Friday Afternoon Links

Assorted content to end your week.

- Wallis Snowdon reports on what critical-care triage caused by a combination of COVID-19 and mismanagement will mean in Alberta's ICUs (at a time when Saskatchewan is facing the same). Jason Warick highlights how Saskatchewan's Chief Medical Health Officer has far more power to protect public health than has been exercised in the course of the COVID pandemic. And Murray Mandryk discusses Scott Moe's embarrassingly delayed and weak reaction to the building fourth wave - though as always it's worth pointing out how Moe has been coddled in his reckless endangerment of the public.

- Meanwhile, Tim Harford offers his take that a key next step in encouraging vaccine uptake is to present a positive view of the number of people already vaccinated. But it's also worth noting that the prospect of a vaccine passport looks to have done far more to boost vaccinations than any amount of mere imploring. 

- Phil Tank writes that Saskatoon is far past the point of being able to humour COVID conspiracy theorists. And Nam Kiwanuka points out how only some, particularly privileged people are granted space to be angry, even as people with genuine complaints face systemic state repression in trying to be heard. 

- Finally, Shawn Gude discusses different conceptions of freedom, and notes that a system designed to allow a few people to amass sickening amounts of wealth inevitably limits the freedom of "non-domination" of many people who would have a larger range of options if they enjoyed greater material equality. 

Monday Morning Links

Miscellaneous material to start your week.

- Annie Lowrey writes about the affordability crisis which has left most Americans in dire financial straits even as aggregate economic numbers look reasonably strong:

(B)eyond the headline economic numbers, a multifarious and strangely invisible economic crisis metastasized: Let’s call it the Great Affordability Crisis. This crisis involved not just what families earned but the other half of the ledger, too—how they spent their earnings. In one of the best decades the American economy has ever recorded, families were bled dry by landlords, hospital administrators, university bursars, and child-care centers. For millions, a roaring economy felt precarious or downright terrible.

Viewing the economy through a cost-of-living paradigm helps explain why roughly two in five American adults would struggle to come up with $400 in an emergency so many years after the Great Recession ended. It helps explain why one in five adults is unable to pay the current month’s bills in full. It demonstrates why a surprise furnace-repair bill, parking ticket, court fee, or medical expense remains ruinous for so many American families, despite all the wealth this country has generated. Fully one in three households is classified as “financially fragile.”
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What is perhaps most frustrating is that the Great Affordability Crisis is amenable to policy solutions—ones most other rich countries adopted decades ago. In other developed economies, child care, early education, and higher education are public goods, and do not require high-interest-rate debts or endless scrambling by exhausted young parents to procure. Other wealthy countries have public-health systems that cover everybody at far lower cost, whether through socialized or private models. And numerous proposals would transform residential construction in this country, including one that just failed in California’s legislature.

- Jordan Yadoo and Noah Buhayar report that the disconnect between wages and housing costs is spreading from the U.S.' largest urban areas across the country. Andrew Longhurst writes about British Columbia's need for far more public assisted living. And CBC News reports that the City of Regina's public posturing about reducing homelessness has led to zero funds being allocated.

- Gabriel Zucman and Emmanuel Saez discuss the need for a wealth tax to rein in the distortion of the U.S.' economy and political system by the richest few. And Jereon Kraaijenbrink points out why even some of the .1% are making a public push for a more fair tax system which would result in their contributing more.

- Meanwhile, Christo Aivalis is the latest to highlight how the Libs' "middle class tax cut" in fact does little for the people who most need the federal government's help. Sam Jones reports on the findings of the UN’s special rapporteur on extreme poverty and human rights that Spain has left people to struggle in poverty even as its economy has recovered from recession. And Phillip Inman reports on new research into the continuing increases in the number of UK workers living in poverty.

- Finally, Tim Harford is optimistic about the prospects of a dematerialising economy which allows for social progress while limiting the environmental damage done by economic growth.

Sunday Morning Links

This and that for your Sunday reading.

- Noam Scheiber and Ben Casselman comment on the role of corporate consolidation in undermining pay and working conditions. And Meagan Day rebuts the claim that employers can be excused for ignoring not-yet-qualified pools of workers by pointing out that the same people once treated as unqualified are now being hired:

This relaxation of hiring standards is a stinging rebuke to right-wing economists, who for years assured us that the main reason for the stagnant post-recession employment rate was that workers themselves didn’t have the right stuff. Throughout the slow recovery, journalists from major papers made a cottage industry of finding CEOs complaining that their hiring searches were coming up empty. Conservative commentators chalked up high unemployment to a so-called “skills gap”: companies needed more qualified workers, they insisted, than were currently on offer.

But something wasn’t right. If companies really needed qualified workers, why weren’t they raising wages to attract them? Or why weren’t they lowering their qualification standards or offering training to less experienced new hires? If companies really did have jobs that desperately required filling, they would have been working harder to fill them. Some flagged this inconsistency early on. “The reason markets adjust,” wrote management professor Peter Cappelli in 2013, “is because the participants, in this case the employers, eventually learn that they either have to raise their pay or lower their expectations in order to get the workers they need.”

The right wing’s explanation for lagging unemployment rate was a classic supply-side argument. The trouble, the argument went, was that firms weren’t getting what they needed to flourish — in this case, an adequate supply of skilled labor. The Left countered with a demand-side perspective: The reason for high unemployment was that ordinary people, not companies, weren’t getting their needs met. If they had more money in their pockets, ordinary people would increase their spending, demand for goods and services would rise, and that would create more jobs. More jobs means lower unemployment, which means greater bargaining power for the already employed, who won’t have to worry about their position being undermined by vast reserves of cheap labor.

