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6, 2000 April, 2000

Highlights—August 29, 2009

  • CNN/Money: IBM Has Cut Around 10,000 US Jobs In 2009 - Union. Excerpt: International Business Machines Corp. (IBM) has laid off approximately 10,000 - roughly double the reported figure - of its North American employees since the start of the year, according to figures from a union. Lee Conrad, an organizer for the Communication Workers of America, which is trying to push IBM employees to unionize, said IBM had made at least 9,308 job cuts since the start of 2009. The figure was calculated using data from redundancy packages, which are called "resource action packages" within IBM. The bulk of the jobs lost were in the U.S., with a handful in Canada. The figures are likely conservative, Conrad said, because they don't count contractors and staff who have lost their jobs but didn't get redundancy packages or were transferred to different locations. ...

    In March, The Wall Street Journal reported that IBM planned to lay off around 5,000 employees. Many of those positions were to be transferred to India and other cheaper locations. Armonk, N.Y.-based IBM has been steadily shifting its employee base to locations like India and reducing its U.S.-based workforce. Foreign-based workers now account for more than 70% of its employees.

  • Yahoo! IBM Employee Issues message board: "Verified IBM job cuts for 2009" by Lee Conrad, president Alliance@IBM. Full excerpt: The following are the job cuts for 2009 as of August 24, 2009 that Alliance@IBM has verified through the receipt of Resource Action packages:
    • Systems Technology Group = 1213 cut (Jan)
    • Software Group = 1419 (Jan)
    • Sales and Distribution = 1449 (Jan)
    • IBM HR = 92 (Jan)
    • Marketing and Communications = 147 (Jan)
    • IBM Research = 193 (Jan)
    • IBM Finance = 307 (Jan)
    • US CIO = 411 (March)
    • Services Delivery = 985 (March)
    • GBS Application Services = 1674 (March)
    • Global GTS = 181 (March)
    • Systems Technology Group = 37 (March)
    • GBS Application Services = 462 (April)
    • ISC Global Supply = 245 (April)
    • Services Delivery = 87 (May)
    • Services Delivery = 222 (July)
    • GBS Industrial = 184 (Aug)

    Total = 9308

    We have received numerous reports of small job cuts over the past year that have not been verified through RA packs. Employee force outs based on Management Initiated Separation also increased this year. IBM contractors also are not included in IBM's Resource Action packages. We do not have numbers for these 3 categories but believe that these cuts added to the above push the total above 10,000.

    If you have RA packs not on this list please send to allianceibmunion@gmail.com Lee

  • Yahoo! IBM Employee Issues message board: "Re: Verified IBM job cuts for 2009" by "ibmretiree2006". Full excerpt: As was noted on the Alliance site, this does not include those who were "forced" into retirement to save someone's job. I know of 3 people in IGS who retired (were going to go within 24 months and one who saved a person's job who has medical issues in the family).
  • Poughkeepsie Journal: Group claims IBM cut 10,000 jobs in 2009. Local toll may have been 900, Alliance says. By Craig Wolf. Excerpts: Asked to respond, IBM spokesman Douglas Shelton said in an e-mail the company isn't verifying specifics. He added, "Because we are one of the largest knowledge-based businesses in the world, we rebalance parts of our skill base as client demands evolve. Jobs are eliminated in one part of the business and created in other parts of the business where clients demand more focus, a new skill set and/or new resources. And while we have eliminated some jobs this year, IBM remains the largest tech employer in the U.S. and the world. We learned in the early '90s that those who wait to address business and competitive issues in this industry don't survive. We have succeeded as a nearly 100-year-old technology company by managing the business in this way." ...

    He added, "Because we are one of the largest knowledge-based businesses in the world, we rebalance parts of our skill base as client demands evolve. Jobs are eliminated in one part of the business and created in other parts of the business where clients demand more focus, a new skill set and/or new resources. And while we have eliminated some jobs this year, IBM remains the largest tech employer in the U.S. and the world. We learned in the early '90s that those who wait to address business and competitive issues in this industry don't survive. We have succeeded as a nearly 100-year-old technology company by managing the business in this way.

  • Poughkeepsie Journal: Selected reader comments concerning the above article follow:
    • IBM will not change its "re balancing" until the Federal Government develops and implements a foreign trade policy that encourages companies like IBM to retain domestic employment. Each administration, Reagan, Bush, Clinton, GW Bush and Obama, have been and continue to develop "Free Trade Agreements" in response to intense lobbying by corporations like IBM. Saying that "we can compete with anybody" repeatedly does not make it so. That IBM Help Desk in India that pays $5.00 per hour versus U.S. at $20.00 or more is tough to compete with unless we are willing to lower our wages and life style to that of India, China and other third world countries. Sure someday, as their standard of living rises and ours declines to equality, as has happened with Japan, we will be able to compete
    • Actually 5% of recent profits was reported as cost reduction, aka: headcount reduction. This doesn't factor in the constant replacement of US workers with visa workers/indentured servants. In order to qualify for the millions of dollars locally and likely billions nation wide for maintaining jobs, ibm has figured out a way to fire American workers and 'retain jobs'. They do that by firing American's and replacing the with visa workers. So the visa workers are getting screwed, American workers are getting screwed, the tax payers are getting screwed, and executives continue to award themselves billions of dollars of stock options which, even when given at a price of zero, they continue to unload. Now is that a great system or what! Workers who don't have power can only get it through organizing, which executive are naturally afraid of since they currently have free reign to lie, cheat, and steal currently.
    • IBMers! Be prepared for major layoffs. I am not sure how many IBMers in the USA are now employed, but in 2008 it was around 115k.. I am hearing through my contacts IBM will be down to 77K USA Employees at the end of 2010. Even the State of NY cannot save you...
    • So to paraphrase Shelton's response: "We are really big and we can do whatever we want - who cares about those we discard, they don't mean anything to us any more. We will just get some new ones at a lower pay rate" (or get some of those great H1B visa folks as was noted earlier by willjames) Pretty slick how in the last two sentences it is noted that IBM "learned" something recently and then the next sentence they have succeeded for over 100 year by managing in this way!

