Saturday Afternoon Links

Assorted material for your weekend reading.

- Declan's summary of a paper on the structural causes of inequality by Michael Kumhof and Romain Ranciere is well worth a read:

(The authors) posit a shift in bargaining power (think decline in unionization rates, offshoring of jobs, etc.) from a working class (95% of the population that earns its money from wages) to an investor class (5% of the population that owns most of the capital) and then assume that the extra revenue coming to the investor class as a result of their improved bargaining power is lent back to the workers. This allows the workers to maintain their relative share of consumption, and provides an additional source of income for the investor class.

Over time, the debt level of the working class increases and the vulnerability of the system to a debt crisis increases along with it.

The authors find that widespread defaults during a crisis will help by reducing debt levels of the workers, but because the underlying cause is left unaddressed (the lack of bargaining power for the workers), this is a weak and short-lived solution, with crises repeating regularly. The quicker, more sustainable solution is measures to restore the bargaining power of the workers so that the incentive for workers to borrow and investors to lend is removed or at least reduced.

- And Ralph Surette joins the crowd looking to get started in rebalancing the relative power of the public and the corporate elite:

(M)any a credulous, manipulated or ideologically driven government has ruined its public finances by chowing down on neo-con propaganda about tax cuts that date back to the Reagan-Thatcher era. New Brunswick is one. So are the U.S and Ireland, to name a few. Need we all go over the cliff?

But this is not just about the best way to stimulate the economy. It’s about whom our governments serve — the public interest of democratic nations, or that of a swiftly rising global aristocracy of money. This new nobility’s power and reach was revealed in the U.S. recently as even the outrageous Bush tax cuts couldn’t be allowed to expire, thanks to a "grassroots" political movement actually funded by right-wing billionaires.
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In terms of the dynamics of the upcoming budget and whether the opposition should or will defeat the government on it, that falls into the ambiguous muddle of our minority politics. The best solution for the moment would be for the Harper government to back off and suspend the cuts. But good luck with that. According to the latest news, the Conservatives are gearing up to spend $6.5 million to promote their tax cuts.

The polls tell us that as many as nine in 10 Canadians believe these cuts have gone far enough, if not too far. However, if this view does not move relative support for the parties, leaving the likelihood of a result much as we have now, we have a failure of public will, and the fractured opposition will have no choice but to muddle through as usual. If Harper and his new world order are allowed a free romp on this one, it will be another sad note attached to the state of our democracy.

- And even one of the contributors to Worthwhile Canadian Initiative notes the role corporate taxes can play in minimizing some of the disconnect between corporate interests and public ones.

- Interestingly, the latest Canada/U.S. border security agreement (or at least the council on regulatory issues to the extent it actually turns out as advertised) seems to be more reasonable than most similar announcements, as it actually involves addressing specific identified trade irritants rather than simply assuming that all government measures ought to be outlawed to the extent they might affect profit-making opportunities. But Thomas Walkom rightly notes why it may mean less than the Cons want us to believe - even if he probably overstates the case:

Integrated production — indeed, globalization itself — depends on the ability of companies to ship commodities cheaply over long distances.

In the heyday of NAFTA, energy prices were low enough to allow this. As long as oil was relatively cheap, it made economic sense to truck auto parts from all over North America for assembly in Windsor.

But as economist Jeff Rubin and others have pointed out, in a world of permanently high oil prices this logic no longer holds.

In this new world, it makes more sense to grow food close to where it is eaten and to produce commodities near their end users.

Countries where labour costs are strikingly low, such as China, will still be able to overcome the energy cost barrier.

But in those like Canada and the U.S., where labour costs are roughly similar, long-distance, integrated production is destined to become a thing of the past.

- And finally, Tabatha Southey provides the definitive take on usage based billing:

Overage charges amount to a disincentive to using the Internet. The charges that would been levied once the user surpassed his or her 25-gigabyte data-transfer cap are essentially a “sin tax” on Internet usage – and the problem with that is we’re all about to become big-time sinners.

We all need to become big sinners and e-gluttons at home and in our business, in fact, or other countries without these sin taxes will trounce us while we’re “only checking our e-mail” like Internet puritans. If we really don’t have the infrastructure to support more sinning, then we need to get on that right now.

Telecoms, I don’t think the answer is scapegoating independent ISPs, with their 3-per-cent market share, for your apparent inability to deliver the product you sell. The number of people checking their e-mail and walking away is dwindling. Soon, just using the Internet to check your e-mail will be like turning on the radio only to catch the time signal, as if you were saving up radio for a rainy day.

Either the major telecoms think that Canadians must sharply curtail their Internet use because it’s “everyone panic!” time in Canada – in which case we’re essentially telling the world that we have the equivalent of tech breadlines – or we’re right to be going back to the drawing board.

[Edit: fixed wording.]

Worth an answer

Not that we expect much more from Jane Taber. But her fluff piece on Jenni Byrne manages to break what should be a serious story while managing to completely miss its significance:

But it was her stint at the PMO as director of issues management that cemented her reputation as tough but effective.

