Corporatization and Resistance, UC Berkeley to U of T

WHAT: Anti-Corporatization teach-in

WHEN: Saturday, January 22 • 10:00am – 5:00pm

WHERE: Sidney Smith Hall, University of Toronto

Event Details: Earlier this year, Peter Munk, the chairman and founder of the world’s largest gold mining company, gave a historic contribution of $35 million to the University of Toronto… But what are the implications of this donation? How much influence will Munk have over the University’s curriculum and bias? Who is Peter Munk and what is his company Barrick Gold’s reputation worldwide?… Our intention with this conference is to empower local critical thinkers and activists to devise our plan in the fight for just education.

Just what is an “anti-corporatization teach-in” (and do you get credits for it?)?   Presumably attendees will learn about the evils of corporate influence on the university environment. Why anyone would want to spend half their weekend immersed in this subject is beyond me: if you want to read anti-corporate-education screeds, you need only troll the internet for an hour, and you’d still have the whole Saturday to yourself.

One also has to wonder why the organizers chose to target Peter Munk. Apart from issues with his personal wealth, they appear to have problems with his company, Barrick Gold, which allegedly,

“takes advantage of inadequate and poorly enforced regulatory controls to rob indigenous people of their lands, destroy sensitive ecosystems and agricultural land, support brutal police and security operations, and sue anyone who tries to report on it.”

They fail to mention, of course, that Barrick creates jobs, industry and wealth in countries which otherwise would have limited economic opportunity. Furthermore, if organizers really don’t want to accept any money that might result from worker “exploitation”, then they shouldn’t take Canadian taxpayer dollars either. Quite a few of those come from unglamorous and “exploitative” McJobs, from burger-flipper, to garment worker, to call centre operator, generated by hard-working stiffs who haven’t had the benefit of a university education themselves.

Since 1992, Mr. Munk’s charitable foundation has bestowed over $100 million on various charities and institutions. It gave $37 million to the Toronto General Hospital (if the sponsors of the teach-in get sick, they may wish to avoid being treated there). It funds the annual Munk debates, an intellectual exchange which has enriched public dialogue in Toronto and beyond. Guests have included Stephen Lewis, Charles Krauthammer, Mia Farrow, John Bolton, and Gareth Evans; this year Tony Blair and Christopher Hitchens debated whether religion is a force for good in the world.

As for the Munk School of Global Affairs, it is headed by Professor Janice Gross Stein, an internationally- renowned scholar and eminently fair-minded intellectual. The agreement on the creation of the school is available online; it states that the University will conduct independent “blue ribbon” reviews and that the School commits to respecting the University’s rules on academic freedom. Mr. Munk is to be consulted on matters such as signage and is to receive regular progress reports on the school’s development.

Gee, if I gave a school $35 million, I’d want to know how things were going, and where my name was going to be. Nowhere does the agreement state or imply that the donor would have control of faculty, curriculum, or anything else which could impinge on academic freedom.

Memo to students: If you feel it will crimp your style to study there, there’s an easy solution: go somewhere else. There are dozens of other universities across the province waiting to welcome you.

It would be interesting to know how many of the organizers and attendees, particularly graduates, regularly make financial donations to their universities?   If they don’t want the Peter Munks of this world to pony up, perhaps they should start coughing up the spare change. Universities don’t come free, and taxpayers do not owe students an education. While public support forms part of our university funding model, it is not the only source. Paying for one’s higher education – and that of future generations – is also the responsibility of those who derive the most benefit from it: ie, the graduates of the university system itself.

Instead of spending time, money and energy protesting Mr. Munk’s valuable contribution to U of T, might I suggest that the organizers spend their day raising money for the university. Hit the phones and call alumni for pledges. Organize a lecture and charge admission. Run a used book sale, used clothing sale, or anything else you can think of. Do something useful, instead of whining about those who do.

National Post

This is the month for taking stock of the year that passed and imagining what the year before us may hold.  For me, two broad and contradictory trends have emerged which just might shape politics and policy in 2011: the extraordinary resilience of neoliberal ideology and the reemergence of inequality as a defining public issue.

Recall the days and weeks after the financial crisis of 2008 when just about everybody was wondering out loud about the limits of unfettered greed, unregulated markets, the separation between the financial economy and the “real economy”.  The leaders of France and Italy talked about restoring morality to capitalism and bringing the financial system under collective control.  Books were written on the fall of neoliberalism.  Blogs of the left saw new opportunity for “progressive” alternatives.  The G20 focused on issues of regulation and old style Keynesian stimulus.  Governments got involved in banking and the auto industry in ways that couldn’t have been imagined just months before.  Cowboy capitalism was over.   The invisible hand of the market had shown us the finger.  But by the time those books on “the rise and fall of neoliberalism” were published they already seemed naïve or at least dated.  The pronouncements of neoliberalism’s death were, it seems, premature.   So what happened?

Neoliberalism, simply put, is an approach that trusts in the market and is scornful of government intervention, favours private over public, market over state.   If its poet was Friedrich Hayek, its most influential proponent was academic and advisor to Ronald Reagan, Milton Friedman.  I don’t want to caricature free market economics; the writings of Friedman and particularly Hayek are more nuanced than the utterings of their apostles, but the message is clear – less tax, less spending, less regulation.  So, in Friedman’s own words, ” there is no alternative way, so far discovered, of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.”   On tax and spend:

I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible. The reason I am is because I believe the big problem is not taxes, the big problem is spending. The question is, ‘How do you hold down government spending?’ … The only effective way I think to hold it down, is to hold down the amount of income the government has. The way to do that is to cut taxes.

On government intervention, “The government solution to a problem is usually as bad as the problem.”

In practice, however, free market government takes many shapes and never looks much like the models described by its architects.   For example, it seems the norm for self-described free-market governments is to run up soaring deficits and debt.  Nor do they necessarily deliver “small government” as we saw with say Reagan and Thatcher and their “offspring”  who built up the security and penal components of government at great cost and with questionable result.  And of course, we recently saw massive intervention to shore up banks and major corporations.  What these governments do have in common is a decline in active social policy, a reluctance to intervene in private decisions, and, above all else, a commitment to reducing taxes which is, after all, much easier to sell politically than reducing public services – though the latter must inevitably follow.

For quite a while these arguments were in disfavour while governments in Europe and, later, in North America were actively building social safety nets and systems of progressive taxation.  But neoliberalism made an impressive comeback.    The economic stagnation of the seventies opened the door to free market advocates and the collapse of the Soviet Union and the fall of the Wall lent their policies the aura of truth.  Its heyday was the eighties and the nineties and it shows little sign of fading.

The brief post-crisis period when everybody, including some of its architects, was raising questions about this approach seems all but over.  Blame for the crisis shifted.  Suddenly the culprits became the people who wanted homes they couldn’t afford or the governments that sought to help them or unaffordable social spending more generally.  How quickly things changed.  No longer was neoliberalism the problem.  Indeed what we need, the argument goes, is more of it.  Because there exist no purely unfettered markets, neoliberal advocates are always free to argue that the problem is not enough neoliberalism.  Some argue, in the safety of retrospect, that stimulus and bailouts were wrong or overdone.  Others argue that they were necessary but it is now time to get back to the track we were traveling – starting with tax cuts and eliminating the newly created or increased deficits.

And so the case is being made.  In the U.S., temporary tax cuts for the rich and others are being extended as government debt hits science fiction numbers.  Even modest attempts at government intervention are decried as socialism.  And a bi-partisan deficit cutting commission has recommended a balanced approach towards a balanced budget primarily through cuts to programs and services, though it did not receive the votes necessary for referral to Congress.  Here in Canada, we keep celebrating that we did less badly than many others through the recession, reinforcing the approach of business as usual  — a focus on balanced budgets and cuts to taxes.

