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Highlights—July 3, 2010

  • Courthouse News Service: Ponzi at IBM, Tech Investor Says. By R.M. Kramer. Excerpt: Four IBM vice presidents orchestrated a 5-year-long Ponzi scheme, demanding money from investors even after canceling the related development project, according to a federal RICO complaint. Devon IT claims the vice presidents, who worked in IBM's hardware division, the Systems and Technology Group, used part of Devon's $12 million investment to inflate the division's earnings and fund projects with other business partners.

    "The RICO defendants are responsible for orchestrating a widespread Ponzi scheme, in violation of the Racketeer Influenced and Corrupt Organizations Act ('RICO'), over a period of nearly five years, involving the direct solicitation of $12 million in investment money from Devon for two information technology projects," according to the complaint.

    "While leading Devon down this road of deceit and as part of their scheme, the RICO defendants improperly included the funding provided by Devon on the financial reports of STG, thereby exaggerating its performance," the complaint states.

  • Triangle Business Journal: Lawsuit accuses IBM of Ponzi scheme, seeks more than $100M. By Frank Vinluan. Excerpts: Two IBM executives based in Research Triangle Park are among the defendants named in a federal lawsuit brought by a small Philadelphia-area technology company that claims IBM orchestrated a Ponzi scheme that defrauded the company of more than $12 million. The suit is seeking more than $100 million from IBM. ...

    In the complaint, Devon claims IBM took the money Devon invested in the partnership and used it to boost earnings figures for Big Blue's Systems and Technology Group. The complaint alleges that IBM continued the scheme by bringing in new partners to invest in projects. Thomas Bradicich and James Gargan, two RTP-based IBM vice presidents, are among the four individual IBM defendants named in the suit. IBM has not yet filed an answer to the complaint.

  • Yahoo! IBM Employee Issues message board: "Raises?" by "trexibmer". Full excerpt: Why doesn't IBM management have the common decency to communicate pay raise information to their employees? If the raises are 0% or only 1% that is no reason to avoid telling the employee! Where is proper COMMUNICATION in this IBM? Life in this IBM is not good.
  • Yahoo! IBM Employee Issues message board: "Re: Raises?" Full excerpt: The Alliance has been asking that question on the web site. Used to be raises were given out in May. then June. Now July. If employees had a contract there would be no uncertainty and no guessing game.
  • Yahoo! IBM Employee Issues message board: "Re: Raises?" by "In Focus". Full excerpt: Of the two (2+) people that I know, who have gotten a raise, the highest one received was 1.4% increase. The other person received a 1% increase. As I was a rated a 2, I am not expecting an increase. I bet my manager doesn't let me know one way or the other, because he has been neutered. It would be interesting to see on this board, the number of 2 rated people that get an increase.
  • Yahoo! IBM Employee Issues message board: "Re: Raises?" by "ibmretiree2006". Full excerpt: Well, of course. Those lazy 2's and 3' don't deserve anything even though their PBC was determined without anyone even bothering to look at performance. If anyone believes that for the vast majority of employees IBM is a fair minded employer I have a bridge in San Francisco for sale. I have been told, however, that employees in India got fairly decent raises. Even 2's and 3's!!!
  • Yahoo! IBM Employee Issues message board: "Re: Raises?" by "trexibmer". Full excerpt: IBM still wants to keep most of the PBC 1 rated employees, if they can, so the PBC 1's can count on a raise. Not all PBC 2+ will get raises. IBM did not allocate enough of pay funding for this cycle so there might not be enough of pennies to go around to everyone who is a PBC 2+. I personally know someone who got a PBC 2+ and a whopping, fat 0% raise. Those PBC 2+ well above market based pay and those to be RAed as a PBC 2+ (they do exist) might not get a raise. Those that have a PBC 2 should just watch their back and forget about watching their paycheck now. RA's are sure to happen. Life in IBM is not good.
  • Yahoo! IBM Pension and Retirement Issues message board: "Pension Rumors" by "zaciewskim". Full excerpt: I work for IBM and I have been hearing the rumors for a month now....apparently I was one of the LAST to hear the rumors, they have been out there for a while. I fully expect that some form of this rumor is true. I also fully expected to hear the announcement shortly.... Alas, IBM is not going to announce this until September...or so I hear from a source who shall remain anonymous. And, the scoop is 'no more pensions'....if you are eligible under the old plan, leave or lose it. This means even people who are not yet eligible to retire. Thanks, IBM, for letting us twist in the wind all summer.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Pension Rumors" by "art_vandalay_". Full excerpt: zaciewskim, I have already provided some points on why I don't see a package at this time with the PPA. Actually, you are somewhat correct in that there will soon be "no more pensions," and that date will occur on July 2014. At that point, everybody will have achieved "retirement eligible" status that is on PPA. The year before would require IBM to fund their pension at 100%. The pension will have no other "bumps."

    Frankly, the best long term strategy (in my opinion) would be for IBM to want to keep these employees on the PPA pension. First, the pension will have been paid for and any money they are able to produce will be cash that they can continue to use for layoffs, exec packages, or showing profit. Secondly, the employees are not drawing out of the funding and I believe they are getting high quality employees at a cheap price.

    A couple of posters have suggested that IBM will simply watch all of these senior employees walk out of IBM, and replace them with cheap replacements off the street. I don't think so. I look around and see that this group of employees (25+ years) are making up the directors, BUEs, and senior team lead talent in many groups that cannot afford this loss of leadership. I think 1999 was much different. We had a deeper bench and the targets back then were the "younger employees" that were viewed as mere cogs.

    I hardly think that business line executives with 30 years of experience will be replaced by $50K employees off the street. Us grunts, sure. IBM has had no qualm going after the troops, but we are talking about the ones that, in some cases, report directly up to these bosses.

    This also brings up another point that as far as I can determine, this rumor started on one specific message board. The board was the generic "IBM Corporation" group that discusses the financial aspects of the company. Based on those postings, I believe there was a good chance that IBM did take a look (or is looking) at the dollars behind a pension change. However, the same sources suggested that IBM booted the plan for one simple reason. Possible lawsuits.

    It has been discussed that IBM can certainly terminate their pension plan at anytime, but I wonder now that the people affected the most would all be over 40 (actually over 51.) This might be something that IBM is a little worried to step into at this time. You have unemployment at a high level, an Obama administration that is worker friendly, and a company that is trying to get stimulus funds and government contracts. Another lawsuit or bad press might not be what IBM needs presently.

