Miscellaneous material to start your week.
- Heather Mallick
discusses what Canada stands to lose as Canada Post is made both more expensive and less functional. Ethan Cox
suggests
that what's missing from Canada Post is a postal bank - which makes
postal services elsewhere both more profitable, and more valuable for
citizens. And the Star points out that the Cons have stood idly by while allowing the institution to fall apart.
- But then, post offices are the least of what the Cons have gone out of their way to portray as beneath them - as made clear by James Moore's
rightfully-skewered declaration that he doesn't see why he should care about - or do anything to help - hungry children.
- Meanwhile, Paul Krugman
reminds us why inequality matters both economically and politically:
It’s now widely accepted that rising household debt helped set the stage
for our economic crisis; this debt surge coincided with rising
inequality, and the two are probably related (although the case isn’t
ironclad). After the crisis struck, the continuing shift of income away
from the middle class toward a small elite was a drag on consumer
demand, so that inequality is linked to both the economic crisis and the
weakness of the recovery that followed.
In my view, however, the really crucial role of inequality in economic calamity has been political.
In the years before the crisis, there was a remarkable bipartisan
consensus in Washington in favor of financial deregulation — a consensus
justified by neither theory nor history. When crisis struck, there was a
rush to rescue the banks. But as soon as that was done, a new consensus
emerged, one that involved turning away from job creation and focusing
on the alleged threat from budget deficits.
What do the pre- and postcrisis consensuses have in common? Both were
economically destructive: Deregulation helped make the crisis possible,
and the premature turn to fiscal austerity has done more than anything
else to hobble recovery. Both consensuses, however, corresponded to the
interests and prejudices of an economic elite whose political influence
had surged along with its wealth.
...
Surveys of the very wealthy
have, however, shown that they — unlike the general public — consider
budget deficits a crucial issue and favor big cuts in safety-net
programs. And sure enough, those elite priorities took over our policy
discourse.
Which brings me to my final point. Underlying some of the backlash
against inequality talk, I believe, is the desire of some pundits to
depoliticize our economic discourse, to make it technocratic and
nonpartisan. But that’s a pipe dream. Even on what may look like purely
technocratic issues, class and inequality end up shaping — and
distorting — the debate.
So the president was right. Inequality is, indeed, the defining
challenge of our time. Will we do anything to meet that challenge?
- And Michael Valpy
discusses the plight of the precariat who have been so deliberately excluded from the Cons' political calculations (other than as a source of cheap labour for their corporate benefactors).
- Fortunately, the continued efforts of the Cons and their provincial counterparts to silence the general public are only giving rise to more creative ways to influence the shape of our society. On that front, Lloyd Maybaum
suggests that employees who have been arbitrarily denied the right to strike should focus their efforts and their dollars on the political system. And Ashley Renders
reports on Unifor's steps to include workers who can't organize through traditional workplace union structures.
- Finally, Mariana Mazzucato
makes the case for governments to serve as generators and incubators of big ideas, rather than pools of funding to be exploited for corporate benefit:
(T)he point of public policy is to make big things happen that would
not have happened anyway. To do this, big budgets are not enough: big
thinking and big brains are key.
While economists usually talk
about things that are not done at all (or done inadequately) by the
private sector as "public goods", investments in "big" public goods like
the UK national health service, or the investments that led to new
technologies behind putting a "man on the moon", required even more than
fixing the "public good" problem. They required the willingness and
ability to dream up big "missions". The current narrative we are being
sold about the state as a "meddler" in capitalism is putting not only
these missions under threat, but even more narrowly defined public
goods.
Public goods are goods whose benefits are spread so widely
that it is hard for business to profit from them (or stop others
profiting from them). So they don't attract private investment. Examples
include transport infrastructure, healthcare, research and education.
Even
if you're an avid free-marketeer you can't avoid benefiting, directly
and indirectly, from such public investments. You gain directly through
the roads you drive down, the rules and policing which ensure their
safety, the BBC radio you listen to, schools and universities that train
the doctors and pilots you depend on, parks, theatre, films and museums
that nurture our national identity. You also gain, indirectly, through
enormous public subsidies without which private schools, hospitals and
utility providers would never be able to deliver affordably and still
make a profit. These are conferred as tax breaks, and provision of vital
skills and infrastructure at state expense.
...
The public sector must produce public goods, and through the creation
of new missions catalyse investment by the private sector – inspiring
and supporting it to enter in high-risk areas it would not normally
approach. To do so it requires the ability to attract top expertise – to
"pick" broadly defined directions, as IT and internet were picked in
the past, and "green" should be picked in the future. Some investments
will win, some will fail. Indeed, Obama's recent $500m guaranteed loan to a solar company Solyndra failed, while the same investment in Tesla's electric motor won big time – making Elon Musk richer.
But
as long as we admit the state is a risk-taking courageous investor in
the areas the private sector avoids, it should increase its courage by
earning back a reward for such successes, which can fund not only the
(inevitable) losses but also the next round of investments. Instead,
calling it names for the losses, ignoring the wins, and outsourcing the
competence and capabilities, is ridding it of the courage, ability and
brains to create the missions, hence opportunities, of the future. And
without brains, all government will be able to do is not make big things
happen but simply serve a private sector that is concerned only with
serving itself.
