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Highlights—September 25, 2010

  • Sacramento Bee: California's Ailing $34 Million Student Database Project Is a Year Behind. By Diana Lambert. Excerpts: California's statewide data system tracking student information was to be fully functioning by now. But CalPADS – the state's $34 million student database project – is a year behind schedule. Gov. Arnold Schwarzenegger has threatened to pull the plug if the new system can't reliably relay data by the end of the year. ...

    Since its rollout a year ago, CalPADS has been fraught with problems. District staffers complained they often couldn't get online to enter required data. "There were multiple defects in the system," said Keric Ashley, director of the California Department of Education's Data Management Division. "You always get bugs (in new systems), but you don't want bugs that are showstoppers." But showstoppers they were. In December, an assessment by Folsom's Sabot Technologies – contracted by the state – called for an immediate shutdown of the system to fix abnormalities. It "discovered significant issues with the system and project, representing a threat to the success of CalPADS," according to the report.

    It said IBM, which is being paid $13.9 million to develop CalPADS, had understaffed the project, and that the team wasn't experienced enough. It recommended that the California Department of Education take better control, stating that IBM was being allowed "to make decisions and take actions with very little (state) oversight or transparency." State schools chief Jack O'Connell sent a letter to school district officials in February suspending the program for two months "due to unacceptable system performance."

    Selected reader comments follow:

    • This fiasco seems to be typical of the way private industry treats its government clients - mere cash cows with no accountability or dedication to a project, this time by a bastion of the computer industry no less. The same sabotagers will then turn around and try to dismantle government programs in order to take over and monopolize public functions - all at inflated taxpayer expense.
    • The big problem is you contracted with IBM to do the work. I work in the industry and IBM can make computers but they can't create software worth a crap. The company I use to for contracted with IBM to handle our desktops and we ended up firing IBM in 2 years which would have been a 10 year contract. They were months behind, didn't get anything right the first time and failed to deliver on the their part of the contract. We will never contract with IBM again.
    • Oh come on. There's nothing wrong with IBM, it's business as usual. You bring a bunch of Indians over on L-1 visas, stick 10 of them in 1 apartment, and pay them minimum wage. That's corporate policy. And this is what u end up with. The contractors have about as much software development skills as the state folks. what the hell did you think was going to happen? How can this be a surprise?
    • I know people who work on the new Medi-Cal account and can tell you this: IBM has well over 60 people working on this account, and 50 of them are H1-B visa workers from India, getting paid $14,000 a year, but IBM still bills at regular CMAS rates. The real question to ask is why the State allows IBM to outsource the work to migrant workers who can work on the cheap, but they still bill at market rates. Meanwhile, unemployment in the State is around 13% and there are qualified high-tech workers seeking jobs, collecting unemployment benefits, and defaulting on mortgages. Also, another thing that needs to be looked at is IBM's track record on public sector contracts. The State of Indiana booted them out of a $1B contract last year and the State of Texas is in the process of doing so for another $1B contract this year. This is an underreport.
    • "It said IBM, which is being paid $13.9 million to develop CalPADS, had understaffed the project, and that the team wasn't experienced enough." Having worked on State IT contracts, I can certainly believe this. Unfortunately, 13.9 million might seem like a lot, but it's more like chump change. Even projects 5 times this large are staffed with many inexperienced workers (and tested by many offshore workers). It's all about profit.
    • Actually this is a prim example of the FAILURES of the private sector. IBM you would think would have top notch people, but the just hire contractors for the project. IBM's Global Services is nothing more than a BODY SHOP selling people time.

      CalPADS was required by the legislation which brought it about to be outsourced as part of the bill that created the need for both CalPADS and CalTIDES, the teacher tracking database, which is also being outsourced to IBM.

      IBM is taking a bath on the project but they think they can sell it to other States and make up their loses and get a BIG Profit in the end. IBM sold the State of California their Expense Accounting System that they use internally at IBM and make a ton of money from it because the State also was required to purchase that from IBM.

      So what is IBM's track record in Educational Systems? Well they have almost bankrupted many school districts with the Network Management Services. They do a low bid then jack up the price when the school district tells them that what they are delivering is not what they agreed upon.

    • The positions for mainframe programmers advertised on DICE by IBM lately only pay about $18 per hour, as opposed to $50+ in the past. You just can't attract experienced people at that price, and it shows. IBM is known for pocketing over 50% of the hourly rate that they charge the state, giving the person actually doing the work less than half. No wonder they are going downhill.
    • I work for a firm with many State contracts. I've also worked with on a project in collaboration with IBM and a few other firms at another State department. I have to agree with the assessments regarding IBM. They under staff projects to maximize returns. They also bring in cheap labor by hiring kids fresh out of college.

      Being as large a company as they are, they are able to assume risks that other companies are not, and squeeze out much of the smaller competition. I observed IBM management bargain and act in extreme bad faith, oftentimes they took a "this is what you're getting take it or leave it, and if you leave it, we'll sue you for breach of contract" attitude. IBM bullies the smaller partners that it works in 'collaboration' with. They bully the state.

      Part of the problem is the State IT, legal, and contract managers need to get a backbone and not buckle under to IBM and some of these other large contracting firms. The fact is that these private companies entered contracts to deliver a product that performs up to specifications. Assuming the requirements were thorough and correct, don't get bullied into paying for something that you didn't receive.