    Plus, we're not talking the 10s of billions of dollars in savings that they were going after in 1999, but probably something, at most, in the $1 or $2 billion range. (Based on my understanding, the discount rate that IBM would need to offer would be 1/2 of the 30 year Bond rate and the 1/2 of the various corporate rates. I believe the 30 year bond is close to 4% and the corporate rates I have seen only fluctuate a quarter of a point higher.) The maximum they can net present value would be 13.5 years, but the average for the PPA class is probably closer to 7 or 8 years. This is significantly different than the original second choicers who in 1999 were initially "NPVed" with 6% over 25 years with a calculated pension that was only 48 months based on a 60 month total.

    Finally, let me state that I have no clue what will or will not happen. I have not heard from anybody in IBM talking about any rumors either. The only discussion I have been part of has been on these message boards. Normally I believe that everybody should feel free to state their opinions, but you posted this information under the guise as fact:

    "Alas, IBM is not going to announce this until September...or so I hear from a source who shall remain anonymous. And, the scoop is 'no more pensions'....if you are eligible under the old plan, leave or lose it. This means even people who are not yet eligible to retire. Thanks, IBM, for letting us twist in the wind all summer."

    By posting this, aren't you the one that is letting IBMers who read this board "twist in the wind all summer?"

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Pension Rumors" by "zaciewskim". Full excerpt: So, don't go anywhere, now the management rumor mill says IBM has decided not to do anything about the pension plan, i.e., they have backed off. Who knows what will happen? Where there is so much smoke there is usually a fire, but I'm not going to trust ANYTHING I hear from ANYONE any more unless it's the head of HR making an announcement. This rumor mill is ridiculous. It's enough to make your head spin. Have a nice summer!
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Pension Rumors" by "Mike Germano". Full excerpt: There are lots of reasons to spread rumors from the top. It may be to soften the blow or to get reaction to proposed ideas. It may also be to spread fear of something much worse than what is coming so that you consider yourself lucky for no increases, re-leveling, more overtime, reduced benefits, and higher employee contributions because you feel like you somehow missed a bullet.

    The stress of impending layoffs does, however, take its toll. I went through at least four or five before I finally got axed several years back and I had to take a job for less money, but the stress is so much less that it may add back a couple years to my life that IBM would probably have taken away due to the toll of constant stress and two or more layoff rumors a year if I had stayed.

    If it does come down to leave or lose it, though, take the money and run. The job market is tough, though, so start looking now before you do bolt out.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Pension Rumors" by Kathi Cooper. Full excerpt: It's not about Al Franken. Try President Obama and Rahm Emanuel (White House). Try George Miller and Bernie Sanders (House and Senate). There were many more, but these guys personally came to our aid during the Cooper suit. Now I'm not saying they would intercede again because players change. However, if IBM really did anything that even squeaked of screwing us, I feel confident we could gather the right politicians to do the right thing again. As one great attorney once told me, everyone has an agenda so make sure your agenda and their agenda compliment each other. And this time, we are no longer in a learning curve.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: New Loophole?" by "art_vandalay_". Full excerpt: First, let me preface that I have no earthly idea if IBM will choose to do any alteration to the IBM pension plan. The only rumors I have heard have been floated on a couple of message boards.

    I don't think it is simply a "no brainer" for IBM to change the plan at this stage. It did make a tremendous amount of financial sense back in 1999. Further changes made even more sense when they froze the plan. I just don't see the same upside for making a change at this point. (However, I will agree that logical decisions and IBM executives do not always go hand in hand.)

    First, if IBM's goal was to simply go after the retirement "bump" that we all get when we reach either 30 years of continuous service or are over 55 years (with 10 years of service), then the horse has pretty much left the barn. By my calculations, there will probably be less than 5,000 IBMers that will not have achieved that goal by the end of 2010.

    That might seem like a lot, but if they would have done a forced conversion to a cash balance in 2006, then the numbers would have been greater than 20,000 to 25,000 of individuals who were still not retirement eligible. The youngest eligible PPA participant will be turning 51 this month. (This is someone who was 40 years old back in July 1999 and had at least 10 years of service at that time.)

    There is money out there that IBM will save by preventing these employees from reaching the "bump." Assuming it equals out to about $150,000 (pretty high estimate) per employee, then best case IBM would be saving is around $750 million. That might sound like a lot, but that is pretty much loose change when we are talking about pension dollars. When you add up all of the changes IBM made to the pension plan in 1999, then we are talking about $10s of billions if they could have avoided relenting to the second chancers. Three quarters of a billion is a lot, but not when you consider the consequences.

    Secondly, I still would wonder why IBM would choose to force these IBMers out (now) when they could easily continue to draw down the number by laying them off. IBM does realize that this set of employees contain a great number of first and second and third line managers throughout IBM. It was one thing to cull the herd in 1999 when we had backups of our backups, but I think this would be a pretty risky move at this point. I think that the IBM execs do realize this after their 1999 experience.

    Additionally, I would think it would be in IBM's best interest to keep the "retirement eligible" employees from leaving at this point. It is true that they are higher paid, but they are also very cheap employees in comparison. The reason is that as long as they are working, then that is a pension that IBM does not have to pay out. If my salary is $120,000, but my present pension value is $60,000, then I am actually a $60,000 employee. There is a better chance that the retirement eligible people will leave as compared to the one not eligible. The logic is that they are younger (non-eligible) and want to continue working.

    One final point is regards to how IBM would calculate the net present value. Again, in 1999, when interest rates were at least reasonable, IBM was able to get away with their 6% value. In today's environment, that might be a bit difficult to swallow. Of course, the rules now suggest that they don't even need to justify their discount rate.

    More importantly, back in 1999, the employees that IBM were truly targeting were all fairly young. The ones in their upper 20s and 30s that lost out on the pension (and a great deal left the company) and even the second choicers (most of who were in their forties.) The second chancers are now all in their 50's. And, it is one thing to "present value" back 25 years, but the impact is simply not as great if you can only go back 8 to 12 years. (This is one of the reasons that I have not included the wearaway amount in IBM's savings. It may still be significant, but I wonder if IBM would see a positive impact to the approximate 20K employees over the age of 55 still working.)

    Plus, if you believe that high inflation could be in our future, then maybe having a cash balance is not as bad as what 1999 might have offered. I assume we can pretty much rule out any COLAs in our future from IBM. IBM won't be able to hold onto the cash balance for very long, since participants that end up staying would have a much shorter stretch than what happened in 1999.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: New Loophole?" by "Tom Logan". Full excerpt: That was an excellent response - and I'll have to agree with a number of your points. Here's my take on it: What made sense in the past - as to whether they could have done this or that and gained more money at the time is out of scope. They already had a number of employees pissed - and maybe they thought doing anything more would create a outcry too large to ignore. The people making these decisions never look back - the only game is - Where can I save, steal, or cheat to get money right now?' These are the guys that cut a 'Thanks' program, dropped the rental car size to compact (for those that don't travel, this amounted to less than $5 a day and is paid by the customer 95% of the time anyhow), cut one week of vacation on the top end, and on and on and on. As you pointed out - the total dollar number may look big to us, but it is just peanuts in savings for a corporation of IBM's size.

