Friday Morning Links

Assorted content to end your week.

- Michael Scherer and Josh Dawsey document the dark-money false flag operation used by Republicans and their wealthy owners to depress Democratic turnout. And Justin Ling calls out Pierre Poilievre for relying on absurd claims to try to generate outrage within the Cons' low-information base. 

- Meanwhile, Thomas Zimmer laments how the U.S.' upper class is indicating its plans to accommodate Donald Trump's authoritarianism in order to preserve its position of privilege. 

- Clement Nocos discusses how Justin Trudeau's temporary GST giveaway is a poor substitute for removing consumption taxes from essential goods. And Danyaal Raza points out that Canadians in general are paying for the private health insurance that's prioritizing the wealthy and undermining our public health care system. 

- Mike Moffatt points out that mixed-use, walkable neighbourhoods can do wonders to both alleviate the housing crisis and minimize avoidable carbon pollution. And Iglika Ivanova and Anastasia French discuss how soaring housing costs are driving up the living wage needed to get by in Vancouver (among other cities). 

- Finally, Nadia Hasan writes about the need for real disability benefits to account for the fact that most people will be disabled at some point. 

Sunday Morning Links

This and that for your Sunday reading.

- Alan Freeman notes that the Libs' aversion to raising public revenue may lock in some of the Cons' most damaging actions:

With the new Liberal government facing fierce economic headwinds — plus a billion-dollar shortfall created by its middle-income tax cut, and a growing need for revenue to cover promised spending on everything from infrastructure and veterans to First Nations and refugees — it would seem logical to at least mull the possibility of raising the GST.

That appeared to be what Finance Minister Bill Morneau was doing earlier this week when he gave a convoluted response to a journalist that was interpreted as opening the possibility to a GST hike sometime in the future.

Within hours — probably after a panicked call from the Prime Minister’s Office — Morneau tweeted a climbdown of his own: “Contrary to misleading headlines, we are not considering changes to the GST.”

What Morneau made clear is that the Liberals are scared to death of being slammed as tax-grabbers by the Conservatives. While much of the Harper legacy is being scrapped — his obstinate refusal to take action on climate change, his surly, tough-guy foreign policy — the anti-tax mantra lives on.

It’s notable that the first thing on Parliament’s to-do list after the Liberals’ election win was the middle-class tax cut. The Liberals want Canadians to believe that the government’s tax burden (except on the super-rich) can continue to decline as it has since 2000.

- Eric Jaffe reports on new research showing how social deprivation can keep children from meeting their potential for intellectual development. And the Globe and Mail argues that Quebec should be honest about any plans to eliminate a high-quality, public child care system in favour of pushing parents toward more expensive private care.

- Andrea Germanos reports on the latest Human Development Index rankings which show Norway at the top of the pack.

- And in what may not be a coincidence as to the importance of respect for workers in generating shared prosperity, the ILO highlights Norway's leadership in ratifying a new protocol against forced labour among other conventions protecting labour rights. And Edward Keenan discusses the different sides of a gig economy - and notes that the 1% may be confusing its own ability to engage in highly-paid consulting with the reality facing precarious workers.

- Finally, Branko Milanovic offers a theory as to the limits in how much worse income inequality could get in the U.S.

Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Scott Clark and Peter DeVries remind us that any fiscal problems Canada has faced under the Cons have been entirely of Stephen Harper's making:

Harper needed a deficit problem; the fact that the previous government neglected to leave him one was just a short-term inconvenience. From the very beginning his fiscal strategy has been driven by a commitment to his Conservative base and ideology — which demand smaller government by any means — and by a desire to show that he had ‘what it takes’. He desperately wanted to be seen by history as a better fiscal manager than his predecessors.

Harper and Flaherty both believed — as do most modern Conservatives — that smaller government inevitably leads to stronger economic growth. Unfortunately, stubborn reality has once again refused to cooperate with an impractical theory.