      Well, I know for the majority of those 100 years you had a more experienced work force ( http://www.ibm.com/ibm/responsibility/employees.shtml ) i.e. more than 50% of your employees had better than 5 years of experience! Also - for the majority of those years you didn't discard people when you wanted to make a buck (yes, they are called that by some - people). Not "jobs" , not "skill base" and not "resources". Good luck in the long term with your immoral business practices and your inexperienced staff!

  • Hudson Valley Times Herald-Record: Union group cites IBM layoffs. 13,000 names off database, Alliance says. By By George Spohr. Excerpts: IBM has removed more than 13,000 names from its internal database of U.S. employees and contractors so far this year — significantly more than previously believed. That's according to Alliance@IBM, a union-backed employee group that has undermined IBM's new policy of not disclosing layoff numbers — "resource actions," as IBM calls them — or locations. It is the highest number of U.S. position reductions yet to leak. The Alliance has maintained it has intelligence showing IBM has plans to trim its North American work force by 16,000 employees this year. Through leaked copies of IBM's own resource-action documents, the group has documented 10,403 layoffs so far, excluding contractors. National coordinator Lee Conrad said his group is sticking by the 16,000 figure. "We still believe it to be true," Conrad said.

    The group has predicted with near-perfect accuracy each of the dozen or so — some major, others minor — waves of layoffs this year at IBM. The company, like many of its peers in the tech industry, has shifted much of it work force overseas, where wages are cheaper. ...

    IBM's own strategy of acknowledging layoffs has been uneven. In the past, the company would acknowledge layoff numbers and locations. But then in January, when the company began mass layoffs of its American workers, the company dismissed reporters' inquiries as rumors or speculation. In recent months, the company's no-comment policy has softened, but not to the point where it again is detailing layoff numbers or locations. "Most matters of a company's internal operation, the public doesn't have an automatic right to that information," said Chris MacDonald, author of the Business Ethics Blog. But given the barrage of negative publicity IBM has dealt with, "I can imagine strategic consultants going either way on whether this is a wise thing, to keep things quiet or to be more forthcoming," he said.

  • Radio Iowa: Ribbon cutting for IBM's new Dubuque "delivery center". By O.Kay Henderson. Excerpts: Officials from IBM are in Dubuque today to mark the opening of the company's newest "delivery center" that will eventually employ over 1,200. Mike Daniels, senior vice president of IBM's Global Technology Services, is among those on hand for this morning's ceremonial ribbon cutting. "We're up and running as of today. That's why we're here," Daniels says. "We've already hired hundreds of employees. By the end of the year we expect that number to be 600. We're right on schedule and by the end of 2010 we'll be fully operational with almost 1,300 people on board." ...

    The State of Iowa gave IBM a package of incentives, including a $12 million forgivable loan. Officials estimate state and local incentives for the project total more than $50 million. The IBM executive says his company also was attracted to northeast Iowa because of the supply of "top talent" graduating from universities in the region.

  • Zack's Investment Research: IBM Opens IT Services Center in U.S. Excerpts: In addition to expanding its international footprint, IBM is also expanding domestic operations. The company has announced the opening of a services delivery center in the U.S. The new facility will maintain, monitor and support computer hardware, software and manage IT services for IBM's clients. The new center joins an extensive network of more than 80 IBM delivery centers worldwide. For the new facility, IBM intends to hire up to 1,300 people by the end of 2010.
  • Dubuque Herald-Tribune: Partnership of IBM, Dubuque a 'smart' move. By Diane Diggelmann, Senior Location Executive - IBM Dubuque. Excerpts: When people, communities and organizations come together, the world can change. As a new resident of this beautiful and historic city, I am proud that IBM and Dubuque have come together. When I first visited here, I was struck not only by the city's beauty, but the genuine friendliness and spirit of its people. Just as noticeable was the sense of pride that bursts from those that call this place home. As I learn more about Dubuque, and the challenges this region has overcome, I continue to be impressed and hopeful for the future. ...

    Since moving here, many have shared with me their perspectives of the past, rightfully reminding me that this is not just any city. This is a true community that buckled down and came together during tough times. It is that spirit of civic cooperation -- combined with the education system, talented work force and Advertisement overall quality of life -- that led to IBM choosing Dubuque for our newest Services Delivery Center, where we provide technology services to our strategic outsourcing clients across the country

  • eWeek: Readers' Comments on H-1B Visa Surprise Visits. Excerpts: This search for fraud misses the REAL problems with the H-1B visa - 1) the "prevailing wage" nonsense and 2) the problems with portability - i.e., the difficulties of an H-1B visa beneficiary of changing jobs. 1) Prevailing wage - this is a joke. There are large loopholes in this portion of the H-1B visa laws which allows employers to LEGALLY underpay H-1B beneficiaries. Moreover, it completely goes against the "free market" philosophy so many economists and corporate big-wigs love to parrot. Why not let the market dictate wages? 2) Portability - when an H-1B visa beneficiary becomes unhappy with his current employer, the H-1B visa laws do allow him to change employers, provided that another employer is willing to take over his H-1B visa. However, when an H-1B visa beneficiary does change employers, he has to re-file his Green Card application. So if he's been waiting for three years to get his Green Card, and then changes employers, that three years is completely wasted. ...

    I have about ZERO sympathy for these companies being audited and some being caught abusing the H-1B visas. This has been going on for 15 YEARS; about time someone checked up on them. Sad it takes a recession of this magnitude to move someone to stop abuses of what is nothing more than a cheap labor pool of indentured workers so US companies can continue to live here and benefit from our society while undermining the ability of US workers to make a living. We've let in over 200,000 of these H-1Bs in a single year in the past 15 years or so. England has a similar program (used to be call the "Skilled Migrant Worker Programme"; know how many they typically let in? About 1,000. That spells "SUCKER" for you and me, allowing in nearly a quarter of a million of these people to be:

    • Stuck with their sponsoring company for 6 years (no raises, no bonuses); if they leave they have to find a new company within X days, pay a fine and start their 6 year immigration clock over again.
    • Paid far less than the "prevailing wage" standard (which is itself far too loose as pay can range all over for a given IT job title). This IS the reason these visas are sought - cheaper labor.

