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Highlights—October 9, 2010

  • Resumark: The 10 Highest-Paid CEOs Who Laid Off The Most Employees. By Sergey Novoselov. Excerpts: CEOs of the 50 U.S. firms that cut the most jobs during the recession earned 42% more than the average S&P 500 firm CEO, according to a study released by a liberal think tank in Washington. The study also found that 36 of the 50 layoff leaders announced their layoffs at a time of positive earnings reports, suggesting a trend of squeezing workers to boost profits and to maintain high CEO pay. When CEOs cut jobs they are often very richly rewarded. ...

    Overall, the study shows that executive pay remains astronomically high compared to previous years. After adjusting for inflation, CEO pay in 2009 more than doubled the CEO pay average for the previous decade, more than quadrupled the CEO pay average for the 1980s, and ran approximately eight times the CEO average for all the decades of the mid-20th century. The study claims that CEOs of major U.S. companies make 263 times the average compensation of American workers. ...

    Rank: 5 IBM. Samuel Palmisano. Paid: $21.1M. Laid off: 7,800.

  • Yahoo! IBM Employee Issues message board: "Re: IBM High School" by "Paul S". Full excerpt: Well I happen to know a few of the over 45,000 people that no longer work for IBM. Most of them left involuntarily. I know some people in their 30s who were fantastic software engineers. They made some mistake, usually the mistake of working for a remote manager.

    If IBM wants to claim it cannot find enough technical people to do the job in the United States, it would not have to look very far to find engineers in their 30s who are still out of work from layoffs in 2009. It wasn't just older, more expensive technical people who lost their jobs. IBM and other technical companies have decided that the best way to cover for shrinking the US workforce is to use the power of the media, especially Business Week to spread this egregious lie that the US lacks qualified technical people to do the jobs of today. And now I hear the TV and other media, and friends and family repeating this absolute farce.

    If you choose to believe that China and India have a larger number of more qualified technical people, that's your call. This NYC program is great but it's just another way for IBM to stage a publicity stunt to reinforce the lie that there are no technically trained people who will work on mainframes and we need to bring in 300 Chinese people.

    Local universities like Marist College, Vassar College, SUNY, all around Poughkeepsie are churning out I/T architects and Comp Sci majors. I haven't seen a summer co-op from these schools since 2008. Get real, the interlocking directorates of American corporations decided en masse to pull out of the US. Luckily that fell on its face for IBM, but the layoffs and outsourcing will continue anyway. Don't spread the Sam's falsehoods!

  • alterNet: Conservatives Want to Raise the Retirement Age -- Doing That Now Would Be Stupid and Cruel. Attacks on Social Security -- along with the transition from stable pensions to risky 401k retirement funds -- are the single biggest threat to our long-term economic security. By Kari Lydersen. Excerpts: If House Republican leader John Boehner, R-Ohio, has his way, people will have to wait until age 70 to retire and receive full Social Security benefits. Raising the retirement age has been proposed in recent months by a number of conservative lawmakers, who point to the fact that Americans have been living and working longer than in decades past. But in the midst of an employment crisis that has hit older workers particularly hard, this idea is both ridiculous and cruel.

    People who went back to work or kept working past traditional retirement age these days are usually not doing so because they enjoy their jobs; rather decreasing pensions and 401ks have forced them to work just to eke out a living, even if it takes a toll on their health. And since the recession, even those who are willing and able to work through their 60s find there are just no jobs for them. The steep decrease in potential jobs for older workers is not likely to change much even as the economy picks up, experts say, meaning a later retirement age translates to more time facing unemployment without a safety net for people who are supposed to be enjoying their golden years. ...

    Last week, a million French people took to the streets to protest President Nicolas Sarkozy’s proposed overhauls of their pension system, which includes raising the retirement age from 60 to 62. But the American public has shown no such organized opposition to proposals to raise the retirement age, despite the fact that a majority already suffer significant penalties for collecting Social Security benefits early. EPI economist Monique Morrissey calls attacks on Social Security -- along with the transition from stable pensions to risky 401k retirement funds -- the “single biggest threat to our long-term economic security.” But though the threat affects everyone, she says,“it’s happening with a lot of misinformation and below the radar.”

    Pathetically, the real root of this sad Hedge Fund Rebellion is a feeling by these powerful, super-privileged megalomaniacs that they are being picked on. One even whined that asking hedge-funders to pay taxes at the same rate as everyone else amounts to the "persecution of the minority." Good grief, man, get a grip! Next thing you know, these doofuses will hire Glenn Beck to host a weepy telethon to "Save the Billionaires Tax Loophole."