    Where/how did you come up with the number of employees affected (5000)? I'll admit that I did no calculation at all - I just assumed the number was larger. Either way - they will do anything for dollars as pointed out in the paragraph above. There are employees (assumption here on my part)Â that spend 40 hours a week doing nothing but looking for pennies to add to net income. Nothing is out of scope. They have already proven that anything legally in a grey area also will be tried - and they will let the courts determine the outcome. I am not even sure that is done fairly - with billions and billions of dollars at stake at large number of corporations,- the goal is simply to win. II suspect there is a lot more going on behind the scene that we never see - just look at the bailout program to see the pull Wall Street has on the government.

    As to any interest rate they would use - the answer is that it will be the legally established limit or the absolute best number they think they can get away with - whichever is possible. I would not be surprised to see a number even beyond what they think they can get away with used - and then conceding to improve it some to show how flexible they are and how much they care for their employees.

    I agree with your net cost of an employee being the difference in salary versus retirement - but I do not think the accounting works like that. I could be totally wrong as I have no knowledge in this what so ever. I think my retirement money is already in the retirement fund requirements either way - whether I am retired or not. So, pushing me out as an employee simply saves them money on the salary side - along with medical benefits, 401K match, social security, vacation and so on. Another bonus to them here is that the older employees cost them considerably more in medical benefits, vacation, and  social security than what our replacements will cost them.

    Another aspect of this often over looked - and this may have been already discussed at some time in the past, is the way they are making these changes. As you know, the first retirement plan change applied to all employees and triggered a major outcry and a law suite They have learned from that and over the years they have split the employees into multiple groups. Now they target the separate groups - and the outcry is too small to attract any attention or carry any weight. This was even highted by the "Â less than 5,000 IBMers " number used below. If you go back through the plan changes made in the past, I think you will find that all these changes only affected one or two groups - and this all planned. They established the group sizes by setting start date and age values for the applicable changes. These are the groups I see (and there could be more):

    • old retirement plan - eligible to retire - full medical for life
    • old retirement plan - eligible to retire - small bucket of medical dollars
    • old retirement plan - not eligible to retire - will get small bucket of medical dollars
    • new retirement plan (I have no idea how these employees are split up if at all)

    This rumored change would basically eliminate the top two groups listed above - paving the way for future changes with fewer employees in any retirement plan at all (contractors,off shore, or a void will replace the retiring employees). They can also provide a 'bridge' and control the percentage of employees they want to include from the third group listed above- from 0 to 100%. Just my opinion

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: New Loophole?" by "thekanck". Full excerpt: Art: Your analysis makes perfect sense but if I play executive's advocate, (a role similar to devil's advocate) I might say:
    1. $750M is perhaps the "savings", but at present IBM is on the hook to provide the annuity, so must have reserves to cover those in the future. By converting now, they save the $750M (for example) and ALSO get to recapture from the pension fund the surplus cash that WAS held in reserve to pay the future expenses (I have no idea how much that is, but I'm sure it's something...)
    2. savings of only $60k "net employee" cost ... ($120K salary vs. $60K pension in your example) even at only $60K that old-timer IBMers are expensive. Every executive knows we are are all interchangeable geek-cogs thus an off-shore geek @ $12K with modest if any benefits allows the company to book a lot of savings even if they hire 2:1. Typical salaries for the USA-GDFs are in the $30K range so still the old timers are not a "deal" at $60K. Medical costs are far lower, replacements would get only two weeks vacation(?), less 401k match, if any at all, etc...

    Also, the $60K pension is "sunk cost" pay you now, pay you later the money is there.

    Regardless ... of that ... IMHO, the most compelling reason to believe the rumor is that big-Sammy turns 60 and wants to wring every last nickel out of this years bottom line that is possible.

    Is there any basis for the rumor? Beats me, but like you said "executive logic" operates differently than "peon-geek-interchangeable-cog" logic. TK.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: New Loophole?" by "Re: New Loophole?" Full excerpt: Good discussion on what may or may not happen with the Prior Pension Plan... Another point to consider is, although the immediate savings to IBM as a whole by converting everybody to a cash balance plan may not be that significant in the scheme of things, it would still be very significant for an older and smaller division like the Server & Technology Group. Having its roots in the mainframe era, it probably still has the highest percentage of employees that qualify for the Prior Plan. Getting these people to leave without paying a severance package would lower the cost structure, improve the division profitability and, therefore, increase its executive bonus pool!!! We all know division executives are handed out financial targets to meet and, short of doing something illegal (a la Bob Moffat), they're given free reign to choose the means and reap the rewards.

    Managing the Pension Plan is a headache and entails some financial risk that IBM can do without on the road to doubling earnings in 5 years.

