Saturday, May 17, 2014

Saturday Morning Links

Assorted content for your weekend reading.

- Bill Moyers interviews Richard Wolff about inequality - featuring Wolff's observation that anybody trying to justify inequality as an inevitable byproduct of unregulated markets manages only to make those markets indefensible:
Bill Moyers: When you say that there's no economic argument that people should be kept at the-- should not share in the gains of economic growth, the response is, "Well, that's what the market bears."

Richard Wolff: Well, you know, in the history of economics, which is my profession, it's a standard play on words. Instead of talking about how the economy is shaped by the actions of consumers in one way, workers in another way, corporate executives in another way, we abstract from all of that and we create a myth or a mystique. It's called the market.

That way you're absolving everybody from responsibility. It isn't that you're doing this, making that decision in this way, it's rather this thing called the market that makes things happen. Well, every corporate executive I know, knows that half of his or her job is to tweak, manipulate, shift, and change the market.

No corporate executive takes the market as given. That may happen in the classroom, but not in the world of real business. That's what advertising is. You try to create the demand, if there isn't enough of it to make money without doing that. You change everything you can. So the reference to a market, I think, is an evasion.

It's an attempt to make abstract the real workings of the economy so nobody can question what this one or that one is doing. But let me take it another way. To say that it's the market is another way of saying, "It's our economic system that works that way." That is a very dangerous defense move to take.

Bill Moyers: Why?

Richard Wolff: Because it plays into the hands of those like me who are critical of the system. If indeed it isn't this one or that one, it isn't this company's strategy or that product's maneuver, but it is the market, the totality of the system, that is producing unconscionable results, multi-million-dollar apartments next door to abject poverty, then you're saying that the system is at fault for these results.

I agree with that. But I'm not sure that those who push this notion of "the market makes it happen," have thought through where the logic of that defense makes them very vulnerable to a much more profound critique than they will be comfortable with.
- Meanwhile, Lana Payne tears into Tim Hudak for his job-killing agenda and long-discredited policy prescriptions, while Alan Pyke discusses how corporate freebies have failed in Kansas. And David Olive singles out Hudak for well-justified scorn in his claim (contrary to all evidence) that another round of handouts to the corporate sector will help Ontario's economic prospects - though Olive is also right to note that there's significant room for greater long-term investment on all sides in the Ontario election.

- Upstream makes the case for a focus on youth homelessness as an area where public investment could radically improve lives. And the NDP is pushing (and petitioning) for a renewed federal role in funding social housing as a means of alleviating poverty.

- The Star takes a look at the Cons' cuts to refugee health care, and confirms the suspicion that the effect of withdrawing funding for needed services would be to inflate costs for the provinces who are left to deal with diseases left untreated for too long.

- Finally, Kady O'Malley points out that the NDP has received a substantial boost from former House of Commons law clerk Rob Walsh in its effort to stop the abuse of parliamentary resources to attack opposition parties. But it's hard to see the Cons being persuaded to change course given that Walsh's warning against "the use of House proceedings for any purpose license parliamentary tyranny by a governing majority over the minority parties sitting in opposition if not also over outside third parties" would fit neatly as a mission statement for Stephen Harper and his minions.

Friday, May 16, 2014

Musical interlude

Junkhouse - Shine

Friday Morning Links

Assorted content to end your week.

- Polly Toynbee looks at how the UK is now treating children in need as investment opportunities to be exploited by investors, rather than people to be assisted. And Mark Taliano writes that privatization is a problem rather than a solution when it comes to providing public services.

- Geoff Leo uncovers still more stories about the abuse of temporary foreign workers. And David Climenhaga looks behind the business lobby's insistence on being granted a low-wage, no-rights pool of disposable foreign labour to replace Canadians who may expect to have lives outside of work rather than devoting their every moment and thought to serving a corporate master:
(W)hen they feel comfortable enough to slip outside their message box, a great many of them disparage their fellow Canadians, especially the young people who traditionally fill food service jobs in this country, because Canadian workers sometimes stand up for their rights and demand fair treatment.