  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM Global Client Director: (Current Employee) “IBM.” Pros: Quality of the people in the company. Cons: Bullying senior management, that creates a culture of fear and a focus on EPS and quarter on quarter growth with no long term business development - just cut cost and buy back shares. Advice to Senior Management: Strive to become a great company again, rather than this sole focus on share price and the short term thinking it drives
    • IBM Project Manager: (Past Employee - 2009) “IBM -- Sadly, another tragic case study for MBA students.” Pros 1) Fortune 100 company name recognition/credential for your resume. This aspect is a two-edged sword however, because many companies no longer consider the company relevant and view it as "2nd or 3rd tier". As a first job just out of college, it'll be fine to get a paycheck and begin your business career. 2) *If* you get in the right group, you *might* have the opportunity to work with technology that can lead to a better job elsewhere. Cons: 1) Inept mgmt with sweat-shop approach that thinks the best way to produce results is increasing annual billable utilization targets for the slave programmers (110% to 120% to 130%) such that you cannot take any earned vacation or holiday time off without "making it up" by working longer hours and/or working weekends. 2) Despite breadth of company organizations and theoretical multiple career opportunities, in actuality you will be stuck in same dept forever (or at least until mgmt discards you due to failure to hit obscene utilization goals and/or outsources your job to a 3rd world country). Advice to Senior Management: Why bother? They'll simply continue down their current destructive path because they're **smarter** than everyone else.
    • IBM Associate Partner in Alexandria, VA: (Current Employee) “IBM losing ground.” Pros: Bonuses when we hit our numbers. Cons: IBM has been turned upside down in the last 4 years in Div 16. There is a serious disconnect between annual targets and market reality. Leadership has created a very hostile environment where everyone is fighting for signings. Advice to Senior Management: Corporate needs to clean house with Public Sector Leaders.
    • IBM Anonymous in Edison, NJ: (Past Employee - 2009) “Balance US Economy.” Pros: Opportunity to work in one of the most complex organization. Salary is competitive compared to Big 4. Cons: Share Stock Options with Employees. Change Annual Review Process. It's obsolete for virtual organization. Too much internal politics and conflict across groups and divisions. Siloed organization that works better in smaller groups. GBS is a body shop for 60% of its workforce. Top 10% gets more credit. Rest is public. Advice to Senior Management: Be more realistic in expectations Be more collaborative with your workforce. White Glove Executives should not be encouraged. Rating employees on 1, 2+, 2 is not fair or justified.
    • IBM Project Manager: (Current Employee) “Good benefits and above average compensation, but be ready for hard work.” Pros: Good benefits and above average compensation. Great knowledge sharing and resources to draw from. Excellent exposure to visible projects. Great experience if you know how to navigate the system to find the right assignments. Cons: Cumbersome and tiring system to get promoted at (e.g. compulsory internal certification). Too many layers of management. Work away from home if working in GBS (i.e. consulting group). Long hours and weekends becoming common place. Advice to Senior Management: Too many layers of management is driving a high cost structure that makes it difficult to compete in the market place.
    • IBM IT Project Manager in Bellevue, WA: (Past Employee - 2010) “IBM was a great company to work for but they have been moving more jobs overseas.” Pros: Lots of good people working for the company. Lots of flexibility to work from home and to change jobs. Good benefits. Cons: Many employees were overworked. Many U.S. employees were being laid off and their jobs given to IBM India employees, also to Brazil and Argentina. In the past few years I was considered the lucky one if I received a 2% raise. Some depts were given pay cuts. The PBC appraisal rating system needs to be scrapped. I hated receiving a large list of PBC objectives from management that were outside of my control. Advice to Senior Management: A global workforce is needed in the growing global economy, however, you need to find a way to keep the U.S. employees instead of getting rid of us.
    • IBM Staff Software Engineer: (Current Employee) “Career Development Is More Theoretical Than Practical.” Pros: The Company has a good work/life balance with the flexibility of working from home. For parents (mothers/parents), its an ideal place to attend to both family and professional responsibilities. Very open and sociable environment allowing for growth in different areas Cons: Ideally, IBM is global and you can develop your career to fit your aspirations. However, an attempt to switch functions or pursue a different role is met with such resistance. Eventually, those who are unable to crack the resistance leave the company. I don't recommend it for those who wish to grow breadth-wise as opposed to depth-wise growth. Most of the move and shifts are within top management. For example, all 5/6 employees recruited in the last 5 yrs have left the department. All the employees in the department have been there 15- 20+ years -- nothing has changed! Advice to Senior Management: Encourage and facilitate employees to explore the wealth of knowledge provided by the company.
    • IBM Advisory Software Engineer in Research Triangle Park, NC: (Past Employee - 2010) “OK for short term early career building or for retiree supplemental employment but that is about it.” Pros: For a young person or someone new to IT IBM still looks good on a resume. Working there for a few years will allow someone to get basic skills and experience that will be helpful after leaving IBM. IBM has fairly decent benefits in regards to Medical and Dental insurance, flexible working arrangements and 401K. The flexible work arrangements make for a reasonable place for a retiree to work as a supplemental employee. There is also a lot less pressure as a supplemental employee and pay is typically better than being hired as an IBM contractor.

      Cons: IBM's intent is to offshore many jobs in the US. This results in high performing employees, in addition to lower performers, being laid off to move much of the highly technical work oversees. IBM used to provide a lot of training for employees in order to maintain current skills and allow folks to upgrade into new technologies. Over that past several years education has been curtailed to increase earnings per share in a decreasing revenue environment. Few and far between pay raises/promotions for expected work load. When I first started with IBM management and executives were engaged with employees. Under the current CEO management has become isolated from employees. The result is a work force that has no general direction or input into product/development cycles. It also displays itself in lack of innovation in products as the folks in the trenches no longer have input in the design processes. To sum it up I have told my children to look at IBM as an employer of last resort.

      Advice to Senior Management: Management and executives need to reengage with employees. This will allow those that know what is truly going on in the business and products to provide much needed data that can be used for product planning and schedules. The current CEO and board need to stop looking at short term earnings and stock price. They need to start looking long term and how to grow revenue organically. There was a time that IBM was the largest computer producer, the largest software vendor, the largest external storage producer, etc. Today it is the leader in none of these. With 31 years I can say it was not the development teams that caused this to happen. The responsibility lays squarely with the executive team.

