Tuesday Morning Links

This and that for your Tuesday reading.

- Joseph Stiglitz reminds us that inequality isn't an inevitability, but a choice favoured (and lobbied for) by the few who want to remove themselves from the general public:

(W)idening income and wealth inequality in America is part of a trend seen across the Western world. A 2011 study by the Organization for Economic Cooperation and Development found that income inequality first started to rise in the late ’70s and early ’80s in America and Britain (and also in Israel). The trend became more widespread starting in the late ’80s. Within the last decade, income inequality grew even in traditionally egalitarian countries like Germany, Sweden and Denmark. With a few exceptions — France, Japan, Spain — the top 10 percent of earners in most advanced economies raced ahead, while the bottom 10 percent fell further behind.

But the trend was not universal, or inevitable. Over these same years, countries like Chile, Mexico, Greece, Turkey and Hungary managed to reduce (in some cases very high) income inequality significantly, suggesting that inequality is a product of political and not merely macroeconomic forces. It is not true that inequality is an inevitable byproduct of globalization, the free movement of labor, capital, goods and services, and technological change that favors better-skilled and better-educated employees.
...
Excessive financialization — which helps explain Britain’s dubious status as the second-most-unequal country, after the United States, among the world’s most advanced economies — also helps explain the soaring inequality. In many countries, weak corporate governance and eroding social cohesion have led to increasing gaps between the pay of chief executives and that of ordinary workers — not yet approaching the 500-to-1 level for America’s biggest companies (as estimated by the International Labor Organization) but still greater than pre-recession levels. (Japan, which has curbed executive pay, is a notable exception.) American innovations in rent-seeking — enriching oneself not by making the size of the economic pie bigger but by manipulating the system to seize a larger slice — have gone global.
...
I see us entering a world divided not just between the haves and have-nots, but also between those countries that do nothing about it, and those that do. Some countries will be successful in creating shared prosperity — the only kind of prosperity that I believe is truly sustainable. Others will let inequality run amok. In these divided societies, the rich will hunker in gated communities, almost completely separated from the poor, whose lives will be almost unfathomable to them, and vice versa. I’ve visited societies that seem to have chosen this path. They are not places in which most of us would want to live, whether in their cloistered enclaves or their desperate shantytowns.

- On the subject of appalling corporate governance, Janet McFarland reports on how even a modest amount of director responsibility is being treated as an outrage by a corporation responsible for polluting land. Apparently, the story goes, if directors are liable for the actions of the businesses they run, their businesses won't feel free to ignore their environmental responsibilities and stick the public with the bill. (And apparently, the story goes, that's somehow a bad thing.)

- Meanwhile, Alison takes a closer look at the Cons' actions to make sure increased wealth doesn't find its way to Canadian workers - as their feigned outrage over the use of temporary foreign workers has hit its expiration date.

- And speaking of transparently temporary fixes, Josh Wingrove takes a closer look at the much-ballyhooed oilsands monitoring program set up by tar sands lobbyists and the Alberta and federal governments. And the scheme touted as promising a "improved understanding of the long-term cumulative effects of oil sands development" is set to expire no later than 2015.

- Finally, Althia Raj reports that the Cons' latest prorogation has officially been exposed as nothing but a sad attempt to escape accountability - as the Cons are trying to pretend it never happened in reinstating all of their legislation to exactly where it stood when they declared the previous session to be over. And Ian Bron and Allan Cutler offer some suggestions for the new throne speech.

On coopting

Paul Wells offers a note of warning for the Libs in recruiting Chrystia Freeland as a candidate. But I see a greater problem for Freeland herself in pursuing the role.

It's not hard to see how Freeland might seem appealing as a means of papering over the Libs' disconnection from the general public:

Chrystia Freeland, winner of the 2013 National Business Book Award for her book Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else (Doubleday Canada), has confirmed her foray into federal politics.

The race to replace MP Bob Rae in the Toronto Centre riding is gaining momentum as the Thomson Reuters editor and managing director has confirmed she will be seeking the Liberal party nomination. 

But it wasn't long ago that an opposition party similarly looked to press its advantage in a perceived area of weakness for the incumbent government - with little regard for whether it intended to follow through on its assurances. And that didn't exactly work out well for the star candidate involved...

Years after a nondescript public servant wouldn’t play ball with institutional sleaze (and became a national hero in the process), Allan Cutler still has Canada on his mind. He is as troubled now as ever he was when Jean Chretien had his name embossed on golf balls to keep Quebec in Canada.

“I had hoped after Gomery that things would change. If anything, it has gotten worse. We have an epidemic of corruption at the federal level. Whistleblowers are even more unwelcome now than they were then.”

