Wednesday Afternoon Links

Miscellaneous material for your mid-week reading.

- Kate Raworth discusses the need to orient ourselves toward measures of progress based on well-being rather than growth - both due to its being intrinsically more important, and more sustainable under conditions of dwindling environmental resources. And Sonali Kolhatkar laments the U.S.' choice - largely paralleled in Canada - between a party determined to accelerate the climate breakdown and one which promises little improvement beyond a slower death. 

- Laura Cozzi and Apostolos Petropoulos highlight how larger SUVs are one of the major contributors to increases in carbon pollution. Matthew Taylor reports on a new study showing the racial and class dynamics behind greenhouse gas emissions in the UK, with wealthy white men as by far the worst class of polluters. And Karl Bode discusses how the U.S. has passed legislation to close off one of the few tools available to hold the wealthiest few to account for their environmental destruction in the form of emissions from private jets.   

- Katrina Miller and Ryan Romard respond to a typical round of demands for austerity in the name of productivity by pointing out that it's inequality, not fair taxes, which results in stagnation and economic decay. 

- Finally, Kim Siever writes that we can't treat the ability of a worker to quit a single job as a remedy for a system designed for exploitation. 

Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Kady points out that despite the Cons' best efforts to stonewall, the Robocon investigation in Guelph looks to have locked in on the source of their fraudulent robocalls. And while it's indeed somewhat concerning that Elections Canada hasn't reached anywhere near the same depth of investigation when it comes to the other 234 ridings where voters have reported questionable calls, a solid case aimed at an individual who took steps to cover his tracks may be just the opening needed to get at the party's wider scheme.

- pogge duly slams Jim Flaherty's economic inaction plan:

You can be sure that the fragility of the recovery will continue to be invoked to justify all manner of government actions. For public consumption, the Harper Government™ will still be focusing like a laser on the economy. But as Flaherty acknowledges here, the main thrust of the government's economic policy will continue to be to give our corporate overlords what they ask for. If things take a turn for the worse, don't look for much help from the Conservatives. If you're a corporation the government is here to help you. If you're a citizen, you're on your own.

- Meanwhile, Jim Stanford follows up on Mark Carney's address to the CAW by pointing out some common ground as to how to improve Canada industrial productivity. And Dan Gardner discusses how the give-business-everything-it-asks-for strategy has proven a miserable failure for the past decade:

If we don’t close that gap, our prosperity will slip away when the commodity boom goes. And the commodity boom will go. They all do.

So how do we improve productivity? “Twenty years ago we created a laundry list of the things we needed to change in the policy front and productivity would blossom,” says Don Drummond, one of the country’s leading economists. “And you know, we changed most of them but productivity didn’t blossom.”

Canadian corporations got lower taxes and all sorts of incentives to invest. But they didn’t, and they aren’t, at least not at anything like the rate that’s needed.  According to the C.D. Howe Institute, investment per worker has risen from $10,100 in 2009 to $11,600 in 2011. But in 2011, American companies invested $13,200 per worker.

“We are heavily underinvested in machinery and equipment, particularly high technology stuff, relative to the U.S.,” notes Don Drummond. “We have roughly half the stock of machinery and equipment per hour worked in Canada that the U.S. does.” The figures for research and development are even worse: Canadian business spends about one per cent of GDP on it, compared to two per cent in the U.S. and 2.5 per cent in Japan, the Scandinavian countries, and others in the OECD.

- Finally, as Thomas Walkom notes, there isn't any real distinction between the Harper Cons and the McGuinty Libs when it comes to squeezing the middle class for corporate gain:

(T)his government wants public-sector workers to get less than nothing. Even the unions’ offer for a zero increase isn’t enough. The Liberal bill would arbitrarily strip away benefits that were previously bargained and keep all but the newest teachers at journeyman wage rates.

And if teachers don’t like it, there is little they can do. The bill would not let them withdraw their labour in protest.

If teachers were deemed essential workers, such a strike ban might make sense. Police officers, for instance, can’t go on strike.

But if teachers were defined as essential workers, the government would have to treat them fairly. It wouldn’t be able to impose a settlement. It would have to let an impartial arbitrator decide.

And my guess is that no impartial arbitrator would give teachers less than nothing.

Tim Hudak’s Conservatives are at least up front on this issue. Hudak seems to believe that unions are evil. He is an honest troglodyte.

