Saturday Morning Links

Assorted content for your weekend reading.

- Murray Dobbin highlights how our political and economic discussions are poorer for the dominance of neoliberalism:

That's it? That's the best the economics profession can come up with to explain Canadians' indebtedness catastrophe? It's all about human behaviour, written in stone, so I guess we might as well just sit back and observe the meltdown in the comfort of our economist's middle-class lifestyle.

But of course that's the very thing they should be examining -- people's determination to live the middle-class life style that our entire culture is based on and which the sophisticated marketing machine tells us we must have -- or we are losers. They need to explore this classic bait-and-switch: manipulate people to buy stuff and then suppress their incomes so they can't.

Carrick's article detailed just how serious the problem is -- repeating numbers that have been quoted numerous times: over 700,000 people would be financially stressed if interest rates rose by even a quarter of one per cent. One million would face that circumstance if they rose by one per cent. The Canadian Payroll Association regularly tracks people's financial stress and its recent survey revealed 48 per cent of people said "[i]t would be tough to meet their financial obligations if their paycheque was delayed even by a week. Almost one-quarter doubted they could come up with $2,000 for an emergency expense in the next month."

I'm sorry, but that's insane in a country that creates as much wealth as Canada does.
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The fact is, those trapped within the context of neoliberal policies don't have a clue what to do.

But everyone knows it's going to get worse. The quality of jobs in Canada continues to fall with low-paid jobs making up an increasing proportion of the total (we are already second in the OECD), with those earning less than the average wage falling furthest behind. This is a continuation of a 12-year trend. Sixty-one per cent of Canadian workers have seen their wage gap increase. These are the conclusions of a recent CIBC report which also concluded that only 15 per cent of people aged 15-24 can be defined as genuinely "employed."

If economists and politicians (NDP -- please note) actually want to change this situation before it descends into full-on dystopia they must, as a UN report recently recommended, "jettison neoliberal ideology." That would include a long list of policies but let's just take one: "labour flexibility." Inequality, flat incomes, work-life imbalance and unsustainable debt can all to a large extent be traced to this deliberate government policy. Just reversing it would start a recovery. That means returning EI to an actual insurance program, reinstating the federal Canada Assistance Plan which provided strings-attached (read: humane rates) money to the provinces for social welfare, increase the minimum wage to living-wage levels, enforce and enhance labour standards and their enforcement, and make it easier, not harder, for unions to organize.

- Statistics Canada examines the gross increase in income inequality over the past three decades, as the bottom 50% of tax filers have seen their share of market income drop by over 28%.

- Iglika Ivanova offers some lessons to be learned from the CCPA's recent report on the cost of child care. And Pierre Fortin makes the case for a national child care policy, while recognizing the need for the provinces to lead the way.

- Meanwhile, Andrew MacLeod reports on the predictable results of B.C.'s privatization of health care administration - which wound up costing 50% more than the supposed price certainty found in the original contract.

- Finally, James Wilt points out that the Libs' climate change "framework" falls well short of meeting the already-inadequate targets they've adopted from the Harper Cons - and wonders whether Canada will end up having to pay for offsets rather than meeting the targets for itself.

Musical interlude

Erato - Now Go

Substandard

There's plenty of ugly news coming out about the continued problems with Brad Wall's pet carbon capture and storage project - including thoroughly unimpressive output numbers, and payouts to Cenovus to make up for a failure to deliver the carbon dioxide it's supposed to be capturing.

But perhaps even more worrisome than the project's well-known failures is the limited definition of success.

When it comes to emission standards, SaskPower's own self-declared metric is to "continue meeting federal emission regulations". (Keep this filed away for next time Wall complains about the federal government setting standards: even the single project where he's put any resources into promised emission reductions can't find any coherent provincial goals to try to meet.)

But what does it mean for a carbon capture project to comply with federal standards?

One possibility is that it means absolutely nothing for the moment. When the Harper government set up its regulations governing coal power, it made exemptions available for carbon capture and storage projects. And if it has that exemption, SaskPower can technically "continue meeting federal emission regulations" regardless of how much CO2 it dumps into the atmosphere until 2017.

