Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Pat Steenberg observes that the Harper Cons' deficits are the result of conscious choices to reduce government revenue - and that we can fix our deficit and rein in inequality at the same time by reversing the damage:

(W)hen our governments say they can no longer afford something, what they are really saying is that “we” cannot afford it. But is this really the case?

Canada’s average GDP per capita — the value of total productive output divided by the population that produced it — has continued to grow, with a few minor interruptions since 1946. Our national wealth is, relatively speaking, where it has always been.

On the other hand, Canada’s median income — the midpoint income level — currently stands at only two-thirds of GDP per capita. Until the 1970s, Canadian GDP per capita and median income were roughly the same.

Obviously, we don’t have a wealth problem, we have a distribution problem.

Second, we have a revenue shortfall. Tax revenue is the interest we claim for the use of public resources which, collectively, we all own and maintain. Simply put, we are not paying ourselves enough.
...
(W)hy, if the total national wealth continues to grow, in absolute terms, do our governments say they can no longer afford to meet our needs?

Here’s why.

Federal corporate income tax brought in $30 billion dollars in 2012. At the 2004 rate, that would have been $42 billion. Repatriating the lost corporate tax revenues from the dead money reserves, brings us $12 billion. Restoring the GST to 7 per cent (at a cost of 84 cents each, a day) — $10 billion. Rolling back defence spending to 2006 levels — $8 billion. Altogether, that gives us an annual revenue increase of $30 billion. Given that the deficit for 2012 is estimated to be $26 billion, we cannot only balance the books this year, but do so with $4 billion to spare. 

- But in fairness, we shouldn't presume that current social programs are enough to meet obvious needs: as Guy Standing recognizes, the corporatist preference for precarious work has created a need for far more substantial income security programs than the ones we have now.

- Paul Kershaw writes that much of the B.C. NDP's election disappointment can be traced to poor turnout among younger voters - highlighting the need to expand the voter pool rather than merely trying to appear "safe" to swing voters. And Duncan Cameron notes that ultimately, the only winners in the election were business interests.

- Erin Weir points out how Regina stands to get hosed due to the costs of privatized waste water treatment, as the federal funding pursued through a P3 program will simply turn into pure profit for a private operator.

- Finally, Paul Wells comments on the Cons' miserable failure when it comes to research and innovation:

The government has known, since its first year in office, that the private sector is not doing enough applied research. Its response has been to put the brakes on pure research in universities. The result has been that the weakness has continued to aggravate, while the strength has been put in danger. At Davos more than a year ago, Harper said his government would “continue to make the key investments in science and technology necessary to sustain a modern competitive economy.” It’s not clear what he meant by “continue.” It is true that recent changes at the National Research Council are designed to bolster, or accompany, or synergize with, or somehow prop up private-sector applied research. I can only wish the NRC luck. If it manages to push Canada up 7 spots in international rankings of research intensity, the country will be back where it was, compared to peer countries, on the day Stephen Harper became prime minister.

Tuesday Night Cat Blogging

Cats on the rocks.

On instructing clients

Let's once again take a slightly closer look at what's been reported about the Cons' senate scandal - as yesterday's revelations about the involvement of Stephen Harper's special counsel and legal adviser Benjamin Perrin may offer a few more indications as to who was actually pulling the strings.

To start with, here's CTV's reporting on the drafting of the agreement between Mike Duffy and Nigel Wright:

Prime Minister Stephen Harper’s former special counsel and legal adviser worked on the legal deal between Nigel Wright and Sen. Mike Duffy’s lawyer that called for Wright to help Duffy pay off $90,000 in invalid expense claims, CTV News has learned.

Sources told CTV’s Ottawa Bureau Chief Robert Fife that back in February, Benjamin Perrin helped draft the letter of understanding that called for Duffy to publicly declare that he would repay the money. In return, sources say, Wright would give a personal cheque to Duffy to cover the $90,000. Sources say the agreement also stipulated that a Senate investigation into expense claims would go easy on Duffy.
... 

Perrin left the Prime Minister’s Office in April and has returned to his position as an associate professor at the University of British Columbia’s Faculty of Law.

As I noted earlier, it seemed dubious that any lawyers at all would be involved in drafting trust conditions or agreements around a merely personal gift. But Perrin's involvement raises some additional questions - no matter how one interprets the chain of events.