...nor for the writer whose criticism was seen to define the problem:

Savoie's passionate condemnation of centralization didn't slow it down. In an odd way, it may even have contributed to it.

"An adviser to a prime minister asked me if I'd sign a copy of Governing from the Centre," Savoie says. "I leafed through it and I noticed that he had read it, he had underlined a few things. And I said, 'Now you're going to do things differently?' He said, 'No, no, no. We use it as a manual.' "

Now, I have no doubt that there are plenty of Libs hastily grabbing copies of Plutocrats for their summer reading. But given that the actual direction of the party under Justin Trudeau has involved backing the Cons and corporate interests at every turn, there's little reason to think Freeland's call to serve "everyone else" is being treated as anything other than a cookbook - nor that the Libs see an expose about the global elite as much besides a manual to gain entrance to the club.

We'll see whether Freeland herself manages to gain any traction on the Canadian political scene. But all indications now are that she's mostly being used to brand continued plutocratic rule with a large red "L" - and the rest of us shouldn't see that as an improvement.

Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Martin Kirk discusses the role governments play in allowing and facilitating the extraction of a substantial portion of the world's wealth to tax havens (h/t to thwap):

Tax theft is endemic all over the world. It is organised through an intricate system of tax havens; the PR around it is astonishingly good, as evidenced by the fact that most people have no idea of its scale and can get distracted by the misdeeds of a few bad apples rather than seeing the barrel they came in; and one of the most vibrant and important hubs – the City of London - is sitting right under the noses of the British politicians who are today decrying the corporations who use it.

Tax havens exist solely to help the rich avoid national taxes. They give them a way to opt out of the social contract. Multinationals happily extract profits from countries and then team up with tax havens to avoid paying their share of taxes that make the countries profitable for them in the first place. Without things like the rule of law, and economic and political stability, the market for most products would flounder. All these things cost, and when people steal taxes they are essentially saying, everyone but us should pay.

The scale of the theft is staggering. Somewhere between $21 and $32 trillion is hidden behind the vast walls of tax haven secrecy. That’s the equivalent of one third of all global annual income. Somewhere between 60 and 70% of all international trade flows through them so that profits can be siphoned off untaxed.

The scale alone means tax havens have a material impact on levels of global inequality and poverty. But more insidious is what they actively facilitate. Tax havens are in the background of practically every instance of large-scale corruption and economic crime of the last thirty years. Every corrupt leader, every major arms dealer and drug cartel, as well as most multinational corporations rely on their ‘discretion’ to do business. It’s a morality-blind service industry for the ultra-rich. Forget the 1% - this industry exists largely for the pleasure and benefit of the 0.02%; the 10 million people who ‘own’ the bulk of the $21trillion hidden.

- Michael Harris talks to Allan Cutler about secrecy and corruption in the federal government - and the one-time Con candidate has some sharp words for the party which recruited him:

Years after a nondescript public servant wouldn’t play ball with institutional sleaze (and became a national hero in the process), Allan Cutler still has Canada on his mind. He is as troubled now as ever he was when Jean Chretien had his name embossed on golf balls to keep Quebec in Canada.

“I had hoped after Gomery that things would change. If anything, it has gotten worse. We have an epidemic of corruption at the federal level. Whistleblowers are even more unwelcome now than they were then.”
...
“In the end, it didn’t matter. Even if I had won the election, I would have been an independent in a few months. And I would have lost the next election.”

After his defeat, Cutler eventually was offered a “six figure” salary to work for John Baird as a policy advisor. There was, however, a condition: Allan Cutler, a man of the people behind the scenes, had to agree not to advocate for anyone in public. He turned the job down.
...
“I think things are actually worse now than they were back then. I have seen evidence of decisions on billion dollar contracts that were decided at meetings where no minutes were kept. I have seen evidence of helicopter maintenance contracts that were moved all around North America to increase the costs.

“In any organization there will always be corrupt people. But the system still protects them and that is wrong. Deputy ministers have a legal obligation to report to the Privy Council when a minister interferes in their departments. They never do. And even if they did, there is no penalty for such interference.”

- Meanwhile, the Cons are doing their best to prove Cutler right in considering them the most corrupt and ineffective government yet. The latest hits include their cover-up of internal communications as to how to respond to concerns about muzzling scientists, the revelation that the Cons are pushing a bill to sweep torture and its consequences under the rug, and the news that Canada's minister responsible for foreign aid has absolutely no clue what foreign aid is supposed to accomplish.

- Finally, Bill Tieleman makes the case as to why we shouldn't lump the NDP, Libs and Greens together under a single anti-Conservative banner. And Jamey Heath's counterargument for a pre-electoral pact doesn't go far beyond "we must do something, this is something, ergo we must do this!".