Credit where due

I suspect there's still going to be plenty of room for argument as to how much attention we ought to pay to inequality in the development of economic policy. But let's give Kevin Milligan and other UBC economists full credit for their observations when prompted by Pete McMartin on issues of inequality and economic structure, including both in terms of why the GDP-above-all-else model has sometimes fallen flat with the public...

The majority of respondents in that poll agreed with Milligan. They, too, felt that, overall, the HST would benefit the economy.

But...while they recognized the HST would benefit the economy, they also felt that, on a personal level, none of the HST’s benefits would accrue to them.

A message resided in that distinction, Milligan felt, one that perhaps spoke to a greater malaise.

“With all the growth in the economy the HST promised,” Milligan said, “these people couldn’t bring themselves to vote for it because they didn’t see that growth benefiting them.”

Read that way, the HST vote wasn’t a referendum on a tax: It was a referendum on the nature of the economy.

It was a signal, perhaps, that many British Columbians felt they were disenfranchised from an economy that no longer worked in their interests. Their incomes were flat or falling. They struggled to cover their bills and mortgages. They watched all the economic gains of the last 15 years go to an increasingly affluent minority. Why vote for a tax that would, in their eyes, only exacerbate those trends?

...and their policy prescriptions to ensure an economy where everyone benefits:

So what, they were asked, would they recommend to close the income gap opening up in Canadian society?

Well, there were no easy answers, was their reply, but there were broad themes. Some of those:

• End programs such as the Temporary Foreign Workers Program that artificially encourage low wages in service industries.

• Recognize that unions — once a bulwark of the middle class — have encouraged better wages not only for unionized workers but non-unionized workers as well, and reconsider government policies that have made the process of union certification more difficult.

• Concentrate efforts for income equality where it is now most needed, not with seniors, who have fared relatively well, but with younger workers, young families and single parents, who have suffered most from income inequality.

• Improve the tax-and-transfer system to increase social assistance to those in the lowest income brackets.

• Re-examine the flatness of our tax structure, which lags behind that of the U.S. in that regard, and the fact we don’t have increasing tax rates for very high incomes. Said Riddell, “We definitely should be looking at higher tax rates at the very top of the income distribution.”

• Begin a national conversation to look at the issue of income inequality, to consider if Canadian society is going in the direction we want it to go. It needn’t be something so cumbersome and official as a Royal Commission, but a task force, perhaps, that shines a more focused light on the concerns the global Occupy movement has brought to the public eye.

And if we can get enough of the Economist Party on board with a similar set of prescriptions in response to an acknowledgment that inequality is an issue worth addressing all along the income scale (rather than merely for the bottom 10%), then there may well be some prospect of incorporating its overall principles into a political platform that succeeds as a matter of both policy and politics.

Good riddance

At long last, B.C.'s HST has met its end. Vaughn Palmer reminds us why, while Iglika Ivanova looks at what comes next.

New column day

Here, on how B.C.'s HST referendum and Wisconsin's state Senate recalls should rekindle our interest in setting up direct democratic mechanisms to hold governments accountable between elections.

No followup links for now since both have been amply covered in the corporate media and the blogosphere alike - but feel free to post any particular favourites in comments.

On hollow victories

Sean Holman raises the possibility that Christy Clark and the B.C. Libs may be no better off if they manage to hang onto the HST in the province's ongoing referendum than if they lose the vote. But I wonder whether it's worth going a step further.

If the vote to axe the HST succeeds despite any manipulations on the part of the government, then it seems at least vaguely plausible that the province might see itself as having sufficiently punished Clark and the Libs for their sins - and thus pay somewhat less attention as future revelations surface. But if Clark uses large amounts of public money and other resources to get her way on the HST, then every bit of news figures to feed into a sense that the Libs have escaped unpunished - making it easier for the NDP to build the case that the next election needs to do the job instead.

Friday Afternoon Links

Assorted content to end your week.

- I'll join the seemingly long list of commentators who wouldn't ever have expected to cite David Brooks, but can't avoid it based on his latest column:

Eldar Shafir of Princeton and Sendhil Mullainathan of Harvard have recently, with federal help, been exploring a third theory, that scarcity produces its own cognitive traits.

