How far had the British Government abandoned the policy of laissez-faire by 1914 Essay Example

How far had the British Government abandoned the policy of laissez How far had the British Government abandoned the policy of laissez-faire by 1914 Essay How far had the British Government abandoned the policy of laissez-faire by 1914 Essay Essay Topic: Claim of Policy 100 years ago 3/4 of the population in Britain were merely working class, 1/3 were living in severe poverty. Life expectancy was short and infant mortality rates were absurd, in Scotland 13 out of every 100 babies would die before they reached the age of one. The government and many rich, prosperous people believed in Self help not State help, many possessed the saying of heaven helps those who help themselves. Overall, in their opinion it was up to the individuals to look after themselves. Many things contributed to the Government finally realising that Britain was at a stage where state intervention was greatly needed. The colossal divide in social classes in the 1800s to early 1900s resulting in many people falling in to great poverty highlighting the lack of efficiency in the Governments laissez-faire ideology. The findings of Booth and Rowntree lead to a national uproar at the high number of people in Britain living without a decent house and enough money to feed a family for a week. By the year 1914, the British Government had abandoned the policy of laissez-faire to a certain extent. David Lloyd George, or otherwise known as The Father of the Welfare State wanted to enforce state intervention to such an extent that it would provide the country with enough help to create a healthy Britain. His initial plan included a state funded National Health Service (NHS), state funded education, unemployment benefit and a state pension. He called this The Welfare State. So why did the British Government resort to abandoning the policy of laissez-faire? The Boer War of 1899-1902 proved the British National Efficiency to be extremely low. Over half of the applicants who seeked work in the army were rejected simply because they were not fit enough. Many people highlighted the fact that if there were no fit or healthy soldiers then there was no protection for Britain as a country or their colonies. Furthermore, if the British workforce were unhealthy then the trade and exports would decrease because of an insufficient output of goods. In January 1906, the Liberal party won 400 seats in the House of Commons, thereby a majority and gaining power. The Liberals strongly believed in state intervention and with Sir Henry Campbell-Bannerman in power till 1908 and thereafter Herbert Henry Asquith, they passed various reforms between 1906-1914, which did in a way remove the old laissez-faire ideology. These liberal reforms targeted many areas of society, but in particular one group that was helped a great deal were the children. Between 1906-1914 the Government passed various policies that would help the growing concern in the deterioration of childrens health and education. In 1906 the School Meals Act was passed, this gave the local councils the opportunity to provide free school meals to children who were in need. However, parents able to afford to pay, were expected to do so. A lot of local authorities failed to undertake this idea, consequently in 1914 the government made the provision of school meals compulsory. In regards to their health, the government passed the 1907 Medical Inspection in Schools Act allowing childrens health to be monitored in school, the dejected reports sent in by doctors thus allowed the local authorities to set up clinics in school in 1912, allowing doctors to regularly check on the health of children. These reforms helped the government to help the people and progress gradually from laissez-faire. However, the cost at times was extortionate- it was easy enough to identify the illnesses but providing the medicine needed was costly. By 1908 various people had recognised that the major causes of poverty were low wages, unemployment or irregular earnings. Others recognised that there was a major damage to health through long working hours and the working conditions, and so after 1908 the government introduced various state intervention policies to help those who were employed to have improved standards and in 1908 the working day for a coal miner was cut to 8 hours, in certain sweated trades the trade board set up boards to control wages and working conditions. On the other boat, help was needed for the unemployed and so in 1911 the National Insurance Act was passed. This was the most radical reform of all and was a major break through in social reform. It worked in two parts; (i) the sickness insurance benefits, which entitled workers to 10s. per week for a period of up to 26 weeks for health reasons and medical treatment for free from a selected doctor. Money to provide this service to workers came from 4d a week from workers, 3d a week from employers and 2d a week from the state. So really the majority of money wasnt being provided by the state! ii) The unemployment benefits- a certain amount of weeks had to be worked before you could receive any benefits, again you could only claim for up to 26 weeks and those cyclical workers e. g. house builders were not covered because it was classed as seasonal work. At this stage the friendly societies, which provided help for the poor, were almost put out of business buy the N. I Acts. Although, these friendly societies did eventually recover to help those workers who were not covered by the governments national insurance policy. The Labour exchanges (or job centres) were also set up to encourage workers to look for work. And so, these acts passed to help the employed and unemployed were another sign of the British Government abandoning their laissez-faire policy and taking a step forward to state intervention. In 1908 the old age pension scheme was set up. This policy was yet again another policy that had been influenced by the ideas and findings of Charles Booth. He, alongside others had stressed the importance in the welfare of the elderly people of Britain for many years. When