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 Table of ContentsTAKING SIDES: Clashing Views on Economic Issues, Fourteenth EditionIssue 2. Are CEOs Paid What They Are Worth? YES: Ira T. Kay, from “Don’t Mess with CEO Pay,” Across the Board (January /February 2006) NO: Edgar Woolard, Jr., from “CEOs Are Being Paid Too Much,” Across the Board(January /February 2006) Ira T. Kay, businessman and author, defends current CEO pay practices. He argues that “Empirical studies show that executive compensation has closely tracked corporate performance,” and that rejecting pay-for-performance will hurt both workers and stockholders. Edgar Woolard, Jr., former CEO and chairman of Dupont, describes four myths regarding the compensation received by corporate business leaders. Dismissing the myths, he believes no one but CEOs get “paid excessively when they? fail.” Issue 3. Is OSHA Working Effectively to Protect the Safety of Construction Workers? YES: Edwin G. Foulke, Jr., from Statement to the Subcommittee on Workforce Protections of the House Committee on Education and Labor (June 24, 2008) NO: Mark H. Ayers, from Testimony before the Subcommittee on Workforce Protections of the House Committee on Education and Labor (June 24, 2008) Assistant Secretary of Labor and OSHA head Foulke states that his agency is committed to protecting employees, that it has a multi-faceted approach to reducing construction-related accidents, and that it has a strong, targeted enforcement program. Union official Mark Ayers believes that OSHA is failing to improve the safety and health of construction workers, and he calls for several changes, including an increase in OSHA enforcement activities. Issue 4. Is the New Medicare Part D Drug Benefit Good Health Care Policy? YES: Mark McClellan, from “Generic Drugs and the Medicare Prescription Drug Benefit,” Testimony to the Senate Special Committee on Aging (September 21, 2006) NO: Jagadeesh Gokhale, from “An Evaluation of Medicare’s Prescription Drug Policy,” Testimony to the Committee on Homeland Security and Government Affairs Subcommittee on Federal Financial Management, Government Information, and International Security (September 20, 2005) Health care administrator Mark McClellan believes that the Part D drug benefit is the most important new addition to Medicare in its history, providing millions of Americans with better benefits “at a significantly lower cost than originally estimated.” Cato Institute senior fellow Jagadeesh Gokhale believes that Medicare’s Part D drug benefit is “bad and shortsighted economic policy.” He believes this program will, among other things, increase private drug prices, impose higher fiscal burdens on future generations, and reduce national saving and investment. Issue 5. Are Health Savings Accounts Working Effectively? YES: American Benefits Council, from “Statement before the Subcommittee on Health of the House Committee on Ways and Means” (May 14, 2008) NO: Linda J. Blumberg, from “Testimony before the Subcommittee on Health of the House Committee on Ways and Means” (May 14, 2008) The American Benefits Council, a national trade association, believes that “HSAs are working as intended” for the vast majority of the 6.1 million Americans covered by “HAS-eligible plans.” Linda J. Blumberg, Urban Institute research associate, identifies a number of problems associated with medical care and argues that “HSAs are not the solutions to these pressing national concerns.” Issue 6. Is It Time to Reform Medical Malpractice Litigation? YES: U.S. Department of Health and Human Services, from “Confronting the New Health Care Crisis: Improving Health Care Quality and Lowering Costs by Fixing Our Medical Liability System” (July 24, 2002) NO: Jackson Williams, from “Bush’s Medical Malpractice Disinformation Campaign: A Rebuttal to the HHS Report on Medical Liability,” A Report of Public Citizen’s Congress Watch (January 2003) The U.S. Department of Health and Human Services (HHS) argues that although the United States has a health care system that “is the envy of the world,” it is a system that is to be brought to its knees by aggressive attorneys who force the medical community to practice costly “defensive medicine.” Jackson Williams, legal counsel for the watchdog group Public Citizen, charges that the position taken by HHS is factually “incorrect, incomplete, or misleading” and even contradicted by other governmental agencies.Unit 2 Macroeconomic Issues Issue 7. Is Wal-Mart Good for the Economy? YES: Los Angeles