  • Raleigh News & Observer: Times swell the ranks of the underemployed. By John Murawski. Excerpts: Every day for more than a year, Gerald Lanier has slipped on his Lowe's apron for his regular shift as a customer service associate at the company's North Raleigh hardware store. Displaced by the recession, this former IBM software engineer now helps do-it-yourselfers select screws and pick plywood. He stocks shelves and loads lumber. He cheerfully greets customers at the door. Lanier, 51, has joined the ranks of the underemployed. Cast adrift in a becalmed economy, these former programmers, engineers and managers now work in grocery stores, retail chains, bookstores and call centers. The pay is meager, and the work is usually unrelated to their careers and education. Experts say many of these professionals may never fully recover economically. ...

    "I went from a big office window up with the VPs and whatnot, and now I have a 12-inch-by-12-inch locker and a red vest," Lanier said. "This is the first hourly job I've been on since high school. You're basically starting over - you're just 30 years older." ...

    Lanier's pay dropped from about $70 an hour at IBM to $13 an hour at Lowe's. He joined IBM in 2001 and left the company in 2006 for a job as system configurator at a tool company in Apex. He was laid off in November 2008 but was confident he would be re-hired at IBM after he had four interviews with his former employer. As job prospects dried up, Lowe's moved Lanier from part time to full time, and then put the engineer through a management training course. But a promotion to a zone manager would require an open slot at a Lowe's within driving distance. Even with his day job in customer service, Lanier has not yet given up on resurrecting his high-tech career. He is spending about $20,000 on night courses for Microsoft and Cisco certification. "When you see your buddies from IBM come through and you're standing there with your red vest and running the cash register, it's hard to grin," Lanier said.

    Selected reader comments follow:

    • The article highlights the fact that job prospects for older, skilled workers is very low, but hundreds of thousands of far less knowledgeable and inexperienced college graduates in their early twenties have been offered employment at an attractive starting salary over the past several months. Why don't these job offers go to people in their forties and fifties?? That's right, it's called age discrimination. You have to catch the hiring manager in the act, which is hard to do, but the evidence is overwhelming. Just look around at all the over forty crowd searching for employment.
    • If there is anything that us folks 50+ need to take from this article is that odds are you are currently earning the most you will ever make - so make sound financial decisions, reduce your expenses, sell the high end cars and oversized houses - I made that decision 5 years ago to do just that and it has been the best move of my life - I drive an old car (1994) and have a 1300 sf house - the best feeling is that if i had to work for $13 an hour I could still pay my bills.
    • Blaming high business taxation and regulations has been the rote drone of the individuals who made these decisions. These companies ELECTED to hire lower wage/skill labor elsewhere in the unrelenting pursuit of quarterly results and the personal gain of high ranking executives. Similar jobs will only "come back" when we stop worshiping at the alter of blind globalization. Our policy needs to take a more rational and longer range approach where the good of the nation is placed ahead of the good of the few. These workers who have been left behind to slowly drown created core value of these businesses. If we're not careful, the core value of our entire economy will erode as we offshore our country.
    • This is the new economy of this nation. The loss of these high paying jobs has nothing to do with the recession. US companies are now proclaiming themselves as Global companies and sending the jobs to low cost nations. Increased government regulations and high business taxation in the US has force these companies to hire elsewhere and to layoff millions. These jobs will never come back.
  • Yahoo! IBM Employee Issues message board: "Re: Bob Moffat’s True Crime" by "trexibmer". Excerpt: I wouldn't mind serving only 6 months in the slammer if I knew I would have a life and a future job as a high paid business consultant waiting for me after cell life from all the high executive level connections and network I still have. Also knowing I still got to retire with my IBM executive pension (LTIP and SERP) and IBM retirement medical. And convince myself I am better off than the hundreds to thousands of HONEST IBMers who obeyed that lil' green IBM honor code book called the BCGuide (I thought the BCGuide didn't apply to me, only for the little nameless grunt IBMer) that I RA'ed for no other reason than my own greed and ego.
  • Forbes: Big Blue Opens Wide And Gulps Down Netezza. Excerpt: IBM said today it has agreed to acquire Netezza for $27 per share, or a total of $1.7 billion, adjusting for cash. Netezza is a provider of high-performance analytics in a data warehousing appliance that can be up and running within hours.
  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM Consultant in Atlanta, GA: (Current Employee) “IBM review.” Pros: Good benefits, decent salary, smart employees - as a traveling consultant you also get to keep your travel points / rewards. Cons: Horrible bureaucracy, I know because I also worked in government & IBM has more bureaucracy than they do! Horrible performance review system - it's jury rigged from the beginning of the year. Built in overtime which as a "professional" you don't get paid for. (e.g. utilization targets over 100%). People get credit for doing nothing on projects - just need to be a manager somehow connected to it. You get the idea... Advice to Senior Management: Need to redo performance review system, invest in employees and don't just use them until they're too expensive & then fire them for new college grads or offshore resources. Build loyalty with your employees.
    • IBM Learning Consultant in Toronto, ON (Canada): (Current Employee) “Consultants aren't dogs to be directed to fetch a stick at every whim.” Pros: Frequently surrounded by smart, motivated people. Cons: 100% deployable and work at the client's whim. If that means you work 8am - 11pm no one cares; they just expect you to do it. Advice to Senior Management: Stop treating your consultants like dirt and expecting them to be grateful.
    • IBM IT Specialist in Herndon, VA: (Past Employee - 2010) “No place for ambition.” Pros: - Good network of information and access to professionals in variety of areas of expertise. Cons - Job growth is very slow, despite continued excellent performance. Learning and skill development are only talked about, and employees are not given enough opportunities to actually carry them out. - Management does not always take responsibility. - Process of assessing and rating management is very poor, and does not accurately convey their performance to their reviewers. - Position classification system is not well designed, and employees' skill levels do not suit their position within the company. - The interview processes are not well designed to properly assess candidates' skill levels. - Lack of openness toward employees. Advice to Senior Management - Listen to your employees' concerns. Listen to your employees' concerns. Listen to your employees' concerns. - Do something about your employees' concerns. - Be proactive in asking for feedback and suggestions. - Live up to IBM's core values--they are there for a reason.
    • IBM Consultant in Melbourne (Australia): (Past Employee - 2010) “IBM.” Pros: High Performance Culture that fosters growth from junior employees. You work with some of the smartest people around and really learn a lot about IBM and other emerging technologies. They will give great opportunities if you show your ability to lead and are generally good at what you do. If you enjoy travelling week to week, the allowances can almost double your income. Cons: Low salary compared to the market at entry and senior level positions. Management level position salary is competitive. If you find yourself on a difficult project, work life balance goes out the window. Not much appreciation for good work, and very little training opportunities. You are expected to learn on the job and learn fast. Advice to Senior Management: Give staff more training opportunities outside of Learning@IBM. Give smaller salary increases more frequently. It works out to be the same in the long run and it keeps employees happy. Why wait 3 years to give a 10k increase that is way less than is expected when you could give 3 3k increases and retain employees.
    • IBM Anonymous: (Current Employee) “Global approach”. Pros: Great flexibility, internationally minded, global approach to business issues. Cons: Too bureaucratic, slow reaction times to market translating into a maniacal cost control. Advice to Senior Management: The management should focus more on larger clients and adopt a different approach for the small-medium sized ones. One process cannot fit all.
    • IBM Sales Specialist in New York, NY: (Current Employee) “Pre sales positions @ IBM.” Pros: large company, perception of diversity and future growth. Cons: GBS - Global consulting services organization RUNs everything. Software sales groups gets swept under the rug. Advice to Senior Management: Equal pay for everyone in organization does not work. Software sales generates the most revenue and highest margin should get paid accordingly.
    • IBM Anonymous in Calgary, AB (Canada): (Past Employee - 2010) “IBM.” Pros: Opportunity to work from home. Cons: Many jobs outsourced over seas. Future jobs in North America at risk. Advice to Senior Management: Too much time focusing on internal red tape rather than the customer
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  • Job Cut Reports
    • Comment 9/20/10: Got laid off about 3 years ago after years of of wondering not if, but when it would happen. I'll be an RN in May and will be making about the same in salary and benefits that IBM paid me for less hours. Also, no more of this keep your skills updated and if your lucky you can keep your job. Where is the incentive in that? -Hagbard15-
    • Comment 9/20/10: Our department just lost 7 contractors including myself. Last day 24 Sept 2010. As a DBA I have seen hundreds of USA based IBMers become contractors or leave the company and a continuous stream of Argentinean and Indian contractors convert to regular employees. -Anonymous-
    • Comment 9/21/10: nov r/a is coming-verified from a FLM..email was sent to mgrs. a few days ago. looks like the big blue pig will be giving a thanksgiving, xmas, and new yrs present to some folks all at one time!!!! glad i was given my get out of jail card!!! -soon to be an ex-ibm'er-thank goodness-
    • Comment 9/22/10: To: -soon to be an ex-ibm'er-thank goodness- If you have a copy of the email then publish it. Otherwise stop with the sky is falling note which does nothing but scare people. Alliance these rumors don't help the cause it just ruins the credibility of the site. -iamgone
    • Comment 9/22/10: to-i am gone...i do not have the email as i am not a FLM. i am not scaring people..i am stating a fact..this one is going to be company wide and it will happen. is this such a surprise? do you think this is going to stop? this corporation is going to exceed it's 2010 EPS roadmap at the expense of the us workforce. the question is going forward is.....what qrtr will the next r/a take place in...not....will there be another one...i only hope folks still around do something abt it in terms of a union.... -soon to be an ex-ibm'er- (thank goodness)-
    • Comment 9/22/10: Told last week that IBM is setting up GDFs in CAlgary, and Montreal in addition to existing one in Toronto. Satellite ones in Edmonton and Winnipeg. People to start moving in on Oct 18. Soon all employees in these cities will be in GDF. No more working from home. Contractors initially then the remaining employees. If outside 80KM radius you are exempt. This would appear to be the precursor for more staff cuts. GDF being implemented on a number of accounts, once people are up to speed on multiple accounts there will be more staff cuts. Time table for various groupings of accounts to be GDF model already in place. -Concerned in Great White North-
    • Comment 9/22/10: '[A]sked whether in hindsight he would have preferred Sun having been acquired by IBM (which pursued a deal to acquire Sun and then backed out late in the game) rather than Oracle, [Java creator James] Gosling said he and at least Sun Chairman Scott McNealy debated the prospect. And the consensus, led by McNealy, was that although they said they believed â??Oracle would be more savage, IBM would make more layoffs.' -Anonymous-
    • Comment 9/22/10: An R/A is certainly not a surprise to anyone in this organization, and some of the rumors like the huge R/A's of 2009 turned out to be true, but there were others that didn't pan out. Sam needs to show short-term profits to coincide with his probable departure. I think a lot depends on the economy, and IBM doesn't want to even take the chance that another downturn will occur. Sam would probably stage a pre-emptive layoff. This is the guy who barely got through basic programmer education so you can bet he holds the most contemptuous views of technical people. The board is clueless that the amount of churn in the company personally created by Sam is causing a loss of revenue.

