Economic PhilosophyOLD NEW• Keynesian Economics • Chicago School• “Demand Side” • “Supply Side” Economics Economics• New Deal • Reaganomics (The Reagan Revolution)
Political Interpretation of Laffer CurveMaximumRevenueNo revenue 0% Tax Rates 100%
Effect of Reagan on US Political Culture USLeft Pre-1981; Right New Deal Reagan era and Great Society eraLeft-right defined as accepted level of government intervention in the economy: right = less intervention left = more intervention
RealignmentNew Deal Coalition Reagan Coalition• Democratic South • Midwest small towns• African-Americans • Wealthiest Americans• Union members • Hawks on foreign policy• Urban North • Blue Collar in North and• Immigrant/newer ethnic Midwest (union and non- groups union)• Farmers • White Southerners • Evangelicals • Yuppies
The Iran Contra ScandalPrivate US $Foreign Gov’t $ Contras Swiss bank accounts; controlled $$$ by North Hostages Iran weapons weapons US Israel
“The Culture Wars”• Abortion• Immigration• Affirmative Action• Bilingual Education• Multiculturalism• Communism• Homosexuality• Taxation• Church and State
Section 2WALLS COME TUMBLING’ DOWN:HYPERPOWER & GLOBALIZATION
Essential Questions• Was America responsible for the fall of Soviet and Eastern European communism?• How did the end of the Cold War change American foreign policy and economic policy? Who were the winners, the losers?
Gorbachev• With economic and political reforms obviously needed, Soviet premier Mikhail Gorbachev initiated perestroika (the “restructuring” or decentralizing of the economy) and glasnost (an “opening” of the Soviet society to public scrutiny)• Gorbachev’s reforms proved difficult to implement and unleashed hostility from the old order it threatened, long suppressed criticism, and ethnic and nationalist separatism• By the summer of 1990, Gorbachev’s reforms had spent themselves
Collapse of the Soviet Empire• Revolutions broke out throughout eastern Europe as people overthrow communist dictators in places like Poland, Bulgaria, and Romania and countries such as Czechoslovakia and Yugoslavia broke apart• The Berlin Wall came down on November 9, 1989 and East and The 1989 Romanian Revolution was a West Germany united in violent overthrow of the communist 1990 regime of Nicolae Ceauşescu
Collapse of the Soviet Empire• Beginning in August 1991, Soviet republics began declaring their independence from the USSR• Also in August, a group of conspirators representing dissatisfied elements of the Communist Party, the KGB, and the military attempted to seize power while Gorbachev was on vacation• Boris Yelstin crushed the coup, but himself replaced Gorbachev• By the end of 1991, the USSR had AP photo of Boris Yelstin atop ceased to exist an armored personnel carrier encouraging resistance to the coup
End of the Bipolar World• The demise of the Soviet Union left the US as the world’s sole superpower• Without the danger of a superpower confrontation, the US was now more free to use its military power• Additionally, new opportunities for cooperative international efforts would become possible without the bipolar competition• This new dynamic would be tested when Iraq invaded Kuwait in 1990
Section 39/11 AND THE “WAR ON TERRORISM”:A COST/BENEFIT ANALYSIS
Essential Questions• Why did the U.S. invade Iraq and Afghanistan?• Has the “War on Terrorism” made Americans more secure?
September 11th, 2001 • Attack on World Trade Center • Nearly 3,000 dead • Islamic fundamentalists attacked symbol of economic and cultural imperialism OR economic freedom and opportunity… • Bush became a “War President” • Osama Bin Ladin
Invasion of Iraq, 2003--???• Bush administration tied 9/11 attacks, Bin Laden and Al Qaeda to Iraq and Saddam Hussein – No ties, no links• Global terrorist threat and “Axis of Evil”• Remake the Middle East into pro-Western democracies favorable to the US• “Mission Accomplished”• War dragged on…Where’s Bin Laden?• Several trillion dollars
Section 4TECHNOLOGICAL BREAKTHROUGHS &FINANCIAL HIJINKS: AMERICA AND THEGLOBAL ECONOMY FROMDEREGULATION TO THE GREATRECESSION
Essential Questions• How did the information technology revolution change Americans’ lives?• Why did the American economy come dangerously close to falling into another depression in late 2008?
The rapid advance of social networks such as Facebook, Twitter, and others has led to dramatic changes in everyday life. These technologies have also sparked intense debate over issues of personal privacy, intellectual property, and copyright provisions.Originally developed by themilitary, the Internet was laterused to connect scholars andU.S. research universities.Beginning in 1995, the Internetbecame commercialized andavailable for individual use.
Factors Contributing to the 2008 Financial Crisis• FACTOR 1: Beginning in the mid- 1990s, government regulations began to erode the conventional lending standards.• FACTOR 2: The Fed’s manipulation of interest rates during 2002-2006• FACTOR 3: An SEC Rule change adopted in April 2004 led to highly leverage lending practices by investment banks and their quick demise when default rates increased.• FACTOR 4: Doubling of the Debt/Income Ratio of Households since the mid-1980s.