Guardian enviro-scribe, George Monbiot, hates NAFTA. He thinks it a scam perpetrated without the consent of the peoples of Canada, America and Mexico by theirContinue reading
This and that for your Thursday reading. – Ashley Renders reports on the Canadian mining companies which are using corporate trade deals to threaten developingContinue reading
Earlier this month the European Court of Justice issued a ruling that ISDS or Investor-State Dispute provisions in a trade deal between the Netherlands andContinue reading
Assorted content for your Family Day reading. – Gloria Galloway reports on Jagmeet Singh’s strong case for fair tax revenues as a key highlight fromContinue reading
Miscellaneous material to start your week. – Elizabeth Kolbert comments on the psychology of inequality, and particularly how the current trend in which a disproportionateContinue reading
This and that for your Tuesday reading. – Yves Engler discusses how Justin Trudeau is now the face of the exploitation of poor countries andContinue reading
This and that for your Thursday reading. – Sarah Anderson studies how corporate tax cuts enrich CEOs, but don’t do anything to help workers. AndContinue reading
This and that for your Thursday reading. – Charles Mathewes and Evan Sandsmark write that it’s long past time to start treating the excessive accumulationContinue reading
This and that for your Thursday reading. – Sarah O’Connor examines the inconsistent relationship between job quantity and quality as another example of how it’sContinue reading
This and that for your Sunday reading. – Larry Beinhart argues that aside from the gross unfairness and economic harm from growing inequality, there’s aContinue reading
Assorted content to end your week. – George Monbiot discusses the importance of recognizing our social connections in making our political choices, rather than treatingContinue reading
Assorted content for your Sunday reading.
– Tim Harford discusses how insurance and other industries are built on exploiting people who are risk-averse due to the inability to absorb substantial costs as “money pumps” for those who have more than they need:
(L)et’s step back and ask ourselves what insurance is for. Classical economics has an answer: people are risk-averse, which means that they will pay good money to reduce the variability of outcomes they face. If home insurance guards against the loss of a million pounds when my house burns down, I’m happy to buy the insurance even though the insurance company expects to make a profit from it.
But this risk aversion emerges from the fact that money is worth more to poor people than to rich people. Gaining a million pounds would make me rich but losing a million pounds would make me poor. I should not gamble a million pounds on the toss of a coin, because the million pounds I might lose is more precious to me than the million pounds I might gain.
As so often with classical economics, this is an excellent description of how we should behave. It is not such an excellent description of how we actually do behave. Risk aversion can only explain why we insure large risks. It cannot explain why we insure small ones.
A money pump is a person whose irrationalities can be systematically exploited for financial gain. The simplest money pump is a person who prefers an apple to a doughnut, prefers a doughnut to a chocolate bar, and prefers a chocolate bar to an apple. Just offer them an apple in exchange for their doughnut plus a penny. They will accept. Then offer them a chocolate bar for their apple plus a penny. Then offer them a doughnut for their chocolate bar plus a penny. They end up with their original doughnut and are three pence poorer. Repeat for ever.
Money-pump arguments are sometimes deployed to object that people cannot be irrational, otherwise they would be bankrupted by money pumping. But economists are increasingly coming to realise that, instead, we should be looking for money pumping in action.
Given our anxiety about small risks, what would the money pumping look like? It would be an insurance policy focused on the narrowest possible slice of risk. It would be sold alongside another product or service, often at the last moment. It would be marketed by creating anxiety and then offering the product to make the anxiety go away. In short, it would look like the collision damage waiver, the extended warranty, and PPI. These bespoke slices of insurance are among the largest money-pumping projects in the modern economy. No wonder the banks abandoned their principles to join in.
– Jared Bernstein and Lori Wallach highlight (PDF) the need for an international trade regime which serves the public interest, not only the greed of the people who already have the most. And Yves Smith theorizes that the public backlash against corporate-centered trade deals may lead both to changes in how international trade is managed, and the identity of the countries at the forefront of developing the standards to be pursued.
