Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Frances Russell writes about the corrosive effects of inequality. And Robert Reich points out one creative option California is considering to address inequality at the firm level: tying corporate tax levels to wage parity, under the theory that shareholders will then have an incentive to push for a fair distribution of wages.

- Peter Richardson reviews Matt Taibbi's The Divide:

 Taibbi explores why Wall Street bankers are seemingly exempt from criminal prosecution, even as New York City targets petty crime — much of it manufactured by police in minority neighborhoods — more aggressively than ever. He cites statistics to make his argument, but mostly he reports on specific cases. One involves a working-class black man who finally decided to fight a misdemeanor charge for blocking pedestrian traffic — that is, standing on the sidewalk in front of his home. Taibbi also considers the zeal with which government agencies investigate and humiliate welfare recipients and undocumented residents for trying to provide for their families during hard times — times made all the harder because of unprosecuted crimes at the top of the economic food chain.

Everyone knows the rich receive special treatment in this country, especially in court. But Taibbi concludes that the government now offers a sliding scale of civil and criminal protection to U.S. residents. At one end of the spectrum, the very rich are virtually beyond accountability, no matter how massive and destructive their crimes may be. At the other end, the nation’s most vulnerable residents face unremitting investigation and prosecution by bureaucracies determined to find them guilty of something.

Taibbi also surfaces a new set of targets: Justice Department prosecutors who seek settlements for even the most outrageous white-collar scams. Many of them are recruited from law firms whose clients include the largest Wall Street banks. Lanny Breuer, who headed the department’s criminal division when the financial meltdown occurred, is Taibbi’s poster boy for this conflict of interest. Both he and Attorney General Eric Holder were partners at Covington & Burling, which represents JPMorgan Chase, Bank of America, Citigroup and Wells Fargo. All too often, Taibbi argues, the prosecutors have continued to behave like defense attorneys. When Holder was a Clinton administration official, for example, he wrote a memo arguing that prosecutors should consider “collateral consequences” when determining whether to charge persons or corporations. If a criminal prosecution would unduly harm innocent shareholders and employees, the logic went, it made more sense to settle. But once bankers realized they were beyond criminal prosecution, the incentives to transgress increased dramatically.
...
“The Divide” marks a shift in Taibbi’s tone. More Lincoln Steffens than Hunter Thompson, Taibbi drops most of the histrionics to reveal the corruption and injustice at hand. He even goes out of his way to be reasonable. He acknowledges that prosecuting financial cases can be expensive and risky, especially when the alleged crimes are complex and the defendants have vast legal resources at their disposal. That fact motivates prosecutors to settle such cases rather than try them in criminal court. He also concedes that many disadvantaged neighborhoods may benefit from tough policing. But he maintains that when combined, the two law-enforcement strategies add up to a glaring injustice. He also notes that it’s far too easy to introduce jurisdictional complications in financial cases that would never be allowed in less consequential cases. To make that point, he recounts a horrific case in which high-profile Wall Street financiers escaped punishment after trying to destroy a company they bet against as well as harassing its executives and their family members. 

- And David Dayen also discusses the consequences of a culture of impunity for the financial sector, with a particular focus on a home-seizure complex which has neither any incentive nor any apparent means to figure out whether a given claim to enforce a mortgage has any basis in fact:

(D)espite the fact that the nation’s courtrooms remain active crime scenes, with backdated, forged and fabricated documents still sloshing around them, state and federal regulators have not filed new charges of misconduct against Bank of New York, Deutsche Bank, U.S. Bank or any other mortgage industry participant, since the round of national settlements over foreclosure fraud effectively closed the issue.

Many focus on how the failure to prosecute financial crimes, by Attorney General Eric Holder and colleagues, create a lack of deterrent for the perpetrators, who will surely sin again. But there’s something else that happens when these crimes go unpunished; the root problem, the legacy of fraud, never gets fixed. In this instance, the underlying ownership on potentially millions of loans has been permanently confused, and the resulting disarray will cause chaos for decades into the future, harming homeowners, investors and the broader economy. Holder’s corrupt bargain, to let Wall Street walk, comes at the cost of permanent damage to the largest market in the world, the U.S. residential housing market.

By now we know the details: During the run-up to the housing bubble, banks bought up millions of mortgages, packaged them into securities and sold them around the world. Amid the frenzy, lenders failed to follow basic property laws, which ensure legitimate transfers of mortgages from one legal owner to another. When mass foreclosures resulted from the bubble’s collapse, banks who could not demonstrate they owned the loans got caught trying to cover up the irregularities with false documents. Federal authorities made the offenders pay fines, much of which banks paid with other people’s money. But the settlements put a Band-Aid over the misconduct. Nobody went in, loan by loan, to try to equitably confirm who owns what.

