Wednesday Afternoon Links

Miscellaneous material for your mid-week reading.

- In an excerpt from the Occupy Handbook, Paul Krugman and Robin Wells discuss how a right-wing obsession with exacerbating inequality led to the U.S.' disastrous response to the 2008 crash:

How did America become a nation that could not rise to the biggest economic challenge in three generations, a nation in which scorched-earth politics and politicized economics created policy paralysis?

We suggest it was the inequality that did it. Soaring inequality is at the root of our polarized politics, which made us unable to act together in the face of crisis. And because rising incomes at the top have also brought rising power to the wealthiest, our nation’s intellectual life has been warped, with too many economists co-opted into defending economic doctrines that were convenient for the wealthy despite being indefensible on logical and empirical grounds.
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(T)he role of rising inequality in creating the economic crisis of 2008 is debatable; it probably did play an important role, if nothing else than by encouraging the financial deregulation that set the stage for crisis. What seems very clear to us, however, is that rising inequality played a central role in causing an ineffective response once crisis hit. Inequality bred a polarized political system, in which the right went all out to block any and all efforts by a modestly liberal president to do something about job creation. And rising inequality also gave rise to what we have called a Dark Age of macroeconomics, in which hard-won insights about how depressions happen and what to do about them were driven out of the national discourse, even in academic circles.

This implies, we believe, that the issue of inequality and the problem of economic recovery are not as separate as a purely economic analysis might suggest. We’re not going to have a good macroeconomic policy again unless inequality, and its distorting effect on policy debate, can be curbed.

- Meanwhile, in a Progressive Economics Forum guest post, Robyn Allan points out the deception behind the supposed benefits of a resource-driven economy. And Mike de Souza reports on how the Cons' latest attacks on Environment Canada will weaken environmental protection, while Mike McCarthy and John Ibbitson discuss other ways in which the Cons plan to make environmental oversight less effective.

- The Vancouver Observer digs into the work done by Front Porch Strategies for the federal Cons. And the four examples of candidates who didn't report their expenses look to me to be one of the stories crying out for further exploration, particularly since some of the expenses at issue in Robocon were also laundered through other people or entities.

- Naturally, needing to build prisons to house has left the Cons short on money for actual rehabilitation. But on the bright side, that should at least make increased prison capacity into a genuinely long-term investment.

- Finally, the CCPA finds that not surprisingly, the Cons' OAS cuts will disproportionately harm poorer seniors.

Monday Afternoon Links

Assorted content for your holiday reading.

- Murray Dobbin highlights the Harper Cons' regular support for the irrational, then points out the policy focus from the NDP which can best serve to point out the difference between the Cons' world and the Canada most voters will want to live in:

So if we can expect even more irrationality in the next four years, where might Harper be vulnerable to a rejuvenated civil society and a resurgent NDP Opposition? One area is the economy. where Harper will continue to try to maintain his edge on other parties. He is very vulnerable here, as the dollar continues to rise, the U.S. economy declines and the housing bubble eventually bursts.

The appeal to the irrational will not work if the economy begins to tank. This is one area where Opposition forces need to focus and not get distracted by Harper's efforts to keep his base happy.

The same applies to the jet fighter issue. If the economy begins to decline (and with it revenues), as many expect, this outrageous expenditure will be more and more vulnerable and it must be a focus of opposition, both the NDP and civil society. The government is right now looking at billions of dollars in spending cuts. Asking Canadians whether it should come from Medicare or jet fighters will be a potent political question.
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The last two major issues for which even Harper's Christian base demands rational policy are Medicare and economic security for seniors. Harper knows that seniors vote in much higher percentages than the general population and the NDP put the issue squarely on the agenda before the election. It needs to stay there -- both because it is good policy, and because it will make Harper's budget slashing more difficult.

Medicare will be Harper's biggest test. He hates it and would dearly love to get rid of it altogether, but if he does not tread carefully and slowly, it could be his downfall.

- J.J. McCullough raises some good points as to why it's somewhat misleading to talk about being able to unite multiple parties as representing a united left in Canada. But I'd think it's worth drawing a distinction between how Canadian politics have operated to date, and how they figure to play out in the future - and with the most powerful federal party being one that's working much harder on drawing ideological distinctions than previous governments have normally done, I wouldn't think it's out of the question that Canadians could have their choices far better defined by 2015 than they have been in the past.

- Erin follows up on his post about the difference between wage- and profit-driven economies with a prescription for Canada:

In large, relatively-closed economies (the Eurozone and United States), it would probably be sufficient to raise wages and redistribute income, allowing higher aggregate demand to then boost business investment.

These same pro-labour policies would be desirable in Canada, but given import leakages, the additional domestic demand may well be insufficient to spur investment. Therefore, Canadian progressives also need more direct policies to spur investment, such as public capital spending (whether on infrastructure or through Crown corporations) and targeted incentives for private capital spending.

- And on a related note, the wage/profit distinction leads to a point from Paul Krugman which seems to me to have wider application than merely an assessment of which measure of inflation to adopt for the purposes of setting monetary policy:

I’ve suspected that what we’re really seeing is the inadequacy of even core inflation as a way to purge transitory effects of volatile prices: the measure takes out purchases of food and energy, but it doesn’t take out indirect effects of raw material prices on costs. New research from Goldman Sachs (no link) seems to support that view: it finds that core inflation is getting a temporary bump from the prices of imported raw materials, and will probably subside if the commodity surge is in fact over.

This in turn suggests that policy should really be based on some kind of “supercore” inflation. Should this simply be wage growth? Adam Posen at the Bank of England has certainly gone well down this route, arguing that the relatively high rate of even core inflation in the UK reflects one-off factors and that stagnant wages show that there are few risks. And I totally agree with Posen about the UK policy issues.

Yet there are problems with a wage target — mainly, you don’t want to base policy on the notion that wage gains are always a bad thing.

Wednesday Morning Links

Assorted material for your mid-week reading.

- The Globe and Mail is the latest source to analyze whether corporate tax cuts have produced the promised returns over the past decade. And the result should come as no surprise:

(A)n analysis of Statistics Canada figures by The Globe and Mail reveals that the rate of investment in machinery and equipment has declined in lockstep with falling corporate tax rates over the past decade. At the same time, the analysis shows, businesses have added $83-billion to their cash reserves since the onset of the recession in 2008.
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In 2000, the combined federal-provincial tax rate was just over 42 per cent, ranking Canada near the top among industrialized nations. The combined rate has since fallen to 28 per cent, placing the country in the middle of the pack, and Conservative Leader Stephen Harper’s goal is to reduce it to 25 per cent by fiscal 2013.

