Thursday Evening Links

This and that for your Thursday reading.

- Colin McAuliffe charts the increasing share of U.S. income going to profits and the already-wealthy. And Dani Rodrik writes about the importance of a progressive movement which seeks to shift the balance of power in how our economy functions, rather than settling for trying to redistribute wealth concentrated in the hands of a few:

There is now growing recognition that tax-and-transfer policies can go only so far. While there is much room for improving social insurance and tax regimes, especially in the US, deeper reforms are needed to help level playing fields in favor of ordinary workers and families across a broad range of domains. That means focusing on product, labor, and financial markets, on technology policies, and on the rules of the political game.

Inclusive prosperity cannot be achieved by simply redistributing income from the rich to the poor, or from the most productive parts of the economy to less productive sectors. It requires less-skilled workers, smaller firms, and lagging regions to be more fully integrated with the most advanced parts of the economy.

In other words, we must start with productive re-integration of the domestic economy. Large and productive firms have a critical role to play here. They must recognize that their success depends on the public goods that their national and sub-national governments supply – everything from law and order and intellectual property rules to infrastructure and public investment in skills and research and development. In exchange, they must invest in their local communities, suppliers, and workforce – not as corporate social responsibility, but as a mainline activity.

- David Sirota examines how Wall Street funds exacerbated the housing crisis arising from the 2008 financial crash. Alexander Sammon points out the plight of communities which offer massive incentives based on the promise of corporate jobs - only to find that those fall far short of producing any security or prosperity for residents. And David Macdonald writes that while Canada's first social impact bonds predictably produced plenty of profits for consultants and advisors, they were grossly inefficient in trying to improve social outcomes (with 60% of funding getting diverted from the supposed end goal).

- Wanyee Li rightly notes that in the wake of a series of deaths of homeless people trying to find warm clothing in donation bins, the core solution is to work on reducing poverty and homelessness - not to merely restrict access to the bins.

- Finally, Andre Picard discusses the predictable breakdowns in a health care system which is understaffed over the holidays when resources are needed most.

Saturday Morning Links

Assorted content for your weekend reading.

- Marty Warren highlights why Tim Hortons workers - and other people facing precarious and low-paying work - need union representation to ensure their interests are respected. And Christo Aivalis writes that the current discussion of minimum wage pairs fairness issues about distribution of wealth with the economic importance of shared prosperity, while Alan Freeman notes that a liveable minimum wage improves matters on both counts.

- Dani Rodrik argues that while exclusionary political populism is dangerous, some economic populism may be entirely appropriate in response to the risk of institutions which only entrench the privileged position of the wealthy. And Ian Buruma theorizes that Japan's stronger collectivist culture may be playing a part in limiting the perceived need for populist demagogues.

- Nicholas Sowels takes a look at the current state of inequality in the UK. Rachael Burford reports on the unconscionable adoption of - and hasty retreat from - a plan to explicitly segregate playgrounds based on parents' ability to contribute to fund-raising campaigns. And Dawn Foster laments the strategy of trying to hide the people who live in poverty, rather than ameliorating their lives:

It should be obvious that banning begging or criminalising rough sleeping will do little to combat homelessness. In July Oxford council considered fining rough sleepers up to £2,500 and attached notices warning of the incoming fines to the bags and belongings of homeless people. Most people in work couldn’t afford a £2,500 spot fine without a considerable impact on their day-to-day finances: someone forced to sleep in a shop doorway because they can’t afford their rent cannot possibly have the cash to hand. The fine is thus about engendering fear, rather than anything one might regard as a workable solution. When homelessness and poverty is hidden from the high street, you can pretend it no longer exists.

It seems foolish and unfathomable, but it also lends us a vision of local and national government for the next few years. With town halls finding budgets whittled down to the bone and struggling to fund the most basic services, addressing the root causes of poverty becomes an impossibility.

