Nicely done

I suspect most readers will have already found their way to it. But for those who haven't, Tabatha Southey duly mocks the Cons' latest act of Harper worship:

The look of the “Rising to the Challenge” ad is Canadian Gothic: Stephen Harper walks alone through the empty corridors of Centre Block, much like Will Smith in I Am Legend. Where is everyone else? Is he locked in? Or has everyone else been locked out? We don't know.

Bright light pouring in through the arched stained-glass windows suggests that either it's daylight outside or an alien invasion is under way. Either way, our Prime Minister is unperturbed.

He makes his way upstairs to his office, where, with the wooden blinds on the windows drawn fastidiously against the light, he works from a few tidy files, writing things on papers – according to the closing shot (Exterior: Night, Parliament Hill), all night long.

There's no computer on his desk. I think this is meant to suggest an old-fashioned work ethic, but when I see a man without a computer, I immediately think, “Oh, condition of parole.”

On counterweights

As promised, let's take a closer look at the reasons for defending per-vote funding to Canada's federal political parties, rather than seeking a deal to eliminate it as suggested in some corners.

To start with, it's worth a reminder as to the relative amount of money currently spent on per-vote funding compared to other types of political communication expenses. A sufficiently cynical federal government faces virtually no practical limits on what it can use to sell its own message to the public. And indeed, we currently enjoy a federal government which isn't interested in following rules about whether public money gets used for partisan advertising.

With the governing party able to control effectively as much funding as it thinks it can get away with to dictate the country's political agenda, I'd hope there isn't much doubt that there's some value in a stable and predictable counterweight. And I'd argue that the need is particularly important from a progressive standpoint, since it's relatively easy for an unchallenged government to tear down in a matter of months programs and services which take decades to build.

So what resources do opposition parties have at their disposal in seeking to counter a government's message which can be reinforced through tens of millions of public dollars?

Most obviously, there are MPs' offices which are well funded through the Parliament of Canada. But those offices face some significant restrictions in terms of both the activities permitted (with direct partisan action normally ruled out), and in the distribution of resources since MP funding mirrors the unfairness inherent in a first-past-the-post electoral system.

And then there's per-vote party funding. Unlike allocations limited to MPs, it doesn't replicate the distortions inherent in a first-past-the-post electoral system: indeed, it actually provides a financial stepping stone for broad-based developing parties, while avoiding the greater benefit to the Bloc or other regional parties found in seat-based allocations.

And direct funding of parties also allows for a far wider range of action than resources run through MP offices. Ideally, I'd want to see as much as possible used on maintaining a party apparatus capable of holding a government to account in the general public at all times. But it also allows for a greater degree of political deterrence, as an opposition party can count on some ability to counter a particularly extreme or excessive ad campaign originating with either a government or a governing party.

Now, as with MPs' offices and privately-raised funds, some parties will make better use of that capacity than others. And it may well be that it's worth tying consistent funding to ongoing activity, perhaps requiring that the subsidy be used to maintain party functions between elections rather than being stashed away as election funding. But the possibility that party-based funding might be better used doesn't serve as reason to get rid of it.

In sum, per-vote funding can be defended in principle as a political stabilizer which helps to prevent a ruthless governing party from drowning out opposing messages and doing a disproportionate amount of damage during its term in office. And we could hardly ask for a better example of the need for such a counterweight than the Harper Cons.

I'll leave the more general argument at that for now. But stay tuned for my take on why the NDP has every incentive to follow the above reasoning rather than looking to barter an end to per-vote funding in exchange for a lower contribution limit.

Saturday Morning Links

Assorted reading to start your weekend.

- Chrystia Freeland's piece on the rise of a new global elite is well worth a read, particularly in noting that how the anationality of the rich has led to exploitation of the public everywhere:

the rich of today are also different from the rich of yesterday. Our light-speed, globally connected economy has led to the rise of a new super-elite that consists, to a notable degree, of first- and second-generation wealth. Its members are hardworking, highly educated, jet-setting meritocrats who feel they are the deserving winners of a tough, worldwide economic competition—and many of them, as a result, have an ambivalent attitude toward those of us who didn’t succeed so spectacularly. Perhaps most noteworthy, they are becoming a transglobal community of peers who have more in common with one another than with their countrymen back home. Whether they maintain primary residences in New York or Hong Kong, Moscow or Mumbai, today’s super-rich are increasingly a nation unto themselves.