in 1908 the pensions were made available, they were only given to those over the age of 70 and to whom the government means testers felt were the most deserving. Although this scheme was most definitely state intervention and not laissez-faire it was certainly not generous. It cost the British Government i 8 million to provide for 668000 people, which helped to add to the budget crisis of 1909. it was not as successful as the other schemes introduced in other aspects of society as the budget was too low and the age limit too high in accordance to the lower life expectancy at that time. Hence, by gathering all of the policies and acts above, which targeted all areas and problems in British society at the time, the British Government had abandoned the policy of laissez-faire to a certain extent However, the introduction of a welfare state and state intervention, with the abandonment of laissez-faire has not occurred wholly. A welfare state did not fully exist yet and the system was still showing signs of laissez-faire. There were still various problems that did not allow laissez-faire to be fully abandoned. The liberal reforms did not create a full Welfare State, this was because of various reasons. To start with although the government was providing health insurance for sick workers, it still did not provide the country with a National Health Service. Secondly, the services provided to ill workers and unemployed workers did not cover their family and so left them without any benefit whatsoever. Furthermore, the pension scheme was insufficient and didnt target the majority of elderly people in urgent help. Finally, another major problem was that the unemployment did not cover the bulk of problems raised by those in need. The failure to fully abandon the laissez-faire ideology was also partly because of the mixture of opinions within the House of Commons and also the general public. Many people favoured the Liberal Reforms and the desertion of laissez-faire, for example the Labour Party, the working class and the middle class (who shared mixed views). However, there was also various opposition who were in favour, for obvious reasons of laissez-faire. This opposition was the Conservative Party and the upper class that didnt see a problem with laissez-faire as the problem of poverty and ill health did not really ever involve them, and if it did they could afford the doctors bills. The upper classes were also basically excluded from the liberal reforms because most of the policies introduced did not effect their lifestyle. To conclude, the British Government had only abandoned the laissez-faire policy by 1914 to a certain extent. By 1914, I feel that the Liberals had created a series of stepping-stones and foundations on which they could eventually build up a full welfare state. They had introduced various acts that brought state help along to the children, the elderly, the employed, the unemployed, the sick and the needy. However the state help provided by the British Government did not cover everyone in the country, people were excluded from the benefits (the prosperous) and therefore were still living by the old laissez-faire policy. The acts and policies introduced although bringing along various good points and benefits did come with a variety of problems that needed to be solved along with budget problems. And so, overall the British government still had various problems and issues to resolve before they could fully abandon the laissez-faire policy and take on Lloyd Georges long needed ideological policy of The Welfare State.

Biography of Lucky Luciano, American Gangster

Biography of Lucky Luciano, American Gangster Charles Lucky Luciano (born Salvatore Lucania; November 24, 1897–January 26, 1962) was instrumental in creating the American Mafia as we know it today. After graduating from the gritty street gangs of New York, Luciano went on to become a henchman for the American branch of the infamous Cosa Nostra. A criminal mastermind, it was Luciano who orchestrated the unification of warring mob factions, creating the first Organized Crime Commission. In addition to taking on the mantle of the first kingpin of the modern Genovese crime family, he and his mob associates launched the highly successful and lucrative National Crime Syndicate. Lucky Luciano Known For: Charles â€Å"Lucky† Luciano was the criminal mastermind whose influence in shaping the mafia earned him the title of â€Å"father of modern organized crime.†Born: November 24, 1897 in Lercara Friddi,  Sicily, ItalyParents: Rosalia Capporelli and Antonio LucaniaDied: January 26, 1962 in Naples,  Campania, ItalySpouse:  Igea LissoniCriminal Convictions: Pandering, drug traffickingPublished Work: The Last Testament of Lucky Luciano: The Mafia Story in His Own Words (as told to Martin A. Gosch  and  Richard Hammer)Notable Quote: â€Å"There’s no such thing as good money or bad money. There’s just money. Early Years Lucianos family immigrated to the United States in 1906. His criminal career began not long after. At the age of 10, he was charged with his first crime (shoplifting). Luciano launched his first racket in 1907, charging Jewish and Italian kids in his Lower East Side neighborhood anything from one or two pennies to as much as a dime for his protection to and from school. If they refused to pay, Luciano beat them up rather than protect them. One of the kids, Meyer Lansky, refused to ante up. After Luciano failed to pound Lansky to a pulp, the two became friends and joined forces in the protection scheme. They remained friends and close associates throughout most of their lives. At the age of 14, Luciano dropped out of school and started a $7 per week delivery job, but after winning more than $200 in a craps game, he realized there were faster and easier ways of earning money. His parents sent him to The Brooklyn Truant School in hopes of straightening him out but in 1916 after his release, Luciano took over as leader of the notorious Five Points Gang, where he became acquainted with future Mafia leaders Vito Genovese and Frank Costello. In the years leading up to World War I, Luciano expanded his criminal enterprises to include