Consider this unguarded commentary by a restaurant owner in my community, St. Albert, Alberta, sympathetically reported by the local bi-weekly.

"After years of struggling to retain full-time staff," the paper's reporter wrote, the local fast-food restaurant operator "resorted to hiring two foreign workers…" The reason, the reporter uncritically explained, was that the restaurateur found Canadian employees didn't show up for work, "showed a lack of commitment" or -- quelle horreur! -- wanted to change their schedules.
(T)alking points notwithstanding, the alleged labour shortage, the claimed skills shortage, the purported high cost of foreign workers and the desire to protect Canadian jobs aren't any of them the real issue -- it's the attitude of Canadian employees.

And remember, the Canadian employees were talking about are people like our own children!

This is a dirty little secret of many small businesses in communities all over Canada. All the government, Chamber of Commerce and trade association talking points in the world can't disguise it: The reason so many Canadian fast food employers love temporary foreign workers is not because Canadians are lousy workers, and certainly not because there's a genuine shortage of Canadians who could do the work, but because TFWs have no rights and are easy to exploit.

Uppity Canadians too readily stand up for their rights.
 - Meanwhile, Jacqueline Nelson reports on the latest protests among fast food workers (this time spanning the globe).

- Rick Salutin rightly slams Tim Hudak's fear-based economic policy. And Josh Mandryk offers some reason for hope in making the case for a stronger fair wage policy on government contracts.

- Finally, Seumas Milne looks at the state of European politics and concludes that a strong populist movement on the left is needed not only for its own sake, but also to ensure that genuine frustrations about the status quo can find some other outlet besides the prejudice and xenophobia of the far right:
(T)he council of ministers and commission will go on calling the shots in cahoots with the corporate interests that wield the real power at the heart of the EU. It is the ever-growing grip of banks and corporations on the Brussels machinery – reflected in the 30,000 lobbyists who feed off its work – that has shaped each new regulation, commission proposal and court ruling.

The result is a system that has given a failed economic model the force of treaty, entrenching deregulation and privatisation while corporate power is privileged over employment and social rights. It's an approach being played out in the Transatlantic Trade and Investment Partnership deal being negotiated between the EU and US – that would allow companies to bypass the courts to enforce business-drafted regulations over elected public authorities.

The result has been an erosion of the modest social protections built into the single market: growing restrictions on public intervention and investment in the name of competition, and the exploitation of migrant workers to undercut existing employees in the name of free movement of services.
So long as Europe's establishment remains locked in this Brussels orthodoxy, the only antidote to the growth of the far right is a populism of the left: one that targets class and corporate power instead of foreigners. In different ways, that has been the approach of Syriza, now leading the polls in Greece, and the Dutch Socialist party, expected to overtake Labour for the first time. Without it the rise of the racists and xenophobes will go on.

Thursday, May 15, 2014

Thursday Morning Links

This and that for your Thursday reading.

- George Monbiot writes that contrary to the theory that wealth is a precondition to environmental standards, increased consumption tends to correlate to disregard for the our impact on the environment:
For years we've been told that people cannot afford to care about the natural world until they become rich; that only economic growth can save the biosphere, that civilisation marches towards enlightenment about our impacts on the living planet. The results suggest the opposite.

As you can see from the following graph, the people consulted in poorer countries feel, on average, much guiltier about their impacts on the natural world than people in rich countries, even though those impacts tend to be smaller. Of the nations surveyed, the people of Germany, the US, Australia and Britain feel the least consumer guilt; the people of India, China, Mexico and Brazil the most.

The more we consume, the less we feel. And maybe that doesn't just apply to guilt.

Perhaps that's the point of our otherwise-pointless hyperconsumption: it smothers feeling. It might also be the effect of the constant bombardment of advertising and marketing. They seek to replace our attachments to people and place with attachments to objects: attachments which the next round of advertising then breaks in the hope of attaching us to a different set of objects.

The richer we are and the more we consume, the more self-centred and careless of the lives of others we appear to become. Even if you somehow put aside the direct, physical impacts of rising consumption, it's hard to understand how anyone could imagine that economic growth is a formula for protecting the planet.