At the same time, however, an old issue is emerging anew in the U.S., in the U.K. and here in Canada – levels of inequality, the likes of which we haven’t seen since the twenties and thirties before the Great Depression.  The evidence is so striking that the issue is actually getting some play.  Both the Prime Minister of England and the leader of their official opposition have picked up the theme, even if only rhetorically at this point.  Newspaper headlines have captured its various manifestations, the concentration of money in the top 1%, the threats to the quality of life in our cities because of deepening class divisions, the struggle of increasing numbers of Canadian families to pay their monthly bills, and the extraordinarily high CEO salaries and bonuses and stock options which seem to be recession proof.  The data are simply too extensive, from too many sources, too consistent to be ignored.

Few commentators seem to be refuting the data.  Of course, there are always a few who dismiss the messenger  or simply pretend the data away.  Margaret Wente, for example, suggested in a recent article that Wilkinson and Pickett’s book on inequality has a hole so big she could fire a cannon ball though it, though, at least on first reading of her piece, I have  seen neither hole nor cannonball.  Others acknowledge the inequality but dismiss it as exaggerated or irrelevant, an unavoidable consequence of economic growth.   A few dismiss the concerns as driven by nothing more than envy though an emerging group of super rich arguing for more taxes seems to give the lie to that.   In any case, envy is quite different from anger and resentment at a situation that seems unjust or damaging to Canada and Canadians.

But “inequality denial” is not the norm.  More and more researchers and analysts are asking not only whether the levels of inequality we are now seeing are just but whether they are sustainable.  Wilkinson and Pickett document the social pathologies that flow from inequality.  Others emphasize the threats to democracy and the social fabric.  The data show that the neoliberal promise of upward mobility based on hard work and ability is far less likely in highly unequal societies.  And voices as diverse as Moyers and Fukuyama wonder aloud about the risks of plutocracy, the merging of money and politics that in the end serves no one’s interests. It seems that when the rungs of the ladder are too far apart it becomes harder to climb and those at the top breathe different air from the rest and that is a dangerous mix.

So how do these two trends — resurgent neoliberalism and growing inequality — manage to coexist?  How do we explain the rebound of neoliberalism in the face of its stark consequences?  Keynes noted the enduring power of economic and philosophical ideas, whether right or wrong, to influence the practitioners of public policy, particularly “those who believe themselves quite exempt from any intellectual influence”.  Jones and Williams have devoted an entire book to the “great tax cut delusion?” and The Politics of Bad Ideas. They, like others, point to weakened public institutions, the devaluing of research and evidence-based decision-making, and the disproportionate capacity of the wealthy to influence public policy not just through party contributions  but through investments in think tanks and ownership of media.  Canada has taken commendable and important steps to limit the ability of big money to donate to political parties but, of course, that is only part of the challenge. Thomas Frank in the U.S. and W.S. Stanbury here have recently documented the myriad ways in which the wealthy currently influence the political and public discourse. It is no surprise that the rich, particularly the very rich, are more effective at influencing public opinion than others – especially when science and evidence are held in low regard.

But perhaps most compelling is the work of economist, Karl Polanyi, writing decades back, on how neoliberalism has built broad support through appeals to one of the highest human values -  individual freedom, with its implicit promise of opportunity for personal success.  Freedom in this frame is defined as economic freedom – to be unfettered in pursuit of ones interests in the market – and with this comes the entitlement to keep what one earns. Not surprisingly, the Cato Institute, an effective American proponent of free market liberalism, calls Milton Friedman, “the hero of freedom”.  The language and arguments are compelling and well suited to this age of the individual.  But there are other ways of thinking about these issues. Polanyi warned some sixty years ago against a narrow economic definition of freedom that could too easily mean freedom from our obligations to others and, at worst, the freedom to abuse and exploit.  For Polanyi, such an approach meant real freedom for the few, not the many, and was built on delusion, the pretense that earnings reflect only individual effort and merit, rather than the contributions of many and the investments of previous generations more willing than we to pay their taxes – not to mention the role of luck and inheritance.  Polanyi rejected the notion that the economy, the market, was the basis for all human organization and freedom.  Instead, he viewed the economy – and freedom as well – as embedded in society.

Why raise Polanyi who wrote his seminal work in the forties? Because no one today seems willing or able to offer a compelling contemporary alternative. Nobody seems ready to talk about taxes.  Everybody is afraid of the accusation of being a “tax and spender”.  Confidence in collective solutions seems to be at an all-time low.  So, will the issue of inequality just disappear into the background along with climate change and democratic reform?  What will it take to get some traction? Even greater polarization?  Social unrest?  Another crisis?  Given the dangers of free market approaches to humans and their environment,  Polanyi predicted the emergence of what he called “double movements” – of those protecting their privilege and of those protecting themselves from the privileged. The outcome of these tension?   Nobody knows.

I found quite moving President Obama’s post-Tucson plea for civility, civic virtue, enlightened citizenship.  But is it simply too naïve to imagine that we might find the will and wisdom to act before a crisis, or to hope that the solution lies in some notion of revitalised democracy and evidence-based decision-making?   Polanyi was a realist – he did not assume that progress was assured.  He understood that the movements of self-protection have no inevitable direction; they may be vulnerable to anger, scapegoating and negativity, especially absent a credible progressive option. It seems fitting that his The Great Transformation has been reissued in these days (with an important preface by Joseph Stiglitz). But that’s no way to end the first post of a new year

Perhaps a more hopeful sign is a very thoughtful review of the McQuaig/Brooks book by conservative National Post columnist Jonathan Kay.  He raises good questions and has his doubts but in the end he concludes that extreme inequality is indeed a problem and he argues that conservatives too must look at how they might deal with the issue, that the risks of inattention are just too high.  It is well to remember that Milton Friedman too wrote about inequality and how it might be mitigated.  It is time to bring equality back into how we do policy and politics in Canada.

Many of those writing now about the dangers of inequality understand that we cannot simply look to the past for solutions, that ever bigger government is not in the cards, that there are legitimate and important arguments to be had about how to move forward.  None is arguing for some egalitarian utopia and all understand that some inequality is inevitable and contributes to innovation and pursuit of excellence.  But they do not accept that the emerging consequences of the free market myth are either tolerable or sustainable.  Some are outraged at the injustice.  All are worried about the consequences for Canadians.

Canada has been very successful in previous generations in mitigating inequality and its impact and Canadians rightly take great pride in the relative safety of our communities, the universality of our health system, and  the broad access to education and opportunity.  In the face of all our diversity of views and experience, Canadians have always found ways to realize our responsibilities to one another,  ways that fit the times.   Today, there are plenty of models and ideas about what might be done, about how we spend, how we regulate, and how we tax.  If  that’s where we are going – - or might go – -  right and left arguing about how much inequality we can tolerate and how best to avoid the extremes and mitigate its worst consequences, well, that’s not a bad place to start.

I think part of it is that, as I’ve gotten older, I want less, not more.  I have ADD tendencies so I’m always trying to stave off clutter.  As a result, when people give me things I did not ask for I take it as an act of aggression.  So that’s part of it.

I didn’t want what the guy was selling, despite his sexy accent.  He was also using some very aggressive sales tactics and became very frustrated with me when I pointed out that he was trying to give me something I didn’t need or want in order to get me to eventually pay for something I didn’t need or want.   Who the heck needs more TV channels these days?

Anyway, there is also a lot of build up right now in the USA to get people into the stores for “deals” on things they likely didn’t realize they needed until they heard it was on sale.  Frenzied consumer days like Black Friday and Boxing Day have their seasoned activist detractors.  I am sure everyone remembers the worker who was trampled to death at Wal-mart on a Black Friday.  So, I don’t need to go on about it.  It got me wondering, though, about people’s disposable income and how little these service industry jobs pay and how there is always a backlash when groups try to get minimum wages raised.

You can listen here to Neil Brooks speak on he and Linda McQuaig’s book The Trouble with Billionaires.  He talks about the gilded age (early 1900s) – when the top 1% were getting 15 or 16% of total wealth in Canada.  Beginning of 1930s – dropped to 10% share for 1% of population.  The authors discuss that things were in place then to redistribute this income.  Up until the end of the 1970s – share of total wealth declines for top 1% of wealthiest, because government continue to intervene with taxes and so on, we all prospered.  The average person saw they were going to be better off than their parents.  Beginning in the 1980s, Canada’s social contract began to unravel.  Business interests went on attack against social and income redistribution programs.  By 2007, the top 1% doubled their share of total income in Canada, the top.01% tripled their share.