A quick question: What is the starting taxi fare in your city? If you are like most upper-middle-class people, you don’t know. If you are like many struggling people, you do know. Poorer people have to think hard about a million things that affluent people don’t. They have to make complicated trade-offs when buying a carton of milk: If I buy milk, I can’t afford orange juice. They have to decide which utility not to pay.

These questions impose enormous cognitive demands. The brain has limited capacities. If you increase demands on one sort of question, it performs less well on other sorts of questions.

Shafir and Mullainathan gave batteries of tests to Indian sugar farmers. After they sell their harvest, they live in relative prosperity. During this season, the farmers do well on the I.Q. and other tests. But before the harvest, they live amid scarcity and have to think hard about a thousand daily decisions. During these seasons, these same farmers do much worse on the tests. They appear to have lower I.Q.’s. They have more trouble controlling their attention. They are more shortsighted. Scarcity creates its own psychology.

- Meanwhile, Katie Hyslop points out that the Cons are ensuring that arbitrary scarcity remains the norm when it comes to educational funding for First Nations - and that efforts to make such a basic service as Internet access available are being cut off:

Earlier this year Aboriginal Affairs announced they would no longer be funding internet connectivity for First Nations schools.

This not only threatens to cut kids in remote areas off from connection with an increasingly globalized world, according to Williams, but also prevents students from taking distance education courses or conducting online research.

"We would lose access to online library services, and that's really important, as in the elementary and secondary schools kids are asked to do research. Most of our schools have very, very poor libraries, if they have a library, and so now that, I think, is a basic service that kids are entitled to," she says.
...
While schools will be forced to reexamine their budgets in order to afford Internet fees, they'll have to take into account a 15 per cent holdback on targeted programming funds for First Nations education as of April 1. The government announced the holdback earlier this year, citing an uncertainty in funds for First Nations education thanks to the federal election delaying the budget.

"That means that there would be 15 per cent less money available to First Nations schools this year to implement programs such as parent involvement, support for teacher retention and recruitment, for language programming, for some of the literacy programming that we've put into place," says Williams, adding government hasn't said when, if ever, the 15 per cent will be restored.

- But at least offices outside the Cons' control aren't similarly looking to restrict the availability of information. And in fact, the PBO's new website discussed by Bill Curry looks like an excellent step in allowing Canadians to see how their money is being spent.

- Finally, Jim Stanford eviscerates the coalition supporting B.C.'s HST (and the "no" side of the current referendum) as being dishonest, unethical, and flat-out wrong. And the Conseil de Presse du Quebec much the same labels to two of the province's most recognizable right-wing names.

On selective benefits

We'll find out before too long whether the B.C. Libs' latest attempt to survive the imposition of the HST will be any more successful than what they've tried for the last two years. But the more interesting effect of today's announcement may be its impact on the other province which harmonized its taxes at the same time.

Here's the message which I'm sure will be repeated plenty more as the HST referendum progresses:

In order to head off that fiscal reckoning, the B.C. Liberals propose to raise corporate taxes by two points effective Jan 1 of next year and to postpone a scheduled reduction in the small business tax.

The moves constitute a reversal of longstanding tax policy under the B.C. Liberals, who've systematically reduced taxes on the business sector. When the New Democrats proposed similar increases, the Liberals denounced them, saying it would negatively impact the investment climate.'

But Finance Minister Kevin Falcon justified the increases by saying that the corporate sector had enjoyed most of the benefits of the tax shift under the HST.

Of course, in Ontario that benefit to the corporate sector from the HST was packaged with...more benefits to the corporate sector in the form of income tax cuts. And all this just before the McGuinty government declared that it had to start cutting back on public services due to the deficit which ballooned as a result of those giveaways.

Now, with B.C.'s government publicly acknowledging the real consequences of the HST and at least trying to paper over its effects, the Ontario Libs figure to have an even tougher time defending their choices. And it shouldn't come as much surprise if it's the party which has offered the more accurate critique of the HST all along that benefits as a result.

Monday Morning Links

Assorted content to start your week.