pimping and drug trafficking, and while the police named him as a suspect in several local murders, he was never indicted. The 1920s By 1920, Luciano had branched out into bootlegging and illegal gambling. With financing and an education in social skills from his mentor Arnold the Brain Rothstein, Luciano and his partners were grossing over $12 million a year from the sale of illicit alcohol by 1925. Luciano, Costello, and Genovese had the largest bootlegging operation in New York with a territory that extended as far as Philadephia. By the late 1920s, Luciano had become a chief aide in the largest crime family in the country, led by Giuseppe Joe the Boss Masseria. Initially recruited as a gunman, as time went on, Luciano came to despise the old Mafia (Cosa Nostra) traditions- and especially Masserias belief that non-Sicilians could not be trusted (which ironically, turned out to be true in Lucianos case). After being kidnapped and mugged, Luciano discovered Joe the Boss was behind the attack. A few months later, he decided to betray Masseria by covertly joining forces with the second largest mafia clan led by Salvatore Maranzano. The Castellammarese War began in 1928 and, over the next two years, several gangsters connected to Masseria and Maranzana were killed. Luciano, who was still working for both camps, led four men- including Bugsy Siegel- to a meeting he had arranged with Masseria. The four men sprayed his former boss with bullets, killing him. After the death of Masseria, Maranzano became the Boss of Bosses in New York but his ultimate goal was to become the leading boss in the United States. Maranzano appointed Lucky Luciano as his No. 2 man. The working relationship was short-lived, however. After learning of a plan by Maranzano to double-cross him and wipe out Al Capone in the bargain, Luciano decided to strike first, organizing a meeting at which Maranzano was killed. Lucky Luciano became The Boss of New York and, almost overnight, he began moving into more rackets and expanding their power. The 1930s The 1930s were prosperous times for Luciano, who was now able to break ethnic barriers formerly laid out by the old Mafia. He strengthened his outreach in areas of bootlegging, prostitution, gambling, loan-sharking, narcotics, and labor rackets. In 1936, Luciano was convicted on charges of compulsory prostitution (pandering) and drug trafficking. He was sentenced to 30-50 years but maintained control of the syndicate while behind bars. The 1940s In the early 1940s at the onset of Americas involvement in World War II, Luciano struck a deal with U.S. Office of Naval Intelligence. He offered to supply information to help protect the mob-run New York docks from Nazi saboteurs  in exchange for a move to a better prison and the possibility of early parole. Luciano was transferred to Great Meadow Correctional Facility from the Clinton Correctional Facility in Dannemora in upstate New York. He continued his collaboration, known as Operation Underworld, for the remaining years of the war. In 1946, Governor Thomas E. Dewey (who while serving as Special Prosecutor was responsible for Lucianos conviction) granted the mobster a commutation of sentence and had him deported to Italy, where he was able to resume control over the American syndicate. Luciano snuck into Cuba in October 1946, where he attended The Havana Conference, a meeting of the five major crime families hosted by Lansky who already had an established presence in Cuba. The cover for the meeting was an appearance by Frank Sinatra. During the week-long conference that focused on the heroin trade and gambling activities in Cuba, and also to decide the fate of Bugsy Siegel and his Las Vegas money pit, the Flamingo Hotel, Luciano met privately with Genovese, who suggested that Luciano take on a figurehead role as Boss of Bosses while allowing Genovese to control the day-to-day activities of the syndicate. Luciano declined, saying: There is no Boss of Bosses. I turned it down in front of everybody. If I ever change my mind, I will take the title. But it wont be up to you. Right now you work for me and I aint in the mood to retire. Dont you ever let me hear this again, or Ill lose my temper. When the U.S. government got wind of Lucianos presence in Cuba, it quickly moved to have him repatriated to Italy, where he remained for the rest of his life. While he continued to profit from mob-related activities, his power and influence waned. Death and Legacy As Luciano grew older, his long-time relationship with Lansky began to falter. Luciano felt he wasnt getting his fair share from the mob. Disgruntled, he arranged to have his memoirs written- not to bare his soul so much as to set the record straight as he saw it. He outlined his exploits to writer Richard Hammer and had also arranged to meet with producer Martin Gosch about a possible film version of the project. Word of his confessional (The Last Testament of Lucky Luciano: The Mafia Story in His Own Words, published posthumously) did not sit well with Lucianos former mob associates. In 1962, Luciano suffered a fatal heart attack in the Naples airport, where he talked about the movie with Gosch. There is some conjecture that Luciano did not die of natural causes and that his death may have been a hit in retribution for his turning canary. Lucianos body was sent back to the United States and buried at St. Johns Cemetery in New York City. It is believed that Luciano was one of the most powerful men in organized crime and to this day, his influence over the gangster activity can be felt in this country. He was the first person to challenge the old Mafia by breaking through ethnic barriers and creating a network of gangs that comprised the first national crime syndicate and continued to exert control organized crime long after his death. Sources Donati, William. Lucky Luciano: The Rise and Fall of a Mob Boss. Jefferson, North Carolina: McFarland Company, 2010.  Gosch, Martin A.; Hammer, Richard. 1974.  The Last Testament of Lucky Luciano: The Mafia Story in His Own Words. Little Brown and Company.Newark, Tim. Boardwalk Gangster: The Real Lucky Luciano. New York: Thomas Dunne Books, 2011.