At the time, left economists pointed out that even as employers were supposedly yearning for acceptable candidates but unable to find them, wages weren’t rising. “If employers cannot get the workers they need,” wrote Dean Baker in 2013, “then they raise the wages they offer to pull workers away from other employers. This is how markets work.” The fact that this wasn’t happening, Baker and others argued, was evidence that there wasn’t a real labor shortage, and that the “skills gap” was just another name for corporate whining. Employers were putting up job ads, sure, but they were also being hyper-selective about who they hired — for instance, refusing people with criminal convictions — a good sign they weren’t really in need.

- Meanwhile, Hadrian Mertins-Kirkwood examines how decarbonization can and should take into account the needs of workers in regions currently reliant on fossil fuels.

- Daniel Tencer reports on Justin Trudeau's callous suggestion that workers robbed of their pensions by corporate greed should be satisfied with Employment Insurance and the Canada Pension Plan. (And it's particularly worth noting how those programs have been allowed to stagnate in order to leave room for exactly the type of private pensions then diverted to enrich executives and shareholders.)

- Finally, Tim Harford discusses the strengths and weaknesses of a focus on self-reported happiness as the basis for policy development. And Andre Picard weighs in on the need to invest in social supports as the most effective means of improving health outcomes.

Sunday Morning Links

Assorted content for your Sunday reading.

- Tim Harford discusses how insurance and other industries are built on exploiting people who are risk-averse due to the inability to absorb substantial costs as "money pumps" for those who have more than they need:

(L)et’s step back and ask ourselves what insurance is for. Classical economics has an answer: people are risk-averse, which means that they will pay good money to reduce the variability of outcomes they face. If home insurance guards against the loss of a million pounds when my house burns down, I’m happy to buy the insurance even though the insurance company expects to make a profit from it.

But this risk aversion emerges from the fact that money is worth more to poor people than to rich people. Gaining a million pounds would make me rich but losing a million pounds would make me poor. I should not gamble a million pounds on the toss of a coin, because the million pounds I might lose is more precious to me than the million pounds I might gain.

As so often with classical economics, this is an excellent description of how we should behave. It is not such an excellent description of how we actually do behave. Risk aversion can only explain why we insure large risks. It cannot explain why we insure small ones. 

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A money pump is a person whose irrationalities can be systematically exploited for financial gain. The simplest money pump is a person who prefers an apple to a doughnut, prefers a doughnut to a chocolate bar, and prefers a chocolate bar to an apple. Just offer them an apple in exchange for their doughnut plus a penny. They will accept. Then offer them a chocolate bar for their apple plus a penny. Then offer them a doughnut for their chocolate bar plus a penny. They end up with their original doughnut and are three pence poorer. Repeat for ever.

Money-pump arguments are sometimes deployed to object that people cannot be irrational, otherwise they would be bankrupted by money pumping. But economists are increasingly coming to realise that, instead, we should be looking for money pumping in action.

Given our anxiety about small risks, what would the money pumping look like? It would be an insurance policy focused on the narrowest possible slice of risk. It would be sold alongside another product or service, often at the last moment. It would be marketed by creating anxiety and then offering the product to make the anxiety go away. In short, it would look like the collision damage waiver, the extended warranty, and PPI. These bespoke slices of insurance are among the largest money-pumping projects in the modern economy. No wonder the banks abandoned their principles to join in.

- Jared Bernstein and Lori Wallach highlight (PDF) the need for an international trade regime which serves the public interest, not only the greed of the people who already have the most. And Yves Smith theorizes that the public backlash against corporate-centered trade deals may lead both to changes in how international trade is managed, and the identity of the countries at the forefront of developing the standards to be pursued.

- Needless to say, the Libs' devotion to the current trade model figures to exclude Canada from that group for the foreseeable future. And the Alberta Federation of Labour laments the Libs' determination to exploit foreign labour at the expense of both easily-abused temporary workers, and the Canadians who would otherwise fill the positions.

- Derek Thompson makes the case for a long-overdue round of trust-busting to reduce corporate power over innovation and economic development.

- Finally, Ed Finn writes that our health system should focus far more on maintaining wellness rather than responding only once an illness develops.

Sunday Morning Links

This and that for your Sunday reading.

- Tim Harford discusses John Maynard Keynes' failed prediction that workers would continue to win increased leisure time over the past few decades:

(I)t is worth teasing out the nature and extent of Keynes’s error. He was right to predict that we would be working less. We enter the workforce later, after long and not-always-arduous courses of study. We enjoy longer retirements. The work week itself is getting shorter. In non-agricultural employment in the US, the week was 69 hours in 1830 — the equivalent of working 11 hours a day but only three hours on Sundays. By 1930, a full-time work week was 47 hours; each decade, American workers were working two hours less every week.

But Keynes overestimated how rapidly and for how long that trend would continue. By 1970 the work week was down to 39 hours. If the work week had continued to shrink, we would be working 30-hour weeks by now, and perhaps 25-hour weeks by 2030. But by around 1970, the slacking-off stopped. Why?
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The gap between the growth of the economy and the growth of median household incomes is explained by a patchwork of factors, including a change in the nature of households themselves, with more income being diverted to healthcare costs, and an increasing share of income accruing to the highest earners. In short, perhaps progress towards the 15-hour work week has stalled because the typical US household’s income has stalled too. Household incomes started to stagnate at the same time as the work week stopped shrinking.

This idea makes good sense but it does not explain what is happening to higher earners. Since their incomes have not stagnated — far from it — one might expect them to be taking some of the benefits of very high hourly earnings in the form of shorter days and longer weekends. Not so. According to research published by economists Mark Aguiar and Erik Hurst in 2006 — a nice snapshot of life before the great recession — higher earners were enjoying less leisure.

So the puzzle has taken a different shape. Ordinary people have been enjoying some measure of both the income gains and the leisure gains that Keynes predicted — but rather less of both than we might have hoped.

The economic elites, meanwhile, continue to embody a paradox: all the income gains that Keynes expected and more, but limited leisure.

