Saturday, February 22, 2014

Saturday Morning Links

This and that for your weekend reading.

- Michael McBane highlights one of the less-discussed changes in the Cons' 2014 budget - as it officially eliminates the federal distribution of health care funding based on provincial need in favour of handing extra money to Alberta:
The Harper government is eliminating the equalization portion of the Canada Health Transfer (CHT) and replacing it with an equal per capita transfer. This means that less populous provinces with relatively larger and more isolated populations will have more and more difficulty delivering more expensive universal health services.

Likewise, provinces with relatively larger proportion of older residents will also be hampered in delivering universal quality care. The move to an equal per capita cash transfer will widen the gap between the have and the have-not provinces and make it next to impossible to maintain national standards in health care.

It is estimated by the Premiers that this one budgetary move will create a funding gap for the have-not provinces of $16.5 billion over the next 5 years. The only province to benefit from this change is Alberta, with its growing, younger population.
- Meanwhile, Andrew Nikiforuk points out one likely result of diverting yet more money into the hands of resource-obsessed provincial governments - as Canada's western provinces are subsidizing fracking compared even to U.S. states (with Saskatchewan the worst offender).

- PressProgress recognizes that we shouldn't trust Tim Hudak's temporary disavowal of part of his anti-worker agenda. And Blacklocks reports that the Harper Cons' cabinet is taking control and ownership of private members' bills aimed to destroy the capacity of unions to organize at the federal level.

- Finally, Chris Selley comments on the Cons' selective interest in protecting human life - including their determination to push drug users toward death rather than treatment.

Friday, February 21, 2014

Musical interlude

London Grammar - Hey Now (Arty Remix)

Friday Morning Links

Assorted content to end your week.

- Rick Smith hopes that the Cons' backtracking on income splitting means that they won't go quite as far out of their way to exacerbate income inequality in the future:
(T)he unfortunate reality is that we are still becoming ever more unequal, a trend due in large measure to political choices. Many countries have found ways to mitigate the growth of income inequality, while in Canada the policy response has tended to reinforce rather than offset the trend.

We know that since the mid-1990s, the social role of government has been dramatically cut back and its redistributive impact has faded. According to the OECD, government taxes and transfers lowered the gap between rich and poor most in Canada, Denmark, Finland, and Sweden in the late 1980s and the early 1990s. By the early 2000s, we joined Switzerland and the U.S. as the countries with the smallest redistributive impact.

That’s why I take caution not to overstate things here. But I do believe Mr. Flaherty’s remarks signal some hope that there is growing public support and political will to address income inequality. At the very least, important public policy will now be tested against a simple and compelling principle: Does this make income inequality better or worse?
- Meanwhile, Trish Hennessy asks people to consider what they'd want to see done if they were finance minister - rather than accepting that we're stuck with the Cons' warped priorities. And Michael Laxer has some suggestions for Andrea Horwath as to how to genuinely make life more affordable for most Ontarians.

- Darcy Henton reports that Alberta's P3 school construction fiasco is only getting worse - as a government-commissioned study makes clear that the schools intended to be turned into corporate profit centres might never get built at all since they might not quite be lucrative enough.

- Finally, Karen Foster offers some important advice for young workers:
(N)early every public voice is telling you that you need to change. As Trish Hennessy put it on the CBC’s Bottom Line panel, we’ve individualized the problems of underemployment and skills mismatches and student debt. Our societal problem has become your personal problem. That’s why everyone’s turning themselves into knots to offer you advice.

My advice to you? Get angry.

Channel your anxiety about getting a job into frustration that we’re back here, again, talking about a “lost generation”, just like we were in the 1980s and 1990s.

Be indignant. When someone tells you it’s your fault for doing sociology instead of welding, tell them to stuff it.

When someone assures you it’ll get better in 10-15 years when the boomers retire, try repeating it back to them so they can hear how ludicrous it is.
The real injustice is not that you are overqualified for or mismatched to the jobs available to you, but that the career you’re shooting for is probably being dismantled into a set of lower-wage, no-benefits, no-security jobs. This is the trend in government, where temporary contracts are the new junior position; it’s also the trend in universities, where contract instructors are taking on more and more of the teaching once performed by tenured faculty. It’s even happening in other unionized workplaces, where collective agreements are being amended to allow for two-tier wage and benefit systems (you can guess who’s in the bottom tier). The situation, in other words, is grim.
Everyone is pressing you to adapt to the present. But you can not adapt. You can not re-train for a job that might just disappear like the first one you trained for. You can not work for minimum wage when you graduate. You can not mold yourself into the perfect worker so that corporations can escape the cost of training you.