Importantly, the wages of workers have stagnated in Canada and the USA.  The median family income in Canada has not gone up in real terms in 30 years.  The median family was making 45,000 back then and they are making 45,000 now. CEOs incomes have risen dramatically and many now make 200 times the amount of the average worker’s wage.  A small percentage of CEOs make over 900 times that amount.  Someone making the minimum wage would have to work nearly 750 years and 2483 years to earn that amount.

So, they ask, what kind of society do we want?  Do we want a democratic society where everyone is seen to be of equal value?   We know that more and more things aren’t making us happier.

It has been said that the primary consequence of the pursuit of a materialistic lifestyle is its failure to yield the promised states of happiness and satisfaction with one’s life in general. This is an important outcome in light of the fact that most materialists expect their possessions to make them happy (Fournier and Richins, 1991). Empirical evidence on the connection between materialism and happiness comes primarily from three studies (Belk 1983, Kasser & Ryan 1993, and Richins & Dawson 1992) and a meta-analysis of work in this area (Wright & Larsen 1993) which all find a negative correlation between materialism and happiness or well-being. It is unclear, however, which way the causation (if any) runs. Does materialism cause unhappiness? Are unhappy people drawn toward material possessions for fulfillment? Or perhaps, does poverty or some other third factor cause both materialism and unhappiness?

So, are higher incomes really the overarching solution?  Probably not, but clearly the disparity growing between those with excessive wealth and the rest of us and the poor is contributing to a very unhealthy society .  Keeping incomes lower is significantly correlated with unhappiness, which is connected to low self-esteem and this fuels the drive to cover these emotions with things.  It seems to me the only folks who benefit from it are those who are making fist fulls of money from our compulsive materialism.  The equation seems really simple:  masses with low incomes + low self-esteem + unhappiness/consumerism = small percentage of wealth holders.  Who would have ever thought it possible.  I’m doing math, again!

Extreme ­inequality is on the rise. Is Alex Rodriguez really 30 times better than Hank Aaron?

By Linda McQuaig and Neil Brooks

Billionaires are on the rise. While workers’ wages have stagnated over the past 30 years, the rich have gotten richer, and the very rich have gotten wildly richer.

We’re no longer amazed to hear that Tiger Woods is making US$100-million a year, or that Oprah Winfrey ranks among the billionaires. Thirty years ago, CEOs of large corporations were content to make 20 or 30 times the average income; now they feel hard done by if they only make 200 to 300 times as much. Things are even more out of whack in the financial world. In 2009, the 25 highest-paid hedge fund managers earned an average over US$1-billion each — about 24,000 times the average income.

These anecdotal reports of rising inequality have been confirmed in countless empirical studies. Perhaps the most widely cited have been a series of studies led by University of California economist Emmanuel Saez and Thomas Piketty of the Paris School of Economics. Using income tax data, the Saez-Piketty studies show that the share of market income captured by the top 1% in the United States rose dramatically from 8.9% in 1978 to a staggering 23.5% in 2007. But even that understates the windfall at the very top. Those in the top 0.01%, for instance, increased their share more than sevenfold, from 0.86% in 1978 to 6.04% in 2007. This is the largest share of national income this very top group has received since the introduction of the U.S. income tax in 1913.

Read more

By Alan Reynolds

If only tax policy could be so simple: Tax the rich and everybody else gets richer and incomes get equalized. Even more complicated is the underlying assumption of the equality seekers, including Linda McQuaig and Neil Brooks, whose premise is that there is some optimum level of inequality. They seem to like the 1947-73 period when, they claim, the top 10% in the U.S. allegedly earned a relatively steady share of close to 35% the total.

The graph supporting this assertion looks impressive. But as Terence Corcoran pointed out in his original article in this series, it’s full of holes. For one thing, it masks the fact that almost all of the increase in income shares of the top 10% can be attributed to the top 1%. Even that doesn’t accurately tell a credible story, because the data behind it are faulty.

There is no dispute about the increase in inequality since 1979 — only about whether that increase ended in 1988 or 1993. Nobody doubts the obvious benefits to high-income investors (and to the low-income unemployed) from the rebound in stocks, bonds and the U.S. economy in 1983-89. But what happened since then?

Read more

Extreme ­inequality is on the rise. Is Alex Rodriguez really 30 times better than Hank Aaron?

By Linda McQuaig and Neil Brooks

Billionaires are on the rise. While workers’ wages have stagnated over the past 30 years, the rich have gotten richer, and the very rich have gotten wildly richer.

We’re no longer amazed to hear that Tiger Woods is making US$100-million a year, or that Oprah Winfrey ranks among the billionaires. Thirty years ago, CEOs of large corporations were content to make 20 or 30 times the average income; now they feel hard done by if they only make 200 to 300 times as much. Things are even more out of whack in the financial world. In 2009, the 25 highest-paid hedge fund managers earned an average over US$1-billion each — about 24,000 times the average income.

These anecdotal reports of rising inequality have been confirmed in countless empirical studies. Perhaps the most widely cited have been a series of studies led by University of California economist Emmanuel Saez and Thomas Piketty of the Paris School of Economics. Using income tax data, the Saez-Piketty studies show that the share of market income captured by the top 1% in the United States rose dramatically from 8.9% in 1978 to a staggering 23.5% in 2007. But even that understates the windfall at the very top. Those in the top 0.01%, for instance, increased their share more than sevenfold, from 0.86% in 1978 to 6.04% in 2007. This is the largest share of national income this very top group has received since the introduction of the U.S. income tax in 1913.

There has been no serious academic dispute over these findings. The American Economic Association awarded Emmanuel Saez the John Bates Clark Medal, given to “that American economist under the age of 40 who is adjudged to have made a significant contribution to economic thought and knowledge,” largely for his work on income distribution.

This data is the basis of our recently released book, The Trouble with Billionaires, which documents the negative consequences of the rise of extreme inequality in Canada, the United States and Britain.

So we were surprised to discover Terence Corcoran’s article in the Post purporting to expose the “myth” of rising inequality (Sept. 16).

Corcoran asserts that “the economic literature is full of debate, most of it in rejection of the basic premise that inequality has been dramatically on the rise.” While there is some dispute over the size of the increase in income inequality among the bottom 90%, there’s been no dispute that inequality has risen, and risen particularly dramatically at the very top.

Corcoran supports his case by referring to a working paper by Northwestern University economist Robert Gordon entitled “Has the Rise in American Inequality Been Exaggerated?” The paper suggests that some analysts may have overstated the increase in inequality, and notes that it has not been a “steady, ­ongoing process.”

But Gordon doesn’t take issue at all with the finding that there’s been a dramatic increase in income share going to the top earners, as noted by Saez and Piketty. In the very first sentence of the paper Corcoran cites, Gordon states: “The evidence is incontrovertible that income inequality has increased in the United States since the 1960s.” In fact, Gordon has documented this trend in his own studies, speculated about its causes, and even shown serious concern about its consequences. As he wrote in a published version of his working paper:

There is a simple solution to growing inequality at the top.… Let the top 1% earn its millions, but then let the government substantially boost the taxation of those rewards, not just in the form of much higher (not just 39%, how about 50%?) top-bracket tax rates, but also a reversal of all the reductions in tax rates on dividends and capital gains of the past 30 years.

So not only does Gordon clearly acknowledge the rise in inequality, he considers it a significant problem that should be addressed through major tax increases at the upper end — a position we heartily endorse. Gordon even goes on to say that “the policy proposals of the Obama administration are, at least so far, meek in contrast to the more radical needed increases in top-income tax rates.”