Even if SaskPower is holding itself to the federal standards for coal plants regardless of any exemption, though, that's far from an ideal outcome.

The federal standards for coal plants are intended only to match the carbon output of existing natural gas plants based on 2012 technology. And those emit between ten and a hundred times as many greenhouse gases as renewable alternatives.

So based on SaskPower's self-declared goal, Wall's multi-billion-dollar gamble has a payoff no greater than the possibility of matching the output from existing fossil fuel technology - even as much cleaner alternatives have become far more affordable. (And that ignores the emission costs of increased oil output which are presumably Wall's reason for pushing CCS in the first place.)

Of course, the money spent on Boundary Dam Unit #3 can't be recouped. But there's no reason at all to keep pouring precious public resources into the CCS money pit - particularly when we can achieve a far cleaner power grid simply by matching what's already working around the world.

Friday Morning Links

Assorted content to end your week.

- Alex Hemingway reviews the evidence on two-tiered medicine from around the developed world, and concludes that a constitutional attack on universal health care would only result in our paying more for less.

- Marc Lee takes a look at the national climate change framework released last week and finds it to fall short in both its insufficient goals, and a lack of a clear plan to achieve them. 

- Erika Shaker examines the difficulties families face as a result of unavailable and unaffordable child care. 

- Martin Regg Cohn nicely highlights the two-faced Ontario PCs, who are denouncing social conservatism publicly while proclaiming it to be a top priority behind closed doors. And both Michael Den Tandt and Michael Harris point out that the NDP is nicely positioned to fill the federal vacuum created by a combination of disappointing corporatist Libs and ineffective Cons.

- Finally, Dave Seglins and Rachel Houlihan report on Dennis Molinaro's discovery of a secret 1951 Canadian cabinet memo authorizing RCMP spying against "subversives" in perpetuity. (And judging from the federal government's response complaining that disclosure would affect ongoing operations, there's reason to suspect that it's still being applied.)

Thursday Afternoon Links

This and that for your Thursday reading.

- Jonathan Sas highlights why we're best off having public services delivered by the public sector:

The three decades long bashing and diminishing of the redistributive capacities of the state has led to pronounced inequality, degraded infrastructure stock, and a blunted ability of government to respond to current societal challenges. Of course, this was what the right-wing wanted. We understand the attack on the public sector as part and parcel of a broader neoliberal economic program that has favored financial deregulation, the expansion of unfair trade and investment deals, the weakening of worker rights and, finally, a retrenchment of welfare state programs and public services.
In Canada, the neoliberal attack on the public sector has been used to justify austerity and to promote both the privatization of existing public assets as well as the private ownership and operation of future projects and assets through P3 agreements. We fundamentally disagree that the private sector is necessarily more efficient or more capable of owning, operating and delivering projects and services as P3 advocates, including some progressives, falsely claim.
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...P3s have been shown to cost more, to leave the public without control of services and assets, and ultimately to saddle the public with the costs if and when a project doesn't work out.  It is for these reasons that we also support municipal moves to in-source or bring privatized services back in-house.
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At this moment of deep political convulsion throughout the West, the fight against privatization is part of a broader struggle against the economic logic that has led to corrosive inequality and underpinned the bankrupt neoliberal economic paradigm. We must continue to dispel the myth that it is the private sector alone that drives innovation or that is capable of driving economic growth and dynamism. And we must fight to ensure that the public is equitably rewarded for the investments it makes.

- Meanwhile, PressProgress offers its take on CIBC's conclusion that Canadian jobs are
deteriorating in quality. And Thomas Piketty argues that we should focus more on ensuring a fair return for labour than on providing a basic income - though I'm not sure that his justifiable concerns about the cheap nature of existing basic income systems rules out the viability of a more generous version.

- Sean McElwee, Jesse H. Rhodes and Brian Schaffner examine the chasm between the donor class which owns U.S. politics, and the public which has to live with political decisions. And Andrew Coyne criticizes Justin Trudeau's sordid dealings with the big-money donors promised access for their cash.

- Finally, the Aurora Banner makes the case for the Libs to stop stalling on their clear promise of electoral reform, while Avvy Go notes that how we vote is just one piece of an inclusive political system. And Neil MacDonald discusses Trudeau's practice in government of emphasizing a positive face on the same old lack of accomplishment we're accustomed to seeing from his predecessors.