– Needless to say, the Libs’ devotion to the current trade model figures to exclude Canada from that group for the foreseeable future. And the Alberta Federation of Labour laments the Libs’ determination to exploit foreign labour at the expense of both easily-abused temporary workers, and the Canadians who would otherwise fill the positions.
– Derek Thompson makes the case for a long-overdue round of trust-busting to reduce corporate power over innovation and economic development.
– Finally, Ed Finn writes that our health system should focus far more on maintaining wellness rather than responding only once an illness develops.Continue reading
Here, examining how Chris Hamby’s brilliant reports on the effect of investor-state dispute settlement terms in past trade agreements should inform our choices in discussing new ones. For further reading…- Haley Edwards offers another worthwhile look…Continue reading
This and that for your Sunday reading.- Chris Hamby starts off what looks to be a must-read investigation on the effect of ISDS rules by discussing how they’re used to prevent governments from punishing corporate wrongdoing:(A)n 18-month BuzzFeed News …Continue reading
This and that for your Sunday reading.
– Chris Hamby starts off what looks to be a must-read investigation on the effect of ISDS rules by discussing how they’re used to prevent governments from punishing corporate wrongdoing:
(A)n 18-month BuzzFeed News investigation, spanning three continents and involving more than 200 interviews and tens of thousands of documents, many of them previously confidential, has exposed an obscure but immensely consequential feature of these trade treaties, the secret operations of these tribunals, and the ways that business has co-opted them to bring sovereign nations to heel.
Reviewing publicly available information for about 300 claims filed during the past five years, BuzzFeed News found more than 35 cases in which the company or executive seeking protection in ISDS was accused of criminal activity, including money laundering, embezzlement, stock manipulation, bribery, war profiteering, and fraud.
Among them: a bank in Cyprus that the US government accused of financing terrorism and organized crime, an oil company executive accused of embezzling millions from the impoverished African nation of Burundi, and the Russian oligarch known as “the Kremlin’s banker.”
Some are at the center of notorious scandals, from the billionaire accused of orchestrating a massive Ponzi scheme in Mauritius to multiple telecommunications tycoons charged in the ever-widening “2G scam” in India, which made it into Time magazine’s top 10 abuses of power, alongside Watergate. The companies or executives involved in these cases either denied wrongdoing or did not respond to requests for comment.
Most of the 35-plus cases are still ongoing. But in at least eight of the cases, bringing an ISDS claim got results for the accused wrongdoers, including a multimillion-dollar award, a dropped criminal investigation, and dropped criminal charges. In another, the tribunal has directed the government to halt a criminal case while the arbitration is pending.
– And Dharna Noor interviews James Henry about the need for international cooperation – at both the government and public level – to crack down on tax evasion.
– Kev responds to the spread of #goodriddanceharper by pointing out that as satisfying as it was to turf the Cons from office, we’re still facing most of the same anti-social policies with a more media-savvy face. And Doug Nesbitt reminds us that the Trudeau Libs are no friends of labour – with Canada Post’s appalling attacks on vulnerable workers serving as just the latest example.
– Finally, the Canadian Press reports on a much-needed push for resources to address mental health in Canada.Continue reading
A new study says the expanded rights granted to foreign investors in the Trans-Pacific Partnership delivers unjustified benefits to foreign investors while posing major risks for ordinary populations of TPP countries.
The post TPP undermines public he…
A new video from the Council of Canadians seeks to start an enlightened public conversation on the Canada-European Union Comprehensive Economic and Trade Agreement, or CETA.
The post New Council of Canadians video seeks to spark public debate on CETA […
The Canadian Centre for Policy Alternatives just launched a new series of reports seeking to “demystify” the Trans-Pacific Partnership (TPP) as Canada inches closer to ratifying the controversial trade deal.
The post Canadian think-tank wants to demyst…
My piece on the mainstream media’s trade deal boosterism was published at Ricochet yesterday. Canada’s media have heaped fawning praise on the Trans-Pacific Partnership, the biggestContinue reading
A new poll commissioned by the Council of Canadians reveals that progressive voters favour an independent assessment Harper’s controversial Canada-Europe Comprehensive Economic and Trade AgreementContinue reading