Businesses were widely expected to use the extra money from successive rounds of tax cuts to build factories and offices and buy new machinery and equipment. At one time, they did just that. From 1960 until the early 1990s, corporations invested almost every penny of their after-tax cash flow back into the business.

But the tax cuts appear to have reversed decades of tradition. Investment in equipment and machinery has fallen to 5.5 per cent in 2010 as a share of Canada’s total economic output from 6.8 per cent in 2005 and 7.7 per cent in 2000, The Globe analysis shows.

- Which explains why Marc Lee's call for some Robin Hood tax policy figures to be just as beneficial on the economic front as the social one:

Unemployment is still just under 8%, which is good compared to the double-digit unemployment of the early 1990s, but not great compared to the expansions of the late 1990s and 2000s. Too much of the employment gains that have come are in part-time jobs, so added to the 1.5 million unemployed are another half-million or so who are under-employed.

That is not good for businesses in Canada. Nor is the fact that one-third of the gains in income over the past decade have gone to the top 1% of households. The super-rich use this income as a means of keeping score, but it is not spent in the real economy. Canada’s wealthiest could have $100,000 fall out of the trunk of their Porches and not even notice. Yet, further down the income ladder, we see record levels of household debt that are contraining spending.

Again, not good for business. A good business climate is one in which demand is strong, where people have good incomes are spending them on good(s) and services...

(A) little Robin Hood in our economic planning would do a lot of good, and as the economy rises so the deficit would fall. Adding in some new tax brackets for very high incomes, as the AFB has recommended, would be even better. Remember that corporate income tax cuts are tax cuts for the richest Canadians. Our economic policies should be judged by whether they increase inequality or not. We know that lower levels of inequality are better not just in stronger demand, but also in terms of broader health and social outcomes. A simple test: does this policy further enrich the already wealthy? If so, it must be rejected.

- Meanwhile, the Cons' caricature of a threat to the economy is no more accurate than their spin as to what's supposed to improve it:

Contrary to federal election campaign rhetoric, neither a minority nor coalition government would necessarily be a detriment to the Canadian economy, economists and political science experts say.

In fact, many argue that deficit reduction will have more lasting impact on the economy that than corporate tax cuts and other short-term spending decisions.
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“No matter who is in power we feel there is a consensus in Canada among the major political parties that deficit reduction is desirable. For us the bottom line is that reduction and elimination of the deficit over the next several years will be the goal of no matter which government is there.”

Federal debt ballooned to nearly 70 per cent of GDP. But that fell to 29 per cent by the end of 2008. It currently stands at about 34 per cent.

Any new budget introduced after the election is likely to show a similar path toward eliminating the budget deficit by 2016, which would be positive for the country’s credit rating, according to Moody’s.

- For those wondering whose side is worth listening to in Fox News North's latest attempt to pick a fight with a more reputable news source, Andrew Potter provides the quote of the day:

It’s amazing what sort of character assassination you can get away through chickenshit use of question marks (in Levant’s case). Or in Lilley’s case, through the deliberate withholding of facts. As Peter Loewen himself told Lilley when Lilley interviewed him for his March 31 story, Loewen did the same sort of work for Harper in 2004 that he later did for Ignatieff. Loewen was also a staffer for a Nova Scotia Progressive Conservative leadership candidate in 2005. And he once donated money to Pierre Poilievre’s nomination campaign.

This information was available to Brian Lilley, his editor, and to Ezra Levant. It is thoroughly despicable that it was not included in the stories that were published. What is going on here? In yesterday’s Globe and Mail, Simon Houpt suggests that Loewen just got caught up in a broader anti-CBC campaign by Sun Media, as it prepares to launch its new television station.

If so, that’s disgraceful enough. But I actually think something more basic is at work here: Intellectual prostitutes like Brian Lilley and Ezra Levant are so used to selling their brains on the cheap in journalism’s back alleys, they find it literally incredible that everyone else’s intellect is not similarly for sale.

- And finally, Dan Gardner reminds us how we got into a federal election campaign, and why the Cons' contempt of Parliament matters.

Friday Morning Links

Assorted content to end your week.

- thwap points out what needs to happen for a change in government to lead to more meaningful changes to our federal political system:

We shouldn't become bullies. But we shouldn't be the cynical enablers. We should make sure that the Liberals don't behave like US Democrats, "looking forward, not backwards" and allowing past crimes to go unpunished and past anti-democratic excesses to become incorporated into Canadian politics as capitalism unravels.

One can be law-abiding, classy, and principled, without being a doormat.
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My point is that after we take power, we should step up our demands for accountability. We can play by the rules and still be absolutely ruthless in destroying the harpercon mentality and setting the precedent that blatantly undemocratic and blatantly criminal behaviour is not tolerated in this country.

- Aaron Wherry rightly points out that the Afghan detainee document process doesn't contain a clear disclosure process when the House isn't sitting to allow documents to be tabled. Which raises the question: have the Cons ever allowed anything embarrassing to be made public when faced with anything short of an absolutely clear obligation?

- In case anybody thought the Cons might have made their nomination processes somewhat more democratic in open seats than they allowed for their incumbents, think again.

- Finally, Jim Stanford's thorough takedown of John Manley's spin on corporate tax cuts is too consistently on target to excerpt - so go read if you haven't already.

[Edit: fixed attribution as per pogge's comment.]

Monday Morning Links

A guided content tour to start your week.

- Perhaps the most striking part of Richard Brennan's story on Jason Kenney's attempts to control the content of "ethnic" media is that even he doesn't seem to dispute anything other than that there might be some carrots for supportive media to go with the sticks against anybody remotely critical:

Conservative Minister of Citizenship, Immigration and Multiculturalism Jason Kenney walked into The Korea Times office in January and admonished the publisher for being Liberal-friendly.

It suddenly made sense to Lawrence Kim why his staff at the daily newspaper was not given the chance to go with Prime Minister Stephen Harper to South Korea late last year while reporters from Korean weekly newspapers on the west coast got to go.

The message was clear — play ball with the Conservatives and there are rewards.

“We were not offered an opportunity (to go to Korea) ... he came and told me that they thought we are against the (Conservatives) and pro-Liberal but I told him that I am not pro or con,” said Kim, publisher of the Toronto daily.
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Kenney’s office disagrees with The Korea Times’ account of what took place at that meeting, but acknowledges it has a problem with the paper’s coverage.

