Saturday, March 29, 2014

Saturday Morning Links

Assorted content for your weekend reading.

- Robert Reich discusses the Koch brothers and their place in the U.S.' new plutocracy:
The Kochs exemplify a new reality that strikes at the heart of America. The vast wealth that has accumulated at the top of the American economy is not itself the problem. The problem is that political power tends to rise to where the money is. And this combination of great wealth with political power leads to greater and greater accumulations and concentrations of both — tilting the playing field in favor of the Kochs and their ilk, and against the rest of us.

America is not yet an oligarchy, but that’s where the Kochs and a few other billionaires are taking us.
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When billionaires supplant political parties, candidates are beholden directly to the billionaires. And if and when those candidates win election, the billionaires will be completely in charge.
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A new gilded age is starting to look a lot like the old one. The only way to stop this is through concerted political action. Yet the only large-scale political action we’re witnessing is that of Charles and David Koch, and their billionaire imitators.
- Don Martin notes that the Cons' idea of an election seems to dovetail with Vladimir Putin's. And Andrew Coyne tears into both the substance of the Unfair Elections Act, and the thoroughly adversarial process being used to ram it into law:
(U)nder any normal government, this would be considered fairly devastating stuff: not only near universal expert opposition, but a widely held suspicion that the bill, far from merely flawed, is expressly designed to tilt the next election in the Conservatives’ favour. As for Poilievre, the revelations that he had acted in such consummate bad faith on such a critically important bill — failing to consult, ignoring some experts’ advice and misrepresenting others — would ordinarily be career-limiting, to say the least.

But this is not a normal government. It does not operate in the usual way, nor does it feel bound by the usual rules. After all, if this were a normal government, it would not have as its minister for democratic reform such a noxious partisan as Poilievre, whose contempt for Parliament and its traditions registers every time he rises to speak in it.
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But as this is not a normal government, Poilievre has instead doubled down. To the detailed objections of its critics, he offers nothing but the same, and I mean exactly the same, talking points, recited without evident effort to persuade but merely to impress upon his listeners how genuinely uninterested in their opinion he is. To Neufeld’s complaints at having his report misrepresented, he responds that Neufeld does not understand his own report. The inaccurate and out-of-context passages he had cited from it were, he told Parliament, quoted “accurately and in context.” If Neufeld did not wish to use these words, he blithely told the CBC’s Evan Solomon, he should not have written them.

And so we face the likelihood, as incredible as it sounds, of the government using the majority it won in the last election to pass a bill widely perceived as intended to fix the next — and contesting that election in the shadow of illegitimacy the bill would cast. It will do so, what is more, not in spite of the opposition it has aroused, but because of it: because it has convinced itself that all such opposition, from whatever source, proceeds from the same implacably partisan motives as its own.
- Meanwhile, Susan Delacourt ties the Unfair Elections Act into the Cons' general desire to combine sophisticated and unregulated private control over information with a less-informed public sector:
Conservatives, allergic to registries and census forms in government, have spent the past 10 years scooping up citizen data for their political use, depositing it into a formidable machine they call the Constituent Information Management System (CIMS.)
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The proposed electoral reform does promise to crack down on people trying to pass themselves off as voters with inadequate identification — a measure that every election expert says will remove voting rights for thousands of Canadians without adequate ID — seniors, youth and aboriginal people in particular.

It’s as if the Conservatives have been watching a whole different movie from the rest of us. The problem wasn’t fake ID in the 2011 election; the problem was fake phone calls, telling voters that their ballot-box location was changed. We didn’t have too many over-eager voters in 2011. We had someone trying to keep people away from the ballot box.

For the sake of argument, however, let’s say that voter ID is a problem.

Why not spend some money to get voters equipped with proper identification before 2015? Why not use that big CIMS database to find out who doesn’t have the proper ID to exercise the basic, democratic right of voting? What about a Canadian citizenship card, complete with residence details?
- John Geddes points out another area where the Cons aren't letting data inform public policy - as they're choosing what even the Department of Finance recognizes to be less economic development based on nothing more than their distaste for public pensions like the CPP.

- Finally, Mark Kennedy reports on this weekend's Broadbent Institute Progress Summit. And for those of us who can't be there in person, the proceedings are being streamed online here.