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There was another solution available here, if Holder’s Justice Department didn’t throw up its hands and settle. Judges could have disassembled the broken mortgage system, and appointed a special master to handle all loans in question. It may have taken years, but the preservation of the public property system makes the time and expense worth it. Unless you would rather kneel to the wishes of the financial industry to keep everything rolling, and let the wound fester.

If you or I pick the lock on a house and try to steal everything in it, we’d probably go to jail. But if I were a bank, and I wrote down on a piece of paper that I simply owned that house, I’d get away with it. That’s the sad legacy of trying to cover up massive fraud instead of dealing with it.

- Don Lenihan responds to Lawrence Martin's suggestion that key PMO staffers be elected by Parliament by pointing out that there's more to democratic accountability than intermittent elections.

- And one of the more important factors needed to hold governments to account is accurate information about what they're doing. Which means there's all the more reason for concern about the Cons' pattern of refusing to release public data and covering up their own actions. But on the bright side, the NDP's push to make government information public by default offers a much-needed contrast.

- Finally, Tim Harper suggests that the temporary foreign worker program is beyond fixing. And
the CP discusses the obvious alternative: rather than binding helpless temporary workers to a single employer for the sole purpose of suppressing their wages and working conditions, we should look to fill with immigrants who can hope to make a future in Canada.

Tuesday Night Cat Blogging

Gifted cats.

Tuesday Morning Links

This and that for your Tuesday reading.

- Duncan Cameron writes that Canada needs a new political direction rather than just a new government - and offers some worthwhile suggestions as to what that might include:

The inter-generational bargain needs to be renewed. Today's workers pay for their past studies and future retirement. Investing in youth and providing for retirement has social benefits and requires collective support. Much can done through a serious progressive income tax, but notable additional sources of revenue for student grants and other social spending exist. A financial transaction tax for instance could raise an estimated $4 billion, and has wide support in public polling.

The biggest transfer of wealth in history is about to take place as the baby boomers pass on inherited wealth to their children. Inheritance needs to be taxed in Canada either as an ongoing wealth tax or through re-introducing succession duties.

Corporations are sitting on piles of wealth -- dead money, former Bank of Canada head Mark Carney called it. Erin Weir estimates that corporate cash on hand at the end of 2013 of $626 billion exceeds the federal debt of $611 billion. Tax idle capital and invest in public education, health, transport, culture and amateur sport.

Knowledgeable research shows that investing in early childhood education, reducing family poverty, improving social housing, ensuring gender equity, enhancing child-care facilities, adopting "living wage" policies, sane nutrition and agricultural practices, and promoting overall equality, reduces the cost of health care and improves the quality of life for everyone. Whether it be pioneering work by Dennis Raphael or the authoritative study by the World Health Organization, the benefits of enhanced equality for health are clear, and attainable when the social determinants of health are addressed successfully.

- Meanwhile, Naomi Klein writes that the crisis of climate change is challenging humanity's ability to act collectively at a point when that capacity is in serious doubt:

Our problem is that the climate crisis hatched in our laps at a moment in history when political and social conditions were uniquely hostile to a problem of this nature and magnitude—that moment being the tail end of the go-go ’80s, the blastoff point for the crusade to spread deregulated capitalism around the world. Climate change is a collective problem demanding collective action the likes of which humanity has never actually accomplished. Yet it entered mainstream consciousness in the midst of an ideological war being waged on the very idea of the collective sphere.

This deeply unfortunate mistiming has created all sorts of barriers to our ability to respond effectively to this crisis. It has meant that corporate power was ascendant at the very moment when we needed to exert unprecedented controls over corporate behavior in order to protect life on earth. It has meant that regulation was a dirty word just when we needed those powers most. It has meant that we are ruled by a class of politicians who know only how to dismantle and starve public institutions, just when they most need to be fortified and reimagined. And it has meant that we are saddled with an apparatus of “free trade” deals that tie the hands of policy-makers just when they need maximum flexibility to achieve a massive energy transition.

...We also have to confront how the mismatch between climate change and market domination has created barriers within our very selves, making it harder to look at this most pressing of humanitarian crises with anything more than furtive, terrified glances. Because of the way our daily lives have been altered by both market and technological triumphalism, we lack many of the observational tools necessary to convince ourselves that climate change is real—let alone the confidence to believe that a different way of living is possible.