      The only problem with the memo to first line managers is that they are generally kept in the dark about R/As, according to several trusty FLM friends (I know there are 2 oxymorons in there.... and a recursive joke as well. During previous R/As they were not told until a few days before the R/A although they had an inkling perhaps. The second lines did know and were not allowed to tell the first lines. Any R/A would typically be finished by November 15th. If there is one. And if you survive that one, you bought yourself Christmas and New Years and maybe 3 weeks after that. That was the pattern 2008-2009. So there may be a problem with that rumor, or not. -Anonymous-

    • Comment 9/23/10: Received an 'urgent email' from a body shop that an undisclosed employer in Dubuque Iowa has 20 open slots for Intel administrators. Be interesting to see how many IBM Reg SAs are RA'd in November because their skills are no longer needed. I've also heard that Iowans are unhappy with the influx of H1B workers and the spike in housing prices in DBQ. Who could have foreseen this? -TJ Watson-
    • Comment 9/23/10: My news is dated but I was laid off right before Christmas 2007 because I was "redundant." I was a band 10 with a performance rating of 2+, and almost 52 years old. I came to IBM as part of the PwC consulting purchase. No warning about the layoff, no indications, no nothing. I don't know how I went from a 2+ to redundant without without any input or suggestion that this was in the works. I feel sorry for anyone still there. -JR-
    • Comment 9/23/10: I can confirm that GDF is in fact in Montreal. The second line manager responsible for this crap has been hanging around for the last few weeks. Nobody seems on edge, but him being there is a sure sign that layoffs are to come. -Anonymous-
    • Comment 9/24/10: I am part of the recent RA (informed late August), that went from a total of 26 to less than 1/2 that number. I guess since it is such a small number its gone un-noticed as I have not seen any reports here. I was a remote employee in ITD. -Got the blues from BigBlue- Alliance reply: It may be a small number; but this is the kind of information we have needed, from the beginning. You have not seen reports, because IBM won't report them. It's up to the employees to report them here, so that everyone can see the aggregate number of people being fired by IBM in the US. Thank you. Good job. Please email the RA pack you received to ibmunionalliance@gmail.com
    • Comment 9/24/10: My team of mostly work-at-home employees 95%, have been selected in August to go through the GDF. Do layoffs always accompany GDF upon a team? We have been told that GDC's are opening in other CDN cities (MTL, Calgary etc) and satellite centers and everyone would have to go to either a GDC or the nearest IBM location. Which doesn't make sense for some of us, as there are people that are just 1 person in a city. Not much is being communicated and from my understanding, co-location is a major factor in GDF and as a result there will be layoffs, and most likely be those that are location in cities where they are the only one. -CanadaIBMer-
    • Comment 9/24/10: November RA's. Everyone on here acts like they are surprised to see November RA's happening. I am not surprised at all. I have been reading this board for at least 5 years and have seen that there are RA's every November. It frustrates me beyond belief that people don't remember this pattern and either join The Alliance or find another job. -Anonymous
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
Minimize
  • New York Times: Short of Repeal, G.O.P. Will Chip at Health Law. By Robert Pear. Excerpts: Republicans are serious. Hopeful of picking up substantial numbers of seats in the Congressional elections, they are developing plans to try to repeal or roll back President Obama’s new health care law. ...

    For starters, Republicans say they will try to withhold money that federal officials need to administer and enforce the law. They know that even if they managed to pass a wholesale repeal, Mr. Obama would veto it. “They’ll get not one dime from us,” the House Republican leader, John A. Boehner of Ohio, told The Cincinnati Enquirer recently. “Not a dime. There is no fixing this.”

  • New York TImes: For Many, Health Care Relief Begins Today. By Kevin Sack. Excerpts: Sometimes lost in the partisan clamor about the new health care law is the profound relief it is expected to bring to hundreds of thousands of Americans who have been stricken first by disease and then by a Darwinian insurance system. On Thursday, the six-month anniversary of the signing of the Patient Protection and Affordable Care Act, a number of its most central consumer protections take effect, just in time for the midterm elections.

    Starting now, insurance companies will no longer be permitted to exclude children because of pre-existing health conditions, which the White House said could enable 72,000 uninsured to gain coverage. Insurers also will be prohibited from imposing lifetime limits on benefits.

    The law will now forbid insurers to drop sick and costly customers after discovering technical mistakes on applications. It requires that they offer coverage to children under 26 on their parents’ policies.

    It establishes a menu of preventive procedures, like colonoscopies, mammograms and immunizations, that must be covered without co-payments. And it allows consumers who join a new plan to keep their own doctors and to appeal insurance company reimbursement decisions to a third party. ...

    Polls have found that many of the provisions taking effect Thursday are popular, tugging at a national sense of fairness and feeding off distrust of health insurers. They bear particular appeal for the 14 million people who must buy policies on the individual market rather than through employers and are thus at the mercy of the industry. And they land on the heels of a government report showing that the recession drove the number of uninsured Americans to 50.7 million in 2009, up 10 percent in a year. As the political battle endures, those most immediately affected are welcoming the changes with collective relief, and hoping that their promise of security is real.