Friday, March 28, 2014

Musical interlude

The Tea Party - Babylon

Friday Morning Links

Assorted content to end your week.

- The Star-Phoenix discusses how the Cons are systematically attacking the independent institutions which are necessary to ensure a functioning democratic system:
When a handful of Conservative MPs from Saskatchewan attacked the integrity of the province's electoral boundaries commissioners last year in an attempt to subvert the democratic process, it may have seemed to be a rogue act of an outlier group of politicians concerned with their electoral future.

But when you consider the tactics of the MPs, who accused Justice Ronald Mills and political scientist Prof. John Courtney on the commission of attempting to gerrymander the boundaries, as well as the Conservative party's illegal use of robocalls, push polls and misleading mass mail-outs in the context of its other attempts to pull end runs around Canada's democratic institutions, it creates a chilling narrative.
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Unlike the government's poor handling of such things as grain transportation, for which Canada was told at a recent international conference that it's no longer considered a reliable global supplier, these attempts to undermine democracy aren't simple cases of mismanagement. They suggest a pattern of behaviour detrimental to the very foundation of Canadian democracy.
- Meanwhile, Jeffrey Simpson notes that Canada's other federal party leaders - along with the occasional Con MP - can agree to iVote's view that we need to foster broad political participation by youth in particular. But Simpson is also right to note that parties will need to do more to speak to the long-term interest of younger voters.

- And Newfoundland and Labrador's new budget offers one example of that type of policy - as the governing PCs have taken up the NDP's proposal to shift from student loans to grants.

- If we needed any further indication that constant tar-sands cheerleading is a loser if exposed to the light of day, the Cons have sunk to the level of pretending that their highly visible, publicly-funded ad campaign didn't happen. And the U.S. loudly announced sorely-needed regulations governing the shipment of explosive oil products by rail - only to gut them quietly only nine days later.

- Finally, Paul Dechene reports on the Regina Public School Board's determination to shutter Connaught School - while Stephen Whitworth looks at how some parents are pushing back.

Thursday, March 27, 2014

Thursday Morning Links

This and that for your Thursday reading.

- Thomas Walkom writes that the Cons' economic prescriptions are doomed to fail because they're based on a fundamental misdiagnosis:
(T)hat half of the Conservative theory is correct. There is still persistently high unemployment.

But the other half, the study found, does not hold water: With the possible exception of Saskatchewan, Canada does not suffer from a surfeit of unfilled jobs.

In reaching this conclusion, the parliamentary watchdog looked at evidence compiled by the Bank of Canada and the Conference Board of Canada, a centre-right think tank.

This evidence shows that an undue number of jobs went begging in the years before 2008, when the economy was booming. But that certainly is not the case now.

The problem now is that there are not enough jobs. Period.
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Conservatives soon reverted to their old-time religion. If unemployment was high, the fault lay with the jobless. They either didn’t have the right skills or were too lazy to move to where the work was.

The answer was threefold. First, cut into employment insurance in order to give layabouts an incentive to move. Second, bring in temporary foreign workers to fill the alleged skills shortages. Third, subsidize employers so as to encourage training.

Along the way, the government also took swipes at its old nemesis, the trade union movement. And it eliminated a law requiring construction companies working on federal projects to pay fair wages.

The result was that Canada ended up with stagnant wage growth among middle-income earners, more temporary foreign workers serving coffee at doughnut shops and not much else.
- Gene Lyons rightfully labels the Koch brothers as the U.S.' most prominent oligarchs. And Paul Krugman recognizes why the need to counter the Kochs' billions has become an effective fund-raising message for the Democrats:
David Weigel reports that Democrats are finding the Koch brothers an effective fundraising tool — emails that bash the Kochs raise three times as much as emails that don’t. 