On one hand, it's possible that Wright was treated as being the "client" giving instructions to Perrin. That possibility raises its own set of questions: is it normal practice for publicly-funded counsel at the PMO to deliver personal legal services to staffers? Did Wright pay the PMO for receiving those services from the office's counsel? Would Wright have the authority to release the relevant documents as the client of record - and indeed, might he have waived any solicitor-client privilege by allowing the PMO to take control of them?

The PMO also declined to release the letter of agreement, saying it is now in the hands of Ethics Commissioner Mary Dawson, who is investigating Wright’s $90,000 cheque to Duffy.

On the other hand, it's possible that the story is one of Stephen Harper's legal advisor acting in his official capacity, taking instructions from Stephen Harper's Prime Minister's Office to draft an agreement in which Stephen Harper's chief of staff paid a Stephen Harper Senate appointee to keep quiet.

That might give the PMO a slightly better claim to try to withhold access to the relevant documents from its end (though Duffy and his lawyer would presumably have copies as well which would be relevant to any RCMP or Senate investigation). But the second scenario also includes a rather obvious common denominator - and no matter how determined he is to flee the country, it's hard to see Stephen Harper avoiding full responsibility if every aspect of the Duffy payout was carried out in his name.

Tuesday Morning Links

This and that for your Tuesday reading.

- Murray Dobbin contrasts the B.C. NDP's recent election loss against the type of popular focus which helped Saskatchewan's CCF to earn a twenty-year stay in office in the face of far more hysterical opposition:

You can design a campaign that projects a positive vision of the future but two things about the NDP's approach doomed it to failure. First, you can't run a positive campaign in a month. It takes time to engage people in a vision of the future, even one they agree with.  Secondly, the NDP tied one hand behind its back by failing to hold the Liberals to account for the horrible, destructive policies they implemented over twelve long years.
...
Tommy Douglas and the CCF (the precursor of the NDP) won power in 1944 in a province totally dominated by a Liberal, pro-business party machine for decades. It won a landslide victory in a media atmosphere of absolute hysteria (headline: "CCF will seize farms"), fearmongering and blatant lies. The CCF held power for twenty uninterrupted years. How? It started out as a movement and retained that character for many years afterward. It was deeply rooted in community. People felt ownership of it and its policies and out (of) that came government programs that met the expressed needs of the people. And that, in turn, brought enormous trust in government. 

People's distrust of government now runs so deep that it will take years of trust-building to regain some democratic equilibrium. That means a totally different kind of politics and a totally different kind of political party. Progressive parties run by brain trusts, engaging in politics as a game, will ultimately lose. For them progressive policies are simply pieces on a chess board, not part of a larger vision. And the longer this style of politics goes on, the more institutionalized and inward looking such parties, including the NDP, become.

- But if we're looking at comparing which types of politics deserve some measure of trust, we can rule out a few fairly easily. For example, Martin Regg Cohn writes about the false promise of privatized liquor sales, while Kathy Tomlinson reports on yet more examples of the temporary foreign worker program being used (with the Cons' approval) to replace qualified Canadians with easily-exploited temporary imports.

- In the latest in the Cons' Senate expense scandal, CTV reports that the paperwork for the hush payment from Nigel Wright to Mike Duffy was drawn up by special counsel in the Prime Minister's Office. Michael Harris writes that Stephen Harper's PMO is falling apart, while Lawrence Martin sees the Cons' abuses of power as reaching a critical mass. Sid Green and various Reform alumni all make the case for Senate abolition if the Cons can't be trusted to police their own. Andrew Coyne sets out the laws which the Cons had to know were violated. And while John Ivison may be the last person left to pretend accountability has anything to do with the Cons' value structure, he does nicely contrast the Cons' one-time promises against their actions once in office.

- Meanwhile, the Cons' commitment to accountability also includes blatant patronage and support for criminal bid-rigging. Try to act surprised.

- Finally, Paul Adams rightly notes that the great challenge for media participants in our time is how to manage the vast amount of available information - and that we should see that development as a massive improvement from the restricted supply which once existed. But we should be more than wary of attempts to push information back behind closed doors, whether through laws or through litigation.