New column day

Here, on SaskTel's response (PDF) to the Wall government's attempt to make excuses to sell off one of Saskatchewan's core Crowns - and how its position in dealing with federal regulators may in fact only be stronger after the selloff of MTS.

For further reading...
- I've written about SaskTel's beneficial impact on us as consumers and citizens here and here. 
- The objectives behind the CRTC's are found here at section 7 - and as I note in the column, a Crown corporation is in a unique position to highlight its local ownership and social contributions.
- Finally, Jennifer Graham reported on SaskTel's response here.

Wednesday Morning Links

Miscellaneous material for your mid-week reading.

- Jacob Levy highlights the importance of "identity politics" - or more specifically, the willingness to fight against systematic inequality of all kinds - as part of an effective progressive movement. And George Monbiot writes that we should be returning to first principles when it comes to the economy, starting with a renewed commitment to rebuilding the commons. 

- Dean Burnett rebuts a UK report which attempted to detach mental health from underlying social issues including poverty.

- Karri Munn-Venn points out that last week's climate change announcement from Canada's federal government falls far short of meeting the world's commitment to reducing greenhouse gas emissions.

- Robert Fife and Steven Chase report on Justin Trudeau's galling claim that in granting pay-for-play access to billionaires, he's not only avoiding being influenced personally, but taking wealthy donors' money to lobby them. And Susan Delacourt sees the cash-for-access system as a strong indication that the Libs haven't changed an iota from their history of backroom politics.

- Finally, Daniel Tencer writes that the Libs are planning far worse systematic intrusions into Canadians' privacy than were ever included in Bill C-51, while also highlighting some needed pushback by Canada's tech industry against yet another round of unjustified and unaccountable online surveillance. And Tonda MacCharles reports on the predictable results of a security state deciding whether or not to be publicly accountable, as CSIS has scrapped a promise to open up about past (and apparently ongoing) spying on journalists.

Tuesday Night Cat Blogging

Matted cats.

Tuesday Afternoon Links

This and that for your Tuesday reading.

- Dennis Pilon highlights how the stubborn defence of disproportional electoral systems can only be explained by a fear of voters' preferences being given effect:

The issue is not whether it’s better to have a few or a lot of parties in Parliament — that’s irrelevant. The issue is whether Parliament should reflect what Canadian voters want. They may want a few or many parties — we won’t know until they get a chance to register their preferences effectively.

People don’t care about some abstract ideal like having a lot of parties in Parliament for it’s own sake; they care about their vote having an impact. They only prefer “having a few big parties that try to appeal to a broad range of people” if they think that their party will be one of those parties. After all, the whole reason we’re discussing this issue of electoral reform is because our current ‘big parties’ have been pretty miserable failures in their efforts to “appeal to a broad range of people.”

And this is why the question is so one-sided. Where are the questions exploring the trade-offs and risks involved in keeping our current voting system — the fact that single-party governments typically come at the cost of electoral competition and inclusive representation, and seem to trigger a pronounced policy lurch with every change in government? The costs in this trade-off discussion, it would appear, only apply to the proposed alternatives — not to the status quo.
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The subtext of their rhetoric, whether deliberate or not, speaks to a Liberal/Conservative majority of voters, basically asking, ‘Do you think the system that benefits you should be kept in place’? Meanwhile, their constant focus on the prospect of ‘instability’ or ‘extremism’ that might result from moving away from the status quo suggests a deep distrust of voters. The fear that voters might make poor choices (ones that these political scientists don’t agree with, in other words) sounds a lot like 19th century arguments against extending the franchise to working people generally.

You have to be a democrat to do justice to discussions of democratic reform. In Canada, a great many political scientists prefer focusing on legitimating our current governing order to empowering voters and adding substance to Canadian democracy.

- Meanwhile, Alex Boutilier points out the incoherence of the Libs' backtracking from a clear promise of electoral reform. And Alex Tyrrell reports on the consensus on proportional representation reached by Quebec's opposition parties.