  • LinkedIn: The Greater IBM Connection. Full excerpts: Rumors afoot... Anyone have info on a rumored pay-out of pensions to those already "retired" from IBM and/or an "offer" for current IBMers on the "old plan" to take a buy-out of pension or retire? Not sure I have my facts straight, and it is JUST rumor, but as I remember my IBM days, when a rumor was winding it's way through the halls, something was usually afoot.
    • I've heard the second part of your comment from multiple sources. Huge discussions on this over at endicottalliance.org too.
    • These rumors are flying around the Rochester site also. A person hears so many different versions it is hard to know what to believe. Sure sounds like something is going to be announced regrading this.
    • Sounds like their actuaries have revised their estimates of life expectancy upward ... and a buyout would remove the requirement of providing additional funding into the plan to cover this!
    • No buy out...the issue is setting a deadline for the 'old plan' such that to be able to retire under that plan you would have to exercise your retirement option under this plan by year end. Should u choose not to do so u would be moved to the existing 'cash balance plan'. The financials would be significant for current 'retirement eligible' employees...but it is just a rumor and was also rumored several years back in the Tri-State NY area.
    • No buy out...the issue is setting a deadline for the 'old plan' such that to be able to retire under that plan you would have to exercise your retirement option under this plan by year end. Should u choose not to do so u would be moved to the existing 'cash balance plan'. The financials would be significant for current 'retirement eligible' employees...but it is just a rumor and was also rumored several years back in the Tri-State NY area.
    • I am 56. I called the folks who administer the plan. I cannot draw on the pension until I am 62. I asked about cashing out with a lump sum and the answer was "I wish we could do that."
    • I was laid off 3 weeks before my fifteenth service anniversary. If I had lasted another 3 weeks I could have drawn my pension starting at 55 instead of waiting until I am 62. What a coincidence that I was laid off when I was.
    • I was laid off 3 weeks before my fifteenth service anniversary. If I had lasted another 3 weeks I could have drawn my pension starting at 55 instead of waiting until I am 62. What a coincidence that I was laid off when I was.
  • The Register: Big Blue sues exec for joining Oracle. 'Should have been on gardening leave.' By John Oates. Full excerpt: IBM is suing Joanne Olsen - a 31-year veteran of the company who used to be general manager of its services division. Olsen was tempted away to join Oracle by Larry Ellison after the purchase of Sun Microsystems - which put the two firms in more direct competition. Big Blue complains that Olsen was contractually obliged to take gardening leave - not work for a competing company - for at least a year. A spokesman for IBM told Reuters: "Joanne Olsen possesses valuable confidential information about IBM and our operations. As a result, she cannot undertake a senior position at Oracle without violating her obligations to IBM." IBM has filed against Olsen in a court in New York State. She declined to comment and Oracle spokespeople were unreachable
  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM IT Architect: (Current Employee) "IBM Global Services." Pros: IBM works on cutting edge technology. Excellent for initial exposure Cons: No opportunity for career advancement. Less pay. Too much travel. Mostly incompetent project managers. Advice to Senior Management While it is a great company to work for, it needs to provide more opportunities for career advancement.
    • IBM IT Specialist in Waltham, MA: (Current Employee) "Great job right out of undergrad." Pros: Great education, opportunity to touch tons of technologies and work with some of the best IBM professionals as well as exposure to work in multiple industries. Cons: Great educational training but not the best mentoring. Be ready to be thrown into the deep end and tread water or even swim laps right out the gate. Advice to Senior Management: You need a better approach to mentoring recent college grads.
    • IBM Hardware Sales Specialist in San Francisco, CA: (Current Employee) "OK if you're in Software or Services. Direction of the company is all software and services." Pros: Benefits are good, co-workers are professionals, access to a wide range of resources to assist. Cons: Lack of a decent compensation plan for sales and technical sales support. Company is being run purely by numbers. No investment in sales relationships. IBM has a track record of failed product launches. Customers do not like IBM. Advice to Senior Management: Good luck.
    • IBM Anonymous: (Current Employee) "Great people, poor management." Pros: IBM has some of the best people in the world. The pay is very attractive. Many employees are mobile with the opportunity to work from home. Cons: Commission is based on quota, so if you are doing well, IBM might raise your quota mid year so you won't make as much money. Advice to Senior Management: IBM has a cookie cutter approach to the sales process. Because management insists on following this approach, they sometimes require their sales team to have inappropriate or awkward conversations with customers. Management should allow their team to manage their own accounts without interference.
    • IBM IT Specialist in Markham, ON (Canada): (Past Employee - 2008) "Contractors heaven." Pros: Good for contractors, FTE always under pressure, You can make good money if negotiations are done are right time. Cons: Lay off master, one call from US and everyone is laid off for no reason. Advice to Senior Management: treat employees as if you want to keep them for long time.
    • IBM Software Engineer: (Past Employee - 2008) "Great place to work, But be aware: you are a small brick in this giant building." Pros: Very smart people to work with; good training opportunities; there are some really interesting projects. Be part of the big blue. Cons: Bad cafe. No gym. Some projects are boring. Need political skills. Advice to Senior Management: Improve promotion and rewards system. Allow employees to work on their most favorite projects.
    • IBM Anonymous: (Past Employee - 2010) "Have to be highly specialized to maintain or get a job at IBM." Pros: Name brand recognition. Being on the technical sales team is a great place to be to heap pocketful of money on the hard work of others. Cons: First level and most middle management are puppets...as they themselves are worried about their jobs. Old boys network phrase comes to mind as they look after each other. Advice to Senior Management" Make a major overhaul in your first level and mid management teams in the same way you keep moving upper management every 3 years or so.
    • IBM Software Engineer in Durham, NC: (Current Employee) "Software Engineer Review." Pros: The benefits are exceptional: free health insurance, dental insurance, disability, 15 vacation days, 12 holidays, 6% 401K matching, ability to work from home. Cons: I was frequently on call which meant I had to carry a pager for a week every other month The raises and promotions were pretty minimal each year I was not allowed to apply to other internal position even after deciding upon an availability date upon hiring. Advice to Senior Management: I believe the company should focus more on working as one unit that all departments working as individual entities not concerned with any other departments progress.
    • IBM Program Manager: (Past Employee - 2010) "Focus is on money, not employees or customer service." Pros: Average pay, some workplace flexibility, good benefits. Many locations around the world in which one might be able to work and at home, maybe. Cons: Focus on moving US jobs to "off shore" jobs to save money and reduce American head count. Corporate wide move to a shared services model which depends on fracturing the work into cheap assembly line components, with little or no contact with or appreciation of the customer. Savage cost cutting. Moving more work on fewer people. Advice to Senior Management: Fire the Scrooges and return focus to the customer and your employees. Get a long-term perspective and lose the short term financial myopia. Put your millions of dollars of bonuses back onto the company so that so many good people won't be laid off so easily. Taking huge bonuses while firing employees may not be illegal, but it is certainly shameful.