The rise of the new plutocracy is inextricably connected to two phenomena: the revolution in information technology and the liberalization of global trade. Individual nations have offered their own contributions to income inequality—financial deregulation and upper-bracket tax cuts in the United States; insider privatization in Russia; rent-seeking in regulated industries in India and Mexico. But the shared narrative is that, thanks to globalization and technological innovation, people, money, and ideas travel more freely today than ever before.

- It isn't much surprise that the Cons would think there's no problem setting up a "politically acceptable" donation system linked to tax returns, ensuring that the idea of donating is linked to one of their core fund-raising messages. But to see whether Tom Flanagan actually takes the idea seriously, shouldn't someone ask about setting up the same type of check-off through, say, a mandatory hospital intake form?

- Speaking of which, Thomas Walkom points out that the Cons' health care agenda is far from hidden:

Like Cameron, our prime minister says he is a big supporter of medicare. He brags that he and his family uses standard medicare doctors rather than the pricey executive clinics preferred by some politicians.

But at the same time, Harper’s Conservative Party platform contains important caveats.

It says provinces should have “maximum flexibility” to deliver health care. This is a hint that Conservative governments won’t be overly worried if provinces try to introduce two-tier care.

It also calls for “a balance” between public and private delivery. Currently, virtually all Canadian hospitals are public.

More to the point, it talks of limiting Ottawa’s use of the federal spending power in areas of provincial jurisdiction such as health.

If that platform promise were honored, medicare – a social program based upon Ottawa’s ability to withhold federal funds from provinces that don’t adhere to national standards – wouldn’t exist in its present form.

So, no. Harper’s agenda isn’t hidden -- for health care or anything else. Like Cameron’s, it is all visible. You just have to look. Carefully.

But Walkom actually manages to miss the best example - as the normal Harper spin about supporting the Canada Health Act is thoroughly contradicted by the fact that his government has chosen not to enforce it.

- Finally, while a court challenge to the Cons' decision to overrule the CRTC on telecom ownership might not be the ideal ground to set limits on cabinet power, it's well worth noting how the government's arguments might apply to a ridiculously large range of other situations:

Lawyers for Ottawa argue cabinet’s power under the legislation is largely unbounded. “The Supreme Court has affirmed that the power exercised by [cabinet] under section 12 … is virtually unbounded,” the Attorney-General’s office said in a submission to the federal court.

Which looks to make for just one more example of the Cons claiming that executive discretion trumps actual laws.

Musical interlude

Everything But The Girl - Before Today (Chicane Remix)

On cultures of defeat

It sure was annoying trying to figure out how to enforce the softwood lumber winning streak Canada enjoyed before 2006. Which is why we should be grateful the Cons had the foresight to turn Canada into a perpetual loser.

Just wondering

Before anybody declares that the Libs are positioning themselves "to the left" of the NDP, shouldn't they be expected to explain what about the Libs' stance is (a) different from the NDP's position, and (b) different in a way that is actually further left than the NDP? Because two Lib ads which fully reflect the NDP's position don't seem to me to fit the definition.

Granted, they do reflect that the Libs are trying to position themselves as the main left-wing option for voters. But the message isn't that the NDP is to the right of the Libs, so much as that the Libs hope to talk loud enough to drown out the NDP's genuine left-wing voice. And I'm not sure many Canadians will be fooled if the Libs claim they can make up in noise what they lack in sincerity.

(Edit: fixed typo.)

Top of the class

Now if only there were some progressive opposition leader seen positively enough by Canadians to offer a meaningful contrast to the barely-tolerated Stephen Harper. Say, what's this?

Canadians rate NDP leader Jack Layton higher than any other elected federal party leader according to a popularity index constructed from a recent survey of eligible voters. Based on data provided by Angus Reid, the popularity index generates a single letter score for each leader, with Jack Layton scoring “A”, Conservative Stephen Harper “C+”, Bloc Quebecois leader Gilles Duceppe “D”, and Liberal Michael Ignatieff “F”.
...
Ranked first for seven of nine positive leadership qualities, Jack Layton scores a remarkable 34 out of a possible 36 points (94%). Stephen Harper finishes second overall to Layton with 25 out of 36 (69%). Gilles Duceppe receives 18 out of 36 (50%), while Michael Ignatieff finishes with a 12 out of 36 (33%).

