Tuesday Morning Links

This and that for your Tuesday reading.

- Christopher Ragan writes about the lessons we should be drawing from the 2008 financial meltdown - as well as so many similar bubbles before it:

Contrary to what many people seem to believe, financial crises like the one that began five years ago are neither rare nor inexplicable. They have been occurring for centuries, and while each one has its own fascinating details, they also have much in common.
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First, there always appears to be some new kind of investment or financial instrument to get investors excited. In Amsterdam in the 1630s, it was the arrival of tulip bulbs from foreign lands. A century later, publicly traded “joint stock” companies were the new thing, and the promise of far-away profits added an exotic twist. In the 2000s, the process of “securitization” and the creation of mortgage-backed securities seemed to offer both high returns and the safety of diversification.

The complexity of many financial instruments gets us to the second common element: The belief that money and intelligence travel together. It is probably natural to think that only really smart people can make it in the complex world of financial markets. When we see these people doing so well, we naturally conclude that they know a lot more than we do and, since they’re so smart, maybe we should do whatever they’re doing. And so the bandwagon starts rolling.

The third element is something very old: By borrowing a lot to purchase investments, investors become highly “leveraged.” The wonderful thing about leverage is that for good investments, the return on equity gets highly magnified because the investor starts with so little equity in the first place. The terrible thing is that for bad investments, the same magnification happens in reverse – and many investors then find themselves with few assets but mountains of debt. In 1630s Amsterdam, individuals borrowed massively to finance their tulip investments. A century later, investors did the same to purchase shares in the Mississippi and South Sea Companies. In the 2000s, individuals purchased houses with enormous mortgages and investors then borrowed money to purchase the associated mortgage-backed securities. The tulips and company shares and houses were all purchased with the expectation of ever-rising prices. But prices didn’t keep rising – they never do.

The fourth element is the assignment of blame after the fact. Maybe it falls on the founder of the company whose share prices collapsed, or the land developer whose real estate values evaporated, or the “predatory” mortgage lenders or the agencies that rated the riskiness of the mortgage-backed securities. There’s rarely a shortage of people to blame. But Mr. Galbraith noted that we never blame “the system,” because to do so would be to question the basis of a market economy – and who wants to do that?

Yet market systems have been prone to financial crises for hundreds of years. We can regulate the extent of leverage, the nature of bank lending, mortgage conditions, corporate governance, and much else. And we are right to do so, because financial markets do not work efficiently in the absence of such regulations. But let’s not delude ourselves into thinking that we can prevent the intrinsic behaviour that fuels financial euphoria and leads to financial booms, collapses and occasional crises. These are an unfortunate but unavoidable part of a market economy.

Mr. Galbraith’s final common element is our painfully short memory preventing us from learning from previous errors. So, maybe the most important lesson to be drawn from the past five years is that we should be less ignorant of our history. Our tendency to neglect the past, and to repeat crucial mistakes, will hasten the arrival of the next financial crisis.

- Anne Kingston writes about the developing Toronto Centre by-election campaign. And while some observers have raised questions about her fawning portrayal of the Libs as a party, the developing themes look to be ones which operate in Linda McQuaig's favour: a candidate with the "home-turf advantage" and a focus on income security versus a "habitué of the Davos think-tank circuit" whose message lacks much appeal beyond a business-school crowd.

- Stephen Maher and Glen McGregor's report on the participation of the Cons' primary counsel in interviews with Michael Sona and other Robocon figures has received plenty of attention. But I'll highlight the fact that Arthur Hamilton's intervention was purely in his capacity as the Cons' counsel - meaning that to the extent he managed to interfere with an investigation into election fraud, he did so in the name of (and the legal interests of) Stephen Harper and company.

- Finally, Nick Taylor-Vaisey and Aaron Wherry both discuss the NDP's use of Twitter to ask the questions the Cons are avoiding by shutting down Parliament. And it may be worth noting the effect that plan will have in getting responses - not from the Cons (who don't figure to be any more responsive than in the real Question Period), but from the public in determining which #QPQ questions receive the widest distribution.

[Edit: fixed typo as per comments.]

Sunday Morning Links

This and that for your Sunday reading.