County Economic Development Corporation, from “Wal-Mart Supercenters: What’s in Store for Southern California?” (January 2004) NO: Democratic Staff of the House Committee on Education and the Workforce, from “Everday Low Wages: The Hidden Price We All Pay for Wal-Mart,” (February 16, 2004) The Los Angeles County Economic Development Corporation believes that the introduction of Wal-Mart supercenter stores into the Southern California market will generate significant savings for consumers on their grocery, apparel, and general merchandise spending, and the redirected spending from the savings will create over 35,000 new jobs. The Democratic Staff of the House Committee on Education and the Workforce believes that Wal-Mart, in its efforts to achieve and maintain low prices, has “come to represent the lowest common denominator in the treatment of working people.” Issue 8. Should Social Security Be Changed to Include Personal Retirement Accounts? YES: The White House, from “Strengthening Social Security for the 21st Century,” http://www.whitehouse.gov/infocus/socialsecurity/200501/strengtheningsocialsecurity.html (February 2005) NO: Dean Baker, from “Bush’s Numbers Racket: Why Social Security Privatization Is a Phony Solution to a Phony Problem,” The American Prospect Online Edition (February 1, 2005) The White House identifies a number of problems with the present structure of the Social Security system and proposes personal retirement accounts as a way of resolving these problems, and “dramatically reduce the costs of permanently fixing the system.” Dean Baker, co-director of the Center for Economic and Policy Research, argues that President Bush’s plan for personal retirement accounts would not fix Social Security; instead, it would “undermine a system that has provided security for tens of millions of workers, and their families, for seven decades, and which can continue to do so for long into the future if it is just left alone.” Issue 9. Should Unemployment Benefits Be Extended? YES: Rebecca Blank, from “Testimony before the Subcommittee on Income Security and Family Support of the House Committee on Ways and Means” (April 10, 2008) NO: Alex Brill, from “Testimony before the Subcommittee on Income Security and Family Support of the House Committee on Ways and Means” (April 10, 2008) University of Michigan Professor Rebecca Blank supports an extension of unemployment, arguing that the time to extend the time period for unemployment benefits is in the early stages of an economic slowdown. American Enterprise Institute Research Fellow Alex Brill argues against a simple extension of the benefit period, in part because it “could likely lead to higher unemployment and slower growth in the United States.” Issue 10. Do American Consumers Need a Credit Card Bill of Rights? YES: Travis B. Plunkett, from Testimony before the Subcommittee on Financial Institutions and Consumer Credit of the House Committee on Financial Services (April 17, 2008) NO: John P. Carey, from Testimony before the Subcommittee on Financial Institutions and Consumer Credit of the House Committee on Financial Services (April 17, 2008) Travis Plunkett, Legislative Director for the Consumer Federation of America, argues that creating a credit cardholder’s bill of rights would have a number of beneficial effects, including the elimination of abusive pricing. John Carey, Chief Administrative Officer of Citi Cards, admits that there is broad dissatisfaction with the credit card industry but asserts that a credit cardholder’s bill of rights will create more problems than it will solve. Issue 11. Should Minimum Wage and Living Wage Laws Be Eliminated? YES: D. W. MacKenzie, from “Mythology of the Minimum Wage,” Ludwig von Mises Institute, http://www.mises.org/story/2130 (May 3, 2006) NO: Jeannette Wicks-Lim, from “Measuring the Full Impact of Minimum and Living Wage Laws,” Dollars & Sense (May/June 2006) Economics instructor D. W. MacKenzie believes that eliminating minimum wage laws would “reduce unemployment and improve the efficiency of markets for low productivity labor.” He also believes that the “economic case for a living wage is unfounded.” Economist Jeannette Wicks-Lim stresses the ripple effects of minimum and living wage laws; these effects increase the “effectiveness” of minimum and living wage laws as “antipoverty strategies.” Issue 12. Do Unskilled Immigrants Hurt the Economy? YES: Steven Malanga, from “How Unskilled Immigrants Hurt Our Economy,” City Journal (Summer 2006) NO: Diana