“Minister Kenney has had a long-standing concern with the biased, unfair coverage the government was receiving in The Korea Times,” wrote his spokesman, Alykhan Velshi.

Velshi said the minister went to the office for an editorial board meeting to simply express “our openness and good faith,” and added that Kenney wasn’t involved in deciding who was invited to the trip to Korea.

- I'm not sure if anybody can explain the news that the Cons will pour $100 million into the War of 1812 other than as an effort to goad the opposition into an election. But might this make for another couple of links to the Cons' Republican counterparts: both a desire to focus on military past at the expense of the present, and a refusal to accept that the South lost?

- Andrew Jackson counters the latest round of unfounded attacks on the civil service, while nicely highlighting how those fighting against the public sector are ultimately working to do nothing more than spread poor pay and working conditions to a broader range of workers:

While now somewhat dated, the best independent Canadian empirical studies show that a modest public sector pay advantage is mainly the product of higher pay for women in lower paid occupations, offset by lower pay for mainly male workers in managerial jobs.

The alleged ”public sector union elite” turns out not to be a bunch of overpaid archtypical bureaucrats, but to be modestly paid women such as caregivers who do much better than their private sector equivalents mainly because the latter struggle with low wages, are under-paid compared to equivalent male co workers, and rarely have access to pension and health benefits.
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”A combination of factors explains government-private sector pay differences. Notable in this regard are pay equity policies, which narrow the male-female pay differentials in government, and the tendency for governments to pay more than the private sector does for service jobs and less than the private sector wage rates for managers. In other words, the spread between the top and the bottom of the pay scale is less in government than in the private sector, likely a result of political, public and collective bargaining pressures.”

These findings in turn help explain why the CFIB attacks public sector wages so fervently - they put upward pressure on them to pay more to under-paid women service workers.

- Finally, Inky Mark's criticisms of the Cons are well worth a read:

One must ask the question: What value is there having a membership in a party that doesn’t respects it’s membership? This lack of democracy at the local level is wrong. It has taken western society 700 years to take the power away from the crown and put it in the hands of the commoner. Today we have a system where the MP is appointed by the leader of the party, not the members of the party. Our young men and women are sacrificing their lives in the name of democracy around the world. Stephen Harper and Don Plett, instead of paying lip service to democracy, it s time to give the membership in Dauphin-Swan River-Marquette the right to an open and fair nomination.

Monday Afternoon Links

Content goes here.

- Brian Topp nicely sums up the state of the current competition for votes between the NDP and the Libs:

It seems reasonable to speculate that the New Democrats achieved their more recent success in the first instance simply by persuading former NDP voters, notably in Ontario and British Columbia, to return home. Having achieved that, Mr. Layton’s New Democrats may now be digging successfully into the “left Liberal” vote. These voters are more likely than the general population to have someone unionized in their family. They will nonetheless be more likely to self-identify as “middle class”. They tilt a bit more female and younger than the typical target Conservative voter. They are more likely to vote on “who do I trust” issues. They don’t like Mr. Harper. They find nothing to inspire them in Michael Ignatieff. And they seem to be helping to provide the New Democrats with a pretty solid vote notwithstanding much speculation to the contrary.

This will be distressing to Liberal campaign planners, who have built their most recent attempt to relaunch Mr. Ignatieff around a direct pitch to precisely these voters. Considering the damage the Conservatives are doing to Mr. Ignatieff on his right flank, it seems a bit funny that his campaign team would focus on an appeal to New Democrats via an abrupt, incongruous parroting of Jack Layton’s policies on corporate taxes and pensions. Maybe the idea was to try to “switch” that vote right now, in the pre-election, through a couple of gadgets and tricks. The Liberals could then perhaps hope that this vote would become one of their entitlements, and they could then turn to fighting the Conservatives on their right flank during the campaign itself. Perhaps by parroting Mr. Harper in some way?

If this is the plan, it doesn’t seem to be working yet. Instead, the story seems to be an almost unbroken decline since Paul Martin and his faction assumed control of the Liberal Party. Suburbanites, new Canadians, “Reagan democrats” in Canada, left Liberals, and – above all – francophone Quebeckers have all been walking away from Mr. Ignatieff’s increasingly small red tent over the past decade, leaving that party with a shrinking base of traditional voters who vote for it, although they can’t articulate any particular reason for doing so these days.

- Meanwhile, the NDP could hardly have asked for a better contrast in the ads that came out today. Here's the Cons trying to paint their picture of a Canada entirely unlike the one they've put in place while in power:

We're lucky to live in Canada, a land where merit means more than privilege, where who you know matters more than who you know or where you came from.

(As an aside, the whole ad looks to be ripe for appropriate annotation.)

But here's the opening salvo in the NDP's national ad:

Q: Is it just me, or has Ottawa stopped working?

A: It sure looks that way. These days, lobbyists, Senators and insiders are getting all the breaks, while more and more seniors are struggling just to pay their bills. We have to do better.

So with one cabinet minister facing censure for misleading our representatives in Parliament, a couple of Harper-appointed Senators facing charges, and nobody's views but the Cons' figuring to be included in the budget that looks likely to provoke an election, which of those messages seems likely to strike voters as more plausible?

- And speaking of privileged Cons in trouble, John Geddes is the latest to chime in on the meaning of the Oda ado:

(A) minister under siege has traditionally fallen into one of three categories: “on the ropes” over errors they’ve made, but not over serious ethical or character lapses; “an embarrassment” because of some glaring instance of poor judgment, but possibly worth saving; and “guilty of a firing offence,” of which the undisputed examples are talking to a judge about a case or “deliberately and obviously misleading the House.”

At least, those used to be the undisputed firing offences. If Oda survives, misleading the House might have to be downgraded to Reid’s second tier of awkward but not necessarily fatal. Of course, the Conservatives aren’t conceding that Oda lied. They offer the following explanations. She was asked in a House committee who had inserted the word “not” in that document, and honestly said she didn’t know, but would have fessed up to having ordered the alteration had she been asked how the change came to be made. And when she said in a written answer to an opposition question that de-funding Kairos was a “CIDA decision,” she meant in the sense that “CIDA encompasses both officials and the minister responsible for CIDA.”