This is all a bit rich, coming from me. Barring catastrophe, there’s a full-time, permanent job awaiting me after my current short-term post is up. But I count myself among those whose duty is to push back on contractualization, precarious work, devalued labour, and market fundamentalism. If you get a good job, good for you. But it will be your duty to ally yourself with the growing legions of young workers who are exploited—and underemployment is exploitation—just because they can be.

Whatever you do, don’t simply figure things out for yourself. If we keep on figuring things out individually, we will never figure things out collectively.

Thursday, February 20, 2014

Thursday Morning Links

This and that for your Thursday reading.

- Mark Taliano discusses how corporatocracy is replacing democracy in Canada, while Jaisal Noor talks to John Weeks about the similar trend in the U.S. And DownWithTyranny reminds us how corporations came to be - and how radical a difference there is between entities which were granted limited liability only in exchange for their pursuit of public goods, and the present model in which liability shields instead serve as cover for antisocial behaviour.

- Meanwhile, Frank Graves confirms that the Cons' goals of public austerity and enrichment of the wealthy couldn't be more out of step with the values of Canadians:
The simple fact is that the agenda of Prime Minister Stephen Harper’s government is no longer about an incremental, gradual shift away from a progressive state to a model of minimal government embodied by neo-conservative Reaganism or Thatcherism. The public may now see trickle-down economics as a cruel hoax — but it still seems to be the theory informing the current government’s approach to the economy.
In Europe and the United Kingdom, commentators have noted that while the younger generation is the most socially progressive, it is less collectivist and statist. It would appear this is not the case here, where younger citizens are much more likely to rate minimal government as a value lower today than they did in 1998 (those the under the age of 25 give “minimal government intrusions” a mean rating of 42, compared to 62 in 1998). At 42 on a scale to 100, this means that minimal government as a political value has virtually no relevance for younger Canadians. The only place it continues to resonate is in older, conservative Canada and the Langevin building.

We’ve updated our tracking on whether Canadians would prefer a larger government with higher taxes and more services or a smaller government with lower taxes and fewer services. The chart below shows an important trendline. Many have claimed that the recent political success of the right points to a ‘blueing’ of Canadian attitudes. The time series data, however, continue to show that Canadians are now less likely to prefer smaller government than they were in the past.
- And as a prime example of an area where greater public economic involvement could serve multiple positive purposes, Ethan Cox makes the case for postal banking:
By offering banking services through its existing network of 6,519 postal outlets Canada Post would overnight become the most accessible bank in the country. In addition to generating revenue which could cross-subsidize postal services well into the future, with profits estimated at an average of 20.5 per cent annually, a public postal bank would provide competition to the big banks and drive down rates for consumers. (Love paying five bucks to withdraw a twenty of your own money? Me neither.)

In addition to its effect on postal services, bank fees and accessibility for all Canadians, a postal bank would have a particularly positive impact on the working poor, the unbanked and Indigenous communities.

Money Mart, the largest Canadian payday lender, had revenues of more than $1 billion in 2012. Little wonder, considering that the average nominal interest such payday lenders charge in Canada is 839.5 per cent (APR). It is estimated that up to 15 per cent of Canadians do not have a bank account, and these “unbanked” are easy prey for the usurious practices of payday lenders, who are often their only option to cash cheques.

A public postal bank would offer cheque-cashing services to all Canadians and allow the unbanked easy access to their money without recourse to these type of institutions.
In summary, a public postal bank would increase access and reduce bank fees for all Canadians, ensure the long-term sustainability of Canada Post and door-to-door delivery and radically improve service to the unbanked and Indigenous communities.

If you own a lot of stock in the big banks then I can see why you would oppose postal banking. But for the rest of us, it’s a no-brainer.
- Finally, Global News looks in detail at Alberta's track record of oil and oil-related spills - finding roughly 60,000 documented incidents over the past few decades.

New column day

Here, starting from Nattavudh Powdthavee and Andrew Oswald's study to discuss on how people have trouble telling the difference between luck and merit (particularly when they're enjoying the benefit of the former) - and how we should take that gap into account both personally and politically.

I'll add here one point omitted from the article. I'm skeptical in general of the all-too-common trend of public institutions like hospitals, libraries and schools being forced to rely on fund-raising lotteries rather than being funded directly. But the study hints at a hidden side effect - as a "successful" lottery which provides a large number of wins to a large number of people may itself serve to undermine popular support for sustained public funding.

For further reading...
- The study is summarized here, and accessible in full here (PDF).
- And for more on the "lottery winners going bankrupt" phenomenon, see here and here.