The job involved daily damage control; she started at 6:30 a.m. with a conference call to ministerial staffers, gauging the issues, troubleshooting and helping to frame the government’s response.

“She turned issues management into a tiger operation,” says a former colleague.

A senior staffer recalls a conference call during the H1N1 crisis when Ms. Byrne, unhappy with how it was being handled, ordered a plane that was heading from Mexico be turned around after discovering there was no health officer to screen for the virus at the airport.

The whole time the staffer said he was thinking, “Can she do that?”

Now, if I'm missing something that would give political staff in the PMO the authority to make decisions about air traffic control, I'm curious to hear what it is.

But absent some indication to the contrary, the answer to the staffer's question would seem to be a glaring "no". And if Byrne's appointment serves as yet another example of the Cons rewarding Harper loyalists who couldn't care less what the law says where it interferes with their desire to exercise total control, then surely that signals a need to dig much deeper into what Byrne and others have done to usurp the role of those who actually have legal authority and responsibility.

On traditional values

Jeffrey Simpson is the latest to take note of the Harper Cons' complete lack of impact on Canadian public opinion:

There have been some drifts in public attitudes, mostly by Canadians becoming more socially liberal. Focus Canada finds Canadians much more tolerant or supportive of gay marriage and abortion – and less favourable to capital punishment – than a decade or two ago.

On crime – the Harper government’s big thrust – Canadians are way offside with the government’s approach. Eighty-two per cent of Canadians don’t fear crime in their neighbourhood, and 77 per cent aren’t afraid to walk there at night.

By a whopping 58 per cent to 36 per cent, Canadians prefer prevention programs and education over tougher punishments as a way to combat crime.

And perhaps most importantly:

Focus Canada’s survey finds Canadians’ top spending priorities to be education, health care, elderly programs, the environment and reducing child poverty. At the bottom are foreign aid, justice, defence, domestic security and arts and culture. The ordering of these priorities hasn’t changed much in two decades, except that support for defence spending – which soared with the Afghan engagement – has returned to the low levels of the 1990s.

Conservative-minded types don’t much like talking about income inequalities, but Canadians think they exist and are widening. A staggering 88 per cent believe the gap between rich and poor has widened in the past decade, and 81 per cent believe the government should reduce the gap.

Needless to say, the latter numbers are particularly significant since they suggest that even a substantial number of the Cons' usual 30% base see inequality as a real issue that needs to be dealt with - even after five years of the Cons using their position in government to claim nothing can or should be done about it. And while Harper has mostly succeeded in getting Canadians to look at factors other than what priorities they most value in evaluating their political options, there's every reason to think that a closer link between the two would see the Cons summarily turfed.

Musical interlude

Rachel Loy - Big Sky (Pierre Pienaar Remix)

Perfectly logical

Of course the Cons can't reveal anything about their planned U.S. security deal to MPs from other parties.

After all, not only would they sacrifice the "they're criticizing it without even seeing it" talking point by doing so, but they'd also enable rival MPs to oppose the plan based on better information. And what right does a mere opposition party have to do that sort of thing?

Friday Afternoon Links

Content goes here.

- Robert Bothwell puts together one of the better descriptions I've seen of the Harper Cons, with a particular focus on the insignificance of their cabinet:

Harper ministers, it is true, have business cards, official cars, and even offices to sit in, but it is a real question whether they cast shadows or have a reflection in a mirror. In their offices sit appointees placed by the Prime Minister’s Office — official minders, perhaps reminiscent of the Soviet commissars who were assigned to inspire the troops and keep an eye on the generals.
...
The overall impression of the Harper cabinet is that its abilities are depressingly low. Consider Ontario’s John Baird, who serves as the government’s attack-buffoon, a special role that requires him to froth and fret in parliamentary committees. The effect is vaguely reminiscent of one of the tackier scenes in the movie Animal House.

Then there is Tony Clement, who after presiding over an explosion of subsidy and public works in his home riding in Muskoka, was required to go before the media and justify how the government was destroying the credibility of the Canadian census. Norman Mailer once wrote of a speech by Richard Nixon that watching it was like watching a man violate himself in public; the same may be said of Clement.
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If Pearson’s era was a time of hope, Harper’s is a time of fear. Pearson was, and remained, the embodiment of that hope. Harper, regrettably, is its negation.

- Embassy nicely covers multiple sides of the current tax-cut debate. But I'm not sure there's any escaping the point made by Andrew Jackson:

(T)he corporations that did do well during the recession—in Canada, the commodities and financial sectors—are poised to make the biggest profits thanks to corporate tax cuts, but won't necessarily turn those profits into new jobs and investments.

"Everybody has this image in mind that cuts in corporate tax rates are going to result in investment in machinery and equipment," said Andrew Jackson, senior economist with the Canadian Labour Congress. But "a very large share of corporate profits in Canada are, in fact, earned in the resource sector, which is booming, and also in the financial sector, where rates of return really don't have much to do with real investment in the economy."

Mr. Jackson argues that most economic studies show business investment is related to the rate of growth of demand rather than capital costs like corporate taxes.

