Harper stresses social welfare, economy in northern spending

While many people think Stephen Harper’s interest in the north is purely military, he wants it known that he’s got the territories’ economic interests in mind too. To that end, the government announced a $36.5 million deal to help with skills training in the North.

Globe scribe Billy Curry writes:

To that end, he and the three territorial premiers announced a new $36.5-million labour agreement yesterday in Yellowknife. The deal will finance skills training for workers in the North, regardless of whether they qualify for employment insurance.

Mr. Harper said skills training will help in moving toward an environment in the North where aboriginals and northern residents are the first people hired when jobs become available.

Economic policy advice for the NDP

Stephen Gordon, a professor of economics at l’Université Laval in Quebec City, runs the Worthwhile Canadian Initiative blog. It deals mostly with Canadian-related economic issues, but recently he wrote a four part series titled “economic policy advice for the NDP.”

He says if the NDP wants to win more seats they’ll have to deal with issues such as inequality, “defending big government,” and taxes. Here are links to each post:

Economic policy advice for the NDP, Part I: Inequality
Economic policy advice for the NDP, Part II: Defending big government
Economic policy advice for the NDP, Part III: The GST
Economic policy advice for the NDP, Part IV: Corporate income taxes

The readable Ignatieff

It’s not economic or business related per say, but Maclean’s blogger Aaron Wherry compiled a list of Michael Ignatieff’s journal and newspaper articles. These pieces should keep you busy for the rest of the summer.

In a recent interview with the Globe and Mail’s Eric Reguly, who asked if Stephen Harper regretted cutting the GST, the PM said: “No, it’s … First of all, I believe cutting all taxes is good policy, okay? I… I’m of the school that… You know, there are two schools in economics on this; one is that there are some good taxes and the other is that no taxes are good taxes. I’m in the latter category. I don’t believe any taxes are good taxes.”

Believe it or not, this caused a knee-jerk volcano to erupt—and not just in Liberal land.

Bryan Borzykowski, a fellow blogger with CB Online (who does not speak for the editorial board of Canadian Business magazine, which also dislikes taxes a lot) called Harper’s anti-taxes remark a remarkable and ridiculous statement for a conservative politician to make.

Borzykowski then pointed readers to what he calls a great post by Globe writer Adam Radwanski, who outs the PM as an anarchist. “If taken to its logical conclusion,” Radwanski insists Harper’s comment means all government spending, along with everything it supports, is bad. “Not just equalization and grants and other things that Harper would have taken offence to back in his National Citizens Coalition days. We’re also talking about defence, and law enforcement, and any public infrastructure whatsoever – stuff that even the most libertarian members of Harper’s party would concede that we need.”

Despite the massive run up in federal government expenditures, Borzykowski and Radwanski both conclude Harper actually thinks it is a good idea to abolish all public spending. But with all due respect to the logic used, it is possible to consider something bad and still accept it.

Taxes. Deficits. Credit cards. Lawyers. Dentists. Editors. Small talk with the hairdresser. Lots of things are necessary evils. And Harper clearly knows a thing or two about them. After all, he is a politician, and they also typically fall into that camp.

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DOUBLE TAKE: Aside from trying to promote myself while generating Web traffic that helps put bread and butter on my table, this blog aims to stir debate by taking a harder look at current news and events. I obviously enjoy voicing my own opinions, but I am a big boy and I welcome all comments that don’t require R ratings. So let me have it via this blog or send me an email at tom.watson@canadianbusiness.rogers.com. I reserve the right to post email comments without disclosing the sender’s name. If you don’t think I am a total twit, follow my DOUBLE TAKE posts via my NotSOCRATES Twitter site.

THOMAS WATSON is a senior writer, market columnist and editorial board member at Canadian Business magazine. Since winning a community journalism award as a cub reporter with the Hamilton Spectator in the early ’90s, he has covered business, finance, politics and technology for various news outlets. Prior to joining CB in 2001, he reported on the steel and automotive sectors for the Financial Post. Watson received two National Magazine Award nominations for business feature writing in 2008, winning a silver award for his coverage of Canada’s ABCP fiasco. He landed his first NatMag nomination for exposing a stock manipulation plot aimed at Waterloo, Ont.-based Open Text during the dot-com boom, when he headed investor relations for an international venture capital outfit in the City of London. Watson holds graduate degrees in journalism, international relations and public finance and undergraduate degrees in history and politics.

The Big Money is Slate magazine’s online business start-up. Though it has its moments of irrational exuberance, it’s a smart and well-written site, and its articles often capture the absurdities of doing business in today’s New York. (Full disclosure: my partner used to work there.)

Some, including the Globe and Mail’s Christie Blatchford, question whether Madoff should have gotten a sentence that’s about six times as onerous as that served to the average murderer in Canada. She also questioned whether those being described as victims for buying in to Madoff’s schemes actually were victims, considering their motivations and the extent to which they were benefiting. She makes several good points.