Osteogenesis Imperfecta Research Paper Example | Topics and Well Written Essays - 1500 words

Osteogenesis Imperfecta - Research Paper Example The bigger amino acid network leads to the formation of steric obstruction that creates a swelling in the collagen structure which consequently affects the contact of molecules with one another as well as the nanomechanics of molecules. As a result of this reaction the body responds by dissolving the deformed structure of collagen because if the body does not do so, the interaction existing between the collagen fibers and hydroxyapatite particles that form the bone is changed making them weak and brittle. Another reason that is suggested for the occurrence of this disease is the state of stress at the collagen fibers; when the stress level changes at the points of mutation, where the bigger cut off pressures lead to rapid failing of fibrils even at medium level. There are a lot of reasons all related to the genes that lead to osteogenesis imperfecta. This disease is generally perceived as hereditary however this is not the case. There are eight different types of osteogenesis imperfe cta, most common being Type 1. ... Hearing impairment in infants Slight protuberance of the eyes Type II The quality as well as the quantity of collagen in this type is poor. Most patients suffering from this type of osteogenesis imperfecta die in the initial years of life due to respiratory breakdown or cerebral hemorrhage. The lungs are underdeveloped due to which the patients face respiratory problems. Deformation of bones and small physique Type II is further classified into type IIA, type IIB and type IIC. Type III The quantity if collagen is sufficient but it is not of the required quality. The deformity of bones is such that sometimes they break eve before birth. Possibility of respiratory problems Short physique, bending of the spinal cord and in some cases the shape of rib cage is spiral Joints are loosened The tone of muscles in the arms and legs is of poor quality Discoloration of sclera which turns it form normal white to blue Hearing problems in early ages of infancy Type IV The quantity of collagen is su fficient but quality is not up to the mark. This type is very much similar to Type I as far as the classification is concerned. The fracture of bones starts in the teenage years Rib cage is barrel shaped which leads to deformation of lungs consequently resulting in respiratory problems. The deformity of bone is mild to medium level. Hearing loss starts from a very early age. Type V This has the same clinical characteristics as that of type IV with interconnected appearance of bones being the basic distinguishing factor. Type VI It has the same clinical characteristics as that of type IV. This stage is distinguished by the fish like appearance of the bones. Type VII This type was discovered in the year 2005

Employee Law and Relation Assignment Example | Topics and Well Written Essays - 2000 words

Employee Law and Relation - Assignment Example This article analyses the basic requirement or what qualifies to bring a claim for unfair dismissals and reviews the recent judgments on termination of employment contract and leads to a broad understanding of what courts consider fair and unfair dismissals. The law explains employee as a person who is employed to provide services to a firm or company on the continuous basis in return of some compensation, who doesn't provide the same services as a part of the independent business. A contract of the employment consists of express terms and implied terms. Express terms explain the terms agreed between the employer and employee, which includes wages and anything, which is related to it. The express contracted terms may not be written one. The express terms may be found in pay slips, letters given to employees before or after he or she started working or in any letter the employee was asked to sign during the course of work. When a particular employment problem crops up it has to be ascertained that whether the employer is a worker. However, any document like, pay slips, the job advertisement any letter sent by the employer in possession of the employee itself will prove that he or she is a worker of that company. The employee must have 12 months continuous service, there are exceptions to this rule. Even if the employee has less than 12 months service he/she may bring a claim for unfair dismissal if he/she is dismissed for the reasons mention under unfair dismissal clauses. To bring a claim under unfair dismissal act the employee must have worked under a contract of service or employment and must have been dismissed in order to raise a claim. In constructive dismissal, the employee resigns, but claims that his employers conduct towards him was the reason to resign the job. If the employer disputes the dismissal, the onus of proving the dismissal lies with the employee, and then only the claim will continue to the next stage. If the employee qualifies under the unfair dismissals legislation he may bring the claim to The Rights Commissioner or Employment Appeals Tribunal.  Ã‚  

Ethics and Law in Dental Hygiene: Case Studies 16 and 17 Essay