- The absurdity at Rights and Democracy doesn't figure to end anytime soon. But fortunately, neither does Paul Wells' coverage:

The audit shows, as Graeme Hamilton wrote in the National Post, that poor management at the organization “predated the presidency of Rémy Beauregard” and that he had “introduced changes to better control spending soon after arriving as president in 2008.” In short, “An organization whose annual budget of $11 million is supposed to defend human rights around the world has spent $253,000″—the cost of the untendered Deloitte contract—”to learn that its suspicions about Mr. Beauregard were unfounded.”

How unfounded? Gauthier’s main suspicion when he hired Deloitte, the audit report stated, was that R&D was sending $30,000 a month in clandestine payments to the agency’s Geneva office. Not only did Deloitte find no proof for this explosive accusation, it found no evidence for it. It was fantasy.
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I would like nothing better (than to put the crisis behind us). But Lawrence Cannon will not let that happen because he wants the architects of this disaster to keep running the wreckage. Jacques Gauthier’s hunches and goose chases cost Canadian taxpayers $1 million last year. One-third of the R&D staff has quit. The organization has said no word of warning or celebration during the astonishing events in Tunisia and Egypt. Saad Eddin Ibrahim still lists his R&D affiliation in his bio. It used to be something to be proud of.

- Finally, Bill Curry and Campbell Clark document the latest example of tax expenses working for Conservatives rather than Canadians:

The Harper government is spending $6.5-million of public funds to promote its tax-cutting record in an advertising campaign centred on what is shaping up as a key election issue.
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Some of the tax cuts are so small, like the $4-million spent each year on the Tradespersons’ Tools Deduction, that the cost of advertising the tax cut is actually more than what the government loses to offer the tax cut.

On minimal impact

I've noted before that despite having the resources of the federal government at their disposal for over five years, the Harper Cons haven't done much to actually change Canadians' minds when it comes to issues and values. And Dan Gardner confirms just how little Harper has done to convince anybody to agree with his conservative philosophy:

We all know the prime minister's take on taxes. "I don't believe that any taxes are good taxes," he famously said. Do growing numbers of Canadians agree? Hardly. In 2005, 72 per cent of Canadians said taxes "are mostly good," while 22 per cent said they're "mostly bad," and 5 per cent said "both" or "it depends." In 2010, the numbers were essentially identical.
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Between 2006 and 2008, support for spending more on "liberal" priorities like child poverty, education, health, and job creation was high and steady. Between 2008 and 2010, it did tend to drop modestly. Support for more education spending, for example, went from 77 to 70 per cent.

Is that evidence of a conservative shift? I doubt it. In 2008, the economy tanked and the budget went into the red for the first time in more than a decade. A little retrenchment was to be expected. The same pattern can be seen in support for conservative spending priorities, after all.

And in absolute terms, conservative spending priorities have much less support.

In 2006, 39 per cent of Canadians said the government should spend more on the justice system; in 2010, only 24 per cent did. In 2006, 44 per cent of Canadians wanted more money spent on the military; in 2010, that was down to 26 per cent. In 2006, 38 per cent of Canadians wanted more money spent on domestic security; in 2010, 28 per cent did.

On the entire list, only one budget item saw its support grow significantly (from 24 per cent to 30 per cent) during the five years of the Harper government: Arts and culture.
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For a rational person, evidence determines belief, not the other way around. And the evidence to date suggests Harper has failed to implement most of the conservative agenda, failed to push the political spectrum to the right, and failed to make Canadians more conservative.

He has done institutional damage, true, but that can be repaired. If Stephen Harper were to quit today, he would be remembered as a nasty but inconsequential prime minister.

On open questions

Carol Goar raises a few of the types of questions that seem to have been ignored far too long in the race to slash corporate taxes. But let's highlight the last couple in particular:

• What proof can (Jim Flaherty) provide that corporate tax cuts make Canadian companies more competitive? They could well have the opposite effect. Instead of hustling for business, investing in research, or capitalizing on Canadian innovations, firms can sit back and wait for the next instalment of tax relief to undercut their international rivals.

• Why is it good economic policy to shift an ever-growing portion of the tax burden from businesses (many of which are highly profitable) to individuals (many of whom are struggling to get back on their feet after the recession)?

For most citizens, corporate tax cuts are not a top-of-the mind issue.

But as a litmus test of their government’s values, its candour and its willingness to balance the needs of all Canadians, they work remarkably well.

Just so we're clear...

No, the question shouldn't be who started talking about the CPP and retirement security first - even if the answer is the NDP.

Instead, there's a real policy difference between a party which is working to substantially improve the lot of seniors generally, and one whose plan only benefits those who have discretionary money to burn.

In fact, the most important difference between the Libs' and Cons' respective plans for selective coverage is that the Cons have chosen to toss an extra cut to the finance sector in the process. So the NDP's platform stands apart in actually meeting the public demand for increased standard CPP benefits.

And with that in mind, it's well worth paying far more attention to who has the right answer, and far less to who started asking the question first.