    • IBM Anonymous: (Current Employee) "Cost cutting our way to growth." Pros: Best in class in so many ways, you get to operate at the pinnacle of your profession. Truly committed to diversity and truly global in culture and DNA - you learn so much just from that alone. Does many things in the world to be very proud of. Cons: It's a complex operating environment so getting anything done is a major pain. As the pressures on employees mount because of cost cutting, they are treating each other poorly. Very high stress environment and not for the faint at heart. The climate has to be among the lowest in the industry...but it sure opens doors if it's on your resume. Leaders know this and are taking full advantage of it. Advice to Senior Management: Take the hit to earnings and re-size the company - and stop this 'death by a thousand cuts' business. You are poisoning the well.
    • IBM Managing Consultant in Atlanta, GA: (Current Employee) "IBM" Pros: Knowledge and experienced colleagues. Opportunities among various groups in IBM. Work Life balance. Exposure to new technologies and client facing exposure. Cons: No fair rating mechanism. Unfair compensation for old employees. Slow promotion process. No special incentives for hard and honest work. Advice to Senior Management: Adjust the salaries of old employees with consistent ratings 2+ and 1 ratings to current market conditions. Establish a fair rating mechanism.
    • IBM Analog Design Engineer: (Current Employee) "Good place to start and learn, but compensation well below market rate." Pros: Good place to start. Good place to learn. Good place if you want to move around and try different things. Cons: Outrageously low pay (in my case, ~30% below market for analog designers.) Constant fear of layoffs leads to generally bad morale (at least in Systems & Technology Group.) Upper management does not seem to understand the value of a high performance worker. Huge mess of bureaucracy. Advice to Senior Management: Figure out how to really reward your top performers (not just talk about it) -- they make your company tick. One good engineer is more valuable than two to three mediocre engineers, but doesn't cost nearly as much.
    • IBM Anonymous: (Past Employee - 2009) "Large and Bureaucratic." Pros: Benefits. A global company. Thought leader in technology. Cons: Very bureaucratic Many more no sayers and oversight (second guessing) than solution and enablers. Much of the organization is internal focused and not client or sales focused. Advice to Senior Management: Get control of so many reviews, controls and multiple audits and enable staff, not burden them. Train and support getting it right the first time - not the cheapest, so SWAT team efforts are not as needed or common (and less costly overall with higher client satisfaction).
    • IBM Inside Sales Representative in Dallas, TX: (Past Employee - 2008) "IBM inside sales (.com) representative. Software Group." Pros: Great opportunities for advancement. Excellent training and benefits. Competitive base. Starting salary right out of college $35k + commissions. Ability to relocate. Cons: Software quotas are nearly impossible to achieve on any given level of expertise. This is almost expected. Management creates obtainable quarterly challenges to suffice real commissions. These are you usually quarterly bonuses of $1500-5000. Territory changes can be frequent. Advice to Senior Management: Too much time spent on updating & forecasting sessions.
    • IBM STG Technical Sales in Charlotte, NC: (Current Employee) "been going downhill for the last 4-5 years." Pros: Good work-life balance. Great co-workers. Decent salary (not the best, but not the worse either.) Great technical community. Good place to learn about new technologies. Cons: too many levels of management (executives with no reporting structure?!?) very hard to get any straight answers from upper management. If you're on a technical incentive plan, you can kiss any incentive payment goodbye. (IBM will make sure you barely make your base salary.) Employee motivation is down the drain. Lots of very talented employees are fleeing the company because of the above-mentioned reasons. Advice to Senior Management: Restore *SOME* respect for the employees (remember, it used to be an IBM core value not so long ago) and it will go a long way. Stop making short sighted cost-cutting decision that make IBM look good to investors on a quarterly basis and start re-investing in longer term goals. IBM's current market position is great, but that's not going to last unless things change. 20$ earnings per share by 2015 is the only thing that matter right now, and IBM will do anything to get there. ANYTHING. Success isn't measured solely on EPS Sam..
    • IBM Project Manager: (Current Employee) "Shift in emphasis - Going the extra mile and being rewarded to punishing us if we don't." Pros: Lots of opportunity, interesting roles, opportunity for development, pay is OK, good tools to do the job, top of its field. Cons: The whole shift in emphasis. We all used to go the extra mile and were rewarded, now it is measured and if we do not do it we are punished. This has the effect of shifting motivation from high morale to low morale with resentment. The company talks about work life balance, yet we have little choice but to work away from home and work long hours. Little recognition is given to this and even the expenses we incur whilst away are penny pinching and ends up costing us. The company has pulled a clever trick in making us work 40 hours each week whilst only paying us for 37. I would have preferred it if they had been honest with us and told us we were having to work 40 and there would be no additional pay. The appraisal system has become a series of moving hoops assessed by people we do not work for and rarely see. Little care is given to ensure feedback we get from task managers is fair. There is no training given to task managers to help them become good managers, apply fair approaches to interviews and feedback. Advice to Senior Management: Seriously look at the above, virtually everyone I talk to are unhappy with this. Addressing these issues will not cost much, will protect the company from simmering resentment and possible litigation.... and.... this is the big one... we will probably work more and go the extra mile whilst once again being happy to do so.
    • IBM Software Engineer in Hairless, England (United Kingdom): (Current Employee) "No career/pay prospects but you do get flexible working." Pros: Can often work from home - can almost always work from home when you need (deliveries / children / pets or to get some quiet). - More than one day a week might require negotiation. Flexible hours - core hours of 10-4 but these are rarely enforced. Flexible contracts - Compressed hours - work 4 but do an hour extra each day and get 90% pay. - Term time only (all school holidays off) for 90% pay. Nice site. Nice, intelligent (if demotivated) coworkers. Cons: IBM wants to reduce its workforce and so has a deliberate policy to reduce morale and encourage people to quit: Very restricted pay rises. PBC 3 process - management are forced to label a fixed percentage of employees in every team as under performing and threaten them with the sack. No education budget. (IBM used to be good here). You are a very small cog. Execs may work you into the ground on a project they've already decided to scrap months ago. Each year a few new graduate starters are abandoned in a team that has no work for them and are ignored, until they either quit or find another team - pretty demoralising realising that IBM really cares so little about it's employees that it will leave them to rot. This also occasionally happens to whole teams of more experienced staff but they are better able to cope. Advice to Senior Management Management: Don't hire staff you don't want. Be honest - if you don't know something admit it - we respect you more for it. Respect technical staff to know their jobs, we know we don't want to and couldn't do your job, accept that we might know how to do our jobs - or al least we should have a right to express an opinion. Execs: You want to maximise share price by maximising profit by cutting costs and don't care about moral or the long-term future of the company. You'll have retired before the effects of demotivating and culling the workforce damage the profits. You don't care that it's the best people leaving first.
  • Wall Street Journal: Warren Buffet's Latest Gift: $1.6 Billion. By Erik Holm. Excerpts: It has been quite a year for Warren Buffet, which means next year will be quite a year for Bill Gates. Every July 1, Mr. Buffet hands over massive chunks of Berkshire Hathaway Inc. shares to the Bill & Melinda Gates Foundation, which focused on global health initiatives and U.S. education projects. The latest donation, based on the closing price of Berkshire's Class B shares on Thursday, is valued at $1.6 billion, or 28% more than last year's $1.25 billion. ...

