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ECN 211 Assignment 4

ECN 211 Assignment 4 - As far as the Emergency Economic...

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Wayne Kocher ECN 211 – McHenry 5-9-09 Blackboard Assignment #4 In Ray Fisman’s article “What’s In It For Me?” he talks about how Republican’s voted on the two different bailout packages, the AHRFPA and the EESA. He discussed the research of three Chicago Business school professors and the conclusions they came to. I think that I picked up on a few economic principles, some of which included the marginal principle and the principle of voluntary exchange. To me it seems that the votes of each congressman have a substantial cost to them. For example, the Congressman who voted no on the mortgage bailout came from districts where there was a relatively low percentage of default mortgages, and vice-versa. Obviously, members of Congress wish to get re-elected, therefore the cost of voting against the needs of their district greatly exceeded the benefit.
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Unformatted text preview: As far as the Emergency Economic Stabilization Act, the members of Congress who received little to no contributions from financial services companies were more likely to vote no, while the Congressman who received large sums of money were likely to vote yes. Simply put, it would cost them money and their seat in Congress if they didn’t go with what was best for Wall Street. The principle of voluntary exchange comes into play here, too. Congressman need votes to retain their seat in Congress and will do what it takes to please the people providing these votes. In each case outlined above, each party is better off when they help one another. To me, politics is an unfortunate state of affairs. To think votes are based on money is ridiculous to me. I hope I never have to get wrapped up in any of that....
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