Wednesday, February 19, 2014

Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Lynn Stuart Parramore offers five convincing pieces of evidence to suggest that the U.S.' plutocrats are losing their minds in their effort to set themselves apart from the rabble. Kevin Roose tells a story about some awful, awful (and disturbingly wealthy and powerful) people. And Patrick Wintour discusses how the UK Cons are dedicating significant public resources to placing impossible demands on the unemployed - then cutting off the livelihood of anybody not acrobatic enough to jump through their newly-created hoops.

- So there's plenty of reason to think Ana Marie Cox is right to call for the middle and lower classes to start putting up a fight against the perpetual top-down class war:
People are angry – and maybe people should be angry. Both Perkins and Mankiw seem to think that the poor (or just the not-rich!) resent the wealthy simply because they have so much. They think we resent the number of zeros in their paychecks. Of course not. We resent that those zeros come out of ours.

Mankiw asks the simplistic question: Are CEOs so valuable as to be worth their exorbitant paychecks? He answers it perhaps even more simply, by cherry-picking famous people. But the question on most people’s minds is simpler still, and yet somehow too difficult for the CEOs and their enablers to comprehend: Am I so expendable as to be worth such a small paycheck ... or no paycheck at all?

To the extent that income inequality is a threat to the rich, it’s not because they are so wealthy – at some point, the wealth of the most wealthy just becomes absurdly unimaginable anyway. No, it’s because the wealth of the super-rich is just so damn far away, without any rungs in the ladder between, no assistance for that leap of faith that allows those who struggle to hope their struggles can cease.
- And Davide Furceri and Prakash Lounganin note that two of the leading causes of growing inequality are public-sector austerity and greater privileges being accorded to private capital. (Not concidentally, those are of course two of the Cons' top political priorities.)

- The Star argues that the Cons shouldn't force a jobs grant program onto Canada's provinces (or workers). But as Thomas Walkom writes, questions of what's fair or appropriate seem rather distant in the face of a government which has nothing but contempt for the law.

- Finally, Paul Adams recognizes what's missing from Canada's federal political scene as a three-party race develops:
The fact that cooperation between the parties and their leaders is not imminent seems to have obscured the possibility — the likelihood, even — that there will be a minority government after 2015, as there was after three of the last four elections.

In that situation, the parties will have to choose with whom they cooperate and on what terms.
(P)arties will probably have to cooperate after the 2015 election — unless they want to see Canadian politics descend into the dysfunctional mess we’ve see south of the border and, at times, here at home in the first decade of this century.
Voters and the media should be pressing the parties hard to explain their approach to cooperation — including who their preferred partners might be in the event we return to minority government in 2015.

Tuesday, February 18, 2014

Tuesday Night Cat Blogging

Ill-fitting cats.

Tuesday Morning Links

This and that for your Tuesday reading.

- Ian Welsh writes about the concentration of wealth and economic control:
Money is permission: you can’t do squat in a market economy without it.  Those who can create it, or who have excessive profits, control what other people can do.

It is for this reason that Jefferson said that banks were more dangerous to democracy than even standing armies.

Money making and differential profits lead to differential power. Over time, if your rate of return is higher than everyone else’s you will gain so much more money than them that you can buy them out, or out-bid them.  The first thing you will do, if you have any sense, is take control of government, because government, which controls the rules of the game (legislation) and violence, is the only other power which can destroy you.  Once they are under control (and the bailouts proved Western governments are under the control of financial institutions), the only remaining threats are your own ability to drive yourself off a cliff, and the very small chance of revolution, which is likely to happen only after you’ve destroyed yourself in any case.
- Emily Atkin reports on another environmental disaster caused by fracking - this time a blowout and spill in North Dakota. Rachel Maddow looks at the West Virginia chemical spill as an example of how the corporate sector will happily use its privileged access to set up inexplicable loopholes even in the wake of a highly visible public safety disaster. And George Monbiot likewise observes that massive flooding in the UK can be traced back to the Conservative government's choice to let industry write its own rules:
Almost as soon as it took office, this government appointed a task force to investigate farming rules. Its chairman was the former director general of the National Farmers' Union. Who could have guessed that he would recommend "an entirely new approach to and culture of regulation … Government must trust industry"? The task force's demands, embraced by Paterson, now look as stupid as Gordon Brown's speech to an audience of bankers in 2004: "In budget after budget I want us to do even more to encourage the risk takers."

