Monday, January 16, 2017

Monday Morning Links

Miscellaneous material to start your week.

- Tom Parkin points out that neither austerity nor isolationism offers any real solution to improve Canada's fiscal and economic standing. And Rob Carrick highlights what should be the most worrisome form of debt - being the increased consumer debt taken on to allow people to keep spending in the absence of wage increases:
“If wage growth slows, so does your purchasing power and so does the economy,” said Armine Yalnizyan, senior economist at the Canadian Centre for Policy Alternatives. This is our strange economic reality today – people are taking on debt to make up for stagnant or declining purchasing power, but it’s not enough to jolt the economy. Growth is still on the weak side, December’s strong job creation numbers notwithstanding.

Ms. Yalnizyan was one of the economists who contributed to a must-read collection of 75 economic charts that Maclean’s compiled as a guide on what to watch in 2017. Her input was a chart showing the growth rate for the average hourly inflation-adjusted earnings of salaried and hourly employees. The chart is headlined, “Canada just can’t shake off the slowth,” a term that means slow growth.

Unfortunately, the data in the chart may understate the problem of income stagnation. Ms. Yalnizyan said the average data are pulled higher by workers with incomes at the highest levels, and by the skew in our working population toward older workers at the peak of their career earning power.
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We should probably spend a little less to keep our borrowing more in line with our incomes. But growth in household debt in the third quarter of last year was actually quite modest at 1.3 per cent. The debt-to-income ratio moved higher – to 166.9 per cent from 166.4 per cent in the second quarter – because disposable incomes rose a puny 1 per cent.

Higher incomes would help contain debt growth, but it’s hard to be optimistic about pay hikes in today’s slow-growth world. A report from CIBC World Markets late last year found that the quality of employment is falling, as judged by the proportion of part-time versus full-time jobs, self-employment versus paid employment and the compensation of full-time jobs....
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There are two ways for the cycle of debt rising faster than incomes to end. Either an economic shock terrorizes people into borrowing less, or we get to a point where incomes rise faster than debt levels. The federal Liberals talk a lot about helping the middle class. We’ll know they’ve accomplished something if wage increases once again give us an advantage over inflation.
- Meanwhile, Simon Enoch writes about the futility of any attempt to cut one's way to growth - with particular reference to the Saskatchewan Party's ill-advised attacks on Saskatchewan workers.

- Maiji Unkuri examines how Finland's basic income trial should ensure that people are able to seek out desirable work. And Sara Mojtehedzadeh reports that Ontario is just now starting to make some effort to document workplace diseases and ensure that workers receive the support they need in response.

- Charles Marohn discusses the impact of different types of public investment in housing, and concludes that poor neighbourhoods offer a far greater return than affluent ones.

- Finally, the CP reports on Oxfam's latest look at wealth inequality in Canada - featuring the revelation that just two people now have more wealth at their disposal than 11,000,000 of their fellow Canadians.

Sunday, January 15, 2017

Deep thought

Some of us might offer a lot more outrage over the histrionics in response to Justin Trudeau's statement of fact on the need to phase out fossil fuels if his own attack dogs hadn't fomented the exact same hysteria when it suited their purposes.

On corruptible structures

Yes, there's no doubt that Kevin O'Leary's suggestion of selling off Senate appointments is nothing short of asinine.

That's not so much because the idea is inherently unconstitutional, but because of its substantive implications. The sale of Senate seats it would involve institutionalizing the worst aspects of the Senate's historical purpose (creating a systemic on behalf of the wealthy against democratic decision-making) and practical use (to reward people based on their ability to shovel money into the political system).

But it's worth noting that the reason O'Leary is in a position to make the proposal at all is the continued existence of a legislative chamber which lacks both a check against abuses in appointments, and any coherent purpose.

At best, any explanation for the continued existence of the Senate (beyond complaints about the difficulty of amending the Constitution) tend to involve the fact that it includes some well-regarded public servants who sometimes use their authority to carry out useful research and analysis of public policy.

But that's a role which precisely the same people could engage in within their own areas of expertise through other structures, without their simultaneously receiving both a lifetime appointment and the ability to generally control the passage of legislation. And so "but sometimes it does good work!" doesn't serve as a particularly compelling argument for the Senate.

Meanwhile, O'Leary's scheme represents a new - yet entirely plausible - worst-case scenario.

To date, the worst the Senate has had to offer is partisanship run amok: appointees whose first and only loyalty is to to the political goals of the Prime Minister, resulting in little check on longstanding governments and potentially insurmountable obstacles to legislative action by new ones, as well as the occasional obstruction of legislation passed by our elected representatives. 

