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Unformatted text preview: Kulper - Econ 189 Kulper 1 Compromises in the Constitution Separation of Powers • Federal government is divided into three branches -- Executive, Legislative, and Judicial. • Each branch is independent and equal. • Each is a balance to the power of the others. u u Federalism -- the national government’s power is limited to only the issues listed in Article I, §8. Individual Rights -- the original Constitution did not mention rights of citizens, so the first 10 amendments (Bill of Rights) spelled those out. Kulper - Econ 189 Kulper 2 Congressional Powers u Article 1 establishes Congress with two houses. • Each state has 2 Senators; number of Representatives is relative to each state’s population. u Article 1 gives Congress powers. • Congress can create and enact legislation, impose taxes, spend money, create copyrights, support the military and declare war. • Congress regulates commerce with other nations and between different states. Each state regulates commerce within its own borders. • Substantial Effect Rule -- Congress may regulate any activity which has a substantial economic effect on interstate commerce. Kulper - Econ 189 Kulper 3 Executive Power Article II defines the powers and responsibilities of the President -- in general he or she is to enforce the nation’s laws. • Appointment -- The president nominates federal judges (including Supreme Court Justices) and heads of most administrative agencies. • Legislation -- The president and his advisors can propose bills to Congress and the president can veto bills from Congress. • Foreign Policy -- The president coordinates international efforts, negotiates treaties and is the Commander in Chief of the military, but he may not declare war. Kulper - Econ 189 Kulper 4 Article III creates the Supreme Court and permits Congress to create lower federal courts. u Federal courts have two key functions: adjudication and judicial review. • Adjudication -- Federal courts hear civil and criminal cases within their jurisdiction. • Judicial Review -- Federal courts can declare a statute or governmental action unconstitutional. – Opponents claim that the Constitution does not grant this power to the courts; and this takes power away from citizens. – Supporters claim that the Constitution gives the judicial system the power to interpret laws and ensures a consistent application of the Constitution. Kulper - Econ 189 Kulper 5 Judicial Power Protected Rights: Free Speech The First Amendment states, “Congress shall make no law… abridging the freedom of speech.” • Speech includes non-verbal communication, such as signs, symbols and acts (like flag-burning). • Political speech -- about a politician or political process is protected, and can be found illegal only if it is intended and likely to promote lawless conduct. • Legal speech may be limited in time, place & manner. • Obscenity is not protected by the Constitution. • Commercial speech -- designed to propose a commercial transaction -- is regulated more strictly than other speech and may be outlawed if false or misleading. Kulper - Econ 189 Kulper 6 Fifth Amendment: Due Process and the Takings Clause • “No person shall be… deprived of life, liberty, or property without due process of law; nor shall private property be taken for public use, without just compensation.” – Procedural Due Process ­­ the government must go through procedures to ensure that the result is fair. The process due is in proportion to what the government is trying to take from the person. – The Takings Clause ­­ when the government takes private property for public use, it must pay a fair price. Kulper - Econ 189 Kulper 7 14th Amendment: Equal Protection u “No state shall… deny to any person within its jurisdiction the equal protection of the laws.” The government must treat people equally, yet they frequently make distinctions among classes of people for different treatment. Is this legal? • Usually acceptable -- based on economic and social relations (such as higher income paying a higher percentage income tax) are usually upheld. • Sometimes acceptable -- based on gender are sometimes upheld, if there is a good reason. • Not acceptable -- based on race, ethnicity and fundamental rights are almost never upheld. Kulper - Econ 189 Kulper 8 Statutory Law u Most new law is statutory, that is, it is legislation passed by either a state legislature or the Congress of the United States. Citizens who vote have some control over statutory law. We elect the state congressional representatives and the United States Senators and Representatives. u Kulper - Econ 189 Kulper 9 How New Laws are Made u u u u u Any member of Congress can initiate a bill, or proposed law. A bill is debated in a committee in the house where it was introduced. It then goes to the full house for a vote. If it passes both houses this way, it goes to the President for his signature. A President’s signature turns a bill into law. If the President does not sign the bill (veto), Congress can override the veto by passing the bill again, with a two-thirds margin. Kulper - Econ 189 Kulper 10 Why Are Bills Proposed? New issues or new worries – such as employment discrimination and Internet privacy or copyright issues u Unpopular judicial rulings – if Congress disagrees with a judicial interpretation of a statute, it may pass a new statute to “undo” the decision of the court, unless the decision at hand is based on the U.S. Constitution. Criminal law – must be set forth in clear terms through statutes rather than left to judicial interpretation. Kulper - Econ 189 Kulper 11 u Common Law • Judge­made law; made up of all the • • • • decisions made by appellate courts. Two hundred years ago, almost all law was common law; most new law is statutory. Common law predominates in tort, contract, and agency law; it is important in property and employment law. Based on stare decisis, meaning “let the decision stand” (previous decisions are generally upheld in similar cases.) Incorporates predictability and flexibility. Kulper - Econ 189 Kulper 12 Changes in Common Law • Over time, changes in society’s norms have an effect on long­standing common law. An example of this is the law that applies to bystanders in emergencies. – Under common law, bystanders have no obligation to assist a victim in an emergency. – Over time, courts have created exceptions, making employers obliged to help an employee who is suddenly stricken with an emergency situation when the employer is present. – Some courts now hold that anyone witnessing an extreme situation or if there is a special relationship, such as patient­therapist, should be required to help, though this is not universal. Kulper - Econ 189 Kulper 13 Administrative Law Federal agencies such as the Federal Aviation Agency (FAA) and the Federal Trade Commission (FTC) and the Bureau of Land Management, all have the power to make regulations which affect citizens and businesses. u Agencies were -- and are -- created to fulfill a need. Someone needs to oversee changing technologies and practices and their effects on society. An agency is created when Congress passes enabling legislation, describing a problem and defining the agency’s powers. Agencies often have considerable power in their areas of specialty, sometimes leading to controversy. The Administrative Procedure Act regulates how agencies operate, in an attempt to reduce the controversy. u Kulper - Econ 189 Kulper 14 Power of Agencies: Rulemaking • Two types of rules – Legislative rules ­­ require businesses and people to act a certain way; have the effect of a Congressional statute. – Interpretive rules ­­ these do not change the law;they define or apply the laws to new situations. Kulper - Econ 189 Kulper 15 Power of Agencies: Investigation u Voluntary -- Some businesses freely give information and readily comply with agency recommendations. u Subpoena -- an order to appear at a hearing and produce evidence, sometimes documents. • Must be relevant to the investigation and under the agency’s jurisdiction, or area of authority. • Must not be unreasonably burdensome on the business. • Must not be privileged; this means that a corporate officer may not be required to incriminate himself. Kulper - Econ 189 Kulper 16 Power of Agencies: Adjudication u to proceed with an issue. Adjudicate -- means to hold a hearing, then decide how • • • • A hearing before an administrative law judge. Parties have counsel, but there is no jury. Informal; both sides present evidence. Judge makes ruling on testimony and evidence. u Procedures for adjudication u If parties are unhappy with results • Loser may appeal to an appellate board. • Appellate board may make a de novo decision, and ignore the administrative law judge’s decision. • Appeals go to a federal court. Kulper - Econ 189 Kulper 17 “Law is complex. The subject becomes less baffling if we understand how society creates law.” Jeff Beatty, Introduction to Business Law Kulper - Econ 189 Kulper 18 ...
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This note was uploaded on 03/17/2010 for the course ECON 100B taught by Professor Kilenthong during the Spring '08 term at UCSB.

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