Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Angella MacEwen takes a look at the large numbers of unemployed and underemployed Canadians chasing a tiny number of available jobs. And Carol Goar calls out the Cons and the CFIB alike for preferring disposable foreign workers to Canadians who aren't being offered a living wage:

If employers want to talk about the government’s abrupt about-face, that is legitimate. If they want an “adult conversation” about work and remuneration, they should be ready to answer some key questions:

• Why should they be exempt from market discipline? The law of supply and demand provides a clear solution to domestic labour shortages. Raise wages or improve working conditions.
• Why are they telling Canadians their kids and neighbours have a poor work ethic? Lots of Canadians do dirty, onerous jobs — pick up garbage, go down mines, wash highrise windows.
• Why are they comparing foreign workers whose immigration status depends on their performance to Canadian workers who have the freedom to walk away from exploitative employers?

The business federation is right. It is time to talk honestly about work.

For its members, having a ready supply of low-wage workers may be paramount. For the rest of society, other priorities matter. Canadians want a fair shot at jobs in their own country. They want fair labour practices. They want one set of rules for everybody.

- And Dave Johnson compares soaring CEO pay in the U.S. to the stagnation facing most workers.

- So it's no wonder that Ipsos MORI finds that respondents around the developed world see worse living conditions for younger generations than the ones enjoyed by older ones. And the CCPA highlights part of the problem, as university students are facing far higher tuition (particularly compared to the wages they can earn to invest in their own futures).

- In another prime example of the importance of public policy in shaping outcomes, Matt Bruenig charts the effect of social programs on child poverty - and shows that the difference between the U.S.'s much higher child poverty levels and the lower number in Scandinavian countries arises almost entirely out of differences in benefits.

- Jeffrey Simpson criticizes the Cons' Unfair Elections Act as a whole. And Tim Harper and the Globe and Mail editorial board zero in on the Senate's sad attempt to water down a bill which should be scrapped in its entirety to allow for all-party and public input into the direction of Canada's elections legislation.

- Finally, Colin Macleod looks to have found the perfect descriptor for the Harper Cons.

Tuesday Night Cat Blogging

Bumpy cats.

Tuesday Morning Links

This and that for your Tuesday reading.

- Timothy Shenk discusses Thomas Piketty's contribution to a critique of unfettered capitalism and gratuitous inequality:

Seen from Piketty’s vantage point, thousands of feet above the rubble, the fragility of this moment becomes clear. Economic growth was a recent invention, major reductions to income inequality more recent still. Yet the aftermath of World War II was filled with prophets forecasting this union into eternity. Kuznets offered the most sophisticated expression of this cheerful projection. Extrapolating from the history of the United States between 1913 and 1948, he concluded that economic growth automatically reduced income inequality. This was the moment when, as Piketty observes with both regret and nostalgia, “the illusion that capitalism had been overcome” secured widespread acceptance.

Time soon deflated this optimism. Although the growth of global GDP has accelerated—billions of people across Asia are now catching up to their rivals, a position analogous to Europe after World War II—the best available evidence suggests that these levels are impossible to sustain at the technological frontier. Europe’s per capita growth dropped to just below 2 percent from 1980 to 2012; the United States’ was even slower, coming in at 1.3 percent. Meanwhile, the link between rising GDP and falling inequality was severed, with the largest gains from diminished growth flowing to the richest of the rich—not even to the 1 percent, but to the one-tenth of 1 percent and higher.

