Poli Sci 149 Midterm Study Guide

Professor J. Robert Shrode

Midterm Study Guide
PS 149 (Winter 2017)

A. General: The midterm consists of 3 questions. All questions will be taken from the study
guide. Generally speaking, full credit answers are typically about 1 to 2 pages in length on an
8.5 by 11 inch blue book.
B. Effective answers will generally include 3 components. First, they will define the core
concepts and their important features. Second, they will use relevant examples or empirical
information (statistics) to illustrate important points. Third, they will explain why the issues being
discussed are important and relevant to the core questions of the course.
C. Keep in mind that you have 20 minutes to answer each question. As a result, keep will
want to keep your introduction to a single thesis sentence if at all possible, and avoid any
conclusion longer than 1 sentence in length. Remember that precision, clarity, and concision
will all be considered a demonstration that you understand the material. I would highly
recommend studying for the exam in groups, but answers do need to be your own.
D. I hold office hours on Wednesdays from 1-3 in my office on the 4th floor of Bunche Hall (RM
4258). Feel free to take a look at the study guide, and come in for clarifying questions
tomorrow.

Questions:
1) In their 1981 paper A Rational Theory of the Size of Government Allan Meltzer and Scott
Richard presented a model that links inequality to support for redistribution. What relationship
does it predict and why? Are the relationships in the Meltzer-Richards model typically born out
in reality? What role does the piece play in the inequality literature? (In other words, how have
other authors responded to it?)

MR model predicts that polities with high levels of income inequality will have higher
levels of government distribution
What we actually see: Countries with low levels of inequality have large welfare states
(Scandinavian countries), and ones with high levels of inequality have smaller welfare
states (U.S.)
As inequality increases so will the distance between the mean and the median incomes
Because of the nature of income distributions the mean is typically higher than the
median
Reasoning behind MR: Since the median voter stands to benefit from additional
redistribution as the income distribution becomes less equal, and politicians will cater to
her in order to win elections, government redistribution will increase as inequality
increases (not what we see)
Many scholars have dedicated careers to trying to explain why MRs predictions dont
manifest in the real world
 Two primary reasons that MRs predictions dont manifest
1) The logic or reasoning doesnt actually occur
2) Other factors make it hard to see the effects but MR
is right.
MR assumes that people will act in their self interest this year, and not in a long term
sense
Not a problem if income for individuals is static, or
the order of incomes remains static.
Income mobility could throw a wrench in this logic
EXAMPLE: How income mobility can short-circuit the MR logic
Imagine 2 workers in Los Angeles, who both live alone
Worker 1 - Tim is a 45 year old short order cook with a high school education. He
makes $10.50 an hour, and works 45 hours a week splitting time between 2 jobs.
(Annual pre-tax income: $24,570)
Worker 2 - Sam is a 28 year old statistics graduate student. Sam makes 23.50 an hour
as a teaching and research assistant. Sam can only work 20 hours a week at the
moment as all other work time is devoted to school. (Annual pre-tax income: $24,440)
Income mobility and MR
Tims ~$25,000 income is probably pretty predictive of his lifetime earnings. There is
certainly a greater than zero chance that Tim will become wealthy, but the odds of this
are pretty low.
Sams ~$25,000 income is probably not predictive of either his lifetime earnings, nor
his place in the income distribution 10 years from now. Once Sam finishes graduate
school, he is likely to end up with a salary between $80,000 and $120,000 placing him
towards the top of the income distribution
According to MR: Both should support redistribution.
According to reality: Sam will not likely support redistribution because he wants to
keep the money he has earned, while Tim will likely support redistribution because it
could help him greatly
Income mobility can short-circuit the MR model, even if it is only perceived (i.e. the
American Dream)

2) Inequality has been increasing in most rich societies since the mid-1970s. Do people
perceive the current rates of inequality accurately? How do these perceptions vary by country?
How do the perceptions, and the reality of inequality, compare to peoples preferences? How
might perceptions of inequality lead to attitudes about redistribution?