Milliken must now decide is there’s merit in those fine lines of defence. The House Speaker has been asked to rule on an opposition motion claiming Oda violated MPs’ privileges by misleading them. She might eventually be found in contempt of Parliament, which would be unprecedented for a cabinet minister. Yet Carleton University political science professor Jonathan Malloy isn’t sure even that would matter much. Malloy says Canadians generally view Parliament now mainly in terms of party wrangling. They cheer for one side or the other based on their partisan inclinations. “If this goes further as a contempt-of-Parliament matter,” he says, “it just becomes an extension of the partisan battle.”

And that might be an acceptable outcome for the Prime Minister. Casting the Oda affair as a mere partisan squabble over parliamentary niceties could allow him to save a minister, and avoid handing his enemies a win on a point of principle, with a possible spring election in the wind. If he succeeds, any cabinet minister’s future missteps will have to be viewed in the changed light of their much improved chances of surviving scandal.

- But of course, the Cons themselves have plenty left to do to try to cut down groups who they think have it too easy at the moment. Take for example victims of rape and domestic abuse. (Cue Jason Kenney: "Please!")

- Finally, Armine Yalnizyan points out how a free trade deal with Europe may add billions more to what are already unnecessarily-high costs for prescription drugs:

The government of Canada is in the process of negotiating a free trade agreement with the European Union–the Canada-EU Comprehensive Economic and Trade Agreement (CETA) — which it hopes to have concluded by the end of 2011.

One of the things the Europeans hope to get from this deal is changes to our drug patent laws and regulations. Specifically, they’d like to see an extension to the exclusivity of patents on top-selling drugs. Pharmaceuticals account for 15.6 percent of total exports from Europe to Canada, with a value of more than $5 billion annually.

In early February a study by Professors Aidan Hollis and Paul Grootendorst, two of Canada’s top academics on pharmaceutical policy, showed that the changes sought by the European Union would add $2.8 billion to our annual expenditures on drugs.

The federal government is calling the shots, but it won’t shoulder the costs. Almost all the cost impact of the new rules will be borne by provinces, private insurers and individuals paying directly.

On accumulated losses

I've previously linked to Erin's post on trends in corporate tax revenue over the past decade. But particularly in the face of budget deficits being used as the primary excuse for plans to slash social spending or push public services into the private sector, I'd think it's worth adding some more information into the mix.

Here's a slight reorganization of information from the same chart (all dollar numbers in the billions) with two new columns: the amount of corporate tax revenue which would have been collected at the 2000 effective rate of 23.4% calculated by Erin, and the difference between that amount and the revenue actually collected:

Year	Profits	Effective Rate	StatCan Revenue	Revenue @23.4%	Revenue Loss
2000	$136.0	23.4%	$31.8	$31.8	0
2001	$127.1	19.1%	$24.2	$29.7	$5.5
2002	$135.2	17.9%	$24.3	$31.6	$7.3
2003	$144.5	19.3%	$27.9	$33.8	$5.9
2004	$168.2	18.9%	$31.7	$39.4	$7.7
2005	$186.6	17.3%	$32.2	$43.7	$11.5
2006	$197.3	19.5%	$38.4	$46.2	$7.8
2007	$200.9	18.5%	$37.1	$47.0	$9.9
2008	$217.0	15.8%	$34.2	$50.8	$16.6
2009	$146.9	15.8%	$23.3	$34.4	$11.1

Totalling up the differences, we arrive at a grand total of $83.3 billion in lost revenue compared to what the federal government would have taken in if the same corporate profits had been taxed at the 2000 effective rate - in recent years averaging over half of the federal contribution to, say, health care through the Canada Health Transfer. And that's before the Cons' final two sets of corporate tax cuts kick in.

So what do we have to show for that lost potential revenue?

The tax-slashing argument is that the reduction in rates should result in increased economic activity. But the fact that both corporate tax revenues and broader economic conditions have fluctuated immensely based on factors such as resource prices and international economic events serves as fairly compelling reason for skepticism about any traceable benefits. And there looks to be little difference between the growth in corporate profits in the 1990s (before the current tax-cutting binge) and that since 2000.

Of course, in the heady days of the early naughts it may have seemed easy to get away with fitting the loss of billions of dollars a year into a budget that had plenty of room for movement. (Though even that hardly looks wise, particularly in retrospect.) But there's extra reason not to double down now that we're already in the red thanks to a decade of profligacy from Libs and Cons alike.

Thursday Morning Links

This and that for your Thursday...

- Maybe it's true that Stephen Harper doesn't bother paying attention to Canadian media after all: why bother when he's spending tens of millions of dollars for others to do it for him?

- Barbara Yaffe seems to take a huge leap in associating the message with Jack Layton's future plans. But she's right on target in taking up Layton's call to limit the most obvious abuses from the Senate:

Layton's comments on the Senate Wednesday were nuanced and thoughtful.

He noted that a New Democratic Party government would seek to scrap the upper chamber, a mission-impossible project requiring constitutional change.

But, for now, all he wants Prime Minister Stephen Harper to do is stop appointing Conservative hacks to the $90-million-a-year body -- and to ban senators from fundraising for their parties.

These are reasonable requests but almost surely will be rejected by the PM who, having recently acquired a majority in the red chamber, is delighted his government's legislation now will be rubber-stamped by Senate seals.
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For all his talk of Senate reform, Harper has given red velvet seats to his former press secretary, a Conservative party president, a former national campaign director and a bunch of defeated Conservative candidates.

It's fair for Canadians to assume that, in return for their appointments, partisan senators serve the interests of the Conservative party more than those of taxpayers.

- Meanwhile, John Moore rightly criticizes the Cons' perpetual demand for tax cuts regardless of the timing or budgetary implications:

Taxes are like food. You can slim down a fat guy by putting him on a diet, but when he reaches his ideal weight he still needs to eat. Conservatives are like fiscal anorexics. They just can't stop obsessing over portion reduction.

Cutting taxes inevitably brings about diminishing returns. Ireland was the darling of the international business set thanks to its 12.5% tax rate--up until the country went bust.
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Naturally the Conservatives and their allies in the business and think-tank communities think lower corporate taxes are always a good idea. Children think not having a bed time is a good idea.

- And finally, Jim Stanford expands on his basis for concluding that more corporate tax slashing may cost up to 46,000 jobs:

Corporate tax cuts have very little positive impact on employment, since they induce very little change in business capital investment spending. Historical evidence in Canada since 2000 (when the corporate tax rate, then 29.1%, began to be dramatically reduced) indicates that business investment has deteriorated since then - whether measured as a share of GDP, as a share of the existing capital stock, or as a share of corporate cash flow.