Monday Morning Links

Miscellaneous material for your Monday reading.

- Yes, there's plenty more on the Cons' Senate scandal, with Tim Harper headlining the latest discussion:

Mike Duffy is radioactive.

The one-time Conservative cheerleader is now the poster boy for the filth which envelops the party brand.

The man holed up on Friendly Lane in Cavendish, P.E.I., has brought down one of the most powerful men in Canada, shaken the Stephen Harper government to its core and blown a hole in the confidence the increasingly skeptical Conservative base has in the party.
...
Wright says he acted on his own, but could he possibly have acted on this without the Prime Minister’s knowledge?

Was he acting on the Prime Minister’s orders?

Did two of the shrewdest political operatives to ever land in Ottawa really believe that a handy chequebook would make a Senate spending scandal go away?

Did the government Senate leader, Marjory LeBreton, know an improper payoff was at the root of Duffy’s note from the teacher when his expenses were being audited?

We have to ask, because no one in the government is giving proper answers.

- Meanwhile, Brian Webb offers his own set of scenarios as to why Nigel Wright may have offered Mike Duffy a get out of jail free card, while Chris Plecash notes that both Duffy and Pamela Wallin may have been singled out for special treatment. Lawrence Martin poses a few more questions about Stephen Harper's involvement. And David Climenhaga notes that if the Cons believed in ministerial responsibility as anything but an excuse to keep underlings from answering questions in public, Harper would be offering his resignation for the actions of his chief of staff.

- Theresa Riley interviews Andrew Rosenberg about the corporate sector's efforts to prevent an accurate assessment of environmental damage and other externalities from intruding on their profits, while Elliot Negin writes about the Koch brothers' attack on climate science in particular. And Miranda Holmes notes that Peter Kent has been spinning on behalf of the oil sector since before he became Canada's most Orwellian Minister of the Environment yet

- All of which is to say that there's yet more reason to want to ensure that our democratic representatives and public servants work on meaningfully regulating business activity, rather than naively trusting in corporate benevolence. But on the bright side, at least one Federal Reserve governor is starting to recognize the damage that inequality does to overall economic growth - signalling that some policy-makers are beginning to come around to the concept of doing their jobs.

Deep thought

An infinite number of monkeys using an infinite number of typewriters will eventually produce the Kirby report on health care reform. This is not a sound argument for spending hundreds of millions of public dollars on monkeys with typewriters.

On corrupted institutions

Plenty of others have had loads to say about the scandal surrounding Stephen Harper, Nigel Wright, Mike Duffy and the Senate generally - with Wright's resignation today serving as just the latest chapter of a story with plenty left to be told. But I'll add a couple of notes to the mix.

First, I'm not sure some commentators (especially those thinking that "the cheque" is the real story) have noticed the significance of this juxtaposition of events:

A senior government official told Postmedia News on Thursday that Wright wrote a cheque to Duffy’s lawyer “in trust.” The official, who spoke on condition of anonymity, said the sole stipulation for giving the money was “that it would be used to pay back taxpayers” and putting it in trust “was the best way to achieve this.”

However, Duffy also took out a loan from Royal Bank to cover the cost of repaying his Senate expenses, according to a Senate source with knowledge of the financial arrangement. On Wednesday, Duffy told CTV in an email that he dealt with the bank alone and Wright was not involved in that transaction.

Now, to the extent that account is accurate, we can draw a couple of conclusions. First, the issue was seen as a formal one requiring the use of Duffy's lawyer rather than a personal cheque - as might be expected if the "just helping a friend" storyline were to hold up. And second, it means that there's a paper trail consisting not only of the cheque, but also of some sort of trust conditions placed on the payment of the money to Duffy's lawyer - and I wouldn't use the "sole stipulation" wording in the Cons' spin to rule out the possibility of another agreement beyond the trust conditions themselves. 

And what about the content of that agreement? Well, that's where the open question of Wright's ability to ensure a whitewash of the Senate's audit of Duffy's expenses come into play.

In effect, no one Senate leader would seem to have had the ability to guarantee the outcome of a report from the internal economy committee. Instead, Wright's payment seems to have been predicated on the assurance that a majority of that committee would take orders, rather than even questioning whether the Prime Minister's Office should be able to dictate the terms of the Senate's own proceedings.