But O'Leary looks to be treating the Senate much as Donald Trump views the U.S.' cabinet: a source of substantial formal power without the constraints of democratic processes, which can be parceled out for the benefit of his corporate cronies. And it's frightening to think what could happen if O'Leary were to get his way, as the wealthy few who could afford to bid on seats would be able to secure the formal capacity to block any public policy which sought to serve any interests rather than their own.

Unfortunately, the Senate as it stands is plainly vulnerable to the whims of a Prime Minister who wants to use it for plutocratic ends. And we'd best ask whether that's something we're prepared to leave in place before O'Leary has sold enough seats to block any potential change.

Sunday Morning Links

This and that for your Sunday reading.

- David Masciotra offers a cultural case for a basic income:
Reward, purpose and meaning are the abstractions meant to pacify the poor and the working class. The rich have wealth, comfort and pleasure. They also have a universal basic income. In Jacobin, Matt Bruenig recently reported that 10 percent of national income is paid to the top 1 percent of income earners as capital income. It is curious that no one worries about the mental health defects they will experience due to lack of meaning.

What provides most people with the greatest satisfaction, nourishment and fulfillment is high-quality relationships, creativity and contribution to a cause of personal conviction. Conservative commentators argue that the removal of an incentive to “work hard” is a potential problem with universal basic income. It is actually a benefit.

Few people could afford to live solely off of their UBI payment. So, while they would still have careers, they might have more time and energy to devote to the passions and priorities outside of their careers. They could dedicate themselves to the artistic or artisanal project they once felt too tired to consider making part of their weekly routine. They could enjoy more time with family and friends, and they might have the necessary surplus of energy to volunteer for charities and political campaigns that they support. Leisure might also become more abundant, and offer treatment for the addiction of careerist madness, along with the cutthroat competition of many offices, that leads Americans to sacrifice millions of paid vacation days every year.

The belief that most people, if given some free money every month, would transform into gluttonous sloths requires paralytic cynicism. Critics of the UBI are correct that most people want to feel the joys of accomplishment and importance, but it is stunningly narrow to believe that the average adult will spiritually and intellectually profit solely in traditional employment. It is more likely that the typical person will devote available time and energy to pleasurable and purposeful activities, even if they do not pay well or at all.

Universal basic income will not create a utopia — poverty will still exist, and many people will still spend too much time at what one Swiss economist calls “bullshit jobs,” but it will provide the poor with relief, and push everyone else in the direction of work-life balance, and overall sanity.
- Dan Levin's article on British Columbia as the "wild west" of Canadian politics is well worth a read - though it's of course worth noting that nearly all of the same criticisms apply to Saskatchewan's lack of fund-raising rules (and associated party payments to the Premier).

- Meanwhile, Murray Mandryk rightly questions why the lowest-paid public employees in Saskatchewan are bearing the brunt of the Saskatchewan Party's attacks on workers. And Anne Kingston discusses how the spread of private paid blood donation in Saskatchewan stands to affect Canadian health care more broadly.

- Finally, Tabatha Southey rightly recognizes the need to limit the use of "fake news" to content known and intended to be fictitious, rather than merely using it as a catch-all response to stories which contradict one's own preferences.

Saturday, January 14, 2017

Saturday Afternoon Links

Assorted content for your weekend reading.

- Dean Baker discusses some of the myths about the effects of corporate globalization - with particular attention to how our current trade and immigration structures are designed to provide easy profits for capital at the expense of labour around the world. And Jason Hickel reports on new research showing how the developed world (or at least its upper class) is extracting trillions of dollars from the countries which can least afford to lose them.

- James Kwak comments on the massive gap between the effects of minimum-wage increases as threatened based on oversimplified economic theories, and the real-world impacts which have been beneficial for workers and the broader economy alike. 

- The International Labour Organization reviews the continued lack of secure employment around the globe. And Ashley Cowburn reports on the UK public's strong support for the idea of reining in CEO income compared to that of a business' general workforce.

- Alexander Kaufman highlights Rex Tillerson's implausible denial that he has any idea Exxon and other oil companies enjoy public subsidies. And Ross Belot points out that based on then Libs' combination of nominal greenhouse gas emissions targets and plans which fall far short of meeting them, we're likely to see yet another public giveaway to the oil sector in the form of carbon bailouts.

- Finally, Dennis Gruending offers his take on the need for a public response to the threat of mass surveillance.