Six weeks before the floods arrived, a scientific journal called Soil Use and Management published a paper warning that disaster was brewing. Surface water run-off in south-west England, where the Somerset Levels are situated, was reaching a critical point. Thanks to a wholesale change in the way the land is cultivated, at 38% of the sites the researchers investigated, the water – instead of percolating into the ground – is now pouring off the fields.
The previous government also saw it coming. In 2005 it published a devastating catalogue of the impacts of these changes in land use. As well as the loss of fertility from the land and the poisoning of watercourses, it warned, "increased run-off and sediment deposition can also increase flood hazard in rivers". Maize, it warned, is a particular problem because the soil stays bare before and after the crop is harvested, without the stubble or weeds required to bind it. "Wherever possible," it urged, "avoid growing forage maize on high and very high erosion risk areas."

The Labour government turned this advice into conditions attached to farm subsidies. Ground cover crops should be sown under the maize and the land should be ploughed, then resown with winter cover plants within 10 days of harvesting, to prevent water from sheeting off. So why isn't this happening in Somerset?

Because the current government dropped the conditions. Sorry, not just dropped them. It issued – wait for it – a specific exemption for maize cultivation from all soil conservation measures.

It's hard to get your head round this. The crop which causes most floods and does most damage to soils is the only one which is completely unregulated.
- Meanwhile, Jeff Rubin discusses how the unexplained and apparently unstoppable seepage of bitumen from should raise serious questions for the oil industry and public policy alike. And sadly, there's an obvious parallel to the UK's flooding story - as in situ production is precisely the type of oil extraction which the Cons have declared to be immune from federal environmental assessment.

- Alison points out a few of the obvious abuses the Cons are setting up in their selective elections legislation. And Robyn Benson highlights the unfairness of the Cons' plans.

- Finally, Blacklocks reports that a review of Canada Post showed that it could be far more useful and more profitable if it pursued postal banking. But naturally, the Cons preferred a lose-lose service cut plan than a win-win plan to do more and make money in the process.

Monday, February 17, 2014

Monday Morning Links

Miscellaneous material for your Monday reading.

- Robert Reich writes about the basic economic lessons the U.S. has forgotten since its postwar boom:
First, America’s real job creators are consumers, whose rising wages generate jobs and growth. If average people don’t have decent wages there can be no real recovery and no sustained growth.
In those years, business boomed because American workers were getting raises, and had enough purchasing power to buy what expanding businesses had to offer. Strong labor unions ensured American workers got a fair share of the economy’s gains. It was a virtuous cycle.
Second, the rich do better with a smaller share of a rapidly-growing economy than they do with a large share of an economy that’s barely growing at all.
Between 1946 and 1974, the economy grew faster than it’s grown since, on average, because the nation was creating the largest middle class in history. The overall size of the economy doubled, as did the earnings of almost everyone. CEOs rarely took home more than forty times the average worker’s wage, yet were riding high.
Third, higher taxes on the wealthy to finance public investments — better roads, bridges, public transportation, basic research, world-class K-12 education, and affordable higher education — improve the future productivity of America. All of us gain from these investments, including the wealthy.
In those years, the top marginal tax rate on America’s highest earners never fell below 70 percent. Under Republican President Dwight Eisenhower the tax rate was 91 percent. Combined with tax revenues from a growing middle class, these were enough to build the Interstate Highway system, dramatically expand public higher education, and make American public education the envy of the world.
We learned, in other words, that broadly-shared prosperity isn’t just compatible with a healthy economy that benefits everyone — it’s essential to it.
- Meanwhile, Marilyn Reid offers a reminder that free trade agreements have more to do with entrenching existing privilege than any interest in trade. Gaius Publius notes that any recovery since the 2008 economic meltdown has been enjoyed solely by a wealthy few. And Tom Tomorrow nicely summarizes where the combination of economic and political forces being marshalled solely for the benefit of those with the most wealth and power ultimately leads:

- Karl Nerenberg and Witold Walczak (via Alexander Panetta) both discuss the anti-democratic direction taken in the Cons' election legislation. Tonda MacCharles analyzes how the torquing of elections rules fits into the Cons' broader strategy for 2015 - while still offering no guarantee of success. And Pierre Poilievre's claim that we shouldn't worry about unlimited election spending because the party manipulating the system for its own advantage won't admit that its legislation means anything hardly offers comfort to voters looking for a free and fair election.

- Meanwhile, if the Cons indeed face an uphill battle in trying to cling to power, the combination of disastrous policy choices and a profound distaste for reality offers an important part of the explanation.