- Carol Goar laments the Libs' lack of action to build a national child care system. And Alex Steffen observes that the movement toward social progress has run into a well-funded but deeply destructive corporate effort to proclaim that change for the better is impossible.

- In a particularly stark example of the gap between the progress which can obviously be made and the excuses for refusing to make it, Tim Fontaine reports on the connection between poverty, inequality and alarming suicide rates among First Nations children - even as Jorge Barrera exposes the Libs' false claim that there's no money available to keep a promise to better fund education.

- David Roberts examines how solar power is rapidly becoming the cheapest option even compared to subsidized fossil fuels.

- And finally, Desmond Cole questions the indefinite detention of migrants to Canada.

Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Steven Hill discusses some of the most glaring problems with an economy based on precarious work. And Tim Harford rightly asks whether a shift away from steady employment will necessitate more public delivery of social benefits:

Details vary but most advanced countries have a list of goodies that must be provided by employers rather than the government or the individual. In the UK a full-time worker is entitled to 28 days of paid leave. In the US the default provider of health insurance is your employer. In many countries, employees cannot be sacked without long notice periods and a decent pension is the preserve of people with a decent job. As for freelancers, they may enjoy flexibility and independence and sometimes even a good living — but as far as social protections go, they are on their own.
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(W)e should end the policy of trying to offload the welfare state to corporations. It is a policy that hides the costs of these benefits, and ensures that they are unevenly distributed. Instead we should take a hard look at that list of goodies: healthcare, pensions, income for people who are not working. Then we should decide what the state should provide and how generously. To my mind, there is a strong argument that the state should provide all of these things, to everyone, at a very basic level. What the state will not provide, individuals must pay for themselves — or seek employers who provide these benefits as an attraction rather than a legal obligation. Call it libertarianism with a safety net.

- Meanwhile, Noam Schieber and Patricia Cohen report on the shadow tax system which has allowed the wealthiest Americans to avoid contributing to the country around them.

- Omar Arias and Dorota Chapko highlight the massive impact of early childhood education on brain development - with particular emphasis on the contrast between more efficient child care funding and the far-less-controversial job training measures which have significantly less positive economic effect.

- James Wood reports on the Alberta NDP's plan to make affordable housing one of its key priorities in the new year.

- And finally, both Gillian Steward and Don Braid highlight Rachel Notley's work to make Alberta into a constructive participant on the Canadian political scene rather than a rogue province.

Saturday Morning Links

Assorted content for your weekend reading.

- Lana Payne discusses the need to address inequality through our political system. But that will require significant pressure from exactly the citizens who have decided they're not well served by today's political options - and Trish Hennessy's look at Canadian voter turnout reminds us of the desperate need for improvement.

- Meanwhile, Tim Harford points out just how far we've gone in focusing on dollars over all other considerations - as even Scotland's referendum on independence is being spun mostly as a matter of dueling fiscal projections rather than community, culture or other policy questions.

- Tavia Grant's report on the deadly legacy - and continued danger - of asbestos is well worth a read, particularly for this reminder that the Cons' offical policy is to promote the material which serves as Canada's largest source of workplace deaths:

In asbestos policy, Canada is at odds with other developed countries, almost all of which have both banned asbestos and launched national campaigns to educate their citizens on its dangers.

Regarding exports and imports, Canada’s long-standing position is that “safe and controlled use” of the mineral poses little risk to human health.

Health Canada’s website maintains that chrysotile (the form of asbestos mined in Quebec) is safer than other types of asbestos, and that asbestos poses risks only when its fibres become airborne and “significant quantities” are inhaled. It plays down the causal relationship between asbestos and some forms of cancer. The website does not inform Canadians that asbestos is the No. 1 cause of work-related deaths. (In contrast, the U.S. Acting Surgeon General, Boris Lushniak, reminded the American public in April that there is no known safe level of asbestos exposure.)

Between 2006 and 2011, Canada was the only developed nation to oppose bringing asbestos under the control of the Rotterdam Convention, a United Nations-sponsored treaty, signed in 1998, that requires the exporters of hazardous substances to disclose the risks.

Indeed, the Conservative government has been a stalwart friend of the industry. “Only the Conservative party will defend this industry here and everywhere in Canada,” Prime Minister Stephen Harper said in Quebec on the campaign trail in 2011. While the Tories were fighting international efforts to restrict trade in asbestos, the government was simultaneously spending millions to remove asbestos from the Parliament buildings and the prime minister’s residence.

- In a similar vein, PressProgress finds that the Cons' cheerleading for the oil sector has reached the point where they're trying to paint the extraction and burning of dirty fossil fuels as a win for the environment. Mitchell Anderson discusses Canada's massive subsidies to big oil (as well as the Cons' pathetic attempts to pretend they don't exist), while Mike de Souza finds that the National Energy Board is spending twice as much moving its offices into a sinkhole as it could muster for new pipeline monitoring, and the CP finds that Alberta's new environmental policy for fracking is "do what you want". And Bruce Johnstone writes that the Cons can't be taken seriously on climate change.

- Finally, David Dayen discusses the astroturf effort to challenge Elizabeth Warren's work in making student loan payments more affordable.

Thursday Morning Links

This and that for your Thursday reading.

- Paul Krugman's review of Thomas Piketty's Capital in the Twenty-First Century includes his commentary on our new gilded age:

Still, today’s economic elite is very different from that of the nineteenth century, isn’t it? Back then, great wealth tended to be inherited; aren’t today’s economic elite people who earned their position? Well, Piketty tells us that this isn’t as true as you think, and that in any case this state of affairs may prove no more durable than the middle-class society that flourished for a generation after World War II. The big idea of Capital in the Twenty-First Century is that we haven’t just gone back to nineteenth-century levels of income inequality, we’re also on a path back to “patrimonial capitalism,” in which the commanding heights of the economy are controlled not by talented individuals but by family dynasties.