So what we seem to see here is the turning of a vicious circle. The more harm we do, the less concerned about it we become. And the more hyperconsumerism destroys relationships, communities and the physical fabric of the Earth, the more we try to fill the void in our lives by buying more stuff.

All this is accompanied in the rich anglophone nations with the extreme neoliberalism promoted by both press and politicians, and a great concentration of power in the hands of the financial and fossil fuel sectors, which lobby hard, in the public sphere and in private, to prevent change.
- But then, it's hard to say our problem lies solely with an exclusive focus on human needs when xkcd points out the EPA's valuation of oil reserves as exceeding that of humanity.

- Meanwhile, Tim McDonnell interviews Ken Silverstein about his reporting from the world of oil fixers.

- Felix Salmon discusses why salaries should be open to scrutiny rather than remaining hidden. But in addition to Salmon's focus on transparency, I'd point out one additional reason why we should favour greater disclosure of what people make: if CEOs have managed to improve their bargaining power and claim a larger share of income based on greater knowledge of what their counterparts are making, the same principle might well apply further down the income scale as well.

- Toby Sanger takes a look at the real effects of Tim Hudak's slash-and-burn plans for Ontario. And Linda McQuaig writes about the utter implausibility of Hudak's associated promises:
Ontario Progressive Conservative Leader Tim Hudak claims he has a plan that will create One Million Jobs. Everywhere he goes in the current election campaign, he stands in front of a backdrop that proclaims One Million Jobs.

Nowhere does he mention that those jobs are imaginary.

His job creation strategy is based heavily on the notion that cutting corporate taxes causes businesses to create jobs — a theory that relies, according to Nobel-Prize-winning economist Paul Krugman, on the “confidence fairy.”

It’s a striking comment on how far to the right the mainstream media has drifted that Hudak’s ‘plan’ is being treated somewhat seriously.

While media commentators have expressed skepticism, they still refer to the plan as “bold” — an adjective that gives it more credence than, for instance, “nutty” would.

Well, yes, bold it is — in the same way that it would be bold for Hudak to say he’ll create one million jobs by cutting Ontarians’ consumption of French fries.
- Finally, Andrew Coyne makes the case for mandatory voting as part of a larger recognition of our civic responsibilities:
The argument for compulsory voting is analogous to that for taxation. No doubt, if paying for public services were voluntary, many people would do so, purely out of a sense of civic duty. But many more would not, reasoning that the first group’s willingness to pay would still ensure these services were provided — only to find their own numbers were so great that the services they had hoped to “free ride” on were unavailable. So instead we force everyone to pay, for services everyone receives.

The same applies to the vote. Voting isn’t like buying a soft drink. When you cast your vote, you aren’t just making a choice about you and your needs. You’re helping to make a collective decision about providing for everybody’s needs. The broader the sample of voters, the more representative of everybody it is likely to be — rather like the census — and the greater the combined stock of experiences and insights brought to bear. Conversely, if some “free ride” on others’ willingness to vote, the whole of the community suffers.

You owe your fellow citizens your counsel, in other words. You benefit because they vote. You owe them no less in return — just as you owe them your share of the cost of public services. We ask very little of citizens in a democracy. Showing up to vote once every four or five years hardly seems much of an imposition. We’re not talking about throwing anybody in jail: a small fine would suffice, or perhaps a tax credit or some such positive incentive for compliance. You could still decline the ballot, or spoil it, or otherwise register your dissatisfaction with the choices on offer. You just wouldn’t be able to sit on your duff.

New column day

Here, looking at one of Thomas Piketty's findings about the self-propagation of wealth which has received relatively little attention - and pointing out how the a pattern of greater wealth grabbing higher returns can both be managed in order to reduce undue concentration of wealth, and even turned to the public's advantage through pools of social capital.

For further reading...
- Piketty's discussion of inequality in returns on capital starts at page 430 of the English translation of Capital in the Twenty-First Century - with his study of university endowment funds at page 447 serving as a particularly useful illustration of the point. 
- Matt Bruenig draws the link between the greater returns to large pools of capital and the value of sovereign wealth funds here
- Finally, the Mowat Centre's study on corporate taxation is here. And Barrie McKenna connected it to Piketty's overall discussion of inequality here.

