1. Ohio Wesleyan University
Goran Skosples
5. United States

2. Background US Constitution principle of classical liberalism
rejection of a strong state
low gov’t intervention that would reduce the liberties of private individuals in their economic activities
laissez faire

3. Economic History Gilded Age (1865-1900) Progressive Era (1900-1920)
Roaring Twenties ( )
Great Depression ( )
Postwar prosperity ( )
Reaganomics ( )
Globalization (1990s-late 2000s)
The Great Recession ( )
Gilded Age ( )
rapid growth and industrialization
low federal gov’t intervention
tariff protection, land grants to the railroads
low role of the unions
increasing income inequality
Progressive Era ( )
Roosevelt (trustbuster) and Wilson
revolt against entrenched wealth
regulation, national park system established
Roaring Twenties
move back toward laissez faire
mass production
Great Depression ( )
GDP decline about 30%, unemployment 25%
New Deal
Keynesian principles
increase in the role of the government
Social Security system, FDIC, SEC, various public works projects
post-WWII
expanded role of the government under JFK
Great Society (Lyndon Johnson)
War on Poverty, Medicare program, civil rights legislation, expansion of social welfare programs
Reaganomics
supply-side policies
deregulation
Milton Friedman
Globalization (1990s-late 2000s)
Stock markets rise – flow of capital
Dot-com boom (IPOs)
Housing boom
Corporate scandals
The Great Recession (2007- )
Housing market collapse
Financial crisis
CDO, MBS, CDS
Massive gov’t spending + debt
Quantitative Easing

4. Government Share of GDP

5. The US Corporation Corporate governance capital markets
shareholders: maximizing shareholder value
neglects stakeholders 
information distortions  required for efficient operation of __________ markets
corporate incentives
stock options
_________ parachute
capital markets
separation of ________ and ___________
provides ________, but allows for ___________

6. Labor Market flexible labor market low union membership
competitive
wages act as _________
low union membership
@ 12% (peaked in mid-1950s at 35%)
currently high rate of unemployment – 8.3% Jan 12
government involvement less than elsewhere
regulation, licensing, setting wages ...

7. A Service Economy Percentage distribution of employment Year
Agriculture
Industry
Service
1870 47 27 26
1900 35 34 31
1920 24 41
1940 19 46
1960 8 51
1980 4 32 64
1990 3 70
1995 20 77
2005 17 80

8. Poverty and Inequality
higher levels of income inequality and poverty
efficiency favored over ___________
principle of self-reliance
economic mobility
Inequality explained
growing gap between the incomes of skilled and unskilled workers
declining union membership
growth in the number of single-income families
increase in the proportion of part-time jobs
GINI graph

9. Child Poverty Rates

10. Inequality