Reboot Statscan

Statscan needs to update its operating system and reboot.

They now operate on a paper system in which only 40 per cent of surveys on spending habits are returned. Those that are returned are sometimes incomplete. Respondents sometime forget to include digital purchases such as orders from Amazon, Netflix and Uber.

Return of surveys is critical in determining strategies like benchmark interest rates which are used to calculate Old Age Security and child tax benefits. Spending habits also helps policy-makers. If Canadians are spending a large amount on drugs, for example, governments could decide to create better drug coverage.

Statscan wants to modernize the way in which they collect data through digital records held by banks. In the light of privacy breaches of Facebook and other accounts, Canadians are understandably nervous.

However, Statscan doesn’t want data that we don’t already share with banks. And unlike bank information, the data will be stripped of personal information such as your name, social insurance number, address and postal code.

We should worry more about the personal data that private companies collect. Economics reporter Barrie McKenna says:

“If you’re seriously concerned about letting others see your financial records, shopping habits and internet surfing behaviour, well, that horse left the barn a long time ago.

Just think for a minute what companies such as Toronto-Dominion Bank, Bell, Facebook, Google, Amazon or the operator of the Highway 407 toll road already know about what you did today, or in the past month. Stitch it all together, and it’s your life in bits and bytes (Globe and Mail, November 4, 2018).”

This hasn’t stopped the federal Conservatives from trying to make hay from Statscan’s plan. They have labelled it “Big Brother on steroids” and an “Orwellian intrusion into the lives of Canadians.”

Politicization of the gathering of statistics undermines the vital role Statscan plays.

There is nothing Orwellian about it and data is secure. Former assistant chief statistician at Statscan, Michael Wolfson, says:

“Under the legislation, neither the courts, the RCMP, Canada Revenue Agency nor Canadian Security Intelligence Service can access the data. Internally, Statscan has designed its computer systems with all kinds of safeguards, and it is a criminal offence to use the data for any purpose other than statistics.”

The mistake that Statscan made was to assume too much. Canadians need to be consulted about the modernization of data collection that Statscan proposes. The lobby group Openmedia is critical:

“Under our current laws, many important elements that could protect our privacy while still allowing StatCan to carry out its critical work are not in place. This includes transparency – notifying us – and meaningful consent.”

There’s a trade-off of my privacy and what I get in return. I regularly reveal details of my private life every time I use an ATM for cash, log on to Facebook to connect with friends, and buy stuff from Amazon. It’s an exchange that I accept.

All the more reason to reveal my spending habits for the public good: I want my data to be used for something other than trying to sell me something.

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The rise and fall of globalization

As the sun sets on globalization, what will a new day bring? The new era will face challenges of rampant parochialism, environmental destruction, inequality and greed.

image: Timetoast.com

The dawn of globalization was unremarkable. Yanis Varoufakis, professor economics and former finance minister of Greece gives the date:

“On Aug. 15, 1971, then-president Richard Nixon announced the ejection of Europe and Japan from the dollar zone. Unnoticed by almost everyone, globalization was born on that summer day (Globe and Mail).”

Before Globalization, it was the dawning of a New Deal (1944). A clever plan, it gave America’s former enemies the resources to rebuild through arrangements such as the Marshall Plan. As an industrial power, the U.S. had shiny new things to sell; now Germany and Japan had money to buy them.

The New Deal ushered in a Golden Age of prosperity. Well-paying jobs, unionization, opportunity grew.  The middle class expanded and inequality shrank.

As a baby boomer, I remember that era. After I graduated from the Southern Alberta Institute of Technology in Electronics, I had a choice of well-paying secure, jobs. After I quit one job and traveled around the world, I easily found another.

The era of globalization in the 1970s promised to reduce global poverty. Before it began to rot at its core, it blushed with ambition.

“Mr. Nixon’s decision was founded on the refreshing lack of deficit phobia particular to American decision-makers,” says Varoufakis. “Unwilling to rein in deficits by imposing austerity . . . Washington stepped on the gas to boost them.”

World-wide prosperity also produced global industrialization. Americans went into debt to buy exports from Germany, Japan and later, China. The American administration didn’t seem to notice, or didn’t care, that cheap global labour was at the heart of industrial decay at home. Why should they care when money was pouring into the U.S. as well as cheap goods?

The flow of global money into the U.S. seems counterintuitive. If Americans were buying global goods, it would seem that the money should be flowing the other way. The magic of Wall Street made it happen.

The deregulation of banks was a catalyst for the financial wizardry of Wall Street. Global investors were attracted by higher interest rates generated by mystical, incomprehensible, investment devices such as derivatives. A lot of the investments went into loans to home-owners who had no way of repaying them.

Then, in 2008, the rabbit no longer emerged from the magician’s hat and the whole financial edifice fell apart.

All that remains of the sad tatters of globalization is massive inequality and loss of jobs in the Western world. Most money sits idle in the hands of the rich while the poor struggle without. Varoufakis characterizes it:

“Its crisis is due to too much money in the wrong hands. Humanity’s accumulated savings per capita are at the highest level in history.”

As globalization sinks below the horizon, two options emerge. One is the walled-state proposed by President Trump and the Brexiters in the U.K. The other is a Universal New Deal that redistributes global wealth, creates new jobs, and lifts the burden of consumer debt.

If such a new deal seems unlikely, it’s worth remembering that the first New Deal and globalization were as well. And if we need an issue to rally around and mobilize action, as World War II once was, we need look no further than the biggest threat to humanity: climate change.