Street homelessness has more than doubled since 2010, when the coalition government was formed, but so, too, has the number of people in temporary accommodation and people approaching councils for help due to eviction and losing their home. But councils have few options when it comes to rehousing. Predictably, many are ending funding for domestic violence and homelessness services and hostels. With no resources to combat the causes of poverty, some councils adopt this backwards approach of criminalisation.

Threatening people with fines or legal action may temporarily move the sight of rough sleeping away from British high streets, but those people don’t evaporate, they can’t be coerced into a more acceptable lifestyle; they won’t rise up and rent a house on a whim. Without the resources and support, they will remain homeless, but under the radar, in the shadows. We will not see them, but they will still exist.

- Finally, in the wake of a series of broken promises and scandals, Michael Harris rightly questions whether Justin Trudeau's words mean anything at all. And Stephen Tweedale offers some suggestions as to what Trudeau could do if he wants to genuinely strengthen democratic engagement, rather than substituting a traveling road show for public participation.

[Update: added link.]

Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Dani Rodrik writes that politicians looking to provide an alternative to toxic populism will need to offer some other challenge to a system biased in favour of the wealthy and powerful:

(P)oliticians who want to steal the demagogues’ thunder have to tread a very narrow path. If fashioning such a path sounds difficult, it is indicative of the magnitude of the challenge these politicians face. Meeting it will likely require new faces and younger politicians, not tainted with the globalist, market fundamentalist views of their predecessors.

It will also require forthright acknowledgement that pursuing the national interest is what politicians are elected to do. And this implies a willingness to attack many of the establishment’s sacred cows – particularly the free rein given to financial institutions, the bias toward austerity policies, the jaundiced view of government’s role in the economy, the unhindered movement of capital around the world, and the fetishization of international trade.

To mainstream ears, the rhetoric of such leaders will often sound jarring and extreme. Yet wooing voters back from populist demagogues may require nothing less. These politicians must offer an inclusive, rather than nativist, conception of national identity, and their politics must remain squarely within liberal democratic norms. Everything else should be on the table.

- Meanwhile, Marco Chown Oved reports on the widespread use of tax havens by Canadian businesses - and the tens of billions of dollars lost to the public purse as a result.

- Reuters reports on Credit Suisse's finding that millenials are worse off than the generation before them. And Samantha Beattie reports on new research showing that nearly half of Ontario students have missed school due to anxiety.

- Alissa Tedesco, Katie Boone, Chetan Mehta and Jim Deutch argue that a fair basic income funded by progressive taxes would work wonders to alleviate the health and social consequences of poverty.

- Finally, Tzeporah Berman offers a reminder of the environmental devastation wrought by the extraction of Canada's tar sands.

Thursday Morning Links

This and that for your Thursday reading.

- The Star's editorial board argues that the Paradise Papers prove the need for a crackdown on offshore tax avoidance. Zach Dubinsky and Harvey Cashore report on one nine-figure scheme cooked up by BMO. And Oxfam offers its list of suggestions to end the UK's tax scandals.

- Meanwhile, Nick Hopkins reports on tax evaders' proud claim they'd secured enough access to top politicians to avoid anything of the sort. Marco Chown Oved exposes how the Harper government similarly gave privileged access and special treatment to tax avoidance lobbyists. And Linda McQuaig comments on the role of Leo Kolber as a fixer for offshoring with the Libs and Cons alike.

- Vitor Mello discusses the rise of neoliberalism and its development as an all-too-rarely questioned starting point for economic debate. And Dani Rodrik writes about the various degrees of neoliberalism - while noting that the more extreme versions fail even on their own terms. 

- Similarly, Noah Smith points out that true supply-side economics include recognition of the value of infrastructure, research spending and other public investments - while the ideological insistence on presenting demand-side solutions solely in terms of tax giveaways misses the opportunity to generate broader growth.

- Finally, the Star's editorial board offers its take as to how to end the overrepresentation of Indigenous people in Canada's prisons.