The evidence is clear: Cutting deficits does not by itself generate economic growth. The Conservative “growth friendly austerity” strategy has failed consistently, whenever and wherever it has been applied — in the U.S. under Republican administrations, in the eurozone in recent years, by the G20 after 2010 … and in Canada since 2010.

Cutting the GST by two points will go down in Canadian fiscal history as one of the worst public finance decisions ever. It served no useful purpose — apart from giving the prime minister the cover he needed to impose a neo-liberal fiscal orthodoxy that diminished the federal government while failing to generate growth and jobs.

All Canadians paid the price for securing Mr. Harper’s legacy. We’ll go on paying it for while.

- Meanwhile, Brent Patterson points out how another of the Cons' "economic management" themes - that of constantly pushing trade agreements which entrench corporate power at the expense of the public - seems designed to prevent the development of an effective national pharmacare plan.

- Andrew Jackson notes that it's silly to think that markets can address climate change without some strong public policy leadership. But of course, for the Cons (and other petro-politicians), the only acceptable time to consider the well-being of the planet is never. And indeed, Mychaylo Prystupa reports that the Cons' kangaroo-court National Energy Board is positively bragging about its elimination of any public voices from regulatory decisions about pipelines.

- Adrian Morrow reports on the Ontario Auditor-General's findings that public-private partnerships have cost that province upwards of $8 billion in public money compared to simple public management.

- Finally, Frances Russell points out how the Cons go out of their way to eliminate precisely the voices which would ensure that public policy benefits everybody, rather than only the privileged few:

Harper now faces a wide swath of civil society groups opposed to his government on everything from shockingly mean-spirited assistance to wounded veterans to wanton disregard for the environment to authoritarian disdain – and deep antagonism -towards the forms and traditions of parliamentary democracy.

Never content with just opposing his adversaries, Harper enjoys pre-empting them, beating them up with a totally unexpected attack.

As prime minister, he frequently uses private members bills to begin the softening up process.

Take, for example, the Conservatives’ visceral – and obviously intensely personal – antagonism to organized labour. Harper is moving swiftly to destabilize and disempower Canada’s trade unions. Using the ruse of a backbench Conservative MP’s private member’s bill as the cover, the legislation will force unions to publicly disclose the names and salaries of all employees earning more than $100,000 a year and reveal how much of their time each spends on political activities, lobbying and other non-labour relations work.

Noticeably missing from this purported concern for union members is any actual changes to ensure workplace rights and protection for Canadian workers. And, of course, there is not the remotest indication of similar disclosures being required from the corporate side of the economy.

What better way to try to weaken, divide and destabilize Canada’s House of Labour than perpetrating a Hobbesian war of all against all by stirring up internal strife between leaders and members and between unions with strong and progressive collective agreements and those struggling with weaker and less robust ones forced to exist on the fringes?

With the Harper Conservatives, it’s always win-win for corporations and the well-to-do and lose-lose for everyone else.

Fool me twice

Andrew Coyne has a suggestion as to how the Cons might extort some increased adherence to free-market fundamentalism from the provinces:

It’s the balance between spending and revenues, not just the totals, that matters. The federal government, as the PBO numbers show, will have substantial fiscal “room,” revenues in excess of what it needs to pay its bills, while the provinces will be in substantial structural deficit. Ottawa has the money, in other words, and the provinces need it — desperately.

This puts the feds in a very strong bargaining position. Rather than simply hand over the loot, as the provinces will inevitably demand, they can use it as leverage: a transfer of x number of GST points, say, in exchange for dismantling provincial trade barriers.

Ottawa will have the fiscal clout to bring some order at last to this chaotic economic union. It should begin thinking how to use it.

Of course, the first problem with Coyne's pretense to compromise is the fact that both proposed actions in fact represent hard-right steps: tax cuts and the elimination of regulations don't reflect a tradeoff, but a complete capitulation to the corporate agenda on the part of provincial governments who may not entirely agree with it.