Friday, January 13, 2017

Musical interlude

HAIM - If I Could Change Your Mind

Friday Morning Links

Assorted content to end your week.

- Per Molander examines new research on the sources of inequality which concludes that massive gaps in wealth and income inevitably arise purely out of chance rather than any individual merit:
Differences in income or assets that are based on differences in capabilities or effort are widely considered to be legitimate, but it is easy to verify that all observed differences cannot be explained in this way. In its 2016 report on the global distribution of wealth, Oxfam International reported that the richest 62 persons in the world own as much as the poorer half of the world’s population, about 3.5 billion people. Clearly, one person cannot be 100 million times as productive as another healthy and reasonably well-educated person. After all, a day and night comprises only 24 hours for all of us, rich or poor.

In a seminal paper on the drivers of inequality, Robert and Ricardo Fernholz have analysed the long-term distribution of wealth in an abstract growing market economy. They assume that the economy generates a surplus which is invested in a financial market. Even assuming that all individuals in this society are identical as far as capabilities, efforts, preferences, and initial assets are concerned, the distribution of assets will become increasingly skewed over time. In the long run, one household will own all the assets. The explanation for this is simple: small variations in return on assets will be magnified over time, because those who are lucky can afford to take somewhat higher risks and will be rewarded with even higher returns, and so on.

Simple as this mechanism may be, it has far-reaching consequences. Even in an imagined world of perfect equals, inequality will develop as a result of our innate tendency towards risk aversion – wealthy individuals can afford to take risks, whereas the less wealthy have to be more cautious. Equality is inherently unstable; even the slightest perturbation of a perfectly egalitarian equilibrium will cause it to degrade into a highly unequal society, where only the self-interest of the richer strata will set the limits.
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In real societies, individuals differ in both capabilities and efforts. But, because of the self-reinforcing effect of differences, the inequalities that we observe will be completely out of proportion with differences in effort or capabilities. Inequality is largely a market failure. This is what makes the case for redistribution.
- Meanwhile, Seth Klein, Iglika Ivanova and Andrew Leyland highlight the desperate need for a poverty reduction strategy in British Columbia.

- Lola Butcher discusses how a housing first strategy can more than pay for itself by reducing burdens on the health care system and other social programs. And Marc Lee points out that tax incentives and subsidies for landlords figure to be far less effective than direct investment in affordable housing.

- Timothy Sawa and Lisa Ellenwood report on the massive amounts of money wasted on high-priced prescription drugs. And to her credit, Jane Philpott is at least examining how to reduce the cost of inflated drug prices - though it remains to be seen when that will lead to actual policy changes.

- Finally, the CCPA's submission to the SaskForward consultation process examines the futility of austerity.

Thursday, January 12, 2017

Thursday Morning Links

This and that for your Thursday reading.

- Alex Hemingway highlights the similarities between Justin Trudeau and Donald Trump in pushing infrastructure plans designed primarily to turn the promise of public services into long-term corporate profit centres:
But as I described recently in the Canadian context, these “partnerships” have proven enormously costly:
“P3s are simply less efficient – on average costing dramatically more than the public sector alternative. And it’s not hard to understand why…
Traditional publicly-funded and operated projects… don’t require paying out profits to private investors and, importantly, have lower financing costs, since government can secure much better interest rates than a private corporation.
This has all been well understood since the 1990s and documented over the years in a whole range of research on P3s.”
In fact, the Ontario Auditor General recently reported that the province had lost a jaw-dropping $8 billion over a decade by building projects as P3s rather than as traditional public infrastructure projects.

To top it off, privatization tends to increase inequality by driving down wages and ramping up user fees, while eroding the capacity of our public sector. That’s why many cities across Canada and around the world have begun bringing services back in-house after failed experiments with P3s.

Now, ignoring this body of evidence, our own federal government is working from the same playbook as Donald Trump, planning a major privatization of Canadian infrastructure.
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This should all be deeply worrying to Canadians. The push for privatization illustrates how neoliberalism is alive and well – in Trump’s America and Trudeau’s Canada. Yet the evidence is clear: selling out our public infrastructure is both unnecessary and incredibly costly. And it’s taking us in precisely the wrong direction at a time when we need a renewed public sphere to meet huge collective challenges.
- Meanwhile, David Rider and Betsy Powell report on the fight against the privatization of Toronto's garbage collection. And D.C. Fraser reports that the Saskatchewan Party's first major move following from Brad Wall's attack on wages has been to threaten the jobs of over 250 custodial workers.

- While I'm still skeptical about what we can expect from Karina Gould as the minister of democratic institutions, PressProgress tracks down some past statements which would suggest she recognizes the need for a proportional electoral system.