- Robert Reich discusses how we'd all better off if we acted in the public interest and insisted that our representatives did the same:

A society -- any society --- is defined as a set of mutual benefits and duties embodied most visibly in public institutions: public schools, public libraries, public transportation, public hospitals, public parks, public museums, public recreation, public universities, and so on.

Public institutions are supported by all taxpayers, and are available to all. If the tax system is progressive, those who are better off (and who, presumably, have benefitted from many of these same public institutions) help pay for everyone else.

"Privatize" means "Pay for it yourself." The practical consequence of this in an economy whose wealth and income are now more concentrated than at any time in the past 90 years is to make high-quality public goods available to fewer and fewer.

In fact, much of what's called "public" is increasingly a private good paid for by users -- ever-higher tolls on public highways and public bridges, higher tuitions at so-called public universities, higher admission fees at public parks and public museums.

Much of the rest of what's considered "public" has become so shoddy that those who can afford to do so find private alternatives. As public schools deteriorate, the upper-middle class and wealthy send their kids to private ones. As public pools and playgrounds decay, the better-off buy memberships in private tennis and swimming clubs. As public hospitals decline, the well-off pay premium rates for private care.
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We're losing public goods available to all, supported by the tax payments of all and especially the better-off. In its place we have private goods available to the very rich, supported by the rest of us. 

- And Peter MacLeod makes the case for political parties to serve as social movements rather than mere electoral machines. But needless to say, Stephen Harper has about as much interest in that possibility as he does in following the rules that govern everybody else.

- Monika Dutt highlights how social programs affect health, particularly for those with the least:

An ideal assistance program is one that is designed to support good health.

The Wellesley Institute suggests some ways in which this can be done: (1) ensuring people have access to the basics, such as income, housing, nutritious food and health care; (2) building skills so that people can move away from depending on income assistance programs; (3) working with existing community resources; and (4) taking health into account when designing assistance programs.

Some provincial programs across the country fulfil some of these criteria, for example through child benefits, which acknowledges that supporting children in their early years leads to long-term better health. However, more could be done to promote health in a way that ultimately benefits individuals, their families, and their communities, and lessens the use of income assistance.

Most people do not want to use these programs, particularly the ones intended for people living in poverty; they would prefer to be able to support themselves and their families on their own. They also do not want to experience poor health due to poverty.

Improving the health of people living in poverty benefits all of us, including those with high incomes. A healthy society is one in which your income doesn’t define how healthy you are.

- Finally, the Tyee documents a few brilliant Fraser Institute Kid Tips.

Saturday Morning Links

Assorted content for your weekend reading.

- Jim Stanford discusses the OECD's findings that job protection actually improves better employment outcomes - while "flexible" labour markets serve only to ensure less opportunity for workers. And Sid Ryan makes the case for premiers to reject a low-wage agenda.

- Oil spills are happening all over the place without being reported. Nobody has any idea what's causing them or what to do about them. Traditional First Nations land is being contaminated. So all in all, it's business as usual in the Cons' dirty-oil economy.

- Meanwhile, investigators into the Lac-Mégantic disaster are keying in on the composition of the oil being shipped - since ordinary crude shouldn't produce the type of explosion that decimated Lac-Mégantic. And Greenpeace rightly calls for some wider consideration of the different types of oil being shipped and used when it comes to setting regulations.

- While I haven't seen much worth commenting on about the Cons' cabinet shuffle, I'll offer one followup note on Pierre Poilievre's history as a robocaller. Having operated a robocall firm himself, he'll likely have as good an idea as anybody both how to take advantage of the law as it stands now, and how to amend the Canada Elections Act so as not to prevent the Cons' robocall contractors from continuing their shady operations. And particularly given the reports this spring that previous elections legislation was stopped at the behest of the Cons' caucus, I'd suspect that's exactly why he's been given the role.

- Finally, Colin Horgan muses about the Cons' strategy in releasing details of their cabinet deck chair rearrangement on Twitter.

Thursday Morning Links

This and that for your Thursday reading.