    • IBM Anonymous in London, England (United Kingdom): (Past Employee - 2008) “I hope it's changed.” Pros: Access to resources, including knowledge management and clever able staff; Multiple locations, ability to work from home. Good education and training. Cons: Staff are treated like cannon fodder when they want to cut costs to drive up share prices. Management flat out lies to staff. You are persecuted if you raised any serious issue such as bullying or sexual discrimination. Advice to Senior Management: Words won't help. Management have an agenda that does not put their employees first no matter what they might say.
    • IBM Senior Software Engineer in Austin, TX: (Past Employee - 2009) “Not your father's or mother's IBM.” Pros: IBM continues to seek out the best and brightest among computer professionals from around the world. The culture of technical excellence and advancement is still solidly in place. Cons: With so many highly talented and skilled professionals, the culture at IBM is often cutthroat to the point that genuine talent is overshadowed by personalities and cliques. Employees are often viewed as disposable and interchangeable, with more emphasis frequently placed on bringing in fresh college hires than retaining more experienced workers. Advice to Senior Management: Delivering value to shareholders needs to be a long term project. You cannot keep treating more experienced workers like we are disposable and expect to retain a dominant position. Nor is sending jobs to the location with the cheapest wages a viable long term solution. The morale level at many locations, in the United States and abroad, is virtually non-existent.
New on the Alliance@IBM Site
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  • Do you work at a GDF? If you do, please contact me, Lee Conrad of Alliance@IBM, at ibmunionalliance@gmail.com
  • 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!
  • Job Cut Reports
    • Comment 9/30/10: IBM lost 8 Mil Order to CA in DC area. IBM losing its charm slowly .-Ramki-
    • Comment 10/04/10: TAA NOTE: I was RA'ed from Boulder last April 2009, second quarter. My whole department in software asset management went to Argentina. Myself and two other former IBMer's started a petition for TAA and after more than a year, (IBM is REALLY hard to prove the off-shoring apparently), we were certified. It states that ALL workers of Global Technology Services Delivery Division who were RA'd on or AFTER February 2009 through TWO YEARS from the date of certification are eligible to apply for TAA assistance....TAA petition number: 73593 I received a letter, but I am sure that thousands of people do not realize they are eligible ... so get the word out if you know anyone that was RA'd after 02/09...Thanks and good luck...IBM totally blows!!!! -Anonymous-
    • Comment 10/06/10: Ok, I'm all for charity and give generously, but is there any point to contributing via ECCC? So IBM takes YOUR hard earned, no thanks to IBM, contribution, lumps them together, sends a check which no doubt says IBM in bold letters, and then executives get big community bragging points about how IBM is helping communities. Would it make sense to BOYCOTT ECCC, but still contribute on your own? I mean, with pay cuts, GR, benefit cuts, no raises even in good times, my charitable contributions would be hundreds of dollars higher if IBM treated employees well. Why give IBM and the greedy executives any credit where its obviously not due. -Spare Change-
    • Comment 10/06/10: -Spare Change- Right on! How about asking IBM to start an ECCC charity for those IBMers they unfairly RA'ed? A lot of them have not found decent re-employment and can use some charity in these hard economic times. Charity should begin at home. -anonymous-
    • Comment 10/06/10: -Spare Change-: I agree, we give and then IBM gets bragging rights, that's why they make such a big production of getting 100% employee response every October. I used to think it was easier to give thru payroll, now I just donate on my own. Added benefit is that I can give to whoever and whenever not just the ones on their list. I also don't acknowledge my volunteer work through their system either. Why should I? so that IBM can suggest that I volunteer because they encourage me to? The workload they hoist upon me certainly does not allow me much time for it... but one way or the other that will soon change. And YES I am an Alliance member. -Critical Mass-
    • Comment 10/07/10: To Spare Change - I decided several years ago that there was NO WAY I was going to let IBM take any credit for my charitable donations. I give to the charities of my choice, and it's none of IBM's business to take credit for my personal actions of giving (especially when they enjoy being so cheap with raises)! Frankly, I have no idea why so many employees want to support this corporate giving (= IBM EEEC) when they can do exactly the same thing on their own without IBM getting the credit. -Agree with Spare Change-
    • Comment 10/07/10: To -Ich Bin Muede- Yes, I know IBM colleagues who were RA'd and brought back as contract employees. To -Spare Change- Yes, BOYCOTT ECCC! I had been a 1% contributor to ECCC through 2007. Then - big RAs started hitting my group; - I found out that executives' bonuses were based on the amount of employee contributions; - I regretted every ECCC contribution I had made; - I vowed: not another penny; - I made up the difference privately; and - I joined the Alliance. Let's all do the same. -Gorya-
    • Comment 10/07/10: As to the ECCC as a past manager I would get 100% participation every year. All I did was ask all to sign the card at 1% and after the 2nd month pull out of the plan. I would get credit for 100% and people would end up doing their own. -wasa1stlinenowra'd-
    • Comment 10/07/10: To -Critical Mass and Gorya - Wow, I knew I was always an IBM ECCC sucker. Now the question is should we return the pledge to attain 100% employee response? -I ALWAYS Support Charities-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
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  • AlterNet: Health Insurers Donate Millions to Tea Party Caucus, and to Republicans Who Pledge to Reverse Health Reform. By Lee Fang. Excerpt: Health insurance companies, after funding tens of millions of dollars in attack ads aimed to kill health reform, are now funding Republican candidates promising to repeal or water-down the bill. A report today notes that insurance companies have massively shifted their campaign giving to Republicans, and that health professionals have “quietly become the biggest supporters of the nascent Tea Party Caucus” with donations of “more than $2.7 million to Tea Party Caucus members.” Additionally, a report today by the Center for Public Integrity republished by National Journal reveals that veteran Republican lobbyist Scott Reed has stepped up to create a $25 million dollar front group to run ads against Democrats, and that it will be funded partially by insurance companies.
  • Los Angeles Times: Health insurers pour money into GOP campaigns, hoping to limit new regulations. By Noam N. Levey. Excerpts: The insurance industry is pouring money into Republican campaign coffers in hopes of scaling back wide-ranging regulations in the new healthcare law but preserving the mandate that Americans buy coverage. Since January, the nation's five largest insurers and the industry's Washington-based lobbying arm have given three times more money to Republican lawmakers and political action committees than to Democratic politicians and organizations. That is a marked change from 2009, when the industry largely split its political donations between the parties, according to federal election filings. The largest insurers are also paying hundreds of thousands of dollars to lobbyists with close ties to Republican lawmakers who could shape health policy in January, records show.

    "The industry would love to have a Republican Congress," said Wendell Potter, a former executive at Cigna Corp., one of the country's biggest insurers. "They were very, very successful during the years of Republican domination in Washington." ...

    Insurers in the past have been able to count on the GOP, which often helped shape the market to the industry's specifications. Republicans expanded Medicare's use of commercial insurance companies to administer benefits, which has been very profitable for insurers. With the help of GOP legislation, insurers also have increasingly shifted costs to consumers through high-deductible plans. And Republicans have pushed to allow insurance companies to sell their plans across state lines, avoiding state regulations. Party leaders have made that a centerpiece of their 2011 healthcare agenda. "We generally support candidates whose views align with our business and healthcare interests," said Aetna Inc. spokeswoman Anjie Coplin.