Case 16 This case presents a very delicate situation that presents many legal and ethical questions. Do you tell your brother his partner has HIV? I would tell my brother, but the how and when, may vary based on circumstance. From a professional ethical standpoint, it would be unethical to disclose the patient’s HIV status without consent. It would violate the patient’s right to confidentiality, as it is the patient’s choice whom information may be shared with (Beemsterboer, 2010, p. 50). It could also be argued that it is a violation of the principle of nonmaleficence. By providing the patient’s HIV status to people unbound by HIPAA, you are putting the patient at risk of discrimination. This could cause mental anguish or psychological issues, therefore, in essence, inflicting harm on the patient. The most valued application of nonmaleficence is, â€Å"One ought to not inflict harm† (Beemsterboer, 2010, p. 42). This would outweigh the ethical argument th at you are also preventing harm to your brother, another less important application of nonmaleficence (Beemsterboer, 2010, p. 42). There is one professional ethical principle that I would argue was being applied. This being the principle of paternalism, stating that healthcare providers should do what they deem best for the patient according to their ability and judgment (Beemsterboer, 2010, p. 47). If the patient had a sexual encounter with the brother, and did not inform him of her HIV status, she may be arrested for reckless endangerment according to Pennsylvania law. A case where an HIV-positive person did not disclose their status to their sexual partner was brought before the Pennsylvania Superior Court. According to Pennsylvania law, â€Å"Disclosure of HIV status is a defense ag... ...w in Dental Hygiene (pp. 39-53). St. Louis, MO: Saunders Elsevier. Commonwealth of Pennsylvania State Board of Dentistry. (2012, September). Section 4.1 Reason for Refusal, Revocation, or Suspension of License or Certificate. In The Dental Law Act of May 1, 1993, P.L. 216, No. 76 Cl. 63. Harrisburg, PA, USA: Pennsylvania Department of State. Hanson, J. R. (n.d.). Fraud or confusion? RDH Magazine, 19(4). Retrieved 3 15, 2014, from http://www.rdhmag.com/articles/print/volume-19/issue-4/feature/fraud-or-confusion.html Smith, A. (2013). How NOT to commit dental insurance fraud! Retrieved from Amy Smith Consulting LL.: http://www.amysmith.biz/tip-of-the-month/2013/6/25/how-not-to-commit-dental-insurance-fraud.html Violations of Public Policy. (2007). Retrieved from Wrongful Termination: http://www.wrongfultermination.com/index.php?option=com_content&task=view&id=66

Incarceration Essay

There has been a lot of discussion regarding the prison population in the United States but little efforts have been engaged in regard to the transformations observed in the composition of the jail population. The law enforcement agents are under obligation by the federal, state, and local authorities to arrest and confine individuals who are criminal suspects. It is the duty of our judicial system to imprison individuals who are crime convicts. The confinement that is imposed on individuals whether prior to or after conviction is what is referred to as incarceration. Any person irrespective of race, color, sex, and age is subject to incarceration at least in theory according to the constitution. Studies have however continued to show increasing imbalance in our penal institutions as more African Americans and Hispanics continue to account to a slightly larger percentage in comparison to the whites. This paper shall present an analysis of the structural inequality as observed in the judicial system within the United States. Structural Inequality: Structural inequality is something that is affecting virtually all societies around the world. This phenomenon however does not stem from the variations amongst individuals as generally thought, but it can be attributed to the meanings and values that individuals hold in regard to these variations. These values and meanings become systemized and thus the foundation of inequality in our society. The society becomes stratified based on differences between the individuals. This leads to a hierarchical society where prejudicial values and attitudes are developed which affects the views held by the different categories of individuals (Bartels-Ellis, 2010). The US is among the world’s most leading jailers with a rating of 750 imprisonments in every 100,000 individuals (Williams, 2009). The prison population is however disproportional with African Americans and the Hispanics and other minority groups accounting for a larger percentage compared to the majority whites. It is estimated that over 60% of the prison population is from the minority groups. The imbalance in the incarcerated population has been attributed to the war against drugs that has gained momentum in the recent past. This has had a toll on the minority groups though studies have continued to indicate that drug use is also a significant phenomenon amongst the whites. The judicial system has therefore been accused of racist discrimination when it comes to matters of fair and effective judgment (Williams, 2009). Racial Bias in the Judicial System: Racial inequalities have been observed when it comes to judicial matters in the United States. There are great variations in the incarceration of different racial groups that make up the population of the US (Martel, 2008). Studies have continued to reveal the unending trend of disparities in the criminal justice system as revealed by the United States Census Bureau in 2000. According to the Bureau, there is un-proportional representation in the incarceration within the US penal institutions which happens to favor the whites. As of the year 2000, out of close to 2 million adult prisoners, 63% were from the minority groups including the African Americans and Latinos. Such disparities are in contravention of the general population as it has been established that the minority groups account for only 25% of the general population (Human Rights Watch, 2002). Statistics: According to Families Against Mandatory Minimums (FAMM), in every twenty blacks aged over 18, one is likely to be in prison whereas for the whites, the imprisonment rate is put at one in every 180 individuals. The African Americans and the Hispanics comprise of about 2/3 of the prison population. As of the year 2001, African American males and Hispanic males had a higher chance of being imprisoned compared to the whites. The blacks had a 32. 2% chance; Hispanics 17. 2% chance; whereas the whites had a 6% chance. In the year 2003, African American prisoners accounted for a larger portion of those serving a term of more than one year at 44% of the prison population followed by the whites at 35% whereas the Hispanics accounted for the remaining 19% (Families Against Mandatory Minimums Foundation, 2010).