- John Studzinski describes how a sense of social responsibility and a country-wide commitment to making jobs available have placed Germany in a better economic position than its European neighbours:

Let me highlight some of the features unique to the Mittelstand model that I believe everyone should learn from – and imitate if they can. The first is what we might call the Mittelstand ethos – that business is a constructive enterprise that aims to be socially useful. Making a profit is not an end in itself: job creation, client satisfaction and product excellence are just as fundamental. Taking on debt is treated with suspicion. The objective of every business leader is to earn trust – from employees, customers, suppliers and society as a whole. This ethos chimes with the values of prudence and responsibility with which every schoolteacher hopes to imbue their pupils. Consequently, about half of all German high-school students move on to train in a trade. Business and education are natural bedfellows.

The second essential feature of the Mittelstand model is the collaborative spirit that generally exists between employer and employees. This can be dated back to the welfare state that Chancellor Otto von Bismarck established in the late 19th century to head off what he saw as the menace of socialism. Its modern-day equivalent is the system of works councils, which ensures that employees' interests are safeguarded, whether or not they belong to a trade union. German workers expect their employers to keep training them, enhancing their skills. In the post-reunification recession, it seemed only natural to German workers to offer flexibility on wages and hours in return for greater job security. More recently the government protected jobs by subsidising companies that cut hours rather than staff.

A third feature of the Mittelstand model is the determination of German companies to build for the long term. To this end, they tend to keep core functions such as engineering and project management in-house, while outsourcing production whenever this proves more efficient. Mittelstand companies are overwhelmingly privately owned, and thus largely free of pressure to provide shareholder returns. This makes them readier to innovate, and invest a larger proportion of their revenues in R&D. There are Mittelstand companies that file more patents in a year than do some entire European countries. It is one of the underlying reasons for their exporting success, even when their goods seem expensive.
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(T)here is much that non-Germans could learn from. To close the gap between education and business, companies should take a greater interest in their local schools and colleges. If you haven't got spare cash for sponsoring gyms or computer equipment, go and talk to sixth-formers or degree students about what you do. Find out what graduates aspire to. It will help you to work out how to attract the next generation.

If you want to get more out of your employees and suppliers, consult them; invite them into your confidence. Don't complain: "We're not like the Germans. It won't work here." Think of a different way. Try harder.

The same applies to governments. Let me mention one simple legislative option. In German law, the owner of a family business who passes it on to the next generation can avoid paying inheritance tax if, during their tenure, they have increased employment and thereby benefited the economy. What better signal could a government give than by favouring those who create employment?

- Sixth Estate comments on the Cons' deceptive efforts to dictate Saskatchewan's electoral boundaries, while Lawrence Martin sees the lies as evidence that the Cons are rotting from the head down. Meanwhile, Alice thoroughly describes the independent boundary development process in Canada and notes that "gerrymandering" isn't the right term to describe the Cons' interventions.

- Chris Hannay discusses how our current governments are missing the point of social media - including with up to eight points of revision and control over every single Tweet.

- Finally, Duncan Cameron writes that the editorial boards and political adversaries criticizing the NDP's Unity Act should instead be recognizing the opportunity created by the party's success in bringing Quebec voters into a discussion as to how to make federalism work.

Monday Morning Links

Miscellaneous material for your Monday reading.

- Michael Harris discusses the impending moment of truth for the Cons in owning up to their substantive failures toward Canada's First Nations:

Whether it’s Canada’s natives or its health ministers, Stephen Harper’s preferred place for his opponents is under his thumb. He has replaced the alternating current of democracy with the direct current of oligarchy. Ordinary people remain as invisible to him now as they have been since 2006.

For that reason, Chief Theresa Spence’s hunger strike has been a disaster for the man who doesn’t like to negotiate, let alone negotiate with a nobody, especially a nobody who has managed to put him under the gun. Remember, this is a guy who wouldn’t even talk to Canada’s premiers. Now they know the drill: stop eating.
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What aboriginals need is for treaties to be honoured on something other than the long hours of the geological clock. What they need is legislative protection for their lands and equal say in the laws that govern them as guaranteed by the Constitution. But what they have gotten from Stephen Harper since his “official” apology to Aboriginal Peoples in 2008 has not quite lived up to the billing of a “renewed” relationship.

