Wheat from the Chaff

Sun Media Brings Fox News to Canada

This is almost hilarious. It must be the most absurd media promo I've ever seen - as if it's a parody made by the people at The Colbert Report or The Onion. Unfortunately, these yahoos are serious.

Buffett Tells ABC Rich Americans Should Be Paying "A Lot More in Taxes"

Billionaire Warren Buffett has come out and said the equivalent of 2+2=4. Or =666, if you're a neo-liberal hell bent on even more tax cuts.

In a recent interview, Buffett said, “I think that people at the high end -- people like myself -- should be paying a lot more in taxes. We have it better than we’ve ever had it.” In opposition to the trickle-down economics which has pervaded American thinking for decades (and particularly the massive George Bush tax-cut agenda), Buffett responded, "The rich are always going to say that, you know, just give us more money and we’ll go out and spend more and then it will all trickle down to the rest of you. But that has not worked the last 10 years, and I hope the American public is catching on.”

Of course, don't feel too badly for the wealthy. Even the Obama administration is promoting a "compromise". The upcoming tax cuts promised by the Bush Administration will still go through, up to the first $250,000. This means that the poor, working class and middle class will not be able to take full advantage of the proposed tax cut. You guessed it: only the upper middle class and wealthy can fully utilize the benefits.

Goin' out in style!

If the boss is forcing you out, then you might as well go out in a blaze of glory!

Here is Bill Bennett's quite remarkable exit interview after being removed from the cabinet of the BC Liberal government:

Bill Bennett faces the media (mp3)

An analysis of the US economy by Robert Reich

I would encourage you to download this speech by Robert Reich. [Right-click on the link and choose "Save Link As" or "Save Target as".] It's a cogent Keynesian analysis of America's current economic situation, except that it's also a near-perfect Marxian analysis, too, aside from the Keynesian interventionist strategies. Reich's key argument is that inequality is bad for business, and unless America can address this fundamental challenge, all of the secondary problems will be insoluble. The irony is that, in the end, Reich copies much of David Harvey's Marxist analysis of the fundamental contradictions of capital accumulation. The only real difference is that Reich wants to save capitalism, while Harvey has no such allegiance.

One interesting contribution by Reich is his discussion of the "three coping mechanisms" that the average American household has been using over the past 30 years to compensate for the effective decline in wages:

1. moving women into the workforce
2. making men work more overtime (a great source of "improved" US productivity)
3. borrowing money against home equity

Reich asserts that these mechanisms have, up to now, allowed Americans to ignore the problems of inequality. However, these mechanisms are now spent, and it's time American politicians own up to the fundamental problem: the engine of the American economy - the average consumer - is no longer capable of spending the money that makes economic growth possible.

The Georgia Straight on Post-Secondary Spending in the Valley

The Georgia Straight, and its online version, the straight.com, are useful sources for news, investigative journalism and media criticism. Amid its pop culture pap and racy personal ads, the Straight can deliver articles of surprising quality on topics rarely seen in BC's corporate media.

Here's a recent article on the imbalance of spending on post-secondary institutions on the south side of the Fraser River compared to the north. It's amazing what a little bit of research and empirical analysis can do:

http://www.straight.com/article-354726/vancouver/region-faces-education-gap

A Choice of Words

Here's an interesting exercise. Replace one word in the Vancouver Sun headline below, and ask how the meaning of the headline has changed. Let's replace "admits" with "argues". Such a change makes the revealed "truth" more a matter of debate and interpretation. Yet I'd argue that this is a reasonable change in wording, given that the article itself never says "admit", and that Angela Merkel has made a fairly dramatic, and probably strategic, change in her own position on German "multiculturalism".

Recognition of a Keynesian Moment

I rarely take a lead editorial from the Vancouver Sun seriously. This Canwest/Postmedia corporate entity is at the center of right-wing propaganda in BC, and is representative of the very conservative outlook from Canada's media generally.

Nevertheless, today's editorial provides a sobering analysis of the American economy and its implications for Canada. It's also a clear (though unstated) reminder that Keynesian economic theory still matters. The editorial admits that the gathering storm clouds of a double-dip American recession are a matter of demand - or lack thereof. There is no supply-side monetarism in the newspaper's argument, primarily because near-zero interest rates have not overcome the massive debts that spring from a consumer society which is also stunningly unequal.

The Vancouver Sun decries the growing evidence of deflation, which is caused by "a drop in aggregate demand. That is clearly the case in the U.S., where consumers have simply stopped spending". And the culprits are not interest rates or its neo-liberal brethren, tax rates. At the center of the problem is a demand-side drop in the expectation of profit: "the drop in demand for goods and services means business has little reason to invest, expand and create jobs". In other words, in a society where the majority of the GDP is controlled by consumers, businesses will not invest in goods, services or productivity enhancements if there is no expectation that consumers will buy these goods and services. Paying less tax is irrelevant if there is no taxable profit.

Keynes, anyone?

Meet the new boss. Same as the old boss.

Canada's corporate media remains unchanged, even though the extensive Canwest newspaper chain has been sold (for $1.1 billion) and renamed Postmedia Network Inc.

From a July 17, 2010, story from the Vancouver Sun, we see that the major players are merely changing their jackets:

... The senior team, which will run the country's largest metropolitan newspaper chain, will be led by newly-installed CEO Paul Godfrey and includes Kirk Allen, former senior vice-president of advertising sales within Canwest, as well as Doug Lamb, the firm's former chief financial officer, a company said in a statement.

The pair will assume the same roles with Postmedia Network and will be joined by Kevin Bent and Gordon Fisher, who were appointed executive vice-presidents of operations in Western and Eastern Canada, respectively.

Fisher moves from publisher of the National Post to president. Editor-in-chief Douglas Kelly has been appointed the new publisher of the chain's national newspaper. Deputy editor Stephen Meurice replaces Kelly as editor-in-chief....

Health Care Costs: Relative to GDP or Gov't Spending?

One of the best reasons to read The Tyee is Will McMartin. He is a rare journalist with the ability and desire to wade through the BC government's own stats in order to separate the wheat from the chaff.

In his latest article on health care spending, McMartin exposes the myth that health care spending is out of control and outstripping our ability to pay for it. Put briefly, McMartin shows that, as a percentage of BC's GDP, health care costs are relatively static. Rather than comparing health care costs to overall government spending, which has gone down as a percentage of GDP, McMartin compares health care costs to GDP itself, which is the measure of overall economic output. As such, he shows that health care is not out of control, and we can continue to pay for it - assuming we don't want to keep lowering taxes. Health care might be taking a bigger slice of government spending, but a bigger share of a consciously reduced spending envelope doesn't change the fact that the real costs of health care have not gone through the roof. In other words, if the BC Liberals choose to reduce taxes and reduce their overall revenue and spending, that shouldn't be used as a battering ram against "rising" health care costs.

One of the great Jon Stewart episodes

One of the benefits of a DVR is that I can watch Jon Stewart's Daily Show even though I'm too old to stay up that late. The following is one of the best episodes I've seen from one of the best reasons to watch TV:

[Update: Because the original episode has been removed, I have to offer this summary news item.]