Although the contours of Piketty’s history confirm what economic historians already know, his anatomizing of the 1 percent’s fortunes over centuries is a revelation. When joined to his magisterial command of the source material and his gift for synthesis, they disclose a history not of steady economic expansion but of stops and starts, with room for sudden departures from seemingly unbreakable patterns. In turn, he links this history to economic theory, demonstrating that there is no inherent drive in markets toward income equality. It’s quite the opposite, in fact, given the tendency for the returns on capital to outpace growth.
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Despite the lengthy historical surveys, Capital in the Twenty-First Century, as its title implies, is as much about the future as it is about the past. Per capita growth for developed economies, Piketty believes, has settled at approximately its maximum sustainable rate, around 1 percent annually. That was enough to make people in the nineteenth century feel they were caught in perpetual revolution, but judged by the best of the twentieth century, or China and India today, it seems positively anemic. With growth reduced, escalating income inequality is all but inevitable without aggressive policy intervention. Piketty’s demand for a global progressive tax on capital has garnered the most attention, usually from commentators eager to dismiss it as utopian. But the global tax is more of a rhetorical gambit than a substantive proposal. It is designed to make Piketty’s real aspiration—the same tax, but confined to the European Union—seem more attainable. When the alternative requires obtaining planetary consent, making one continent sign on to a policy becomes a reasonable reach. Countries as large as the United States, he believes, could go it alone with considerable success.

Progressive taxation of capital is one part of a larger project that Piketty calls building “a social state for the twenty-first century.” This economist is no revolutionary: the major arguments over the structure of government, he believes, have already been settled. The twentieth century bequeathed a vision of government responsible for the education, health and pensions of its citizens, and those obligations will be upheld in the twenty-first. For Piketty, the most urgent task is not raising the general welfare but clawing back the advances of the 1 percent. Much needs to be done, he writes, “to regain control over a financial capitalism that has run amok.”

- The Globe and Mail slams the Cons for continuing to push the Unfair Elections Act, while Michael Bolen and Lawrence Martin both see it as a northern expansion of Republican-style vote suppression. Adam Shedletzky worries that it represents the end of reason in our electoral system, while Patti Tamara Lenard discusses its infringement on voting rights. And Bruce Cheadle reports that the federal government defended the Cons' previous ID requirements by pointing to exactly the vouching process which is to be eviscerated under the Unfair Elections Act.

- Meanwhile, Alice Funke notes that the Cons' current MPs are fleeing into seemingly safer new ridings - suggesting they don't think they can win where they did in 2011. And Chantal Hebert points out Stephen Harper's eroding support - offering another indication as to why fighting a fair election in 2015 simply isn't an option for the Cons. 

- Andrew Nikiforuk writes about the combination of minimal safety enforcement and high rates of worker injuries in the tar sands. And PressProgress wonders whether this will be the week that the oil industry's constant spin finally unravels.

- The Globe and Mail argues that we should be encouraging long-term immigration rather than driving down wages through temporary and disposable labour.

- And finally, Gerald Caplan analyzes Quebec's provincial election, and finds that the biggest winner was a party which didn't contest it:

(S)omething significant seems to have changed within Quebec’s political culture. It appears that many young Quebecois, traditionally separatists and social democrats, voted Liberal Monday night to express their weariness with separatism and their disillusionment with the PQ’s embrace of Pierre-Karl Peladeau and neoliberalism. That’s nothing but good news for the NDP. In the 2011 federal election, many young Québécois abandoned the Bloc and joined the Layton orange wave, electing a ginormous contingent of NDP candidates. Under Tom Mulcair, those MPs, many young and inexperienced, have acquitted themselves surprisingly well. If played right – a big “if” for any political party, as Monday’s election reminded us – their appeal to younger Quebecois should be another NDP slam dunk.

On vested interests

Shorter Linda Frum:

As one of Stephen Harper's hand-picked counterweights to the troublesome democratic rabble, I refuse to acknowledge any difference between "encouraging voter turnout" and "abetting electoral fraud". The less people with a voice in how this country is run, the better.

Monday Morning Links

Miscellaneous material to start your week.

- Michael Harris observes that the Cons' vote suppression tactics match the worst abuses we'd expect from the Tea Party:

Stephen Harper would make a good governor of Arizona.

In addition to the lies and sleaziness his government has been serving up during its majority, its sickening reliance on marketing over truth, its dishonest use of technology in political matters, and its shameful abuse of language, the prime minister is blighting democracy in the name of political advantage.