It’s a remarkable claim—and precisely because it’s so remarkable, it needs to be examined carefully and critically.
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(I)t turns out that Vautrin was right: being in the top one percent of nineteenth-century heirs and simply living off your inherited wealth gave you around two and a half times the standard of living you could achieve by clawing your way into the top one percent of paid workers.

You might be tempted to say that modern society is nothing like that. In fact, however, both capital income and inherited wealth, though less important than they were in the Belle Époque, are still powerful drivers of inequality—and their importance is growing. In France, Piketty shows, the inherited share of total wealth dropped sharply during the era of wars and postwar fast growth; circa 1970 it was less than 50 percent. But it’s now back up to 70 percent, and rising. Correspondingly, there has been a fall and then a rise in the importance of inheritance in conferring elite status: the living standard of the top one percent of heirs fell below that of the top one percent of earners between 1910 and 1950, but began rising again after 1970. It’s not all the way back to Rasti-gnac levels, but once again it’s generally more valuable to have the right parents (or to marry into having the right in-laws) than to have the right job.

And this may only be the beginning. Figure 1 on this page shows Piketty’s estimates of global r and g over the long haul, suggesting that the era of equalization now lies behind us, and that the conditions are now ripe for the reestablishment of patrimonial capitalism.

- Meanwhile, Sam Ro interviews Gerald Minack about the long-term damage to business as wages get pushed downward in the name of temporary profits. And Don Cayo is the latest to expose the CCCE's dishonest tax contribution spin.

- Tim Harford discusses the corrosive effects of long-term unemployment, noting that people who have been unemployed for six months or more are effectively shut out of the job market afterwards. Kate McInturff points out the continued gender imbalance in hiring both between and within professions. And Armine Yalnizyan highlights what the federal government could do to help younger workers get a foot in the door if it was actually interested in reducing youth unemployment.

- But there's plenty of reason for concern that the needs and preferences of the public aren't generally finding their way into law - as Larry Bartels writes in comparing the relative influence of public opinion and different types of pressure groups:

A forthcoming article in Perspectives on Politics by (my former colleague) Martin Gilens and (my sometime collaborator) Benjamin Page marks a notable step in that process. Drawing on the same extensive evidence employed by Gilens in his landmark book “Affluence and Influence,” Gilens and Page analyze 1,779 policy outcomes over a period of more than 20 years. They conclude that “economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence.”

Average citizens have “little or no independent influence” on the policy-making process? This must be an overstatement of Gilens’s and Page’s findings, no?

Alas, no. In their primary statistical analysis, the collective preferences of ordinary citizens had only a negligible estimated effect on policy outcomes, while the collective preferences of “economic elites” (roughly proxied by citizens at the 90th percentile of the income distribution) were 15 times as important. “Mass-based interest groups” mattered, too, but only about half as much as business interest groups — and the preferences of those public interest groups were only weakly correlated (.12) with the preferences of the public as measured in opinion surveys.

- Finally, Paul Adams asks whether Stephen Harper is done for as a political force.

Sunday Morning Links

This and that for your Sunday reading.

- Dean Starkman writes about the media's failure to see and report on the culture of corruption and manipulation that led to the 2008 economic meltdown:

Was the brewing crisis really such a secret? Was it all so complex as to be beyond the capacity of conventional journalism and, through it, the public to understand? Was it all so hidden? In fact, the answer to all those questions is “no.” The problem—distorted incentives corrupting the financial industry—was plain, but not to Wall Street executives, traders, rating agencies, analysts, quants, or other financial insiders. It was plain to the outsiders: state regulators, plaintiffs’ lawyers, community groups, defrauded mortgage borrowers, and, mostly, to former employees of financial institutions, the whistleblowers, who were, in fact, blowing the whistle. A few reporters actually talked to them, understood the metastasizing problem, and wrote about it. You’ll meet a couple of them in this book. Unfortunately, they didn’t work for the mainstream business press.
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To read various journalistic accounts of mortgage lending and Wall Street during the bubble is to come away with radically differing representations of the soundness of the U.S. financial system. It all depended on what you were reading. Anyone “paying attention” to the conventional business press could be forgiven for thinking that things were, in the end, basically normal. Yes, there was a housing bubble. Any fair reading of the press of the era makes that clear, even if warnings were mitigated by just-as-loud celebrations of the boom. And yes, the press said there were a lot of terrible mortgage products out there. Those are important consumer and investor issues. But that’s all they are. When the gaze turned to financial institutions, the message was entirely different: “all clear.” It’s not just the puff pieces (“Washington Mutual Is Using a Creative Retail Approach to Turn the Banking World Upside Down”; “Citi’s chief hasn’t just stepped out of Sandy Weill’s shadow—he’s stepped out of his own as he strives to make himself into a leader with vision”; and so on) or the language that sometimes lapses into toadying (“Some of its old-world gentility remains: Goldman agreed to talk for this story only reluctantly, wary of looking like a braggart”; “His 6-foot-4 linebacker-esque frame is economically packed into a club chair in his palatial yet understated office”): it’s that even stories that were ostensibly critical of individual Wall Street firms and mortgage lenders described them in terms of their competition with one another: would their earnings be okay? There was a bubble all right, and the business press was in it.

- Meanwhile, Andrew Leach comments on the Harper Cons' own carbon bubble - as a government relentlessly pushing tar sands development seems utterly oblivious to the reality that further development could become non-viable based on a readily-foreseeable (and indeed necessary) change in climate policy.

- Rick Mercer rants about the Cons' fixation on income splitting - and how it shows they couldn't care less about anybody who doesn't share their own privileged lifestyle:


- And Doug Cuthand observes that First Nations have been particularly marginalized based on their failure to fit into the Cons' target demographics:

Funding has been eliminated to the following groups since the Harper government came to power: Sisters in Spirit, NAHO, the National Aboriginal Health Organization, The First Nations Statistical Institute and NWAC, Native Women's Association of Canada. Virtually all the aboriginal political organizations experienced funding cuts this year.