    The rise in Berkshire's stock present the Gates Foundation, founded by Mr. Gates and his wife in 1994, with an enviable challenge: They have to spend it all. One condition of Mr. Buffet's donation is that the group's annual giving must exceed his previous year's gift. Mr. Gates, co-founder of Microsoft Corp., has provided billions of dollars to the foundation, too. The group made grants totaling $3 billion last year to pay for vaccine research, farming projects, microfinance efforts, teacher training, and other charitable work, according to the foundation's website. The total value of Mr. Buffett's gift, including shares he has pledged to hand over in future years, was about $39 billion on Thursday. It is the largest charitable donation in history. Mr. Buffett's holdings are mostly in the more-expensive A shares. He has been converting portions of his holdings to the so-called Baby B shares since announcing the donation in 2006.

  • ZD-Net: IBM moving to Firefox. By Dana Blankenhorn.
  • The Hill: Top Republican: Raise Social Security's retirement age to 70. By Michael O'Brien. Excerpts: A Republican-held Congress might look to raise the retirement age to 70, House Minority Leader John Boehner (R-Ohio) suggested Monday. Boehner, the top Republican lawmaker in the House, said raising the retirement age by five years, indexing benefits to the rate of inflation and means-testing benefits would make the massive entitlement program more solvent. ...

    Republicans have made cutting spending and reforming entitlement programs a key part of their 2010 campaign message. "The choice this year could not be clearer. While Democrats are fighting to create jobs and stand up for seniors, middle class families, and small businesses, Republicans are fighting for Wall Street and to bring back the same policies that caused the worst economic crisis since the Great Depression," said Ryan Rudominer, the national press secretary for House Democrats' campaign committee.

New on the Alliance@IBM Site
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  • To Alliance@IBM supporters: The Alliance is the only organization that advocates and supports IBM employees and ex-employees. In fact, there are few like it in the Information Technology field. It is always difficult to keep an organization like this alive, but as a supporter you know how important it is that we exist. We are calling on you today to help keep us alive another year by joining as a member or associate member. See our online forms below. As our membership has dropped, it is imperative that we gain new members or this organization and web site will cease to exist. Help us keep our organizing and advocacy work alive!
  • General Visitor Comments: Due to a lack of membership growth the comment sections will be closed until we see sufficient growth in full membership, associate membership or donations. Many of you that visit our site have not yet joined, but seem to value its existence. The only comment section that will remain open will be Job Cuts Reports. If you have information that you want the Alliance to know about please send to ibmunionalliance@gmail.com. Information of importance will be put on the front page of this web site. To join go here: Join The Alliance! or here: Join The Alliance!
  • Tell-A-Friend! Take action! IBM must employ US workers on ALL Government contracts! Pass your message on to your friends and colleagues, and invite them to sign up for Alliance@IBM.
  • Job Cut Reports
    • Comment 6/26/10: Job cuts at Greenock IBM SPango valley, Managed out told to find a job within 4 weeks; found a job only to be told that they don't want IBMer employed as they want an agency. Can't win any way -Joe-
    • Comment 6/28/10: Has anyone else noticed a pattern of RA'ing those who were out for an extended period of time due to medical problems? Last year I had some pretty bad medical issues and was out and in march of this year I was RA'ed. Asking around I noticed a pattern several others who have been RA'ed were in a similar boat. I heard though a source in IBM that even though my case for retention went way up the chain (VP's etc) HR was the one who ultimately denied me staying in. Anyone else notice that pattern as well? -Anonymous-
    • Comment 6/28/10: I agree with the poster who said that there is a pattern of RA'ing those who become sick and disabled. I became disabled in 2008 and was out for 5 months - Since I worked from home I was able to go back to work but 8 months later after a fantastic appraisal and the largest bonus payment I ever got - I was selected for the RA. I was 2 months short of my 29th year - but I was able to get back on Short Term Disability with my doctor's help for 3 months and when I came back got the retirement bridge. I was always friendly with the VP of my organization but even he clammed up and could not help me - I am sure it was HR who picked me because of my illness. -Anonymous-
    • Comment 6/28/10: There are a lot of people who have negative feelings about unions, some of them very vocal. I was one of them. There were places I worked in which I saw unions that were corrupt, full of lazy workers who felt a sense of entitlement that I could not relate to at all. But in the past ten years I have seen things from a different perspective. When corporations put share price above all else, disregarding the quality of their product or service, that is a problem.

      When they make immense sums of money without sharing it among those whose time, efforts, sacrifice, and knowledge brought in the profits, it is unfair. When hard working people are dropped after dedicating years to their job since there is a cheaper alternative overseas or in a town with lower cost of living, something is amiss. I am a realist and do not think that a union will be without its drawbacks or potential for problems, but things are certainly not in your favor as they are. Those who are truly happy with things as they have been are in the minority -- I fear that the majority are just too beaten down and timid to speak up.

      IBM would not have such enormous profits if it were not for those in the trenches working so many hours in fear of losing their jobs for salaries that are below the market average. We work overtime without documenting it. We don't take vacation days we are eligible for because we fear being out of the office will put us on the next list.

      We've lost a viable pension plan, variable pay, and no longer even hold out hope for a pay increase each year. We watch as thousands of fellow workers are unceremoniously forced out of the company during a great recession while IBM posts record earnings. We no longer get training in what we need to do our jobs, let alone that which would enable us to advance our careers. I just don't see why the membership has not expanded dramatically since January 2009. -He Who Carries the Pickle-

    • Comment 6/28/10: "Has anyone else noticed a pattern of RA'ing those who were out for an extended period of time due to medical problems?" A pattern? Could very well be. But of course IBM will say it is all without merit. Without a union and being an AT Will employee IBM can do whatever it wants in regards to employees who have medical issues and missed billable hours because of medical reasons. A case in fact: I was out on short term disability last year for months and then was shortly RA'ed when I returned too.

      When I started my 30 day blacklisted from applying for another IBM job period I was told I couldn't report to work site. Like I had a communicable disease or something.

      Now I get an IBM health representative from IBM sponsored health insurance calling me how my health is and how I am feeling .and I don't even work for them anymore even though have to pay the exorbitant COBRA premiums. When I was on disability no calls were made. When I was working for them I had to make sure I couldn't take two consecutive sick days without a doctor's note. Talk about IBM caring about employee health. Like why would IBM really care about an ex-employees health now?

      Maybe IBM knows something about the health issues that have befallen those they soon RA? A pattern? Quite right. -sickend-

    • Comment 6/29/10: To Medical Problems: There is no trend towards those out for an extended period of time with medical problems. There is a trend towards American workers, period. It doesn't matter who you are or what job you work in. If you are in the US, you are targeted for RA, skills rebalancing, or whatever colorful name they want to call it this year. The way IBM treats workers is why Unions got started in the first place. Unfair labor practices. Unless workers band together and get a union in place, IBM will never be a good company to work for. -Gone_in_07-
    • Comment 6/30/10: I have noticed a pattern in the RA's. Everyone who has been RA'd has not had a union contract. -Doyathink?-
    • Comment 6/30/10: Not sure about the correlation between medical leave and RA's. I was out in 2009 for 3 months (originally scheduled for 6 weeks but had complications), and I'm still here. However, a friend had shoulder surgery and was out for extended time in 2009 and was RA'd in 2010. Maybe they keep just enough of us to 'prove' they don't RA people with medical issues, or perhaps my name is on a list, but I haven't been notified yet. Sad part is, my friend needed and wanted to stay in the job, and I want out of IBM.