Wednesday Afternoon Links

Miscellaneous material for your mid-week reading.

- Dani Rodrik argues that it's too late to try to compensate the people being deliberately left behind by trade deals - and that instead, we need to make sure their interests are actually taken into account in how trade is structured:

Today’s consensus concerning the need to compensate globalization’s losers presumes that the winners are motivated by enlightened self-interest – that they believe buy-in from the losers is essential to maintain economic openness. Trump’s presidency has revealed an alternative perspective: globalization, at least as currently construed, tilts the balance of political power toward those with the skills and assets to benefit from openness, undermining whatever organized influence the losers might have had in the first place. Inchoate discontent about globalization, Trump has shown, can easily be channeled to serve an altogether different agenda, more in line with elites’ interests.

The politics of compensation is always subject to a problem that economists call “time inconsistency.” Before a new policy – say, a trade agreement – is adopted, beneficiaries have an incentive to promise compensation. Once the policy is in place, they have little interest in following through, either because reversal is costly all around or because the underlying balance of power shifts toward them. 

The time for compensation has come and gone. Even if compensation was a viable approach two decades ago, it no longer serves as a practical response to globalization’s adverse effects. To bring the losers along, we will need to consider changing the rules of globalization itself.

- David Cay Johnston looks at the public records available about Donald Trump's wealth to highlight how he and his fellow .01%ers have been benefiting financially at the expense of most Americans.

- Rachael Pells points out how U.K. funding intended to help poorer students is in fact being used to paper over general funding shortages - resulting in cuts to exactly the schools which most need support.

- Bill Curry exposes the Trudeau Libs' secrecy when it comes to reports on airport privatization in the name of protecting Credit Suisse as a potential profiteer. And Geoff Leo reports on the Sask Party's repeated concealment of documents about the Global Transportation Hub scandal to cover up for CP.

- Finally, CBC reports that the privacy of mere citizens isn't so much a concern, as evidence by Eric Olauson's apparently-unquestioned demand to do a "background check" on people who dared to e-mail him a comment about the budget.

Sunday Afternoon Links

This and that for your Sunday reading.

- Bessma Momani writes that Donald Trump's plan to leave the U.S. at the mercy of unregulated financial markets figures to cause another crisis comparable to - or worse than - that of 2008:

Nearly 10 years ago, the U.S. financial industry was exposed as a glorified Ponzi scheme that bundled toxic assets and failing mortgages into seemingly respectable pension plans and investment schemes that were sold across the world. The Obama administration spent its first term, with global support of the G20 and other countries focused on tighter international standards, to introduce regulations that the financial industry bitterly fought but lost. These regulations, loosely known as the Dodd-Frank act in the U.S. Congress, are about to be dismantled, bit by bit.
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But it can get worse. In an era of what economists call secular stagnation, where we have a global savings glut, fewer global investment opportunities and low interest rates, global money is also pouring into the United States on expectations of a surge in infrastructure spending, a clampdown on offshore corporate tax havens and the lowering of Dodd-Frank financial regulations.

This is coinciding with global money leaving many emerging market economies that look geopolitically unsettled, such as Turkey, and those rattled by Mr. Trump himself, such as Mexico. With a euro zone that looks shaky in a post-Brexit era and experiencing a rise of nationalists competing in a slew of upcoming elections, ironically, the U.S. still manages to look like the safest investment for the capital industry. Meanwhile Chinese plutocrats are charging Communist Party members with corruption as President Xi Jinping conveniently also consolidates his hunger for centralized power, causing another slow exodus of Chinese wealth.

Here we have the perfect storm brewing of hot money going into the United States in search of higher interest rates and the likely dismantling of financial regulations meant to place a check on speculative bankers and investors. The end result might just be that we return to the same conditions of the mid-2000s, the eve of the international financial crisis. The sky is not yet falling, but the cracks are getting wider and wider and we ought to start listening to Chicken Little on the global economy.