  • Wall Street Journal: Proposed Rules Rankle Insurers. By Avery Johnson. Excerpt: One of the most critical aspects of the federal health overhaul for insurers is shaping up as a mixed bag for the industry, as regulators issued draft rules Thursday on how the companies must account for how much they spend directly on patients' medical care. The overhaul stipulates that insurers' medical-care spending for individual and small-business health plans must equal at least 80% of the premiums they collect on those plans. For large-company health plans, the spending requirement is at least 85% of the collected premiums. That will limit how much money insurers have left for administrative expenses and profits. If their medical spending falls below the new thresholds, they will have to pay out rebates.
News and Opinion Concerning the "War on the Middle Class"
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: For the Unemployed Over 50, Fears of Never Working Again. By Motoko Rich. Excerpt: Patricia Reid is not in her 70s, an age when many Americans continue to work. She is not even in her 60s. She is just 57. But four years after losing her job she cannot, in her darkest moments, escape a nagging thought: she may never work again. College educated, with a degree in business administration, she is experienced, having worked for two decades as an internal auditor and analyst at Boeing before losing that job.

    But that does not seem to matter, not for her and not for a growing number of people in their 50s and 60s who desperately want or need to work to pay for retirement and who are starting to worry that they may be discarded from the work force — forever. Since the economic collapse, there are not enough jobs being created for the population as a whole, much less for those in the twilight of their careers.

  • New York TImes op-ed: The Angry Rich. By Paul Krugman. Excerpts: Anger is sweeping America. True, this white-hot rage is a minority phenomenon, not something that characterizes most of our fellow citizens. But the angry minority is angry indeed, consisting of people who feel that things to which they are entitled are being taken away. And they’re out for revenge. No, I’m not talking about the Tea Partiers. I’m talking about the rich.

    These are terrible times for many people in this country. Poverty, especially acute poverty, has soared in the economic slump; millions of people have lost their homes. Young people can’t find jobs; laid-off 50-somethings fear that they’ll never work again.

    Yet if you want to find real political rage — the kind of rage that makes people compare President Obama to Hitler, or accuse him of treason — you won’t find it among these suffering Americans. You’ll find it instead among the very privileged, people who don’t have to worry about losing their jobs, their homes, or their health insurance, but who are outraged, outraged, at the thought of paying modestly higher taxes.

    The rage of the rich has been building ever since Mr. Obama took office. At first, however, it was largely confined to Wall Street. Thus when New York magazine published an article titled “The Wail Of the 1%,” it was talking about financial wheeler-dealers whose firms had been bailed out with taxpayer funds, but were furious at suggestions that the price of these bailouts should include temporary limits on bonuses. When the billionaire Stephen Schwarzman compared an Obama proposal to the Nazi invasion of Poland, the proposal in question would have closed a tax loophole that specifically benefits fund managers like him. ...

    The spectacle of high-income Americans, the world’s luckiest people, wallowing in self-pity and self-righteousness would be funny, except for one thing: they may well get their way. Never mind the $700 billion price tag for extending the high-end tax breaks: virtually all Republicans and some Democrats are rushing to the aid of the oppressed affluent.

    You see, the rich are different from you and me: they have more influence. It’s partly a matter of campaign contributions, but it’s also a matter of social pressure, since politicians spend a lot of time hanging out with the wealthy. So when the rich face the prospect of paying an extra 3 or 4 percent of their income in taxes, politicians feel their pain — feel it much more acutely, it’s clear, than they feel the pain of families who are losing their jobs, their houses, and their hopes.

    And when the tax fight is over, one way or another, you can be sure that the people currently defending the incomes of the elite will go back to demanding cuts in Social Security and aid to the unemployed. America must make hard choices, they’ll say; we all have to be willing to make sacrifices. But when they say “we,” they mean “you.” Sacrifice is for the little people.

  • Investment News: Obama says extending tax cuts to rich is ‘irresponsible'. Excerpts: “I can't give tax cuts to the top 2 percent of Americans” and “lower the deficit at the same time,” the president said during an hour-long town-hall discussion on jobs and the economy on CNBC television from the Newseum in Washington. To give “tax relief primarily to millionaires and billionaires” would be “ an irresponsible thing for us to do,” Obama said. “Those folks are least likely to spend it.” ...

    Obama is challenging congressional Republicans to make only middle-class tax cuts permanent. He wants lawmakers to find agreement on initiatives to spur economic growth and hiring and on extension of Bush-era tax cuts for individuals who make less than $200,000 a year and couples earning less than $250,000.

  • truthout: The Defining Issue: Who Should Get the Tax Cut - the Rich or Everyone Else? By Robert Reich. Excerpts: Who deserves a tax cut more: the top 2 percent — whose wages and benefits are higher than ever, and among whose ranks are the CEOs and Wall Street mavens whose antics have sliced jobs and wages and nearly destroyed the American economy — or the rest of us? ...

    The rich spend a far smaller portion of their money than anyone else because, hey, they’re rich. That means continuing the Bush tax cut for them wouldn’t stimulate much demand or create many jobs. But it would blow a giant hole in the budget — $36 billion next year, $700 billion over ten years. Millionaire households would get a windfall of $31 billion next year alone. ...

    And the Republican charge that restoring the Clinton tax rates for the rich would hurt the economy — because it would reduce the “incentives” of the rich (including the richest small business owners) to create jobs — is ludicrous. Under Bill Clinton and his tax rates, the economy roared. It created 22 million jobs. ...

    As I’ve noted before, in the late 1970s, the top 1 percent got 9 percent of total national income. By 2007, the top 1 percent got almost a quarter of total national income. ...