  • Bloomberg BusinessWeek: U.S. Waives Health Insurance Minimums for 1 Million. By Drew Armstrong. Excerpt: Almost a million workers won’t get a consumer protection in U.S. health law meant to cap insurance costs because the government exempted their employers. Thirty companies and organizations, including Jack in the Box Inc., won’t be required to raise the minimum annual benefit included in low-cost health plans often used to cover part-time or low-wage employees. The Department of Health and Human Services, which provided a list of exemptions, said it granted waivers in late September so workers with such plans wouldn’t lose coverage from employers who might choose instead to drop their health insurance altogether. Without the waivers, companies would have had to provide a minimum of $750,000 in coverage next year, increasing to $1.25 million in 2012, $2 million in 2013, and unlimited coverage in 2014.
  • New York Times: Health Care’s Uneven Road to a New Era. By David Leonhardt. Excerpts: Consider what it would be like to have a health insurance plan that capped annual benefits at $2,000. For any medical care costing more than that, you would have to pay out of pocket. Examples of care that costs more than $2,000 — and often a lot more — include virtually any cancer treatment, any heart surgery, a year’s worth of diabetes treatment and care for many broken bones. Even a single M.R.I. exam can cost more than $2,000. A typical hospital stay runs thousands of dollars more.

    So does this insurance plan sound like part of the solution for the country’s health care system — or part of the problem? A $2,000 plan happens to be one of the main plans that McDonald’s offers its employees. It became big news last week, when The Wall Street Journal reported that the company was worried the plan would run afoul of a provision in the new health care law. In response to the provision, McDonald’s threatened to drop the coverage altogether, until the Obama administration signaled it would grant some exemptions. ...

    On the surface, these claims can sound credible. But when you dig a little deeper, you often discover the same lesson that the McDonald’s case provides: the real problem was the status quo. American families spend almost twice as much on health care — through premiums, paycheck deductions and out-of-pocket expenses — as families in any other country. In exchange, we receive top-notch specialty care in many areas. Yet on the whole, we do not get much better care than countries that spend far less.

    We don’t live as long as people in Canada, Japan, most of Western Europe or even relatively poor Jordan. Misdiagnosis is common. Medical errors occur more often than in some other countries. Unique to the developed world, millions of people have no health insurance, and millions more, like many fast-food workers, are underinsured. In choosing their health reform plan, President Obama and the Democrats eschewed radical changes, for better or worse, and instead tried to minimize the disruptions to the current system. Sometimes, Mr. Obama went so far as to suggest there would be no disruptions, saying that people could keep their current plan if they liked it. But that’s not quite right. It is not possible to change a system as huge, and as hugely flawed, as ours without some disruptions.

  • Wall Street Journal: Waivers Aim at Talk of Dropping Health Coverage. By Reed Abelson. Excerpts: As Obama administration officials put into place the first major wave of changes under the health care legislation, they have tried to defuse stiffening resistance — from companies like McDonald’s and some insurers — by granting dozens of waivers to maintain even minimal coverage far below the new law’s standards. The waivers have been issued in the last several weeks as part of a broader strategic effort to stave off threats by some health insurers to abandon markets, drop out of the business altogether or refuse to sell certain policies. ...

    Several leading insurers, including WellPoint, Aetna and Cigna, have also objected to new rules requiring them to cover even those children who are seriously ill, warning that they will stop selling new policies in some states because the rules do not protect them from having to cover too many sick children. “The hardest part of health reform is always going to be the transition,” said Peter T. Harbage, a former state health official who is a policy consultant in Sacramento. He predicts more insurers and employers will lean on the government to delay or weaken the new regulations. “I think this pressure just increases until we get to 2014,” he said, referring to the year that the law will fully go into effect.

  • Kaiser Health News: Reminding Ourselves What Has Gone Right With The Health Law. By Tom Daschle. Excerpts: Six months after the passage of health care reform, it is easy to forget how far we have come in such a short time. With the daily drumbeat of attacks on the law, full of distortions and appeals to people's fears, it is no wonder that many Americans still have serious doubts about whether they will be better off. So this is a good time to remind ourselves of what has gone right with the law – and how much better our health care will be in the coming years if we give the new law a chance and work together to make it a success. It will take years to make the law's most important changes. But by the time they are in place, if all goes well, most Americans truly will be better off. And they will not want to go back to what we used to have. ...

    It is also worth reviewing the important changes that are already taking place. The biggest improvements in the health insurance marketplace will not begin until 2014, but already, there are new measures that will protect consumers from dangerous holes in their coverage.

    If you're an adult with a pre-existing condition, and you have been unable to obtain health insurance for six months or longer, you can now apply to temporary high-risk pools in all of the states that can help you get coverage. The pools -- some run by the states, others by the federal government -- will act as a safety net until 2014, when health insurers won't be able to turn you down if you have a health problem.

    And as of Sept. 23, the six month anniversary of the law's enactment, a whole new set of protections is phasing in: coverage for children with preexisting conditions, coverage for young adults through their parents' health plans, a ban on lifetime limits on people's benefits, more generous annual limits on their benefits, better appeal rights, and the end of the practice of "rescission" -- cancelling people's coverage retroactively when they get sick. These are not all of the changes the law will make to give people more reliable health coverage. But they are an important start that will keep many of the most vulnerable patients from falling through the cracks -- as long as the administration and health insurers work together to find the right balance on the regulations.

  • Physicians for a National Health Program: Insurance is a strange model for health care. It's meant for life's uncertainties, but illness is actually a pretty sure thing. By Edward P. Ehlinger, M.D. Excerpts: For once I agree with Jason Lewis -- sort of. Using an insurance model to cover preexisting health conditions doesn't make any sense, as he says ("Government health care is on the way," Oct. 1). But I would take his notion a step further. Using an insurance model for basic and essential health care also doesn't make any sense.