People most definitely do NOT perceive the current rates of inequality accurately
Americans are the worst at guessing current rates, maybe because of our inaccurate
perceptions about income mobility
Kiatpongsan asks: Do people from different countries and different backgrounds have
similar preferences for how much more the rich should earn than the poor?
Most countries inaccurately perceive the levels of inequality in their country
 US actual pay gap from CEOs to unskilled worker is 354:1, respondents estimated it to
be 30:1, while the ideal ratio is 7:1
Same picture across all countries (Taiwan was the closest in the estimated ratio
compared to the ideal ratio)
What makes someone more accurate at estimating inequality?
Bottom 40% of the SES scale
College degree
Older
Politically centrist
All of these factors are only marginally important (People still massively
underestimate unequal pay) - they are statistically significant, and substantively
small
People want smaller pay gaps according to Kiatpongsan
These results demonstrate a strikingly consistent belief that the gaps in incomes
between skilled and unskilled workers should be smaller than people believe them to be
and much smaller than these gaps actually are.
The consensus that income gaps between skilled and unskilled workers should be
smaller holds in all sub- groups of respondents regardless of their age, education,
socioeconomic status, political affiliation, and opinions on inequality and pay.
These results suggest thatin contrast to a belief that only the poor and members of
left-wing political parties desire less income equality people all over the world and from
all walks of life would prefer smaller pay gaps between the rich and poor.
If people believe that pay gaps between CEOs and unskilled workers are too big, then
they should be more supportive of income redistribution. Even when still underestimating
the real gap between these two groups, most respondents believed that the ideal ratio
should still be significantly smaller. U.S. respondents estimated the ratio to be 30:1 and
the ideal ratio to be 7:1. This same pattern can be found in all of the countries surveyed.

3) Some scholars assert that U.S. voting rules and electoral institutions explain in part why
European countries often have larger welfare states than the U.S. Explain how our voting rules
and electoral institutions differ from those frequently seen in other developed democracies.
How could this affect the amount of redistribution within our society?

Multi Member Districts vs. Single Member Districts

U.S. uses SMD while most European countries use MMD
SMDs result in a stable two-party system
SMDs cross-pressure voters and prevent the rise of a viable populist party
SMDs also move policy towards geographic based forms of redistribution
Once you move away from unidimensional political conflict a two-party system is less
likely to accurately represent voters policy concerns
In two-party systems the middle class is more likely to form an electoral coalition with the
upper class than in MMD systems with proportional representation
 In majoritarian systems characterized by geographically based districts, in which each
district chooses one representative (SMD), the elected government will favor spending
programs that can be geographically targeted, like pork barrel projects.
In proportional electoral systems (MMD), instead, spending on universal programs are
favored, since in each district more than one representative is elected in proportion to
the vote received.
EXAMPLE: Consider social security, for instance. Anybody above a certain age is
eligible to receive it, regardless of his or her residence. However, certain districts may be
disproportionately populated by elderly voters. In any event, the hypothesis tested is that
universal transfer programs should be larger in more proportional electoral systems.
US also has a two party system.
The two party system, and the lack of proportionality, created obstacles that blocked the
formation of a strong and lasting Socialist party in the US. The socialist parties in
european countries pushed for a stronger welfare state. Because a third party has never
gained enough of a holding in the U.S. political system, there hasnt really been a push
for welfare centered policies, universal and means-tested alike.