Corcoran also refers to a critique of the Saaez-Piketty studies by Alan Reynolds of the libertarian Cato Institute. A key assertion by Reynolds is that Saez and Piketty use pretax numbers, and that, once taxes and transfers are added in, there’s been no increase in inequality. This suggests that government redistribution is adequately compensating for increasing market inequality, effectively cancelling its impact. Sadly, however, this simply is not true.

Virtually every study on after-tax income in the United States shows there is little redistribution done by government, and that rising inequality is clearly evident in after-tax income, as well as in pretax income. For example, the Congressional Budget Office reports that from 1979 to 2006, the average after-tax income of the lowest fifth of tax-filers increased only 11%, while for the top 1%, it increased 256%. So much for redistribution.

Similarly, the 2008 OECD report “Growing Unequal?” notes that: “Redistribution of income by government plays a relatively minor role in the United States. Only in Korea is the effect smaller…. The effectiveness of taxes and transfers in reducing inequality has fallen still further in the past 10 years.”

There’s room for serious debate around the issue of extreme inequality. For instance, some commentators justify today’s huge pay packages at the top on the grounds that enormous incentives are necessary to encourage top performances. But this does little to explain why Alex Rodriguez, today’s top-earning baseball player, earns 30 times more (in inflation-adjusted dollars) than Hank Aaron, the top-earning player in the early 1970s, whose performance on the field was as good or better (without the benefit of steroids).

Even more dramatic examples of the disconnect between today’s pay packages and performance are found throughout the world of business and finance. Let’s not forget that Merrill Lynch paid its “top people” some US$4-billion in bonuses in 2009 — right after that same group of overachievers had steered the company to a US$27-billion loss, and in the process helped trigger the global economic meltdown.

Many commentators will object that higher taxes on the rich would lead to stunted economic growth. But as Gordon himself notes, “rapid economic growth from 1947 to 1973 took place in an era of top-bracket tax rates ranging from 78% to 90%. High top-bracket tax rates are not incompatible with healthy growth.”

There are fascinating questions about income inequality that cry out for serious public debate, and we look forward to debating them with Corcoran and others. But let’s not get caught up in a sideshow dispute over whether billionaires are just figments of our imaginations.

Financial Post

Linda McQuaig is a journalist and Neil Brooks is a ­professor of tax law at Osgoode Hall Law School. Their book, The Trouble with Billionaires, is published this month by Penguin Books Canada. A Toronto launch event is scheduled for Tuesday at the Ryerson Student Centre and on Sunday in Calgary at the Plaza Theatre.

By Alan Reynolds

If only tax policy could be so simple: Tax the rich and everybody else gets richer and incomes get equalized. Even more complicated is the underlying assumption of the equality seekers, including Linda McQuaig and Neil Brooks, whose premise is that there is some optimum level of inequality. They seem to like the 1947-73 period when, they claim, the top 10% in the U.S. allegedly earned a relatively steady share of close to 35% of the total.

The graph supporting this assertion looks impressive. But as Terence Corcoran pointed out in his original article in this series, it’s full of holes. For one thing, it masks the fact that almost all of the increase in income shares of the top 10% can be attributed to the top 1%. Even that doesn’t accurately tell a credible story, because the data behind it are faulty.

There is no dispute about the increase in inequality since 1979 — only about whether that increase ended in 1988 or 1993. Nobody doubts the obvious benefits to high-income investors (and to the low-income unemployed) from the rebound in stocks, bonds and the U.S. economy in 1983-89. But what happened since then?

McQuaig and Brooks say there is no debate about these graphic depictions of growing income equality, which are based on the work of Piketty and Saez. But many complex measurement issues concerning income distribution during the past two decades are being questioned.

Aside from my own work, there’s Paul Ryscavage’s classic study Income Inequality in America and Stephen Rose’s new book, Rebound.Other skeptics include Richard Burkhauser at Syracuse University and his associates, Bruce D. Meyer at the University of Chicago and Robert X. Sullivan at the University of Notre Dame, and several others.

There is also no dispute about the high salaries of ­dozens of top athletes, the top 100 CEOs or 25 hedge fund managers — only about ­inequality among the ­population as a whole. ­Superstars and top executives account for no more than 4,000 of the 1.4 million ­taxpayers in the top 1%.

In a forthcoming paper for the Cato Journal I use data from Piketty and Saez to show that most growth of top 1% incomes since the 1986 tax reform has been the result of shifting income from corporate tax forms to individual tax forms (by using Subchapter S corporations, partnerships and LLCs) when individual tax rates fell in 1987 and 2003. There were also unusually large increases in reported capital gains and dividends after those tax rates were cut in 1997 and 2003.

Labour income, ­including superstars and CEOs, had ­little to do with ­changes in top incomes, aside from stock options during the tech-stock boom of 1998-2000. In 2007, the top one percent’s share of salaries, bonuses and stock options amounted to 6.29% of all labour compensation, down from 6.87% in 1988.

Furthermore, the average real labour income of the 1.4 million people in the top 1% U.S. income group (aside from capital gains, dividends and business income) went up in 1999-2000, but has otherwise been rather trendless over the past 20 years. (See graph above). Yet labour income (CEO bonuses, superstars, athletes) is all these folks talk about.

As Mr. Corcoran noted, the Piketty and Saez data exclude transfer payments and income that is simply not reported on individual tax returns, often legally (e.g., by being sheltered within a corporation or individual retirement account).

They are not measuring shares of income at all, unless government cheques from, say, Social Security or the earned income tax credit are not income. Government transfers now exceed US$2.3-trillion a year, and account for three-fourths of disposable income among the poorest 20% of U.S. households.

The Piketty-Saez estimates also cover just 10% of “tax units” (students who work part-time are counted as poor “families” even if their ­parents are affluent), telling us nothing about what has happened to living standards of those with low or middle incomes. They measure ­pretax income, which only tells us what top incomes would be in a hypothetical world with no government and no taxes.

The OECD study McQuaig and Brooks ­mention finds “taxation is most ­progressively distributed in the United States,” far more so than Sweden, Canada or France. This makes estimates of pretax inequality ­irrelevant.

The OECD, responding to me, claims the Piketty-Saez estimates are confirmed by “studies that take into account payments of both personal and corporate taxes,” which means the Congressional Budget Office (CBO). The CBO actually adds most corporate taxes to pretax incomes of the top 1%, which is one of many dubious calculations. That bloats top incomes, but does nothing to neutralize the statistical distortion from shifting between corporate and individual tax returns.

McQuaig and Brooks cite CBO estimates from 1979 to 2006, but nearly all of the big gains in top percentile incomes happened before the 1986 tax reform and after the 2003 tax cuts, both of which grossly distort the data. From 1988 to 2003, the CBO estimates that after-tax income of the bottom fifth increased by 14.4%, not greatly below the 22.4% rise for the top 1%.

If the CBO used a more accurate price index, the real income gains at the bottom would have exceeded those at the top (according to Broda, Leibtag and Weinstein’s study “The Role of Prices in Measuring the Poor’s Living Standards” in the spring 2009 Journal of Economic Perspectives).

As shown in my 2007 paper, available at cato.org, CBO estimates are extremely sensitive to what Piketty and Saez (in an article with ­Anthony Atkinson of Oxford University) refer to as “the ­response of reported income to changes in tax law.” When tax rates on capital gains were reduced in 1997 and 2003, taxable capital gains reported by the top 1% soared for four years. When the dividend tax was cut to 15% in 2003, ­dividends reported by the top 1% ­quintupled in four years.

Numerous studies by Saez and others confirming such powerful responses of reported income to changes in tax rates (“elasticity of taxable income”) mean tax-based income statistics are inherently misleading when tax rates change.

If McQuaig and Brooks, Robert Gordon or anyone else believes the Piketty-Saez estimates of pretax incomes of the top 1% can “be addressed through significant tax increases at the upper end,” they are making a sophomoric mistake. Higher tax rates or larger transfer payments could not possibly have any direct effect on the Piketty-Saez figures, because those figures explicitly exclude taxes and transfer payments.

