Sunday, February 24, 2013

Sunday Morning Links

That and that for your Sunday reading.

- Alex Himelfarb weighs in against gratuitous austerity by pointing out the dishonest cycle of excuses used to push destructive policy:
(T)he consequences of cuts are increasingly visible, first for the most vulnerable: aboriginal communities struggling to meet basic needs, higher tuitions and student debt, refugees who cannot get needed medicine, more unemployed Canadians thrown onto inadequate welfare because they cannot access insurance. Some consequences will play out more slowly: weaker environmental regulations, cuts to education and science, neglect of crumbling infrastructure, eroding public services will all make our economy less competitive, less fair, less sustainable. The deeper the cuts, the more public services erode, the more inequality and poverty grow, the greater the risks of social disruption and the higher the political costs. Then what?

The final refuge is to argue that all the right things have been done and now it’s up to the market. These arguments are already on the business pages of our media: when the governor of the Bank of Canada urged business to put some of the cash they were sitting on back into the economy, the austerians reacted with force. Don’t worry about “dead money,” they said. Don’t worry about the failure of the corporate sector to turn its profits — and tax cuts — into job-creating investments. Sounding eerily like old Communists clinging to the notion of inevitable revolution, their argument was pure ideology — “it’s only a matter of time,” surely market forces, as the laws of economics require, will kick in. If there are inexorable laws of economics that yield jobs and growth from cuts to taxes and government, it seems somebody forgot to tell business.
- Chrystia Freeland notes that the promise of prosperity out of free trade looks to be similarly empty within one of the largest trade relationships in the world, as the primary effect of increased U.S. trade with China has been domestic job losses:
“U.S.-China trade is almost a one-way street. This trade relationship doesn’t clearly give you the benefit that you can sell a lot of stuff to your trade partner,” Dorn said. “If you talk to someone who is somehow involved in the promotion of free trade, they may say that maybe the headquarters of Apple (AAPL.O) benefits. That may be true. But the first-order effect is of job loss.”
...
What is challenging about both of these trends, and what makes the hollowing out of the middle class a political problem as well as an economic one, is how different they look depending on whether you own a company or work for one.

Shipping middle-class jobs to China, or hollowing them out with machines, is a win for smart managers and their shareholders. We call the result higher productivity. But, looked at through the lens of middle-class jobs, it is a loss. That profound difference is why politics in the rich democracies are so polarized right now. Capitalism and democracy are at cross-purposes, and no one yet has a clear plan for reconciling them.
- Meanwhile, Laurie Monsebraaten discusses the plight of the precariat, as roughly half of workers in the Toronto area lack secure employment. And pogge rightly notes that the trend toward instability is part of a conscious set of policy choices aimed at redistributing wealth in the direction of the few at the top:
Governments over the past thirty years or so have increasingly catered to the corporate agenda while organized labour has been steadily undermined. Politicians have practically hurt themselves in the rush to sign on to so-called trade agreements that curtail their own ability to affect the economy in favour of giving more control to the private sector. They've either looked on benignly or actively smoothed the way for employers who want to rely less on full time employees and turn as many jobs as possible into temporary, contract positions with no benefits.

Wasn't the state of affairs described in this article the point? People who feel their economic position is precarious will settle for lower wages, fewer benefits and more abuse. Their employers can look forward to bigger profits on which, thanks to those same co-operative governments, they'll pay lower taxes.
- Finally, the public editor of a Bell-owned paper has concluded that there's no need for any critical look at Bell's motives or choices so long as it proclaims a story to be purely a matter of good news. I for one see no way this philosophy could possibly go wrong.

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