History 479B
Devine
Fall 2012
Study Questions for
Wells, American Capitalism, pp.
109-163
- Why was increasing worker
productivity seen as an effective way to control inflation? [see p. 111]
- What was “industrial
policy”? What were its shortcomings
as economic policy (both political and intellectual)?
- Why did conservatives believe
that tax cuts would be the best way to revive the economy and increase
productivity? What role did the
economist Alfred Laffer play in shaping
conservative economic policy?
- What were the short-term and
long-term effects of the Federal Reserve’s tight-money policy of
1979-1982? Overall, how did this
policy affect the economy and people’s perceptions of the economy?
- According to the author, what
factors slowed productivity growth between 1973 and 1982?
- Between 1983 and 1989 what
happened to a) the inflation rate; b) the unemployment rate; c) the Gross
Domestic Product; d) worker productivity; e) real wages; f) the gap
between rich and poor?
- What role did broader social
developments and changes in the economic structure play in widening the
gap between rich and poor? What
trends in particular were most significant?
- Which regions and sectors of the
economy suffered during the 1980s? Why?
Why was there no significant political uprising to protest the
worsening conditions?
- What sectors of the economy
prospered during the 1980s? Why?
- How did anti-trust and labor
relations policies change during the Reagan years?
- Why did the power of organized
labor decline during the 1980s? To
what extent was this decline inevitable due to structural changes in the
economy?
- After 1982, why did the federal
deficit remain so high even though the economy was prosperous? (Note that Republicans, Democrats, and
the author all offer different answers to this
question.)
- What does the author mean when he
says that “Americans paid for deficits not in higher taxes but in higher
interest rates”? (Wells, 138) Why
did high deficits produce high interest rates? What were some of the
negative effects of high interest rates?
- Why does the author argue that
those who feared that the growing trade deficit reflected a decline in the
“competitiveness” of U.S.
industry had “missed the point”?
Why did certain industries like steel, automobiles, and consumer
electronics lose business to foreign competitors while other American
industries remained competitive?
- What were the pros and cons of
“downsizing” and corporate reorganization?
How can a country “downsize” its way to prosperity?
- What is a “leveraged
buyout”? Why did many financiers
engage in this practice during the 1980s?
- What factors account for the
booming stock and bond markets of the 1980s?
- What happened to the commodities
markets during the 1980s? How were
developing nations affected?
- What is the difference between
“import substitution” and “liberalization”? (Both are policies that developing
nations pursued to improve their economic position.)
- What caused the Savings &
Loan crisis of the late 1980s?
- How did George Bush’s economic
policies (or lack of economic policies) hurt him politically?