Thursday Morning Links

This and that for your Thursday reading.

- Ken Georgetti discusses how the corporate tax giveaways of the past 15 years have hurt most Canadians:

The Conservative government and special interest groups claim incessantly that cutting corporate income taxes is good for the economy and for individual Canadians. We have been led to believe that tax giveaways to corporations would lead companies to reinvest in research and development as well as machinery and staff training to boost productivity. This is supposed to stimulate economic growth and create better paying and more secure jobs. But that is not what has happened in Canada during the past decade.

Let's look at the record since 2000, when the drive to slash corporate taxes began.  The average annual economic growth between 2000 and 2012 was 1.14 per cent, one of the longest periods of low economic growth in decades. Business investment in research and development has fallen from 1.13 per cent of GDP in 2000 to 0.88 per cent of GDP in 2012. Investment in employee training and skills development is down by 40 per cent since the 1990s. The amount spent on training per employee in Canada in 2010 was $688; in the U.S it was $1,071. And now, taxpayers will get the privilege of subsidizing companies for employee training, with the federal government's proposed Canada Jobs Grant.
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The years of tax giveaways have, indeed, been good for business. Their after tax profit margins rose from 6.9 per cent in 2000 to 8.1 per cent in 2012, and now we know what they have been doing with the money. Between 2000 and 2012, the total cash reserves of private, non-financial private corporations in Canada grew from $182 to $541 billion, an increase of over 300 per cent. During the same period, CEO pay went sky-high. The average CEO compensation at Canada's largest non-financial corporations averaged $7.96 million in 2012.

Corporate tax giveaways mean that the federal government has foregone billions of dollars in revenues. To pay for the tax breaks, Ottawa has borrowed billions of dollars and driven up the national debt. Now, the government has chosen to make big cuts to public services essential to Canadians in order to pay the bill for its tax giveaways.

We hold Corporate Tax Freedom Day to draw attention to the failure of business to deliver on its promises to Canadians. Clearly, slashing corporate tax rates did not produce the expected outcomes. No strings attached corporate tax cuts are a cruel and very expensive hoax and we should demand our money back.

- Meanwhile, Linda Nguyen reports that while the same Con/corporate grouping tries to minimize public pensions in favour of private schemes which allow the financial sector to skim massive rents off the top, the vast majority of Canadians expect to rely on the CPP and provincial equivalents to support their retirement.

- Trish Hennessy writes that Ontario should try to get on the right side of history by setting its minimum wage at a level which will keep full-time workers out of poverty. And the Wellesley Institute concurs while discussing the importance of also indexing it to inflation.

- Kev and Dan Tan are both rightly skeptical about the Libs' sudden Senate announcement (followed by almost immediate backtracking about what it actually means). But Paul Wells sums it up best:

The last two acts of Richard II are about sorting out the effects of Bolingbroke’s rash act, and I won’t spoil it for you but it gets a little messy. Similarly, it’s hard to know where the Liberal Party as a whole goes from here. Terry Mercer gave his life to this party. Dozens of other senators and their staffers, same deal. Percy Downe was Chrétien’s chief of staff; he got told this morning he has no further function as a Liberal. An NDP staffer this morning was gleeful, because with only 34 MPs and zero Senators, the Liberals may no longer qualify for a caucus room in the Centre Block. It’s not entirely clear how all this will work.

Nor is it clear it is a permanent state of affairs. The old Reform Party was dead-set against MPs’ pensions until its members started to qualify for some. Stephen Harper did not appoint a single senator until he realized Stéphane Dion had planned to appoint plenty if the coalition crisis had gone the other way. Among a thousand other backtrack scenarios, it’s possible to imagine a future Liberal prime minister — perhaps his name would be Trudeau — watching as a coherent Conservative Senate caucus blocks Liberal legislation that has gone orphan in the Senate. In the nearer term, every time a fellow or lady who still collects a Senate paycheque shows up at a gathering of Liberals, the sincerity of this divorce will be open to question.

- Finally, Matthew McKean discusses how public confidence in politics may be the most important factor in improving voter turnout (and presumably public participation in many forms as well). And the Cons' consistent attempts to weasel their way out of responsibility for their actions surely can't be helping matters.

Tuesday Morning Links

This and that for your Tuesday reading.

- George Monbiot comments on the outsized influence of advertisers on children:

How many people believe this makes the world a better place? A company called TenNine has hung hoardings in the corridors and common rooms of 750 British schools. Among its clients are Nike, Adidas, Orange, Tesco and Unilever. It boasts that its "high impact platform delivers right to the heart of the 11-18 year old market".

Other firms are closing in. Boomerang Media, which represents Sega, Atari, Virgin, Umbro and others, has persuaded schools to distribute Revlon perfume samples to their pupils. This campaign, it says, "was effectively linked into their PSHE and PE classes". PSHE means personal, social, health and economic education, or "learning to live life well". How the disbursement of perfume by teachers helps children to keep fit and live well is a mystery I will leave you to ponder.