We cannot forget the failure of this government to honour the Kelowna Accord that would have injected more than $5 billion into a series of First Nations initiatives, including housing, education health and economic development.

In addition to the cuts to the political organizations, First Nations administrations have seen budget cuts ranging from 10 per cent to 25 per cent. A clause has been inserted in tribal council funding agreements that none of their grant allocations can be used for "advocacy or political activities."

How the Department of Colonial Affairs plans to police this is beyond me. You can't have a group of chiefs in a room without them discussing political issues.

The government views tribal councils only as service providers. In other words, it sees tribal councils replacing the Department of Indian Affairs and becoming the new Indian Agents. The days of participatory democracy are but a memory. The Harper government wants to control the agenda, and any group that provides an independent or contradictory voice is suspect.

In addition to the cutbacks to First Nations organizations, institutions and services, we now have the "Fair Elections Act" that is attacking our democratic rights as Canadians. The removal of the vouching for voters without proper ID could be problematic for First Nations voters.
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This leads me to conclude that the Conservatives have given up on us as supporting them in the next election. They have cut our funding to the bone, and now they are reducing our impact at the ballot box. Is this Harper's war on Indians?

- Finally, Tim Harford notes that too much reliance on "big data" can lead to massive mistakes when institutions fail to recognize the limits on what a particular set of information actually tells us.

Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Joe Fiorito discusses the spread of income inequality in Canada. And Doug Henwood reviews Thomas Piketty's Capital in the 21st Century, while wondering what will follow from the empirical observation that accumulated wealth tends to perpetuate itself to the detriment of most of the population:

The core message of this enormous and enormously important book can be delivered in a few lines: Left to its own devices, wealth inevitably tends to concentrate in capitalist economies. There is no “natural” mechanism inherent in the structure of such economies for inhibiting, much less reversing, that tendency. Only crises like war and depression, or political interventions like taxation (which, to the upper classes, would be a crisis), can do the trick. And Thomas Piketty has two centuries of data to prove his point.
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Economics as a discipline loves stories about equilibrium and convergence. Vast inequities should, in theory, be “competed away,” as neoclassical economics likes to say. But mostly they’re not. Globally, poorer countries should gain on richer ones as technology and education spread and mobile capital’s search for higher returns makes the poor less poor. That has happened to some degree, but rapidly developing economies such as India and many African nations remain much poorer than the United States or Western Europe. In the case of personal wealth, old fortunes should decline and be replaced by new ones, just as manual typewriters were replaced by electric ones, and electric typewriters were superseded by computers. But in fact old money is remarkably persistent. Yes, we’ve seen the creation of a large number of new fortunes over the last few decades, a change from wealth’s dark days of the mid-twentieth century. Bill Gates is the son of a well-off lawyer who was nowhere near a billionaire; Mark Zuckerberg sprang from the loins of a dentist and a psychiatrist. They are the very picture of modern new wealth. But despite those new fortunes, inheritance remains very important. David Rockefeller, worth $2.8 billion at the age of ninety-eight, is number 193 on the Forbes 400. Overall, Piketty concludes, it’s likely that half or more of the wealth of the upper orders originates in inheritance.

And though Piketty doesn’t explore this, I’ve long suspected that a major force for the repeal of the estate tax in the United States has been that the billionaires of the neoliberal age—the tech and finance moguls, some famous, some barely known—have been thinking about their legacy. The scions of the second Gilded Age want to see their grandchildren on the Forbes 400, just like David Rockefeller is a ghost of the first Gilded Age. I’m less sure whether they want to see their names on traditional foundations—maybe more the entrepreneurial kind. But it’s clear that the political salience of the “death tax” is a reflection of a cadre of fortunes of a sort that was long out of fashion.

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Anticapitalist rhetoric need not be lazy—and for all the empirical sophistication of Piketty’s work, his political thinking is hardly a model of complexity or effort. He mostly aspires to contribute to rational democratic deliberation about “the best way to organize society.”

Still, while such deliberation is clearly necessary, political action cannot be factored out of that process just because we happen to have lived through the Cold War’s unmourned collapse. It’s energizing to see that a younger generation of political intellectuals, who were in grade school when the Berlin Wall came down, missed the anticapitalist vaccination. They might be able to take Piketty’s data and cause some genuine trouble with it. Because serious trouble—demonstrations, strikes, insurgent political movements—is what it will take to derail capitalism’s inevitable tendency toward concentration. Short of that, it looks like we’ll be continuing our journey along the road to a new serfdom.

- Meanwhile, Bart Cammaerts highlights the need to distance democratic decision-making from the influence of big money. And Salon offers a few educated guesses as to when and how the next financial crash may strike - with the influence of the financial sector on lax regulation serving as a major driving force.

- Carol Goar takes note of Peggy Nash's efforts to address youth unemployment, while pointing out the risk of a "lost generation" if reasonably secure jobs are a thing of the past.

- Finally, Tim Harford takes a look at how behavioural economics have already influenced public policy - and how much more room there is to test the work done by governments to maximize the achievement of policy goals while minimizing costs.

Saturday Morning Links

Assorted content for your weekend reading.

- Tim Harford proposes four first steps to start combatting income inequality. And the Star's editorial board makes clear that there's tax room available for Ontario (among other jurisdictions) to pursue in order to serve the public good:

Sousa promises to protect the “middle class” — whatever that is. But he need not fear a backlash if his spring budget increases the burden on those making substantially more than the average, whether that starts at $150,000 or some higher level. Four other provinces — including B.C., whose government leans right — have done that in the past few years without substantial blowback.