    Insurance is a great mechanism that people can use to offset their risk of losing some material thing of great value like their house, boat, car or jewelry. It can also be used to protect a valuable personal occupational asset like a voice for an opera singer, a hand for a surgeon or a knee for a football player. And it can be useful in providing protection from a singular catastrophic event like a malpractice suit or the premature loss of life.

    But for something that is predictable, ongoing, needed by everyone, or necessary for the welfare of our community, an insurance model makes absolutely no sense. That's why we don't use an insurance model to provide police or fire services or to provide an education to our children. For these we use the tax model. Basic essential health care should also be in this category.

    We know that almost everyone will eventually need some health care and much of it will be ongoing. For a defined population, the health care needs are predictable, and we know that the health of individuals affects the overall welfare of our community. In addition, most believe that people should get treated for illnesses, diseases and injuries that might befall them and expect that everyone should have access to preventive services like prenatal care and immunizations that make our communities a healthier and better place.

    Our insurance-based model doesn't match our societal needs and expectations in many respects. It denies coverage to those who need care the most. Since health and income are related, it charges more for the people who can least afford it. It encourages a link with employment that has numerous negative side effects. By its reimbursement mechanism, our insurance-based health care system has also fostered maldistribution of resources between primary and specialty care.

    The proof of the folly of using an insurance-based model for health care is that, while we have the most expensive health care system in the world, approximately one-third of Americans are uninsured or inadequately insured. The consequences of this are that health status indicators for the United States are far from the best.

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: Cheap Debt for Corporations Fails to Spur Economy. By Graham Bowley. Excerpts: As many households and small businesses are being turned away by bank loan officers, large corporations are borrowing vast sums of money for next to nothing — simply because they can. Companies like Microsoft are raising billions of dollars by issuing bonds at ultra-low interest rates, but few of them are actually spending the money on new factories, equipment or jobs. Instead, they are stockpiling the cash until the economy improves. The development presents something of a chicken-and-egg situation: Corporations keep saving, waiting for the economy to perk up — but the economy is unlikely to perk up if corporations keep saving. ...

    The Fed’s low rates have in fact hurt many Americans, especially retirees whose incomes from savings have fallen substantially. Big companies like Johnson & Johnson, PepsiCo and I.B.M. seem to have been among the major beneficiaries. “They are benefiting themselves by borrowing and keeping this cash, but it is not benefiting the economy yet,” said Dana Saporta, an economist at Credit Suisse in New York.

  • New York Times op-ed: Fear and Favor. By Paul Krugman. Excerpts: A note to Tea Party activists: This is not the movie you think it is. You probably imagine that you’re starring in “The Birth of a Nation,” but you’re actually just extras in a remake of “Citizen Kane.” True, there have been some changes in the plot. In the original, Kane tried to buy high political office for himself. In the new version, he just puts politicians on his payroll.

    I mean that literally. As Politico recently pointed out, every major contender for the 2012 Republican presidential nomination who isn’t currently holding office and isn’t named Mitt Romney is now a paid contributor to Fox News. Now, media moguls have often promoted the careers and campaigns of politicians they believe will serve their interests. But directly cutting checks to political favorites takes it to a whole new level of blatancy. ...

    Nobody who was paying attention has ever doubted that Fox is, in reality, a part of the Republican political machine; but the network — with its Orwellian slogan, “fair and balanced” — has always denied the obvious. Officially, it still does. But by hiring those G.O.P. candidates, while at the same time making million-dollar contributions to the Republican Governors Association and the rabidly anti-Obama United States Chamber of Commerce, Rupert Murdoch’s News Corporation, which owns Fox, is signaling that it no longer feels the need to make any effort to keep up appearances. ...

    Perhaps the most important thing to realize is that when billionaires put their might behind “grass roots” right-wing action, it’s not just about ideology: it’s also about business. What the Koch brothers have bought with their huge political outlays is, above all, freedom to pollute. What Mr. Murdoch is acquiring with his expanded political role is the kind of influence that lets his media empire make its own rules.

    Thus in Britain, a reporter at one of Mr. Murdoch’s papers, News of the World, was caught hacking into the voice mail of prominent citizens, including members of the royal family. But Scotland Yard showed little interest in getting to the bottom of the story. Now the editor who ran the paper when the hacking was taking place is chief of communications for the Conservative government — and that government is talking about slashing the budget of the BBC, which competes with the News Corporation. So think of those paychecks to Sarah Palin and others as smart investments. After all, if you’re a media mogul, it’s always good to have friends in high places. And the most reliable friends are the ones who know they owe it all to you.

  • Third Way: A Taxpayer Receipt (PDF). By David Kendall and Jim Kessler. Excerpts: Corn syrup, milk chocolate, sugar, cocoa butter, coconut, almond, soy lecithin… any consumer can read these ingredients and their nutritional value on every package of a 75-cent Almond Joy. What is provided to a taxpayer with a $5,400 tax bill? Nothing. For many Americans, the amount they pay in taxes is larger than any purchase they make during the year, but studies show they know almost nothing about where that money goes to. This contributes to ridiculous beliefs, like the view that 20% of government spending goes to foreign aid, for example. An electorate unschooled in basic budget facts is a major obstacle to controlling the nation’s deficit, not to mention addressing a host of economic and social problems. We suggest that everyone who files a tax return receive a “taxpayer receipt.” This receipt would tell them to the penny what their taxes paid for based on the amount they paid in federal income taxes and FICA. ...

    Below is an example of what a receipt might look like for a typical taxpayer with a 2009 U.S. median income of $34,140, who paid $5,400 in federal income tax and FICA. It is very easy to generate and extremely informative to taxpayers.

  • New York Times op-ed: That’s Where the Money Is. By Bob Herbert. Excerpts: It’s beyond astonishing to me that John Boehner has a real chance to be speaker of the House of Representatives. I’ve always thought of Mr. Boehner as one of the especially sleazy figures in a capital seething with sleaze. I remember writing about that day back in the mid-’90s when this slick, chain-smoking, quintessential influence-peddler decided to play Santa Claus by handing out checks from tobacco lobbyists to fellow Congressional sleazes right on the floor of the House. It was incredible, even to some Republicans. The House was in session, and here was a congressman actually distributing money on the floor. Other, more serious, representatives were engaged in debates that day on such matters as financing for foreign operations and a proposed amendment to the Constitution to outlaw desecration of the flag. Mr. Boehner was busy desecrating the House itself by doing the bidding of big tobacco. ...