Wednesday, May 14, 2014

Wednesday Afternoon Links

Miscellaneous material for your mid-week reading.

- Jared Bernstein takes a look at after-tax inequality, and finds that it fits neatly with Thomas Piketty's prescription to address the concentration of income and wealth through strong public policy:
(W)hile the progressive taxes and transfers that don’t show up in Mr. Piketty’s data reduce the level of inequality at any point in time, they don’t have that much impact on its growth. The share of comprehensive income going to the top 1 percent grew 6 percentage points before taxes and transfers from 1979 to 2010, and 5.4 points after taxes and transfers. (If one stops at 2007, before the recession, the same comparison yields an increase of 9.8 points before tax and 9.3 after).

So, yes, critics are correct that inequality analysts, including Mr. Piketty, should look at the impact of taxes and transfers. But if they’re fact driven, what they find will not alter their view about the upward trajectory of inequality. Instead, the extent of wage stagnation and its corollary, the increased role of transfer income and tax cuts in raising middle-income living standards, should alarm them. Instead of hacking away at the safety net, the data reveal the need to preserve it while increasing the quantity and quality of employment opportunities and the real growth rate of earnings for the majority of the work force.
- And David Atkins notes that inequality looks like an important issue to push back against the drift to the right - as evidenced by the Republicans' panic in trying to defend policies designed to make the rich richer:
The GOP's entire supply side theory is that if you reduce regulations and taxes on employers, they'll make more money and be able to hire more people. But even if that were true--and it isn't--it doesn't follow that any potential jobs they might create would actually be good jobs. In fact, most of the jobs that have been created since the Great Recession are low wage work. Most voters are smart enough to realize that.

The GOP could, in theory, blame immigration for driving down wages, and go the hardcore xenophobe populist direction of much of the European right. But that would almost certainly permanently lose them the Hispanic vote in a big way almost permanently, which would be electoral suicide.

But there aren't many other places to go for the GOP on inequality. One local Republican candidate for Assembly said at a recent debate that government regulations were constraining business, and that if we got rid of wage controls then wages would go up. That's literally how boxed in and nonsensical their position is.

If Democrats want to win, this is the issue they'll push. The GOP is in a tailspin on it, and they don't have other good messages in the till.
- Harry Stein comments on Pfizer's attempt to use an acquisition as a major tax dodge, while Brian Goldman discusses how pharmaceutical manufacturers are delaying the availability of new medications in Canada. Which naturally means the Cons figure it's time to hand still more free money to big pharma in the form of the CETA - and Joel Lexchin and Marc-André Gagnon study the costs.

- Carol Goar documents the demolition of the Cons' excuses for pushing the use of temporary foreign workers rather than skilled Canadians. And Lee-Anne Goodman reports that the TFWP is even shadier than previously reported - as employers are actively refusing to answer Canadian applications before applying for indentured servants based on the false claim that they can't find workers in Canada:
(From) customer service representatives in New Brunswick to food service supervisors in B.C. and RCMP clerks in Saskatchewan, many of the 110,000 jobs listed on the job bank are no longer available. A litany of postings are several months old; some have been on the site for more than a year.

Some job-seekers also complain that they never heard back from employers after applying for jobs posted online. An email address set up under a generic name by The Canadian Press has not received any replies to multiple queries about various job postings, including at companies that already employ temporary foreign workers.

Bill Wadsworth, a helicopter pilot in B.C., says he applied for jobs at numerous companies that he later learned were given a positive labour market opinion — or LMO — that allowed them to hire temporary foreign workers.

"I had applied to, and had the qualifications, to work for 75 per cent of the LMOs," he said in a recent interview.

"During my job search, I would contact these companies every two weeks on average. The response was always the same: 'We have no openings.'"
- Finally, Trish Hennessy discusses the plight of the Canadian middle class in her latest Index.

Tuesday, May 13, 2014

Tuesday Night Cat Blogging

Welcoming committee cats.