Politicians can’t protect citizens — taxpayers — from fiscal realities forever. If we want the services we get from government, we’ve got to pay for them. And if we truly worry about growing inequality, increasing the burden on the (comparatively) well paid is one important way to address it.

Even conservatives, at least those who fear Ontario is flirting with disaster as its debt mounts, should not run from the concept of higher taxes. A new study by the right-wing Fraser Institute warns, in apocalyptic tones, that the province’s debt is more than twice as big as that of California, long considered a fiscal basket case.

One solution would be slashing services beyond recognition. A much better course would be making sure Ontario has the tax revenue to pay for what it provides — and what we value.

- Meanwhile, Scott Clark and Peter De Vries note that we should expect a responsible government to reevaulate and ultimately back off of ill-advised election promises - lest frivolous schemes like income splitting burn billions of dollars while serving no useful purpose.

- Laura Payton interviews Andrew Reynolds about the Unfair Elections Act and the message it sends to developing democracies. And Trevor McKenzie-Smith takes a look at the bill's potential effects in Canada:

Proposed changes contained in this Act would allow candidate representatives the right to go beyond observing the process to ensure fairness. Instead they will be able to insert themselves directly in the voting process via the new right to ‘examine’ voters’ identification before they are allowed to vote. This is a dramatic shift in roles for campaign volunteers, and is a recipe for conflict that could result in systematic bullying of voters and elections staff by partisan campaign volunteers.

Candidates’ representatives have virtually no training and in many cases can get the rules mixed up. Further, they are not impartial like Elections Canada staff must be, and the potential exists for them to target certain voters for challenge in order to give their candidate an advantage.

Allowing a candidate’s rep to stand between the voter and the ballot box is a fundamental shift away from observer to actor, which will result in many peoples’ right to vote being challenged unnecessarily. This practice could also give voters the impression that these volunteers have real authority when challenging a voter’s credentials, further deterring them from voting.

This proposed change would act to further disenfranchise people who are already underrepresented in our electoral system. Aboriginal people, people with low incomes, people who move a lot, first time voters, students, homeless people, and many others could become targets for further scrutiny by candidates’ representatives who are there to do political work. And if unchecked that political work could result in rights being denied.

- Thomas Duck hears an echo of the Walkerton crisis in the Cons' cuts to Environment Canada.

- Meanwhile, Nicholas Keung identifies something even worse in a mooted immigration policy which would keep spouses from reuniting in Canada if they don't meet a wealth threshold. And it's particularly worth noting that the Cons have gone out of their way to encourage employers to engage in exactly the type of abuses they claim to be addressing at the family level.

- Finally, Ken Rasmussen puts "lean" in context as just another administrative fad which is fated to deliver far less than promised by its proponents.

Tuesday Morning Links

This and that for your Tuesday reading.

- Andrew Jackson writes that increases in Canadian inequality have been the result of deliberate policy choices:

In an important recent book, Inequality and the Fading of Redistributive Politics, Keith Banting and John Myles argue that, while rooted in the market, politics has also been a major force behind rising income inequality in Canada. They emphasize the impact of deep cuts to income transfer programs for working-age Canadians in Canada’s “neo-liberal moment” in the mid-1990s.

Their argument is reinforced by Statistics Canada research by Andrew Heisz and Brian Murphy presented to a recent Institute for Research on Public Policy conference on income inequality.

Rising market income inequality in Canada over the 1980s and continuing into the 1990s was broadly offset by redistributive government policies until the early 1990s. However, for a decade, from the early 1990s to the early 2000s, the redistributive impact of the personal income tax and income transfer system faded significantly, and then stabilized at a lower level.

This change was almost entirely due to changes in income transfer programs, as opposed to changes in the personal income tax system. And the big change was cuts to unemployment insurance (UI) and social assistance.
...
The problem is that a rising percentage of working Canadians can find only insecure and part-time jobs at low wages. The major reduction of EI and social assistance income benefits has not been matched by other means of propping up low incomes from work, such as tax credits for the working poor and child benefits for low-income families. These remain relatively small programs.

Addressing rising income inequality will mean coming to terms not just with long-term trends in the market, but also with the political decisions we made some 20 years ago.

- And Rick Goldman agrees that we'll need a strong policy response to reduce inequality.

- Meanwhile, Carol Goar discusses the CLC's similar recognition that precarious work and underemployment represent growing problems for Canadian workers. And Kaylie Tiessen's CCPA study observes that the problem is particularly acute in Ontario.

- Tim Harford suggests that insularity and secrecy played a massive role in the 2008 economic meltdown - and offers some proposals to make sure the financial system is less vulnerable to both.

- Carol Linnitt comments on the oil industry's government-approved takeover of Alberta's educational curriculum.

- And finally, Matt Fairley's reporting on an increase in wireless rates across most of Canada makes it clear that there's only one type of competition which actually leads to more affordable basic services for consumers:

Canada’s big three wireless carriers have hiked the base prices for new plans by $5 in most markets over the past two months.

Rogers, Telus and Bell Mobility now all charge $80 per month for new smartphone plans with a new contract, $5 more than those same plans cost when they were introduced last year. The prices for other smartphone plans with more data cost upwards of $145.

The price hikes affect every province except Manitoba and Saskatchewan.
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Manitoba and Saskatchewan, however, have more competitive pricing. Due to strong regional competitors in SaskTel and MTS, Bell and Rogers plans start at $65 per month with five GB of data. An equivalent plan elsewhere in the country costs $55 more per month.

Friday Morning Links

Assorted content to end your week.

- Stuart Trew fleshes out the Cons' new(-ly explicit) Corporate Cronies Action Plan - and it goes even further in entrenching corporate control over policy than one might have expected at first glance:

- The makeup of the advisory panel that consulted with Trade Minister Fast skews the new Action Plan in favour energy- and water-intensive agricultural export sectors, multinational business represented by the CCCE, and the energy sector. There was no worker representation on the advisory committee. And the involvement of the Canadian Federation of Independent Business is arguably more of a cover for Harper than a sign that Canada's trade policy is designed to help small- and medium-sized companies the most. The Action Plan says SMEs are the "backbone" of the Canadian economy and yet only 41,000 of 1.09 million companies are engaged in external trade. That is a very domestically oriented backbone.

