Saturday Morning Links

Assorted content for your weekend reading.

- Thomas Walkom discusses why politicians have thus far failed to take any meaningful action on climate change. But it's also worth noting that the question of whether voters are pushing for change may not be the only determining factor in government decision-making.

Most obviously, debt and deficits (which are no less distant from the immediate interests of voters than climate change) are seen as demanding constant and immediate action even at the expense of anybody's apparent short-term political interests - with unpopular and destructive policy choices regularly defended based on the accepted belief that no responsible government can ignore a greater issue. And while the fiscal scolding may be based all too much on a general aversion to government rather than any sane ranking of priorities, a similar and more positive principle might develop in the area of climate change: leaving aside the exact means chosen, there's surely some value in arguing that the end of not damaging our planet should be part of any reasonable set of governing principles.

- Of course, "a secure living for all" would also fit neatly into that category. On that front, Guy Standing makes the case for a basic income, while Neil Irwin points out that (contrary to the spin of the right) strong social programs strongly encourage workforce participation:

(M)ore people may work when countries offer public services that directly make working easier, such as subsidized care for children and the old; generous sick leave policies; and cheap and accessible transportation. If the goal is to get more people working, what’s important about a social welfare plan may be more about what the money is spent on than how much is spent.

That is the argument that Henrik Jacobsen Kleven, a professor at the London School of Economics, offers to explain the exceptional rates of participation in the work force among citizens of Sweden, Norway and his native Denmark.

...

There is a solid correlation, by Mr. Kleven’s calculations, between what countries spend on employment subsidies — like child care, preschool and care for older adults — and what percentage of their working-age population is in the labor force.

Consider Marianne Hillestad of Steinberg, Norway. She teaches kindergarten; her husband, Ruben Sanchez, installs heating and ventilation systems. Day care for their three children, ages 4, 7, and 9, works out to about $1,100 a month; Ms. Hillestad estimates that if she had to pay a market rate, it would be nearly twice that, eating up most of her paycheck.

...

Collectively, these policies and subsidies create flexibility such that a person on the fence between taking a job versus staying at home to care for children or parents may be more likely to take a job.

- Following up on Thursday's column, Don Cayo chimes in on Canadians' broad public support to fight inequality. And Dennis Howlett makes the case for strong enforcement against tax cheats to ensure wealthier citizens pay their fair share.

- Finally, Brent Patterson notes that the Cons managed to prevent a toothless NAFTA panel from even examining the effect of fish farms on B.C. salmon stocks by voting against any review. And ThinkProgress highlights Enbridge's recent Regina spill as yet more reason to be dubious of pipeline promises.

Musical interlude

Emma Hewitt - Rewind (Mikkas Remix)

On representative units

Does anybody remember which particularly prominent political pundit went far out his way to trumpet the idea that the basic unit of political legitimacy is the caucus - to the point of repeatedly advocating a legislated requirement that a caucus vote override the decisions made by the whole of a party's membership?

I ask only because he seems to have been replaced with a far more reasonable impostor.

By the majority-of-caucus standard set under Michael Chong's Reform Act (or the stronger forms suggested by Andrew Coyne among others), the decision of a majority of Wildrose Party MLAs to join up with Jim Prentice's PCs following a caucus vote should be seen as having been fully validated.

So why then is Coyne among the people rightly lambasting Danielle Smith and company for their move? Well, that has to do with the flaws in the original theory behind the Reform Act.

Elected representatives are (and should be) only the tip of the iceberg when it comes to determining the direction of any political party. And we're right to consider it illegitimate when those representatives make choices which run contrary to the underlying basis for their elected positions - even if a majority of their caucus-mates happen to agree.

What's more, an undue focus on a narrow set of representatives rather than the broader populations they represent can make it far too easy for politicians to bargain away their votes or seats, rationalizing the action on the theory that the trust reposed in a representative through the ballot box represents a mandate to use an elected position for personal gain. And that can happen just as easily on a group basis as an individual one.

Of course, the question of how to then check top-down power remains open. (Though it's worth noting that exactly one party has respected the ethical principle that a mandate to serve one party can't simply be passed to another in both law and practice.)

And it's doubtful that any legislated structure can do the job in the absence of a strong and active membership which can ensure that self-serving actions are met with an appropriate response in the next election cycle.