And you can see why: the Kochs are perfect villains. It’s not just what they are — serious evildoers who use their wealth to push hard-line right-wing, anti-environmental policies that redound very much to their own benefit. It’s also what they aren’t: they’re wealthy heirs, not self-made men, they aren’t identified with innovation (which you can at least argue for Bill Gates), they haven’t made money for other people like Warren Buffett. So focusing on the Kochs is a way to personalize a vision of conservative politics as a defense of people with unearned privilege.
- Meanwhile, David Atkins sees the tycoon funder of a campaign to secede from California as exemplifying the antisocial rich who can't even fathom the presence of humanity among their fellow elites:
It's always a big shock to selfish rich people that most other well-to-do people aren't as selfish as they are. It's important to remember that many of the very wealthy are like Warren Buffett, people who vote primarily for Democrats and aren't afraid to pay a little more in taxes to have a fruitful, stable and fairer society. It's not even the 1% that are ruining things for the rest of us; it's a very sociopathic, very energetic fraction of that 1%. And they're really shocked when other people don't behave as asininely as they do.
- Finally, following up on today's column, Joe Gunn discusses why fair elections are a moral issue. Dan Lett recognizes the gap between the public interest in maximizing voter participation, and the (varied) partisan interest in suppressing it. And Lawrence Martin makes the case that voting should be compulsory.

New column day

Here, on how the Cons' explanations for the Unfair Elections Act reflect a disturbing attempt to rule out any voter motivation other than partisan interests - while excusing future Robocon-style deceit by placing all responsibility for accurate information on Elections Canada alone.

For further reading...
- Alison documents the Con MPs who have already been caught fabricating stories to excuse vote suppression.And James Di Fiore apologizes for a single experiment which is now being pointed to ad nauseum as the basis for preventing hundreds of thousands of Canadians from voting.
- Pierre Poilievre's talking points are here (among other places).
- Finally, the Elections Canada survey referred to in the column is here. And as a noteworthy contrast, Crawford Kilian discusses StatsCan's findings as to why others didn't vote in 2011.

Wednesday, March 26, 2014

Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Joe Fiorito discusses the spread of income inequality in Canada. And Doug Henwood reviews Thomas Piketty's Capital in the 21st Century, while wondering what will follow from the empirical observation that accumulated wealth tends to perpetuate itself to the detriment of most of the population:
The core message of this enormous and enormously important book can be delivered in a few lines: Left to its own devices, wealth inevitably tends to concentrate in capitalist economies. There is no “natural” mechanism inherent in the structure of such economies for inhibiting, much less reversing, that tendency. Only crises like war and depression, or political interventions like taxation (which, to the upper classes, would be a crisis), can do the trick. And Thomas Piketty has two centuries of data to prove his point.
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Economics as a discipline loves stories about equilibrium and convergence. Vast inequities should, in theory, be “competed away,” as neoclassical economics likes to say. But mostly they’re not. Globally, poorer countries should gain on richer ones as technology and education spread and mobile capital’s search for higher returns makes the poor less poor. That has happened to some degree, but rapidly developing economies such as India and many African nations remain much poorer than the United States or Western Europe. In the case of personal wealth, old fortunes should decline and be replaced by new ones, just as manual typewriters were replaced by electric ones, and electric typewriters were superseded by computers. But in fact old money is remarkably persistent. Yes, we’ve seen the creation of a large number of new fortunes over the last few decades, a change from wealth’s dark days of the mid-twentieth century. Bill Gates is the son of a well-off lawyer who was nowhere near a billionaire; Mark Zuckerberg sprang from the loins of a dentist and a psychiatrist. They are the very picture of modern new wealth. But despite those new fortunes, inheritance remains very important. David Rockefeller, worth $2.8 billion at the age of ninety-eight, is number 193 on the Forbes 400. Overall, Piketty concludes, it’s likely that half or more of the wealth of the upper orders originates in inheritance.

And though Piketty doesn’t explore this, I’ve long suspected that a major force for the repeal of the estate tax in the United States has been that the billionaires of the neoliberal age—the tech and finance moguls, some famous, some barely known—have been thinking about their legacy. The scions of the second Gilded Age want to see their grandchildren on the Forbes 400, just like David Rockefeller is a ghost of the first Gilded Age. I’m less sure whether they want to see their names on traditional foundations—maybe more the entrepreneurial kind. But it’s clear that the political salience of the “death tax” is a reflection of a cadre of fortunes of a sort that was long out of fashion.
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Anticapitalist rhetoric need not be lazy—and for all the empirical sophistication of Piketty’s work, his political thinking is hardly a model of complexity or effort. He mostly aspires to contribute to rational democratic deliberation about “the best way to organize society.”