Indeed, business capital spending in recent years has fallen below realized business cash flow; companies have been accumulating cash and other liquid assets as a result. By the third quarter of 2010, the cash and short-term financial assets of non-financial businesses in Canada had reached $480 billion - almost a half-trillion dollars (source: Statistics Canada Balance Sheet data, CANSIM database). Since the advent of the recession two years earlier, businesses socked away an additional $83 billion in new cash. (This is in stark contrast to the behaviour of consumers and governments during this time, who incurred substantial new debt in order to finance expanded spending.) Further enhancing the cash flow of business, with no strings attached to incremental investment undertakings, will accomplish nothing other than enhancing that large stockpile of idle cash even further.

When governments allocate large sums of revenue to corporate tax cuts, those resources are no longer available to fund other priorities - like extending EI benefits for laid-off workers, investing in infrastructure or housing, or supporting public programs through transfer payments (like health care or education). All of those programs create far more jobs than corporate tax cuts. Therefore, shifting money from EI benefits (or infrastructure or public services) into corporate tax cuts destroys net jobs.

Wednesday Morning Links

Content goes here.

- Erin takes on Jack Mintz' latest set of fact-free tax-cut cheerleading, this time by pointing to Mintz' own apparently-forgotten words about the optimal tax level:

He claims that the revenue loss will be “relatively small” or “relatively insignificant” without actually suggesting a dollar amount (pages 3 and 20). By comparison, the Department of Finance (see Table 3.5), the opposition parties, and even the Canadian Manufacturers and Exporters estimate that this cut will reduce annual corporate tax revenues by $6 billion.

The “relatively small” claim has a footnote citing the 2007 Tax Competitiveness Report, also authored by Mintz. That report referenced “the tax-revenue-maximizing rate of 28 percent” (pages 0, 14 and 22).

The proposal Mintz now finds so odious is to roll back the federal rate to 18%. With a 10% provincial rate, that would mean a combined rate of 28%!

So, today’s report alleges that there is “little, if any, revenue cost” (page 20) to cutting well below what Mintz himself identified as the “tax-revenue-maximizing rate.” (Finance Canada and I think the revenue-maximizing rate is far above 28%.)

- And even better, Erin is at least getting a few lines in edgewise in CP's coverage of Mintz. Though four lines compared to at least as many full articles dedicated to Mintz is far less than what's needed to provide any semblance of balance to the discussion.

- Carol Goar criticizes the opacity of over a hundred billion dollars in tax breaks currently littering Canada's public policy:

(I)t would be salutary to scrap some (tax breaks). The trouble is neither MPs nor citizens have enough information to evaluate or debate them. Parliamentarians can’t hold the government to account for them. Taxpayers can’t ask that an outdated or inequitable tax expenditure be scrapped in order to preserve a valued program or service.

It’s wrong that these tax preferences are not part of pre-budget consultations. They have an important bearing on the cost of government and the size of the deficit.

It is regrettable that Canadians have to rely to guesstimates and pocket-calculator figures. But what is most disturbing is that a multi-billion component of the nation’s finances is off-limits to the people who pay Canada’s bills.

- Finally, Terence Corcoran, it's time to step away from the Kool-Aid. (Or else provide some evidence for the stunning assertion that innovation has been universally "repressed" since time immemorial.)

Friday Morning Corporate Tax Reading

As the discussion over corporate tax slashing heats up, there's plenty worth reading on . Let's start with Andrew Jackson's observations on what actually drives investment, and how small a role corporate income tax rates play in the picture:

Ultimately, an investment will be made if expected returns exceed a hurdle rate of return. Canada does not have to be the lowest tax jurisdiction in North America or the world to sustain a set of good corporate investment opportunities so long as corporations can find other things they value - accessible natural resources; cheap power; good infrastructure; skilled workers; low benefit costs due to public health care etc. etc. (Many of these things have, of course, to be financed through taxes.)

Further, at any given time, especially in periods of strong economic growth, some corporations will be earning profits which exceed average and previously expected rates of return. If they anticipate continued high rates of return, an increase in effective rates of tax will not decrease investment so long as profitability remains above the threshold level. And any tax cut would make no difference to the investment decision but would simply result in lost government revenue.

This is the case today in much of the energy and minerals sector. An increase in the effective rate of corporate income tax would not slow investment, and any cut in the corporate tax rate will simply divert high resource rents from citizens to corporate shareholders (and half of the assets are foreign owned.)

Similarly, profitability has in recent years generally been much higher in the financial sector, and there is little reason to believe that bank and insurance profits are a major driver of business investment in the real economy. Higher taxation of excess corporate profits in these sectors could raise additional revenues at little cost in terms of lower real investment.

And Erin follows up by describing how that theory will play out in practice:

With Jim Flaherty’s target corporate tax rate of 25%, investments would need a pre-tax return of only 13.3% (13.3*(1 - 0.25) = 10). So, recent corporate tax cuts should prompt the corporation to make some tranche of new investments with pre-tax rates of return between 13.3% and 15.6%.

But as Andrew notes, investments with pre-tax returns above 15.6% would have happened anyway. On all of those investments, corporate taxes were a perfectly efficient and costless source of public revenue. Corporate tax cuts were a pure giveaway that did nothing to improve incentives.

Also as noted by Andrew, pre-tax rates of return are not constant. If there is insufficient demand for a corporation’s output, the potential return on new investments will be close to zero. Public spending financed by corporate taxes can get potential investments over the hurdle by increasing demand and/or by providing needed inputs like infrastructure.
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To a substantial extent, corporate taxes just skim off excess profits from investments that are already over the hurdle. Rather than simply defending corporate taxes as a necessary source of revenue, there is a case to be made that they are a particularly efficient means of raising revenue.

On representative samples

We may have to send up a Weir Signal for a more thorough debunking of Jack Mintz' latest call for handouts to the corporate sector. But to see what we're dealing with, let's take a closer look at just one paragraph:

Again, the recent economic literature has provided a new perspective on corporate tax revenue and rate reductions, suggesting that revenue losses are minimal, especially when a country has a high corporate income tax rate by international standards.

Of course, this comes only paragraphs after Mintz notes that Canada's current rates are at or below the levels of countries like Japan, Australia and New Zealand which are cited as "international standards" for comparison. So if there is a point where rates might be reduced without too much fiscal pain, that point would have long since passed.

Moreover, Mintz' statement suggests that trying to lead the race to the bottom produces diminishing returns. Yet somehow Mintz considers that reason to hurry up our pace.