The Obama tax measures that Mr. Gordon talks about, however, are not just aimed at the top 1% in the Piketty-Saez universe. They are aimed at the top 2% to 3% — a group that accounts for 25% of U.S. consumer ­spending. The Economist noted that Obama’s proposed tax ­increases on higher incomes next year would cover merely nine days of budget deficits.

After taking into account the ways taxpayers avoid higher levies and the adverse effects on spending and ­hiring, however, the Obama tax plans would likely yield nothing but pain.

Financial Post
Alan Reynolds is a senior fellow at the Cato Institute in Washington.

Here are some gems from the article;

- There is a compelling need for a serious, UN-mandated investigation of these killings, which are as horrific as the killing on the Achille Lauro.

- Needless to say, it’s hard to imagine Harper being so welcoming and convivial had, say, the Iranian navy — or Somali pirates — seized a ship in international waters and killed nine people on board.

- Both Elshayyal and Canadian activist Kevin Neish, also on-board, report that the attack began with Israeli commandos firing live ammunition onto the darkened ship from helicopters above, before descending onto it.

In an inaugural address to 2,000 soldiers in the Ottawa Congress Centre in February 2005, Gen. Rick Hillier declared: “When Canadian troops go overseas, they expect sex.” Within a split second, he corrected himself: “success.”

It was clearly a slip of the tongue. But, according to someone who was there, it also fit the mood of the room. After years of feeling like an emasculated army of peacekeepers, Canadian soldiers finally had a real fighting man at their helm. No more girlie-man peacekeeping, boys! We’re gonna make war!

The transformation of the Canadian military into a war-oriented force – a partner in George W. Bush’s freewheeling War on Terror – was the product of the influential Hillier, with the backing of the Harper government.

Hillier’s testimony last week before a parliamentary committee highlighted just how dangerous this transformation has been.

It’s now clear that Ottawa ignored unmistakable warnings (including from its own diplomat on the scene, Richard Colvin) that the Canadian military was transferring detainees to situations in which they would likely be tortured.

Far from refuting Colvin’s allegations that his warnings were ignored, Hillier essentially confirmed Colvin’s point about the indifference of Canadian officials to the fate of Afghan detainees. Testifying that he hadn’t read Colvin’s emails until recently, Hillier insisted that he wouldn’t have acted any differently if he had read them at the time, since nothing in them would have alerted him “to either the fact of torture or very high risk of torture.”

If Hillier was unaware of the risk of torture, it was only because he wilfully ignored compelling evidence – and not just from Colvin, who cited Red Cross officials in Afghanistan.

Even before Colvin sent his first warning, Louise Arbour, former justice of the Canadian Supreme Court and at the time UN high commissioner for human rights, wrote a March 2006 report on Afghanistan, noting “serious concerns” over reports of torture, which are “common.”

That same month, the U.S. state department reported that Afghan authorities “routinely” torture detainees, “pulling out fingernails and toenails, burning with hot oil, sexual humiliation and sodomy.”

Afghanistan’s own government watchdog, the Afghan Independent Human Rights Commission, reported in 2004: “Torture continues to take place as a routine part of police procedures.”

These damning reports were summarized in an article entitled “Canada’s role in torture,” written by University of Ottawa law professor Amir Attaran, in the Ottawa Citizen in April 2006. When Colvin started sending his urgent warnings a month later, they should have simply confirmed what Hillier and other officials already knew from highly credible sources.

This suggests that the disregarding of Colvin’s warnings is part of a larger problem – the adoption of a Bush-like War on Terror mentality in the top ranks of our military and government. It seems that respect for international law was replaced with a lawless pursuit of bad guys – “evildoers” to Bush, “detestable murderers and scumbags” to Hillier.

This cowboy mentality is further demonstrated in the Harper government’s attempt to smear Colvin as a Taliban sympathizer.

Colvin has demonstrated a rare level of courage and integrity, risking his career to protect some of the world’s most vulnerable people from torture and to bring Canada’s leaders back into line with international law. He’s the guy who reported the schoolyard bully.

Neither Taliban nor girlie man, Richard Colvin is a person with real guts – indeed, in my books, something of a national hero.

lmcquaig@sympatico.ca

Toronto Star, November 17, 2009

The good news is that there are still some tickets left for the Fraser Institute’s 35th anniversary gala dinner next Monday night in Vancouver. The bad news is that the tickets – including tables for 10 at $7,000 – will probably all eventually be sold. And that means yet more money flowing into the amply filled coffers of an organization that for 3 1/2 decades has worked tirelessly to cut taxes for the rich, undermine public health care, destroy confidence in public education and prevent Canada from joining the global climate change battle. Amazingly, the rich executives attending the Vancouver gala will all get tax receipts for their tickets, allowing them to further reduce their taxes below the already low levels the Fraser Institute has been instrumental in winning for them. (The effective tax rate on the richest .01 per cent of Canadians – a group that will be out in force at the gala – has fallen by 26 per cent in the past decade and a half, according to Statistics Canada data.) The Fraser crowd will be revelling in the growing power of business in Canada – a significant change from the more egalitarian 1970s, when the institute started up with help from U.S. conservatives like billionaire Richard Mellon Scaife and the John M. Olin Foundation, notes Donald Gutstein in his new book Not a Conspiracy Theory. The crowd next Monday will no doubt be especially thrilled to have dodged a bullet. This time last year, in the wake of the Wall Street collapse, financial elites everywhere seemed under siege. In Canada, Stephen Harper’s Conservative government almost fell after it signalled it wasn’t planning any economic stimulus – only to be saved when Harper talked the Governor General into allowing his minority to survive, even though it had lost the support of Parliament. A year later, financial elites are safely back in the saddle, enjoying a virtual stranglehold over key public policies. Simon Johnson, former chief economist of the International Monetary Fund, argued in The Atlantic last May that in recent decades the U.S. financial elite has essentially captured control of the U.S. government, in much the same way financial oligarchies capture control of Third World “banana republics.” The muscle of Canada’s own elite is evident in the way it has blocked meaningful action on climate change – even though a massive injection of government funds could convert Canada to a green economy while restoring the 400,000 jobs lost in the past year. But that’s not on the Fraser Institute’s agenda. Fronting for Big Oil, it’s been pumping out climate change misinformation for years, generating enough public confusion to allow the Harper government to get away with doing nothing. At a conference in Barcelona earlier this month, some 400 environmental organizations declared Canada the world’s most obstructionist country in global efforts on climate change. The Fraser Institute describes itself as an “independent non-profit research and educational organization.” Sounds like any struggling charity, except that the tax receipts go to ensure that the glittering gala crowd continues to keep the country on a tight leash. Five years ago, then opposition leader Stephen Harper lavished praise on the institute in a video clip shown at its 30th anniversary gala in Calgary. This time, with Harper carefully cultivating a more moderate image, he may not be on the jumbotron. But members of Canada’s financial elite won’t be worried; they’ll know their man’s on the job.

Linda McQuaig’s column appears every other week.

lmcquaig@sympatico.ca

Let’s imagine, for a moment, how different the public debate would be today if it had been unions that had caused the current economic turmoil.

In other words, try to imagine a scenario in which union leaders – not financial managers – were the ones whose reckless behaviour had driven a number of Wall Street firms into bankruptcy and in the process triggered a worldwide recession.

Needless to say, it’s hard to imagine a labour leader being appointed to oversee a bailout of unions the way former Goldman Sachs CEO Henry Paulson was put in charge of supervising the $700 billion bailout of his former Wall Street colleagues.

My point is simply to note how odd it is that the financial community has emerged so unscathed, despite its central role in the collapse that has brought havoc to the world economy.

Of course, not all members of the financial community were involved in Wall Street’s wildly irresponsible practices of bundling mortgages into securities and trading credit default swaps. But the financial community as a whole, on both sides of the border, certainly pushed hard to put in place an agenda of small government, in which financial markets largely regulated themselves and citizens (particularly high-income investors) would be spared the burden of paying much tax.

