
Government,
1933—1970s
Rightsizing
Government,
1970s—present
Provider of
monetary and
fiscal structure
Minimal
Modest Substantial Great Great but shifting
Provider of
infrastructure
Modest Substantial Great Great Reduced
Purchaser
Modest Modest Modest Substantial Substantial
Regulator of
Business
Virtually none Virtually
none
Substantial Substantial Reduced and
shifting
Social architect
Virtually none Modest Substantial Great Reduced and
shifting
Service
provider
Virtually none Modest Substantial Substantial Reduced and
shifting
Safeguard
against risk
Virtually none Virtually
none
Minimal Substantial Substantial
Promoter of
business
Virtually none Substantial Substantial Substantial Substantial but
shifting