- Trish Hennessy calls out the Cons' fear campaign - while hinting at the reality that their insistence on gambling more and more of our prosperity on faith-based market schemes only serves to reinforce their message that we can hope for nothing better than a state of constant panic:

In the lead-up to the 2008 recession, during the best of economic times, Canadians were taking on epic levels of household debt.

Research from Statistics Canada, the Canadian Centre for Policy Alternatives, and elsewhere documents a disturbing rise in income inequality over the past generation, reversing what, post-World War II, had become a more egalitarian, compassionate Canada (though not a perfect Canada).

Research also showed that Canadian households were working longer hours, toggling multiple jobs and relying on multiple income earners in the household just to keep afloat.

A concentrated number of elite Canadians were getting so rich from economic growth that it was starting to look like the 1920s all over again — for the lucky few.

But a growing number of Canadians were admitting to pollsters they were one or two paycheques away from financial disaster. In essence: They were one piece of bad news away from having the dream of a middle class lifestyle fall to pieces.
...
The thing about insecurity is that it breeds fear – fear of change, fear of chaos, fear of decline.

The politics of fear exploits, rather than protects. It distracts at a time when we need focus. It divides when what we need is unity.

What we saw in Canada during the 2011 federal election was a master at the politics of fear – Stephen Harper – playing the game like his life depended on it. And he won.

- But at least when it comes to workers' rights, the Star for one isn't buying the line that we should immunize businesses from all laws and obligations in hope that they'll reward us with a few more jobs:

Workers at the bottom of the pay scale have long been among the most exploited. Their desperation to keep a job they can’t afford to lose makes them easy targets for unscrupulous employers.

But the extent to which vulnerable workers in Ontario are being ripped off by some employers, as outlined in a new study, is startling.

One in three low-wage workers has had wages unfairly withheld or outright stolen by employers, according to the Workers’ Action Centre report. For some, it’s paycheques that are short hours, for others it’s being denied vacation pay or forced to work copious overtime hours for no pay at all.

This amounts to “wage theft” and an indictment of the government’s ability to enforce its labour laws and regulations on behalf of those who need the protections the most.
...
When a substantial complaint of wage theft is verified, that should trigger a broader labour investigation into the company involved. And the ministry needn’t wait for complaints to roll in. Inspectors should more proactively target employers in high-violation industries.

On paper, Ontario has strong laws. But they need to be enforced in a way that offers real protection for the poorest and most vulnerable workers.

- Harvey Oberfeld describes the real tradeoff at play in British Columbia's HST referendum:

(The HST) may be smart, from a corporate point of view, but how fair is it really for a company, let’s say, that measures revenues in millions to enjoy an EXTRA tax break at the cost of single parent families, young couples struggling to buy their first home, single people unable to even afford an unshared apartment or seniors struggling to make ends meet?

What the Tax Alliance doesn’t seem to realize is that the HST was not a tax break: it was tax SHIFT … from business to individuals.

Over the next few weeks, the public will see and hear Smart Tax Alliance ads, featuring “financial professionals” saying the HST helps business re-invest and acts as the “engine for economic growth”, cutting administrative costs and headaches.

We get it.

But all this is accomplished … not by getting rid of the costs and headaches … but by passing them on to the rest of us … many, many people with much less money than the companies that now get the savings. How is that justifiable, especially in a province that was already boasting BEFORE the addiitonal HST savings, that BC had some of the lowest corporate taxes in North America?

- Finally, now that the initial media rush to scrutinize and criticize Ruth Ellen Brosseau seems to be winding down, the media is starting to cover a few more of the NDP's new MPs. And Daniel Leblanc's profile of Mathieu Ravignat paints exactly the picture the NDP figures be looking to develop among all of its elected members:

Mr. Ravignat is focusing on local issues for now, such as economic development and protecting the pensions of workers, including those in the forestry industry in the Pontiac region. But he says he entered politics on behalf of Sophia and Gabriella, his two daughters,

“I’ve long been politically active, but running as a candidate was something else,” he says. “That decision was made for my kids. There is a future to build for them. They are so precious, and I want to make sure they still have access to education and health care.”