US Institutions in the Global Financial Crisis - Free Essay Example

Sample details Pages: 10 Words: 3069 Downloads: 2 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? This essay discusses about the global financial crisis that struck United States. It will look at what measures did US government took to protect these financial institutions. Then it will analyze shareholder and stakeholder models of corporate social responsibility, then relate this theory with the situation. Next it will discuss whether US governments action could be justified from either or both of these models and it will talk about the short and long term consequences of government intervention. And in conclusion it will discuss whether actions taken by US government is best for society or not. The global financial crisis all started back in 1977, when Community Reinvestment Act was passed by 95th US Congress and signed into law by president Jimmy Carter (Busy Times, 2008). It was designed to encourage commercial banks to meet the needs of borrowers in all segments of the communities, including low-income neighborhoods (Busy Times, 2008) Then initially led by very low interest rate regime during Alan Greenspans era, 2000 2006, it allows homebuyers to take up mortgage with low interest as it allow financial institution to generate income growth, and one of it is subprime lending, practice of making loans to borrower who do not qualify for market interest rates of traditional housing mortgages cause it had problems with their credit history or the credibility to prove they had enough income to support the loan payment (Busy Times, 2008). Through this, borrowers with bad credit history were able to get a mortgage loan, even borrowers with no income, job and ability to repay; consequently it decreases the lending standards, as shown below (Busy Times, 2008). With this situation, 2nd tier institutions were lending money to homeowners, and then securitize the assets and sell it to major US financial institutions including many investment banks, and those investment banks sold it to investors (Busy Times, 2008). This cycle allow bank to earn extra income for the sale, consequently this let to a sharp rise in household debt, graph 1 (Busy Times, 2008). At first it was not a problem cause house price kept growing for years, graph 2, thus borrower could not repay the loan, bank could always foreclose mortgage and sell the collateral (the house) at a higher price (Busy Times, 2008). - Graph 1 Household Debts (APRA, 2008) Graph 2 House Price (APRA, 2008) - But as housing affordability fell, housing prices rose more than disposable income, this meant people were not up to meet the test of subprime, therefore banks income would fall due to lower volume of loans, but there were unrealistic expectations of asset growth in housing (Busy Times, 2008). Housing prices starts to fall, and more and more people defaulted, so now there are more houses in the market than buyers, which causes housing prices to fall even further (Busy Times, 2008), which mark the start of the global financial crisis. Global Financial Crisis initially started in United States, and United States being a super power country, brings a huge impact to the rest of the financial world. Trying to fix this, United States government responded by providing some solutions, one of it is Troubled Asset Relief Program (TARP). The Troubled Asset Relief Program (TARP) set up under the Emergency Economic Stabilization Act, 2008 (Ghosh, S. Mohamed, S., 2010), authorized the US Treasury Secretary a total of $700 billion to establish TARP (Ghosh, S. Mohamed, S., 2010). TARP provides wide raging powers to US Treasury secretary to purchase, manage and sell troubled assets held by financial institutions, and to sell or enter into securities, loans, repurchase transaction or other financial transactions with respect to any troubled asset purchased under the Act (Ghosh, S. Mohamed, S., 2010),. Under TARP, bank, thrifts, credit unions, broker dealers and insurance companies are deemed as financial institutions, but central bank or i nstitution that is owned by foreign government is not deemed as financial institution (Ghosh, S. Mohamed, S., 2010),. And as for troubled assets, it include residential, commercial mortgages, securities, obligations and other instruments based on related to such mortgages, in each case originated or issued on or prior to March 14, 2008 as defined by the Act (Ghosh, S. Mohamed, S., 2010). TARP was originally intended to be a lending programme and one that would increase liquidity by encouraging the flow of credit between the banks and from banks to customers (US treasury, 2008a). The idea was to enable federal government to obtain up to US$700 billion of illiquid mortgage backed securities (MBS) and assets backed securities (ABS) and thereby lubricate secondary mortgage markets (US Treasury, 2008a). TARP was also design to minimize losses of financial institutions owing the toxic assets and thereby, inducing credit growth (Ghosh, S. Mohamed, S., 2010), Economic Stabilization Ac t, 2008, states the objective of TARP, is to provide stability to US financial system, preventing disruption in economy at large and financial system and protect US taxpayer (Ghosh, S. Mohamed, S., 2010), The Act also offers setting up of Troubled Assets Insurance Financing Fund (TAIFF), the purpose is providing financial institutions the chance to purchase insurance from government to guarantee their troubled assets (Ghosh, S. Mohamed, S., 2010). But conversely, in about five weeks, Treasury was suppose to buy those toxic assets off the balance sheets of the bank and financial institutions, but instead the Treasury bought non voting preferred stock from banks and institutions through investing TARP funds in them (US Treasury, 2008d). Cause of that, TARP has failed to ensure liquidity, repair confidence, build trusts in the banking system, redress the issues of encouraging lending to homeowners, counter massive foreclosures and contraction in housing market and stop house prices from spiraling downwards (Congress Oversight Panel Report, 2009c; Barr, 2008; McIntyre, 2009). The first tranche of $250 billion TARP money was used to pump in $167 billion in 87 banks in exchange for preferred stock and warrants (US Treasury, 2008e). Next it went to AIG, about $40 billion (US Treasury, 2008f), then to Citibank, about $45 billion in exchange for preferred stocks and warrants (Ericson et al., 2009). As in Wall Street Journal, it discuss that U.S. government made a bail out as of American International Group Inc. (AIG) as it injects $85 billion to the firm, this show the intensity of its concerns about