Furchtgott-Roth, from “The Case for Immigration,” The New York Sun(September 22, 2006) Columnist Steven Malanga believes the influx of unskilled immigrants into the U.S. economy has imposed large costs on the larger society, including job loss by native workers and lower investment in labor-saving technology. More importantly, he argues that this immigration has increased utilization of the “vast U.S. welfare and social-services apparatus.” Diana Furchtgott-Roth, senior fellow at the Hudson Institute and director of Hudson’s Center for Employment Policy, and a former chief economist at the U.S. Department of Labor, observes that annual immigration is “a tiny fraction of our labor force,” and immigrant laborers are “complements, rather than substitutes for native born Americans.” She also cites a National Academy of Sciences study that concluded that foreign-born households are no more likely to use “welfare” than native-born households. Unit 3 The World Around Us Issue 13. Is a Fair Trade Policy Superior to a Free Trade Policy? YES: Joseph E. Stiglitz, from “Fair Trade” The National Interest (May/June 2008) NO: Gary Hufbauer, from “Free Trade” The National Interest (May/June 2008) Former chief economist of the World Bank, Joseph E. Stiglitz, argues that trade liberalization can make everyone worse off when markets are not perfect. Furthermore, “free trade” agreements protect special interests in the advanced industrial countries. Stiglitz maintains that the United States should move toward fairer trade and should manage trade liberalization better so that the rich and the poor in all countries share the benefits of trade. Gary Hufbauer, senior fellow at the Peterson Institute for International Economics, claims that free trade, when properly implemented with market reforms, “can lift the lives of hundreds of millions of people.” Free trade “pays off” for the United States and “is not some sort of ‘gift’ to foreign countries.” He is critical of political rhetoric in the United States on halting or opting out of trade agreements, including NAFTA. Issue 14. Is Loan Mitigation the Answer to the Housing Foreclosure Problem? YES: David G. Kittle, from “A Review of Mortgage Servicing Practices and Foreclosure Mitigation,” Statement before the House of Representatives Committee on Financial Services (July 25, 2008) NO: Julia Gordon, from “A Review of Mortgage Servicing Practices and Foreclosure Mitigation,” Testimony before the House of Representatives Committee on Financial Services (July 25, 2008) Mortgage Bankers Association official David Kittle, after reviewing the cost of foreclosure and loan mitigation options, presents data to back his assertion that loan mitigation is working. Center for Responsible Lending policy counsel Julia Gordon stresses both the direct costs and the spillover costs of foreclosures and believes that voluntary loan modifications “have done little to stem the overwhelming tide of foreclosures.” Issue 15. Will Biofuels Like Ethanol Reduce U.S. Dependence on Foreign Oil? YES: Bob Dinneen, from “Should Congress Reassess the Renewable Fuel Standard in the Energy and Independence Security Act? (Pro),” Congressional Digest (June 2008) NO: Charles T. Drevna, from “Should Congress Reassess the Renewable Fuel Standard in the Energy and Independence Security Act? (Con),” Congressional Digest (June 2008) Bob Dinneen, president and chief executive officer of the Renewable Fuels Association, states that America’s ethanol producers are providing significant economic, environmental, and energy security benefits today. Expansion of the domestic biofuels industry will reduce America’s dependence on imported oil. Charles T. Drevna, president of the National Petrochemical and Refiners Association (NPRA), argues that the biofuels mandate has increased food prices and contributed to food shortages around the world and stressed the ethanol transportation infrastructure. Issue 16. Are Spending Cuts the Right Way to Balance the Federal Government’s Budget? YES: Chris Edwards, from “Statement,” Senate Committee on Finance, Subcommittee on Long-Term Growth and Debt Reduction (September 28, 2006) NO: Charlie Stenholm, from “Testimony,” Senate Committee on Finance, Subcommittee on Long-Term Growth and Debt Reduction (September 28, 2006) Chris Edwards, director of tax policy studies at the Cato Institute, believes that federal government overspending is the cause of its current fiscal problems. Higher taxes are not the solution because they “would result in