  • Today's Workforce: Michael Steele and the Demise of Working America. By Robert Merriman. Excerpts: Nearly every week for the last six months, as I drive along “Mainstreet” on my way to work, I’ve noticed a new storefront that has gone vacant. These are not the vacant addresses that once housed “Old Navy” or “The House of Knives;” and 4th Avenue is not a strip mall. These were shops and boutiques that operated and prospered for the last 20 or more years by catering to the desires and whims of what had been one of the most prosperous communities in the nation. But ever since the mask was removed from Bush’s depression last summer, many of these privileged professionals are finding themselves squeezed financially in the same wringer as the rest of America’s middle class has been for quite some time. As a result, one by one, these shops are falling by the wayside.

    The American economy we see today is the end-result of political policies that have been transforming American society for the past 30 years. Based on slogans such as privatization, de-regulation, free trade, out-sourcing, “conservatism,” tax reform, and right to work, legislators have been giving American business what it wants since the days of President Regan. They have turned this country into a place that no longer resembles the country it was when I grew up in the 1950’s and 1960’s.

New on the Alliance@IBM Site
Minimize
  • Job Cuts Status & Comments page
    • Comment 08/24/09: "What are employee forceouts and management initiated separations (like fireing for cause that cannot be within an RA?). If these and contractors do not get packages with statistics, how do you know they increased, and by about how many?" I don't have numbers, but in the past 12 months I've seen 3 people retire under my second line when it was clear they were not leaving by choice. We were even told 2 of these guys were told if they didn't take retirement, someone else would get RA'ed. I suspect a lot of this happened. In my previous 5 years, I'd never seen this happen. -NewToRchland--
    • Comment 08/26/09: According to BluePages, there have been about 13K names removed since 1/2009 in the USA. Some may be contractors, but that's 13K people let go in the USA, about 10%. -Anonymous-
  • General Visitor's Comment page
    • Comment 08/22/09: A brother in the UK- wrote: >>who is not even answering emails from his direct reports. Are you able to expand on that? -anon- Our country GM is not answering emails from direct reports (and others) that dare to question the decision to close the pension plan resulting in a lot of workers having no option but to ask the company if they can have early retirement. The company is under no obligation to honor it and indeed it is not doing so while the "pension consultation" is ongoing (this is a UK legal requirement but it is really IBM reinforcing what it is going to do and it is not a negotiation by any stretch of the imagination). The net effect is that this will decimate areas of the company where skills are already thin on the ground and there is no plan to"offshore" any jobs, the slack will have to be picked up by those that are unlucky enough to remain. There really is no plan B and it is just about cutting cost out so that the execs can make Sam's numbers.

      For those that are unlucky enough to remain the pension plan will be changed such that the early retirement discount factor will move from 3% per annum, to a "cost neutral" basis - which means that it is likely to be 7% per annum. So, these people will hang on as long as they can and then leave the company at either a time of their choosing, or IBM's choosing. The goal in the UK is to have 20% of the staff on PIPs (performance improvement plans) which will make it easier for HR to force them out the company with no package.

      Our govt sits around and does not protect us. IBM knows this and is forcing it to the nth degree. At the moment PBC rating of 3 guarantees that you will be on a PIP. There are some very nasty letters being sent by management in the UK to groups that do not do this with reminders that certain groups need to "tow the line" or else.

      As for offshoring it is well known in Hursley that in certain development areas that the teams in India and Taiwan are just not up to the mark and resource has been diverted from other projects to"help them out" shall we say. There are rumours that announcements are going to have to be delayed because of this. Additionally, in Europe, contracts require that 20% of the deal utilizes "global resource". Some companies are pushing back on this as they are saying that they do not want to speak to anyone in anything but their own language (e.g. Italians only want to speak to Italians) and in the UK the same is happening. Although we are multi-cultural as a legacy of the days of the Empire and the EU, the same is also true of UK customers and they are tired of the hit and miss nature of dealing with BRIC countries, however nice they may be (and they are nice and friendly I will concede that point).

      There is a huge swell of people joining the union including 1st/2nd line managers, DE's and our GM is getting a lot of letters from MP's demanding answers as to what he is playing at. There is talk of the matter being brought up for debate in parliament (which is conveniently in recess) when it returns. IBM's timing was deliberate and calculated to ensure that this was the case. They (IBM) are spitting blood over the negative publicity as this, in an already tough climate, damages IBM. As you can imagine we do not care one iota. Many people are leaking IBM Confidential information to the press, as IBM refuses to play ball in a number of areas. One example is that somehow, amazingly, IBM cannot provide our representatives on the consultation committee with a distribution list of all those of us that are affected by this pension change. Imagine that with all the resource that IBM has!

      So, it is having to be done by word of mouth and sending emails to certain people that you think may still be in the same pension plan as you. It has galvanized certain areas of the company and should send a signal out to the rest of it (most have their head in the sand to put it politely) as this is the beginning of the end for IBM in the UK. There are a lot of disaffected people that are now working to rule (our rule is a 37 hour working week) and phones and sametime go off pretty quick these days. Trying to get help or emails answered unless they are mates of yours is nigh on impossible and this pleases a lot of us immensely.

      The *only* thing IBM understands is being hit in the pocket and this is happening already - which of course means that more cost will be taken out of the company to inflate profits. For me personally after 5th April 2010 this company can sink without a trace and I will do all I can to help that when the right offer comes along. I am not alone in this. One way or another there are 3000 people that want revenge and will get it in their own way, hopefully at a time of their choosing. If I stay with IBM I will be certain to look for payback on certain people/areas that did not stand with us. Does this make me the same as "them"? I am not certain, and nor will I care I am afraid to say. I will look after "brothers", and the people I know of old that are are affected by this, the rest can go to hell.