And the "tax room" theory serves only to exacerbate inequality among the provinces - replacing fiscal federalism which provides stability for all provinces with a go-it-alone philosophy.

But let's put those general problems aside in favour of a more specific reality about the Cons' posturing around tax points. Because the Cons have made exactly the same promise of offering provinces tax room before - and then used any effort to follow up as an opportunity to bash the provincial governments in question.

Again, here's how Jim Flaherty first presented the Cons' GST cuts:

Our government firmly believes that unanticipated surpluses, the last area I wanted to mention, should be used primarily to reduce the debt and reduce federal taxes rather than to launch new policies in areas where the federal government is not best placed to design or deliver programs.

This, in turn, creates tax room that provinces and territories can consider filling for their specific needs and purposes.

So what happened when Ontario tried to take Flaherty up on the offer in order to fund public transit?

“We did not lower the GST to have it taken away from Ontarians by the Wynne government with a new sales tax hike,” said Flaherty, who cut the federal levy from 7 per cent to 5 per cent prior to harmonization.

In sum, any provincial leader would have to be painfully gullible to think that the Cons will let further federal tax slashing open the door to provincial revenue gathering. And so if the provinces have any desire to be able to deliver programs for the public benefit, their ask needs to be for direct funding - lest their bargaining position get all the worse with time.

[Edit: fixed wording.]

Sunday Afternoon Links

Assorted content to close out your weekend.

- Erica Alini points out that the effect of the Cons' lobbying on behalf of the tar sands has been solely to make sure that the absolute worst polluters force the public to pay the cost of their activities, as anybody actually operating cleanly in the oil sands would actually have a competitive advantage under the European Union's proposal which is now temporarily on hold:

(T)he basic message from Brussels is one we should listen to. The oilsands are, after all, a dirtier kind of fuel feedstock and we’d probably be doing a lot better in our global PR crusade if we had made more of an effort to make Alberta’s oil cleaner. Besides, the FDQ, as currently formulated, contains a clause that allows oilsand producers to obtain a lower-carbon fuel label if they can show that their emission performance is actually below the default value associated with their feedstock type, notes Pembina’s Jennifer Grant. Some of Alberta’s producers may already qualify for this.

- Others have already responded to last week's trial balloon by noting the fundamental unfairness involved in charging more taxes on poor Canadians in order to hand out yet more free money to the rich. But there's another aspect to the assumptions underlying the theory as well: in effect, that it's not worth anybody's time to try to figure out how to make fairer taxes work, such that tax policy should be based almost entirely on ease of enforcement (which will of course mean wringing as much as possible from people who can't afford to plan around tax changes rather than pursuing anything even faintly linked to principles of justice or fairness).

- Which leads nicely to Susan Delacourt's take on Robocon highlights the fact that the Cons' political success rests almost entirely on the assumption that voters are easily turned off of the political process - highlighting the need to make sure that assumption won't hold up:

"Voter suppression" is the alleged purpose of the calls. The idea was that if you phoned people, told them the voting location had changed, they'd just decide it was too much of a hassle to go and cast a ballot. Think about that for a second. To pull this off with any success, you had to count on people being so lazy, busy or disengaged that they'd throw away their democratic franchise because of a minor inconvenience. Cynical? Or just realistic? Voting, the most basic act of our democracy, rests on the idea that people will make a physical effort to participate. Someone (or many someones) calculated that the prospect of even slightly more effort would kill voter motivation. That's kind of insulting, actually. Not as insulting as calling people child pornographers, I guess, but still a rather minimalist view of the Canadian public -- as robots, easily reprogrammed.

- Meanwhile, the NDP digs up the direct connections between Racknine and the Cons. Sixth Estate is neatly charting the ridings affected by the Cons' electoral fraud.