The agenda advanced much further in the U.S., but had an impact in Canada, particularly on the tax front.

One would think that those who pushed this agenda so enthusiastically would, at the very least, be a tad embarrassed today.

But so influential are those in the financial elite – and their hangers-on in think-tanks and economics departments – that they continue to appear on our TV screens, confidently providing us with economic advice, as if they’d played no role whatsoever in shaping our economic system for the past quarter century.

Of course, we’re told there’s been a major change in their thinking, in that many of them are now willing to accept large deficits in today’s federal budget, in the name of stimulating the economy.

While this does seem like a sharp departure from the deficit hysteria of the 1990s, a closer look reveals the change may not be that significant.

In fact, financial types have always accepted deficits – when they liked the cause. Hence their lack of protest over George W. Bush’s enormous deficits, which were caused by his large tax cuts for the rich and his extravagant foreign wars.

What they don’t like is governments going into deficit to help ordinary citizens – either by creating jobs or providing much unemployment relief.

So the Canadian financial community has been urging that the stimulus package consist mostly of income tax cuts – even though direct government spending would provide much more stimulus and do more to help the neediest.

If the Harper government follows the financial community’s advice, we will simply move further along with the small government revolution launched by Ronald Reagan in the early 1980s.

Of course, tax cuts are not the same as financial deregulation. But they are twin prongs of a bundled package aimed at reducing the power of government to operate in the public interest.

Surely it’s time to rethink this resistance to government acting as an agent of the common good.

And maybe it’s time for a little humility on the part of a financial elite that long has enjoyed such deference while turning out to be so spectacularly inept.
 

Linda McQuaig’s column appears every other week. lmcquaig@sympatico.ca

Dateline: Monday, January 12, 2009, Toronto Star 

Speaking on CBC Radio’s Sunday Edition on the weekend, an Israeli commentator described the situation Israel faces as “agonizing”.

This seems apt, given the horrific recent developments in Gaza. But Yossi Klein Halevi wasn’t referring to the results of Israel’s military assault – including Red Cross reports of Palestinian children found starving next to the corpses of their mothers. Rather, he was referring to the harsh criticism Israel is receiving from around the world.

When commentators despair over Israel’s agonizing choice – accept the falling rockets or face condemnation – they leave out another option: end the occupation.

For Halevi, the issue boils down to terrorism. With Hamas rockets falling on Israel, what alternative does Israel have but to strike back?

This depiction of the situation is accepted by the Canadian government under Stephen Harper.

And there is a certain logic to it – if we restrict our focus to the falling rockets.

But restricting our focus like this obscures the central fact of this decades-old conflict – millions of Palestinians, in Gaza and the West Bank, have lived under Israeli military occupation for more than 40 years. (The removal of a few Israeli settlements from Gaza in 2005 resulted in tighter, not looser, Israeli military control over the territory.)

When commentators like Halevi despair over Israel’s agonizing choice – accept the falling rockets or face condemnation – they leave out another option: end the occupation.

Israeli spokespeople say they’d like to do this, but insist they can’t negotiate with terrorists.

However, the evidence suggests another factor may be the real obstacle: Israel doesn’t want to give up the land it’s been occupying. Certainly, Israel has moved in the opposite direction, allowing Jewish settlers to take over large swaths of Palestinian land.

There are now more than 250,000 heavily-armed Jewish settlers living in the West Bank where a future Palestinian state is slated to be. They have made it clear they intend to stay.

Indeed, for the past 40 years, there have been two sets of developments going on simultaneously in the Israeli-Palestinian conflict – one under the glare of public attention and one largely off camera.

In the spotlight, there have been peace negotiations, interrupted by bouts of violence. Meanwhile, well out of sight, is the inexorable takeover of Palestinian land by Israeli settlements, effectively removing the possibility of a peace deal.

The failure of moderate Palestinian factions like Fatah to make any progress on the land front – or even to halt the settlements – led to the election of the more militant group Hamas in 2006.

Since the Israelis show no willingness to stop the land takeover, countries like Canada have a vital role to play.

Former Canadian Conservative leader Robert Stanfield understood this. In 1979, he was appointed to advise Joe Clark’s government after it announced a controversial plan to move the Canadian embassy to Jerusalem – a move that signalled Canada’s acceptance of Israel’s annexation of Jerusalem.

After travelling to the region, Stanfield concluded that Canada shouldn’t move the embassy because this would compromise Canada’s role as a “fair minded interlocutor”.

Crucially, Stanfield also asserted that the Palestinian issue lay at the heart of the Arab-Israeli conflict, and that Canada should support a Palestinian homeland.

It is this broader perspective that is so lacking in the approach of the Canadian government today, allowing Israel to restrict the focus to the falling rockets.

One wonders if the prospect of giving up control over Palestinian land – foregoing the dream of expanding Israel to its biblical size – is what Israel’s elite really finds “agonizing”.

Toronto Star, December 16, 2008

As a child, Michael Ignatieff probably wouldn’t have sounded unreasonable saying he wanted to be prime minister when he grew up.

The newly crowned Liberal leader has always had some impressive trappings: good looks, noble lineage, verbal dexterity, an air of gravitas and an impressive CV of teaching human rights at Harvard.

His self-imposed, decades-long exile from his native land might pose a problem in some countries. But here, where our elite instills in us a sense of inferiority to great powers like the U.S. and Britain, Ignatieff has been forgiven for finding Canada a little confining.

Still, there are some problems.

I’m not just referring to Ignatieff’s well-publicized support for George W. Bush’s invasion of Iraq and for torture (but only of really bad people).

More broadly, Ignatieff seems to lack convictions, let alone basic human feeling.

In a revealing interview with the Star‘s Linda Diebel during Israel’s 2005 invasion of Lebanon, Ignatieff was asked if his call for a ceasefire had been prompted by the Israeli bombing of the Lebanese village of Qana, which left 28 dead, including numerous children. Ignatieff denied that it was the Qana bombing that had influenced him. “This is the kind of dirty war you’re in when you have to do this and I’m not losing sleep about that.”

Now, it’s okay to note that war is hell and innocent people die. But to say “I’m not losing sleep about that” – after media photos displayed the mangled remains of very small children – suggests a degree of detachment that borders on the unfeeling.

Ignatieff compensated by calling the Qana bombing a “war crime” during a French-language TV interview.

That turned out to be a far greater misstep politically, and Ignatieff struggled to distance himself from his own words. Two years later he was still backtracking, describing his “war crimes” comment as “the most painful experience of my short political career, and it was an error.”

Some observers chalked all this up to inexperience.

But does it really take experience – beyond being alive – to feel something when children are bombed to death? To then go full circle and denounce the bombing as a war crime, and then go full circle again and try to retract an arguably appropriate term, suggests the behaviour of someone who flaps wildly in the wind, who cuts and runs in the political heat, who lacks a basic moral compass.

Ignatieff showed the same moral evasiveness in his attempt to distance himself from his support for the Iraq invasion.

Given the scope of the Iraqi tragedy that has unfolded, anyone who played a role in facilitating the invasion has a great deal to account for. And Ignatieff did play a role. From his prestigious human rights perch at Harvard, Ignatieff’s eloquent defence of Bush’s war plans in the New York Times Magazine in the run-up to the invasion helped sell a preposterous war to the American people.

Rather than taking some responsibility and expressing genuine remorse in a follow-up New York Times Magazine article in 2007, Ignatieff artfully dodged and ducked any blame, absolving academics like himself of any responsibility for promoting the war. As a mea culpa, Ignatieff’s piece was long on mea and short on culpa.

Media commentators here have been quick to hail Ignatieff as a natural leader, strong and resolute.

He does have good curb appeal. But beyond the measured phrases and chiseled features, the royal stuff inside may be more Jell-O than jelly.

When Barack Obama was elected president on that electrifying night early last month, it became clear – if it wasn’t already – why Stephen Harper had rushed Canadians to the polls a few weeks earlier.

The last thing Harper would have wanted was to run for re-election after Americans had chosen a historic figure who promised to overturn the very Bush agenda to which Harper had so resolutely clung.