The Harper government has unilaterally changed the Indian Act. It has unilaterally changed environmental legislation that weakens protection of fresh water and endangered fish species. It has made it easier for major developments to take place with less study of the environmental impact and no equal say for aboriginals. And in 2012, the very year Stephen Harper pledged to renew the search for justice for all native peoples, his “little minister” — as Chief Spence described John Duncan — announced sweeping cuts for core aboriginal organizations across Canada.

One hundred expert academics signed a damning letter to Duncan last November decrying the loss of funding for native communities in the area of health, clean drinking water, education and infrastructure. “The potential loss of expertise is staggering, and could take a generation to recover from,” the researchers warned.

- Frank Graves rightly notes that social media hasn't yet had as strong an impact on our political scene as some might have expected. But I'll note that it's still an open question whether it will eventually fulfill its potential - especially when it's possible to look to the U.S. for obvious examples of success in reaching new voter groups.

- Donald Savoie writes that the decades-old fad of trying to run government like a business has proven unsuccessful:

Public servants of yesteryear would emphasize proper data-gathering procedures and produce analyses with predictive power. Politicians grabbed the policy-making levers and decided to turn bureaucrats into better managers. Public servants were not about to admit that their management skills were lacking, so politicians looked to the private sector for inspiration. As a result, strategic plans were turned into business plans, citizens into customers and cabinet into a powerless board of directors, and attempts were made to tie pay to performance.

The notion that public administration could be made to look like private-sector management has been ill-conceived, misguided and costly to taxpayers. Management in the private sector has everything to do with the bottom line and market share. Administration in the public sector is a matter of opinion, debate and blame avoidance in a politically charged environment. It doesn’t much matter in the private sector if you get it wrong 40 per cent of the time so long as you turn a handsome profit and increase market share. It doesn’t much matter in the public sector if you get it right 99 per cent of the time if the 1 per cent you get wrong becomes a heated issue in Question Period and the media.
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Public servants now produce all manner of reports and navigate various accountability requirements to fabricate a bottom line. The result: Ottawa has an oversupply of officers of Parliament, accountability and oversight processes and performance and evaluation reports. Hundreds of reports are carted every year to Parliament, where they remain unread unless one of them has information to embarrass the government.

The business vocabulary in government has, if nothing more, empowered managers to grow government operations by stealth. The Chrétien-Martin review (1994-98) eliminated 45,000 positions, but by the time Stephen Harper launched his own review in 2011, the government had added more than 70,000 positions. Thousands of new oversight positions have been created in Ottawa to manage accountability processes. Thirty years ago, 70 per cent of federal public servants were located in the regions; today, the number is 57 per cent. Without putting too fine a point on it, public servants in the field deliver public services, while those in Ottawa provide policy advice and manage processes and oversight requirements.

- But if there's one lesson we should hope to take from a business mindset, it's that we shouldn't leave obvious sources of revenue on the table - and plenty of voters look to have bought into that view.

Leadership 2013 - The Basics

Before I start taking an individual look at the candidates in Saskatchewan's 2013 NDP leadership campaign, I'll point out a few areas of discussion from past leadership races which don't look to be matters of great distinction between the candidates this time out.

Endorsements

As I've noted before, I tend to see endorsements as a threshold issue with diminishing returns for a candidate. Aside from a basic level of publicly-stated support required to establish a candidate as a serious presence in a race (and subject to any surprising endorsements against type which help to change perceptions of the candidate), there's relatively little to be gained by listing names of supporters or serving up boilerplate endorsements.

In this campaign, all four of the announced candidates look to have met the basic level of initial support. Cam Broten and Trent Wotherspoon were both able to include multiple prominent MLAs past and present in their launches; Ryan Meili's support base looks to generally parallel his core group from the 2009 campaign; and Erin Weir's combination of MLAs, MPs and even former Manitoba Premier Howard Pawley easily meets the initial threshold.

From that starting point, the main effect of endorsements may be to signal failing campaigns (if endorsers start jumping ship), or to tie candidates to particular issues if prominent activists choose to take a side. But I wouldn't expect to see many endorsements substantially change the complexion of the campaign.