- Finally, pogge notes that we should be entirely willing to listen to any actual examples of problems pointed out by Cons as well. And indeed I wouldn't be at all surprised if, as Stephanie Levitz theorizes, the end result is a long-needed discussion as to how voter data should be handled by political parties.

Parliament in Review: November 2, 2011

Wednesday, November 2 saw the House of Commons debate two bills dealing with democratic reform. And the result was a remarkable gap between the values the Harper Cons presented in justifying their party's policy orders, and the ones they actually apply in practice.

The Big Issue

The bill which received the most public attention - due to the Cons' decision to ram it through Parliament - was the government's new seat allocation legislation. And it was on November 2 that the Cons served notice of their intention to shut down debate - even as they complained about the unfairness of locking new MPs into the deliberations of a previous Parliament when that served as an excuse to scrap potentially-critical committee reports.

But perhaps more interesting was the debate on Mathieu Ravignat's anti-floor-crossing legislation. After all, I'm not sure anybody can remember the last time a Harper Con dared to speak out publicly against his or her leader's actual efforts to suppress any independent thought by individual MPs. And yet, here's what Michelle Rempel had to say as to the dangers of a bill preventing floor-crossing:

This bill would seriously undermine the independence of members of this House and I do not think that is something we should encourage or support.

This bill would have some practical negative consequences. The bill would impose restrictions upon members who wish to express a different position than the one endorsed by a majority of their caucus. This bill would also impede members of Parliament in representing the interests of their constituents, which is one of the fundamental duties under our Constitution.
...
(T)he roles, rights and obligations of individual members of Parliament are well established in Canada's legislation whereby members of Parliament are central actors in our Westminster system of government. Practically, the caucus system in our Parliament is joined with, but distinct from, the registered party system.

Bill C-306 would go against existing rules and traditions by allowing the party machinery to take precedence over individual rights and responsibilities of each member of Parliament and their caucus choices. This does not correspond to our system of government. As I stated earlier, I believe Bill C-306 would have negative and undesirable consequences on the roles of members of Parliament.

And Scott Reid was similarly concerned with some theoretical MP independence which was wrung out of his own party long ago - without suggesting for a second that he or his party's majority caucus might have any interest in reversing the trend toward total top-down control.

Meanwhile, Ravignat discussed the need to build trust in elected officials. Peter Stoffer pointed out that the Cons had a rather different take on the legitimacy of floor-crossing when it was Belinda Stronach exercising what she saw as her individual prerogative to jump between parties. Kevin Lamoureux rightly noted that Manitoba's NDP government passed a bill based on the same principle. And David Christopherson cited the example of David Emerson as an affront to the ability of voters to make informed and meaningful choices:

If we accept that (party identification) is a legitimate, rationale, understandable and important reason for people to think about voting for a candidate, the platform or the party, if one then bails out, as did Mr. Emerson, which is the richest example, and I do not like to personalize, it takes one's breath away.

I do not think the writs were even returned. The ink was hardly dry on the ballots, and this man was already trotting across the floor to join another party. He believed that was the right thing to do, for him, but what about all those constituents who had a reason to believe that once elected, the member would actually go about enacting the platform and policies of the party that member belonged to?

By crossing the floor, in many cases a member is throwing away what he or she believed in to join a party that is 180 degrees in the other direction. How do we think constituents feel? They would sit there wondering what happened. Constituents went out and voted in good faith, as did all their friends, and they expected that the money they donated to that campaign and the sign that they posted were all to help get enough seats on a particular platform so that the way the constituent would have liked to have seen Canada shaped on a particular issue would have actually happened. Now that would be gone, because the member could just cross the floor in order to remain a cabinet minister. It really is problematic.

Withholding Consent

It was well reported that MPs from the Bloc Quebecois and Greens were denied unanimous consent to make a statement in honour of Canadian veterans. But somewhat less attention was paid to a bevy of motions on other topics which were also denied, including:
- Alexandre Boulerice's motion to introduce the materials he had referred to in noting concerns about money handed to the Perimeter Institute without proper allocation;
- Tom Lukiwski's motion to allow an NDP member to speak first to a government bill;
- Frank Valeriote's motion for committee study into the Canadian Wheat Board; and
- Sean Casey's motion on travel by the Standing Committee on Veterans Affairs.