      This has been a short sharp shock to me and I realize that I have to look after myself as no-one else will I have discovered. Two months ago if you had told me that I would be writing like this I would have laughed at you. All rather sad. I think what really sticks in a lot of our throats worldwide is that we built this company over (for me at least, 25 years of hard work) and it is being given away to countries that are cheap to increase the execs bank balance, and that hurts me more than anything. A bond that I thought existed has been broken and there is no going back from this. -A brother in the UK-

    • Comment 08/22/09: Yesterday, received letter from Employee services that my cobra has been terminated for non-timely payment. With no warning of any kind! Payment was sent by me on time, they received it (or claim to have received it )one day later than 'due date' and CASHED my check!! And happily terminated my coverage. This is outrageous! Of course I got on the phone immediately, and my 'issue' has been sent to some 'research team', now I have to wait for their decision. I am ready to hire a lawyer if they do not reinstate me! I am just warning you all to be careful, because they are ready to pull the plug on you any moment.. If anyone has dealt with this, please share. -maria- (moved from job cut reports)
    • Comment 08/22/09: >>In the UK we are being shafted too on the pension front. Unfortunately the of my colleagues disappoint me by not seeing this as just the start and have their heads up their butts in most cases with the "well it doesn't affect me" attitude. -A brother in the UK-: Welcome to IBM America circa 1999. Please, take action. Otherwise you too will be reduced to talking on a message board ten years hence and your pension will be a 1/3 of what it should be and you will have no medical when you most need it. -anonymouse-
    • Comment 08/22/09: Maria - the same thing happened to me. I wrote one check in the wrong amount (did not add dental). After I called to complain, they reinstated -- telling me that you get "one" forgiven. Use automatic deduction from your checking - because unless you mail it certified, return receipt requested, you can't prove that they received it by the date due. -annonymous-
    • Comment 08/24/09: Silly Willy, for anyone considering the Match program with India as a destination, I'd recommend they do some research on disease stats in India. Note this Outbreak Notice for Meningococcal Disease in India (August 24, 2009) (commonly referred to as meningitis or epidemic meningitis). I also found a WHO report on "Combating [deadly] diarrhoeal disease in India [water borne]". I saw CNN report recently that TB was epidemic. And a BBC report "Encephalitis kills 200 in India". At the minimum, definitely not an advised destination for children with developing immune systems http://wwwn.cdc.gov/travel/content/outbreak-notice/meningococcal-india.aspx -RAed 2009-
    • Comment 08/24/09: Speaking of the match program, Has anyone, anywhere actually done this, other than people who where natives of the country they where being relocated to? Just wondering if there is anyone that stupid and gutless. -anon-
    • Comment 08/24/09: This depression has been caused by globalism and there is no way out of it until the system is changed. Sooner or later you have to admit that there is a global class war going on. Shipping jobs to the Third World gutted our economy. The more they globalize the worse things get but the system won’t change until it goes completely bankrupt (I give it 5-10 years at most). As long as the Palmisanos can tell Washington what to do, the crap will continue until the final collapse. We are witnessing the end of the American Empire.

      You can’t have the economy running abroad and still remain a wealthy country and a superpower. It’s either or. So what can we do to defend ourselves? Please join a union, hook up with other people who are equally fed up, form a group, start a new party, help preparing to replace this corrupt to the bone global pile of crap.

      The future is a system where big business will be exiled from politics. Go ahead and call me a commie, however do you still want to cater to these disgusting upper class greedbags after you lose your job, home, cars, health insurance, pension, kids’ future, everything? When poverty bites you in the @ss, you may rethink this whole commie thing. Instead of raising the flag every morning and supporting the war think of our children who were sent to die for the bonuses of corporate CEOs so the likes of Sam Palmisano can buy yet another luxury yacht, jet and private island. These “people” have no shame.

      Our parents in the 60s knew something that our generation still needs to learn: nothing in life is granted and you can only have what you are ready to fight for. So, what have you done today to fight for your rights? There are so many of us, we can make a difference, but we must start doing something! Joining a union is doing something. -Angry pro-union dude-

    • Comment 08/25/09: Does anyone know how long one can sit on the bench in GTS these days before getting whacked? Also any word of cuts during sept to get ready for 4th Q? Thanks all. -Tony- (moved from job cut reports)
    • Comment 08/28/09: Has anyone heard any rumors of layoffs in September? Things are pretty quiet. I haven't heard anything which concerns me. Usually there are rumors of layoffs, then all goes quiet right before we are hit. Are we in the 'quiet' period right now? -dun-4-
  • Pension Comments page
  • Raise and Salary Comments IBM CEO Sam Palmisano: "I am pleased to announce that we will not only be paying bonuses to IBMers worldwide, based on individual performance, but that they'll be funded from a pool of money nearly the same size as last year's. That's significant in this economy -- and especially so, given the size of the 2007 pool. Further, our salary increase plan will continue, covering about 60 percent of our workforce. As always, increases will go to our highest performers and contributors. We should all feel good about the company's ability to invest in people in these very concrete ways."
    • Comment 08/26/09: Salary = 224000; #Yrs Since Raise = 0; %Raise = 3; Band Level = 9; This Yr-PBC = 1; Job Title = RSM; Years Service = 11; Hours/Week = 50; Div Name = Research; Location = Yorktown; Message = glad to have a raise -joe-
  • PBC Comments
  • International Comments
    • Comment 08/29/09: Country = United Kingdom; Union Affiliate = UNITE(UK); Job Title = Technical Support Specialist; IBM Division = GTS; Message = I have been dismayed for years about the erosion of the relationship between management and staff. PBC's forced into a 'downward assessment', education all but killed off (ultimately 'dumbing down' employee technical abilities). Management have imposed a methodology of 'divide and conquer', by - amongst others - awarding pay-rises to those lucky enough to get any according to PBC standings. They have for years used too much stick, and quite simply no carrot. The company (UK) used to be able to boast a workforce that would walk over 'hot coals' in the name of IBM. Fiercely loyal, passionately believing in IBM, and would never, ever countenance the thought of having any union representation. Since the early 1990's the erosion of IBM - both as a company, and as an employer is astounding. This is - in my mind - nothing short of criminal mismanagement. 'Big Blue' is being captained by 'Capt. Ahab', and navigated through corporate waters by 'Blind Pew', totally oblivious to the catastrophe ahead. They WILL NEVER regain the loyalty, trust, and belief from their workforce again ......... I do believe they are sounding the 'Lloyds Bell' for the 'once great ship' IBM...... -justaUKmule-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
Minimize
  • New York Times: Daschle Has Ear of White House and Industry. By David D. Kirkpatrick. Excerpts: Six months have passed since the morning when Tom Daschle, the former Senate Democratic leader, under fire for not paying certain taxes, called President Obama in his study off the Oval Office to withdraw his nomination as health secretary and reform czar. But these days it often seems as if Mr. Daschle never left the picture. With unrivaled ties on both ends of Pennsylvania Avenue, he talks constantly with top White House advisers, many of whom previously worked for him.