    These figures don’t even count in taxes. The $1.3 trillion Bush tax cut of 2001 was a huge windfall for people earning over $500,000 a year. They got about 40 percent of its benefits. The Bush tax cut of 2003 was even better for high rollers. Those with net incomes of about $1 million got an average tax cut of $90,000 a year. Yet taxes on the typical middle-income family dropped just $217. Many lower-income families, who still paid payroll taxes, got nothing back at all. And, again, nothing trickled down.

  • Wall Street Journal: Advice for the 'Poor Rich'. Excerpts: Everybody hates Todd Henderson. In case you haven't heard, he's the University of Chicago law professor who unwisely blogged last week about his financial woes in a post headlined "We Are the Super Rich." Mr. Henderson and his wife, an oncologist, make more than $250,000 a year, and apparently they're struggling to get by. If President Barack Obama gets his wicked way, and tax rates rise for those earning more than $250,000 a year, Mr. Henderson says it will mean real sacrifice in his family. ...

    "I can show you a client of mine right now who lives in a suburb of Chicago, he's a doctor, makes $350,000 a year, and he routinely racks up $25,000 on his credit cards," says Michael Kalscheur, a financial planner at Castle Wealth Advisors in Indianapolis. The reason? Too many people have "unrealistic expectations," says Mr. Kalscheur. They figure they should be vacationing in Italy, driving expensive cars, the whole deal. "We need to knock him upside the head. He's got to stop spending money." Every financial planner will tell you the same thing: The real challenge is tackling the psychology. ...

    Stop blaming the government. According to the Congressional Budget Office, $265,000 is the average income of a household in the top 20% of the country, and $395,000 is the average for those in the top 10%. (The thresholds, of course, will be much lower). So you're near the top of the tree in the richest country in history. At the same time, contrary to what you seem to think, federal taxes are not extortionate by modern historical standards. According to the CBO, families in the top 20% pay average federal taxes of 25.1%. The figure in President Reagan's final year in office: 25.6%. ...

    Oh, and one more thing. Never, ever, ever again blog about how hard it is to live on $300,000 or $350,000 a year at a time when one middle-aged man in four can't find a full-time job, and one in five can't find any job at all.

  • truthout: Bleeding-Heart Republicans. By Jim Hightower. Excerpts: Who says that Republican congress-critters don't care about minorities in our society? Why, at this very moment, they are pushing hard to pass a $372 billion federal program to lift the economic fortunes of just one minority group -- a far more generous proposal than Barack Obama has even dared to contemplate.

    The focus of the GOP's generosity is a true American minority: the richest one-tenth of one percent of our people. Living in penthouse ghettos like Manhattan's Upper East Side, this tiny minority of about 120,000 people (who have an average annual income of $8 million) would get some $3 million each over the next decade from the Republican proposal. Doesn't that just make your heart bleed with empathy?

    This windfall will go to the most un-needy among us if the GOP gets Congress to renew the Bush tax cuts for the superrich. Yes, the same Republican lawmakers who have opposed even modest funding to keep schoolteachers and firefighters on the job are wailing that we should take hundreds of billions of dollars from our public treasury and hand them to some of the richest people on the planet.

    What's at work here is the narcissistic psychosis of the privileged -- the delusional belief that they are entitled to special treatment because they're ... well, they're rich and therefore consider themselves to be both superior and especially deserving.

  • Washington Post editorial: The GOP's 'Pledge to America': Deficits can rest easy. Excerpts: If Republicans are serious about governing responsibly, they have an odd way of showing it. And for politicians who purport to hate the deficit -- odder still. The House Republicans' "Pledge to America," unveiled with fanfare Thursday at a Sterling hardware store, mixes irresponsible tax cuts with implausible spending caps and unspecified actions to control entitlement spending. The resulting concoction is a profile in cowardice.

    "Our debt is now on track to exceed the size of our economy in the next two years," their document notes. "The lack of a credible plan to pay this debt back causes anxiety among consumers and uncertainty for investors and employers."

    Good points. Sadly, the "Pledge" contains no credible plan to reduce this debt. On the contrary, it would increase the debt by $4 trillion -- yes, trillion -- by extending all the expiring Bush tax cuts and adding new ones, including a poorly conceived deduction for small businesses. Talk about picking winners and losers; the tax code is already laden with special benefits for small business. This latest deduction would cost $25 billion over two years.

    The Republican plan promises dramatic spending cuts. It would roll back non-security discretionary spending to 2008 levels and cap future growth. But it shirks the politically sensitive task of explaining where the savings would come from. It tosses out a few, relatively small-dollar ideas -- "cutting Congress' budget" and "imposing a net hiring freeze on non-security federal employees," saving $35 billion over 10 years -- and then resorts to the old waste, fraud and abuse dodge. Minority Leader John Boehner crowed that the rollback would save $100 billion in the first year alone. Yes, but from where? Anyone can make that promise; tell us which NASA programs you will end, which national parks you will close. The proposal would require cuts of more than 20 percent in discretionary funding, the deepest in recent history. Leave aside the upside-down claim that cutting spending by this amount in the midst of an economic downturn would help create jobs. What, exactly, do Republicans propose to cut?

  • New York Times op-ed: Downhill With the G.O.P. By Paul Krugman. Excerpts: Once upon a time, a Latin American political party promised to help motorists save money on gasoline. How? By building highways that ran only downhill.

    I’ve always liked that story, but the truth is that the party received hardly any votes. And that means that the joke is really on us. For these days one of America’s two great political parties routinely makes equally nonsensical promises. Never mind the war on terror, the party’s main concern seems to be the war on arithmetic. And this party has a better than even chance of retaking at least one house of Congress this November. Banana republic, here we come.