Advertising in schools offers corporations a genuine captive market. Trade associations which defend the dark arts of persuasion argue that if you don't like advertisements, then you don't have to look at them. But in this case you do. While surveys suggest that roadside hoardings raise awareness of a company's products among 28% of the people who pass them, posters in schools, according to TenNine, reach over 80%.

Every year, advertisers press a little further into our lives, shrinking the uncontaminated space in which we may live. In ways of which we are often scarcely aware, they change our perceptions of the world, alter our values, infiltrate the language.
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In his book Childhood Under Siege, Joel Bakan shows how computer games and social networking are being merged to create new advertising platforms. The aim, according to an executive he quotes, is to "get users in the door to play for free and then monetise the hell out of them once they're hooked". One way is to issue points or virtual coinage to kids who click on advertisements.

All this is promoted as fun and freedom. Parents who try to restrict children's access look like prudes and killjoys. "As our kids become immersed," Bakan notes, "in a [corporate] culture that works to pry them loose from us, we become less able to find the connection, respect, authority and credibility we need to keep them safe, healthy and in the long term happy."
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So it didn't take me long to decide to sign the open letter by a new campaign called Leave Our Kids Alone, asking for a ban on all advertising aimed at children under 11. It is long overdue: it's a marvel that we have for so long tolerated this capture of children's minds by companies exploiting their innocence and wonder. This is a campaign about more than advertising. It's about who we are: free-thinking citizens, raised on the best information and judgment that parents and teachers can provide; or captive consumers, suckled at home and at school on subtle corporate lies. I urge you to join it.

- But Erika Shaker notes that corporate interests haven't been able to completely override critical thought - with the Cons' temporary foreign worker system looking like a prime example of an issue where the general public is rightly questioning why actual people have no place in Conservative and corporate decision-making.  And Ken Georgetti calls on the Cons to fix the system they've broken.

- Martin Regg Cohn points out that the Ontario Libs' gas plant scandal also serves as a case in point as to the dangers of ill-advised privatization:

It was the Liberal embrace of privatization in 2004 that drove the government to contract out any new power generation — from gas-fired plants, solar and wind — to the private sector, explicitly sidelining government-owned Ontario Power Generation.
Think about that: OPG happens to have decades of experience in siting power plants — including nuclear reactors — across Ontario while engaging with local communities (ever notice our nukes aren’t plagued by active NIMBYism?). It also has enormous fiscal capacity to borrow money for power plant construction without resorting to parasitical U.S. private equity funds charging nearly criminal rates of interest and penalties.
Instead, the Liberals bought into the fantasy that privatization equals efficiency. And the shibboleth that the private sector always delivers on time and on budget.
Not in Mississauga, where the private sector ran out of time — and money. Eastern Power won the contract by bidding low for the project, but turned out to be a high-cost operator: Not only did it borrow money at 14 per cent (compounded quarterly), as the auditor noted incredulously, it demanded to be compensated for supposedly paying an administrative assistant at the rate of $110,000 a year.
So much for efficiency.

- Which offers a useful reminder to work on avoiding the same types of problems with a new Regina wastewater treatment plant.

- And finally, CBC reports that while Peter Penashue gets ever more shrill in shouting that he abused his ministerial authority in order to secure pork for his riding, his party refuses to even acknowledge that anything of the sort ever happened.

Sunday Morning Links

Assorted content to end your weekend.

- In keeping with the theme of my column this week, the Mound of Sound highlights the distinction between a "plutonomy" which serves as the source of easy profits, and a "precariat" which businesses are looking to treat as irrelevant (except when they need a bailout).

- And Ken Georgetti discusses how that distinction fits with the regular attacks on organized labour from the Cons and their provincial cousins: 

The erosion of collective bargaining is linked directly to a growing income gap in our society. Corporate profits are at near or record highs while the wages of Canadians have stagnated for an entire generation. There is a direct relationship between attacks upon unions and a shrinking of the Canadian middle class.

Left to its own devices, free collective bargaining really does work for the common good. Unions have been able to ensure that workers share, at least to some extent, in the corporate profits that they helped create. Unions have been successful in reducing systemic wage gaps in workplaces. Being in a union means better wages for women, workers of colour, aboriginal people and people with disabilities.

The more equal wage structure in unionized workplaces sets wage and benefit standards that spill over into other workplaces. Employees tend to be paid better when they live in communities with unionized workers earning decent wages. Finally, countries with strong labour movements have a larger, more vibrant middle class and achieve greater societal fairness because unions advocate for government policies that benefit all working people, not just their own members.

Our government's heavy-handed interventions in the labour market weaken basic labour rights, and that hurts all middle class Canadians.

- Meanwhile, David Olive points out that austerians are simply exacerbating exactly the problems they claim to want to fix, while also creating longer-term investment deficits that will need to be addressed later.

- Grant Robertson reports on the Cons' willingness to let banks select and fund their own "external complaints bodies", rather than answering to any accountability mechanism anybody whose findings might not be entirely in keeping with the bank's desires.

- Finally, Michael Geist details how CETA is being used to imposed draconian copyright restrictions with little public attention.

Friday Morning Links

Assorted content to end your week.