Tuesday Afternoon Links

This and that for your Tuesday reading.

- Doug Saunders interviews Thomas Piketty about the need for checks on the undue accumulation of capital, and the readily available means of achieving that end:
To solve the problem of rising inequality, you propose small worldwide taxes on capital transfers and on wealth, and prohibitive taxes on extreme incomes and inheritance. But such taxes are not popular today, and there is little sign they will catch on. Does this make you pessimistic?

I believe in the power of ideas, I believe in the power of books, but you have to give them time. Books have a very long-term impact, and it’s never a deterministic impact – you can never say “this book has had this particular impact on policy.” It’s much more complex.

The kind of policy conclusions I derive in the book are already in the public debate. For instance, we have this talk about tax havens. Five years ago, people were saying that nothing would ever happen; Swiss banks would keep their accounts secret and would never accept having automatic transmission of information. And then suddenly there were U.S. sanctions against Swiss banks and things began to change. I think these general moves will continue.
- Kayle Hatt takes a look at the spin behind Tim Hudak's slash-and-burn plan for Ontario - as well as what the province stands to lose through the wanton destruction of public services. And Esther Epp-Tiessen explains why we should see a contribution to the social good in the form of taxes as part of our duty to each other.

- Which means Victor Adebowale and Henry Kippin are right to comment on the need for people to feel they have some say in how our public services are set up - rather than being stuck with a corporate model (italics removed):
[Citizens'] notions of public good appear increasingly out of step with reforms being made to our current public service model. The highest proportion of those surveyed see public services as ‘important to the whole community’ (33%), and ‘available for everyone to use’ (33%) – somewhat at odds with a dominant narrative that has focused on targeting, cuts and, at the extreme, ‘deserving’ and ‘undeserving’ welfare recipients. No major party talks any more in terms of universal entitlements or the ‘same services for everyone’ – partly because of public finances, but also because a batch of studies tell us postcode lottery is already a reality.
 It is not enough for future actors in public service markets to prove delivery competence, financial integrity and an appetite for risk. Private profit and producer interest has clearly been pursued over public purpose in some cases, and this must change – again, a relationship with two sides.
- Meanwhile, the Mowat Centre offers a proposal for corporate tax reform - featuring a far greater focus on rents and windfall profits rather than normal rates of return on investments.

- Finally, Mike de Souza reports on how the public interest is being left out of the National Energy Board's considerations in enforcing the rules governing pipelines.

Monday, May 12, 2014

Monday Afternoon Links

Miscellaneous material for your Monday reading.

- Alyssa Battistoni writes that a universal basic income could go a long way toward solving environmental and economic problems alike by placing a focus on sustainable quality of life rather than increasing consumer consumption:
If overconsumption is actually the problem, we can’t fix it by consuming more, however eco-certified the products. Indeed, the very idea that green jobs will drive economic recovery is closely tied to notions of continued American hegemony: green tech is the next big thing, the rhetoric goes, and America needs to get ahead in the global race to innovate. But nearly every country in the world harbors similar hopes. That the wealthiest country in the world is so panicked at the prospect that others might catch up reveals the fallacy of the notion that continued growth will somehow reach an endpoint in which everyone enjoys a decent standard of living.

Continued growth isn’t the only way to get there. The mythology surrounding the New Deal often obscures the fact that labor’s response to the Depression was not to make more work, but to share existing work more broadly by shifting to a thirty-hour workweek; Keynes himself famously predicted we’d be down to a fifteen-hour workweek by the end of the century. The decision to use fiscal policy to stimulate consumption instead was a way of avoiding deeper structural changes — to grow the pie rather than ask who was eating most of it. Since then, instead of increasing leisure time, productivity gains have largely increased private consumption for an increasingly small number of people. These days, of course, people are having leisure forced on them — it’s employers who are cutting hours and workers who are desperate for more. It’s clear that we can meet needs with vastly less labor than will support a population dependent on stagnating wages. While neoclassical economists pose the consumption-leisure tradeoff as a choice made by individuals, whether or not people work in the first place is clearly determined by decisions made at a society-wide level.

