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By the end of this section, you will be able to:

  • Explain how special interest groups and lobbyists can influence campaigns and elections
  • Describe pork-barrel spending and logrolling

Many political issues are of intense interest to a relatively small group, as noted above. For example, many U.S. drivers do not much care where the tires for their car were made—they just want good quality as inexpensively as they can get it. In September 2009, President Obama and Congress enacted a tariff (taxes added on imported goods) on tires imported from China that would increase the import price of Chinese tires by 35 percent in its first year, 30 percent in its second year, and 25 percent in its third year. Interestingly, the U.S. companies that make tires did not favor this step, because most of them also import tires from China and other countries. (See Globalization and Protectionism for more on tariffs.) However, the United Steelworkers union, which had seen jobs in the tire industry fall by 5,000 over the previous five years, lobbied fiercely for the tariff to be enacted. With this tariff, the cost of all tires increased significantly. (See the closing Bring It Home feature at the end of this chapter for more information on the tire tariff.)

Special interest groups are groups that are small in number relative to the nation, but quite well organized and focused on a specific issue. A special interest group can pressure legislators to enact public policies that do not benefit society as a whole. Imagine an environmental rule to reduce air pollution that will cost 10 large companies $8 million each, for a total cost of $80 million. The social benefits from enacting this rule provide an average benefit of $10 for every person in the United States, for a total of about $3 trillion. Even though the benefits are far higher than the costs for society as a whole, the 10 companies are likely to lobby much more fiercely to avoid $8 million in costs than the average person is to argue for $10 worth of benefits.

As this example suggests, we can relate the problem of special interests in politics to an issue raised in Environmental Protection and Negative Externalities about economic policy with respect to negative externalities and pollution—the problem called regulatory capture    (which we defined in Monopoly and Antitrust Policy ). In legislative bodies and agencies that write laws and regulations about how much corporations will pay in taxes, or rules for safety in the workplace, or instructions on how to satisfy environmental regulations, you can be sure the specific industry affected has lobbyists who study every word and every comma. They talk with the legislators who are writing the legislation and suggest alternative wording. They contribute to the campaigns of legislators on the key committees—and may even offer those legislators high-paying jobs after they have left office. As a result, it often turns out that those who are being regulated can exercise considerable influence over the regulators.

Questions & Answers

Income elasticity of demand
Shaan Reply
what is labour force
ademu Reply
Labour force is the number of people who are actively and presently working in a country to increase the availability of goods and services.
Mbye
It refers to the active population available for work at a going rate.
Daniel
labour force is the number of people who are active and present working in a country to increase the availability of goods and services
Deborah
The law of diminishing returns States that "all other things being equal as more and more of a variable factor(labour) is employed on a fixed factor (Land) ,marginal product initially increases reaches a maximum and there after diminishes or fall
samuel Reply
how does exceptional demand occur
Esther Reply
It occurs, due to certain reasons, but to make my answers brief. Exceptional demand occurs when our earnings change. As the law of demand says the higher the price the lower the demand. However no matter how high the price is the person will still purchase the good due to his level of income.
Mbye
opportunity cost definitions
Surur
What do you mean mean by opportunity cost definition?
Mbye
OK thanks for the answer
Esther
Opportunity cost, means, in order to get something, you sacrifice something
Taha
Opportunity cost simply means, sacrificing one commodity at the expense of another.
Mbye
A production manager should continue to use inputs until the Marginal Product (MP) reaches at zero. Justify this statement.
Newtan
What is the scale of preference
Mbye
Esther👌
TSEKO
The law of diminishing returns
Mbye
Apply, PoE, Process of elimination, the 1st stage of production is not correct for the producer to produce because he has the option to increase his production level, so, eliminate that. In third stage, its not rational to produce because, Total output declines. Hence, it is only in the second
Taha
Stage, that the producer produces, also because, it is at this stage that the total output is maximum.
Taha
Hence proved
Taha
A production manager should continue to use inputs until the Marginal Product (MP) reaches at zero. Justify this statement.
Newtan
plz help
Newtan
thanks
Surur
deference b/n aggregate demand and aggregate supply
Surur
ok a production manager should continue to use it inputs until MP reaches zero because at that stage it is called rational stage. And at this stage when a producer produce anything he/she will get more output, aside that too the Total product (TP) will also be at it maximum.
samuel
Exceptional demand occurs due to demand conditions, and when it does not obey the law of demand.
samuel
e
mukul
A production manager should continue to use inputs until the Marginal Product (MP) reaches at zero. Justify this statement.
Newtan Reply
anyone help me Please
Newtan
does the richest experience scarcity?
elan Reply
how do you master a subject
elan
Yes, this is due to the fact that human wants are unlimited in number how ever he has everything his heart desires, he still have dreams of owning/having something else of a great value.
Tusajigwe
that's true,thank you tusajigwe
elan
why firm maximize profits when MC=MR
Abel Reply
The night before an economic exam you decide to go for outing instead of staying at home and studying for your exam.you get 50 percent on your exam as compared with the 70 percent that you normally score.
Muhammad Reply
join me
Abel
why do banks charge fees and charges?
Shirley Reply
What is Labour
Angela Reply
the service provide by the labourer is termed as labour.
Prtj
Meaning of Standard of living
Fazrat Reply
pls what is the meaning of opportunity cost
Fazrat Reply
the cost of next forgone alternative is called opportunity cost. for example you have two choices, either work or study and you choose to study then the opportunity cost for study is the earnings which you can earn while opting job.
Prtj
so what if I choose work it is the same as study
Fazrat
if you choose to work, then the cost of study is the opportunity cost for work
Prtj
ohk tnx
Fazrat
welcome. much love .
Prtj
Hi
Frank
hi Frank
Prtj
what is production
Frank
the output made by firm or companies are called production. however production can be of tengible goods or it can be of intengible.
Prtj
Thanks
Frank
welcome Frank.
Prtj
how can inflation be defined
Mboko Reply
rise in general price level is called inflation.
Fardin
when the price of goods and services rise, the cost of living also increases. basically the increase in general price level is call inflation
Khushtar
when demand increase and supply decrease .leads to fall of quality and volume index's leads to inflation .
Khaja
inflation is a monitry policy that leads to continues increase in price of commodity in a geographical location with some period of time
Osola
why firm maximize profits when MC=MR
Abel
inflation can be define as the persistent increase in price of a commodity
Joseph
what is economic
Enock Reply
economics is a science under which we study all those human activities which is related to scarcity with unlimited wants. By proff. Robbins .
Vibhu
it is a social science
ashiru
what is the difference between macro economic and micro economic
Bubu
Economic is a social science which studies human behaviour in relation to ends and scares means which have alternative uses
Nana
Economic is a social science that studies individuals, busnisses,governments, and deal deal with the entire society as a scarcity.
Mo
what is the differences between ends and wants?
Richard
Economics is a social science which studies human behavior in relationship to ends and scares means which have alternative uses
Musu
what is the differences between ends and scarce
Albert
Ends is considered as goals,aims, objectives,want among others whereas scarce is the insufficient of resources to satisfy the needs of individual,firm,and state
Suzana
Economic is a science which study human behavior as a relationship between ends and scarce means which has alternative uses
Suzana
macroeconomics is the study of the economy as a whole while microeconomics is the study of individual consumers and business film.
nicholas
Economic is a social science which studies human behavior in relation to ends and scares means which have scares means which have alternative uses.
Awuah
what is the indicator of economics development
Bibu Reply

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Source:  OpenStax, Principles of economics. OpenStax CNX. Sep 19, 2014 Download for free at http://legacy.cnx.org/content/col11613/1.11
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