Of course, that utterly warped sense of loyalty to Harper is far from new for his appointed senators. But it absolutely goes to the core of the Senate as an institution.

If an operator from the PMO can make - and keep - promises as to what Senate committee members will decide in policing their own members, then there's absolutely no credible argument to be made that the upper chamber is even pretending to function as an independent body. And so, abolish, abolish, abolish.

Sunday Morning Links

This and that for your Sunday reading.

- Justin Ling writes that the Cons' aversion to accountability isn't limited to their own government, as they're one of the few holdouts against transparency in resource-sector reporting of payments to governments abroad.

- Meanwhile, Stuart Trew discusses an international citizens' initiative to keep the Trans-Pacific Partnership from imposing harmful copyright rules:

A coalition website, launched this week as a 17th round of TPP negotiations gets underway in Lima, Peru, calls on TPP negotiators to "reject copyright proposals that restrict open Internet, access to knowledge, economic opportunity and fundamental rights." The website gives people an opportunity to send the same message and receive regular updates on Fair Deal campaign actions and successes.

"A fair deal on copyright in the TPP takes into account the interests of Internet users, libraries and archives, those with disabilities, educators and business innovators as well as creators," says Susan Chalmers from InternetNZ, one of 30 founding members of the new campaign. "We're all part of the Internet economy. The Fair Deal coalition is promoting fair copyright standards for the TPP that reflect the needs of the broadest cross-section of society."

These beliefs are shared by many TPP participating countries. Peru's chief negotiator, Rodrigo Contreras, wrote in a popular Peruvian magazine this week that the country should avoid limits on access to knowledge online and the over-extension of copyright protection terms for books, movies or music, that limit their availability in libraries and schools, and that would make it more expensive for lower income people.

- Paul Krugman looks at Ireland as a prime example of gross economic numbers bearing no particular relationship to the actual strength of an economy - as profits moved there out of convenience are doing nothing whatsoever to reduce 14% unemployment. (Needless to say, it's always a good time for a reminder that's exactly the model the Saskatchewan Party wants to inflict on the province.)

- And Leif Larsen reports that still more Irish workers who have lost their jobs to corporatist mismanagement are being used to hurt workers in Canada - this time to avoid the possibility that workers on Manitoba construction sites might attempt to unionize.

- Jessica Bruno writes that the Cons' cuts to research extend to Agriculture and Agri-Food Canada,

- Finally, Rosie DiManno rightly criticizes the gall of Toronto's police in rewarding themselves for the civil rights abuses perpetrated at Toronto's 2010 G20 meeting.

Saturday Morning Links

Assorted content for your weekend reading.

- Not surprisingly, plenty of commentators have weighed in on the latest set of Senate scandals engulfing Mike Duffy, Pamela Wallin, Nigel Wright and Stephen Harper among others. Diane Francis takes the opportunity to point out that the Senate is an institutional anachronism (a point with which I of course agree). Murray Mandryk notes that the Cons' story involves the belief that their clan can do no wrong, Chantal Hebert sees the Cons having simply changed the party name in the Liberal culture of entitlement they once claimed to despise, while Andrew Coyne views the latest incidents as an example of the Cons' general distaste for audits and other accountability mechanisms. And Tabatha Southey nicely details just how many laughable claims one would have to believe in order to take the Cons' side in defending their Senate abuses.

- Meanwhile, Aaron Wherry points out that as far as Jim Flaherty is concerned, expensive, publicly-funded self-promotion is the new accountability.

- Don Lenihan theorizes that the Cons would be well-positioned to create a sustainable development charter if they wanted to. But "if they wanted to" is a rather important qualification - particularly given that they seem to have put J. Wellington Wimpy in charge of the sales pitch for environmental action ("I'd gladly regulate them next decade for an increase in profits today!")

- Nathan VanderKlippe writes that TransCanada has roughly matched the Cons' level of interest in dealing constructively with anybody who raises concerns about pipelines - which serves as one of the main reasons why it's run into so much opposition. And Esther Hsieh contrasts the massive public benefits provided by Norway's resource development plan against the glaring lack of a development strategy in Canada.