- Meanwhile, Mike Palecek reminds us how Canadians could enjoy both improved accessibility and lower costs in banking services with a postal bank - so long as the possibility isn't squelched to preserve profits for private banksters.

- Dani Rodrik examines the sometimes-conflicting pressures in trying to reduce inequality at the level of both countries and individuals within them. And the Sunday Times reports on one practice sure to exacerbate both, as Italy is planning to require immigrants to perform unpaid labour in order to seek asylum.

- Finally, Sean McElwee examines why on abortion (and other issues) widely-shared progressive positions are losing out in the U.S. due to the lack of stronger connections between partisan politics and popular movements.

Sunday Morning Links

This and that for your Sunday reading.

- Dani Rodrik writes that today's brand of trade agreement has little to do with economic theory as opposed to political power:

What purpose do trade agreements really serve? The answer would seem obvious: countries negotiate trade agreements to achieve freer trade. But the reality is considerably more complex. It’s not just that today’s trade agreements extend to many other policy areas, such as health and safety regulations, patents and copyrights, capital-account regulations, and investor rights. It’s also unclear whether they really have much to do with free trade.
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When trade agreements were largely about import tariffs, negotiated exchange of market access generally produced lower import barriers – an example of the benefits of lobbies acting as counterweights to one another. But there are certainly plenty of examples of international collusion among special interests as well. The WTO’s prohibition on export subsidies has no real economic rationale, as I have already noted. The rules on anti-dumping are similarly explicitly protectionist in intent. 

Such perverse cases have proliferated more recently. Newer trade agreements incorporate rules on “intellectual property,” capital flows, and investment protections that are mainly designed to generate and preserve profits for financial institutions and multinational enterprises at the expense of other legitimate policy goals. These rules provide special protections to foreign investors that often come into conflict with public health or environmental regulations. They make it harder for developing countries to access technology, manage volatile capital flows, and diversify their economies through industrial policies. 

Trade policies driven by domestic political lobbying and special interests are beggar-thyself policies. They may have beggar-thy-neighbor consequences, but that is not their motive. They reflect power asymmetries and political failures within societies. International trade agreements can contribute only in limited ways to remedying such domestic political failures, and sometimes they aggravate those failures. Addressing beggar-thyself policies requires improving domestic governance, not establishing international rules. 

- The Star rightly argues that Canada can't claim to have a plan to meet its greenhouse gas emission reduction targets without actually doing the math as to how to get there.

- Lynell Anderson, Morna Ballantyne, Martha Friendly set out a plan for a national child care system - though unfortunately there's no indication that the federal government has any interest in putting the idea into action. 

- Paul Dechene highlights the disingenuousness of Brad Wall's Twitter tantrums. And David Climenhaga spreads the word about Wall's Bradsplaining, while noting that Brad Trost is exhibiting exactly the same tendencies.

- Finally, Tara Katrusiak Baran discusses the dangers of threatening violence and suppression based on political disagreement - while pointing out that economic anxiety is no excuse for dehumanizing our fellow citizens. And Danny Quah and Kishore Mahbubani theorize that the rise of the authoritarian right has more to do with a perceived loss of control than with any economic factors.

Tuesday Morning Links

This and that for your Tuesday reading.

- Dani Rodrik discusses the growing public opposition to new corporate-dominated trade deals based on the lessons we've learned from previous ones:

Instead of decrying people’s stupidity and ignorance in rejecting trade deals, we should try to understand why such deals lost legitimacy in the first place. I’d put a large part of the blame on mainstream elites and trade technocrats who pooh-poohed ordinary people’s concerns with earlier trade agreements.