On advantageous choices

There's plenty to quibble with in James Travers' latest. But the most important point seems to be an assumption Travers (rightly) makes about the U.S. which seldom seems to be considered true in Canada:

Living next door to the elephant makes the mouse nervous. Long and sometimes bitter experience — remember P.E.I. potatoes and softwood lumber? — teach that Americans are relentless, as they should be, in pursuing national advantage.

Which would seem to be an entirely reasonable expectation from Canada's governments at all levels as well. But from softwood lumber to fighter jets, the Harper government's pattern in dealing with the U.S. in particular is one of signing stunningly bad deals for the sake of being able to claim to have done something, then forcing Canada to accept the terms and costs. And at all levels, the current discourse tends to assume far too often that governments' interactions with businesses and peers should be based on catering to elite whims rather than looking for possible public advantage.

Of course, there's ample room for debate as to where that advantage may lie. But given the recognition that our trading partners and other actors will rightly look to protect and develop their own interests, it's long past time for us to demand that our governments do the same on our behalf.

Thursday Morning Links

This and that for your Thursday.

- Pogge rightly notes that the cover-up coalition of the Cons, Libs and Bloc has successfully managed to ensure that the Afghanistan documents ordered to be produced by Parliament remain safely buried - and points out whose position is looking more and more astute as a result:

May I once again commend Jack Layton and the New Democrats for walking away from this bit of political theatre. After the supposedly historic ruling by the Speaker in support of parliamentary supremacy, the Libs and the Bloc have joined with the Conservatives in turning the whole thing into a farce.

- Abacus' latest message poll looks to provide yet more evidence that the Cons' party line is sounding less and less plausible among the general public.

- Presumably the Cons' MPs are under even an even tighter muzzle than usual (to the extent that's possible). But if a story is going to be based on nothing but finding "signs of rattled nerves" in the absence of any evidence, would it really be that tough to get somebody to talk about defending a vulnerable Con seat as well rather than referring only to opposition parties?

- Finally, the Cons' decision to respond to public pressure by declaring that the CRTC's decision to allow large ISPs to impose usage-based billing on their competitors will be overturned is undoubtedly for the best. But before the issue fades away, it's well worth noting the hilarity in seeing supposed free marketeers like the National Post editorial board claim without a trace of irony that the fact that large companies have traditionally billed in a certain way should serve as evidence that no other options should be available.

[Edit: fixed wording.]

On exceptional outcomes

It's great news that the NDP's efforts to make AIDS drugs more accessible in Africa have received a surprising reprieve in the House of Commons, as federal MPs granted unanimous consent to allow Paul Dewar to assume sponsorship of a bill introduced by Judy Wasylycia-Leis.

But it's also worth noting how the obvious pluses to such a simple exception make the usual rules of Ottawa look even more pointless and petty than they might otherwise. And I'd be curious to know when the last time was that anything with the potential to produce substantive policy results was agreed to by all parties as a matter of comity (rather than, say, the political posturing involved in the legislation to override the regulatory decision to shut down the Chalk River reactor).

On strong opinions

The CUPE/Environics poll showing massive public support for improvements to the Canada Pension Plan has received a reasonable amount of of attention. But it's well worth highlighting exactly what more than three-quarters of respondents agreed with:

There has been talk about expanding the Canada Pension Plan [RRQ/QPP for Quebec respondents] to help people save more for retirement. The CPP covers almost all workers. The amount that individual workers and employers pay into the plan would increase slowly over the next several years to provide higher retirement benefits from the CPP. Generally speaking do you support or oppose increasing Canada Pension Plan benefits. Is that strongly or somewhat?

Total support: 76%

In other words, the poll didn't phrase support for an expanded CPP in terms of voluntary individual supplements or other half-measures. Instead, it directly asked about improved benefits for all CPP recipients, and made explicit note of the resulting need to pay more into the plan. But even with that cost made clear, an overwhelming majority of respondents viewed the idea positively.

So the poll's results are actually even stronger than they look at first glance. And both the Cons and Libs would be well served to take note that Canadians are so strongly in favour of making sure that all CPP recipients enjoy a more secure retirement.

On protected sources

And in keeping with the media commentary theme, Jane Taber unveils the worst excuse for anonymity I've ever heard:

A month ago, a $500-a-head fundraiser to help John Baird’s re-election efforts noted that “in all likelihood a federal election will be called in 2011.”

In a few short weeks, however, that rhetoric has been ramped up considerably. A second email invitation sent around this week suggests the enemy is now at the gate.
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A recipient of the invite, who asked to remain anonymous, noted the change in tone: “Two weeks ago it’s to help John prepare now it’s to come celebrate or vilify the nasty coalition.”

Which raises the question: who precisely is so afraid of not being invited to John Baird's fund-raisers as to need media protection?

Telling it like it is

Kudos to the CP's Bruce Cheadle in meeting the Cons' attempt to turn the Canada Revenue Agency into part of their advertising structure with the right response:

In response to written questions about why tax changes from 2006 were linked to the 2009 budget for an ad running in 2011, the ostensibly non-partisan revenue agency provided bullet-point responses that began with boilerplate boosterism:

"The Government of Canada is focused on the economy and is putting the needs of Canadians first."