Websites

Similarly, I'd consider at least some effective and consistent online presence to be a must. But all four candidates meet that standard easily with neatly-designed and regularly-updated websites.

That said, there is some room for any candidate to stand out by figuring out ways of using the website which serve to better engage potential supporters. And on that front, there are a couple of initiatives worth noting: Weir is holding a digital town hall October 1 to introduce himself to interested observers, while Meili's campaign story looks like a noteworthy development in presenting a single, easily-accessed campaign narrative.

Online Support

Finally, another area of campaign strength combining the two above issues similarly looks to be less than decisive in trying to determine who has an edge.

While Jason has tracked Facebook "likes" so far, there doesn't look to be enough difference in either numbers or type to substantially distinguish the candidates yet. And I'll be hesitant to draw much from the Facebook numbers from here on in unless one candidate can cultivate an influx of new supporters within Saskatchewan who wouldn't otherwise figure to participate in the campaign.

Similarly, the campaigns have naturally taken online polls as an opportunity to show early-campaign support. But the one obvious example so far took multiple turns before Wotherspoon finally jumped to a substantial lead. And while that end result bodes well for Wotherspoon as a show of strength, I'd think it's most significant that all of the campaigns were able to move the needle at various points.

So with those factors looking like they won't serve to distinguish the current contenders, what should we watch for as the campaign develops? Not surprisingly, I'll have a few suggestions involving each candidate in posts to come.

On open channels

Fern Hill is frustrated at how political reporters have tried to make a non-story out of the #denounceharper hashtag which trended globally yesterday as Twitter users took the opportunity to discuss what Canadians actually want for Canada Day. And I can certainly understand the concern at normally well-connected reporters choosing to dismiss widespread public activism, particularly in contrast to such compelling issues of public importance as "what do you call the July 1st holiday?"

But I'd think there's a more positive side to the story: based on Kev's numbers, it's possible to reach upwards of 14 million people to talk about the gap between the Canada we want and the Con petro-state we're stuck with even without any particular help from most media outlets. And if we can make a habit of developing those types of channels while not worrying about what the media ignores, then we should be able to significantly reshape how a large number of people see Canada's political landscape - long before either governmental PR flacks or media gatekeepers bother to pay attention.

Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Martin Papillon offers up some lessons for the NDP in Francois Hollande's French presidential victory:

Being ideological does not have to mean being radical. It means anchoring your platform in a clear, coherent set of ideas that will resonate with the electorate, including more centrist voters who could lean your way. Under the current political climate in Canada, there is little risk for the NDP in campaigning on a progressive platform, as long as it is perceived as the main, credible, alternative to the Conservatives.

The socialists under Hollande used this approach with great success. Listening to some of his key speeches, it was striking to note the prominence of classic progressive themes such as equality, social justice, and solidarity. The key, of course, is how one deploys these foundational ideas. Hollande’s progressive discourse was tied to concrete themes that resonated with the French electorate. When socialists spoke about social justice, it was in reference to the growing gap between the well-heeled elite and the middle class. This was a gap that Sarkozy, nicknamed “president bling-bling,” embodied for many French.

Hollande was not afraid to ruffle some feathers, either. He demonized the greed of a “faceless” financial sector and challenged his future European allies to privilege economic recovery over austerity measures. Hollande campaigned on themes that made sense to the middle class. This is why Mulcair is on the right track with his approach to the environment and the oil sands. Development may be good, he has suggested, but it comes with a cost. Let’s be honest and make sure we don’t simply pass on this cost to future generations.

- Meanwhile, Tim Harper rightly notes that despite some highly-coordinated faux outrage from the Cons and their fellow corporate shills, it's Mulcair who occupies the reasonable ground as the NDP and Cons debate whether to make all other Canadian interests subordinate to the whims of the oil patch.

- Jim Stanford points out out that the Cons are proudly taking credit for pushing jobs toward disposable temporary foreign workers rather than developing sustainable industries in Canada.

- All of which goes a long way toward explaining the Cons' war on brains. But fortunately, they haven't been able to shut down intelligent discussion just yet - as exemplified by Charmaine Borg's effort to take the lead in studying the privacy implications of social media.