    The Times’s Eric Lipton, in an article last month, noted that Mr. Boehner “maintains especially tight ties with a circle of lobbyists and former aides representing some of the nation’s biggest businesses, including Goldman Sachs, Google, Citigroup, R.J. Reynolds, MillerCoors and UPS. “They have contributed hundreds of thousands of dollars to his campaigns, provided him with rides on their corporate jets, socialized with him at luxury golf resorts and waterfront bashes and are now leading fund-raising efforts for his Boehner for Speaker campaign, which is soliciting checks of up to $37,800 each, the maximum allowed.” The hack who once handed out checks on the House floor is now a coddled, gilded flunky of the nation’s big-time corporate elite. ...

    The U.S. is in terrible shape right now because far too much influence has been ceded to the financial and corporate elites who have used that influence to game the system and reap rewards that are almost unimaginable. Ordinary working Americans have been left far behind, gasping and on their knees. John Boehner has been one of the leaders of the army of enablers responsible for this abominable state of affairs.

  • truthOut: Wall Street's Global Race to the Bottom. By Robert Reich. Excerpt: Wonder what’s happening with bank reform? Watch your wallets. Having created giant loopholes in the Dodd-Frank law recently passed by Congress (keeping “customized” derivatives underground, for example), fighting off attempts to cap the size of the biggest banks, and keeping capital requirements relatively modest, Wall Street is now busily whittling back the rest through regulations. Squadrons of lawyers and lobbyists are now pressing the Treasury, Comptroller of the Currency, SEC, and the Fed to go even easier on the Street.
  • truthOut: The Cash Cow of Anonymity. By Eugene Robinson. Excerpts: The Republican grab for Congress is being funded by a pack of wolves masquerading as a herd of sheep. How sweet and innocent they seem, these mysterious organizations with names like Americans for Job Security. Who could argue with that? Who wants job insecurity? It turns out, according to The Washington Post, that an entity called Americans for Job Security has made nearly $7.5 million in "independent" campaign expenditures this year, with 88 percent of that total going to support Republican candidates. Who's putting up all that money? You'll never know, because Americans for Job Security -- which calls itself a "business association" -- doesn't have to disclose the source of its funding. ...

    You will not be surprised to hear that all of this money is being used to try to oust Democrats and replace them with Republicans. And where is the money coming from? Silly of you to ask. There is no limit to the amount that an individual, corporation or trade association can give to American Crossroads -- but the group is not required to tell you who those deep-pockets donors might be.

    Democrats are doing the same sort of thing, or trying to. But Republicans are outspending Democrats by 7-1 in this kind of "independent" campaign spending. So while Democratic candidates enjoy a big advantage in official campaign funding -- the kind that has limits and disclosure requirements -- this edge is blunted by the wave of "independent" GOP cash. ...

    The Supreme Court made all this possible with its ruling earlier this year, in Citizens United v. Federal Election Commission, which legalized unlimited campaign spending by corporations, unions, trade associations and other such entities. And the independent-expenditure groups with the patriotic names are often structured as nonprofits, which means they are not required to disclose their donors publicly. The result is a system in which oil companies opposed to an energy bill that would begin to steer the country away from fossil fuels, or Wall Street firms who want to undo financial regulatory reform and return to the days of the Big Casino, or gazillionaires who want to keep George W. Bush's tax breaks can all spend as much as they like to try to buy Congress for the Republican Party. And they can do it secretly, in the dark, without anyone knowing. It's bad enough that public offices can be purchased. It's unconscionable that we can't even know who the buyers are.

  • Washington Post: The costs of rising economic inequality. By Steven Pearlstein. Excerpts: Although much of the Republicans'"Pledge to America" is given over to a discussion of economic issues, there is one topic that is never mentioned: the dramatic rise in income inequality. As with global warming, Republicans seem to have decided that the best way to deal with this fundamental challenge is to deny it exists.

    If you asked Americans how much of the nation's pretax income goes to the top 10 percent of households, it is unlikely they would come anywhere close to 50 percent, which is where it was just before the bubble burst in 2007. That's according to groundbreaking research by economists Thomas Piketty, of the Paris School of Economics, and Emmanuel Saez, of the University of California at Berkeley, who last week won one of this year's MacArthur Foundation "genius" grants.

    It wasn't always that way. From World War II until 1976, considered by many as the "golden years" for the U.S. economy, the top 10 percent of the population took home less than a third of the income generated by the private economy. But since then, according to Saez and Piketty, virtually all of the benefits of economic growth have gone to households that, in today's terms, earn more than $110,000 a year.

    Even within that top "decile," the distribution is remarkably skewed. By 2007, the top 1 percent of households took home 23 percent of the national income after a 15-year run in which they captured more than half - yes, you read that right, more than half - of the country's economic growth. As Tim Noah noted recently in a wonderful series of articles in Slate, that's the kind of income distribution you'd associate with a banana republic or a sub-Saharan kleptocracy, not the world's oldest democracy and wealthiest market economy. ...

    Concentrating so much income in a relatively small number of households has also led to trillions of dollars being spent and invested in ways that were spectacularly unproductive. In recent decades, the rich have used their winnings to bid up the prices of artwork and fancy cars, the tuition at prestigious private schools and universities, the services of celebrity hairdressers and interior decorators, and real estate in fashionable enclaves from Park City to Park Avenue. And what wasn't misspent was largely misinvested in hedge funds and private equity vehicles that played a pivotal role in inflating a series of speculative financial bubbles, from the junk bond bubble of the '80s to the tech and telecom bubble of the '90s to the credit bubble of the past decade.