- The Star makes the case for a national child care system for the good of children, parents and the overall economy alike. And Kevin Carey and Elizabeth Harris write about new research showing a clear connection between investment in education (particularly in lower-income areas) and students' economic opportunities.

- Finally, Paul Mason takes note of the obvious implications of Mark Carney's warning against inequality, particularly as it relates to the proliferation of low-wage and precarious work:

Carney’s solutions, though couched in language eviscerated in order to avoid offence, boil down as follows. First, economists have to accept that the current form of capitalism is failing the 99percent. Gains from both technological progress and globalisation flow more to the rich than the poor. Second, he says, we have to stimulate growth by relying less on creating money, and more by creating growth: governments have to start using taxpayers’ money to invest, and redesign the economy so that our dire productivity is reversed. Third we have to redistribute wealth downwards instead of upwards.

If Theresa May’s government was actually listening to Carney (instead of trying to undermine him as in reality), they should scrap Philip Hammond’s austerity targets, raise tax revenues, shut down tax havens and take decisive measures to end the creation of low-wage, low-productive jobs. To do that you would have to re-regulate the economy and hard.

It would, in short, have to be somebody’s responsibility that 20,000 low-wage cash business appear out of nowhere; somebody has to care about it other than the police, whose raids on such businesses frequently scoop up just enough trafficked migrants to hit the headlines, but never enough to actually put the traffickers out of business, nor to raise wages.

At the same time, you would have to redistribute wealth aggressively. Not all of that needs to be done through taxation. If, instead of privatising public services, you ran them as non-profit corporations, providing rail, broadband and energy at prices below the cost of production, the redistributive effect would be significant. People on rock-bottom wages would suddenly have a lot more to live on.

On top of that you need to actively raise wages. That needs more than a worker on the board: it needs a recognised union rep in every workplace. If Amazon, Pret a Manger, the courier industry and the construction firms were obliged by law to negotiate with unions, and to cease repressing them, there would be upward pressure on wages across the whole economy. Another way of creating that pressure would be for local and national government to hike public sector pay.

Call it what you will, it would no longer be globalisation as we know it, and it would reverse 30 years of free market labour reforms.

Monday Morning Links

Miscellaneous material to start your week.

- Miles Corak offers a must-read paper on the two stories most often told about inequality in Canada, reaching this conclusion on the recent accumulation of wealth at the top of the income spectrum and the readily observable inequality of opportunity based on the inheritance of social and economic capital:

(C)areful analyses lean toward the view that higher rents may be behind the greater incomes of the Canadian top 1 percent. Lemieux and Riddell (2016) conclude their detailed study by saying:

On balance, we think that our findings are more consistent with a rent-extraction story than with a market-based explanation…. Although some high incomes are surely compensation for hard work, the growth in top incomes over time has been so large that rent extraction must be the major contributing factor. (134)

They show that top earners are particularly concentrated in certain professions. For example, about one-quarter of those with top-1-percent incomes in 2011 are trained in medicine, law and jurisprudence, or business and commerce. Over a 20-year period, the fraction of the top 1 percent working in finance doubled from about 5 to 10 percent, as did the fraction working in oil and gas extraction industries, moving from less than 3 percent to more than 7 percent of all top earners. This is consistent with research by Murphy and Veall (2015), who document that the top 1 percent are disproportionately found in Toronto and Calgary. Together, these facts are all suggestive of the possibility that institutional factors—such as the capacity to negotiate the terms of compensation from governments, as in the case of doctors, or from boards of directors, as in the case of senior managers—determine pay. They are also suggestive of the possibility that factors beyond individual effort, such as commodity price and exchange rate movements, also create opportunities for higher pay.
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(T)he most common way to find a job is through family and friends. That holds true for all of us, but it is immensely more likely for the kids of the very rich. Corak and Piraino (2016, 2011) show that about 40 percent of young Canadian men have at some point worked for exactly the same firm that at some point also employed their fathers. But if dad's earnings put him in the top 25 percent, these chances are above average; they start taking off if dad is in the top 5 percent and are higher still for top earners. Almost 7 out of 10 sons of top-1-percent fathers had a job with an employer that had also employed their fathers. All parents want to help their children in whatever way they can. However, top earners can do it more than others, and with more consequence: virtually guaranteeing, if not a lifetime of high earnings, at least a good start in life.