the danger of AIG collapsing to the financial system (Kartnitschnig, M. et a, 2008). The decision was difficult one, as federal government had been strongly resisting overtures from AIG for an emergency loan or intervention that would prevent the insurer from falling into bankruptcy (Kartnitschnig, M. et a, 2008). Cause just a week before, government decided not to intervene to help Lehman Brothers Holdings Inc, as a result it went bankruptcy, but this time government decided AIG was truly too big to fail (Kartnitschnig, M. et a, 2008). U.S. government also took over mortgage lending giants Fannie Mae and Freddie Mac as the teetered near collapse, another Wall Street giants, Merrill Lynch Co agreed to self it self to the Bank of America Corp (Kartnitschnig, M. et a, 2008). In the end, U.S. negotiators negotiate a proposal that could help both sides, which the Federal will lend $85 billion to AIG and in return U.S. government would be entitled to 79.9% equity stakes in form of warrants (equity participation notes) and the two year loan will have Libor (London interbank offered rate) + 8.5% interest rate (Kartnitschnig, M. et a, 2008). Shareholder theory suggest that business are just arrangements by which shareholders advance capital to managers to be utilized for specified ends and for receive an ownership interest in the venture (Beauchamp et al, 2009,p.66). In this perspective, managers perform as agent for shareholders, though bound by agency relationship to do so exclusively for the purposes of their shareholder principle (Beauchamp et al, 2009, p.66). This fiduciary relationship implies that managers does not have the obligation to expand business resources in ways that are not authorized by shareholders, despite presence of societal benefits from doing so (Beauchamp et al, 2009, p.66). However, both shareholders and managers are free to use their private funds for charitable or socially beneficial project, but when performing as officers of the business, managers have the duty not to divert business resources away from the intention of the shareholders, and managers, him or herself are obligated to follow legal directions of the shareholders and are required to maximize shareholder financial returns (Beauchamp et al, 2009, p.66). Nevertheless, it does not state that managers to ignore ethical constrai nts in pursuit of profits, rather it make certain managers are compelled to pursue profits by all legal and non deceptive means (Beauchamp et al, 2009,p.66) Adam Smiths invisible hand argument state the market is efficient if everyone is allowed to pursue Conversely, shareholder theory has been looked from two different perspectives, which are consequentialist and deontological. Consequentialist, argue that businesses or businesspersons does not have any social responsibilities, other than to legally and honestly maximize profits of the firms (Beauchamp et al, 2009,p.67). Deontological side; argue that based on observation, shareholders transfer their funds to business managers on the provision, those funds are used on their wishes (Beauchamp et al, 2009,p.67). If managers accepted those funds on that specific circumstance, they are not allowed to spend it to accomplish social goals, other than authorized by shareholders, and if they did without authorization, they would be viola ting their agreement and spending other peoples money without their concern (Beauchamp et al, 2009,p.67). Stakeholder theory, a theory of organizational management and business ethics that addresses morals and values in managing an organization (Philip et al, 2003), as in the definition above, the theory itself is divided into two parts, organizational management and business ethics. The organizational management side is known as Empirical theory of management and the business ethics as Normative theory of business ethics. As in this essay, it will focus on the Normative theory of business ethics. Empirical theory of management just discuss about effective managements are required for balancing consideration of and attention to the legitimate interest of all stakeholders, anyone who has stake on firm (Beauchamp et al, 2009,p.69). Normative theory in the other hand, argue, regardless whether stakeholder management leads to improved financial performance, managers should manage the business for the benefit of all stakeholders (Beauchamp et al, 2009,p.69). It views firms not as a mechanism for increasing stockholders returns, rather as a vehicle managing stakeholder interests and sees management as having a fiduciary relationship not just to stockholders, but all stakeholders (Beauchamp et al, 2009,p.69). As a result, it guides management to give equal interest to all stakeholder (Beauchamp et al, 2009,p.70), therefore in this normative form, stakeholder theory imply business have true social responsibilities (Beauchamp et al, 2009,p.70) But normative theory and empirical theory agree on one thing, the best way to enhance the stakeholders return on their investment is to pay attention to the legitimate interests of all stakeholders (Beauchamp et al, 2009,p.69). Stakeholder theory holds that managements fundamental obligation is not to maximize the firms financial success, but to ensure its survival by balancing the conflicting claims of multiple stake holders (Beauchamp et al, 2009,p.69). Meeting this obligation, act accordance to two of stakeholder management must be done, which are, principal of corporate legitimacy and stakeholder fiduciary duty. Principle of corporate legitimacy, the corporation should be managed for the benefit of its stakeholders: its customers, suppliers, owners, employees, and the local communities(Beauchamp et al, 2009,p.70). The rights of these groups must be ensured and, further, the group must participate, in some sense, in decisions that substantially affect their welfare (Beauchamp et al, 2009,p.70) Stakeholder fiduciary duty, management bears a fiduciary relationship to stakeholders and to the corporation as an abstract entity, which must act in the interests of the stakeholders as their agent, and it must act in the interests of the corporation to ensure the survival of the firm, safeguarding the long term stakes of each group(Beauchamp et al, 2009,p.70). As to shareholder theory, the act ions of the corporations comply with this theory, as corporations look for sources of income through securitization process. The cycle begin with institutions lending money to homeowner, then securitizing the assets and selling it to major U.S. financial institutions including many investment banks, and finally those investment sell it to investors (Beauchamp et al, 2009, p.66). This allow bank to earn