The Liberals are more duplicitous. They work to cripple trade unionism while protesting that they are friends to the middle class that such unions protect.

Sunday Morning Links

Assorted content to end your weekend.

- For much of the relatively recent past, one of the areas of relative consensus in economic theory is that productivity increases would find their way to workers. But Paul Krugman shows that hope to be utterly misplaced:

Where did the productivity go?

The answer is, it’s two-thirds the inequality, stupid. One third of the difference is due to a technical issue involving price indexes. The rest, however, reflects a shift of income from labor to capital and, within that, a shift of labor income to the top and away from the middle.

What this says is that widening inequality makes a huge difference. Income stagnation does not reflect overall economic stagnation; the incomes of typical workers would be 30 or 40 percent higher than they are if inequality hadn’t soared.

Which confirms all the more that we need to work more on redistribution, rather than on the hope that expanding the economic pie through productivity gains will benefit anybody other than those constantly angling for a larger share.

- But of course, the Cons are doing their utmost to make sure as little of the benefit of any economic growth as possible goes to mere workers. And the Star takes them to task on their efforts to push cheap, disposable foreign labour to replace Canadians who might know and act on their employment rights:

Since Prime Minister Stephen Harper assumed power in 2006, the number of foreign temporary workers admitted into Canada has grown by 40 per cent. The temporary worker stream is now larger than the stream of permanent workers intending to set down roots and become citizens.

...
When Canada introduced its temporary foreign worker program in 2002, the governing Liberals vowed never to adopt the European model route in which “guest workers” are paid less than nationals and treated as second-class residents.

But under Harper, the country is now moving in that direction.

Likewise, Thomas Walkom has this to say:

Employers could solve their labour shortages by offering higher wages or — in the case of skilled trades — by training Canadians to do the job.

But, if government is willing, it’s easier and more profitable to import cheaper, trained labour from abroad.

And this government has shown that it’s willing. It says that if Canadians don’t want to see jobs going to foreigners, they should quit whining and accept lower wages.

Which is why Ottawa’s answer to complaints made about temporary foreign workers is to toughen Employment Insurance rules.

Kenney has warned that unemployed workers who refuse to take low-wage jobs will have their EI benefits cut off. If Canadians agree to work for less, he explains, Ottawa won’t have to bring in as many low-wage outsiders.

All of this is a solution of sorts, I suppose, albeit a 19th century one. But it is a solution that threatens to bring with it the kind of agitation now seen in countries like France, Holland and Greece — where the racist right is on the rise and where far too many workers view immigrants as mortal enemies out to steal their jobs.

- Lawrence Martin asks whether we still live in a democracy - and the answer is rather disturbing. And the Canadian Association of Journalists gives the Cons their due reward for suppressing information.

- Finally, Michael Hollett suggests that anybody hoping for a more progressive and representative government get behind the NDP in order to implement proportional representation. And Brian Topp points out that the Libs' own perpetual appeals to strategic voting - which I'd note represent arguably the lone consistent note in the party's campaigns over the past decade - may end up being the greatest obstacle to their efforts to rebuild.

Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Bruce Campbell comments on the link between rising inequality and declining democracy, while Rachel Mendleson notes that the erosion of workplace democracy and the labour movement is a key factor in both.

- Meanwhile, Erin points out that while decades of corporatist policy haven't done anything to improve productivity, the greater consumer demand from a better distribution of wealth might well help matters.

- pogge rightly questions why the CBC continues to trumpet Fraser Institute propaganda as newsworthy. But I wonder whether the answer is simply to turn the apparent incentives on their head: if the media indeed finds pre-packaged news irresistible and doesn't bother to present competing views, maybe we should start putting our critiques of astroturf organizations into a similarly media-friendly form to be similarly reported without question.

- Finally, is there any surprise that in the midst of constant admonitions that we need to harmonize (read: torch) laws between provinces and countries to the greatest extent possible, the one time our regulators want to strike out on their own is to increase the volatility of casino capitalism when the U.S. is looking to install some meaningful "circuit breakers"?

Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Jim Stanford points out that when it comes to manufacturing, any talk of an "invisible hand" doing much for productivity is based purely on faith rather than evidence:

When it comes to Canada’s lousy record in productivity and innovation, the standard prescription of economists is both clear and predictable. They believe unregulated markets are the best way to allocate resources and determine the composition of output. Therefore, to improve efficiency and innovation, simply improve markets: Eliminate “distorting” taxes. Eliminate regulations. Sign more free-trade agreements. Cut “red tape.” That will unleash the full potential of the private sector to innovate and optimize, and Canada will become a northern tiger.

