Saturday Morning Links

Assorted content for your weekend reading.

- Joseph Stiglitz writes that while we should expect natural resources to result in broad-based prosperity, Australia (much like Canada) is now turning toward the U.S. model of instead directing as much shared wealth as possible toward the privileged few:

There is something deeply ironic about Abbott’s reverence for the American model in defending many of his government’s proposed “reforms.” After all, America’s economic model has not been working for most Americans. Median income in the US is lower today than it was a quarter-century ago – not because productivity has been stagnating, but because wages have.

The Australian model has performed far better. Indeed, Australia is one of the few commodity-based economies that has not suffered from the natural-resource curse. Prosperity has been relatively widely shared. Median household income has grown at an average annual rate above 3% in the last decades – almost twice the OECD average.

To be sure, given its abundance of natural resources, Australia should have far greater equality than it does. After all, a country’s natural resources should belong to all of its people, and the “rents” that they generate provide a source of revenue that could be used to reduce inequality. And taxing natural-resource rents at high rates does not cause the adverse consequences that follow from taxing savings or work (reserves of iron ore and natural gas cannot move to another country to avoid taxation). But Australia’s Gini coefficient, a standard measure of inequality, is one-third higher than that of Norway, a resource-rich country that has done a particularly good job of managing its wealth for the benefit of all citizens.

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Australia should be proud of its successes, from which the rest of the world can learn a great deal. It would be a shame if a misunderstanding of what has happened in the US, combined with a strong dose of ideology, caused its leaders to fix what is not broken.   

- Meanwhile, Julian Beltrame reports that Canada's combination of corporate tax giveaways and gutting regulations has done nothing to change stagnant business investment. (Though as Armine Yalnizyan notes, that's sadly accompanied by the C.D. Howe Institute insisting on more of the same failed corporatist policies.) Don Pittis writes that stagnant wages are leaving Canadian workers with nothing to show for economic growth. And Dennis Howlett's mild optimism about Ontario's single-year budget is more than outweighed by his recognition that Ontarians are far worse off for decades of austerity and tax slashing:

For years now, Ontario governments (both Liberal and Progressive Conservative) have been inflicting austerity policies while failing to comprehensively collect revenue from large corporations and the wealthy. This sloppy fiscal management persisted - long after it was obvious that it just doesn't work.

Cuts to public services have caused a lot of pain and not much gain in terms of reducing deficits. Those cuts also boosted unemployment, slowed economic recovery and reduced tax revenue.

We can no longer afford the steep price tag that comes with avoiding revenue side solutions. Governments need to be clear about the real costs of tax cuts and loopholes.
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After so much tax cutting, Ontario kick starting a $1 billion reversal is a pretty small step. But it is a step in the right direction. But further steps in this direction are needed in the next budget, including possibly some modest but broader income tax increases.

There's a caveat though.

Boosting taxes on the rich and on corporations will not result in more revenue if governments don't close tax loopholes and take stronger measures to go after tax cheats. On this front too, though there were some encouraging words in the Ontario budget:

"Reducing corporate tax avoidance and closing tax loopholes is a priority for the Ontario government. The government supports the principle that everyone should pay their fair share of taxes, including corporations."

Word is that Ontario government will be pushing the federal government and the Canada Revenue Agency to step up their efforts. This is welcome news. Each and every Canadian province loses revenue from corporate tax avoidance schemes that take advantage of tax loopholes and offshore tax havens. It is time for a strong stand by all provinces at the premiers meeting scheduled for August. They can no longer avoid tackling what has become a chronic problem.

- Stephan Lefebvre points out how yet another set of free-trade spin is based on flat-out lies about the effect of NAFTA.

- Ethel Tungohan highlights the absurdity of the Cons' temporary foreign worker tinkering which does nothing at all to help actual workers of any kind:

If Kenney and Alexander truly want to protect temporary foreign workers from abuse, they would include robust measures that take into account the reality of these workers’ lives.

Workplace audits should be accompanied by a guarantee that abused temporary foreign workers will not be deported and will be given jobs in other companies for the duration of their stay in Canada.

Temporary foreign workers should be given open work permits that tie them to a specific industry, but not to a specific employer to mitigate abuse.

And, most importantly, the Canadian government should recognize that temporary foreign workers provide important economic contributions to Canada. Like other immigrants, they come to provide for themselves and their families. They should be provided pathways to Canadian citizenship.

If they are good enough to work, they are good enough to stay.

- Finally, today is another NDP Day of Action - this time focusing on climate change to celebrate Jack Layton's birthday. You can search for an event here - and I'll point out my home riding's canvass and barbecue in particular for anybody in Regina interested in getting involved.

On lasting influence

Murray Dobbin continues his quest to push for more big ideas from the federal NDP here. But it's worth dividing his take into one theory well worth applying, and one which would be entirely counterproductive.