While the index indicates Layton is held in higher regard than his competitors, the size of gap between Layton and the second-place finishers provides additional evidence as to the extent to which he is liked by Canadians. For example, in terms of being “down-to-earth”, Layton is 13 percentage points ahead of second-placed Harper. When it comes to being “honest”, Layton is 16 percentage points ahead of Harper. In terms of being “open”, Layton is 20 percentage points ahead of Ignatieff and a whopping 22 percentage points ahead of Harper and Duceppe when it comes to being “compassionate”.

Friday Morning Corporate Tax Reading

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

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

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

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

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

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

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

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

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

On just sentences

Yes, motive and sincerity matter. Which is why an absolute discharge for a conscientious objector to the census is probably justified.

And which is also why thorough (political) punishment for the disingenuous manipulators making use of such people for their own political ends is also sorely needed.

On disagreement

I try not to spend too much time on reading tea leaves trying to determine the timing of the next federal election. But it's worth correcting the bizarre argument that Jack Layton's focus on seniors should be seen as reason to think the NDP would end up supporting the Cons.

After all, Layton's message is entirely consistent with the NDP's list of policy priorities, which include one issue (pensions) which applies solely to seniors, another (home heating expenses) which can be seen as particularly important for those on fixed incomes, and only one (home retrofitting) which can be seen as primarily applying to other age groups. So Layton's focus on seniors doesn't look to reflect any change from the NDP's starting point.

But it does seem to serve as a thorough rejection of the Cons' list of approved discussion topics, which includes a couple of issues relevant to older workers but absolutely nothing with any effect on seniors.

So if anything, Layton's choice of reference points makes it less likely than before that the NDP will see enough of value to make it worth passing a budget. Which means that it may not be long before the Libs are back in the position of deciding whether they'll support another budget based on nothing more than the desire to avoid an election.

On safe choices

If we needed more evidence that the Cons' constant fearmongering about crime is far less effective among the general public than the political sphere, Angus Reid provides it:

Canadians are feeling secure in their communities, with 57 per cent rating their safety as excellent or good. Yet Canadians don’t appear willing to give credit to the Conservatives and their law-and-order agenda.

Just 14 per cent say they feel safer than they did five years ago while the majority (62 per cent) said they didn’t see a difference.

So a significant majority of Canadians are rightly rejecting the idea that we need to build and pack dozens of new prisons in order to feel safe in our communities. And even of those left over, a majority don't see the Cons as having done any good.

What's all the more remarkable is that the poll comes after a five-year span where the Cons have gone largely unchallenged in bleating constantly about crime to distract from their lack of interest in governing in more important areas. And the fact that the public has proven so resilient in disagreeing with the Cons' dumb-on-crime position should make for reason for the opposition parties to be far more confident in both minimizing the importance of crime compared to the issues Canadians really care about, and strongly countering the Cons' rhetoric on the subject.

Thursday Morning Links

This and that for your Thursday reading...

- Peter Thurley responds to Michael Ignatieff's appearance in Kitchener by pointing out that Lib MPs in the area's seats wouldn't have made a lick of difference thanks to the choices of Ignatieff and previous Lib leaders:

(I)f Ignatieff hopes to take back Kitchener, he’s going to have to account for the fact that his MPs voted alongside Stephen Harper’s Conservative government on 114 different confidence motions, effectively handing Mr. Harper carte blanche to impose his will on Canadians.

The partial privatization of Canada Post, cost thousands of postal workers their jobs. The siphoning of $57 billion from the Employment Insurance fund, away from Canadians when they needed it the most. One of the lowest corporate tax rates in the western world, in a time when the poorest Canadians need goods and services more than ever before.

That’s the Liberal record.

There is one question every voter must ask themselves before they go to the polls in the next election: If Karen Redman had been MP in Kitchener Centre since 2008, would her votes on matters of concern to Canadians have been any different than the votes that Mr. Woodworth cast? And if not, wouldn’t a vote for a New Democrat make more sense?

- And James Travers rightly notes that the trend of increasing inequality has been, and figures to remain, equally strong under Con and Lib governments alike:

Michael Veall, an economics professor at Hamilton’s McMaster University, makes the case this way. “Had the Liberals been in charge of the last few budgets, it’s arguable that the differences today would be very small.”