    He still speaks frequently to the president, who met with him as recently as Friday morning in the Oval Office. And he remains a highly paid policy adviser to hospital, drug, pharmaceutical and other health care industry clients of Alston & Bird, the law and lobbying firm. Now the White House and Senate Democratic leaders appear to be moving toward a blueprint for overhauling the health system, centered on nonprofit insurance cooperatives, that Mr. Daschle began promoting two months ago as a politically feasible alternative to a more muscular government-run insurance plan.

    It is an idea that happens to dovetail with the interests of many Alston & Bird clients, like the insurance giant UnitedHealth and the Tennessee Hospital Association. And it is drawing angry cries of accommodation from more liberal House Democrats bent on including a public insurance plan.

  • New York Times editorial: Who Wants to Yell Next? Excerpt: The cacophony at town hall meetings on health care has startled too many members of Congress into passivity and pandering. But not Representative Barney Frank, who did not shrink last week from a woman loudly demanding to know why he supported President Obama’s “Nazi policy.” The Massachusetts Democrat responded with a question of his own: “On what planet do you spend most of your time?” None of the I-respect-your-opinion razzmatazz being mouthed by more timorous politicians. Mr. Frank could have been more civil. It is time for everyone to remember that town hall sessions were invented for rational discussions of differences, not as an outlet for self-therapy caperings à la “The Gong Show.” But it was certainly refreshing to hear him try to jolly or shame his audience into a serious debate, asking, “Which one of you wants to yell next?”
  • New York Times editorial: About Your 401(k). Excerpt: A thornier problem is that even someone who steadily contributes to a 401(k) and makes sensible investments can end up with too little — depending on whether the markets are up or down as retirement nears. A calculation by Gary Burtless of the Brookings Institution showed that a 401(k) participant who retired in 2008 after contributing 4 percent of pay over 40 years and investing in a conservative mix of stocks and bonds would be able to replace a fourth of his pre-retirement income. That is only half as much as a similar worker who retired during the bull market in 1999, but far better than retiring in 1974 when markets were in a swoon.
  • New York Times op-ed: All the President’s Zombies. By Paul Krugman. The debate over the “public option” in health care has been dismaying in many ways. Perhaps the most depressing aspect for progressives, however, has been the extent to which opponents of greater choice in health care have gained traction — in Congress, if not with the broader public — simply by repeating, over and over again, that the public option would be, horrors, a government program.

    Washington, it seems, is still ruled by Reaganism — by an ideology that says government intervention is always bad, and leaving the private sector to its own devices is always good. Call me naïve, but I actually hoped that the failure of Reaganism in practice would kill it. It turns out, however, to be a zombie doctrine: even though it should be dead, it keeps on coming.

    Let’s talk for a moment about why the age of Reagan should be over. First of all, even before the current crisis Reaganomics had failed to deliver what it promised. Remember how lower taxes on high incomes and deregulation that unleashed the “magic of the marketplace” were supposed to lead to dramatically better outcomes for everyone? Well, it didn’t happen.

    To be sure, the wealthy benefited enormously: the real incomes of the top .01 percent of Americans rose sevenfold between 1980 and 2007. But the real income of the median family rose only 22 percent, less than a third its growth over the previous 27 years. Moreover, most of whatever gains ordinary Americans achieved came during the Clinton years. President George W. Bush, who had the distinction of being the first Reaganite president to also have a fully Republican Congress, also had the distinction of presiding over the first administration since Herbert Hoover in which the typical family failed to see any significant income gains. ...

    There’s a lot to be said about the financial disaster of the last two years, but the short version is simple: politicians in the thrall of Reaganite ideology dismantled the New Deal regulations that had prevented banking crises for half a century, believing that financial markets could take care of themselves. The effect was to make the financial system vulnerable to a 1930s-style crisis — and the crisis came. “We have always known that heedless self-interest was bad morals,” said Franklin Delano Roosevelt in 1937. “We know now that it is bad economics.” And last year we learned that lesson all over again. ...

    The debate over the public option has, as I said, been depressing in its inanity. Opponents of the option — not just Republicans, but Democrats like Senator Kent Conrad and Senator Ben Nelson — have offered no coherent arguments against it. Mr. Nelson has warned ominously that if the option were available, Americans would choose it over private insurance — which he treats as a self-evidently bad thing, rather than as what should happen if the government plan was, in fact, better than what private insurers offer.

    But it’s much the same on other fronts. Efforts to strengthen bank regulation appear to be losing steam, as opponents of reform declare that more regulation would lead to less financial innovation — this just months after the wonders of innovation brought our financial system to the edge of collapse, a collapse that was averted only with huge infusions of taxpayer funds.

  • Associated Press, courtesy of Fort Worth Star-Telegram: Insurers explore savings in healthcare abroad. By Tom Murphy. Excerpts: Elizabeth Kunz of South Carolina left her dentist’s office this spring with a mouth full of problems and no way to pay for them. She went out of her way — to Central America — to find a solution. Her trip to the tropics is part of a health insurance experiment for trimming medical costs: overseas care. As Washington searches for ways to tame the country’s escalating healthcare costs, more insurers are offering networks of surgeons and dentists in places like India and Costa Rica, where costs can be as much as 80 percent less than in the United States.

    Until recently, most Americans traveling abroad for cheaper nonemergency medical care were either uninsured or wealthy. But the profile of medical tourists is changing. Now, they are more likely to be people covered by private insurers, which are looking to keep costs from spiraling out of control.