4) Compare the levels of intergenerational income mobility in the U.S. to those in other
countries. How do these realities compare to perceptions of income mobility and beliefs in
meritocracy? How does intergenerational mobility differ for various classes in our society, and
how is it the same? Explain how this phenomenon has impacted or impacts economic
inequality.

there is less relative mobility in the United States than in many other rich
countries. The United States along with the United Kingdom have a relatively low rate of
relative mobility while Canada, Norway, Finland, and Denmark have high rates of
intergenerational mobility. France, Germany, and Sweden fall somewhere in the middle
The most common measure of intergenerational mobility, called intergenerational
income elasticity, has been estimated to be in the neighborhood of 0.5. This
number means that, on average, if a childs parents income is 20 percent higher than
the average family in the parents generation, then the chances are that as an adult the
child will have an income that is 10 percent higher than the average for his or her
generation. In short, if this mobility measure is 0.5, about half of the advantage of
growing up in a more affluent family is transmitted from parents to their children.
Reality: People think that everyone has the same opportunity to do better than their
parents or peers, but the reality of the situation is much different. The richer your parents
are, the more likely you are to move up in economic status. Those born in the poorest
group CAN see an increase in their income, but a large portion (42%) of those children
will remain in the same economic position as their parents.
Adults whose parents were lower on the ladder can see an increase in their incomes,
both because of economic growth and because they move up the ladder relative to their
parents, and many do.
 4/5 children whose parents were in the bottom fifth of the income distribution end up with
higher incomes than their parents.
Contrary to American beliefs about equality of opportunity, a childs economic position is
heavily influenced by that of his or her parents. Forty-two percent of children born to
parents in the bottom fifth of the income distribution remain in the bottom, while 39
percent born to parents in the top fifth remain at the top. Children of middle-income
parents have a near-equal likelihood of ending up in any other quintile, presenting equal
promise and peril for those born to middle-class parents. Only 6 percent of children born
to parents with family income at the very bottom move to the very top.
Meritocracy: In this society those who work the hardest and have the greatest talent,
regardless of class, gender, race, or other less-germane characteristics, have the
highest income. Americans believe that they live in a meritocracy
It is worth noting, however, that even in a meritocracy people are born with different
genetic endowments and are raised in different family environments over which they
have no control, raising fundamental questions about the fairness of even
a perfectly functioning meritocracy.
These circumstances of birth may be the ultimate inequalities in any society. That said, a
meritocracy with a high degree of relative mobility is clearly better than the alternatives.
there is more stickiness at the top and bottom of the earnings ladder in all
countries.
That is, men whose fathers have particularly low earnings are more likely than other men
to have low earnings themselves, and men whose fathers are at the top
of the earnings distribution are likely to attain that top status themselves.
Starting at the bottom of the earnings ladder is more of a handicap in the United
States than it is in other countries.
Impacts Inequality: Because it is harder to get out of the bottom group of income
earners and easier to stay in both the bottom and top groups, inequality is constantly
getting worse. Yes, we see income rising in all income brackets, but it is rising faster for
those in the top 10% than it is for the bottom 20% and even bottom 50%. Because being
in the middle class means you have equal chances of moving down or up and there is a
general stickiness to living in the bottom quintile, economic inequality is getting worse,
specifically in the United States

5) Economic inequality can be measured in several ways. Three of these include wealth,
income, and consumption inequality. Which of these is typically highest in a society, and which
one is typically lowest? Explain the logic behind this order. Why might we care about each?

Most researchers agree that wealth inequality is usually the highest within a society,
while consumption inequality is usually the lowest.
Some economists say income data has too many flaws to be the primary measure of
inequality.
 For one thing, many income-inequality measures use income before accounting
for the impact of taxes and transfer payments (such as Social Security, food
stamps and unemployment benefits), which act to reduce inequality.
Critics of the income-based approach note that an individuals (or households)
income can vary considerably over time, and may not reflect all available
economic resources such as credit availability, government assistance or
accumulated family wealth.
Wealth inequality tends to be much higher than either income or consumption inequality,
but it also tends to not vary as much over time.
Lower half of all households have very little or no wealth.
Why?
They have fairly low incomes, which means they cant afford to save their money.
Maybe they are living paycheck to paycheck if they are very poor.
The amount of money you haved saved plus all of your compiled assets is your
wealth
Individuals with high incomes can invest, buy property, buy bonds, and save their
money, which cant normally be done by someone with a low income. The top
10% own more than half of all wealth because of this, which means that wealth
inequality is extremely high
Consumption inequality= income + credit based spending - investments

6) Right now, inequality is growing within many developed countries, but inequality globally is
decreasing. Explain how these two phenomena are linked. What are the most important
implications of these trends for the U.S. as a country, and for the world in general? How is
globalization linked to these phenomena?