Multinationals easily shift their profits to low-tax jurisdictions with financial transactions and transfer pricing.

Or in the case of a substantial number of multinationals in Canada based on our location, the result of tax breaks in Canada is that they simply pay more tax in the U.S. instead.

But if one were concerned about financial shenanigans and transfer pricing, there are ideas around to deal with such problems. Who wants to bet that Mintz will lead the charge in rejecting them?

Prime Minister Stephen Harper made the correct observation that Canada collects as much corporate income tax revenue today as it did earlier when rates were much higher.

If by "correct", one means "patently false". But then, accuracy never seems to be much of a concern when it comes to handing money to the corporate sector.

So take the rest of Mintz' column with the appropriate mine's worth of salt.

Saturday Morning Links

Assorted content for your weekend reading.

- Erin thoroughly debunks Jayson Myers' attempt to fabricate a nonexistent link between tax cuts and job creation:

Myers actually does not find a very close correlation between after-tax profits and employment (page 16), so he instead focuses on the unemployment rate (page 17). His summary mistakenly states, “Close positive relationships exist between: Canada’s unemployment rate and after-tax business profits” (page 3), implying that higher unemployment corresponds to higher profits. As noted later, “it is a negative relationship” (page 17).

This negative correlation is hardly surprising. In boom years, profits go up and unemployment goes down. In recessions, profits fall and unemployment rises. Indeed, Myers’ graph of profits and unemployment looks like a graph of Canadian business cycles (top of page 17).

However, correlation is not the same as a causal relationship. It is always possible that a third factor – such as the business cycle – is driving both variables.

Even if there is a causal relationship, it is unclear which way the causation runs. Myers’ story is that higher business profits cause more hiring, which causes lower unemployment. But an equally plausible story is that lower unemployment causes more consumer spending, which causes higher business profits.
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Myers’ report is not about corporate tax rates or their possible incentive effects. In his model, corporate tax cuts matter only insofar as they increase after-tax profits. Rather than implementing planned corporate tax cuts at an annual cost of $6.2 billion, Ottawa might as well just write corporate Canada a series of postdated cheques for $6.2 billion each.

But of course, the Globe and Mail reproduces Myers' take without question. So the facts don't seem likely to matter when it comes to what actually gets published in the corporate press.

- Which means it falls to the rest of us to point out the obvious: demand creates jobs.

- Were you worried that Canada might have the necessary equipment to track down pollution in case of an oil spill? Don't worry: the Cons are shutting it down - so that anybody responsible for a spill won't be faced with inconvenient realities about what's actually been released.

- But of course, who has time to deal with environmental emergencies when there are volunteer efforts to be co-opted? Up next in the Cons' plan to attach themselves to anything popular regardless of their utter lack of contribution to it: new Senate appointee Larry Smith uses his influence with the CFL to make sure that next season's championship game is played for the Harper Cup.

- Finally, Linda Deibel documents the Cons' appalling efforts to stifle dissent in the public and private sectors alike. But perhaps the most telling part of her article is the Libs' typically timid response - which Deibel can't allow to pass without comment:

Asked about Liberal tactics, caucus member Lee responds: “We generally go into things being nice and we're not used to being elbowed in the corners. There's a reluctance to get down in the mud.”

It's frustrating, he adds. “I think the hope is that it will all go away . . . Maybe we are being naïve.”

Ya think?

Thursday Morning Links

This and that for your Thursday...

- You wouldn't know it from the focus on the Libs' tour launch over the course of the week. But yes, there is another Canadian leader currently making the rounds - and unlike Michael Ignatieff, he'll actually have something new to say:

NDP Leader Jack Layton is embarking on a pre-election tour taking direct aim at the Prime Minister in primarily Tory ridings across the country.

He kicked off the tour Tuesday in Sault Ste. Marie, Ont., where he called on Mr. Harper to “stop gouging” consumers and remove the harmonized sales tax on home heating fuel.

He'll hit another 17 communities from British Columbia to Newfoundland and Labrador by Jan. 26, when the NDP caucus is slated to meet to plot strategy for the Jan. 31 resumption of Parliament.

Along the way, Mr. Layton intends to introduce a handful of new candidates and unveil a couple of platform planks – on Senate reform and Canada's future role in Afghanistan.

- Erin points out a particularly sketchy tactic use by the CME in unveiling its latest request for massive corporate tax slashing, as the study was apparently withheld from anybody who might disagree to make criticism more difficult.

- Meanwhile, Corporate Knights points to the fair tax idea as a means of reducing the use of loopholes. But in drawing the comparison to the fair trade movement, I'd think it's well worth noting the minimal effect that voluntary measures have had compared to what would be possible if all businesses were made subject to an equal set of rules.

- Finally, Jim Creskey slams Jason Kenney for attacking the people who deal with refugee issues every day in response to their attempt to improve his legislative choices:

Rightfully, and perhaps in part because Christianity is a religion founded on a refugee family—Jesus, Mary and Joseph—the bishops publicly objected to the government bill. The bishops sent an open letter to Prime Minister Stephen Harper and Immigration Minister Jason Kenney, who also happens to be a Catholic.

""References by representatives of your government to 'bogus' refugee claimants undermine Canada's obligations to refugee protection and question the credibility of refugees fleeing persecution and seeking to have their rights recognized," the letter read. "They also foster hostility towards refugees and fuel xenophobia in general."
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Kenney might have responded to the bishops' criticism the way Catholics the world over have done on matters of conscience for centuries: argued heatedly and in passionate detail.

But Kenney would have none of it. Instead, he just shot down the bishops for being too dumb to know what they were talking about, and that they were being manipulated by their non-clerical staff.

The letter reflects a "long tradition of ideological bureaucrats who work for the bishops' conference producing political letters signed by pastors who may not have specialized knowledge in certain areas of policy," Mr. Kenney told Deborah Gyapong of the Canadian Catholic News service.

Instead of taking a hard public look at a bill widely seen as flawed, Kenny leapt into argumentum ad (hominem)—arguments about the person instead of the idea. Something my old Jesuit logic teacher taught me never to do.

Kenney must have missed that class.

On obvious solutions

Andrew Jackson's post on the modest amount of resources needed to outright eliminate poverty in Canada is jarring enough on its own:

In 2008, the incidence of low income for all persons in Canada measured by the LICO After Tax measure was 9.4%, and the average gap or income shortfall relative to the LICO AT line was 33%. That gap in turn is equivalent to 1% of the after tax income of all Canadians.