When Stephen Harper gave Canada fixed elections dates, no one expected a whole lot more “fixing” was still to come. There was; Bill C-23. By potentially removing hundreds of thousands of voters from the next election, Canada could now have elections with fixed dates and fixed results.

- Joseph Heath writes about the need to shift from a political culture grounded entirely in talking points and instant responses to one which allows for substantial consideration of policy choices - while the recognizing the difficulty in trying to shift from one to the other. And Susan Delacourt points out that the assumption that voters won't or can't understand even moderate policy discussion lies at the root of the problem:

Everyone has heard about income inequality — the widening gap between haves and have-nots. It’s the big public-policy challenge of our time.

But there’s another form of inequality that should also be worrying us. Let’s call it information inequality: the widening gap between those in the know and those who know not. When did facts and evidence become the domain of an elite few?

I spent a lot of time the past few years researching a book about how marketing has taken over Canadian political culture and policy-making. Some of this all-marketing, all-the-time approach threatens to make wants more important than needs, the short term more important than the long term and advertising more powerful than journalism. It’s a culture that rewards people who can whip up emotions rather than those who can marshal facts and evidence to make their case; a culture where anecdotes trump statistics.
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The mark of a healthy economy, we’re told, is one in which everyone has a chance to improve his or her lot in life. A healthy democracy should work the same way — a society in which everyone has a chance to know more, where we don’t write people off as permanently apathetic, any more than we’d write them off as permanently poor.

If we want to close that information gap, we need more “responsibility to inform” and less “people don’t care.”

- Meanwhile, Tim Harper notes that voters in Calgary Signal Hill and Kitimat both sent strong messages over the weekend that they won't mindlessly defer to those with money or power in making important political decisions.

- Which isn't to say the Cons will stop trying to hand over as much power to the corporate sector as they can get away with. On that front, Randall Affleck comments on the increased power being handed to big agribusiness to prevent farmers from using seeds; Tara Carman catches the Cons once again enabling employers to hire cheaper foreign workers rather than Canadians looking for jobs; and Michael Geist notes that what's being billed as privacy legislation is also being used to allow businesses to share Canadians' personal information for commercial purposes.

- And in case we needed a reminder as to whether we can expect business to give anything back in exchange for being handed the world on a silver platter, Steve Benen reports on Caterpillar's brazen tax avoidance.

- Finally, Robyn Benson discusses how strong public services serve as a much-needed antidote to inequality.

Sunday Morning Links

Assorted content for your Sunday reading.

- Will Hutton writes about Thomas Piketty's rebuttal to the false claim that inequality has to be encouraged in the name of development - and the reality that we have a public policy choice whether to privilege returns on capital or broad-based growth:

It is a startling thesis and one extraordinarily unwelcome to those who think capitalism and inequality need each other. Capitalism requires inequality of wealth, runs this right-of-centre argument, to stimulate risk-taking and effort; governments trying to stem it with taxes on wealth, capital, inheritance and property kill the goose that lays the golden egg. Thus Messrs Cameron and Osborne faithfully champion lower inheritance taxes, refuse to reshape the council tax and boast about the business-friendly low capital gains and corporation tax regime.

Piketty deploys 200 years of data to prove them wrong. Capital, he argues, is blind. Once its returns – investing in anything from buy-to-let property to a new car factory – exceed the real growth of wages and output, as historically they always have done (excepting a few periods such as 1910 to 1950), then inevitably the stock of capital will rise disproportionately faster within the overall pattern of output. Wealth inequality rises exponentially.

The process is made worse by inheritance and, in the US and UK, by the rise of extravagantly paid "super managers". High executive pay has nothing to do with real merit, writes Piketty – it is much lower, for example, in mainland Europe and Japan. Rather, it has become an Anglo-Saxon social norm permitted by the ideology of "meritocratic extremism", in essence, self-serving greed to keep up with the other rich. This is an important element in Piketty's thinking: rising inequality of wealth is not immutable. Societies can indulge it or they can challenge it.
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The lesson of the past is that societies try to protect themselves: they close their borders or have revolutions – or end up going to war. Piketty fears a repeat. His critics argue that with higher living standards resentment of the ultra-rich may no longer be as great – and his data is under intense scrutiny for mistakes. So far it has all held up.