  • truthOut: Executive Excess. By Jim Hightower. Excerpts: Look out, they're angry. Foaming-at-the-mouth angry. And they're lashing out, saying they won't take it anymore. As one of their leaders angrily cried, "It's a war." Indeed -- they're on the move to take their country back. Forget the tea party rowdies, this is the champagne party! More precisely, it's the Dom Perignon-$1,000-a-bottle-champagne-party, propelled by -- get this -- billionaire's rage.

    Yes, some of the richest, most pampered people on the planet -- people who literally wallow in luxury every day, with never a concern about losing a job, a home or health care, or getting their kids into college -- these people are wailing in self-pity. They are Wall Street hedge-fund operators, which essentially means they are high-flying financial flimflammers. What has stoked them into an elitist fury is a Barack Obama proposal to close off a ridiculous tax loophole that has let them pay only 15 percent of their lavish income in taxes, rather than the 35 percent rate that us commoners pay.

    One of the richest of the ragers, Steve Schwarzman of the Blackstone Group, sees Obama's proposal as an outrageous intrusion into the suites of the elite, comparing it to "when Hitler invaded Poland." This over-the-top-tantrum comes from a multibillionaire -- a guy who spent $3 million in 2007 just to throw himself a birthday party! Come on, Steve, you're filthy rich. Stop hyperventilating, and pay your taxes!

  • The Guardian (United Kingdom): America's deepening moral crisis. The language of collective compassion has been abandoned in the US, and no politician dare even mention helping the poor. By Jeffrey Sachs. Excerpts: Much of America is in a nasty mood and the language of compassion has more or less been abandoned. Both political parties serve their rich campaign contributors, while proclaiming they defend the middle class. Neither party even mentions the poor – who now officially make up 15% of the population, but in fact are even more numerous when we count all those households struggling with healthcare, housing, jobs and other needs.

    The Republican party recently issued a "Pledge to America" to explain its beliefs and campaign promises. The document is filled with nonsense, such as the fatuous claim high taxes and over-regulation explain America's high unemployment. It is also filled with propaganda. A quote from President John F Kennedy states that high tax rates can strangle the economy, but Kennedy was speaking half a century ago, when the top marginal tax rates were twice what they are today. Most of all, the Republican platform is devoid of compassion.

    America today presents the paradox of a rich country falling apart because of the collapse of its core values. American productivity is among the highest in the world. Average national income per person is about $46,000 – enough not only to live on, but to prosper. Yet the country is in the throes of an ugly moral crisis.

    Income inequality is at historic highs, but the rich claim they have no responsibility to the rest of society. They refuse to come to the aid of the destitute, and defend tax cuts at every opportunity. Almost everybody complains, almost everybody aggressively defends their own narrow, short-term interests, and almost everybody abandons any pretense of looking ahead or addressing the needs of others. ...

    The result of all this is likely to be a long-term decline of US power and prosperity, because Americans no longer invest collectively in their common future. America will remain a rich society for a long time to come, but one that is increasingly divided and unstable. Fear and propaganda may lead to more US-led international wars, as in the past decade. ...

    The lesson from America is that economic growth is no guarantee of well being or political stability. American society has become increasingly harsh, where the richest Americans buy their way to political power and the poor are abandoned to their fate. In their private lives, Americans have become addicted to consumerism, which drains their time, savings, attention and inclination to engage in acts of collective compassion. The world should beware. Unless we break the ugly trends of big money in politics and rampant consumerism, we risk winning economic productivity at the price of our humanity.

  • Jim Hightower: Save The Billionaire's Tax Loophole! Excerpts: Look out, they're angry. Foaming-at-the-mouth angry. And they're lashing out, saying they won't take it anymore. As one of their leaders angrily cried, "It's a war." Indeed – they're on the move to take their country back. Forget the Tea Party rowdies, this is the Champagne Party! More precisely, it's the Dom Pérignon-$1000-a-Bottle-Champagne-Party, propelled by – get this – billionaire's rage.

    Yes, some of the richest, most pampered people on the planet – people who literally wallow in luxury every day, with never a concern about losing a job, a home, health care, or getting their kids into college – these people are wailing in self-pity. They are Wall Street hedge-fund operators, which essentially means they are high-flying financial flimflammers. What has stoked them into an elitist fury is an Obama proposal to close off a ridiculous tax loophole that has let them pay only 15 percent of their lavish income in taxes, rather than the 35-percent rate that us commoners pay.

    One of the richest of the ragers, Steve Schwarzman of the Blackstone Group, sees Obama's proposal as an outrageous intrusion into the suites of the elite, comparing it to "when Hitler invaded Poland." This over-the-top-tantrum from a multibillionaire – a guy who spent $3 million in 2007 to throw himself a birthday party! Come on, Steve, pay your taxes!

    Pathetically, the real root of this sad Hedge Fund Rebellion, is a feeling by these powerful, super-privileged megalomaniacs that they are being picked on. One even whined that asking hedge funders to pay taxes at the same rate as everyone else amounts to the "persecution of the minority." Good grief man, get a grip! Next thing you know, these doofuses will hire Glenn Beck to host a weepy telethon to "Save the Billionaires Tax Loophole."

  • Washington Post: In foreclosure controversy, problems run deeper than flawed paperwork. By Brady Dennis and Ariana Eunjung Cha. Excerpts: Millions of U.S. mortgages have been shuttled around the global financial system - sold and resold by firms - without the documents that traditionally prove who legally owns the loans. Now, as many of these loans have fallen into default and banks have sought to seize homes, judges around the country have increasingly ruled that lenders had no right to foreclose, because they lacked clear title. These fundamental concerns over ownership extend beyond those that surfaced over the past two weeks amid reports of fraudulent loan documents and corporate "robo-signers." ...

    Janet Tavakoli, founder and president of Tavakoli Structured Finance, a Chicago-based consulting firm, said that for much of the past decade, when banks were creating mortgage-backed securities as fast as possible, there was little time to check all the documents and make sure the paperwork was in order. But now, when judges, lawyers and elected officials are demanding proper paperwork before foreclosures can proceed, the banks' paperwork problems have been laid bare, she said. The result: "Banks are vulnerable to lawsuits from investors in the [securitization] trusts," Tavakoli said.