In short, we could eliminate poverty by shifting just 1% of our collective income to the almost one in ten Canadians living in low income.

But Jackson's observation is particularly noteworthy when compared to the growing income shares of the wealthiest Canadians. After three decades of increasing inequality, the entire amount of money required to eradicate poverty in Canada is equal to only one sixth of the increase in the income share of the top 1% since 1977. Or if one prefers to start higher up the income chain, one third of the increase for the top 0.1% would do the job as well.

Of course, merely dealing with poverty wouldn't itself solve all the issues raised by the growing income and wealth gaps. But it's well worth noting the potential to completely wipe out poverty with only a small slice of the gains of the upper classes - signalling that the reason for inaction has nothing to do with an inability to afford steps to tackle poverty, and everything to do with a lack of will to do so.

On dangerous repetition

Yesterday, I noted that the Libs might want to be a bit more careful in echoing the CTF's message about supposed tax increases. Now, Andrew Jackson offers a better reason: that the CTF's claims are flat-out wrong in a way that distorts the purpose of vital social programs:

(A)ctually..., there has been no increase in the CPP contribution rate for 2011. True, the earning ceiling has been raised in line with average earnings, but that is not a real tax increase on two counts. First, there is no inflation adjusted increase at all for anyone, least of all anyone earning below the earnings ceiling. Second, the increased contribution ceiling will be rewarded down the road with a higher benefit, so it is not really a tax at all let alone a tax increase.

As for EI, yes the premium rate is being hiked marginally, from 1.73% to 1.78% for employees. (The horror! The horror!) This is just one third of what would have been required to balance the EI account moving forward. And the rise in the EI Account deficit over 2009 and 2010 was almost entirely attributable to increased payouts of regular benefits as a result of the recession (to the tune of some $10 Billion over two years), not to maternity/parental/sickness and compassionate care benefits which were unchanged in 2010. There was a very modest increase in EI funded training, most of that going to income benefits for unemployed workers being retrained.

Sunday Afternoon Links

Some light reading to close out your weekend...

- As the country's political conversation turns to new free trade agreements and continental integration, Erin points out one more example of how the last set delivered exactly the results feared by their detractors when it came to innovation, rather than the gains promised by free-trade supporters. Which is why the Star is right to be skeptical of yet another process that figures to exclude Canadian citizens from having any say.

- But at least with Canada seeing far too little resistance to corporatist policy demands, the potential EU trade agreement figures to raise some activist ire across the Atlantic.

- And there's some relatively good news on a global scale when it comes to dealing with some of the problems that are being denied or ignored by the Con government in Canada, as the Cancun agreement on climate change at least suggests some surprising positive momentum (even if it falls far short of actually defining how the world will deal with greenhouse gas emissions in the years to come).

- Finally, via impolitical, Sylvia Bashevkin's commentary on how progressive political scientists are having little impact on the broader political scene is well worth a read. But it's worth noting that the problems identified by Bashevkin go far beyond political scientists as such:

The core belief that civil society exists, and that it operates in part as an essential check on the actions of democratic states, has been endangered for decades—or for so long that we risk forgetting this foundational idea. One crucial reason why progressive political science enjoys minimal public profile is because it is grounded in the valuation of a highly oppositional idea, one that has been seriously on the defensive since the rise of neoconservatism, namely the belief that citizen mobilization and government action can produce positive improvements in the lives of individuals and for the collective entity we call society.

Given the dominant view since the 1980s that markets matter, while states and societies (if the latter even exist) do not, it is hardly surprising to find low rates of voter turnout among citizens who came of age in that decade and following. Eroded levels of electoral participation and declining public trust in political institutions and leaders have spread to middle-aged and older voters as well. Moreover, a dangerous feedback loop has evolved to reinforce this pattern, since diminishing the importance of government means fewer and fewer of the best and the brightest are attracted to run for office or join the public service. The tenor of parliamentary debates has arguably declined as well, with civil behaviour and meaningful policy debates increasingly rare in our aptly named question periods (that produce few answers to the problems facing Canadians). What citizen realistically believes, particularly in an age of such dauntingly complex policy challenges, that democratic government can provide solutions to problems when both the A and B teams have deserted the polis?
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The demand for political science analysis is, of course, the flip side of the supply problem. It is true that progressive perspectives have been diluted by a rightward shift in print and electronic media organizations since the 1980s, but this is only part of the story. The more troubling piece is that conservative advocates have been better communicators, finding new ways to dress up old ideas such as laissez-faire capitalism and patriarchal family organization in spiffy new outfits for each debating season. Even with rising levels of formal education in Canada and most of the industrialized world, those concepts are still easier to explain than Keynesianism or gender equality and, in anxious times, they enjoy the advantage of evoking nostalgic ties to a shared (however imperfect) past.

The crucial edge the right enjoys, however, follows from a conscious, decisive push to invest in foundations, think tanks, conferences, media outlets and so on to promote a particular point of view, and to train like-minded folks to sing with impact from the conservative hymnal. Alas, nothing close to matching funds has materialized in the rest of the political spectrum—a phenomenon that underpins the absence of fresh, compelling voices that could champion consumer rights or affordable housing, with these perspectives creatively repackaged in attractive ways.

Suddenly it all makes sense

So that's why there's a significant backlash against even trying to measure happiness as a positive outcome - as at least Andrew Jackson's quick chart suggests that it correlates nicely with low inequality. But let's take the comparison a step further by also considering the provincial ranks for GDP per capita. Among the interesting connections between the three factors:

- Prince Edward Island ranks #1 for both lowest inequality and most satisfaction. And the fact that the province ranks #10 in GDP per capita doesn't seem to have affected the high degree of provincial happiness.
- Conversely, British Columbia, Ontario, Alberta and Saskatchewan all rank in the top 5 for GDP per capita, while also ranking as the four provinces notably higher than the others in inequality. And all have a happiness ranking significantly below their GDP ranking (5 and 9, 4 and 10, 1 and 5, and 2 and 4 respectively).
- And for those wondering whether there's an inevitable conflict between reducing inequality and the level of GDP per capita, Newfoundland and Labrador looks to serve as a strong counterexample - ranking #3 in per-capita GDP, tied for #3 in lowest inequality, and #2 in satisfaction.

