Saturday Morning Links

Assorted content for your weekend reading.

- Erin thoroughly debunks Jayson Myers' attempt to fabricate a nonexistent link between tax cuts and job creation:

Myers actually does not find a very close correlation between after-tax profits and employment (page 16), so he instead focuses on the unemployment rate (page 17). His summary mistakenly states, “Close positive relationships exist between: Canada’s unemployment rate and after-tax business profits” (page 3), implying that higher unemployment corresponds to higher profits. As noted later, “it is a negative relationship” (page 17).

This negative correlation is hardly surprising. In boom years, profits go up and unemployment goes down. In recessions, profits fall and unemployment rises. Indeed, Myers’ graph of profits and unemployment looks like a graph of Canadian business cycles (top of page 17).

However, correlation is not the same as a causal relationship. It is always possible that a third factor – such as the business cycle – is driving both variables.

Even if there is a causal relationship, it is unclear which way the causation runs. Myers’ story is that higher business profits cause more hiring, which causes lower unemployment. But an equally plausible story is that lower unemployment causes more consumer spending, which causes higher business profits.
...
Myers’ report is not about corporate tax rates or their possible incentive effects. In his model, corporate tax cuts matter only insofar as they increase after-tax profits. Rather than implementing planned corporate tax cuts at an annual cost of $6.2 billion, Ottawa might as well just write corporate Canada a series of postdated cheques for $6.2 billion each.

But of course, the Globe and Mail reproduces Myers' take without question. So the facts don't seem likely to matter when it comes to what actually gets published in the corporate press.

- Which means it falls to the rest of us to point out the obvious: demand creates jobs.

- Were you worried that Canada might have the necessary equipment to track down pollution in case of an oil spill? Don't worry: the Cons are shutting it down - so that anybody responsible for a spill won't be faced with inconvenient realities about what's actually been released.

- But of course, who has time to deal with environmental emergencies when there are volunteer efforts to be co-opted? Up next in the Cons' plan to attach themselves to anything popular regardless of their utter lack of contribution to it: new Senate appointee Larry Smith uses his influence with the CFL to make sure that next season's championship game is played for the Harper Cup.

- Finally, Linda Deibel documents the Cons' appalling efforts to stifle dissent in the public and private sectors alike. But perhaps the most telling part of her article is the Libs' typically timid response - which Deibel can't allow to pass without comment:

Asked about Liberal tactics, caucus member Lee responds: “We generally go into things being nice and we're not used to being elbowed in the corners. There's a reluctance to get down in the mud.”

It's frustrating, he adds. “I think the hope is that it will all go away . . . Maybe we are being naïve.”

Ya think?