The agency said "a number of tax measures" were introduced in 2009, and provided a link to the action plan web site. Of the CRA ad campaign's several stated priorities, just one measure — a first-time homebuyers tax credit — came about as part of the recession-fighting budget.

Wednesday Morning Links

Miscellaneous midweek material.

- Erin nicely responds to Stephen Gordon's otherwise reasonable defence of modeling as a basis for policy-making by pointing out what's obviously missing from the models which call for constant corporate tax slashing:

I think that poorly-designed models also afflict tax policy, and WCI has recently showcased some important examples. Stephen has been promoting a conventional model of corporate taxes, which assumes that they apply to all operating profits.

This model ignores interest deductibility, Canada’s dividend tax credit, and the US government’s worldwide taxation of American corporations. These features mean that the minimum returns required to justify marginal investments are generally unaffected by Canada’s corporate tax rate.

Another recent WCI post repeats the model of sales-tax harmonization that seems to have taken over the minds of most mainstream Canadian economists. In this model, the HST is about removing sales tax from machinery and equipment to boost investment.

In fact, the previous Provincial Sales Tax already exempted much machinery and equipment. Most of the HST’s input tax credits will actually be for construction materials and intermediate goods.

On the whole, mainstream economists are too quick to discard institutional details in favour of abstract models. The institutional details often are, or should be, “the main features of interest.”

- Trish Hennessy's numbers on inequality in Canada are well worth a look generally. But the most important point is how small a number is required to make a significant dent in the problem:

• 17th
Canada ranks 17 out of 24 OECD nations on children's material well-being. (Source)

• One in 10
Canadian children live in poverty. One in four Aboriginal children live in poverty. (Source)

A solution
Shifting 1 per cent of Canadians' collective after-tax income to the one in 10 Canadians living in low income would eliminate poverty in Canada.

- Embassy reports on the misdirection involved in the Cons' efforts to conjure up some supposed economic benefits out of throwing tens of billions of dollars into F-35s. But I have to wonder about another set of links between government messaging and business interests: is it possible that the Cons are doing again what they did in forcing their softwood lumber sellout on the forestry industry, and signalling that anybody who doesn't play along can expect to be left out no matter what planes are procured in the future?

- Finally, Lawrence Martin rightly questions the direction of Canada's democratic system:

Owing to brutal partisanship, Parliament’s committee system has become increasingly dysfunctional. Watchdog groups such as the Integrity Commissioner’s Office have been turned into lapdogs. The public service’s policy development function, once significant, has been blunted. An unprecedented government-wide vetting system instituted by the Tories has stifled free speech.

In our democracy, those who dare speak out – think diplomat Richard Colvin and the Afghan detainees’ controversy – risk paying a big price. In the House of Commons, attempts to reform Question Period get nowhere. At elections, voter turnout tumbles. Our supposedly independent boards and tribunals are stuffed with partisans. Agency heads who don’t fall into line are fired or intimidated.

A system of total control by the Prime Minister’s Office, long in the making by both main parties, has come to be accepted. At the party level, an antiquated system of backroom bossism rules the Conservatives. Members either fall into line or risk going the way of Helena Guergis.

These are only some of the ways in which our system is getting worse instead of better. There are more. So while we watch the events in North Africa and the Middle East and hope democracy takes hold there as it did in the Warsaw Pact countries, we should also give a thought to the functioning of our own democratic system.

[Update: corrected Martin's name as per comments.]

No coincidence

Is there much doubt that the attitude of entitlement and unaccountability from Stephen Harper's Senate cronies such as Larry Smith and Don Plett has something to do with this?

Canadian senators were already under scrutiny on their first day back from winter break, with the results of a new poll indicating one-third of Canadians want to see the Senate abolished -- an increase of about 27 per cent since 2007, the last time the question was asked.

Tuesday Night Cat Blogging

Cuddling cats.

Pop Quiz

Alice tallies up the 2010 fund-raising numbers for Canada's political parties. Which means it's time for another round of Spot the Moment where Coalition Fearmongering Permanently Fired Up the Cons' Fund-Raising Base:

Tuesday Morning Links

This and that for your Tuesday reading.

- Duncan Cameron nicely sums up the choice again facing Michael Ignatieff:

The best the Liberal leader can hope for is that the combined efforts of the three opposition parties will result in the defeat of enough Conservatives, that the NDP and the Liberals together could form a government by defeating the Conservatives on the speech from the throne following the election. A coalition government with more combined Liberals and NDP than Conservatives is what Harper fears most, and not only because he would he no longer be prime minister. After losing office, his tenure as Conservative party leader would likely end as well.

Upon becoming Liberal leader, Ignatieff rejected the option of forming a government with the NDP. If he wants to avoid a career change, Ignatieff has to understand that he will only become prime minister as leader of a coalition government, and act accordingly.