The elites minimized distributional concerns, though they turned out to be significant for the most directly affected communities. They oversold aggregate gains from trade deals, though they have been smallish since at least NAFTA. They said sovereignty would not be diminished though it clearly was in some instances. They claimed democratic principles would not be undermined, though they are in places. They said there’d be no social dumping though there clearly is at times. They advertised trade deals (and continue to do so) as “free trade” agreements, even though Adam Smith and David Ricardo would turn over in their graves if they read, say, any of the TPP chapters.

And because they failed to provide those distinctions and caveats, now trade gets tarred with all kinds of ills even when it’s not deserved. If the demagogues and nativists making nonsensical claims about trade are getting a hearing, it is trade’s cheerleaders that deserve some of the blame.

One more thing. The opposition to trade deals is no longer solely about income losses. The standard remedy of compensation won’t be enough — even if carried out. It’s about fairness, loss of control, and elites’ loss of credibility. It hurts the cause of trade to pretend otherwise.

- Scott Sinclair and Stuart Trew point out why progressives have reason to oppose the CETA, while Craig Scott rightly questions the Libs' spin on it And Gareth Hutchins reports on Canada's experience with challenges to democratic legislation under NAFTA as a cautionary tale for other countries.

- Jeremy Gilbert writes about the need for a social movement (going far beyond the partisan political scene) to provide a meaningful alternative to neoliberalism.

- Bob Mackin reports that the Vancouver International Airport Authority's CEO is highlighting the dangers of a selloff of airport assets. And Bill Curry notes that cities are raising important questions about the Libs' musings about diverting direct infrastructure funding toward an "infrastructure bank".

- Finally, James Wilt examines the utter incoherence of Brad Wall's excuse for a climate change plan.

Tuesday Morning Links

This and that for your Tuesday reading.

- Peter Rossman explains why the CETA falls far short of the mark in accounting for anybody's interests other than those of big business. And Dani Rodrik discusses the dangers of laissez-faire fundamentalism, particularly to the extent it threatens to undermine the foundation of a functional society:

(T)he lesson from the 1980s is that some reversal from hyper-globalization need not be a bad thing, as long as it serves to maintain a reasonably open world economy. As I have frequently argued, we need a better balance between national autonomy and globalization. In particular, we need to place the requirements of liberal democracy ahead of those of international trade and investment. Such a rebalancing would leave plenty of room for an open global economy; in fact, it would enable and sustain it.
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The key challenge facing mainstream political parties in the advanced economies today is to devise such a vision, along with a narrative that steals the populists’ thunder. These center-right and center-left parties should not be asked to save hyper-globalization at all costs. Trade advocates should be understanding if they adopt unorthodox policies to buy political support.

We should look instead at whether their policies are driven by a desire for equity and social inclusion, or by nativist and racist impulses; whether they want to enhance or weaken the rule of law and democratic deliberation; and whether they are trying to save the open world economy – albeit with different ground rules – rather than undermine it.

- Michael Enright writes about the obvious failure of Canada's corporate sector to convert billions in giveaways into economic investment. And that track record in relying on the corporate sector offers all the more reason to be wary of Justin Trudeau's plan to sell off what's left of our common wealth.
 
- Casey Quinlan examines how corporations are using underfunded public school systems in the U.S., while Daniel Boffey notes that private schools in the UK are creating new barriers for poor children.

- Sarah Smarsh theorizes that the rise of Donald Trump can be explained in part by the failure of the media and other cultural institutions to provide a voice for many working people. And David Beers warns us that we shouldn't trust the mainstream right to recognize the risk of a Trump-style demagogue.

- Finally, Dougald Lamont reminds us why we shouldn't pretend the Canadian Taxpayers' Federation stands for anything other than unaccountable corporate influence. And DeSmog Canada examines the grossly insufficient state of political finance regulations in British Columbia.

Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Dani Rodrik suggests that instead of engaging in extended hand-wringing over the collapse of public interest in corporate trade deals, we should instead be working on strengthening domestic social contracts:

The frustrations of the middle and lower classes today are rooted in the perception that political elites have placed the priorities of the global economy ahead of domestic needs. Addressing the discontent will require that this perception is reversed.