  • Media Matters for America: Myths and falsehoods about health care reform. Excerpts: MYTH 1: There is no health care crisis... MYTH 2: Health care reform will impose rationing... MYTH 3: Health care reform provides for euthanasia, "death panel"... MYTH 4: Health care reform legislation will cover undocumented immigrants... MYTH 5: Health care reform will raise your taxes... MYTH 6: Health care reform would tax all small businesses... MYTH 7: Health care reform would add $1 trillion-plus to deficit... MYTH 8: House bill would ban private individual insurance... MYTH 9: Obama said he didn't read House bill... MYTH 10: Co-ops are an adequate substitute for a public option... MYTH 11: Obama is pushing a system like the U.K. and Canada... MYTH 12: Obama, Dems pushing "socialized medicine"... MYTH 13: Prominent opponents of health care reform are credible... MYTH 14: Government can't run a health care program...
  • Workforce Management: House Panel Asks Health Insurers for Executive Pay, Other Financials. Excerpt: A House committee with jurisdiction over health care reform legislation has sent letters to more than 50 major commercial health insurers asking them to identify by name each executive who earned at least $500,000 a year in any year from 2003 to 2008. The letter, signed by Rep. Henry Waxman, D-California, chairman of the House Energy and Commerce Committee, and several other Democratic panel members, asks for salary information for those individuals, as well as bonuses and the fair value of stock and option awards, among other things. The letter also requests premium payments, claims payments, sales expenses, administrative expenses and profits for 2005 to 2008.
  • Crooks and Liars: Krugman: Why is Obama Letting Reaganite Rhetoric Shape the Debate? By Susie Madrak. Excerpts: The astonishing thing about the current political scene is the extent to which nothing has changed. The debate over the public option has, as I said, been depressing in its inanity. Opponents of the option — not just Republicans, but Democrats like Senator Kent Conrad and Senator Ben Nelson — have offered no coherent arguments against it. Mr. Nelson has warned ominously that if the option were available, Americans would choose it over private insurance — which he treats as a self-evidently bad thing, rather than as what should happen if the government plan was, in fact, better than what private insurers offer.

    But it’s much the same on other fronts. Efforts to strengthen bank regulation appear to be losing steam, as opponents of reform declare that more regulation would lead to less financial innovation — this just months after the wonders of innovation brought our financial system to the edge of collapse, a collapse that was averted only with huge infusions of taxpayer funds.

    So why won’t these zombie ideas die?

    Part of the answer is that there’s a lot of money behind them. “It is difficult to get a man to understand something,” said Upton Sinclair, “when his salary” — or, I would add, his campaign contributions — “depend upon his not understanding it.” In particular, vast amounts of insurance industry money have been flowing to obstructionist Democrats like Mr. Nelson and Senator Max Baucus, whose Gang of Six negotiations have been a crucial roadblock to legislation.

  • Jim Hightower: Rick Scotts Latest Fraud. Excerpts: Our country's corporatized health care system is so uncaring that 76 percent of Americans tell pollsters it must be "fundamentally changed" or "completely rebuilt." But Rick Scott says uh-uh – what health care needs is more corporatization – and even Wal-Martization.

    Rick who? He's the ex-CEO of the massive Columbia/HCA hospital chain and a laissez-fairyland zealot who is feverishly opposing Barack Obama's health reform ideas. I say "ex-CEO" because his profit-above-all-else approach to running Columbia ran it into a very deep ditch – and got him fired in 1997. Among his "health care" tactics were overbilling Medicare, giving kickbacks to doctors who referred patients to his hospitals, and dangerously understaffing hospitals to cut costs. Columbia later pled guilty and paid $1.7 billion to settle fraud charges against it.

    Yet, he's running TV ads and infomercials featuring him as a health care "expert." Scott's ads attack Obama with that tired, old bugaboo of "Government Run Health Care," and to coordinate his attack, he has hired the same PR hacks who ran the infamous "Swift Boat Veterans" assault on John Kerry in 2004.

    Scott's television blitz features theatrical horror stories of "socialized medicine," direly warning that this is Obama's plan. Only... it isn't. Not even close. Private doctors, nurses, and others of our choosing would continue to provide our health care. The change that Obama seeks is merely in how we pay these practitioners. By offering a new "public option" we'd have the choice of sticking with an insurance corporation, or buying into a public insurance pool.

  • New York Times editorial: World’s Best Health Care. Excerpts: Critics of President Obama’s push for health care reform have been whipping up fear that proposed changes will destroy our “world’s best” medical system and make it like supposedly inferior systems elsewhere.

    The emptiness of those claims became apparent recently when researchers from the Urban Institute released a report analyzing studies that have compared the clinical effectiveness and quality of care in the United States with the care dispensed in other advanced nations. They found a mixed bag, with the United States doing better in some areas, like cancer care, and worse in others, like preventing deaths from treatable and preventable conditions.

    The bottom line was unmistakable. The analysts found no support for the claim routinely made by politicians that American health care is the best in the world and no hard evidence of any particular area in which American health care is truly exceptional. ...

    Contrary to what one hears in political discourse, the bulk of the research comparing the United States and Canada found a higher quality of care in our northern neighbor. Canadians, for example, have longer survival times while undergoing renal dialysis and after a kidney transplant. Of 10 studies comparing the care given to a broad range of patients suffering from a diverse group of ailments, five favored Canada, three yielded mixed results, and only two favored the United States.

  • New York Times: The Problem With Prevention. By Michelle Andrews. Excerpts: In a podcast on his Web site, Senator Tom Harkin, the Senate Health, Education, Labor and Pensions Committee point person on prevention, had this to say (MP3): “The full panoply of wellness and prevention provisions in our bill will result in countless tens of billions of dollars in annual savings.”

    If only it were that simple. Nearly 40 percent of all deaths in the United States every year are a result of smoking, poor diet, lack of exercise or alcohol abuse. Preventing those behaviors or reducing their incidence is likely to save money. And one thing that everyone seems to agree on is that putting money toward community-based activities is a good thing, from widening sidewalks so people can get out and walk to getting fresh fruits and vegetables into grocery stores and healthy lunches into school cafeterias. ...

    But the picture is murkier for other preventive interventions. Very few actually save money. A study published in The American Journal of Preventive Medicine in 2006 examined 25 common preventive services and found that just a handful resulted in savings (PDF). These included childhood immunizations, offering to help smokers kick the habit and discussing daily aspirin use with people at risk for heart disease.

