Saturday Morning Links

Assorted content for your weekend reading.

- The Globe and Mail weighs in on the Lac-Mégantic tragedy by pointing out that we should be far more concerned about public safety than technical defences and excuses. Saskboy notes that as soon as a corporation's business choices lead to a massive public disaster, the result is a claim that it can't be responsible for anything. Julian Sher looks at the history of cost-cutting by railroads including MMA, while Heather Mallick focuses on the issue of single-engineer trains.

- Stuart Trew catches Jean Charest and the Fraser Institute actively encouraging increased Canadian prescription drug costs in the name of finishing off a trade deal of dubious value with the EU:

We learned recently that the Ontario government believes CETA could save provincial exporters up to $100 million as a result of tariff elimination in Europe. But provincial trade officials admitted this sum would be undercut or even eclipsed by the hundreds of millions of dollars more the province would have to pay annually for Brand Name versus cheaper generic drugs, as predicted by the federal government and other studies.

As I've said before, this trade-off, which the majority of countries negotiating the TPP are apparently not willing to make, essentially swaps potential corporate gains (e.g. if Ontario firms make use of the lower tariffs, and if brand name drug makers bother to invest more in Canada) for absolute and permanent real losses to public revenues. It would also hit individual pocket books since private drug plans would be effected by the patent extensions.

- And Lori Culbert reports on the destruction of British Columbia's Therapeutics Initiative, Canada's main source of independent information about prescription drugs, at the behest of big pharma.

- Peter O'Neil reports on the PBO's findings about funding for First Nations schools in British Columbia, with the less-than-surprising conclusion being that students on reserve are being thoroughly underfunded

- Paul Dechene discusses the City of Regina's pathetic attempts to retroactively rewrite the rules for a a petition drive which received more support than anybody holding public office in the city.

- Finally, David Dayen writes that less than five years after a global financial meltdown caused mostly by lax regulation, both U.S. parties seem fine leaving a massive loophole in the minimal effort to protect the public interest passed in response:

The Dodd-Frank financial reform law intended to end the practice of financial industry behemoths shifting away their riskiest practices from U.S. regulators’ prying eyes. But a rule that would subject the $630 trillion global derivatives market to the same regulations, no matter the location of the trades, is on life support, thanks to a combination of foreign regulators, bank allies at federal agencies and in Congress, and Treasury Secretary Jack Lew, who may have delivered the final blow last week. The complex battle over derivatives also reflects a battle for the soul of the Democratic Party, between populist reformers and Wall Street-friendly shoe polishers. And while the situation is fluid in advance of a Friday deadline, as it stands now, the shoe polishers are winning.

Derivatives are those massive bets on bets that are only tangentially related to real-world assets, like a rise in home prices or the reduction of the dollar. They accelerated the financial crisis when the housing bubble collapsed, and until recently, they were totally unregulated. But Dodd-Frank included substantial derivatives reform, forcing the trades to run through transparent clearinghouses, and forcing the dealers to carry sufficient capital to cover losses. Most important, under the “cross-border” provision, all affiliates that trade more than $8 billion in derivatives would be subject to the same regulation, regardless of where they are based. That’s crucial, because the five biggest U.S. banks control 95 percent of the derivatives market, and they have thousands of overseas affiliates where they often park their trading desks (at least half of their trading takes place overseas, according to International Financing Review). This allows them to spread risk in unregulated areas, only to plead for federal assistance when it all blows up. “Doing derivatives rules without cross-border is like blocking the front door and leaving the back door wide open,” said Marcus Stanley of Americans for Financial Reform.