    On Thursday, House Republicans released their “Pledge to America,” supposedly outlining their policy agenda. In essence, what they say is, “Deficits are a terrible thing. Let’s make them much bigger.” The document repeatedly condemns federal debt — 16 times, by my count. But the main substantive policy proposal is to make the Bush tax cuts permanent, which independent estimates say would add about $3.7 trillion to the debt over the next decade — about $700 billion more than the Obama administration’s tax proposals.

    True, the document talks about the need to cut spending. But as far as I can see, there’s only one specific cut proposed — canceling the rest of the Troubled Asset Relief Program, which Republicans claim (implausibly) would save $16 billion. That’s less than half of 1 percent of the budget cost of those tax cuts. As for the rest, everything must be cut, in ways not specified — “except for common-sense exceptions for seniors, veterans, and our troops.” In other words, Social Security, Medicare and the defense budget are off-limits.

    So what’s left? Howard Gleckman of the nonpartisan Tax Policy Center has done the math. As he points out, the only way to balance the budget by 2020, while simultaneously (a) making the Bush tax cuts permanent and (b) protecting all the programs Republicans say they won’t cut, is to completely abolish the rest of the federal government: “No more national parks, no more Small Business Administration loans, no more export subsidies, no more N.I.H. No more Medicaid (one-third of its budget pays for long-term care for our parents and others with disabilities). No more child health or child nutrition programs. No more highway construction. No more homeland security. Oh, and no more Congress.”

  • Huffington Post: GOP 'Pledge To America' Director Lobbied For AIG, Exxon, Pfizer, Chamber. By Sam Stein. Excerpts: The Republican Party's 21-page blueprint, "Pledge to America," was put together with oversight by a House staffer who, up till April 2010, served as a lobbyist for some of the nation's most powerful oil, pharmaceutical, and insurance companies. ...

    Until early this year, Wild was a fairly active lobbyist on behalf of the firm the Nickles Group, the lobbying shop set up by the former Republican Senator from Oklahoma, Don Nickles. During his five years at the firm, Wild, among others, was paid $740,000 in lobbying contracts from AIG, the former insurance company at the heart of the financial collapse; $800,000 from energy giant Andarko Petroleum; more than $1.1 million from Comcast, more than $1.3 million from Exxon Mobil; and $625,000 from the pharmaceutical company Pfizer Inc.

  • New York TImes editorial: The Founding Fathers Versus the Tea Party. Excerpts: Like many popular insurgencies in American history, the Tea Party movement has attempted to enlist the founding fathers as fervent adherents to its cause. The very name invokes those disguised patriots who clambered aboard ships in Boston Harbor in December 1773 and dumped chests of tea into the water rather than submit to the hated tea tax. At Tea Party rallies, marchers brandish flags emblazoned with the Revolutionary slogan “Don’t Tread on Me” while George Washington impersonators and other folks in colonial garb mingle with the crowds. ...

    But any movement that regularly summons the ghosts of the founders as a like-minded group of theorists ends up promoting an uncomfortably one-sided reading of history. The truth is that the disputatious founders — who were revolutionaries, not choir boys — seldom agreed about anything. Never has the country produced a more brilliantly argumentative, individualistic or opinionated group of politicians. Far from being a soft-spoken epoch of genteel sages, the founding period was noisy and clamorous, rife with vitriolic polemics and partisan backbiting. Instead of bequeathing to posterity a set of universally shared opinions, engraved in marble, the founders shaped a series of fiercely fought debates that reverberate down to the present day. Right along with the rest of America, the Tea Party has inherited these open-ended feuds, which are profoundly embedded in our political culture. ...

    No single group should ever presume to claim special ownership of the founding fathers or the Constitution they wrought with such skill and ingenuity. Those lofty figures, along with the seminal document they brought forth, form a sacred part of our common heritage as Americans. They should be used for the richness and diversity of their arguments, not tampered with for partisan purposes. The Dutch historian Pieter Geyl once famously asserted that history was an argument without an end. Our contentious founders, who could agree on little else, would certainly have agreed on that.

  • Huffington Post: Americans Vastly Underestimate Wealth Inequality, Support 'More Equal Distribution Of Wealth': Study. By William Alden. Excerpts: The report (pdf) "Building a Better America -- One Wealth Quintile At A Time" by Dan Ariely of Duke University and Michael I. Norton of Harvard Business School (hat tip to Paul Kedrosky), shows that across ideological, economic and gender groups, Americans thought the richest 20 percent of our society controlled about 59 percent of the wealth, while the real number is closer to 84 percent.
  • AlterNet: 15 Shocking Facts Show That the Middle Class is Being Wiped Out. As wealth continues to leave the United States and as the U.S. gets even deeper into debt, more Americans are going to become poor. By Michael Snyder. Excerpts: The "America" that so many of us have taken for granted for so many decades is literally disintegrating right in front of our eyes. Most Americans are still operating under the delusion that the United States will always be "the wealthiest nation" in the world and that our economy will always produce large numbers of high paying jobs and that the U.S. will always have a very large middle class. But that is not what is happening. The very foundations of the U.S. economy have rotted away and we now find ourselves on the verge of an economic collapse. Already, millions upon millions of Americans are slipping out of the middle class and into the devastating grip of poverty. Statistic after statistic proves that the middle class in the United States is shrinking month after month after month. Meanwhile, millions of Americans are starting to wake up and are beginning to realize that we have very serious problems on our hands, but they have no idea what is causing our economic distress and they are unaware that most of our politicians have absolutely no idea how to fix the economic disaster that we have created. ...

