Smart Links 31 January 2012
Commentary on capitalism, Canadian banks, disruptive technology in the publishing business, how innovation works, the Iran problem, and the price of beef.
The hand wringing about capitalism as being too hot – the Washington consensus – or too cold – where the state dominates – misses the truth that ultimately the most sustainable communities, national and global, find the balance between the twin virtues of inequality of outcome and equality of opportunity.
The challenge is how to tax and regulate the economy in such way as to ensure unequal economic outcomes that provide the public revenue to invest in instruments of social justice, namely equality under the law, world class public education, the science of good health available to all citizens, and best in class public transportation.
Together these are more likely to produce sustainable world class community and economic outcomes as they are the foundation for the next generation of economic success.
Financial Times -- ‘Davos consensus’ under siege
If nothing else, Newt Gingrich’s campaign for the US presidency has contributed an excellent new phrase to the language. His coinage – “pious baloney” – kept popping into my head in Davos last week, every time I saw the World Economic Forum’s ubiquitous slogan: “Committed to improving the state of the world”.
Financial Times -- Hollande vows to raise taxes for rich and banks
François Hollande has outlined plans to raise taxes from the country’s banks, big companies and higher earners to close the country’s budget deficit and fund job creation in his bid to defeat Nicolas Sarkozy in France’s presidential election.
Useful comparison points on the relative strength of Canadian banks. (ed's note -- still the merging of investment banks with commercial banks imbeds the moral hazard that the Canadian taxpayer will be on the hook when the next financial tsunami hits).
Financial Times -- Canadian banks 1, Australian banks 0
Fitch has put Australian banks on ratings watch negative, while affirming Canadian banks’ ratings. As Fitch points out in an accompanying report, both countries’ major banks are among the few such institutions rated AA and have many similarities.
Short the publishers.
The Atlantic -- Will Amazon Kill Publishing?
The tech giant and book merchant is signing its own authors to get a leg up on Apple and Barnes & Noble. It just might crush New York's publishing establishment in the process.
Innovation takes different paths.
New York Times -- The Yin and the Yang of Corporate Innovation
IN the hunt for innovation, that elusive path to economic growth and corporate prosperity, try a little jazz as an inspirational metaphor.
Hammer or hand shake?
New Yorker – Iran: Table Talk
In the State of the Union address of 1954, which Dwight Eisenhower delivered less than a year after he had secretly ordered the C.I.A. to overthrow Tehran’s left-leaning government, he celebrated “the forces of stability and freedom” at work in Iran.
Let them eat chicken.
Vancouver Sun -- Beef prices set to soar
The price you pay for meat at the grocery store is likely to rise again in 2012.
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Twin Virtues: Inequality of Outcomes & Equality of Opportunity©
Ultimately, the most successful societies find the balance between the twin virtues of inequality of outcomes and equality of opportunity.
The new politics must marry the twin virtues of unequal outcomes and equality of opportunity.
When too few get too much everybody loses.
Feminism is about women living their lives on their own terms, marshalling the resources of the society to make that possible, and men embracing this as vital to a successful society and their own liberation.
Can it be that striving for equality of opportunity however imperfect the process not only benefits the individual but also creates benefits for the society that are unintended but wonderful?
Economics must be a 'moral enterprise' as much as politics claims to be. Economic outcomes need to be framed in terms of right and wrong not just efficiency if only because these often align in surprising ways that are good for society and the economy.
My vision of Canada is that any Canadian child from a family of limited circumstance can expect to have a chance at lifetime of unlimited opportunities.
Free trade is a wonderful thing. Time and time again economists have proven that free trade creates enormous wealth for each country 'on the whole'. Historians have shown that free trade is usually associated with rising political, social and cultural liberty. The perennial problem is that free trade always creates tremendous disruption for thousands even millions of individuals often concentrated in one geography, and where the state is idle, not investing in best in class instruments of social justice, free trade can be a permanent ticket out of the middle class, down, not up.
Tax policy should be founded on the principle of generating steady tax revenues sufficient to maximise environmentally sustainable economic growth in order to fund fair government.
Public policy should be designed to decrease inequality before the law and increase equality of opportunity.
Capitalism is not the problem; the problem is what we do with capitalism.
Content is always more difficult to argue than conspiracy.
Let the state regulate and the market operate (most things).
Welfare strategies are best designed as a hand up, not as a hand out.
Political debate should not be fact free fighting.
Explanation lasts longer than eloquence.
Always favour empowerment over dependency.
The most enduring public figures are embraced for the causes they fought for and not the concept of themselves they hoped others would remember them by.
Find your voice and don't be the echo of somebody else.
It is possible to operate on two different levels: the practical, cautious and conservative; and the realm of ideas, open, free, and radical.