- Finally, Andrew Potter discusses the de-institutionalism of media organizations as a means of ensuring reporting standards - while hinting that it may be possible to develop alternate ways to avoid being swamped by fake news.

New column day

Here, on how a change in government hasn't done anything to slow the spread of Canada's surveillance state - both in terms of intrusive new legislative proposals, and a continued determination to operate even outside the law.

For further reading...
- Again, Dave Seglins and Rachel Houlihan reported on the Cold War-era wiretapping approvals which are still being officially denied by the federal government.
- Justin Ling documented the history of "lawful access" legislation, along with the more recent effort of Ralph Goodale and the RCMP to repackage the same intrusions in a new message.
- Tonda MacCharles reported on both CSIS' admission that it too spied on journalists, and its subsequent broken promise to own up to its past surveillance - seemingly because it's still engaged in the same tactics now.
- Finally, Colin Freeze reports that CSIS has also been seeking bulk data collection mechanisms for years. Asha Tomlinson points out how many apps already collect far more data than they need for business purposes. And Sasa Petricic looks to China for a warning as to the implications for privacy and individual freedom when state power meets the centralized collection and use of data.

Tuesday, January 10, 2017

Tuesday Night Cat Blogging

Surrounded cats.




The Minister of Silly Excuses

Yes, Justin Trudeau has set up his predictable excuse for breaking his promise of electoral reform by putting a new minister in charge of the file during a crucial period. But let's see what Karina Gould has had to say about a more fair democratic system in communicating with her constituents (PDF):
Participants focused on the importance between direct and proportional representation. It was expressed that being able to vote directly for someone to represent constituents was important. Some felt that the Mixed Member Proportional system provides this ability. However, participants also expressed concern that most people do not understand proportional representation. Some participants also indicated that Canada is too large and sparsely populated in certain regions for Proportional Representation to be an appropriate option. 
The consultation demonstrated that electoral reform is a complex issue and there are many considerations to be made before one can identify an ideal system for Canada.
Sadly, that combination of blaming proportional systems for the confusion being fostered by the Libs themselves and otherwise stacking the deck against the very concept of proportionality (no matter what the people being consulted actually say) looks to explain Gould's appointment.

Which isn't to say it represents a reasonable formulation of any coherent approach to the state of our democracy. But it represents exactly the kind of smokescreen Trudeau favours as a statement of the Libs' self-serving opposition to their own core electoral promise - and it'll be a pleasant surprise if Gould offers anything more reasonable in her new position.

Update: Kady O'Malley links to the formal report (PDF) from Gould's consultation. While the first paragraph of the text above is very close to one within the report, readers can draw their own conclusions as to how the broader discussion was pared down in Gould's message to constituents.

Tuesday Morning Links

This and that for your Tuesday reading.

- Jesse Ferreras reports that Canada's supposed job growth has included almost nothing but part-time and precarious work. And Louis-Philippe Rochon points out how the influence of the financial sector has led to economic choices which serve nobody else's interests:
What makes governments hesitate to pursue policies they have been told would benefit the economy and the working class?

I am forced to conclude that these choices do not depend on economic factors, but rather on political ones, and in particular, the over-influence of finance and financial leaders in the political arena.

Full employment is possible, if governments chose to pursue it. Nothing stops government from adopting policies that would reduce the great inequalities in income by increasing marginal tax rates, adopting inheritance taxes and more.

Inevitably, however, these policies would hurt the financial elites who have become way too tangled up with the political class. It would also inevitably shift social power toward the working class and away from finance. 
- Jim Stanford writes that much of the dogma underlying corporate free trade deals is at long last being met with scrutiny. And Noah Smith comments on the constant - and unfair - assumption that public policy shouldn't even be considered as a means of improving people's lives absent some discrete market failure.

- Andrew MacLeod reveals the results of the B.C. Libs' attempt to dodge a modest boost to the Canada Pension Plan - showing that two-thirds of respondents favoured the expansion which the Clark government tried to undercut. 

- Jessica Elgot reports on Jeremy Corbyn's call for a maximum wage law in the UK. And the Guardian's panel response offers plenty of food for thought - particularly to the effect that where the problem to be addressed is the disproportionate accumulation of income and wealth, the right policy prescription is likely through taxes rather than regulation.

- Finally, Andrew Coyne discusses the radically difference models which give rise to varied views on a basic income, while noting that Hugh Segal's proposed pilot program will offer a useful study of a model which should appeal to all sides.