It’s beginning to look like we should have taken the other New Deal. We need to explicitly shift toward working less — to reorient the consumption-leisure tradeoff towards the latter on a social level — and share the work that remains more evenly.
Basic income won’t, in and of itself, solve environmental problems; it won’t replace coal plants with solar panels or ease pressure on depleted aquifers. If instituted as a justification for cuts to other social programs, it would be disastrous both socially and environmentally; robust public services are necessary if we’re to live on less. But it marks a critical starting point in rethinking the relationship between labor, production, and consumption, without which environmental hand-wringing will go nowhere.

More pragmatically, in providing an alternative to dependence on destructive industries and removing the threat of job blackmail from communities desperate for livelihoods, it makes change a real option, giving workers and communities more power to demand protections against environmental harms. It can start to reorient social focus away from an eternal game of consumption catch-up toward the good life.

It admittedly won’t do much to curb the upper bounds of consumption, at least not right away. But it might point in that direction. Environmentalists like to point to World War II for evidence that people will accept restrictions on consumption for the sake of a shared cause, but the so-called Greatest Generation didn’t exactly accept rations with a patriotic grin. What that experience does demonstrate, however, is that while people don’t like limiting consumption under any circumstances, what they really don’t like is cutting back if everyone else isn’t doing the same.
- And Paul Krugman takes a look at the upper end of the U.S.' income spectrum to test whether outsized incomes reflect any useful contribution to the world at large:
(M)odern inequality isn’t about graduates. It’s about oligarchs. Apologists for soaring inequality almost always try to disguise the gigantic incomes of the truly rich by hiding them in a crowd of the merely affluent. Instead of talking about the 1 percent or the 0.1 percent, they talk about the rising incomes of college graduates, or maybe the top 5 percent. The goal of this misdirection is to soften the picture, to make it seem as if we’re talking about ordinary white-collar professionals who get ahead through education and hard work.

But many Americans are well-educated and work hard. For example, schoolteachers. Yet they don’t get the big bucks. Last year, those 25 hedge fund managers made more than twice as much as all the kindergarten teachers in America combined. And, no, it wasn’t always thus: The vast gulf that now exists between the upper-middle-class and the truly rich didn’t emerge until the Reagan years.

Second, ignore the rhetoric about “job creators” and all that. Conservatives want you to believe that the big rewards in modern America go to innovators and entrepreneurs, people who build businesses and push technology forward. But that’s not what those hedge fund managers do for a living; they’re in the business of financial speculation, which John Maynard Keynes characterized as “anticipating what average opinion expects the average opinion to be.” Or since they make much of their income from fees, they’re actually in the business of convincing other people that they can anticipate average opinion about average opinion.

Once upon a time, you might have been able to argue with a straight face that all this wheeling and dealing was productive, that the financial elite was actually providing services to society commensurate with its rewards. But, at this point, the evidence suggests that hedge funds are a bad deal for everyone except their managers; they don’t deliver high enough returns to justify those huge fees, and they’re a major source of economic instability.

More broadly, we’re still living in the shadow of a crisis brought on by a runaway financial industry. Total catastrophe was avoided by bailing out banks at taxpayer expense, but we’re still nowhere close to making up for job losses in the millions and economic losses in the trillions. Given that history, do you really want to claim that America’s top earners — who are mainly either financial managers or executives at big corporations — are economic heroes?
- Meanwhile, Becky Sweger highlights how the U.S.' tax system continues to be biased in favour of corporate giants. Jim Stanford discusses how needless austerity has contributed to pitiful Canadian employment numbers. And Andrew Langille points out that Tim Hudak wants to make matters much worse for workers in Ontario.

- Robert Reich offers a few populist principles which are finding support among prominent members of both major U.S. political parties, while also serving as important checks on the mindset that power exists only to serve those who already wield it. And Jeffrey Simpson rightly questions whether elites can be expected to meaningfully deal with inequality.

- Finally, Aleksandra McHugh writes about the corporate takeover of education policy. And Robert Bostelaar exposes the Cons' shadow civil service made up of a low-paid, temporary workforce.