extra income for sale, and generate a massive income (Beauchamp et al, 2009, p.66). By doing so, it comply with the shareholder theory, as it argue that businesses or businesspersons does not have any social responsibilities, other than to legally and honestly maximize profits of the firms, but this theory is best for short term (Beauchamp et al, 2009, p.67). Since the theory emphasize on best to maximize profit, banks lower their standards of lending, not thinking thoroughly the consequences, banks were able to lend more and to securitize more, which can generate more income (Beaucha mp et al, 2009, p.66). At first it was not a problem at all, as if borrower could not repay loan, bank could always foreclose mortgage and sell collateral (house) at a higher price, cause house price kept growing for years (Beauchamp et al, 2009, p.67). But as years past by, housing affordability fell, since supply is less then demand, to be able to equalize it, price need to be put up (Beauchamp et al, 2009, p.66). As housing price rose more than disposable income, more people were not up to meet the test of subprime, for that reason banks income would fall due to lower volume of loans (Beauchamp et al, 2009, p.67). But due to unrealistic expectations of asset growth in housing, housing prices start to fall and more and more people defaulted, so now there is more supply than demand (Beauchamp et al, 2009, p.67). To equalize this, price needs to be put down, soon as housing prices fall down, it marked the start of the global financial crisis. Fiduciary duty of a shareholder theor y is to maximize their income for their shareholder, and neglecting other factors (Beauchamp et al, 2009, p.67). But in stakeholder theory, the fiduciary duty is to act in the interest of the stakeholder and must act in the interest of the corporations to ensure survival of the firm, safeguarding long-term stakes of each group and it holds that managements fundamental obligation is not to maximize the firms financial success, but to ensure its survival by balancing the conflicting claims of multiple stakeholders (Beauchamp et al, 2009, p.67). It also view firms not as mechanism for increasing stockholders returns, rather as a vehicle managing stakeholder interests and sees management as having a fiduciary relationship not just to stockholders, but all stakeholders (Beauchamp et al, 2009, p.66). As a result, it guides management to give equal interest to all stakeholder, therefore in this normative form, stakeholder theory imply business have true social responsibilities (Beauchamp e t al, 2009, p.67). It also suggested, corporation should be managed for the benefit of its stakeholders: its customers, suppliers, owners, employees, and the local communities(Beauchamp et al, 2009,p.70). The rights of these groups must be ensured and, further, the group must participate, in some sense, in decisions that substantially affect their welfare (Beauchamp et al, 2009,p.69). As what the U.S. government does, it complies with this theory. U.S. government intervenes with this situation, to help stabilize the financial system, cause if not, the financial crisis could have a worsen affect and everyone would suffer more. The U.S. government intervenes through TARP (Troubled Asset Relief Program). Those funds in TARP were used to pump in $167 billion in 87 banks in exchange for preferred stock and warrants (US Treasury, 2008e). Then to AIG, $40 billion (US Treasury 2008,f) then Citibank, $45 billion in exchange for preferred stocks and warrants (Ericson et al., 2009). U.S. go vernment also took over mortgage lending giants Fannie Mae and Freddie Mac as the teetered near collapse (Kartnitschnig, M. et al, 2008). The U.S. government also offers setting up of Troubled Assets Insurance Financing Fund (TAIFF), to help financial institutions have a chance to purchase insurance from government to guarantee their troubled assets (Ghosh, S. Mohamed, S., 2010). By those actions, it could show that US government is complying with the stakeholder theory. As the US government intervenes with those funds, it shows an act in interest of the corporations to ensure survival of the firm, safeguarding long term stakes of each group, and holds that managements fundamental obligation not to maximize the firms financial success, but to ensure its survival by balancing the conflicting claims of multiple stakeholder (Kartnitschnig, M. et al, 2008). Although the fundamental obligation was not to maximize firms financial success, but there fiduciary duty also stated to act in the interest of shareholder, and shareholder does want returns on their investment. Therefore the U.S. lend the $85 billion to AIG, but in return to U.S. government, U.S. government would be entitled to 79.9 equity stakes in form of warrants and 2 year loan will have Libor + 8.5% interest rate (Kartnitschnig, M. et a, 2008). This show both short term and long term consequences of this government intervention generate a positive outcome, as for the short term, US government sustain those companies from bankruptcy, so it does not worsen the financial crisis, hurting more people in their financial situation. For the long term, the US government benefit from the interest rate that they get from those banks. But from bailouts, it could also bring negative short-term effects, such as higher taxes, bigger government and lower salaries (Taylor, M., 2007). As well as for long term, it could bring negative effects, such as government abandoning fiscal discipline, asset bubble or inflation could occur and commodities bubble driven by negative real interest rate (Peng, B.,2008). In conclusion, this essay has discussed about the global financial crisis that struck United States. It discussed the measures that US government took to protect these financial institutions, such as TARP or TAIFF. It also have discussed and related shareholder and stakeholder models of corporate social responsibility with the Global Financial Crisis, by justifying US government action from either of these models and analyzing the short and long term consequences of the government intervention, and the conclusion that the action that US government has taken for this current situation was best for society, as if US government have not taken those steps. It could have worsen the financial crisis and have a greater impact to others countries, just like a domino affects. Cause United States is a super power country, which have a lot of impacts to other countries in this world. By taking those s teps, it was best for this society. Don’t waste time! Our writers will create an original "US Institutions in the Global Financial Crisis" essay for you Create order