- This corporate advisory committee will become, under the Action Plan, a permanent "advisory council" that "will include two standing subcommittees, one on emerging markets and the other on established markets. Comprising business and industry leaders, experts in international business and key representatives from the SME community, the subcommittees will bring together the voices of all businesses, big and small. They will provide strategic insight, advice and real-world perspectives on how to keep the market access plans relevant to Canadian business needs." Will the meetings be private, like Minister Flaherty's corporate summer retreats in Wakefield? The advisory council meetings were (see below).

- The government-business merger will work both ways. The Harper government will place "embedded Government of Canada personnel within key industry associations in order to gain better insight into sectoral needs and ensure these are reflected in services provided." Why spend money to hire a lobbyist in Ottawa when you can have the government spending the public's money to attending your meetings?

- Meanwhile, CBC reports that the Cons are breaking yet another promise to regulate oil-sector greenhouse gas emissions. And the most they've learned after constantly scrapping their promised timelines is not to bother offering any more commitments.

- David Climenhaga writes that Alison Redford's PCs are attacking precisely the voters who allowed them to hold onto power by imposing draconian wage freezes on public-sector workers. But I'm not sure it's fair to be surprised that an anti-social party is imposing anti-social policy - and indeed the more important lesson may be one about the dangers of settling for a "lesser of the evils" government which will gleefully turn against workers when it sees an opportunity to do so.

- The Star again laments Canada's utter failure to live up to its 1989 commitment to end child poverty, while Carol Goar similarly criticizes the right's attacks on unemployment benefits. And Tim Harford recognizes the case for a guaranteed annual income - which would go a long way toward ending poverty in general.

- Finally, Keith Reynolds discusses what happens when P3s and offshore tax avoidance intersect - with a B.C. hospital serving as a clear example:

Partnerships BC considers the taxes paid by the private P3 partner when it is deciding whether or not to choose the public-private partnership method of project development. Partnerships BC claims these private sector taxes as an advantage of P3s, but what happens if the project is moved to a tax haven and taxes paid decline dramatically?
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So how is B.C. reacting to this? What are they doing about the possibility the tax revenues they projected from P3s are disappearing into tax havens like Luxembourg? As it turns out, absolutely nothing. An earlier blog post found the Ministry of Finance in response to a Freedom of Information request asking about the impact of tax havens and P3s said "although a thorough search was conducted, no responsive records were located. Your file is now closed."

Partnerships BC provided 75 pages of material in response to the same request. None of it dealt with the tax impact to government if a project moved to a tax haven.

Now one more B.C. public-private partnership has seen its ownership move to Luxembourg. What is the cost to taxpayers? Nobody knows and the results from FOI requests suggest the government isn't looking.

Tuesday Morning Links

This and that for your Tuesday reading...

- Joseph Stiglitz discusses the abuse of intellectual property law to turn publicly-funded research into privately-held profit centres (no matter how many people die as a result):

(A) Utah-based company, Myriad Genetics, claims more than that. It claims to own the rights to any test for the presence of the two critical genes associated with breast cancer – and has ruthlessly enforced that right, though their test is inferior to one that Yale University was willing to provide at much lower cost. The consequences have been tragic: Thorough, affordable testing that identifies high-risk patients saves lives. Blocking such testing costs lives. Myriad is a true example of an American corporation for which profit trumps all other values, including the value of human life itself.

This a particularly poignant case. Normally, economists talk about trade-offs: weaker intellectual-property rights, it is argued, would undermine incentives to innovate. The irony here is that Myriad’s discovery would have been made in any case, owing to a publicly funded, international effort to decode the entire human genome that was a singular achievement of modern science. The social benefits of Myriad’s slightly earlier discovery have been dwarfed by the costs that its callous pursuit of profit has imposed.

...
Sadly, the US and other advanced countries have been pressing for stronger intellectual-property regimes around the world. Such regimes would limit poor countries’ access to the knowledge that they need for their development – and would deny life-saving generic drugs to the hundreds of millions of people who cannot afford the drug companies’ monopoly prices.
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Intellectual-property rights are rules that we create – and that are supposed to improve social well-being. But unbalanced intellectual-property regimes result in inefficiencies – including monopoly profits and a failure to maximize the use of knowledge – that impede the pace of innovation. And, as the Myriad case shows, they can even result in unnecessary loss of life.

- Lana Payne writes that the Cons have at least blinked in acknowledging problems with their preference for cheap, disposable temporary foreign workers over Canadian job-seekers. But lest there be any thought that they're doing anything more than the bare minimum to respond to a public-relations firestorm, CBC reports that they've been aware for at least a year that TFWs were being used in the same industries and locations where workers were receiving EI benefits for want of work. Tavia Grant confirms that the Cons' economic strategy is creating three times as many temporary jobs as permanent ones. And Tim Harford is the latest to weigh in on the corrosive effects of long-term unemployment on an individual's career prospects.

- Dennis Howlett highlights another failure of the Cons in government - noting that even after tax havens have emerged as a widely-known public issue, Con MPs have rejected any recommendations which would meaningfully address the problem.

- Meanwhile, the Cons are trying to deflect blame for their losing $3.1 billion of public money by saying...it's somebody else's fault for not identifying their failures sooner. Sound familiar?