Still, while such deliberation is clearly necessary, political action cannot be factored out of that process just because we happen to have lived through the Cold War’s unmourned collapse. It’s energizing to see that a younger generation of political intellectuals, who were in grade school when the Berlin Wall came down, missed the anticapitalist vaccination. They might be able to take Piketty’s data and cause some genuine trouble with it. Because serious trouble—demonstrations, strikes, insurgent political movements—is what it will take to derail capitalism’s inevitable tendency toward concentration. Short of that, it looks like we’ll be continuing our journey along the road to a new serfdom.
- Meanwhile, Bart Cammaerts highlights the need to distance democratic decision-making from the influence of big money. And Salon offers a few educated guesses as to when and how the next financial crash may strike - with the influence of the financial sector on lax regulation serving as a major driving force.

- Carol Goar takes note of Peggy Nash's efforts to address youth unemployment, while pointing out the risk of a "lost generation" if reasonably secure jobs are a thing of the past.

- Finally, Tim Harford takes a look at how behavioural economics have already influenced public policy - and how much more room there is to test the work done by governments to maximize the achievement of policy goals while minimizing costs.

Tuesday, March 25, 2014

Tuesday Night Cat Blogging

Upstanding cats.





Tuesday Morning Links

This and that for your Tuesday reading.

- Paul Krugman expands on the Republicans' insistence on privileging inherited wealth over individual work:
(N)ot only don’t most Americans own businesses, but business income, and income from capital in general, is increasingly concentrated in the hands of a few people. In 1979 the top 1 percent of households accounted for 17 percent of business income; by 2007 the same group was getting 43 percent of business income, and 75 percent of capital gains. Yet this small elite gets all of the G.O.P.’s love, and most of its policy attention.

Why is this happening? Well, bear in mind that both Koch brothers are numbered among the 10 wealthiest Americans, and so are four Walmart heirs. Great wealth buys great political influence — and not just through campaign contributions. Many conservatives live inside an intellectual bubble of think tanks and captive media that is ultimately financed by a handful of megadonors. Not surprisingly, those inside the bubble tend to assume, instinctively, that what is good for oligarchs is good for America.

As I’ve already suggested, the results can sometimes seem comical. The important point to remember, however, is that the people inside the bubble have a lot of power, which they wield on behalf of their patrons. And the drift toward oligarchy continues.
- And David Cay Johnston similarly recognizes that a thoroughly corrupted political system has led to trickle-up economics:
When an economy grows at 1 percent annually but investment returns are 5 percent, the already wealthy need to reinvest only a fifth of their gains for their fortunes to grow at the same rate as the overall economy. The rest can be spent on a sumptuous lifestyle.

Since by definition the very rich do not need to consume 80 percent of their incomes — the portion by which investment returns exceed the growth of the economy in Piketty’s model — they can reinvest most of their annual gains in the market.  Over time this accumulating capital will snowball.

The official American income numbers, crunched by Piketty and his sometime colleague Emmanuel Saez, show that in the 21st century wealth and income increases are almost all taking place among the tiniest sliver of the wealthiest and highest-earning. This trend emerged in the mid-1970s, accelerated under Reaganism and took off like a rocket after the tax cuts and anti-regulatory policies of the George W. Bush administration.
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Piketty shows that whether capital is taxed or not, inequality will grow under current policies because savings from current wages and salaries cannot grow as much as returns to existing riches.

The process of accumulating “becomes more rapid and inegalitarian as the return on capital rises and the [overall economic] growth rate falls,” Piketty writes.

“Whenever the rate of return on capital is significantly and durably higher than the growth rate of the economy,” he writes, “it is all but inevitable that inheritance (of fortunes accumulated in the past) predominates over saving (wealth accumulated in the present).”
- Meanwhile, Teresa Tritch takes up the cause of entrepreneurial government. And CBC reports that health care is just one of many areas where we figure to get far more for our investment through the public sector than through for-profit allocation mechanisms:
About 60 per cent of Canadians are covered by private health insurance for health-care services such as prescription drugs, health-care economists say. Most are insured through their employers, with for-profit firms dominating the industry, said study author Michael Law of the Centre for Health Services and Policy Research at the University of British Columbia in Vancouver.