In particular, Harper was saddled with a history of lining up ever so close to Bush on two vital issues of growing importance – resistance to addressing climate change and an unwillingness to abandon discredited neo-conservative economic policies. Obama had talked eloquently during the campaign about overturning the Bush stance on both.

Harper may be many things but he’s not dim-witted. After the Obama victory – which produced near euphoria in Canada – Harper realized he had to abandon (or at least disguise) his Bush-era mentality.

And for a while he did, approaching the Obama camp about a U.S.-Canada deal on greenhouse gas emissions, and signing onto the Obama-led chorus calling for Keynesian-style economic stimulus. Harper even urged running up deficits, the once unforgivable political sin that now seems less controversial than community organizing.

But, as the government’s economic update revealed last week, Harper can suppress his deep right-wing urges only so long before they start erupting in the most embarrassing ways. The update was almost incoherent.

In the midst of the worst economic crisis since the ’30s, the document was severely lacking in economic stimulus, even reporting plans for a small surplus (whatever happened to Harper’s new best friend, the deficit?) and was full of old-style partisan backstabbing and public sector union bashing. It was more Sarah Palin than Barack Obama.

Accustomed to beating the opposition into submission, Harper apparently hadn’t noticed that, where there had once been nothing but mushy soft stuff, the Liberal party had miraculously grown a spine.

Let’s hope it doesn’t shrivel. A Liberal-NDP coalition, headed temporarily by lame duck Liberal Leader Stéphane Dion, promises to be a superior government to one run by Harper. And any last-ditch attempt by Harper to prove himself a born-again Keynesian – promising deficits from sea to sea to sea – would have little credibility. We’ve all seen what this guy does when he thinks he can get away with it.

Certainly, there is much that a Liberal-NDP government could accomplish – on the economy, on climate change, on poverty. The Liberals are always at their best when they feel the hot NDP breath of social justice tickling at their necks. Otherwise, they tend to simply cavort with big business.

When the NDP held the balance of power federally from 1972 to 1974, the Liberals introduced a national affordable housing program, pension indexing and a national oil company. The Liberal-NDP accord in Ontario led to the first provincial pay equity legislation in 1987.

It’s true that a majority of Canadians didn’t choose Dion to be prime minister. But the same is true of Harper, a polarizing figure who provokes intense negative reactions in many Canadians.

During the recent campaign, there was much talk of strategic voting among Liberals, NDP and Greens – anything to stop another Harper government. A substantial 62 per cent of voters cast ballots in the hopes of electing someone other than Harper.

The majority may finally get the result it wanted, not the one our cockeyed, first-past-the-post electoral system so often delivers.
lmcquaig@sympatico.ca

Does the president of the United States have the right to order a detainee buried alive?

Oddly, this grotesque question was posed at a U.S. Congressional hearing last week. Even odder was the answer — from John Yoo, former deputy assistant attorney general in the Bush administration, now a law professor at the University of California.

“I don’t think that I’ve ever given the advice that the president could bury somebody alive,” Yoo told a judiciary subcommittee hearing into detainee interrogations.

Well, I guess that’s comforting to know. But it was striking to watch Yoo evade answering whether he considered there was any treatment so vicious and inhuman that it would be beyond the president’s power to inflict it on a detainee, in the interests of national defence.

Apparently there isn’t. In a public debate in 2005, Yoo was asked if he thought it would be lawful for the president to authorize crushing the testicles of a detainee’s child.

It would seem like a simple “no” would suffice. But here’s how Yoo responded: “I think it depends on why the president thinks he needs to do that.”

Asked about that line last week during his Congressional testimony, Yoo didn’t deny saying it, but protested that it was taken “out of context.” Does that mean there’s a context in which a top legal adviser might advise the president that that’s okay?

After 7 1/2 years of George W. Bush, much of the media and political establishment — which have never shown much interest in holding Bush to account — now appear anxious to simply move on. They seem determined to leave unexamined the full cruelty and mendacity of the Bush administration, with its unlawful wars and blatant violations of the Geneva Conventions.

Moving on is a great idea – once there’s been some accountability, with a full public recognition of wrongdoing, and a commitment to bring about change. Otherwise, nothing will have been learned.

The comments of Yoo, who authored top-level internal memos justifying torture and virtually unlimited presidential power, suggest a moral depravity in very high places.

That depravity led to the horrific abuses at Abu Ghraib and at other U.S. prisons in Iraq, Afghanistan, Guantanamo Bay and “black sites” around the world.

The dean of the Massachusetts School of Law, Lawrence Velvel, argues that Bush and top administration officials, including Yoo, should be tried for war crimes. His law school is holding a conference in September to map out ways to try to pursue these prosecutions “if need be, to the ends of the Earth.”

Meanwhile, here in Canada, it seems we’re supposed to avert our gaze. Strong critiques of Bush are slapped down for being “anti-American.”

Certainly, the Harper government, while quick to spot anti-democratic behaviour in Zimbabwe, is blind to it south of the border. Not only has Ottawa failed to join European nations in protesting Guantanamo Bay — and refused to do anything to help the Canadian imprisoned there — it actively co-operates with the United States on security matters and has sent thousands of Canadian troops to Afghanistan to fight in the front lines of Bush’s “war on terror.”

All this is presented as helping our neighbour, and building democracy in Afghanistan. Another way to look at it is that we’re lending support to an administration whose moral compass doesn’t seem to rule out burying people alive or crushing the testicles of children.

[emphasis mine]

Averting Our Gaze From US Cruelty

by Linda McQuaig

Does the president of the United States have the right to order a detainee buried alive?

Oddly, this grotesque question was posed at a U.S. Congressional hearing last week. Even odder was the answer — from John Yoo, former deputy assistant attorney general in the Bush administration, now a law professor at the University of California.

“I don’t think that I’ve ever given the advice that the president could bury somebody alive,” Yoo told a judiciary subcommittee hearing into detainee interrogations.

Well, I guess that’s comforting to know. But it was striking to watch Yoo evade answering whether he considered there was any treatment so vicious and inhuman that it would be beyond the president’s power to inflict it on a detainee, in the interests of national defence.

Apparently there isn’t. In a public debate in 2005, Yoo was asked if he thought it would be lawful for the president to authorize crushing the testicles of a detainee’s child.

It would seem like a simple “no” would suffice. But here’s how Yoo responded: “I think it depends on why the president thinks he needs to do that.”

Asked about that line last week during his Congressional testimony, Yoo didn’t deny saying it, but protested that it was taken “out of context.” Does that mean there’s a context in which a top legal adviser might advise the president that that’s okay?

After 7 1/2 years of George W. Bush, much of the media and political establishment — which have never shown much interest in holding Bush to account — now appear anxious to simply move on. They seem determined to leave unexamined the full cruelty and mendacity of the Bush administration, with its unlawful wars and blatant violations of the Geneva Conventions.

Moving on is a great idea – once there’s been some accountability, with a full public recognition of wrongdoing, and a commitment to bring about change. Otherwise, nothing will have been learned.

The comments of Yoo, who authored top-level internal memos justifying torture and virtually unlimited presidential power, suggest a moral depravity in very high places.

That depravity led to the horrific abuses at Abu Ghraib and at other U.S. prisons in Iraq, Afghanistan, Guantanamo Bay and “black sites” around the world.

The dean of the Massachusetts School of Law, Lawrence Velvel, argues that Bush and top administration officials, including Yoo, should be tried for war crimes. His law school is holding a conference in September to map out ways to try to pursue these prosecutions “if need be, to the ends of the Earth.”

Meanwhile, here in Canada, it seems we’re supposed to avert our gaze. Strong critiques of Bush are slapped down for being “anti-American.”

Certainly, the Harper government, while quick to spot anti-democratic behaviour in Zimbabwe, is blind to it south of the border. Not only has Ottawa failed to join European nations in protesting Guantanamo Bay — and refused to do anything to help the Canadian imprisoned there — it actively co-operates with the United States on security matters and has sent thousands of Canadian troops to Afghanistan to fight in the front lines of Bush’s “war on terror.”