- Finally, Paul Krugman comments on the Republicans' chutzpah in blaming everybody else for their own regular deficits. Suffice it to say that Christy Clark would fit right in:

The key measure you want to look at is the ratio of debt to G.D.P., which measures the government’s fiscal position better than a simple dollar number. And if you look at United States history since World War II, you find that of the 10 presidents who preceded Barack Obama, seven left office with a debt ratio lower than when they came in. Who were the three exceptions? Ronald Reagan and the two George Bushes. So debt increases that didn’t arise either from war or from extraordinary financial crisis are entirely associated with hard-line conservative governments.

And there’s a reason for that association: U.S. conservatives have long followed a strategy of “starving the beast,” slashing taxes so as to deprive the government of the revenue it needs to pay for popular programs.

The funny thing is that right now these same hard-line conservatives declare that we must not run deficits in times of economic crisis. Why? Because, they say, politicians won’t do the right thing and pay down the debt in good times. And who are these irresponsible politicians they’re talking about? Why, themselves.

To me, it sounds like a fiscal version of the classic definition of chutzpah — namely, killing your parents, then demanding sympathy because you’re an orphan. Here we have conservatives telling us that we must tighten our belts despite mass unemployment, because otherwise future conservatives will keep running deficits once times improve.

On adaptation

Murray Mandryk's Wednesday column serves as a downright painful example of Monday morning quarterbacking - cherry-picking examples from seven decades of Saskatchewan governments to criticize "rash decisions" without recognizing the difference between reasonable experimentation and blatant cronyism. And under Mandryk's implicit standard for public-sector risk aversion (that if something could possibly prove to be anything less than an unqualified success, it's not worth doing), Saskatchewan's legislative assembly would be meeting around a donated table in a barn situated in the middle of the still-undeveloped prairie.

But Mandryk is far from the only voice suggesting that such a standard should apply to government decision-making. As much as I agree with Donald Savoie's overall criticism of the viewpoint that government should be run like a business, he too takes as a given that the public sector should be held to an impossibly high standard:

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.

But the consequence of accepting that view is that we're bound to be stuck with a sub-optimal set of choices. Private actors will effectively be free to go ahead even with projects which have a near-certainty of causing public harm (since a government can't be certain it will do good by intervening to stop them). And public projects with even a strong possibility of success and a minimal opportunity cost will be rejected out of hand.

So what alternative model can we use to make sure that government decision-making best serves the public interest - both in avoiding bad ideas, and encouraging the development of good ones?

I'll suggest that we should want our governments to apply substantially the same lens to regulatory and public policy decisions. In either case, we should consider the costs of both action and inaction - and recognize that stagnation in a system which fails to try new ideas is itself a detrimental outcome.

Fortunately, that lens is nicely described by Tim Harford in Adapt. Without getting into too much detail, I'll summarize his philosophy as applying an evolutionary model to public policy development: encouraging new ideas which have a plausible (if far from certain) chance of success, while ensuring that risks are taken only on a scale where their failure won't significantly affect the broader public interest.

As a corollary of that view of public policy, a single failed program doesn't necessarily signal a failed government. (In fact, the reasonableness of a government can be found in large part in its willingness and ability to evaluate its own decisions - including acknowledging the failure of pilot projects while recognizing how the lessons learned may lead to future success.)

Instead, the fundamental question is whether a government orients its activities toward a reasonable set of opportunities. And that should include both making choices at the cabinet table, and devolving survivable amounts of decision-making authority to lower levels.

Of course, the evolutionary model for public policy development also implies that we should look to preserve the positive results of successful adaptation. And it's here that Saskatchewan's right-wing governments have done the most damage: from giving away Crowns which could have held tens of billions of dollars of value for the public to taking a wrecking ball to a well-developed film industry without even a hint of reasonable explanation, the PCs and Sask Party have proven to be more interested in demolishing anything which might speak to the NDP's good decisions than in maintaining and improving ideas which have obvious benefits for the province.

In sum, we should expect our elected representatives to look for opportunities to advance the public interest. And while it's indeed essential for governments to make reasonable choices, we won't get those if we presume that doing nothing is the only safe option - or indeed a viable choice in general.

[Edit: fixed wording.]

Sunday Morning Links

This and that to occupy your Canada Day.

- Tim Harford discusses why randomized trials as part of a genuine evidence-gathering process are a must in developing public policy.

- Mike de Souza reports that the federal Department of Fisheries and Oceans was already short on resources to do its job even before the Harper Cons decided to start hacking away at it. And Keith Ashfield is apparently nowhere to be found since he acknowledged that the Cons' plan is to facilitate pollution in Canadian water.

- Mark McCaw makes the case for peaceful protest against the Harper Cons. And it makes all the sense in the world to look at such a strategy against a government which thinks its only job in dealing with the public is to manage PR rather than to actually listen to citizens' concerns.

- Finally, both Gerald Caplan and Dr. Dawg see Canada Day as an opportunity to discuss the country we want - rather than settling for the deterioration the Cons are inflicting on us. Meanwhile, anybody in Regina looking for information on what's going on can stop by here.

Monday Evening Links

Assorted content to end your day.

- Toby Sanger posts about the OECD's findings on inequality in Canada, with this particularly jumping out as to how much less progressive our tax system is now than it was two decades ago:

Taxes and benefits play a smaller role in reducing inequality in Canada than in most OECD countries: prior to the mid-1990s, they offset more than 70% of the rise in market income inequality, now it’s less than 40%(.)

- Leftwords points out that UK hospitals which were built as P3s as a matter of government decree are now demanding - and receiving - a higher cost for services as a result of that ill-advised choice. And Tim Harford highlights the absurdity of the free-marketeers' argument that public-sector pay should be seen as nothing but a cost to society while private-sector pay is seen as the be-all and end-all of policy development.

- Erika Shaker takes Margaret Wente more seriously than Wente deserves, but makes up for it with a thorough skewering of her condescension toward the Occupy movement.

- Finally, Mia Rabson points out that the Cons can't be taken seriously in feigning concern with bullying in Canada at large when it forms the centrepiece of their political strategy.