And little wonder: just when we needed to gather, our public sphere was disintegrating; just when we needed to consume less, consumerism took over virtually every aspect of our lives; just when we needed to slow down and notice, we sped up; and just when we needed longer time horizons, we were able to see only the immediate present.

- Inga Ting discusses how Australia's two-tier health system has done nothing but make wait times longer for those who can't afford to jump a queue. And Andrew MacLeod reports on the attempt of Brian Day and other medical profiteers to force a similar system on the Canadian public - even as the Canadian Medical Association (having moved on from Day's profit-over-patient mentality) points out how poverty already serves as a serious barrier to health.

- Finally, Kathleen Geier takes her own look at the power of wealth in influencing public policy. Dave Gilson examines the preferential tax treatment for people who already have more than they need - a point which is equally applicable in Canada when one compares the CCCE's own numbers as to how small a percentage of income businesses pay in taxes to the rates applied to individuals. And Trish Hennessy warns against throwing taxes under the bus as an option to fund our social priorities.

Monday Morning Links

Miscellaneous material for your Monday reading.

- Michael Harris writes that the Cons' primary purpose while in power has been to hand further power and wealth to those who already have more than they know what to do with:

These corporations and their political mouthpiece, the Republican Party, are Stephen Harper’s heroes. He has spent his entire political career marching Canada down the same corporate road that leads to oligarchy. He is less the prime minister of a country, than a super-salesman of corporate interests. That’s why his policies often look so wacky but aren’t. They do exactly what they are intended to do.

They are not designed for the country’s benefit, but for corporate interests. That’s what Nexen and Northern Gateway are about. That’s what Harper’s revenue-losing corporate tax cuts are all about. The [corporations] get break after break, and the public loses its mail service, veterans lose their service centres, and public servants get their pink slips.
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We haven’t got far to go [to become an oligarchy]; 86 families in this country, representing .002 percent of the population, have accumulated more wealth than the poorest 11.4 million Canadians.

If it can be said that Stephen Harper has a vision at all, it is to keep it that way.

- Paul Krugman responds to the observation that the U.S.' political class mostly addresses the preferences of the wealthy by pointing out that there's a meaningful difference between the major political parties in their respective handling of equality issues. But I'd go a step further and question whether the current influence of the wealthy means electoral politics are "irrelevant" or insufficiently relevant - and that if the answer is the latter, then there's all the more reason to pursue change through the political system.

- Meanwhile, Les Whittington reports that grassroots action is having a real effect on the Cons' attempts to place the oil industry ahead of all other interests. But Dean Beeby notes that the Cons' reaction has been to stop gathering the evidence which shows that the public has no interest in their spin - this time by refusing to test public reaction to publicly-funded political advertising (even as they continue to pour tens of millions of dollars into the ads themselves).

- Matthew Yglesias makes the case for taxes on extreme incomes for the purpose of addressing inequality - and notes that there's reason to pursue that end even if the result isn't an increase in revenue:

(T)he tax code structures even the "pre tax" incomes of very high earning people. Very high taxation of inheritances would mean fewer big inheritances, not more tax revenue. Very high taxation of labor income would mean fewer huge compensation packages, not more revenue. Precisely as Laffer pointed out decades ago, imposing a 90 percent tax rate on something is not really a way to tax it at all — it's a way to make sure it doesn't happen.

If you believe systematically lower CEO compensation packages would mean a mass withdrawal of talent from the business world and a collapse of American industry, then those smaller pay packages could be an economic disaster. But the more plausible theory is that systematically lower CEO compensation packages would mean systematically higher compensation spending elsewhere in the corporate structure. Either more frontline workers or better-paid ones. The new tax code would redistribute value inside the corporate structure without anyone actually paying the new sky-high taxes.

- Finally, Ian Welsh suggests that we may need some significant regulation of online rent-seekers in order to ensure that the ability to exchange information in an instant actually leads to real opportunities for content creators.

[Update: added link.]

Sunday Morning Links

This and that for your Sunday reading.

- Charles Demers points out the impact Svend Robinson has had on Canadian politics - and suggests that he should be the model for fellow progressives:

Not only did Svend embody something different from the usual electioneering pabulum [sic] — a genuine belief in the righteousness and effectiveness of indigenous, environmentalist, and social movement direct action, for starters — but, as Truelove’s wonderful and readable and extremely well-researched book shows, he also showed how gadflies could still exercise real power and affect people’s lives. The episode in which Svend leads the successful campaign to keep “the right to enjoy property” from being enshrined in the Charter (Robinson worried that if it were, things like minimum wage laws and environmental legislation could be imperiled) is indicative; a recurring theme throughout the book is how a third party MP, sometimes even a backbencher, could make real and lasting legislative change. In the end, that might be what was scariest to conventional NDPers about Svend: not only that his radical politics and irreverence endangered the party’s ability to win enough votes to become official opposition or even government, but the fact that his own example showed that if they were smart enough, worked hard enough, and were willing to participate in and draw on social movements, they didn’t necessarily have to, if all they wanted to do was effect change (as opposed to winning). In a world of horse-race politics, where everyone’s killing themselves trying to get to the inside lane, Svend was off in the stables unionizing the jockeys and pointing out that the track was built on stolen land.