Lecture 5
Inequality in the U.S. has risen over the past few Decades
This trend is common over the same period within
most rich countries
Over the past few decades, global inequality has
declined substantially
The Answer? Globalization (Trump Argument)
Corporations are benefiting from:
Cheap labor alternatives
Cheaper component parts
Increased access to foreign consumers
Prior to Globalization
Countries had extremely poor wages. Even the tiny wages that corporations are
paying people in Africa, Mexico and China are higher than jobs previously
located in the area
No middle class
After Globalization
 Increased middle class jobs
Increased wages
Increased export driven industry
Only need $10 a day to be part of the global middle class, which corporations are
100% willing to pay over the wages expected in the United States
Substantial reduction in extreme poverty
So while manufacturing and other similar paying jobs are leaving the United States,
creating more inequality in the US, jobs are going to other poorer countries and reducing
inequality by helping to create a middle class. Global inequality is decreasing while
inequality in the US and other similar nations is getting worse.
Automation is mainly affecting the working and middle class in the US. It is cheaper to
use robots to do work previously done by humans, which means there are less jobs
available for people trying to find work in the US and other rich, developed nations.
Trump thinks Globalization is the main problem, but automation is the real problem that
the US and the world currently faces according to experts and researchers. Automation
is also taking wealth and income away from our middle and working class and gives that
money to corporations, which drastically increases inequality.

7) Larry Bartels makes the argument that economic growth is higher when Democrats have
control of the White House. Explain how this pattern impacts upper, middle, and lower income
citizens. How would inequality levels look if only Democrats had been in power since the end of
World War II? How about Republicans?

Unequal Democracy, Chapter 2

Under Democrats, post-tax income growth for upper, middle, and lower income citizens
are higher than when Republicans control the White House
Republican presidents generally preside over extremely low (Sometimes negative)
growth in the lower class of citizens
Upper class people experience high income growth under Republican presidents, but
still see substantially less growth than when compared to Democrats being in power
Income Inequality, if Democrats were in power since WWII, would actually be slightly
lower than what it currently is. If Republicans were the only ones in power since WWII,
then income inequality would be substantially worse than what it currently is.
Of Course, Bartels also argues that is almost impossible to actually know what the levels
of inequality would look like in these situations and know whether either party had the
political will or political power to change redistribution
WHY?
Republicans: supply side economics - fight inflation, and stimulate growth by giving
money to investors)
Democrats: bottom up (or middle out) growth - increase the incomes of the working and
middle class to increase demand for goods
Stimulus spending (think infrastructure)
Eisenhowers priorities
Focus on fighting inflation
Reduce federal budget
Theorized that stimulus spending stifle business Initiative
Saw recessions and unemployment as self-correcting
LBJs priorities
Oversaw period of very high growth
Passed major legislation to address poverty and some of these programs would also
serve as increased stimulus as well
Medicare and Medicaid
Job Corps
Food Stamps
Community Action Program
EXAMPLE: Fords decision to not do anything about an oil shock for the 1st year of its
existence, and it getting worse

8) Bartels argues that income growth is higher when Democrats have control of the White
House. Political scientists know that when growth rates are high in the year leading up to an
election, so is support for the incumbent party. Why dont we then see Democrats get elected to
the presidency at much higher rates than Republicans?