      On another note, like others have said, the one thing that IS the same for ALL ra'd workers they were without union contract. I joined the union, What have YOU done lately to ensure you're not next? -Something to THINK about-

    • Comment 6/30/10: Anyone who wants to console themselves and think HR chooses who gets RA'ed is kidding themselves. These decisions are made by your line management, usually at a second line level or above. HR does provide the amount or percentage of people to get the axe in an organization. -long_time_beemer-
    • Comment 6/30/10: Sorry, but union or no union, IBM will continue to RA folks. With a union you just may get a better package. A union doesn't mean job security -anonymous- Alliance reply: Actually it is much more than that. A union AND a contract, as a legal document, requires certain things from management and the company. Justifying job cuts is one. Making sure that people are not singled out based on age, illness, etc. The company and the union are required to have a dialogue and negotiations on job cuts, including finding alternatives. It is not just IBM's way or the highway.
    • Comment 6/30/10: -He Who Carries the Pickle- That is why I, as a Republican and now a Tea Partier, back the Alliance. This might seems strange, but let me explain myself. Sure, unions might not be perfect but IBM is a crooked, corrupt, immoral mess that needs a union to try to keep it, should I say, honest in it's dealing with their employees as they deal with their customers.. -anonymous- Alliance reply: Thank you for your support. AllIance@IBM does not publicly support any party or political platform. Our sole issue is Labor and the mission to organize IBM employees toward a union contract. We have members that are Republicans, Democrats, Independents, etc. and all members agree that a union contract with IBM will level the playing field for non-management employees. We hope you will sign-up as a member and help us continue the work we started; toward a union contract for IBM employees.
    • Comment 6/30/10: "I got screwed into the CB plan and was wondering if there is anything that kicks in at 30 years that I would miss if I left at 28 or 29 years." Sorry, the cash balance plan is not a retirement plan but a cash fund that is used till it's gone. There is no "Kick" after 30 years or any other time as in the defined retirement plan that you were screwed out of. With the CB plane, once the money is gone, it's gone. "I have noticed a pattern in the RA's. Everyone who has been RA'd has not had a union contract." Because no one in the US IBM has a union contract, what's the point? Sign up with 80,000 of your friends, then maybe you can stop the insanity -Ich Bin Muede-
    • Comment 7/01/10: Well, looks like the U.S. Senate failed on an action to vote to fund the unemployment "emergency" benefits. Won't try again until after recess, soonest 7/12. Note, depending on your state, you may roll into the Extended Benefits that is separate from the Emergency Tiers that wait funding by Congress. -anonymous-
    • Comment 7/01/10: "Sorry, but union or no union, IBM will continue to RA folks. With a union you just may get a better package. A union doesn't mean job security -anonymous- " A union means a contract. You know;Like Sammy the CEO has. I am sure HIS contract does provide some level of security and defined benefits and retirement and severance. Just like ours will when enough folks realize if a contract is good enough for Sammy its good enough for us, also. Contracts must be good for IBM or Sammy would not have one! Its the least we can do to emulate our leadership and demand a contract also. If Sam's contract is good for IBM ours will be even better for IBM because there are so many of us currently without one. I wanna be like Sammy! So should you. -Doyathink?-
    • Comment 7/01/10: Manager gave us our salary increases on Monday (if you can call it that). I took my 0.57% increase (yep, you read that right) and joined the union. Thanks IBM!! Come on guys. We work our tail off day in and day out. I read yesterday Palmisano had his pension increased from $20M to $40M. Let's do something to stop this nonsense when we're receiving salary increases of less than $50/month (don't tell me I should be happy I got an increase, or that I have a job. My workload doubled AGAIN last year, and this is how they thanked me). Let's make things right at this company when we were proud for what it stood for and what it meant to be an IBM employee! -anonymous-
    • Comment 7/02/10: To -long_time_beemer- : I know for a fact I was RA'd by my first line manager. When my team was reorged we got a new manager and SHE kept her team lead from another team in place as our team lead. He knew nothing about our operation and just had a big mouth. She wanted me to lead the team but he would have the title. I refused to be her puppet. As a result, the next RA had my name on it. The other team members told me later, they were told I was let go because I was "too disgruntled". So how do we fight discrimination like this? The only way is with a Union in place. To those of you left, organize and unionize. It's the only way. Otherwise you are an "at will" employee and this company and management are going to treat you any way they want. Happy 4th of July to all. -Gone_in_07-
    • Comment 7/02/10: No raise at all this year, it is time to start looking for another job. This company is hopeless and IBM Management knows that the workers are afraid to stand up for themselves, I will demonstrate how this is done by leaving since no one is willing to work for a better environment. Say what you want defenders of the sinking ship, but I fought a good fight along the way.

      It is up to the people to join together and there seems to be 3 classes. The older ones are stuck on their pensions and afraid to rock the boat. The middle career class are in debt up to their eye-balls and think their jobs are secure. The younger career class just doesn't believe in organizing because they think this bullshit is acceptable so they just don't give a shit.

      I predict some jerk will give me grief on here, but that is part of the problem, people are not allowed to voice their opinion and the protectionists chew up anyone with their own opinion and spit them out. I am sure there will be some jerk jumping on me, I really don't care anymore, chew on this dust as my feet leave the building. -Time-For-A-New-Job-