Nor does it seem likely that human beings' inherent sense of justice has been suspended. Of course the reaction plays out differently in different eras: I suspect some of the energy behind Scottish nationalism is the desire to build a country where toxic wealth inequalities are less indulged than in England.

The solutions – a top income tax rate of up to 80%, effective inheritance tax, proper property taxes and, because the issue is global, a global wealth tax – are currently inconceivable.

But as Piketty says, the task of economists is to make them more conceivable. Capital certainly does that.

- And Paul Krugman takes a look at the gross amount of wealth - by Gabriel Zucman's estimate up to 8% of all the wealth on the planet - which has been funneled to tax havens in order to be isolated from any contribution to the social good.

- Of course, any public response to the continued distortion of political systems in favour of the wealth will require a massive amount of citizen activism. And Alexandra Bradbury and Jane Slaughter discuss how to build an enduring movement.

- Meanwhile, Kitimat's plebiscite rejecting the Northern Gateway pipeline should serve as an important demonstration that even the best-funded corporate propaganda campaign won't necessarily win out against a strong community.

- But it's a much more difficult task to achieve a change in general policies. And there's plenty of reason to focus on the Cons' continued refusal to regulate the oil industry which now represents Canada's largest source of CO2 pollution - particularly as the rest of the world starts to notice that renewable alternatives are well within reach.

- Finally, Marianne Lenabat wonders how Canada has been turned into one of the most reactionary actors on the global scene in recent years even when public opinion is still generally favourable toward social democracy.

Saturday Morning Links

Assorted content for your weekend reading.

- Ezra Klein comments on the U.S.' doom loop of oligarchy - as accumulated wealth is spent to buy policy intended to benefit nobody other than those who have already accumulated wealth:

On Thursday, the House passed Paul Ryan's 2015 budget. In order to get near balance, the budget contains $5.1 trillion in spending cuts — roughly two-thirds of which come from programs for poor Americans. Those cuts need to be so deep because Ryan has pledged not to raise even a dollar in taxes.

As a very simple rule, rich people pay more in taxes and poor people benefit more from services. So if you pledge to balance the budget without raising taxes, you're going to end up making the rich richer and the poor poorer. But Ryan goes further than that: he actually cuts taxes on the rich.
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Wealthy people will be even better poised to influence the 2014 and 2016 elections than they were to influence the 2010 and 2012 elections. Now, wealthy people are not a single voting bloc, but most wealthy people would like to continue being wealthy. And so you see bipartisan movement towards policies that protect their wealth, most recently with the Democratic legislature in Maryland voting to eliminate the state's estate tax.

Over time, a political system that gives the wealthy more power is a political system that is going to do more to protect the interests of the wealthy. It's the Doom Loop of Oligarchy, and we're seeing it daily.

- Meanwhile, Jim Stanford documents Canada's own descent into neoliberalism. And Carol Goar highlights how the Cons are doing their utmost to eliminate opportunities for young workers.

- The National Post's editorial board points out the absurdity of the Cons attacking their own appointed Chief Electoral Officer. Andrew Coyne calls out the Cons for turning what should be wholly unobjectionable principles - such as an accurate census and a fair electoral system - into their own political firing line. And Tabatha Southey duly mocks the assertion that Elections Canada is the new Illuminati.

- But then, a party merrily engaged in systemic illegality - such as, say, interference with access to information - figures to have little choice but to try to shout down any investigation which might reveal what it's actually up to.

- Finally, Thomas Walkom reminds us about some of Jim Flaherty's deliberate cuts to important public services including the CBC. And PressProgress charts how Lib and Con governments alike have slashed Canada's public broadcaster over the past three decades.