But at the very least, nobody should hold any illusion that handing special power to party caucuses will resolve the problem.

[Edit: fixed wording.]

Thursday Morning Links

This and that for your Thursday reading.

- Jordon Cooper rightly argues that we should move away from forcing people to rely on homeless shelters and other stopgap measures when we can afford to provide permanent homes:

We fill a bus for the hungry while ignoring that the reason for it is that social service programs depend in part on our generosity to feed people. We bring care packages to shelters and forget that cities elsewhere in Canada have drastically reduced the number of people in shelters and the time they spend there, and that it's cheaper than keeping people in shelters. One can make Christmas at shelters an extremely pleasant experience. I have seen shelters provide fabulous food, nice gifts, good movies and quality entertainment over the holidays. Staff, volunteers and even residents go all out to make things pleasant and inviting.

Yet, at the same time, you are left with people who remain homeless. If you ask them if they would rather be in a dorm or a their own apartment, the answer would be the same for each: They want a place to call home.
...
As important as it is to be charitable toward the poor, it is more important to find long term solutions to social problems and implement them. As great as it is to help someone in a shelter at Christmas, it would be even better if they didn't have to be there.

- Zoe Williams laments the UK's move toward different classes of new citizenship based on wealth. And Susana Mas reports that the Cons are being even less subtle about making cash up front the default standard for immigrants to Canada.

- Jim Tankersley writes that far too many of the U.S.' best and brightest young minds are being diverted into a financial system which does nothing but extract wealth for itself. And Michael Lewis has a few suggestions to reverse that pattern.

- Scott Clark and Peter DeVries comment on the absurdity of being governed by a party which is fundamentally opposed to the idea of government. And Michael Harris highlights the gap between what the Cons plan to campaign on next year, and what Canadians actually want out of a federal government.

- And finally, Linda McQuaig reminds us of Canada's appalling role in encouraging and facilitating torture in the wake of the U.S.' long-awaited report. 

New column day

Here, on this week's confirmation from the Broadbent Institute that Canadians severely underestimate wealth inequality - as well as the strong popular support to reduce the wealth gap.

For further reading...
- The Norton/Ariely study of the views of Americans on wealth inequality is found here, and discussed further here, here and here.
- And Danielle Kurtzleben writes that actual wealth inequality in the U.S. has only been getting worse since 2010.

Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Mariana Mazzucato comments on the role of the innovative state - and the unfortunate reality that we currently lack anything of the sort due to corporatist thinking:

(T)hanks in part to the conventional wisdom about its dynamism and the state’s sluggishness, the private sector has been able to successfully lobby governments to weaken regulations and cut capital gains taxes. From 1976 to 1981 alone, after heavy lobbying from the National Venture Capital Association, the capital gains tax rate in the United States fell from 40 percent to 20 percent. And in the name of bringing Silicon Valley’s dynamism to the United Kingdom, in 2002, the government of British Prime Minister Tony Blair reduced the time that private equity funds have to be invested to be eligible for tax reductions from ten years to two years. These policies increase inequality, not investment, and by rewarding short-term investments at the expense of long-term ones, they hurt innovation.


Getting governments to think big about innovation is not just about throwing more taxpayer money at more activities. It requires fundamentally reconsidering the traditional role of the state in the economy. Specifically, that means empowering governments to envision a direction for technological change and invest in that direction. It means abandoning the shortsighted way public spending is usually evaluated. It means ending the practice of insulating the private sector from the public sector. And it means figuring out ways for governments and taxpayers to reap some of the rewards of public investment, instead of just the risks. Only once policymakers move past the myths about the state’s role in innovation will they stop being, as John Maynard Keynes put it in another era, “the slaves of some defunct economist.”


- And Ross Gittins describes how an obsession with balanced budgets and tax tinkering is preventing Australia from even discussing meaningful social and economic goals.

- Of course, that will sound all too familiar based on the Harper Cons' treatment of Canada. And Carol Goar surveys some of the crazy policy choices which have led us to be grossly overreliant on unstable resource prices, while Trish Garner notes that poverty remained endemic even a supposedly strong economy prior to the resource bust.

- Murray Mandryk recognizes that the Wall government's determination to favour private consultants rather than building a strong public sector workforce is thoroughly counterproductive. And Paul Hanley laments the waste of $1.4 billion of public money on a carbon-capture scheme which is both dirtier and more expensive than renewable alternatives.