And while it's not clear which of those MPs (if any) had reason to think other parties would agree to their requests, it's not hard to see how the Cons' tough line on statements by the Bloc and Greens may have set an unfortunate precedent.

In Brief

Tyrone Benskin both celebrated the 75th birthday of the CBC, and worried about the Cons' witch-hunt against it. Andrew Cash demanded answers as to the lack of accountability for police abuses at the G20 in Toronto. Jean Crowder pointed out the absurdity of saying "get a job!" as an answer to poverty when a significant number of food bank users are children, while Linda Duncan highlighted the problem of poverty for First Nations in particular. Nycole Turmel raised the concerns of Quebec, Ontario and B.C. alike at being stuck with the bill for the Cons' dumb-on-crime policies. Mylene Freeman questioned the Cons about Canada's poor performance in pay equity, only to be told by Tony Clement he's proud that women receive 73 cents on the dollar. Scott Simms introduced a private member's bill to remove the GST and HST from funeral expenses. James Moore's answer to a question seeking information about cuts to Canadian Heritage "broken down by employee status, by title, and by program activity" helpfully identified cuts of 578 jobs with no further information about what had actually been slashed. Yvon Godin pointed out that the Cons' job posting for the Auditor General position actually failed to include any aptitude in French as even a preference (let alone a requirement). And Brian Masse questioned the Cons' cuts to border communications at the same time they were funnelling what was supposed to be border funding into Tony Clement's pork-barrel projects.

On relative expenses

Stephen Gordon is once again criticizing the NDP's home heating proposal. But let's set the record straight on one part of the analysis which is highly misleading, and note that the philosophical issues aren't as clear-cut as he wants to make them out to be.

To start with, let's deal with this claim:

It could be argued that the gains for low-income households are proportionately greater, because the inequality in income is greater than the inequality in benefits. But using proportional gains as a criterion strikes me as setting the bar too low: even George W. Bush's tax cuts manage to make it over this hurdle.

But there's an important distinction in how to handle "proportional gains" - and it makes for a crucial distinction in who's helped most by the NDP's home heating plan.

Gordon links to an article framing Bush tax cuts based on the proportion of total taxes paid, with absolutely no reference to their effect on household income. (In effect, the standard is more "proportional losses" in taxes paid than proportional gains in anything.)

But when one looks at the effect on after-tax household income - which would seem to be the point if one's intention is to deal with actual effects on household activities rather than merely resentment over the amount of taxes paid - the effect is rather different:

Without a doubt, and despite White House rhetoric to the contrary, the direct effect of the tax cuts is to widen after-tax income inequality. If the tax cuts are extended into 2011, after-tax incomes will increase by more than 9 percent for households in the top 1 percent of the income distribution in that year, by between 2 percent and 3 percent for households in the middle 60 percent, and by only 0.1 percent for households in the bottom 20 percent.

So let's apply the same analysis to the NDP's plan. Using the midpoint numbers for each income level on the NDP's chart noted by Gordon and presuming that 5% tax will be removed from home heating costs, the numbers are as follows:

A household with income of $15,000 sees its heating bill reduced from $1,678 to $1,598.10. It saves $79.90 in cash, or 0.53% of its annual income.

A household with income of $45,000 sees its heating bill reduced from $2,041 to $1,943.81. It saves $97.19 in cash, or 0.22% of its annual income.

And a household with income of $75,000 sees its heating bill reduced from $2,400 to $2,283.71. It saves $116.29 in cash, or 0.16% of its annual income.

Again, the above isn't to say that the NDP's plan couldn't be improved. But to suggest that it bears any meaningful resemblance to the Bush tax cuts in its relative effect on households is far off base.