Canadian economic and social policy has been generally following this advice for a quarter-century. Taxes are lower, globalization is embraced, labour markets are unforgiving, business is freer (and more profitable) than any time in our history. Ironically, however, the more vigorously we pursue the holy grail of self-adjusting markets, the worse our productivity and innovation has been.
...
This seeming contradiction between Canada’s business-friendly policy environment and the failure of the resulting empowered private sector to deliver innovation and productivity growth puzzles economists who advocate market-driven approaches. They search for some remaining imperfections or residual market impediments to explain the failure of Canadian productivity and innovation to take off.

But what if the starting assumption of their model – namely, that unconstrained private market forces always produce the most efficient, innovative economy – is not justified? What if, in fact, markets work more productively and creatively when they are guided, supported, and constrained, rather than simply being unleashed? What if the best approach is to challenge and direct markets to more productive and innovative outcomes?

International experience reinforces my skepticism of market-driven policy. The successful state-led industrialization experience of several Asian and Latin American economies in recent decades, where policy was proactive and interventionist, suggests that innovative, productivity-enhancing growth does not occur spontaneously as a result of market forces. Instead, the “visible hand” of government intervention, manifested in a wide range of forms, is more strongly associated with qualitative and quantitative economic progress. Targeted subsidies, strategic trade interventions, active industrial strategies in high-tech industries, domestic procurement strategies, and even public ownership of key firms have all been more effective in promoting innovation and export success than Canada’s hands-off approach.

- And speaking of evidence, interim Auditor General found none that the Cons cared in the slightest whether their stimulus spending saved any jobs other than their own.

- Meanwhile, Information Commissioner Suzanne Legault has pointed out that the Cons' move to destroy the data supporting the long gun registry makes for a disturbing precedent. But I have to wonder whether as secretive a government as Stephen Harper's will see that precedent as a feature rather than a bug: what better way to cover its tracks for future misdeeds than to make the disappearance of information into standard operating procedure?

- Finally, while engaging in a bit more "they all do it" than seems justified, John Ivison rightly slams the Cons' contempt for Parliament.

On productive discussions

Progressive commentators have been ready and able to debunk the right-wing claim that Canada's productivity issues can (and can only) be solved through yet another round of corporate tax cuts. But the National Post reports that one of Canada's most prominent economists is equally of the view that tax cuts, along with other seemingly favourable conditions, haven't done a thing to encourage corporate investment:

An influential Bay Street economist said Tuesday that corporate Canada is partly to blame for the country's dismal productivity record because companies have failed to take advantage of prosperous times to invest in machinery, training and technology.

Don Drummond, chief economist of Toronto-Dominion Bank, said the investment climate - with low interest rates, reduced corporate taxes and a Canadian dollar close to par with its U.S. counterpart - has never been better for companies to invest in the machinery and equipment needed to boost productivity growth.

"The short message is ... Canada is not keeping up," Mr. Drummond said in his report. "The performance of Canadian firms in fostering new investment is not impressive."...

nvestment in machinery and equipment, an important driver in boosting productivity, has also been lacklustre in Canada. As a share of profit, investment in machinery was at an all-time low in 2006, "suggesting that the high level of profits has deterred firms from pushing for productivity growth because the bottom line is already well padded," Mr. Drummond wrote.

High corporate taxes have always been cited as a main reason for companies failing to invest more in productivity-enhancing measures. But Mr. Drummond said the tax regime has had little effect on the corporate sector's after-tax profitability.

The current comparable rates of taxation, between Canada and the United States, suggest that "the corporate tax system can't be blamed for Canada's investment shortfall," the economist said.

Of course, facts have seldom stopped corporate apologists from insisting that the next round of tax cuts will be the one to suddenly spring corporate Canada into action.

But while corporations themselves may have a vested interest in ignoring reality to push for even more breaks, Drummond's report offers yet another important indication that nobody else's interests would be served by more corporate giveaways. And with Canada's lack of corporate reinvestment apparently violating the theoretical expectations which usually underlie the argument for government inaction, there's all the more reason to think that real capital investment and productivity gains will only be reached if Canada's federal and provincial governments are willing to act for themselves to create real incentives for productivity growth.