- And finally, the CLC rightly blasts the Senate for refusing to apply either second thought or any apparent sobriety in rubber-stamping an anti-labour bill which all parties agree contained serious errors.

On managerial lapses

Shorter Tony Clement:

I believe there's an art to managing public money. And that's why I see no problem whatsoever with budgets which are works of fiction.

Tuesday Night Cat Blogging

Cats with mats.

Tuesday Morning Links

This and that for your Tuesday reading.

- Carter Price offers another look at how inequality damages economic development. And the Broadbent Institute examines the wealth gap in Canada - which is already recognized as a serious problem, but also far larger than most people realize:



- Paul Buchheit discusses how the U.S. is turning poor people into commodities or criminals. Chuk Plante reviews some facts about child poverty in Saskatchewan - with a particular focus on the need to measure and reduce the alarmingly high rates of child poverty among First Nations children. Suzanne Moore points out how poverty in childhood affects a person for a lifetime. And Betsy Isaacson reminds us that a basic income would work wonders in eliminating poverty.

- Tim Naumetz exposes both the Cons' failure to spend budgeted public money on renewable energy, and their overspending on oil and gas. And PressProgress catches Christy Clark literally talking up the concept of lumps of coal at Christmas - offering about the most stark example yet that our petro-politicians have nothing to offer other than trying to talk up what's long been seen as an outcome to be avoided.

- Meanwhile, Giuseppe Valiante reports on what happens when a more independent body carries out a cost-benefit analysis of risky resource development, as Quebec's environmental review board has given a thumbs-down to shale gas development.

- Finally, Christopher Waddell observes that the Cons are destroying access to information in Canada.

Monday Morning Links

Miscellaneous material to start your week.

- Barrie McKenna comments on how far too many governments have bought into the P3 myth with our public money:

Governments in Canada have become seduced by the wonders of private-public partnerships – so-called P3s – and blind to their potentially costly flaws. In a typical P3 project, the government pays a private sector group to build, finance and operate everything from transit lines to hospitals, sometimes over decades.

These projects almost always cost significantly more than if governments just put up the money themselves and hired contractors to build the same infrastructure, under conventional contracts. Ontario Auditor-General Bonnie Lysyk found that the province may have overpaid to the tune of $8-billion for 74 major infrastructure projects, dating back nine years.

A key factor is financing. Private-sector companies can’t borrow as cheaply as governments can, adding significantly to the cost, especially on contracts that may run for decades.

Other transaction costs, including lawyers and consultants, are also typically higher with P3s. But the biggest variable is the substantial price tag put on the risk shifted from governments to the private sector. Ontario is convinced the risks of cost overruns, delays, design flaws and the like are substantially lower with public-private partnerships, and it’s willing to pay a premium for that peace of mind.

Unfortunately, the government has struggled to accurately price that risk, relying on the murky and potentially inflated calculations of outside consultants. As Ontario Economic Development Minister Brad Duguid sheepishly admitted: “It is a bit of an art, identifying risk, as much as a science.”

Ontario’s Auditor-General is blunter, suggesting the government’s so-called “value assessments” are little more than junk science.
...
The allure may have a lot more to do with politics, than sound financial management. These projects give governments the ability to push spending down the road, with ribbon cuttings today and most of the bills due later.

They also allow governments to duck the inconvenient responsibility when things go terribly wrong. No politician, or bureaucrat, wants to have to explain why a high-profile project is late or over budget.

Taxpayers may have a very different perspective on the responsibilities of public officials, and a few good suggestions on what to do with an extra $8-billion.

- And James Bagnall notes that it's also a regular practice for the Cons and other governments to write the rules of supposedly neutral competitions to favour their preferred bidders.

- Jim Tankersley reports on the devaluation of the American worker over the past few decades. And David Climenhaga finds that Jim Prentice's idea of getting input about the needs of workers is to gather seven executives in a closed-door "blue ribbon" panel.

- Allan Maki interviews Ted Clugston about Medicine Hat's success in eradicating homelessness - though the most important lesson to be drawn from the story may be that we shouldn't let naysayers (which Clugston once was) stand in the way of vital public policies. And Cory Weinberg discusses San Francisco's push to make sure that underused public land directed toward meeting housing needs, while David Ball reports on a creative effort to make home ownership more affordable in Calgary.