- Jason Kenney makes it abundantly clear that family-class immigrants in less-than-wealthy families aren't welcome in his country - singling out for particular scorn anybody who "(goes) back to being poor" after being joined by family in Canada.

- Finally, Robyn Benson makes the case for engagement - on whatever level possible - as a key to reaching positive outcomes within unions and other organizations.

[Edit: fixed wording.]

Musical interlude

Damien S - Stars Collide (Timothy Allan Remix)

Friday Morning Links

Assorted content to end your week.

- Paul Krugman draws a much-needed connection between austerity politics and Naomi Klein's Shock Doctrine:

What Smith didn’t note, somewhat surprisingly, is that his argument is very close to Naomi Klein’s Shock Doctrine, with its argument that elites systematically exploit disasters to push through neoliberal policies even if these policies are essentially irrelevant to the sources of disaster. I have to admit that I was predisposed to dislike Klein’s book when it came out, probably out of professional turf-defending and whatever — but her thesis really helps explain a lot about what’s going on in Europe in particular.

And the lineage goes back even further. Two and a half years ago Mike Konczal reminded us of a classic 1943 (!) essay by Michal Kalecki, who suggested that business interests hate Keynesian economics because they fear that it might work — and in so doing mean that politicians would no longer have to abase themselves before businessmen in the name of preserving confidence. This is pretty close to the argument that we must have austerity, because stimulus might remove the incentive for structural reform that, you guessed it, gives businesses the confidence they need before deigning to produce recovery.

And sure enough, in my inbox this morning I see a piece more or less deploring the early signs of success for Abenomics: Abenomics is working — but it had better not work too well. Because if it works, how will we get structural reform?

So one way to see the drive for austerity is as an application of a sort of reverse Hippocratic oath: “First, do nothing to mitigate harm”. For the people must suffer if neoliberal reforms are to prosper.

- Meanwhile, Esther Hsieh writes that Norway's rejection of laissez-faire economics has resulted in the most productive economy on the planet - with social support for skilled workers (such as universal child care) and income equality serving as key drivers of that economic success. And the Canadian Institute for Health Information observes that universal public health care serves as an important form of income equalization in Canada.

- Michael Byers and Purple Library Guy each offer an assessment of the lessons to be drawn from British Columbia's election results. And Alison reminds us what Christy Clark has sounded like when she hasn't been trying to neutralize her party's penchant for environmental destruction.

- Finally, Thomas Walkom recognizes that the problems with Canada's Senate go far beyond Mike Duffy. And Michael Harris notes that the scandal surrounding Duffy includes Stephen Harper and his inner circle (no matter how much they scramble to escape accountability now):

But we do not live in a better world, we live in this one. Stephen Harper’s inclination is to make up the rules as he goes along. I for one do not see this as loyalty to his minions, but rather as a show of power. When, for example, the ethics commissioner has caught a cabinet minister or two in a breach of the rules, the PM has been known to simply dismiss the finding. The cases of Christian Paradis and Jim Flaherty come to mind.

So Harper’s initial instinct was to save Duffy. He began that process by taking the public on a mind-numbing sojourn into the rules and regulations of the Senate. He used the escape clause of the Deloitte audit, that by Senate definition, knowing where you live is a brain-twister. And he has never had a problem dismissing the ethical part of any problem if it collided with his agenda. Look what he did to Kevin Page for the high crime of outing the PM’s lie over the cost of the F-35s.

But dry-cleaning Duffy quickly turned into a sticky proposition. For one thing, this one has gone right up the nose of the public and people are gagging. And then there are those two mutually exclusive stories about how the senator’s debts were paid off.

...

One enduring question is this: Why did Nigel Wright bail out Mike Duffy before the sharp pencil boys from Deloitte had even finished their damning audit?

But there is an even bigger issue. If Stephen Harper doesn’t see anything wrong with his chief of staff making a $90,000 gift to a sitting Conservative senator engulfed in scandal, is there anything he wouldn’t endorse for partisan gain?

Thursday Morning Links

This and that for your Thursday reading.

- Duncan Cameron is the latest to weigh in on the Cons' distorted sense of priorities in directing public research money toward private profits:

Publicly available research is important. Since no one knows where discoveries or advances in knowledge will lead, the entire scientific community needs access to new research. There is no other way to maximize potential societal benefits. Learning is cumulative, innovative thinking flows from research building on public research.