Of course, the above is only an extremely rough look based on a crude ranking which doesn't take into account the level of difference between provinces. But on the surface, there looks to be enough of a disconnect between GDP and citizen satisfaction to suggest that any attempt to actually determine what people want - rather than simply assuming that it correlates with and is measured by wealth - may well lead to some serious questions about our current policy direction.

Saturday Morning Links

Assorted material for your weekend:

- Your latest Con copyright talking point: if someone from an opposing viewpoint hasn't presented draft legislation, they deserve to be ignored. Which makes for an interesting political strategy: presumably the goal is to provoke somebody to draft something that the Cons can attack, but isn't there some serious risk involved in dwelling on procedure while allowing the opposite side to argue on principle?

- From the standpoint of dealing with short-term deficits without damaging (and indeed perhaps even improving) the theoretical long-term incentive to boost economic development, Andrew Jackson's suggestion of a one-time capital levy makes a world of sense. Needless to say, I never expect to hear of it again.

- Michael Harris weighs in on the Libs' latest Afghanistan capitulation:

The chill Stephen Harper has put on parliament is still looking for a spine to run up in the Liberal Party. The only Liberals standing up for anything are men and women whose loyalty requires official silence outside of caucus. Dion’s questioning of the training mission is a thundering rebuke of the elitist appeasement that plagues the party at the top.

- Finally, the Free Press's coverage in Winnipeg North paints a rather stark distinction as to how two of the campaigns are doing in actually getting people interested in participating:

Chief, a political rookie, is facing Liberal Kevin Lamoureux, a strong constituency man and formidable campaigner who has represented 75 per cent of the sprawling federal riding at one time or the other in his 18 years as an MLA. The NDP hopeful boasts a team of more than 300 volunteers.

The other main contender is Julie Javier, acting executive director of the Philippine Canadian Centre, who has run a low-profile campaign in which she has avoided two all-candidates meetings and ducked media interviews (she only consented to a brief telephone interview for this piece and refused to pose for a photograph, emailing one of herself instead) to concentrate on door-knocking. She said this week she has 10 volunteers working on her campaign.

And the distinction looks to be more a matter of bad news for the Cons than anything: doesn't it seem downright stunning that a governing party would be unable to summon up more than 10 volunteers from one of Canada's ten biggest cities for a by-election campaign?

Friday Morning Links

- I've pointed out the glaring problems with the Libs' pension policies before, with the most obvious being the fact that it's utterly useless for anybody who doesn't already have spare money that they don't know what to do with. But their White Paper adds into the mix the radical idea of...holding a meeting. Which will surely have retirees sleeping more soundly at night.

- The CCPA has produced a handy list of claims made under NAFTA. But while its focus is on the number of claims, it's also worth highlighting just how broad a scope of government action has been challenged.

Many of the claims involve environmental issues, ranging from conservation measures to limit the number of caribou hunted and salmon fished, to bans on dumping garbage in lakes, to laws prohibiting bulk water exports. But the scope of NAFTA chill also includes the laws that serve to protect a publicly-funded health care system, the decision to close the income trust tax loophole, and the operation of Canada Post - and there's no telling how many ideas have been squelched in the meantime due to fear of similar claims.

- Andrew Jackson offers his take on the ongoing potash issue:

It is easy to cast the Conservative decision as pure politics, and surely Harper and Clement were pushed into this against their will. But the fact remains that a major crack and division has opened up within the ranks of the conventionally wise, and that a welcome precedent has been set. If a take-over serves only the needs of investors and does not serve the national economic interest, then it should be rejected.

We can and should build on this decision to push for transparent public interest reviews of takeovers, and effective enforcement of any conditions imposed. Some foreign investments do make sense, but most come at a cost - the loss of head office and supplier jobs; the weakening of local economic linkages; loss of corporate tax revenue as higher corporate debt is taken on to finance the transaction; and, often, direct job losses and a deterioration in industrial relations as operations are squeezed to pay for the often excessive take-over premium.

- And finally, we can add another $300 million to the pile of money frittered away by the Cons with nothing of value to show for it.

Monday Morning Links

Assorted content for your holiday reading...

- John Moore points out why expertise shouldn't be considered a bad thing:

I don’t know about you but I like specialized knowledge. I like people with a mastery of their trade flying my planes, performing my surgery and designing my bridges. Experts are people who know stuff. They use their specialized knowledge to plan urban transportation strategies, establish the acceptable level of poison in our food and draw up plans for things like nuclear plant meltdowns.

It doesn’t mean the experts are right about everything, nor that we have to lie down and take everything government dishes out, but when a career statistician says a voluntary long form census is useless, I tend to put that advice ahead of the “gut feeling” and “mother instinct” so prized by the Tea Partiers.

Of course I know that by writing this column, I’m just part of the problem. That’s the caprice of populism; it’s buttressed by a form of epistemological closure. Anyone who dares question the new anti-snobbery is merely trying to protect his sinecure and privilege.

But as American senator Sam Rayburn once said, “Any jackass can kick a barn down. It takes a carpenter to build one.”

- Though sometimes it is worth noting when an expert's self-interest can lead to counterproductive results. And Bruce Livesey makes much that point in picking up on the harms of financialization in Canada's steel industry:

In a paper he co-wrote earlier this year, Lazonick says “financialization” is where corporate executives are obsessed with distributing value to shareholders at the expense of investment in innovation and jobs. He says it’s having a pernicious affect on the North American economy facing aggressive challenges from Asia, especially China. “In the 2000s the financialization of the US business corporation undermined the innovative potential of marketization and globalization, thus not only exacerbating inequity and instability but also restricting the potential for economic growth,” writes Lazonick. “Despite the financial meltdown of 2008, there are scant signs in the 2010s of institutional changes that will constrain the destructive behavior of financialized corporations.”

One of the results of the aggressive invasion of hedge funds and investment funds into the Canadian steel industry was its demise as a nationally-owned industry. Between 2005 and 2007, the entire Canadian steel industry was sold off to foreign corporations.

At the very time that Canada’s industrial base is in such dire straits, one of our essential industries was bartered away. And finance capital had a lot to do with it.

- Don Boudria and other Libs are up in arms over the addition of MPs to the list of "public office holders" for the purpose of lobbying registration. But while I'm sympathetic to the argument, wouldn't it sound a lot more plausible if the Libs weren't so eagerly giving away far more fundamental elements of Parliamentary privilege?

- Finally, pogge is entirely right in noting that by negotiating (however meager) wage increases while refusing to even consider actually funding their cost, the Cons are effectively enlisting civil servants in the destruction of their own departments.