32.2 The Domestic Mission
๐ง Core Themes
Supply-side economics dominates Republican policy
Growing economic inequality
Efforts to reform education system
Government struggles during crises
Financial system instability leads to Great Recession
๐ธ Economic Policy
Supply-Side Economics
Tax cuts โ especially for wealthy
Goal: increase investment, stimulate economy
Reality
Wealth gap increases
Wages stagnate
Rich gain more influence
๐ Inequality
Top earners gain majority of income growth
CEOs earn hundreds/thousands times workers
Middle/lower classes struggle more
๐ Education Reform
Problems Identified
U.S. students lag globally
Racial achievement gaps
Solutions
No Child Left Behind (2002)
Standardized testing
Accountability system
Penalties for low-performing schools
School Choice
Charter schools
Vouchers for private education
๐ณ 2004 Election
Bush reelected despite:
Iraq War criticism
No WMDs found
Prison abuse scandals
John Kerry fails to strongly challenge Bush
๐ Second Term Challenges
Failed domestic reforms:
Social Security privatization
Estate tax repeal
Immigration conflict:
Harsh laws proposed
Massive protests
๐ช Hurricane Katrina
Massive destruction in New Orleans
Poor populations most affected
FEMA response widely criticized
Symbol of inequality + government failure
๐ Economic Problems
Early Issues
Recession (2001)
Outsourcing jobs
Corporate fraud scandals
๐ฆ Financial Crisis Causes
Easy credit
Subprime mortgages
Securitization (CDOs)
Credit default swaps
Housing bubble
๐ฅ Great Recession (2008)
Events
Housing market collapse
Bank failures
Financial panic
Government Response
$700 billion bailout (TARP)
Aid to banks + auto industry
๐ Effects
Massive job losses
Foreclosures
Stock market crash
Global economic slowdown
โ Big Takeaways
Free-market faith weakened
Inequality became more visible
Government seen as:
Ineffective (Katrina)
Biased toward wealthy (bailouts)