- But as Brian Topp notes in commenting on the Libs' about-faces on corporate taxes, pensions and climate change, the problem may be that Ignatieff is underestimating the general public at his own peril:

What are we to make of Mr. Ignatieff’s sudden embrace of Mr. Layton’s policies – policies he went to most extraordinary lengths to prevent from being implemented, while voting only months ago to support their opposites under Mr. Harper?

The answer is that Mr. Ignatieff, like many of his sort, apparently holds the people of Canada in contempt.

Mr. Ignatieff therefore feels safe placing a bet that most Canadians don’t follow or understand federal politics or policies. And that he therefore won’t be held accountable for his record as a principal opponent of the policies he now passionately advocates – for the moment – and as the principal enabler of Conservative policies that pull in the precisely opposite direction.

- Meanwhile, Alice crunches the numbers to determine what Canadian political parties spend on fund-raising, noting in particular how much the Cons spend to rack up their superficially-impressive totals (which are of course largely subject to public reimbursement):

The Conservatives had 112,184 contributors in 2008, and 101,385 of them in 2009. This means they spent $71.07 per contributor in 2009, up from $64.67 in 2008, to raise on average $175-190/head. And it's the gross contributions that get the tax credit. Wow.

- The Star makes the case as to why any link between corporate tax cuts and economic outcomes is tenuous at best:

(A)ll things being equal businesses might well locate where taxes are lowest. But all things aren’t equal and never have been. Corporations set down roots for all sorts of reasons and most have little to do with tax levels. They come to Canada because of our highly trained workforce, access to major markets, sophisticated communications, lack of corruption, quality social services and more.

If corporate taxes were all that mattered, Ireland with its rate of 12.5 per cent would still be booming. No one would do business in Scandinavia, where taxes remain high. In the United States, where corporate taxes vary enormously from state to state, companies would be flocking to zero-tax areas like Nevada and Wyoming. Curiously, they aren’t.

It’s also not clear that lower corporate taxes necessarily lead to more jobs. The evidence on that is decidedly mixed. Other measures, such as spending on infrastructure or cuts to personal income taxes, may help create as many or more jobs.

- And finally, Murray Dobbin rightly points out that the current focus on corporate taxes should provide a golden opportunity for the NDP:

Here is the opening the NDP could use to take on the issue those close to the party know they want to lead on: the need for tax increases to meet the revenue needs for all the things Canadians say they want. The caucus is eager but the party staff grows peaky at the mere thought -- understandably. There are, so far, no civil society voices engaging the public on the subject, and legitimizing it, a fact that will go down in history as the social and labour movements' biggest failure of the era.

But now it's out there. Taxes are the price we pay for a civilized society -- and people know it. When asked if they could be assured revenue from a tax increase would go to any number of public goods -- education, childcare, reducing poverty -- two-thirds to three-quarters of Canadians say they would be willing to pay higher taxes. Its one of the many contradictions facing progressive politicians: people no longer trust government as it is, but know the importance of government as it could be.

The latter is the base upon which the NDP must build if it is to make a breakthrough in the next election -- which it must achieve if it is going to confront the intransigent Michael Ignatieff with the need for an accord or coalition government.

On trivialities

Not that there should have been any doubt. But Statistics Canada's top economic analyst confirms the obvious about how much identifiable effect corporate tax slashing actually figures to have:

Philip Cross’s comments speak to the debate raging between the Conservatives and the Liberals: Are corporate tax cuts an elixir for investment, growth and jobs, as the Conservatives claim?

Or are they a drain on the fiscal purse at a time when there are better ways to create jobs, as the Liberals argue?

"A couple of billion dollars (of savings from tax cuts) is a drop in the bucket of corporate income here," Cross said in an interview. "It’s trivial."

Of course, it's well worth noting that the results of some of the other possible uses for a fraction of the tax cut amount - say, lifting every senior in the country out of poverty through the Guaranteed Income Supplement - would be far from trivial for those involved. And it may take an awful lot of publicly-funded ads for the Cons to try to make the case that we should fund the minor benefit for those who need it least over a major boost for those who need it most.

Even more shocking

Unaccountable partisan hacks proclaim their entitlement to continue unaccountable partisan hackery on your dime:

Senators have given themselves the right to pepper the country with mailings attacking opposition parties as long as they refrain from attacking each other, QMI Agency has learned.
...
“This is insane," NDP MP Peter Stoffer said. “They are unaccountable and unelected and they can use taxpayers dollars to attack … (NDP Leader) Jack Layton?”

The House of Commons stopped MPs last spring from sending highly partisan “garbage” to other MPs’ ridings and the Senate should do the same, Stoffer urged.
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The Conservative-dominated Senate committee clarified the rules around mailings after receiving complaints Tory senators Bob Runciman and Don Plett had sent newsletters to Liberal ridings in their home province attacking the party for being soft on crime.

Now, it's somewhat surprising that Stephen Harper's patronage-laden majority bothered to hold the vote rather than simply daring anybody to stop them. But can there be a more definitive statement that the Cons are determined to abuse their publicly-funded sinecures in the Senate as thoroughly as possible?

