Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Toby Sanger takes a look at Canada's balance sheets and finds that both households and governments are piling up debt while the corporate sector hoards cash:

(A)ll the recent handwringing over rising household and debt levels ignores one critical point: any one person’s financial liability is someone else's financial asset. Across all the sectors in the economy (households, corporations, governments and non-residents) in the national balance sheet, net borrowing and lending all balance out to zero.

The rising income share of the top one percent has been startling (and also echoed in increasing imbalances in debt and wealth by income and generation) the shift in net borrowing and lending between the household and corporate sector is just as dramatic, and reflect almost perfect mirror images of each other.

For decades until the mid-1990s, Canadian households were net lenders to corporations and to governments. Since then, with low wage increases and rising house prices, households have increasingly gone into financial debt, borrowing an additional $706 billion since 1997 -- an increase in net borrowing to the tune of about $50,000 per household. Meanwhile, with high profits, low taxes and low rates of investment, Canadian corporations have built up ever larger surpluses. They’ve become net lenders to the tune of $730 billion since 1997, with non-financial corporations accumulating $675 billion in cash.

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The solution is clear: we need to rebalance our national balance sheet. The imbalance in our national balance sheet won’t be fixed until corporations are pushed to do something with their surpluses: invest in the economy, distribute to shareholders and/or pay workers more. If they don't, our governments should increase corporate taxes and used the increased revenues to invest in the economy, improve public services and reduce the financial pressures households are dealing with -- and help alleviate our real debt problem.

- Meanwhile, Neal Irwin points out that Wall Street's return to gross excess as usual since it crashed the global economy in 2008 demonstrates that we can't trust businesses to even notice the public interest. Linda McQuaig and Neil Brooks question why Canada offers special tax breaks to the wealthy few who enjoy stock options. And Ezra Klein highlights Paul Krugman's theory as to how CEOs are claiming ever-larger salaries while denying gains to anybody else.

- At the same time, BBC reports on the large number of employers failing to offer living wages in Scotland. Sara Mojtehedzadeh comments on the bizarre set of exemptions and loopholes in Ontario employment standards. And while there's some good news in CBC's report about temporary foreign workers being granted a reprieve while testifying against employers who have threatened them with deportation, it's obviously a problem that the threat was plausible in the first place.

- Michael Harris discusses how Stephen Harper's debate cowardice reflects his general unwillingness to answer for his actions. And in a similar vein, Glen McGregor crunches the numbers on Harper's fear of question period in the House of Commons.

- Finally, Ian Welsh offers a useful strategy for activists who want to make sure that their values and ideas are reflected in our broader political choices.