[Update: Though of course it's also worth pointing out that the dichotomy between presenting progressive positions and earning electoral success may be a false one to begin with.]

- Peter Frase discusses the need to move beyond complaints about the status quo and propose an alternate model as to how things can be improved. And Dean Baker points out that Thomas Piketty's description of near-inevitable capital concentration may miss some obvious opportunities to turn technological developments into widespread gains - even if we're far from applying them to the extent possible.

- But it is worth documenting how capital is managing to perpetuate itself at the expense of mere people. And David Harvey's commentary on the spread of luxury services and the new "prosumer" model is worth a read on that front.

- Meanwhile, any assertion of the public interest over private profit-seeking looks rather remote at the moment. On that front, Theresa Tedesco and Jen Gerson report on the massive private interests being served by Canadian Senators - even as the same patronage appointees try to excuse their split loyalties by complaining about the insufficiency of six-figure public salaries. And David Pugliese notes that the Cons are willing to let the private sector decide which Arctic search and rescue capabilities are sufficiently profitable to be maintained as public safety is privatized.

- Finally, Alan Bowker asks the Cons to follow the post-war Robert Borden model of voluntarily working on a better democratic system - rather than the wartime philosophy of rigging the system in their favour on the assumption that democracy is dangerous. And Susan Delacourt proposes that a voter identity card could go a long way toward meeting the Cons' excuses for cracking down on voting while minimizing the damage to voting rights.

Saturday Morning Links

Assorted content for your weekend reading.

- Paul Krugman explains how one's political values figure to affect one's view of evidence as to the success or failure of a policy:

(T)he liberal and conservative movements are not at all symmetric in their goals. Conservatives want smaller government as an end in itself; liberals don’t seek bigger government per se — they want government to achieve certain things, which is quite different. You’ll never see liberals boasting about raising the share of government spending in GDP the way conservatives talk proudly about bringing that share down. Because liberals want government to accomplish something, they want to know whether government programs are actually working; because conservatives don’t want the government doing anything except defense and law enforcement, they aren’t really interested in evidence about success or failure. True, they may seize on alleged evidence of failure to reinforce their case, but it’s about political strategy, not genuine interest in the facts.

One side consequence of this great divide, by the way, is the way conservatives project their own style onto their opponents — insisting that climate researchers are just trying to rationalize government intervention, that liberals like trains because they destroy individualism.

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(A)nother factor is the lack of a comprehensive liberal media environment comparable to the closed conservative universe. If you lean right, you can swaddle yourself 24/7 in Fox News and talk radio, never hearing anything that disturbs your preconceptions. (If you were getting your “news” from Fox, you were told that the hugely encouraging Rand survey was nothing but bad news for Obamacare.) If you lean left, you might watch MSNBC, but the allegedly liberal network at least tries to make a distinction between news and opinion — and if you watch in the morning, what you get is right-wing conspiracy theorizing more or less indistinguishable from Fox.

Yet another factor may be the different incentives of opinion leaders, which in turn go back to the huge difference in resources. Strange to say, there are more conservative than liberal billionaires, and it shows in think-tank funding. As a result, I like to say that there are three kinds of economists: Liberal professional economists, conservative professional economists, and professional conservative economists. The other box isn’t entirely empty, but there just isn’t enough money on the left to close the hack gap.

- Linda McQuaig discusses the Cons' combination of elitist operations and populist messaging. Don Lenihan considers populism to be merely a particularly cynical form of elitism - which often serves to divert needed accountability by replacing the public's role in keeping an eye on its leaders with the promise of a savior to take on the job. And Jim Coyle questions how children of privilege like Rob Ford and Justin Trudeau can keep a straight face while claiming to stand up for the little guy - while comparing the respective plausibility of their pitches.

- Of course, elitism in the ranks of our political leaders is all the worse when it's accepted by other institutions which should protect the public interest. On that front, Michael Harris wonders whether the RCMP is doing the bidding of the PMO rather than pursuing justice in electing not to pursue charges against Nigel Wright, while suggesting that we're at least owed an explanation for the choice.