Shocking

Apparently needlessly locking people up is a waste of money. Who would ever have suspected?

On low points

I stand corrected on the question of whether Stephen Harper has ever been presented with any threat to his leadership of the Cons. But Paul Wells and John Geddes' latest revelations about Harper's response to the 2008 coalition only look to reinforce the view that it'll take the removal of the Cons from office to lead to Harper's ouster:

Haltingly, Prentice laid out the ops committee’s consensus: Harper should ask the governor general to prorogue Parliament, suspending the legislative session almost before it had begun. Only three days earlier, Harper had promised Canadians he would put his government to a confidence vote that would determine its fate. Prorogation would cancel that vote. It was for the good of the country, Prentice said. Give everyone a chance to cool down.

Harper was tempted by another path. Let them win, he said, with no great conviction. Let Stéphane Dion try to run the country, with Jack Layton calling the shots and Gilles Duceppe sitting in judgment over the whole mess. It’ll fall apart in six months. We’ll pick up the pieces in the next election. Come back stronger than ever.

James Moore cut in. Prime Minister, he said, you can’t be sure it will work that way. They’ll be so terrified of facing the voters they’ll cling to one another for a long time. They may even make this thing work. You can’t know.

The Prime Minister was unconvinced. It fell to Jay Hill to make the strongest appeal. “Prime Minister,” he said quietly, “If you give up power now, I don’t know if you can survive as leader of the Conservative Party of Canada.”

It is hard to pick a highlight in Stephen Harper’s five years as Prime Minister, but that’s the low point right there.

Out of character

Jim Flaherty is continuing to try to narrow any discussion about the budget, presumably to avoid having the opposition's proposals discussed while helping the Cons to claim credit for more interest in helping workers than they deserve. But let's take a closer look at what Flaherty is really saying:

Mr. Flaherty, in a broadcast interview from the World Economic Forum in Davos, Switzerland, offered a taste of what’s ahead this week as Parliament resumes Monday after a nearly two-month break. Squabbling over corporate tax cuts, approved by Parliament in 2007 but now a focal point of Liberal opposition, is expected to dominate debate in the buildup to the 2011 budget, which the Minister said would be tabled some time in March.

Mr. Flaherty opened the door to compromise with the opposition parties on initiatives such as the retraining of older workers laid off from industries undergoing deep restructurings, such as the auto and forest sectors. The minority Conservative government only needs the support from one of the parties — such as the NDP or Bloc Quebecois — to get the budget passed.

So at base, Flaherty considers it a matter of "compromise" for a Con budget to contain even the type of minimal retraining assistance that he's willing to countenance in order to secure an opposition party's support. Which can only suggest by implication that an uncompromised Conservative position would involve nothing of the sort.

In other words, left to their own devices - say, after winning a majority - the Cons themselves wouldn't see any more need to do anything for older workers than they seem to for seniors based on the NDP's requests. Which means that even the limited range of workers who may see potential for some small amount of relief in the Cons' budget should be highly wary of rewarding Flaherty for anything they get.

On defined options

The inevitable effect of Stephen Harper's "majority or coalition" framing of Canadian voters' choices looks to be sinking in even among Con supporters. Here's Bob Plamondon:

Stephen Harper is warning us that, unless we elect a majority Conservative government at the next opportunity, a coalition of the other parties in the House of Commons will take over, virtually overnight. “They will deny it every day of the campaign,” the Prime Minister predicts. “The day after, they will do it.”

But by telling Canadians that a coalition represents a serious threat, he also gives it legitimacy. And because a coalition may be the only way he can be defeated, Mr. Harper should be careful about tempting his opponents.
...
(H)aving warned Canadians that he needs a majority to block a coalition, Mr. Harper would be in no position to cry foul if he ends up on the opposition benches, even if his party wins the most seats next time out.

Mind you, Plamondon seems a bit too eager to allow Harper to dictate how legitimate a coalition of other parties can be. And he leaves out the question of whether the idea of cooperation may itself be seen as a positive, particularly compared to the Cons' one-man rule.

But it's absolutely correct to note that Harper's message implicitly allows for the prospect of a coalition in the very near future. And any statements now which portray it as an inevitable outcome will be awfully tough to take back if Harper once again ends up having to fight to hold onto power in the face of a coalition alternative.

On habit forming

Elections Canada is looking for ways to target younger voters in order to get them participating when they have the chance. But I have to wonder whether the obvious answer is one which involves actually making the political scene accessible sooner:

While young voters are more likely to vote as they get older, “They are beginning at such a low level of participation that overall turnout can only be expected to decline,” says a 2009 paper commissioned by Elections Canada, the agency that conducts federal elections and referendums.

“That’s a major concern,” says Elections Canada spokesman John Enright. “Surveys are showing us that if we don’t capture them and get them interested and engaged at their first opportunity to vote, we’ve likely lost them forever. They’re going to remain disengaged throughout their lives."

Of course, as matters stand the voting age coincides with an age where it figures to be most difficult to reach young Canadians through any centralized messaging effort. In contrast, the few years before the current voting window make for what's probably the best time to introduce new voters through a consistent process, as for the vast majority of teens it combines at least some level of awareness and education about politics with a handy common voting location.