greater tax avoidance, slower growth, less reported income, and thus less than expected tax revenue, perhaps prompting policymakers to jack up tax rates even higher.” Former congressman Charlie Stenholm argues that in addressing deficit and debt problems, everything should be on the table. He stresses that addressing long-term fiscal challenges will require “some combination of stronger economic growth, restraining health care costs, scaling back benefit promises of entitlement programs, increasing the eligibility age for Social Security and Medicare, increasing revenues, and other tough choices.” Issue 17. Has the North American Free Trade Agreement Benefited the Economies of Canada, Mexico, and the United States? YES: John M. Melle, from “Statement,” Senate Subcommittee on International Trade of the Committee on Finance of the United States Senate (September 11, 2006) NO: Sandra Polaski, from “The Employment Consequences of NAFTA,” Senate Subcommittee on International Trade of the Committee on Finance of the United States Senate (September 11, 2006) Deputy Assistant U.S. Trade Representative John M. Melle outlines the benefits of NAFTA and concludes that the three NAFTA countries “have not only become better customers for each other but better neighbors, more committed partners, and effective colleagues in a wide range of trade-related international organizations.” Sandra Polaski, director of the Trade, Equity and Development Project, argues that NAFTA has produced negative effects in all three countries, including contributing to wage inequality in the United States. But the largest negative effects have been felt by the rural poor in Mexico: They “have borne the brunt of the adjustment to NAFTA and been forced to adapt without adequate government support.” Issue 18. Do the Testing and Accountability Elements of the No Child Left Behind Act Prevent a Proper Cost-Benefit Evaluation? YES: George Miller, from “Should Congress Make Fundamental Changes in the No Child Left Behind Act? (Pro),” Congressional Digest (May 2008) NO: Raymond Simon, from “Should Congress Make Fundamental Changes in the No Child Left Behind Act? (Con),” Congressional Digest (May 2008) Chairman of the Education and Labor Committee of the United States House of Representatives, California Democrat George Miller states that schools and students are not making enough progress and significant changes must be made to the law so that its goals may be achieved. “America needs and must have an educational law that insists on accountability with high expectations and high-quality assessments; that closes the achievement gap; and helps all children to learn.” Deputy Secretary, U.S. Department of Education, Raymond Simon states that NCLB is working for students. Simon believes that there is consensus for a limited number of changes. He claims that NCLB’s insistence on scientifically based research and the gathering and using of reliable data has been one of its major successes. Issue 19. Is the Inequality in U.S. Income Distribution Surging? YES: James M. Cypher, from “Slicing Up at the Long Barbeque,” Dollars & Sense (January/February 2007) NO: Diana Furchtgott-Roth, from Testimony before the Subcommittee on Workforce Protections of the House Committee on Education and Labor (July 31, 2008) Economist James M. Cypher believes that the U.S. economy is currently experiencing the largest shift in the distribution of income and wealth since the late nineteenth century, with the share of income of the poorest 90 percent of the population falling from 67 percent in 1970 to 52 percent in 2000. Hudson Institute Scholar Diana Furchtgott-Roth does not deny that income inequality is rising but argues that by considering alternative measures of income and recognizing demographic changes, the shifts in income distribution are not a cause for alarm. Issue 20. Is the Treasury’s $700 Billion Bailout the Solution to the Credit Crisis? YES: George W. Bush, from “President’s Address to the Nation,” http://www.whitehouse.gov/news/releases/2008/09/20080924 (September 24, 2008) NO: Newt Gingrich, from “Before D.C. Gets Our Money, It Owes Us Some Answers,” nationalreviewonline (September 21, 2008) President George W. Bush maintains that the rescue will reduce the risk posed by troubled assets and allow banks to resume credit flows to families and businesses. Newt Gingrich contends that the bailout will become a long-term mess and that there is a nonbureaucratic solution to the multiple crises affecting the economy. |