"When we looked across the for-profit insurers in Canada over the past 20 years, for the plans that are typically bought by individuals and small- or medium-sized employers, there was a pretty dramatic change in the gap between the premiums people paid in and the benefits that got paid back to them," Law said in an interview.

"Whereas Canadians were paying in a dollar and getting 92 cents back in 1991, they were paying a dollar and getting 74 cents in 2011."

Canadians need to realize those costs are ultimately passed on to them directly in higher premiums or indirectly as lower wages, Law stressed.
- Finally, Josh Eidelson offers an inside look at Walmart's treatment of its workers - with both managers and rank-and-file employees alike looking to have plenty to gain from an increase in legal protection against employer abuses.

Monday, March 24, 2014

Monday Morning Links

Miscellaneous material to start your week.

- Yves Smith notes that a short-sighted focus on returns for shareholders generally represents a poor allocation of resources even on the level of a single corporation - while also pointing out what that mindset does when shared across the business sector:
As the Occupy Wall Street movement correctly recognized, the concentration of income and wealth of the economic top “one percent” of society has left the rest of us largely high and dry. Corporate profits are increasingly going to share buybacks or dividend distribution, but very little is going back into research and development efforts, capital reinvestment, and employment.

Corporations, in other words, are devoting increasing amounts of their considerable and growing financial resources to redistribution rather than innovation. And they are doing so based on the justification of 
“increasing shareholder value.”

However, as Lazonick points out, when the shareholder-value mantra becomes the main focus for companies executives usually concentrate on avoiding taxes for the sake of higher profits and don’t think twice about permanently axing workers. They also increase distributions of corporate cash to shareholders in the form of dividends and, even more prominently, stock buybacks.

When a corporation becomes financialized in this way, the top executives no longer concern themselves with investing in the productive capabilities of employees, the foundation for rising living standards. Instead they become focused on generating financial profits that can justify ever higher stock prices – in large part because, through their stock-based compensation, high stock prices translate into megabucks for these corporate executives themselves.

It’s not a pretty state of affairs. Lazonick discusses how we evolved from a society in which corporate interests were largely aligned with those of broader public purpose into a state where crony capitalism, accounting fraud, and corporate predation are predominant characteristics.

Lazonick makes a very powerful case that the ideology of “maximizing shareholder value” primarily works to the benefit of the very corporate executives who make corporate resource allocation decisions, and who derive high levels of remuneration from munificent stock option awards. As for the rest of us, we’re left to fight over the crumbs.
- Meanwhile, Nick Cohen writes that the ample funding and brazen dishonesty of climate-change denialists has thus far trounced scientific facts in the battle to set environmental policy.

- Lana Payne offers her take on the Unfair Elections Act, while the Globe and Mail calls for the bill to be scrapped. Laura Payton observes that while the Cons have conjured up plenty of imaginary issues to be resolved by decrees from on high, they've done nothing to address very real concerns about voter privacy. And Malcolm French highlights a worrisome step toward U.S.-style partisan oversight of elections:
To this day, no honest observer can say with absolute confidence which of Al Gore or George W. Bush received the larger number of votes in Florida. At the end of the day, the election was decided by the fact that there were more Republican state officials and Republican appointed judges involved in the adjudication of the results than Democratic state officials and Democratic appointed judges.

As a Canadian, I thought the oddest thing about the entire Florida recount was that every single official and every single judge acted according to partisan interests. That applies as much for the Democrats as the Republicans. No one actually cared about finding the democratic outcome of the vote. Unlike a Canadian judicial recount by a judge legally obliged to be impartial, the American system is an entirely partisan affair at every level.

It seems our present government likes the American model, where democracy is less about who gets the most votes than about who gets to appoint the most officials.  The Harper government's Orwellianly named Fair Elections Act (dubbed by pretty much everyone else as the Unfair Elections Act) takes every lesson of the far right assault on the American electoral process and imposes it on our hitherto non-partisan process.
- Meanwhile, Susan Delacourt sees the Cons' desire to radically overhaul elections, other political institutions and judicial appointments without the slightest bit of input from the public or from other parties as ample reason for a federal election.