Unequal Democracy, Chapter 2

Why isnt the economic voting model impacted?
Economic growth in the 9 months leading to the election is most important
Democratic Presidents policies seem to stimulate the economy in the second
year of their term (Democrat:4.4 percentage points vs Republican: -0.8
percentage points)
Excluding year 2 growth rates are quite similar (Republican: 2.5 percentage
points, and Democrat: 2.3 percentage points)
Republicans actually achieve peak growth in election years
Answer: Voters are myopic
Voters are extremely near-sighted when it comes to politics and the economy. Reagan
made a statement that the economy was better than it was 4 years ago, but voters did
not care about what happened 4 years ago. They care about what happened in the past
6-9 months
They care about what the economy is right now or what it was a few months ago,
because that is more relatable and is easier to see/experience
9) In Homer Gets a Tax Cut, Larry Bartels argues that what factor played the largest role in
determining support for the Bush Tax Cuts? Why did Bartels see this as problematic? Why did
these cuts get popular support amongst the working class, when the benefits disproportionately
benefited the upper class?

The results of his analysis suggest that most Americans support tax cuts not
because they are indifferent to economic inequality, but because they largely fail
to connect inequality and public policy.
Bartels argues that low income voters support economic policies against their
self-interest because they cant predict the outcomes of those policies
Support for the Bush tax cuts was strongly shaped by people's attitudes about their own
tax burdens, but virtually unaffected by their attitudes about the tax burden of the
richeven in the case of the estate tax, which only affects the wealthiest one or two
percent of taxpayers.
Public opinion in this instance was ill informed, insensitive to some of the most important
implications of the tax cuts, and largely disconnected from a variety of relevant values
and material interests.
Public support for the Bush tax cuts derives in considerable part from unenlightened
considerations of self-interest on the part of people who do not recognize the
implications of Bushs policies for their own economic well-being or their broader political
values.
Millions of citizens say that the federal government should spend more on a wide variety
of programs, that the rich are asked to pay too little in taxes, and that growing economic
inequality is a bad thingbut simultaneously support policies whose main effects will be
to reduce the tax burden of the rich, constrain funding for government programs, and
exacerbate growing economic inequality.
One is left to wonder how these people would resolve the contradictions implied by their
simultaneous antipathies toward inequality and taxationif they recognized those
contradictions.
Better-informed respondents were not only much more likely to express views about the
tax cut, but also much more likely to express negative views. Less informed: .84 (lots of
support. More informed: -.06 (way less support for tax cuts)
it appears that the strong plurality support for Bushs tax cut is attributable to simple
Ignorance.
For estate tax: knowledge had no effect on peoples support for it
Since the primary direct effect of repealing the inheritance tax would be to reduce the
long-run tax burden of the wealthiest one or two percent of American taxpayers,
respondents who believe the rich pay too much in taxes should be much more likely to
favor repealing the estate tax, while those who believe the rich pay too little in taxes
should be much more likely to oppose repeal.
Since repealing the inheritance tax would have no direct effect on respondents
own tax burdens (for all but the wealthiest handful) or on the tax burden of the
 poor, opinions about whether these taxes are too high or too low are less
obviously relevant.
However, if respondents recognize that repealing the inheritance tax is likely to
lead, eventually, to increases in other, broader-based taxes (in some combination
with reductions in government services and larger budget deficits), those who
believe their own taxes (or the taxes paid by the poor) are too high may be
inspired to oppose repealing the inheritance tax
People are just not informed on the tax cuts to know whether they would hurt
them or help them. Most likely, the tax cuts would hurt them and really only
heavily benefit the richest in society
Question about whether the rich should pay more or less in taxes had no
predictive power
If you thought you paid too much in taxes, then you supported the tax cuts,
regardless of the benefit it would have to your pocketbook.

10) In Why Americans Hate Welfare Martin Gilens argues that several factors explain why
support for welfare and food stamp programs differ substantially from support for most other
welfare programs. What are the two LARGEST factors according to Gilens? How do these
factors impact peoples attitudes?