- pogge points out the Cons' suppression of news that a lack of running water on First Nations reserves facilitated the spread of H1N1 - offering a case in point as to both how neglect of social needs can carry widespread ramifications, and how little interest the Cons have in improving matters. But the story looks like another prime example as to how we could and should be doing better for people facing third-world conditions in our midst - as Dan Gardner rightly points out.

- Of course the Harper Cons' end-of-session spin is that their ramming through tons of legislation without meaningful review or debate somehow represents a positive change from having to pay attention to any factor other than their own partisan ends. But John Ivison, Jeffrey Simpson and Chris Selley all write from a common theme that the Cons' determination to shut down democratic discussion is the real story of this fall - and a sad testament to the state of Canadian politics under Harper.

- Ken Georgetti comments on the need for CPP reform rather than yet another set of "retirement security" plans which do nothing for anybody without tens of thousands of spare dollars to sock away - and a high tolerance for having their retirement fund siphoned off by the financial sector:

People can be forgiven for steering clear of the retirement savings industry. Market meltdowns have decimated portfolios no fewer than five times in the last two decades. Industry management fees and expenses are also a serious turnoff.

A Morningstar study published this year gives the Canadian mutual fund industry an F for having the highest fees among the 22 countries surveyed.

With a median total expense ratio of 2.31 per cent for an equity fund, Canadian investors can expect to lose more than half of their investment account balance to fees by the time they retire.
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Fortunately, we have a pension plan that delivers secure, predictable retirement benefits at low-cost. Virtually all employed and self-employed Canadians already contribute to the CPP, which is fully portable and provides an inflation indexed lifetime retirement benefit to millions of retirees.

The CPP enjoys low costs on account of its large scale, efficient administration and professional governance, and the Canada Pension Plan Investment Board oversees a diversified and professionally managed fund on behalf of the plan. Benefits are paid for by contributions and investment income, not government tax revenues.

But CPP benefits were intentionally limited from the beginning to replace just 25 per cent of average pensionable earnings - ironically, to leave room for workplace pensions that employers are now deserting in droves. We could double future CPP benefits for today's young workers through a modest, phased-in increase in contributions over time. Those pundits who claim this would discourage hiring should remember that the CPP contribution rate rose fully 65 per cent between 1997 and 2003, when the unemployment rate fell to 7.6 per cent from 9.1 per cent.
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We've got to get moving and improve the best features of the system we have - the CPP. That's what the finance ministers should commit to in Victoria.

- Finally, Skinny Dipper has set up a fully-ranked poll for the NDP's leadership campaign. I'd see the first-ballot numbers as more likely to indicate a focus on this particular poll rather than actual candidate strength, but the results look to be instructive as to where support turns on subsequent ballots. (And so far, Peggy Nash looks to be doing rather well on both fronts.)

Saturday Morning Links

Assorted content for your weekend reading.

- Marc Lee presents an alternative economic vision to the capital-first-and-only approach that currently serves as conventional wisdom.

- Meanwhile, Andrew Jackson suggests five philosophical principles that can help the NDP to form government in 2015 on a social democratic platform:

More – not less – public investment is needed to increase private sector productivity and future economic growth.

Expanding public programs is a more equitable, and also a much more cost effective, way to provide the services we all need.

Expanding public programs is key to shoring up an equal opportunity, middle class society.

We need a strong and productive private sector as well.

Unions shape an equal society.

- And Ken Georgetti expands on the last point:

The people who have been occupying financial districts in Canadian and American cities are motivated by anger over the glaring economic unfairness that exists in our society. The labour movement welcomes what these young people camping outdoors in tents are saying -- because we have said the very same thing for many years.
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Unions have traditionally contributed to a healthy middle class in a number of ways. They limited to some degree the share of total national income that goes to corporate profits. That corporate share now is near a record high in Canada and the U.S. as the bargaining power of unions has weakened.

Unions have also been able to narrow the pay gap between senior managers and professionals and the rest of the workforce. There is certainly a need for income differentials to compensate employees for taking jobs that require greater skills, effort and responsibility, but the pay gap has risen to absurd levels. As recently as 1995, the average pay of Canada's highest paid 50 CEOs was 85 times the pay of the average worker. Just 15 years later, their average compensation had skyrocketed to 219 times the pay of the average worker.

Unions are also successful in reducing systemic wage gaps in workplaces. Being in a union means better wages for women, workers of colour, aboriginal people and people with disabilities.

It is also true that the more equal wage structure in unionized workplaces will set wage and benefit standards that spill over into non-union workplaces. Those non-union workers tend to be better paid when they live in communities with a critical mass of unionized workers earning decent wages. Experts at the International Monetary Fund and the Organization for Economic Cooperation and Development have confirmed the labour movement's argument that the single best mechanism to narrow the income gap is broad-based collective bargaining.

The final and most important reason why countries with strong labour movements are more equal is that unions advocate for government policies that benefit all working people, not just their own members. Employers, especially large employers, tend to be hostile to unions because we challenge their power in the workplace and the wider society. Beginning 30 years ago, government policies that shifted power and wealth to those who already had more set the stage for today's growing inequity.

- So of course it shouldn't be hard to tell who stands to benefit as Brad Wall and his government keep on attacking unions.