- Meanwhile, Erik Loomis asks why we treat employer wage theft as an administrative matter to be met with a slap on the wrist, rather than an abuse just as deserving of criminal intervention as an employee's stealing from the till. And the Star-Phoenix editorial board duly slams the Cons' "victims' rights" legislation which once again uses a misleading title to introduce regressive changes to the criminal justice system.

- Kim Nursall reports on TD's study examining the long-term costs of climate change - which include both tens of billions in losses to Canadian GDP, and human costs going far beyond what can be easily quantified. And Leilani Farha and Michele Biss look at the numbers we're missing in discussing homelessness in Canada, while pointing out that we already know plenty which should push us to act.

- Finally, Rob Nagai suggests that the NDP should change its attitude to take a more positive view of fund-raising. But I'd note some distinction between the view of the party apparatus (which has done plenty to work on the issue) and the grassroots (which probably does better fit Nagai's description of preferring issue advocacy to fund-raising) - and suggest that if the NDP is going to find a find-raising advantage, the longer-term goal should be to better build fund-raising into its member-driven activities.

Musical interlude

Mossy - Euphoria

Friday Morning Links

Assorted content for your Friday reading.

- Robert Kuttner discusses Karl Polanyi's increasingly important critique of unregulated markets and corporatist states. Sarah Kendzior writes about the latest cycle of workers stuck in poverty who are striking back against a system designed to suppress their standard of living. And Michael Rozworski examines the effect of the Cons' temporary foreign worker focus on Canadian workers:

(W)hile food attendants made up 9% of all TFW Labour Market Opinions (LMOs) issued in Canada in 2012, they comprised 17%, or almost double, of TFW LMOs in Alberta, the province that has the tightest labour market. Indeed, in Alberta the top five occupations filled by TFWs are all in services. For a program that is meant to help employers find workers for otherwise impossible-to-fill positions, it seems to be doing quite the opposite: helping employers staff low-wage service occupations that are relatively always in demand. Government documents show as much – Alberta employers were applying for low-level service LMOs in the same jurisdictions where unemployed workers with skills for those occupations were on EI.

Employers are using TFWs to enforce discipline especially at the lower end of the job market. Increasing bifurcation between low- and high-wage jobs means that the effect is potentially all the greater.
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Bringing in more TFWs is one more means of ensuring that a tighter labour market does not lead to increased agitation for better pay and better conditions. When unemployment (and the even greater underemployment) starts to fall, the increased use of temporary foreign workers is a means of securing continued economic power. The cruel irony is that temporary foreign workers hoping to counteract the effects of an unequal global distribution of goods and power on their families are being used to help safeguard and enlarge disparities in their new home.

The different rules for temporary foreign workers – their institutionalized precarity – help spread a lighter but still increasing precarity throughout the rest of the lower-wage workforce. This is enough to condemn the TFWP as a policy tool that stacks the hand of employers in broader labour relations.

The particular genius of the TFWP, especially as applied to low-wage work, goes further. The TFWP is not only a labour policy tool but, at the same time, an immigration program and, as such, interacts with existing prejudices that limit solidarity along the axis of immigration and race. These work to counteract the potential for solidarity that arises from shared experiences of deteriorating labour conditions. The function of the TFWP on the labour market and on immigration should not be analyzed in isolation. The program lies at a problematic but potentially fruitful intersection of class and immigration – by and large meaning at the intersection of class and race.

- Ben Casselman points out that the timing of a job loss has far more to do with one's future prospects than education, occupation or any other factor which could plausibly be tied to merit. And Lisa Wright reports on the trend toward highly unstable work - which can only increase the odds of a single job loss coming at just the wrong time.

- Claudia Calderon Machicado makes a strong business case for fair paid leave and sick leave programs.

- The CCPA offers a series of papers on the role unions can and should play in ensuring economic fairness - and the steps the Cons and similar governments are taking to prevent them from acting.

- Finally, Matt Taibbi highlights the fact that inequality by design isn't limited to income or wealth - as the same justice system which readily throws people in jail for extended periods of time for relatively minor offences has done nothing to address gross criminal behaviour in financial markets.

New column day

Here, on the Canadian public's widespread recognition - and worrisome acceptance - that life will be worse for younger generations than for older ones.

For further reading...
- Ipsos-MORI's poll referenced in the column is here.
- The CCPA's feature on post-secondary education costs is here, while Holly Moore reports on it here.
- And I'll again point out the one recent bright spot in post-secondary education policy, as Newfoundland and Labrador are working on eliminating student loans rather than figuring that increasing student debt loads represent a positive development.