Which isn't to say that lowering the voting age to allow for an election cycle before voters turn 18 will necessarily help population-wide voting percentages. But if a major part of the current issue is that young Canadians aren't getting in the habit of voting, then wouldn't it make sense to set a voting age where it's easier to help establish some positive habits instead?

Sunday Afternoon Links

A leisurely stroll through the intertubes to end your weekend.

- Mark Thoma raises the question of whether inequality itself may serve as a barrier to long-term growth:

We’ve given the market economy 40 years to solve the problem of growing inequality, and the result has been even more inequality. Markets do not appear to be able to solve this problem on their own, at least not in any reasonable time frame. Some people say education is the answer, but we have been trying to reform education for decades, yet the problems remain. The idea that a fix for education is just around the corner is wishful thinking.

If we want to preserve a growing and socially healthy economy, and avoid moving to lower growth points on the inequality curve, then we will need to do much more redistribution of income than we have done over the last several decades. We must ensure that the rising economic tide lifts all boats, not just the yachts.

- And it looks like the public is starting to catch on. Though I do have to wonder if the results would have been any different if there had been a meaningful debate over, say, the previous decade's worth of cuts.

- Meanwhile, Erin takes a closer look at Canada's corporate tax revenues since the Libs started slashing rates in the early 2000s, and finds no apparent link between lowered rates and any desirable results:

CIT revenues were buoyant through 2008, despite rate reductions, because corporate profits surged. But CIT cuts would have paid for themselves only if they caused this surge.

Did lower rates prompt multinationals to report more of their profits in Canada? If so, the largest inflows would have occurred when rates changed. In reality, profits increased as much during the three-year period when the general rate was stable (+32.7 billion between 2004 and 2007) as during the four-year period when it fell (+32.2 billion between 2000 and 2004).
...
CIT cuts did not cause much, if any, of the increase in pre-tax profits before the economic crisis. But they have significantly reduced the share of profits collected as public revenue. Therefore, the fiscal cost of CIT cuts is substantial.

- And speaking of wasted public resources, who wants to defend the argument that there's any benefit to the public in the Cons' latest round of parliamentary secretary appointments?

On defensive maneuvers

It hasn't been much of a secret that most of Stephen Harper's political strategy has been based on relentlessly directing anger within his party toward the Libs. But while there's some indication that the Libs are responding with a garrison mentality of their own, let's note that they figure to be best served by looking for some allies rather than matching the Cons' constant attacks on all comers.

Here's John Ivison on the Libs' apparent strategy:

(T)here is a more cunning plan, according to people in Mr. Ignatieff’s inner circle — a two-election strategy, where the Liberal leader faces off against a rookie Conservative leader a year or two down the line.

The Liberals would like to win an election this year but are realistic enough to have much more modest ambitions. The party currently has 77 seats, based on winning 26% of the vote at the 2008 election.
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(M)odest gains do seem attainable. In the event the Liberals did hold Mr. Harper to a reduced minority, they cling to the reasonable expectation that the Conservatives might be in the market for a new leader.

So what's the problem with that theory? Effectively, it relies on Stephen Harper voluntarily stepping down as the Cons' leader rather than finishing the job that's been his singular focus for the past two decades - even while he continues to control the government apparatus. But there's precious little reason to think that a leader who's built up a full-on messiah complex about the need to keep anybody else from forming government will suddenly reverse course based on the mere loss of a few seats.

But might Harper face internal pressure to step aside? Not only is there little reason to think there will be much of a push from inside the Cons toward that direction, but all evidence is that the Cons themselves will want Harper to stay on and cling to power as long as possible. Just remember the message Harper got from his party when he nearly single-handedly torpedoed his own government (p. 180 of Lawrence Martin's Harperland):

Harper was more despondent than the others at the PMO. Some had expected him to be geared for battle. But it was the opposite. He was resigned to defeat, prepared to give up the government. Staffers had never seen him like this, pale and shaken. He told them, in so many words, that it was over, that the government would fall.

His team tried to dissuade him from this defeatist course. The argued that they had to find a way to hang onto power...The staff worked on changing his mood and convincing him to fight it out.

Indeed, there's no indication at all that anybody within the Cons aside from Harper was willing to cede any power. And while there were a few trial balloons about a change in leadership in hope of appeasing the opposition parties, those came to nothing.

So all indications are that the Cons are bent on hanging onto power at all cost, and that even at Stephen Harper's worst they're willing to put total faith in his ability to hold it. That is, until events prove otherwise.

With that in mind, a reduced Harper minority government doesn't figure to get rid of Harper or substantially improve the Libs' chances two elections down the road.

Instead, the one factor that figures to have any hope of shifting the Cons off their current destructive course is a change in government. Which should serve as reason for the Libs to work toward that end from a strong starting position - rather than hoping that treating their potential allies in Parliament the way the Cons have treated them will somehow allow them to wait out a leader who doesn't look to be going anywhere as long as he holds power.