  • New York Times: Kennedy Death Adds Volatile Element to Health Fight. By Carl Hulse and Katharine Q. Seelye. Excerpts: The death of Senator Edward M. Kennedy has quickly become a rallying point for Democratic advocates of a broad health care overhaul, a signature Kennedy issue that became mired in partisanship while he fought his illness away from the Capitol. “The passion of his life was health care reform,” said Representative David R. Obey, the liberal Wisconsin Democrat who is chairman of the Appropriations Committee. “Above all else, he would want us to redouble our efforts to achieve it.”

    Yet Democrats have serious internal differences on how to approach health care, and Republicans and Democrats remain deeply divided on the policy proposals — a gulf some say Mr. Kennedy was uniquely equipped to bridge. It seemed unlikely that Republicans would suddenly soften their firm opposition in the aftermath of Mr. Kennedy’s death or that Democrats would relent on their push for substantial change, especially for a government-run insurance plan, which Mr. Kennedy endorsed.

  • New York Times op-ed: Congress’s Health Care Numbers Don’t Add Up. By Jon R. Gabel. Excerpts: For competence and integrity, few organizations command more respect in Washington than the nonpartisan Congressional Budget Office. As health care reform makes its way through Congress, the budget office’s assessment of how much various elements might cost may determine the details of legislation, and whether it ultimately passes. But when it comes to forecasting the costs of reform, the budget office’s record is suspect. In each of the past three decades, when assessing major changes in Medicare, it has substantially underestimated the savings the changes would bring.

    In the early 1980s, Congress changed the way Medicare paid hospitals so that payments would no longer be based on costs incurred. Instead, hospitals would receive a predetermined amount per admission, based on the patient’s primary medical problem. This encouraged shorter stays, led to fewer diagnostic services and reduced administrative costs. The Congressional Budget Office predicted that, from 1983 to 1986, this change would slow Medicare hospital spending (which had been rising much faster than the rate of inflation) by $10 billion, and that by 1986 total spending would be $60 billion. Actual spending in 1986 was $49 billion. The savings in 1986 alone were as much as three years of estimated savings. ...

    The budget office’s cautious methods may have unintended consequences in the current health care reform effort. By underestimating the savings that can come from improved Medicare payment procedures and other cost-control initiatives, the budget office leads Congress to think that politically unpopular cost-cutting initiatives will have, at best, only modest effects. This, in turn, forces Congress to believe it can pay for reform only by raising taxes, which then makes reform legislation more difficult to pass.

  • Washington Post: 5 Myths About Health Care Around the World. By T.R. Reid. Excerpts: As Americans search for the cure to what ails our health-care system, we've overlooked an invaluable source of ideas and solutions: the rest of the world. All the other industrialized democracies have faced problems like ours, yet they've found ways to cover everybody -- and still spend far less than we do.

    I've traveled the world from Oslo to Osaka to see how other developed democracies provide health care. Instead of dismissing these models as "socialist," we could adapt their solutions to fix our problems. To do that, we first have to dispel a few myths about health care abroad:

    1. It's all socialized medicine out there... 2. Overseas, care is rationed through limited choices or long lines... 3. Foreign health-care systems are inefficient, bloated bureaucracies... 4. Cost controls stifle innovation... 5. Health insurance has to be cruel...

  • Huffington Post: Fear, Greed and X-Rays. By Dr. Andrew Weil. Excerpts: Fear and greed are potent motivators. When both of these forces push in the same direction, virtually no human being can resist. And doctors -- despite many expectations to the contrary -- are human beings. This is one reason why medical costs in the U.S. have spiraled out of control, yet we are among the least healthy people in the developed world. ...

    Along with over-scanning, over-biopsying, over-blood-working and other diagnostic excesses, fear propels over-treatment. Anytime a physician diverges from standard U.S. treatment protocols, nearly all of which skew toward expensive drugs and surgery, lawsuit-fear looms. "Defensive treatment" strips physicians of clinical judgment, costs billions and leaves patients less healthy, but it's hard to blame physicians who practice it. As one wearily told me, "You never forget your first lawsuit."

    Physicians like to discuss the fear side, because it shifts the blame to lawyers. The greed side, however, deserves just as much scrutiny and reform. Consider "The Cost Conundrum: What a Texas town can teach us about health care," a must-read New Yorker article by Atul Gawande, M.D. Gawande visited McAllen, Texas, to discover why per-capita health care expenditures there are the highest in the nation. He found that many physicians in high-medical-cost cities such as McAllen have a diversified "revenue stream," the result of what one hospital administrator termed "entrepreneurial spirit." This "spirit" often manifested in physicians owning their own medical testing equipment, which meant the more tests they ordered, the more money they made. A 2002 University of North Carolina study showed doctors who own imaging equipment sent patients for roughly two to eight times more imaging tests than those who don't own.

    In Gawande's article, a McAllen doctor who refused to hop aboard this gravy train had a more sensible take on the local "spirit." "Medicine has become a pig trough here," he said. "We took a wrong turn when doctors stopped being doctors and became businessmen."

  • Los Angeles Times: President Obama: Healthcare; you promised. An open letter reminds the president of the major campaign vow that got him into the White House. By Anne Lamott. Excerpts: I am afraid there has been a misunderstanding since that election in 2008, during which 66,882,230 Americans cast their votes for you. Perhaps one of your trusted advisors has given you bum information. Maybe they told you that we voted for you -- walked, marched, prayed, fund-raised and knocked on doors for you -- because we hoped you would try to reunite the country. Of the total votes cast that long-ago November day, I'm guessing that about 1,575 people wanted you to try to reconcile the toxic bipartisanship that culminated in those Sarah Palin rallies.

    The other 66,880,655 of us wanted universal healthcare. ...

    And Mr. President, that is what the Republicans are saying to you: They are just not that into you, sir. This may have thrown you for such a loop that you have forgotten why you were elected -- which was to lead your people back to the promises of our founding parents. Many of us no longer recognized our country after eight years of Bush and Cheney, and you gave us your word that you would help restore the great headway we had made on matters of race, equality and plain old social justice.