Meanwhile, Gordon also draws a distinction between income issues and pricing issues, once again saying "give money to poor people" without defining the term or recognizing the political difficulties with that course of action. But that brings us back to the point about essential goods that Gordon has given up on addressing when it comes to other goods not subject to the GST, but seems bent on applying at every opportunity in response to the NDP's plan.

Like food, housing and other essential expenses, home heating costs are an expense borne to a relatively similar extent by households across the country - and as is obvious from the chart above, representing a far higher proportion of expenses for poorer households. And it's different from higher-end goods where one might in fact see consumption taxes as playing a positive social role.

But what about the possible social costs of bringing down the price of heat? Gordon rightly notes the issue of greenhouse gas emissions, which may indeed be impacted by heating costs to the extent people actually use more heat rather than using the savings elsewhere. But as usual, he leaves out the fact that the NDP's plan deals with that expressly by including a home retrofit program intended to improve efficiency in the longer term.

Which means that the main effect of the NDP's plan taken as a whole is simply to make one essential good less expensive in comparison to all other goods. And that process on a larger scale looks to me to be the idea at the core of an affordability agenda which makes it easier for Canadians at all income levels to pay for the basics they need to live in Canada.

The art of the possible

Following up on this post, Stephen Gordon replies to Robert as to his take on expanding the reach of consumption taxes:

So Stephen, are you in favour of charging the HST on groceries and then giving low income households money for that?
Posted by: Robert McClelland | October 04, 2010 at 08:01 PM

Yes. But that battle was lost long ago.
Posted by: Stephen Gordon | October 04, 2010 at 08:17 PM

Which is pretty much the answer I'd expected - and certainly makes for a consistent view of how a tax system should be set up in theory.

But then we get to the practical side of the issue. And while one can understand Gordon's reason for frustration with the system as it stands, surely one also has to recognize that any policy is going to be discussed within something resembling our existing political reality. Which seems rather important when the NDP or any other party develops a policy proposal.

At another time, with another government, Gordon's "just give money to poor people" answer to redistributive issues might well make for the foundation of a better theoretical policy than one which involves cutting consumption taxes for all. (Though I'll post later as to why the economic theory behind that principle has inherent political weaknesses.)

But last I checked, the Harper Cons' answer to any suggestion about helping poor people ranged from hysterical laughter to the unprintable.

So the NDP's choice is then between tilting at windmills and proposing something which it knows will be shot down in short order, or making a suggestion that's at least close enough to the governing party's worldview to have some chance of being taken seriously. And if the measure catches on enough to push the Cons to act, then the result is the implementation of a policy which has some positive redistributive effects in percentage-of-income terms (even if it does fall short of the mark in absolute terms).

Again, that can reasonably be seen as less than an ideal outcome - and I'll be the first to agree that the NDP also needs to have its longer-term societal goals in mind, even if I may not agree entirely with Gordon as to what those should be. But there's some middle ground between a political party which is focused only on communication strategies at the expense of policy and one focused solely on theoretical outcomes which fail utterly to connect with politics as they stand - and I wouldn't want the NDP to trap itself in the latter extreme any more than the former.

On essential goods

Stephen Gordon has predictably rushed in to criticize the NDP's call to remove the GST/HST from home heating. But while Gordon has taken a fairly consistent line in favour of consumption taxes in the abstract, I haven't seen much from him directly addressing one element of our current tax policy which makes the idea an entirely logical fit.

So, to Gordon or anybody else looking to take his side:

Is there such a thing as an essential good that should be left out of a consumption tax system (e.g. groceries as matters stand now)? And if so, isn't there at least a reasonable argument to be made that heating oil should similarly be classified as essential?

Or is the preferred model simply to tax as many goods and services as possible? And in that case, why isn't there just as much effort to point out that omission in our current tax policy as there is to pillory the NDP for its proposal?