Connections matter. And for the top earners this might even be nepotism. This is not a bad thing if parents pass on real skills to their children, skills that might be specific to particular occupations, industries, or even firms. If this is the case, then it makes economic sense to follow in your father's footsteps. Wayne Gretzky often talked about the role his father played in developing his skating and stick handling skills. They spent hours and hours together on the backyard rink. But not all top earners got to where they are because of this sort of investment. In fact, sons of top-earning fathers who do not work at the same employer as their fathers are much more likely to fall out of the top than those who do (Bingley, Corak, and Westergard-Nielson 2012). Bad nepotism promotes people above their abilities by virtue of connections, and it erodes rather than enhances economic productivity. Richard Reeves (2013) of the Brookings Institution encapsulates this intuition when he speaks of a “glass floor” supporting untalented rich kids, a floor that at the same time limits the degree of upward mobility for others.

- Meanwhile, Robert Reich discusses the likely effects of the Trump administration - which of course include making the U.S.' appalling income and wealth inequality all the worse. And Noah Smith highlights the needed development of economic targets to address inequality - though I'd question his implicit view that we should assume that unmeasurable factors such as "the social prestige and self-respect that come from having a job" deserve special mention, while the well-documented costs in health and welfare arising out of poverty and inequality can be ignored.

- PressProgress examines what Brad Wall has gone out of his way to avoid recognizing about climate change - though I'd consider them to be overly generous in stopping at five points.

- Finally, Thomas Levenson makes the case for far more public investment in pure scientific research.

Sunday Morning Links

This and that for your Sunday reading.

- Dani Rodrik writes that today's brand of trade agreement has little to do with economic theory as opposed to political power:

What purpose do trade agreements really serve? The answer would seem obvious: countries negotiate trade agreements to achieve freer trade. But the reality is considerably more complex. It’s not just that today’s trade agreements extend to many other policy areas, such as health and safety regulations, patents and copyrights, capital-account regulations, and investor rights. It’s also unclear whether they really have much to do with free trade.
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When trade agreements were largely about import tariffs, negotiated exchange of market access generally produced lower import barriers – an example of the benefits of lobbies acting as counterweights to one another. But there are certainly plenty of examples of international collusion among special interests as well. The WTO’s prohibition on export subsidies has no real economic rationale, as I have already noted. The rules on anti-dumping are similarly explicitly protectionist in intent. 

Such perverse cases have proliferated more recently. Newer trade agreements incorporate rules on “intellectual property,” capital flows, and investment protections that are mainly designed to generate and preserve profits for financial institutions and multinational enterprises at the expense of other legitimate policy goals. These rules provide special protections to foreign investors that often come into conflict with public health or environmental regulations. They make it harder for developing countries to access technology, manage volatile capital flows, and diversify their economies through industrial policies. 

Trade policies driven by domestic political lobbying and special interests are beggar-thyself policies. They may have beggar-thy-neighbor consequences, but that is not their motive. They reflect power asymmetries and political failures within societies. International trade agreements can contribute only in limited ways to remedying such domestic political failures, and sometimes they aggravate those failures. Addressing beggar-thyself policies requires improving domestic governance, not establishing international rules. 

- The Star rightly argues that Canada can't claim to have a plan to meet its greenhouse gas emission reduction targets without actually doing the math as to how to get there.

- Lynell Anderson, Morna Ballantyne, Martha Friendly set out a plan for a national child care system - though unfortunately there's no indication that the federal government has any interest in putting the idea into action. 

- Paul Dechene highlights the disingenuousness of Brad Wall's Twitter tantrums. And David Climenhaga spreads the word about Wall's Bradsplaining, while noting that Brad Trost is exhibiting exactly the same tendencies.

- Finally, Tara Katrusiak Baran discusses the dangers of threatening violence and suppression based on political disagreement - while pointing out that economic anxiety is no excuse for dehumanizing our fellow citizens. And Danny Quah and Kishore Mahbubani theorize that the rise of the authoritarian right has more to do with a perceived loss of control than with any economic factors.