If progressive tax policies to reduce inequality are impeded by the mobility of corporations around the world, it should be the latter that gives way, not the former. If countercyclical fiscal and monetary policies are precluded by short-term capital flows, it is finance that should be regulated.

If industrial policies to diversify developing economies are precluded by World Trade Organisation rules, it is trade rules that should be reformed. If domestic labour standards are eroded due to international competition with countries where workers have few rights, it is trade that should bear the brunt.

If foreign investors ask for special protections that shield them from the domestic legal system, the answer should be no. Above all, politicians should stop hiding behind globalisation. The case for structural reforms and other policies should be made on their own merits, rather than because of some putative need to “compete” in global markets.

- Matt Elliott points out the obvious problems in relying on magical assumptions that the private sector can alter the costs of providing necessary public services. And Robert Reich notes that Donald Trump's tax avoidance should offer an important lesson about a tax system designed to further enrich people who already have access to giant pools of money.

- Bill McKibben writes that a charm offensive won't do anything to change the inexorable math of climate change. And David Roberts rightly argues that governments around the globe are falling far short of the level of urgency needed to keep their climate commitments.

- Finally, Thomas Walkom offers his take on the similarities between the Trudeau Libs and the Harper Cons. And Tom Parkin points out how Justin Trudeau is betraying the progressive voters who helped him take power.

Sunday Afternoon Links

This and that for your Sunday reading.

- Andrew Jackson discusses how the rise of right-wing, prejudiced populism can be traced to the failures of global corporate governance. And Dani Rodrik argues that it's time to develop an international political system to facilitate - rather than overriding - democratic action:

Some simple principles would reorient us in the right direction. First, there is no single way to prosperity. Countries make their own choices about the institutions that suit them best. Some, like Britain, may tolerate, say, greater inequality and financial instability in return for higher growth and more financial innovation. They will opt for lower taxes on capital and more freewheeling financial systems. Others, like Continental European nations, will go for greater equity and financial conservatism. International firms will complain that differences in rules and regulations raise the costs of doing business across borders, but their claims must be traded off against the benefits of diversity.

Second, countries have the right to protect their institutional arrangements and safeguard the integrity of their regulations. Financial regulations or labor protections can be circumvented and undermined by moving operations to foreign countries with considerably lower standards. Countries should be able to prevent such “regulatory arbitrage” by placing restrictions on cross-border transactions — just as they can keep out toys or agricultural products that do not meet domestic health standards.

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Third, the purpose of international economic negotiations should be to increase domestic policy autonomy, while being mindful of the possible harm to trade partners. The world’s trade regime is driven by a mercantilist logic: You lower your barriers in return for my lowering mine. But lack of openness is no longer the binding constraint on the world economy; lack of democratic legitimacy is.

It is time to embrace a different logic, emphasizing the value of policy autonomy. Poor and rich countries alike need greater space for pursuing their objectives. The former need to restructure their economies and promote new industries, and the latter must address domestic concerns over inequality and distributive justice.

- William Lazonick and Matt Hopkins note that already-appalling estimates of the gap between CEOs and other workers may be severely underestimating the problem. And Iglika Ivanova laments British Columbia's woefully insufficient changes to its minimum wage which will keep large numbers of workers in poverty.

- In one positive development for corporate accountability, Telesur reports that the International Criminal Court is now willing to take jurisdiction over land grabbing, environmental destruction and other corporate crime.

- Harry Stein writes that there are significant economic and social gains to be achieved by better funding social infrastructure.

- Finally, Jeremy Nuttall interviews Robert Fox, the NDP's new national director, on the plan to building a more activist party - both in the sense of better engaging with existing activists, and developing a culture of ongoing action. And Robin Sears offers a long-term path for the NDP to once again lead Canada toward progressive policies.