However, this analysis underestimates the extent to which the Wall Street of the past nine months has needed the story of Bernie Madoff. He’s become a lighting rod for anti-Wall-Street anger – and a cathartic symbol for all that went wrong in a world where money magically created new money, and where not enough people asked enough questions about how or why this was happening. They just hoped it would continue, and that they’d get out with enough of a golden parachute to survive, once the mountain of debt on which that period’s prosperity was built came crashing down.

To illustrate the extent to which no-one was asking questions, or even wanting other people to ask questions, of how money was being made in the Leveraged Society, one of the first stories I covered when I moved down to the U.S. in January 2007 touched on a report put out by the redoubtable New York Senator Charles Schumer. It complained that excessively onerous Sarbanes-Oxley regulations were causing companies and capital to flee New York’s exchanges for the more welcoming climes of London’s AIM. How times change. Today, all Schumer can talk about is the importance of forcing AIG executives to pay back their bonus money.

Such whiplash-inducing shifts in attitudes to market regulation help show why Madoff got away with what he did – and then, once caught, received such a crazy sentence. With Bernie behind bars for 150 years, this thinking goes, the crime has been punished, the perpetrator put away. Now the rest of Wall Street can draw a veil over that particular era – and move on.

Too bad economic reality is likely to get in the way of that particular thesis. But still, everyone craves closure. And at least the man got sentenced. In Canada, he’d be busy writing a self-aggrandizing book, or some other such promotional activity, while regulators across provincial boundaries bickered amongst themselves as to how  to charge him.

Meanwhile, Ruth Madoff continues to entertain (and appall) with talk of crying herself to sleep, thinking of the millions of people her husband bilked. It’s a sentiment that doesn’t exactly go over well with the newly poor that Madoff left behind. As one so-called victim, paraphrasing Dante, put it: “May Satan grow a fourth mouth [of hell] where Bernard L. Madoff deserves to spend the rest of eternity.”

Meanwhile, the Canadian angles to Madoff’s demise continue to unspool. But more on that later.

GLOBE — Obama turns left: The U.S. President is putting the state in charge of the economy in the land of free enterprise. Are the ‘best and brightest’ up to the task?

FINANCIAL POST — Flaherty follows Carney in warning on inflation: Talk of more stimuli for the Canadian economy is unwarranted, Finance Minister Jim Flaherty said Friday in a speech in London, in which he acknowledged inflation represents a “danger” on the horizon given the cash governments and central banks are pushing into the markets.

ANDREW STEELE — Right for Ontario?: The front-runner for the Ontario PC Party announced his candidacy yesterday on the front lawn of Queen’s Park, flanked by half the provincial caucus. But while a sense of inevitability will likely be enough to get Tim Hudak the PC leadership, does he have the time to transition to a general election?

THE BIG MONEY — The political risk of toxic assets: The political risk premium attached to U.S. investments is higher than at any time in recent memory. All corners of the market are depending on Washington to “get it right.” That a bad speech by Geithner could apparently destroy the Dow on Feb. 10 and a good policy release could boost it a month later demonstrates the strong impact politics is having on finance. No investment is immune from politics for the time being.

Here’s a great piece by Toronto-based lawyer Robert Silver on whether or not presidents and prime ministers should be offering financial advice.

Says Silver in the Globe and Mail: “So, while I have no problem with presidents or prime ministers acting as cheerleaders-in-chief for their economies, the notion of them acting as financial advisors to the nation is equally silly on either side of the border.”

There are a number of interrelated drivers for this shift including pressure from securities regulators and large institutional investors, more stringent purchasing guidelines among mass retailers and other corporations, and a new zeitgeist among consumers of all ages that places as much priority on values as on value.

One of the key questions posed by Ms Maxwell is “With all this talk of measurement and disclosure, what has happened to the social dimension?” Some interesting examples are cites including programs by Unilever that foster economic development and sustainability for communities where it operates (see: Unilever commits to sourcing all its tea from sustainable sources.)

However, it finding the sweet spot remains challenging – largely because the management tools used in corporations are almost always quantitative and social outcomes involve behaviour change that, if successfull, lead to qualitative change with respect to issues including health, health care, environment, education, and so on.

At Impakt, we’re faced with this challenge on a daily basis. Recently, we developed a new tool that is a first step towards helping CSR managers understand the value of their social purpose programs. We call it the Partnership Valuation Tool and its essentially a cost/benefit analysis for community programs that involve significant investment but have largely qualitative benefits/outcomes.

I  think that finding the convergence of financial and social returns can and should be done in a more disciplined way. However this is territory that will always depend on good judgment by corporate managers and community leaders. As the sign in Einstein’s office at Princeton read “Not everything that counts can be counted, and not everything that can be counted counts.”