    • Comment 7/02/10: To the IBM'er who got the raise, yes, be thankful you got a raise and still have a job. You haven't been RA'd yet and don't know that it is not easy to find a job -- and a job anywhere near your current inflated salary. Be thankful and stop complaining -Anonymous-
    • Comment 7/02/10: Hundreds of RAed IBMers not only have no job, no raise, now they have no unemployment insurance. So stop the whining about what your raise was or wasn't and how hard you worked. YOU STILL HAVE A JOB, well, at least for the time being. If you want to keep working in IBM, JOIN the Alliance UNION ASAP or be prepared to join the hundreds of RAed employees who have nothing now. -anonymous-
    • Comment 7/02/10: To Both Anonymouses on 07/02/2010. I know it's hard to find a job right now, I have friends that have been out of work for over a year. You don't have to preach to me. For every person we lose on our team, we hire 2 or 3 in India, so I know my job is on the way out. Read a little closer too, I AM a union member. Your desire to bark negative comments at me clearly clouded your reading capability there. And if you think my salary is overinflated, you have no idea what I'm making, so stop assuming. I'll complain as much as I want. I put in more than my honest 8 hours every day, have done so for almost 20 years and deserve better than this. We all do. So let's work together and stop attacking each other, otherwise they've already won -anonymous-
    • Comment 7/03/10: -Gone_in_07- I don't think first lines pull the RA trigger generally. They might give input but the decision is organizational based at higher management levels. I had a strong feeling I was to be RAed when on medical leave, when rated as a PBC 2+, I got a 0% raise. When I asked IBM HR why I didn't get a raise when I heard PBC 2+'s generally got one I asked whether being on medical leave had anything to do with it. No answer. When I returned to work I learned of my RA. I am sure my IBM director made the RA decision about me. He never helped me whenever I asked for a salary review. He never supported me on anything actually. -beemedout-
    • Comment 7/05/10: As I see it the reason IBM is such a lousy company to work for is because most folks don't join this union. A beemer opening their mouth for the right cause is as rare now as a dodo bird sighting. IBM management likes you wishy washy, do nothin', wait and see, no actung, don't stand up and spit types and it gives them all the more ammunition to do job cuts. The fireworks will continue now. If the quarterly numbers finally disappoint you can bet IBM management will have the ax sharper and ready. -ibmumers-
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.

  • New York Times: The Third Depression. By Paul Krugman. Excerpts: Recessions are common; depressions are rare. As far as I can tell, there were only two eras in economic history that were widely described as "depressions" at the time: the years of deflation and instability that followed the Panic of 1873 and the years of mass unemployment that followed the financial crisis of 1929-31.

    Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline — on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses.

    We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.

    And this third depression will be primarily a failure of policy. Around the world — most recently at last weekend's deeply discouraging G-20 meeting — governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending.

  • New York Times editorial: "Who Will Fight for the Unemployed?" Excerpts: Without doubt, the two biggest threats to the economy are unemployment and the dire financial condition of the states, yet lawmakers have failed to deal intelligently with either one. Federal unemployment benefits began to expire nearly a month ago. Since then, 1.2 million jobless workers have been cut off. The House passed a six-month extension as part of a broader spending bill in May, but the Senate, despite three attempts, has not been able to pass a similar bill. The majority leader, Harry Reid, said he was ready to give up after the third try last week when all of the Senate's Republicans and a lone Democrat, Ben Nelson of Nebraska, blocked the bill. ...

    So if lawmakers are wondering why consumer confidence and the stock market are tanking (the Standard & Poor's 500-stock index hit a new low for the year on Tuesday), they need look no further than a mirror. The situation cries out for policies to support economic growth — specifically jobless benefits and fiscal aid to states. But instead of delivering, Congressional Republicans and many Democrats have been asserting that the nation must act instead to cut the deficit. The debate has little to do with economic reality and everything to do with political posturing. A lot of lawmakers have concluded that the best way to keep their jobs is to pander to the nation's new populist mood and play off the fears of the very Americans whose economic well-being Congress is threatening.

    Deficits matter, but not more than economic recovery, and not more urgently than the economic survival of millions of Americans. A sane approach would couple near-term federal spending with a credible plan for deficit reduction — a mix of tax increases and spending cuts — as the economic recovery takes hold. But today's deficit hawks — many of whom eagerly participated in digging the deficit ever deeper during the George W. Bush years — are not interested in the sane approach. In the Senate, even as they blocked the extension of unemployment benefits, they succeeded in preserving a tax loophole that benefits wealthy money managers at private equity firms and other investment partnerships. They also derailed an effort to end widespread tax avoidance by owners of small businesses organized as S-corporations. If they are really so worried about the deficit, why balk at these evidently sensible ways to close tax loopholes and end tax avoidance?

  • Jim Hightower: Dems Cave In To Corporate Political Power. Full excerpt: Should bank robbery be legal, as long as the robbers wear name tags? Such an absurd concept is at the core of the proposal by Democratic congressional leaders to "restrain" the ability of corporations to steal America's elections. Corporate giants – from Wall Street to Walmart – were unleashed to pull off such robberies by the Supreme Court in an absurd January decree that corporations are "persons" with free-speech rights and, therefore, are entitled to spend unlimited sums of money from their massive corporate treasuries to run their own campaigns to defeat or elect anyone they want.

    This is the nuclear bomb of politics, empowering corporations to drop megatons of money on candidates, literally letting this narrow special interest buy our government.

    Democrats promised quick action to stop this armed robbery of the People's democratic authority. But – flexing milquetoast rather than muscle – the Dems proposed nothing but a disclosure bill. It meekly accepts the "right" of corporations to steal people's political power – as long as the barrage of corporate campaign ads come with name tags, revealing who's doing the stealing.

    Yet, so-called leaders of the party are now even backing off on disclosure, watering down their own milquetoast. First came the NRA, shooting a hole in the bill to let them escape the disclosure requirement. Of course, other entities – from AARP to the U.S. Chamber of Commerce – want the same exemption, so it's fast becoming a non-disclosure bill... and a joke.

    Backers say that these exemptions are the "only way" to win enough votes to pass the bill. What wimps! There is another way – Democrats should get out of Washington, where corporate money already rules, and go to the people, rally grassroots America to ram meaningful reform down the throats of these thieves.

  • New York Times: Lobbyist Says It's Not About Influence. By Eric Lichgblau. Excerpts: On the eve of a critical Congressional vote last week on a sweeping measure to regulate Wall Street, the prominent lobbyist Tony Podesta met with one of the lawmakers to go over some final language and discuss the effect it could have on his many corporate clients. Once that was over, Mr. Podesta pivoted back to another client, BP, to help the company navigate Congressional waters and, in short, try to prevent an ugly situation from getting even uglier.

    For weeks now, the two biggest issues in Congress have been cleaning up Wall Street and cleaning up the Gulf Coast. To the surprise of no one in the capital's K Street corridor, Mr. Podesta — Democratic fund-raiser, avid art collector and member of a family brand in Washington — has had a big hand in both. And medical companies have also been drawn to his firm, particularly in the wake of the health care legislation.

    In a remarkable season of lobbying, business is booming for the Podesta Group, already one of Washington's biggest players. It has become particularly lucrative for firms like Mr. Podesta's that are skilled at wielding influence in Congress, the center of epic debates on health care, bailouts and financial regulations.

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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