Musical interlude

Weekend Players - Pursuit of Happiness

Friday Morning Links

Assorted content to end your week.

- Linda McQuaig responds to the CCCE's tax spin by pointing out what's likely motivating the false attempt to be seen to contribute to society at large:

Seemingly out of the blue this week, the head honchos of Canada's biggest companies, the Canadian Council of Chief Executives, put out a media release insisting that their taxes are not too low.

This defensive posture -- who mentioned murder? -- reveals they fear others may be slowly catching on to the massive transfer of wealth to the richest Canadians that's been going on for the past 14 years due to the systematic cutting of corporate tax rates.

If Canada's corporate tax rate was the same today as it was in 2000, we'd be collecting roughly an extra $20 billion a year in taxes -- enough to fund national child care, free university tuition, children's dental care or other programs that have long existed in other advanced countries but that no one here, in these lean and mean times, dares to be caught dreaming about anymore, let alone advocating out loud.
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(T)he CBC's interview with Howlett sparked gasps of rage from the bowels of the business press, notably Terence Corcoran in the National Post -- even though a detailed description of the Cameco case and other tax avoidance schemes had just appeared in a special issue of Canadian Business under the cover headline: How to pay no taxes -- Many of Canada's largest companies pay almost no tax: What's their secret?

Of course, that report, directed towards a business audience, is seen as harmless. It's quite another matter when that information is used by the likes of Howlett to wake up the Canadian public to this wealth grab by some of our biggest corporations -- companies which pushed governments to slash taxes and then largely avoided even those lower rates by shifting their profits offshore.

- David McKie reports on the PBO's latest study - which shows that the federal government has once again been underestimating the cost of cleaning up contaminated sites by billions of dollars (which will have to be funded out of the public purse).

- Dr. Dawg discusses the Fort Chipewyan cancer cluster - and the even more cancerous attitude on the part of the Alberta government which is looking to silence the victims rather than acknowledge any health problems which might be caused by the tar sands. And David Climenhaga wonders what comes next now that we know about both the cluster and the province's disdain for those affected.

- Jason Markusoff reports on Calgary's work in figuring out the costs and benefits of new construction - which lead to the conclusion that newly-developed suburban neighbourhoods tend to be a cost sink for at least 11 years, with the cost of repaying the resulting debt eating up any tax revenues for another ensuing decade.

- Finally, Andrew Coyne weighs in again on the Cons' combined refusal to try to justify anything within the Unfair Elections Act, along with their choice to instead declare war on Elections Canada as a diversion from the bill. Anita Vandenbeld describes the bill and its ramming through Parliament as global disgraces. Lawrence Martin notes that the Cons' attacks on Marc Mayrand are mostly a matter of fear that the truth about 2011 electoral fraud is about to be revealed. And Adam Bunch nicely summarizes what's at stake as the Unfair Elections Act is considered by Parliament.

On public priorities

I'm not sure whether last week's column played a role, but there have been an awful lot of attacks on Saskatchewan's Crowns since then at a time when the parties don't seem to be highlighting the issue. So let's sum up the arguments being made to undermine the public enterprises that are serving Saskatchewan so well.

Shorter Will Chabun:

Sure, actual people may be better off because of Crown competition in the wireless sector. But won't somebody think of the rent-seekers?

And shorter Star-Phoenix editorial board:

The Wall Saskatchewan Party has no coherent or sensible policy when it comes to the Crowns. So let's eliminate the only legal barrier to a wholesale sell-off and see what happens.

New column day

Here, on the distance Canada has yet to travel in meeting even the basic needs of our fellow citizens - as well as the promise that Housing First and other new models may help to bridge that gap.

For further reading...
- Michael Green commented on the Social Progress Index here, while Canada's results can be found here.
- By way of comparison to the Social Progress Index, see my earlier post and linked column on other means of going beyond GDP in measuring development, with particular emphasis on the Canadian Index of Wellbeing.
- And CTV reported on the success of Housing First here, while the Mental Health Commission of Canada's summary and detailed report (PDF) are both available for review.