- Finally, John MacInnes and Jeroen Spijker discuss what an aging population really means:
[An increase in Remaining Life Expectancy (RLE)] is crucial because many behaviours and attitudes are more strongly linked to that than to age. Most acute health care (hospital treatment) costs are incurred at the very end of a person’s life, irrespective of their age. Population ageing has no direct impact. The pattern for social and long term care costs turns on what is happening to morbidity. Improvements in public health (especially the increase in levels of education and decline of smoking) are driving down age specific disability and morbidity rates: people are staying healthier longer. We do not know clearly (because consistent longitudinal data are scarce) whether the rise in life expectancy is pulling up the absolute average time older people spend in care or with chronic health conditions. However we can say one thing with certainty: as life expectancies increase it is systematically misleading to assume that tomorrow’s 65 or 80 years olds will have the same health profile as today’s. As RLE increases, people of the same age get ‘younger’: people with the same years lived as their counterparts in earlier cohorts, have more years left. Paradoxically popular jargon understands this very well: ‘50 is the new 40’.

The standard indicator of population ageing is the Old Age Dependency Ratio (OADR). It takes those aged 65+ and divides by the number of working age (16/20-64 years). It is not fit for purpose. Most people aged 65+ are not ‘dependent’. A million are employed (three times the number in care or nursing homes). Grandparents are the most important source of childcare after parents themselves. Many do voluntary work. Their consumer power is large and growing. It makes little sense to count everyone of working age when we can count those actually working. In fact, there are more ‘working age’ dependents - people not at work - (9.5 million) than there are people of state pension age in Britain.

We therefore recently proposed an alternative measure, the Real Elderly Dependency Ratio (REDR), which counts men and women with a RLE of ≤15 years divided by the number employment, irrespective of their age. In contrast to the inexorable rise of the OADR, we find that the REDR has fallen over recent decades in affluent countries, has stabilized now and is likely to increase only slowly over the next couple of decades.

Sunday, February 16, 2014

Sunday Morning Links

Assorted content for your Sunday reading.

- Robert Reich comments on the concerted effort by the U.S.' rich to exacerbate inequality - and points out how it's warped their worldview. And Dean Baker criticizes the spread of inequality by design:
And then there is the financial sector where Mankiw tells us that the extraordinary pay is compensation for the volatility of paychecks. That's interesting, except the vast majority of comparably talented and hardworking people would be happy to get the pay the finance folks get in the bad years. Much of the big money on Wall Street stems from highly leveraged bets that beat the market by seconds or even milliseconds. This provides as much value to the economy as insider trading, which it in fact it resembles closely.

It would be interesting to see what would happen to the big fortunes in the financial sector if it had to pay a small transaction fee, effectively subjecting it to the same sort of sales tax that is paid in almost every other sector of the economy. It would also be interesting to see what would happen to the private equity folks if they lost the opportunity for the tax gaming that is their bread and butter.

I could go on (read my non-copyright protected book on the topic), but the point should be clear. If the 1 percent are able to extract vast sums from the economy it is because we have structured the economy for this purpose. It could easily be structured differently, but the 1 percent and its defenders aren't interested in changing things. And the 1 percent and its defenders have a great deal of influence on the direction of economic policy.
- And Kathleen Raven discusses how children in particular suffer from the spread and entrenchment of poverty and inequality:
Researchers looked at data on 3,142 U.S. counties between 2005 and 2009. They found that rates of child maltreatment ranged widely, from 0.2 percent to 3.1 percent of children.

Using statistical methods to gauge income inequality, they found a steep rise in the rate of child maltreatment with rising inequality. The relationship held after researchers adjusted for poverty itself, and other factors such as the racial and ethnic makeup of regions, education levels and the number of people receiving public assistance income.

Where inequalities are most extreme, communities may become more polarized, with the affluent group influencing where public aid money goes, or what programs are made available in the community, said Dr. Ruth Gilbert, a clinical epidemiologist at University College London in the UK.

"Where the state or federal government is a key provider of services, such as day care and education," Gilbert said, "then you may have situations where poorer children mingle with middle-class kids and this helps create a better understanding between the two classes."
- Unfortunately, the needed end to the Cons' income-splitting scheme seems to have given rise to plenty of talk about how to develop the next-most-destructive option to destroy the federal government's fiscal capacity. Maria Babbage surveys a range of policies from the reasonable (child care and targeted benefits to lower-income parents) to the thoroughly top-weighted (general income tax cuts), while Barrie McKenna has little apparent interest in anything but the latter. And Dennis Howlett notes that there's precious little evidence to suggest a fair tax system is on the Cons' radar.

- Finally, Simon Enoch takes a look at the track record of prison food privatization in the U.S.