All this is presented as helping our neighbour, and building democracy in Afghanistan. Another way to look at it is that we’re lending support to an administration whose moral compass doesn’t seem to rule out burying people alive or crushing the testicles of children.

Linda McQuaig’s column appears in The Star every other week.

© Copyright Toronto Star 1996-2008

Not the way the rest of Canada imagines, though. Sure, we can’t figure out why other Canadians think Toronto is cold, unfriendly, and snobbish when it’s pretty much the exact opposite. So we’re always fretting about that, but not in a “we’re better than you and why don’t you agree” sort of way.

The topic preoccupied us for different reasons this time. At the latest event in Pages Books’ This is Not a Reading Series, Key Porter Books launched Toronto: A City Becoming, an anthology of essays by several prominent Torontonians, edited by David Mcfarlane. What we dearly wanted to know was — “becoming what, exactly?”

As five contributors to the book discussed their ideas about the city, moderated by CBC Radio One’s Jian Ghomeshi, there were as many separate conceptions of Toronto as there were panelists.

One idea that took some unexpected battering was the “city of neighbourhoods” characterization. It’s my most cherished Toronto label, yet Globe and Mail city columnist John Barber finds it meaningless. He asks what city isn’t a “city of neighbourhoods,” and fears the concept is being corrupted along ethnic lines lately. Meanwhile, architecture and urban design professor Michael Awad believes it’s a fragmenting, “adolescent” conception, meaning Toronto needs to grow up and be whole. And architect and urban planner John Van Nostrand points out that there are no “neighbourhoods” north of Eglinton anyway, in the sense most Torontonians mean when they use the word.

That “north of Eglinton/south of Bloor” divide entered the discussion frequently. Linda McQuaig, political author and Toronto Star columnist, decries the growing gap between the inner city rich, and the poor being shoved to the suburbs. Van Nostrand agrees this is a problem, though for structural rather than class-related reasons. Poorer people have always taken root at the more affordable edges, but the city then reached out with services (e.g. streetcar routes). Today, most municipal money goes inward, south of Bloor, and not outward to connect poorer citizens with the wider city.

The panelists concurred that there’s no single idea that sums up Toronto. Awad goes further, deriding the “branding” that the city repeatedly attempts. (What did the ad campaign of two years ago, “Toronto Unlimited,” actually mean?) If there’s any unifying aspect to the city, says Awad, it’s Toronto’s “history of failed Master Plans.” Which, incidentally, is a Good Thing. He agrees with Van Nostrand that we need less grandiose planning, allowing Toronto just to be itself.

What “really” goes on in Toronto, says David Mcfarlane, is barely connected to what visitors see; he views tourist attractions as “impostors.” Of tourists, he says you almost “want to invite them to your home so they don’t have to go to Casa Loma.” He means that the ongoing, day to day richness of Toronto life can’t be encompassed during a short stay. In fact, Mcfarlane reverses the old saying: this is a great place to live, but not to visit.

One moment stood out that perhaps belied the panelists’ belief that Toronto can’t be characterized by a single idea. A questioner from London, England, asked what Toronto contributes to the “human project” that can possibly compare to what London contributes. John Barber responded firmly that nothing like Toronto’s ethnic mix has ever happened in the world before. This is the one city on the planet where that is being worked out, and we will get it right (implication: because we have to, or else), and we will teach the rest of the world how to do it.

Perhaps, as Jian Ghomeshi suggested, Toronto should come to terms with not being and having everything, and recognize that that “cultural product” is what Toronto is ultimately known for. That alone would be a pretty spectacular legacy.

Do I want to read this book? Given the fact that these and many more fascinating perspectives await me in this volume — and given the fact that I’m a Torontonian, and like to read about myself — of course I do.

McQuaig’s focus is North American Energy Security which, in essence, is an agreement that Canada guarantee an energy supply to the USA.  The catch is that we must do that before we take what we need!  Why would Canada agree to ensuring the US supply before ensuring our own?  As McQuaig says, there are about 10 years of regular oil supplies left in Canada.  Are we too nice, offering it to the US first?  Or, too stupid?  Yes, there’s the Alberta tar sands, but that über project has garnered a huge outcry from ecological organizations, northern peoples, environmentalists, and even a few politicians, such as former Alberta premier, Peter Lougheed and the Mayor of the Alberta boomtown, Fort McMurray.

Are we, as Canadians, really prepared to give over our own energy security, the ecological integrity of our beautiful north and the well-being of our northern and First Peoples so that the business elite can continue to line their own pockets?  Do we really want to continue fueling the USA’s wars?  Furthermore, are we willing to let this carry on without the due process of our democratic institutions?

In August 2007, Prime Minister Harper refused to accept letters on this matter from 10,000 concerned Canadians.  In the April 2006 Throne Speech, Mr. Harper promised to present “significant international treaties” to a vote in Parliament.  In the last session, he did not do so.  Did he lie to Canadians?  And why, as we learned from US President Bush’s State of the Union Address earlier this week, is our Prime Minister is continuing to forge ahead with the SPP?  He has plans to meet with Presidents Bush and Calderon this April in New Orleans.  But he will do so without the consent of the Canadian people, despite promises — not to mention the obligation — to do so!

Should you so wish, you can tell the Prime Minister how you feel about this lack of democratic process.  The Council of Canadians have been following the developments on the SPP very closely.  It was the organization that forced some media attention onto the issue last summer.

If we truly treasure democracy then we are obliged, as responsible citizens, to speak out when it is being circumvented or abused.  This, I think, is one of those times.  If you do nothing else, at least inform yourself on this important issue.  It will change your life, one way or the other.

I’m often guilty of focusing more on American politics than those of Canada, which is why I picked up last week’s book, Holding The Bully’s Coat: Canada and the U.S. Empire, by Canadian journalist Linda McQuaig (Doubleday, 2007). In it, she looks at how the role of Canada as a peacekeeping nation has mutated into one of America’s lackey. It casts a critical gaze over the policies of the Martin Liberals and Harper’s Conservative government and highlights some key incidents during which Canada challenged the self-assumed authority of the U.S. on the world stage. I’m not much of a book reviewer but I would recommend this to anyone interested in a distinctly Canadian view of current politics. 

This week, I’m reading How America Gets Away With Murder: Illegal Wars, Collateral Damage and Crimes Against Humanity by Canadian law professor Michael Mandel (Pluto Press, 2004). I’m only 40 pages in but so far it’s been making the case that the Iraq War (2001) is indeed an illegal war under international law – the same laws that the U.S. promised to adhere to when it joined the UN. Other chapters examine Kosovo, Afghanistan, and war crime tribunals. It’s not specifically dealing with Canada’s relationship with the U.S. but I’m always glad to hear a Canadian’s perspective on the issues. Maybe I’ll write a proper review once I’m done.

For an American’s view on Bush’s economic policy, check out this recent article for Vanity Fair by my economist hero Joseph Stiglitz. He analyzes the legacy that the current administration is leaving Americans – including short-sighted measures to stimulate economic growth, which are leaving millions of people stuck with unprecidented credit card debt (does no one remember the 1920s? Buying on credit was one of the major contributors to the Great Depression.) and mortgages they can no longer afford. The article also discusses the hypocritical nature of U.S. economic policies, both domestically and internationally.

If you’ve never read it, I highly recommend Stiglitz’s Globalization and Its Discontents (W. W. Norton & Company, 2002). Formerly the Senior Vice President and Chief Economist for the World Bank, Stiglitz critically examines the policies of the World Bank and the IMF, how these policies were applied in several areas around the globe, and the ramifications of said policies. Not really light afternoon reading but for anyone with a hard-on for international economic policy and historic case studies, it’s a must-read.

I try to read a lot of books and not just non-fiction (I’m a science fiction junkie and have recently started reading graphic novels) ; in future posts, I intend to write more about what I’ve been reading – if for no other reason than to be updating this blog!