    This economic nightmare has taken literally decades to develop, and both Democrats and Republicans have contributed greatly to this disaster. Both parties have absolutely refused to stand up to the Federal Reserve and the horrific economic policies that they have been shoving down our throats for decades. Both parties have stood idly by as the U.S. trade deficit has absolutely exploded in size and the United States has become significantly poorer month after month after month. Both parties have refused to do anything as month after month after month large numbers of factories and good paying jobs leave the United States.

    Both parties have shoved the spending accelerator to the floor when they have been in power and now we have the largest national debt in the history of the world. Both parties have done essentially nothing as the health care industry, which was once the envy of the world, has degenerated into a cesspool of corruption and greed and now seems designed to do little more than to provide pharmaceutical companies and health insurance crooks with obscene profits.

  • Huffington Post: New Rule: Rich People Who Complain About Being Vilified Should Be Vilified. By Bill Maher. Excerpts: New Rule: The next rich person who publicly complains about being vilified by the Obama administration must be publicly vilified by the Obama administration. It's so hard for one person to tell another person what constitutes being "rich", or what tax rate is "too much." But I've done some math that indicates that, considering the hole this country is in, if you are earning more than a million dollars a year and are complaining about a 3.6% tax increase, then you are by definition a greedy asshole. ...

    Last week Mayor Bloomberg of New York complained that all his wealthy friends are very upset with mean ol' President Poopy-Pants: He said they all say the same thing: "I knew I was going to have to pay more taxes. But I didn't expect to be vilified." Poor billionaires -- they just can't catch a break.

    First off, far from being vilified, we bailed you out -- you mean we were supposed to give you all that money and kiss your ass, too? That's Hollywood you're thinking of. FDR, he knew how to vilify; this guy, not so much. And second, you should have been vilified -- because you're the vill-ains! I'm sure a lot of you are very nice people. And I'm sure a lot of you are jerks. In other words, you're people. But you are the villains. Who do you think outsourced all the jobs, destroyed the unions, and replaced workers with desperate immigrants and teenagers in China. Joe the Plumber?

    And right now, while we run trillion dollar deficits, Republicans are holding America hostage to the cause of preserving the Bush tax cuts that benefit the wealthiest 1% of people, many of them dead. They say that we need to keep taxes on the rich low because they're the job creators. They're not. They're much more likely to save money through mergers and outsourcing and cheap immigrant labor, and pass the unemployment along to you. ...

    Another of my favorites, Congresswoman Michele Bachmann said, "I don't know where they're going to get all this money, because we're running out of rich people in this country." Actually, we have more billionaires here in the U.S. than all the other countries in the top ten combined, and their wealth grew 27% in the last year. Did yours? Truth is, there are only two things that the United States is not running out of: Rich people and bullshit. Here's the truth: When you raise taxes slightly on the wealthy, it obviously doesn't destroy the economy -- we know this, because we just did it -- remember the '90's? It wasn't that long ago. You were probably listening to grunge music, or dabbling in witchcraft. Clinton moved the top marginal rate from 36 to 39% -- and far from tanking, the economy did so well he had time to get his dick washed.

    Even 39% isn't high by historical standards. Under Eisenhower, the top tax rate was 91%. Under Nixon, it was 70%. Obama just wants to kick it back to 39 -- just three more points for the very rich. Not back to 91, or 70. Three points. And they go insane. Steve Forbes said that Obama, quote "believes from his inner core that people... above a certain income have more than they should have and that many probably have gotten it from ill-gotten ways." Which they have. Steve Forbes, of course, came by his fortune honestly: he inherited it from his gay egg-collecting, Elizabeth Taylor fag-hagging father, who inherited it from his father. Of course then they moan about the inheritance tax, how the government took 55% percent when Daddy died -- which means you still got 45% for doing nothing more than starting out life as your father's pecker-snot.

  • truthout: The Super Rich Get Richer, Everyone Else Gets Poorer and the Democrats Punt. By Robert Reich. Excerpts: The super-rich got even wealthier this year, and yet most of them are paying even fewer taxes to support the education, job training, and job creation of the rest of us. According to Forbes magazine’s annual survey, just released, the combined net worth of the 400 richest Americans climbed 8% this year, to $1.37 trillion. Wealth rose for 217 members of the list, while 85 saw a decline. For example, Charles and David Koch, the energy magnates who are pouring vast sums of money into Republican coffers and sponsoring tea partiers all over America, each gained $5.5 billion of wealth over the past year. Each is now worth $21.5 billion. ...

    From another survey we learn that the 25 top hedge-fund managers got an average of $1 billion each, but paid an average of 17 percent in taxes (because so much of their income is considered capital gains, taxed at 15 percent thanks to the Bush tax cuts). ...

    Only twice before in American history has so much been held by so few, and the gap between them and the great majority been a chasm — the late 1920s, and the era of the robber barons in the 1880s. And yet the Bush tax cuts of 2001 and 2003, which conferred almost all their benefits on the rich, continue. Democrats have decided to delay voting on whether to extend them for the top 2 percent of Americans or for the bottom 98 percent until after the mid-term elections. Democrats have thereby given up a defining issue that could have enabled them to show the big story of the last three decades — the accumulation of almost all the gain from economic growth at the top — and to make a start at reversing it. When will they ever learn?

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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