- Finally, Michael Harris lists a few of the questions we should expect to see answered as the Robocon investigation continues.

Sunday, March 23, 2014

Sunday Morning Links

This and that for your Sunday reading.

- Edward Robinson laments the willingness of European centre-left parties to abandon any attempt to argue against austerity even when the evidence shows that's the right position to take:
Centre-left parties in Europe appear to have completely lost the argument for pragmatic fiscal policy, much in the way that US Democrats seemed to lose their own case precisely at the moment when stimulus was working. Consider again how little financial commitment it would have taken to have shored-up confidence in Greek sovereign debt via Eurobonds. Greek debt in 2010 represented only 3.6% of Eurozone GDP. Fran├žois Hollande’s government was supposed to be making the case for Eurobonds.

What is worse, the centre-left now appears to have let the very explanation of (or blame for) the crisis slip away from them into the hands of neoliberals. Instead of constantly reminding voters and markets that sovereign debt-to-GDP ratios were falling in the Eurozone (and the UK) before the crisis, they have given up. Voters seem to have forgotten that the massive public debts accrued since 2008 had been private debts before then.

From this analysis flows austerity’s legitimacy. To social democrats, it seems profoundly misguided to be prescribing supply-side medicine to a problem which was fundamentally caused by a huge uptick in private-sector debt, necessitated by steadily falling effective demand for 30 years. Of course, there is always inefficiency or corruption, but these were not the primary causes of the crisis. Nonetheless, centre-left parties are assenting.
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While elections are on the table we must campaign hard, both within our respective national parties and within the broader argument at European level. But if that cannot shift the balance, then genuine social democrats will soon need to decide whether or not to stand by the fading hope of a return to economic pragmatism in the Eurozone or whether to throw their lot in with those calling for the tried and tested routes out of chronic indebtedness.

Choose the former and we risk being permanently subsumed into European austerity elites, choose the latter and we find ourselves, against the European project, with some unattractive intellectual companions and just as much uncertainty. It is a real dilemma.

But surely the status quo of never-ending internal devaluation is politically unacceptable, damaging to the ideal of a united Europe and harmful to democracy and economic development.
- Meanwhile, Matthew O'Brien writes that plenty of U.S. families with relatively high gross incomes are nonetheless living paycheque to paycheque - meaning that precarious financial situations aren't limited to the lower end of the income scale. And while workers across the board are struggling to get by, Paul Krugman highlights how the right is pushing for ever more giveaways to people who live off of wealth rather than labour:
In my last post I tried to document the extent to which modern Republican rhetoric has already adopted the values of “patrimonial capitalism”, even though America’s top one percent still owes its high incomes largely to compensation rather than wealth. On reflection, I thought I should also document the extent to which the GOP has put its money — or, actually, taxpayers’ money — where its mouth is, with concrete policies that favor wealth over work.

Consider, as Exhibit A, the Bush tax cuts. Bush did cut the top tax rate on earned income from 39.6 to 35 percent, a 12 percent reduction. But he cut the rate on capital gains from 21 to 15, a 28 percent reduction; he cut the rate on dividends from 39.6 (because dividends were previously taxed as ordinary income) to 15, a reduction of more than 60 percent. And he put the estate tax on a path toward zero — a 100 percent reduction.

The estate tax made a partial comeback thanks to the awkward fact that a Democrat was in the White House, and there have been some tax hikes on capital income. The point, however, was that Bush tried to give people living off wealth, inherited wealth in particular, much bigger tax cuts than he gave high earners.
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Even now, 6 of the 10 wealthiest Americans are heirs rather than self-made entrepreneurs — the Koch brothers plus a bunch of Waltons. There’s every reason to believe that the role of inheritance will only grow over time.

And if it does, half our political system will be cheering it on and offering the ever-more-empowered heirs as much assistance as possible.
- And Alison highlights how the Kochs in particular have used their money to warp Canadian politics in favour of their own interests.

- Mariana Mazzucato reminds us that public policy can set a necessary foundation for innovation, while pointing out that the Cons have preferred to hand free money to entrenched corporate interests and resource extractors rather than encouraging the development of new ideas.

- Finally, Don Lenihan offers a useful set of criteria for open government - while highlighting how far we are from the ideal.