Now with the privatization of research findings, discoveries and knowledge become industrial secrets, unavailable to Canadians who have paid for it, and lost to other scientists.
...

Conservative distrust of scientific knowledge was evident under Mulroney who abolished the Science Council of Canada (along with a series of other research bodies like the Economic Council of Canada, and the Institute on Peace and Security).

Harper's science policy is to continue cutbacks to grants for basic science, and the new NRC mandate is to vacate the field, yet Canada ranks fourth in the world in publishing basic science findings in peer-reviewed publications (science starts with peer review).

The Harper government punishes its winners because it claims Canada performs poorly when it comes to registering scientific patents. The so-called solution is to wind down basic science, and hand over scientific resources to companies.

Instead of promoting research and development the government solution encourages corporations to outsource it to NRC. Not only does basic science lose, applied industrial research by private companies is transferred to the NRC instead of being done in-house.

- CTV reports on the news that Nigel Wright, chief of staff to Stephen Harper, personally gifted Mike Duffy the money used to repay wrongly-claimed accommodation and travel expenses. Jennifer Ditchburn traces Duffy's patchy record of expense claims and find that he was billing the public for supposed Senate business while campaigning for the Cons. Andrew Coyne and Thomas Walkom call on Duffy to resign, while the Toronto Star and Ottawa Citizen note that the PMO needs to provide far more explanation as well.

- Marilla Stephenson writes about the damage being done to Atlantic Canada by the Cons' push to end seasonal employment. Erin Trafford reports on the abuse of foreign workers in Halifax, as cleaning workers were paid as little as $3 per hour while facing potential deportation if they dared to speak out. And Campbell Clark notes that while the Cons continue to push for a flow of dollars and jobs across borders, they're looking to keep roadblocks in the way of refugees and workers.

- Finally, Erin Weir adds to my previous observations by pointing out just how ill-advised the Sask Party's plan to privatize ISC actually is. And once again, I've managed to err on the side of being overly generous to the Wall government:

Last year, ISC generated $20 million of profit for the provincial treasury. Losing 60 per cent of this profit, $12 million, every year is a very costly way to get $120 million of one-time cash. That deal would be equivalent to borrowing in perpetuity at an interest rate of 10 per cent.

If the shares of ISC were to fetch less than $120 million, this rate would be even higher. By comparison, the Saskatchewan government could finance infrastructure at an interest rate of three per cent by issuing provincial bonds.

Don McMorris, the minister responsible for privatizing ISC, suggests that corporate taxes change this equation. On April 16, he told the legislative assembly: "The government will retain about 40 per cent of the shares of ISC ... not to mention the corporate tax that the other 60 per cent will be paying back into the coffers of the province of Saskatchewan."

But most corporate tax is paid to Ottawa rather than to the provincial treasury. The Saskatchewan government is promising to cut the provincial corporate tax rate to 10 per cent, compared to a federal rate of 15 per cent.

As a Crown corporation, ISC is exempt from both taxes. A privatized ISC with $20 million of profit would pay $2 million of provincial corporate tax and $3 million of federal corporate tax, leaving after-tax profits of $15 million. Of that, 60 per cent, or $9 million, would go to private shareholders.

Between that and federal corporate tax, Saskatchewan would lose $12 million of annual revenue.

[Edit: fixed title.]

New column day

Here, on how a narrow focus on pursuing a seemingly safe path to a bare majority government may have contributed to the B.C. NDP's stunning election defeat this week.

Needless to say, there's no lack of other commentary on the election, with Alice Funke, Sixth Estate, Michael Stewart, Paul Ramsey and Thomas Walkom all reaching conclusions relatively similar to my own. And while not a lot of observers can claim to have identified the problem in B.C., Dan Tan and Leftdog look to have earned at least partial credit.

[Update: Let's add David Climenhaga's take to the mix.]

But I will take issue with Chantal Hebert's theory as to the effect of the B.C. election on federal politics. While the NDP surely wants to build its reputation as a governing party, I don't see the provincial election as substantially weakening the case for federal office in 2015 - and indeed voter remorse under another term of Christy Clark may well play to the party's advantage.