Thursday Morning Links

This and that for your Thursday...

- Maybe it's true that Stephen Harper doesn't bother paying attention to Canadian media after all: why bother when he's spending tens of millions of dollars for others to do it for him?

- Barbara Yaffe seems to take a huge leap in associating the message with Jack Layton's future plans. But she's right on target in taking up Layton's call to limit the most obvious abuses from the Senate:

Layton's comments on the Senate Wednesday were nuanced and thoughtful.

He noted that a New Democratic Party government would seek to scrap the upper chamber, a mission-impossible project requiring constitutional change.

But, for now, all he wants Prime Minister Stephen Harper to do is stop appointing Conservative hacks to the $90-million-a-year body -- and to ban senators from fundraising for their parties.

These are reasonable requests but almost surely will be rejected by the PM who, having recently acquired a majority in the red chamber, is delighted his government's legislation now will be rubber-stamped by Senate seals.
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For all his talk of Senate reform, Harper has given red velvet seats to his former press secretary, a Conservative party president, a former national campaign director and a bunch of defeated Conservative candidates.

It's fair for Canadians to assume that, in return for their appointments, partisan senators serve the interests of the Conservative party more than those of taxpayers.

- Meanwhile, John Moore rightly criticizes the Cons' perpetual demand for tax cuts regardless of the timing or budgetary implications:

Taxes are like food. You can slim down a fat guy by putting him on a diet, but when he reaches his ideal weight he still needs to eat. Conservatives are like fiscal anorexics. They just can't stop obsessing over portion reduction.

Cutting taxes inevitably brings about diminishing returns. Ireland was the darling of the international business set thanks to its 12.5% tax rate--up until the country went bust.
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Naturally the Conservatives and their allies in the business and think-tank communities think lower corporate taxes are always a good idea. Children think not having a bed time is a good idea.

- And finally, Jim Stanford expands on his basis for concluding that more corporate tax slashing may cost up to 46,000 jobs:

Corporate tax cuts have very little positive impact on employment, since they induce very little change in business capital investment spending. Historical evidence in Canada since 2000 (when the corporate tax rate, then 29.1%, began to be dramatically reduced) indicates that business investment has deteriorated since then - whether measured as a share of GDP, as a share of the existing capital stock, or as a share of corporate cash flow.

Indeed, business capital spending in recent years has fallen below realized business cash flow; companies have been accumulating cash and other liquid assets as a result. By the third quarter of 2010, the cash and short-term financial assets of non-financial businesses in Canada had reached $480 billion - almost a half-trillion dollars (source: Statistics Canada Balance Sheet data, CANSIM database). Since the advent of the recession two years earlier, businesses socked away an additional $83 billion in new cash. (This is in stark contrast to the behaviour of consumers and governments during this time, who incurred substantial new debt in order to finance expanded spending.) Further enhancing the cash flow of business, with no strings attached to incremental investment undertakings, will accomplish nothing other than enhancing that large stockpile of idle cash even further.

When governments allocate large sums of revenue to corporate tax cuts, those resources are no longer available to fund other priorities - like extending EI benefits for laid-off workers, investing in infrastructure or housing, or supporting public programs through transfer payments (like health care or education). All of those programs create far more jobs than corporate tax cuts. Therefore, shifting money from EI benefits (or infrastructure or public services) into corporate tax cuts destroys net jobs.