At the outset, I'll agree with Dobbin's take that a number of the NDP's current policy themes reflect defensive positions or basic oppositional choices rather than a bold push into new political space:

Megan Leslie lists a number of NDP policies which she describes as "bold," but with all due respect, most are defensive, involve resisting Stephen Harper's anti-democratic agenda, or are long-standing policies that have also been supported by the Liberals -- such as child care. Returning to pre-Harper corporate tax levels is a start -- but Thomas Mulcair's absolute refusal to consider increasing personal income taxes even on the wealthy shows timidity, not boldness. And without reclaiming lost revenue, promises of child care and a national housing program ring hollow.

Leading "the charge against Stephen Harper's attempt to import voter suppression tactics" is what any opposition party should be doing, and opposing the outrageous subsidies given to oil companies is good policy but hardly a "big idea."

And while there's room for debate in both the elements included in Dobbin's list of "big ideas" and some obvious exclusions, they're certainly some possibilities which deserve further discussion:

If the pathologically destructive nature of finance capitalism is to be addressed, there needs to be a political party that can do so by expanding the window of acceptable policies. And that means promoting bold ideas that directly challenge the policies that are creating the crises. Some examples: make advertising to children illegal and begin to address the obesity epidemic; instead of capping credit card fees, establish a public national bank to compete directly with the private banks; get out of NAFTA; use the Bank of Canada's mandated power to lend to governments at near-zero interest rates and pay down the debt; challenge the outrageous behaviour of pharmaceutical companies by establishing a public company actually dedicated to people's health and not shareholder profit, and ban the use of antibiotics in animal feed before they become useless and people start dying again from a scraped knee.

But having made the case for policies which may deserve greater attention, Dobbin also argues that the NDP shouldn't care whether it's ever in a position to implement those policies:

(I)f you want to see a big, bold idea accepted as government policy you have to expand that window to include the new idea. Overton described the evolution to broad public acceptance as a process that develops by degrees: "Unthinkable; Radical; Acceptable; Sensible; Popular; Policy." The right used this model and stuck with it for 30 years to achieve its current dominance. Ideas like slashing unemployment insurance and welfare, privatizing crown corporations, gutting taxes on the wealthy, making huge cuts to social programs and signing "trade" deals that give corporations more power, were all "unthinkable" or "radical" in the beginning. But after 30 years of relentless promotion and the courting of politicians, all of these ideas are now public policy. The advent of medicare in Saskatchewan followed precisely this road to fruition.

And any party wishing to actually deal with the crises we face will need to accept that it will take time to make the necessary bold policies sensible and popular. But so long as the NDP clings to the fantasy of winning a majority it will avoid big ideas for this reason. Contrast that with the NDP in the 1960s, when it took the big idea of medicare to the national stage and forced the Liberal government to implement it. That is the NDP's historic role in progressive social policy: not winning elections but promoting bold ideas until they become popular.

The dramatic shift in strategy -- seriously going for a majority -- has been disastrous for the NDP. It led them to opportunistically defeat the Liberal government and give power to Stephen Harper. Inexorably, the NDP is becoming another liberal party in order to be competitive. Federally, they're badly trailing a Liberal Party with a pretty face and no policies. The tragic irony in this is, of course, that even if the NDP did win, it would have a mandate limited to liberal policies.

Of course, this analysis conspicuously omits any explanation as to why the NDP ought to be limited to some "historical role", or how winning elections is somehow something to be avoided.

In fact, it can hardly escape notice that the NDP's greatest historical influence was linked to the perception that it could plausibly form the government in the relatively near future. The era of big policy wins in the 1960s and 1970s arose in no small part out of the Libs' concern about the growth potential of the NDP (which had of course come together precisely for the purpose of challenging for government where the CCF had failed). In contrast, the perception that the NDP was a minor political force forced Jack Layton to keep his requests modest and focused on short-term gains in recent minority Parliaments.

Which means that Dobbin's own limited focus contains its own tragic irony: a party which rules out a serious attempt to build toward government is far less likely to earn enough influence to be able to shape public policy. (And it certainly won't be able to set the example as to how progressive policies can work in practice - as Saskatchewan's CCF did as a precursor to the national adoption of Medicare.)

Moreover, Dobbin seems to miss some of the most important value in the NDP's recent organizing efforts. Greater outreach to a wider range of people can only help build both the NDP's credibility in making policy suggestions and public awareness of the NDP's own proposals - not to mention providing a mechanism to reach the public directly in assessing what policies might prove both popular and desirable without being unduly constrained by the Ottawa conventional wisdom. 

In sum, Dobbin is right to highlight the need for the NDP to champion policies which meaningfully counter the Con/Lib corporate consensus. But he's wrong to assume that represents a reason to abandon any effort to win a place in government - especially if that means perpetually ceding power to exactly those parties.

Instead, big ideas and political strength are each necessary elements of a meaningful effort to build a more progressive society. And the NDP will do best for itself and for Canada if it works on developing both.