    People, get ready, you said; there's a train a 'coming. And we did get ready. We hit the streets. We roared, whispered, cried, whooped and went door to door, convinced that even if Dr. Martin Luther King Jr. had not specifically dreamed of you, his dream of justice and equality and pride might come into being through your vision, your greatness, through the hope that your words gave us, through the change you promised. He dreamed of a leader like you. Just like you. And something in the deepest part of this country's soul heard. ...

    We did not know exactly how you would proceed to restore our beloved Constitution. It seemed beyond redemption, like my kitchen floor did briefly last week after my dog, Bodhi, accidentally ate 24 corn bread muffins. You said you would push back your sleeves and begin, that it would take all of us working harder than we ever had before, but that you would lead. While acknowledging the financial and moral devastation of the last eight years, you said you would start by giving your people healthcare. You would do battle with the conservatives and insurance companies. You said in your beautiful way many times that this was the overarching moral and spiritual issue of our times, and we understood this to mean that you took this to be your Selma, your Little Rock.

    I hate to sound like a betrayed 7-year-old, but you said. And we believed you. Now you seem to have abandoned the dream. That is why moderates and liberals and progressives like myself all seem a little tense this summer. It is time to call your spirit back. We will be here to help when you get back from vacation. We want to help you get over the disappointment of Mr. Grassley's cold shoulder, of Mr. Enzi blowing you off, even that nice Olympia Snowe standing you up. We can and will take to the streets again, march and hold peaceful rallies, go door to door, donate to any causes that will help get out the truth of what a public option would mean. But we need you to shake off the dust of the journey and remember the promises of Dr. King, and we need you to lead us toward what is no longer so distant a shore.

    Do it for Teddy Kennedy, boss. Do it for the other Kennedys too, for Dr. King, for Big Mama, for the poorest kids you met on the trail, the kids who go to emergency rooms for their healthcare, do it for their mothers and for Michelle. Just do it. Trusting you, Mr. Obama.

News and Opinion Concerning the U.S. Financial Crisis
Minimize "It is a restatement of laissez-faire-let things take their natural course without government interference. If people manage to become prosperous, good. If they starve, or have no place to live, or no money to pay medical bills, they have only themselves to blame; it is not the responsibility of society. We mustn't make people dependent on government- it is bad for them, the argument goes. Better hunger than dependency, better sickness than dependency."

"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.

  • Wall Street Journal: Goldman's Trading Tips Reward Its Biggest Clients. By Susanne Craig. Excerpt: Goldman Sachs Group Inc. research analyst Marc Irizarry's published rating on mutual-fund manager Janus Capital Group Inc. was a lackluster "neutral" in early April 2008. But at an internal meeting that month, the analyst told dozens of Goldman's traders the stock was likely to head higher, company documents show. The next day, research-department employees at Goldman called about 50 favored clients of the big securities firm with the same tip, including hedge-fund companies Citadel Investment Group and SAC Capital Advisors, the documents indicate. Readers of Mr. Irizarry's research didn't find out he was bullish until his written report was issued six days later, after Janus shares had jumped 5.8%.
  • New York Times: Rise of the Super-Rich Hits a Sobering Wall. By David Leonhardt and Geraldine Fabrikant. Excerpts: The rich have been getting richer for so long that the trend has come to seem almost permanent. They began to pull away from everyone else in the 1970s. By 2006, income was more concentrated at the top than it had been since the late 1920s. The recent news about resurgent Wall Street pay has seemed to suggest that not even the Great Recession could reverse the rise in income inequality.

    But economists say — and data is beginning to show — that a significant change may in fact be under way. The rich, as a group, are no longer getting richer. Over the last two years, they have become poorer. And many may not return to their old levels of wealth and income anytime soon. ...

    Bill Gates, Warren E. Buffett, the heirs to the Wal-Mart Stores fortune and the founders of Google each lost billions last year, according to Forbes magazine. In one stark example, John McAfee, an entrepreneur who founded the antivirus software company that bears his name, is now worth about $4 million, from a peak of more than $100 million. Mr. McAfee will soon auction off his last big property because he needs cash to pay his bills after having been caught off guard by the simultaneous crash in real estate and stocks.

  • Jim Hightower: Compensating Wall Street's Sociopaths. Excerpts: The chilling caw of the raven in Edgar Allen Poe's classic tale of horror was, "Nevermore." In a modern update, however, a covey of greed-crested Wall Street bankers have one-upped Poe with an on-going tale of financial horror in which their incessant, bone-chilling cry is: "Evermore." As in evermore money for themselves – fatter salaries, guaranteed bonuses, expansive perks... more, more, more.

    If you thought that Wall Street's birds-of-a-feather would be embarrassed by their disastrous management failures, chastened by the collapsed of their banks, shamed by the massive government bailouts, and humbled by the public's disgust at their greed, you don't know your birds. This particular breed has a sense of entitlement that's bigger than all of Dallas. A recent study, for example found that even as nine of Wall Streets biggest bank failures were grabbing bailout money last year, they were lavishing bonuses of more than a million bucks apiece on about 5,000 of their top bankers. These banks lost a total of $81 billion in 2008 and went begging to Uncle Sam for $165 billion in direct bailout funds – yet they merrily awarded $32 billion in bonuses to their executives!

    Yes, that means they used our tax dollars to cover this bonus-for-failure program.

    This year, the same flock of Entitled Ones is already setting aside billions of dollars for executives bonuses to be paid at the end of the year, and they’ve even returned to the cuckoo practice of guaranteeing themselves multimillion-dollar bonuses – no matter how they perform. It's time we quit pampering these sociopaths by allowing their absurd sense of self-entitlement to swamp common sense and the common good. No mere banker should be paid a dime more than what a good teacher, a fire fighter, or a nurse makes.

If you hire good people and treat them well, they will try to do a good job. They will stimulate one another by their vigor and example. They will set a fast pace for themselves. Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will share in its sucess, they will contribute in a major way. The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders. —Thomas J. Watson, Jr., from A Business and Its Beliefs: The Ideas That Helped Build IBM.

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