As Veall agrees, the single most significant point of departure was the politically popular, fiscally suspect Conservative decision to twice trim the GST. Savaged by most economists as regressive, those cuts, coupled with record spending, set the country’s return course for deficits long before the 2008 recession.

It’s also true Conservatives spread the loose change of small tax cuts more widely than program-oriented Liberals. But on the big buck stuff — stimulating the economy, bailing out the auto industry, rebuilding the military and lightening the corporate tax load — Liberals made or would have made similar choices.

Parallel courses lead to more or less the same destination. In Canada’s case, that’s a place where the wealth divide is widening and inequality, with its inherent threats to social cohesion and collective advancement, is rising.

- Which leads to Alex Himelfarb's question as to how increased awareness of inequality and a seldom-questioned free-market ideology can coexist. But given that the level of public focus on inequality is itself a fairly recent development, I'd see reason for hope that we're actually at a turning point when it comes to the economic assumptions that have led to our current gilded age.

- And finally, Eric Sager offers a reminder that the Cons' choice to gut long-form census doesn't need to be a done deal - and that it's well worth reversing:

If you think the fuss is over, think again. Far too many groups require the reliable data that only the long-form census provides. The "save-the-census" website lists more than 350 organizations that have condemned the prime minister's decision.

Those who use data from the long-form census include federal and provincial government departments, municipalities, city planners, health organizations, charities, non-government organizations, academics and many others.
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There is another reason why the fuss isn't over.

The long-form census is required for other surveys. It provides the basis for sampling for the Labour Force Survey (which remains mandatory, by the way). The Labour Force Survey is used to calculate unemployment rates and other essential economic data, and is also the starting point for many other surveys.

This is why economists and business groups have argued that cancelling the long form census will have snowballing negative effects throughout society.

On costly advertising

I don't think I was alone in largely presuming that the Harper Cons were perfectly happy pointing to executive authority as their answer to any attempt at accountability. But could it be that through their latest set of ads, the Cons have inadvertently outed Canada's very own answerable-to-no-one Fourthbranch?

Ya know, there might just be a story there

Not that I disagree with this part of John Ivison's latest:

A large number of the “broken promises” revolve around accountability for which the Conservatives lost their enthusiasm once in power. This is a government that has long believed if Canadians don’t know what the government is doing, they don’t know what it’s doing wrong. Hence, the complaints of Suzanne Legault, the federal information commissioner, that the Access to Information regime is “at rock bottom”, in part because her office cannot order the release of information — another thing the Tories said they would facilitate.

But is there any particular reason why the Cons' belief in keeping Canadians in the dark for their own political protection should be a mid-paragraph throw-in, rather than a major issue for Ivison and others to highlight at every available opportunity?

On technicalities

Stephen Harper:

That doesn’t mean all Canadians agree with this government. Certainly many don’t. But I think most Canadians understand that we’re a government that is – whether they agree with us or not – reasonably confident, focused on real issues, on trying to make the country better, not trying to enrich or glorify ourselves.

Which is technically accurate. After all, most of the ridiculous self-glorification under the Cons has focused on Harper in the singular sense, not his government's members plural.

Wednesday Morning Links

Content goes here.

- Les Whittington nicely summarizes the fiscal consequences of five years of Con government:

More than two decades later, Harper is still pursuing the goal of transforming Canada into a more right-wing nation along the lines envisioned by the likes of Margaret Thatcher and Ronald Reagan.

During five years in power, the Prime Minister and his colleagues have relentlessly anchored their economic strategy on this goal. They have done so by shedding government programs, shifting cash resources to the provinces and, above all, hamstringing Ottawa’s ability to act in future by reducing its financial clout through personal and corporate income tax cuts.

“I said for a long time, and nobody listened to me for the longest time, that my goal was to make conservatism the natural government philosophy of the country,” Harper said in a published interview during the 2008 election campaign. And he believes it’s working, he told reporters.

In practice, this five-year campaign has quietly reshaped the socioeconomic face of the country by altering the way Canadians pay for programs and services funded by the national government.

Altogether, tax cuts decreed by the Conservatives since 2006 will result in foregone federal revenues of $220 billion between 2007 and 2013. Of that, $60 billion in tax savings go to Canadian corporations.

