Business and Labor Policy: A Mixed Blessing? Essential Questions: 1. How does the government regulate business? 2. Why does the government regulate business? 3. How has government progressed to fit the changing needs of the nation?

1. Is Laffer for or against government involvement in businesses? 2. What is an example of the “desperation” he refers to? “Those who advocate, in their desperation, more government to solve the problems of our society are demonstrably wrong... The solution rest in less—not more—government” -Arthur B. Laffer

1. Is Kambor for or against government involvement in businesses? 2. What reasons does he cite to support his claim? “Many Americans have forgotten that we set up regulatory agencies in the first place to protect the public interest. Industries considered vital to the public—such as transportation, food, finance, communications, and nuclear power—were regulated in order to provide the public a steady flow of safe products in a stable environment.” -Victor Kambor, July 1984

I. Background The gov’t supports private businesses The gov’t regulates private businesses Mixed economy Passed to protect American businesses Used to provide lower prices to consumers Result of War of 1812 Tariffs Allows goods to be affordable Quotas restrict the amount of a certain product that can enter US markets Free Trade

II. Promoting and Protecting Businesses Tax Incentives Businesses can deduct certain expenses from annual tax returns This does not mean they don’t have to pay for it Loans Gov’t loans to businesses at low interest rates You have to qualify Cash Payments Direct cash payments Products and services that are considered important to the general public Ex: Trans- portation

III. Department of Commerce “Foster, promote, and develop the foreign and domestic commerce of the United States” -Congress A. Information services - Free advice! B. Financial Assistance - Loans C. Development services - Classes on management provided by Small Business Assoc. (SBA)

IV. Historical Focus

V. Enforcement Federal Trade Commission Established A. Examine corporate stock purchases B. Investigate trade practices C. Enforce laws that prohibit false advertising D. Define unfair competitive practices E. Issue orders to halt these practices F. Require truthful labels on textiles and furs G. Regulate packaging and labeling H. Check consumer credit agencies I. Require disclosure of lending

VI. Today in the U.S. A few firms dominate a particular industry In 1990, about 50 multibillion-dollar companies controlled 1/3 of US manufacturing A. Economic power belongs to oligopolies