Thursday Morning Links

This and that for your Thursday reading.

- Paul Krugman's review of Thomas Piketty's Capital in the Twenty-First Century includes his commentary on our new gilded age:

Still, today’s economic elite is very different from that of the nineteenth century, isn’t it? Back then, great wealth tended to be inherited; aren’t today’s economic elite people who earned their position? Well, Piketty tells us that this isn’t as true as you think, and that in any case this state of affairs may prove no more durable than the middle-class society that flourished for a generation after World War II. The big idea of Capital in the Twenty-First Century is that we haven’t just gone back to nineteenth-century levels of income inequality, we’re also on a path back to “patrimonial capitalism,” in which the commanding heights of the economy are controlled not by talented individuals but by family dynasties.

It’s a remarkable claim—and precisely because it’s so remarkable, it needs to be examined carefully and critically.
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(I)t turns out that Vautrin was right: being in the top one percent of nineteenth-century heirs and simply living off your inherited wealth gave you around two and a half times the standard of living you could achieve by clawing your way into the top one percent of paid workers.

You might be tempted to say that modern society is nothing like that. In fact, however, both capital income and inherited wealth, though less important than they were in the Belle Époque, are still powerful drivers of inequality—and their importance is growing. In France, Piketty shows, the inherited share of total wealth dropped sharply during the era of wars and postwar fast growth; circa 1970 it was less than 50 percent. But it’s now back up to 70 percent, and rising. Correspondingly, there has been a fall and then a rise in the importance of inheritance in conferring elite status: the living standard of the top one percent of heirs fell below that of the top one percent of earners between 1910 and 1950, but began rising again after 1970. It’s not all the way back to Rasti-gnac levels, but once again it’s generally more valuable to have the right parents (or to marry into having the right in-laws) than to have the right job.

And this may only be the beginning. Figure 1 on this page shows Piketty’s estimates of global r and g over the long haul, suggesting that the era of equalization now lies behind us, and that the conditions are now ripe for the reestablishment of patrimonial capitalism.

- Meanwhile, Sam Ro interviews Gerald Minack about the long-term damage to business as wages get pushed downward in the name of temporary profits. And Don Cayo is the latest to expose the CCCE's dishonest tax contribution spin.

- Tim Harford discusses the corrosive effects of long-term unemployment, noting that people who have been unemployed for six months or more are effectively shut out of the job market afterwards. Kate McInturff points out the continued gender imbalance in hiring both between and within professions. And Armine Yalnizyan highlights what the federal government could do to help younger workers get a foot in the door if it was actually interested in reducing youth unemployment.

- But there's plenty of reason for concern that the needs and preferences of the public aren't generally finding their way into law - as Larry Bartels writes in comparing the relative influence of public opinion and different types of pressure groups:

A forthcoming article in Perspectives on Politics by (my former colleague) Martin Gilens and (my sometime collaborator) Benjamin Page marks a notable step in that process. Drawing on the same extensive evidence employed by Gilens in his landmark book “Affluence and Influence,” Gilens and Page analyze 1,779 policy outcomes over a period of more than 20 years. They conclude that “economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence.”

Average citizens have “little or no independent influence” on the policy-making process? This must be an overstatement of Gilens’s and Page’s findings, no?

Alas, no. In their primary statistical analysis, the collective preferences of ordinary citizens had only a negligible estimated effect on policy outcomes, while the collective preferences of “economic elites” (roughly proxied by citizens at the 90th percentile of the income distribution) were 15 times as important. “Mass-based interest groups” mattered, too, but only about half as much as business interest groups — and the preferences of those public interest groups were only weakly correlated (.12) with the preferences of the public as measured in opinion surveys.

- Finally, Paul Adams asks whether Stephen Harper is done for as a political force.