Undeserving Poor and Racial Attitudes

Undeserving Poor
People, especially those that dont support welfare (less-educated, Southern,
Republicans, young) believe that the poor are undeserving
They have the feeling that most people on welfare could get out of their situation
without help from the Government
Americans believe that welfare, and government spending in general is inefficient
69% agreed that when something is run by the government is it usually
inefficient and wasteful
Respondents often thought that
welfare recipients were taking advantage of the system (66%) as opposed to
genuinely in need of help. (34%)
Most able-bodied people on welfare prefer to sit home and collect benefits even
if they can work. (59%)
Amongst people who receive welfare most could get along without it if they tried
(61%) as opposed to most really need help. (39%)
Most didnt agree that
Most people on welfare who can work try to find jobs so they can support
themselves.
Racial Attitudes
Idea of lazy blacks
The idea has been around since slavery
 Americans typically overestimate the proportion of African Americans on welfare
roles (At time of Gilens writing 27% of welfare recipients were black)
Respondents to surveys estimated this to be roughly twice as large (~50%-55%)
Today, roughly 1 in 3 TANF beneficiaries are black (number is similar for whites
and non-white hispanics)
68% of respondents asserted that non-white welfare recipients were mostly black
Gilens runs a test to find out if this stereotype affects welfare spending/cuts
H1: People who believe that blacks are lazy are more likely to oppose welfare
spending
H0: Attitudes about the work ethic of blacks are unrelated to welfare spending
If H1 is correct then support for welfare cuts will rise as we move away from
people who believe that blacks are hard working and towards those who believe
that blacks are lazy
If H0 is correct, then we should see that welfare support is roughly equal
amongst people who identified blacks as being lazy and those who believe
them to be hard working
H1 wins
The most important race-based source of opposition to welfare is the perception that
blacks economic problems stem from their own lack of effort.
These three characteristics were associated with low support for welfare:
Married (lean conservative, tend to be wealthier)
Older (encourages the breakup of families)
High income (lack of experience)
MEDIA PORTRAYAL OF THE POOR IN THE 60s
If people think that welfare recipients are undeserving or lazy, then they will be more
inclined to support cuts to means-tested welfare programs such as Food Stamps and
Medicaid. If they know someone on welfare or someone who has been on welfare, then
they will be less likely to think this way.
He also talks about how people are generally more likely to support means-tested
welfare programs in times of slow growth (Not super important)

11) In Why Americans Hate Welfare Martin Gilens compares support for welfare programs in the
U.S. both to each other and to support for similar programs in several European countries.
What are the most striking patterns that he discusses? What programs stand out as being the
most/least popular? Which programs are more popular in Europe than in the U.S.?

Common welfare policies that we lack

Universal healthcare
Free childcare
In many developed countries free maternity leave
Americans are less likely to say that the government has an essential responsibility to
(% of respondents who say its essential)
see to it that everyone who wants a job can have one.
 U.S. 34% (Germany 60%; Italy 79%; Britain 55%)
providing good medical care
U.S. 42%; Germany 63%; Italy 79%; Britain 74%)
Looking after old people
U.S. 41% (Germany 51%; Italy 69%; Britain 58%)
Provide adequate housing
U.S, 25% (Germany 39%; Italy 69%; Britain 61%)
With the exception of housing a large majority of U.S. citizens agree that all of
these things are either an essential responsibility or important responsibility"
List of programs where Americans prefer spending increases rather than cuts
Elderly
Health care (has since been polarized, but increases were preferred by
independents in 2011 pew surveys)
Education
Retraining Programs
Food programs for low income families (+47)
List of programs where Americans prefer spending decreases rather than cuts
unemployed people (-14)
Food stamps (-34)
Welfare (-49)
People on welfare (-61)
Support for Government assistance to the poor
80%-90% of Americans support government help for the poor /combating poverty
70% want to guarantee food and shelter
77% of Americans want a tax-supported relief program for all those who have a
clear need for assistance.
73% of Americans preferred to address the causes rather than the effects of
poverty
90+% of Americans think that poverty will always be a major problem for our
society. (75% believe that this would be the case even with unlimited
government resources)