Democratic Renewal

I just got back from my Algonquin trip, so just a very brief post. In skimming today's Star, there is a very interesting piece by Bob Hepburn on efforts at democratic renewal in Canada to combat the ongoing Harper attack on citizen engagement and voter participation. Small seeds can yield tremendous fruit if properly nurtured.

A Humbling Lesson About Critical Thinking

I am going to be offline for a few days as I join two of my fellow retirees on a trek to Algonquin Park, so I leave you with the following rather lengthy blog post:

While I am always mindful of the vital importance of critical thinking, logic, and clear writing, and try to practise all three, I also know that I regularly fall short of those ideals. Recently, I had a humbling reminder of my shortcomings.

It began innocently enough with an email from my son, who works in Alberta, about the IPhone5 that was just announced. I sent him an email I received about how, despite earlier promises by Apple, the conditions and wages under which the phone are assembled at Foxconn in China have not improved. Here is a link for further details on those conditions.

In response, my son sent the following:

Ya, I remember when the Foxconn head told the media that managing his one million animals (his employees) gave him a headache.

It's a trade off. If you mandate higher wages, that will be passed along in the price, making goods in Canada more expensive, which disproportionately lowers the standard of living of poor people here, which pushes them back into poverty living conditions. It's like what my policy ethics professor was saying about while its true lower class wages are stagnant, poor people are still much better off than ever before when almost every poor person now can afford a flat screen tv with Blu Ray, and a computer, and a smart phone, etc. These things used to be available to only the high income earner, but because of goods made cheaply in China, everyone can afford electronics today. I'm not saying increasing Chinese wages is the wrong choice to make, but keep in mind that it will contribute to poor people in Canada having a lower standard of living. But maybe from a big picture perspective higher prices are worth it.

One thing I learned from the MPP [Masters of Public Policy] degree is that what seems like a good policy on the surface often has devastating unintended consequences. An example is in Greece currently, where people weren't paying property taxes, so the government added it onto home electricity and gas bills to ensure people pay. A lot of people stopped paying their natural gas bills, and a court ruled it was illegal for utility companies to cut off people's gas, resulting in utlility companies being unable to pay for their gas, resulting in threats by the gas company to cut off all gas to utilities. Ultimately, the government stepped in to avoid this with a huge payment, and now it basically pays everyone's gas bills, AND still no one pays their property taxes. Let me know if you want me to send you an article on this.

Another example we were taught is in medieval England where rats were out of control. The King stated that you'd get paid a lot of money for each rat corpse you turn it. The end result for people started breeding rats, and the rat population exploded, and rats were everywhere. I can think of a dozen examples of unintended consequences.

My point is that on the surface the Apple situation seems difficult to oppose; who doens't want better working conditions? But unfortunately the people who are starting this petition probably aren't economists or public policy analysts, and cannot begin to predict the cascading and potentially devastating effects such a policy might result in. I'm quite skeptical these days of any publication which promotes a certain policy. That's why government is so slow moving, because they have to consult with every stakeholder to ensure they understand every possible implications, and be prepared for it.

Sorry for the long email, it just bothers me when everyone on the internet thinks they're a policy analyst these days. Saying "I think higher wages in China are a good idea because poor people need more money" is far too simplistic an analysis for me to accept as valid. But as I type this I realize that it may be geared at Apple voluntarily increasing wages, not the Chinese government mandating it, which is quite different.

To which I replied:

You have obviously given a lot of thought to the issue, Matthew, and what you say makes a lot of sense, but when all is said and done, the cheap labour is being exploited by Apple to maximize its profits, something I know that benefits their shareholders.

Ultimately, a balance between the competing interests needs to be struck, in my opinion.

He replied:

There are many large electronics manufacturer that manufacture through Foxconn; [as a result of wage hikes] their prices would go up as well. It's not just about Apple; other companies' share prices would go down.

How does this affect pension plans, and people retirement savings since a lot of people's nest eggs are in these stocks? There was a story yesterday about the iPhone 5 potentially propping up the US economy up to 0.5% annualized. What happens when all electronic sales go down due to higher prices? Will be have a recession? Probably not, but it will have an effect. Will the jobs go to Bangladesh instead? How much would this hurt the Chinese economy where growth is quickly falling? Could we have a global slowdown because of it?

It's a complicated issue is my point, and there is a lot to analyze before one can say it's a good idea or not. Where is the economic analysis with this policy suggestion? It seems to be missing.

And so the debate goes on. While I still hold that a balance needs to be struck, the correspondence with my son reminded me of how complicated issues are once one delves beneath the surface, and that all of us, manufacturers, corporations, shareholders and consumers have roles to play in the matter of workers' rights, working conditions, and wages.

And so I shall end as I began. Critical and logical thinking are ideals to which I aspire, but I do realize that the ideal can never be consistently attained. In the end, I guess, as with most worthwhile endeavours, all we can do is to consistently try our best.

See you in a few days.

How Romney Really Feels About the Non-Rich

A secret video from a Romney fundraiser reveals more about the presidential candidate than he probably wants people to know:

The full story and additional video can be found here.

A Fact Check on Tory Lies

I suspect that the Harper regime's capacity for fear-mongering, character assassination and bald-faced lies, so much in evidence in previous smear campaigns against Stephen Dion and Michael Ignatief, will have a greater challenge in confronting Thomas Muclair:

H/t Larry Hubich

If They Won't Spend It, Perhaps We Should Tax It Back?

That is the question I am left with after reading this article in today's Star on the over $500 billion (the article erroneously describes it as $526 million) corporate Canada is sitting on, in part thanks to generous tax cuts, rather than investing some of it and creating jobs.

A Voice of Sanity on Iran

Journalist and columnist Joe Klein offers some calm and sane commentary while others are clamoring for war against Iran:

H/t Roger Ebert

An Avaaz Petition Against Harper's World Statesman Award

I recently wrote two blog posts expressing my dismay over the naming of Stephen Harper as World Statesman of the Year by The Appeal of Conscience Foundation.

An Avaaz petition, just started by a Canadian, is asking the foundation to reconsider granting this award and is available online; it lists several of the reasons this is such an egregious insult to all people who believe in the tenets of real democracy and human rights.

I sincerely hope you will consider signing it. It can be accessed here.

h/t Sandra Harris