A friendly reminder

Some people who should know better are suggesting that universal media condemnation (as opposed to public involvement on social media) should be seen as the main factor in getting the Cons to climb back down on arbitrary online surveillance. So let's take a ride in the wayback machine.

It wasn't long ago that the Cons sprung a nasty surprise on the country on another issue, and were met with similarly strong and unanimous criticism from the media in response. Does anybody remember how willing they were to change course based on editorial ire in the absence of the same level of public outcry?

Of course, the above shouldn't be taken to suggest all social media campaigns are equally desirable or effective - and I'd think the brilliant #tellviceverything hashtag did far more to move the needle than the more controversial @vikileaks account. But the last thing we can afford is for the public to think it's best off staying out of the way and leaving criticism of the Cons to the opinion pages alone.

[Edit: fixed wording.]

Saturday Morning Links

Some reading material for your weekend...

- Gerald Caplan goes somewhat further than I would in cheekily calling for asbestos exports to be considered a crime against humanity. But he's absolutely right to keep highlighting the embarrassment of being the lone developed country fighting to keep producing and exporting a product that's been long since deemed too dangerous for use at home.

- Longtime Saskatchewan Premier Allen Blakeney weighs in with his suggestion as to how to handle the province's potash reserves:

It is not easy to formulate a rule that would prevent consumers of potash from buying PCS shares but it would be relatively easy to formulate a rule under the Investment Canada Act that says 60 per cent of all shares of the corporation shall be owned by Canadian citizens who are resident in Canada.

It's hard to imagine any group or groups of Canadian citizens living in Canada who could own 60 per cent of PCS shares and also represent potash consumers.

The more likely owners would turn out to be the Ontario municipal employees pension plan, the Ontario Teachers' pension plan, the Quebec Caisse de Depot, the Canada Pension Plan and pension plans in other provinces.

Ownership by these groups and by a wide number of Canadians would be a good deal more comfortable for the Saskatchewan government to deal with than ownership by massive potash consumers' groups or the largest mining company in the world, BHP Billiton.

- Dr. Dawg and pogge point out the latest appalling development in Alex Hundert's treatment following his arrest for speaking on a public panel:

On the night of Wednesday October 14th, Alex was told by the security manager at the Toronto East Detention Centre that he had to sign the bail conditions or face solitary confinement in “the hole”, without access to phone calls or writing paper. He was put in solitary confinement after an initial confrontation with correction staff where he resisted initial attempts to make him sign. He was denied the right to call his lawyer, and told that if he didn’t sign now, they would revoke the bail offer and he would be held in solitary confinement until his eventual release from prison.

Coerced into signing these conditions, Alex was thrown out of Toronto East and left to find his own way home to his sureties’ house. The prison authorities forced him into a position where he could potentially be accused of further breaching his bail. Alex is now back on house arrest with an enforced curfew, with non-associations with co-accused and members of SOAR, AWOL, NOII and other community organizers. He also has the additionally imposed restrictions of no direct or indirect posting to the internet, no assisting, planning, or attending any public meeting or march, and no expressing of views on a political issue.

- Needless to say, Hundert would be a leading current candidate for a present-day internment list. And just think, it may only take 50 years for you too to find out whether you're mentioned on one!

- Finally, Michael Geist offers a partial rebuttal to Malcolm Gladwell's much-circulated piece on social media and activism. But I'd think the argument can be relatively easily boiled down to a distinction between what social media does well (particularly disseminating information which might not otherwise be shared across the weak ties brought into contact), and what it doesn't do at all on its own (the hierarchical organizing discussed by Gladwell, which may be facilitated and promoted over social media but still requires the development of closer ties).

Self-defeating

Dan Cook has fixed his faulty math, but seems to be continuing with a drumbeat of condescension toward Canadians outraged over Stephen Harper's prorogation. And not surprisingly, Harper's minions seem to be eager to echo the theme.

But is there any message more likely to actually keep the group in the news and expanding - or better yet, turn its current Facebook supporters toward more concrete action - than a consistently dismissive tone of "bah, your opinion doesn't count"?

Update: A warm welcome to readers who have found their way here through CAPP's links page. And for those wondering, the more concrete action mentioned above is highly recommended.