And much of these tax reductions will be paid for with borrowed money. Over the same period, Ottawa will record a cumulative $169 billion deficit.
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The overall impact of the Conservative tax reductions in Canada has been to intensify the inequalities in wealth across society.

According to Toronto research agency Investor Economics, the richest 3.8 per cent of Canadian households controlled 66.6 per cent of all financial wealth (not counting real estate) by 2009, up from 60.6 per cent in 2005 just before the Conservatives came to power.

And the agency predicts the portion of financial wealth controlled by this richest group of Canadians is headed for 70 per cent by 2018.

- Frances Russell leads the response to the Cons' attempted spin about "ethical oil".

- Apparently Thomas Walkom is celebrating five years of Harper government by recycling ideas that became far-fetched within weeks of the Cons taking power. Which isn't to say that looking at PR as a huge part of the price for supporting the Cons didn't make some sense before the Bloc and Libs permanently destroyed any opposition leverage - but at this point the idea couldn't look less plausible.

- Finally, while there's been plenty of talk about the CRTC's move to permit false news, I'm not sure there's been enough attention paid to the standard for enforcement even once a broadcaster fails to clear that low bar:

The CRTC is not empowered to fine or imprison radio or TV executives who breach regulations.

The agency typically tries to persuade broadcasters to change bad behaviour and only takes punitive action — cancelling or refusing to renew broadcast licenses — when a broadcaster systematically and deliberately flouts the regulations.

So even "news" which is both false and damaging under the new test won't figure to result in any consequences if a broadcaster puts on even the slightest show of innocence or inadvertence.

Let me win and there'll be nothing to talk about

Shorter Lorne Gunter:

Most talk about "civility" really only represents one side of a debate about the role of the state wanting to silence the other. But if we just ran everything my way by rendering government irrelevant, then actual civility would be sure to follow.

Tuesday Night Cat Blogging

Cats at play.

On riot control

One followup point on the Cons' latest set of attack ads doesn't seem to have been noted elsewhere, but serves to thoroughly undermine the Cons' attempt to brand themselves:

For example, one ad about the Conservative government's record begins with images of riots -- seemingly connected to the economic troubles in other nations.

"Troubles far away can still reach us at home," says the narrator. "Our economic recovery is still fragile. That's why we can't stop working."

So guess which party has directly threatened to bring exactly the kind of troubles depicted in the ad to Canada if it lost a democratic vote in the House of Commons?

Yes, that's right: Stephen Harper's minions have made it clear that the chaos they claim to be guarding against will be the price of removing them from office. Which should serve as reason to want to get that done at the first opportunity.

Well said

Murray Dobbin discusses how top-end incentive structures affect our broader society:

The CEOs' virtual control of the public policy process which allows for this obscene level of inequality delivers another message: democracy, whose essence is equality, will not be allowed to mess with the "natural" order of things. Samuel Huntington, one of the U.S. elite's longest-running apologists, pined 35 years ago for the good old days: "Truman had been able to govern the country with the co-operation of a relatively small number of Wall Street lawyers and bankers." He pines no longer. How is it any different today as the financial sector, supported by the resource and manufacturing giants, effectively dictate economic policy to whatever government is in power.

There is nothing in this compensation pattern that benefits the corporation itself or the economy more broadly. In fact it is clear that just the opposite is the case: compensating CEOs for the share price (over which they have almost no control) rather than profitability, stability, employee loyalty, long-term growth, modernization and strong capitalization actually weakens the corporation and distorts proper management. And inequality, to which this disparity contributes, damages competiveness, innovation and productivity.
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It is rare for any commentators in the business press to even raise the question as to whether or not any of the CEOs receiving multiple millions in compensation are actually worth it. The pay levels, including bonuses, imply that the CEOs are geniuses -- uniquely responsible for the success of their companies. But there is nothing in management theory or practice to support such a conclusion. One of the most famous management gurus, Peter Drucker, who conducted a ground-breaking study of General Motors, stated: "No institution can possibly survive if it needs geniuses or supermen to manage it. It must be organized in such a way as to be able to get along under leadership composed of average human beings. No institution has solved the problem of leadership... unless it gives the leader a sense of duty and a sense of mutual loyalty between him and his associates...."

That "sense of mutual loyalty" has long since been tossed in the dust bin of business history. Loyalty now has to be paid for in the millions.