- Finally, Gerald Caplan explains what he'd tell Stephen Harper if given the chance. But in light of the tiny odds of Harper having interest in a word of it, I suspect we're better off making the same statements to the general public.

On unjust cause

Shorter Peter Kent, Stephen Harper Talking Point Dispenser Level Infinity:

The Dear Leader fired me for making some effort to do a job with the work "environment" in the title, rather than merely going through the motions. And through much re-education, I've come to see that he was right to do it.

Sunday Morning Links

This and that for your Sunday reading.

- Kevin Page points out a few of the issues which should be on the table when Canada's finance ministers meet next week:

Our finance ministers are smart. They know that faster growth is going to require higher investment rates and sustainable public finances. But the reality is that Canada is falling down on capital investments in both the private and public sectors. Business capital investment has grown a weak 2 per cent over the past two years. That is not boosting the investment rate. Meanwhile, government capital investment has declined 2 per cent over the same period, and that is after the 2009-10 fiscal stimulus. This is not a recipe for boosting growth.

Why do we continue to pursue an approach that stunts growth now and for the future? Is this public sector mismanagement? Or, is this an effort to achieve a balanced budget that allows for spending on current goods or services (for my generation that votes) at the cost of capital goods for future generations (our children and grandchildren that do not yet vote)?
...
The austerity approach set out in the 2012 federal budget will succeed in generating a balanced budget, but at a cost: slower growth and degraded public services like support for veterans. Meanwhile, the government is responding to its improved fiscal situation not by raising the investment rate, but by cutting taxes further.

Analysis by the Parliamentary Budget Office (and Finance Canada) indicates that the federal fiscal structure is sustainable. This is largely because Ottawa has reduced the growth escalator on health transfers, downloading the problem to the provinces. Provincial governments, already struggling under increased pressure caused by slow growth, have a long-term fiscal gap they will have to address.

Given all of these challenges, the finance ministers’ meeting ought to be a pivotal moment. The temptation to focus primarily on oil prices must be avoided. If we want economic growth to raise incomes, address inequalities and ensure essential public services, we are going to have to raise the investment rate in Canada. There’s no other way.

- And Andrew Jackson notes that even our mediocre economy of the past few years has relied on unsustainable household-level debt to make up for government neglect:

Younger households on modest incomes are often highly stretched financially, have little or no equity in their homes, are often carrying high levels of credit card debt, and are saving very little for retirement. When housing prices fall and/or interest rates rise, they will be highly vulnerable

By contrast, to households, non financial corporations are in rude financial health, and have been net lenders to the rest of the economy in recent years. Credit market debt of non financial corporations is 58% of business equity, a ratio which has been stable for a decade, and these corporations are currently sitting on $656 billion of cash or what former Bank of Canada governor Mark Carney referred to as “dead money.”

While the Bank of Canada has consistently said it hopes to see a “rotation” of demand from households to corporate investment, household debt continues to rise, driven by low interest rates and generally stagnant incomes. CIBC Economics has noted a recent acceleration of consumer borrowing.

As the old saying goes, when something cannot go on forever, it won't. Households cannot continue to borrow so as to spend more than they earn, and house prices cannot rise indefinitely compared to incomes.

We risk a major shock to the economy when the day of reckoning arrives, not least because business investment is unlikely to grow rapidly at a time when household demand is weak.

Some part of the economy, be it households, corporations or governments, has to be borrowing at any given time so as to put savings to use and to maintain overall demand. If households are stretched and business are reluctant investors, it will be up to government to save us from a downturn through increased public investment.

- But Thomas Walkom discusses Stephen Harper's stubborn consistency in remaining out of touch with Canadians - a pattern which includes handing out tax baubles rather than developing an economic policy that actually benefits workers. And Louise Elliott offers another important example of the principle, as the Cons are approving Microsoft's plan to drive down wages and avoiding hiring Canadians by rubber-stamping a request for hundreds of temporary foreign workers.

- Branko Milanovic observes that Russia offers a particularly stark example as to how free-market dogmatism led to both a destructive giveaway of public assets, and a corrupted form of corporatism afterward. But unfortunately, Robert Benzie reports that the Ontario Libs are just one of many current governments following the same path.

- Finally, Larry Savage and Stephanie Ross comment on the need for a united labour front in working to replace the Harper Cons and other reactionary governments with progressive alternatives.