  • CNN/Money Fortune: Buffett says cut taxes for all but the rich. By Colin Barr. Excerpts: Warren Buffett said it's time to raise taxes on the 'very rich' -- and perhaps cut them for the rest of the population. Buffett, the billionaire investor who runs Berkshire Hathaway (BRKA), said Tuesday at Fortune's Most Powerful Women Summit in Washington that the nation's tax code "has gotten distorted to a huge extent," by levying higher taxes on secretaries and janitors than on CEOs and private equity whiners. He called, as he has in the past, for policymakers to redress that iniquity by raising taxes on the rich. Buffett said taxes will have to rise in general in coming years if we want to dig our way out of a giant budget deficit. ...

    Buffett has been railing for years about the absurdity of the current tax structure – he remarked Tuesday with some disbelief that he pays the lowest rate in his Omaha office -- and has accordingly called for higher taxes on those earning large wages, including himself. But he hasn't previously pushed for lower taxes on those making less. Asked why not, he said that no one ever asked. A tax cut for low-income people could boost consumer spending at a time of high unemployment and fading government stimulus funds. But such a shift might not play well with the Tea Party types who have made an issue of the fact that 47% of U.S. households paid no federal income tax last year. Regardless, Buffett says the tax numbers don't add up and will have to rise. So why not raise taxes on those who can afford to pay? "We're going to need to get more money," said Buffett. "Why not get it from me instead of the guys who will serve us lunch?"

  • truthOut: Foreign-Funded "US" Chamber of Commerce Running Partisan Attack Ads. By Lee Fang. Excerpts: The largest attack campaign against Democrats this fall is being waged by the U.S. Chamber of Commerce, a trade association organized as a 501(c)(6) that can raise and spend unlimited funds without ever disclosing any of its donors. The Chamber has promised to spend an unprecedented $75 million to defeat candidates like Jack Conway, Sen. Barbara Boxer (D-CA), Jerry Brown, Rep. Joe Sestak (D-PA), and Rep. Tom Perriello (D-VA). As of Sept. 15th, the Chamber had aired more than 8,000 ads on behalf of GOP Senate candidates alone, according to a study from the Wesleyan Media Project. The Chamber’s spending has dwarfed every other issue group and most political party candidate committee spending. A ThinkProgress investigation has found that the Chamber funds its political attack campaign out of its general account, which solicits foreign funding. And while the Chamber will likely assert it has internal controls, foreign money is fungible, permitting the Chamber to run its unprecedented attack campaign. According to legal experts consulted by ThinkProgress, the Chamber is likely skirting longstanding campaign finance law that bans the involvement of foreign corporations in American elections. ...

    Previously, it has been reported that foreign firms like BP, Shell Oil, and Siemens are active members of the Chamber. But on a larger scale, the U.S. Chamber of Commerce appears to rely heavily on fundraising from firms all over the world, including China, India, Egypt, Saudi Arabia, Brazil, Russia, and many other places. Of course, because the Chamber successfully lobbied to kill campaign finance reforms aimed at establishing transparency, the Chamber does not have to reveal any of the funding for its ad campaigns. Dues-paying members of the Chamber could potentially be sending additional funds this year to help air more attack ads against Democrats.

    Here’s how it works. Regular dues from American firms to the Chamber can range from $500 to $300,000 or more, depending on their size and industry, and can be used for any purpose deemed necessary by the Chamber leadership. For example, the health insurance giant Aetna has reported that it paid $100,000 in annual dues to the Chamber in the past. But for specific advocacy or advertising campaigns, corporations can hide behind the label of the U.S. Chamber of Commerce and give additional money. Last year, alongside their regular dues, health insurance companies like Aetna secretly funneled up to $20 million to the Chamber for attack ads aimed at killing health reform (publicly, health insurance executives claimed they supported reform). Last week, Politico reported that News Corporation, the parent company of Fox News, gave an extra $1 million to the Chamber for its election season attack campaign.

    There are many reasons foreign corporations are seeking to defeat Democratic candidates this November. The Chamber has repeatedly sent out issue alerts attacking Democratic efforts to encourage businesses to hire locally rather than outsource to foreign counties. The Chamber has also bitterly fought Democrats for opposing unfettered free trade deals. To galvanize foreign businesses, the Chamber has commissioned former Ambassador Frank Lavin — who served as the McCain-Palin Asia campaign director and has appeared on television multiple times recently saying a Democratic Congress is bad for business — to speak before various foreign Chamber affiliates to talk about the stakes for the 2010 midterm elections.

  • Denver City Buzz Examiner: Did lobbyists use foreign money to defeat anti-outsourcing bill? By Richard Blake. Excerpts: On October 5th Lee Fang of ThinkProgress.org reported that the U.S. Chamber of Commerce, which has been instrumental in defeating bills aimed at repealing the tax incentives that encourage outsourcing, has opened its membership to foreign entities. These entities run the gamut of American businesses based overseas, to foreign corporations such as British Petroleum and Siemens, to foreign corporations OWNED BY FOREIGN GOVERNMENTS, such as the Bank of India and Bahrain Petroleum Company.

    Entities that join the Chamber, which pay dues depending on the size of their organization, can pay dues ranging from $500 to hundred of thousands of dollars a year. The ThinkProgress piece does not specify what portion of the Chambers budget is used to influence political legislation, elections or discourse, but the Center for Responsive Politics reported that in 2009, for the first time, the "U.S." Chamber of Commerce outspent BOTH the Republican and Democratic parties in terms of lobbying activities, organizing and political advertising. It seems those who have long sought a viable third party need wait no longer. That party is now here, even if its hand is hidden. Shades of the "Trade Federation," that morphed into the Evil Empire in Star Wars. Was George Lucas a prophet of sorts?

    The ThinkProgress piece notes the twin developments of the Chamber's aggressive overseas fundraising campaign, mostly through "business councils," and "AmChams" and the fact that the Chamber has pledged "an unprecedented $75 million" to defeat mostly, if not entirely, Democratic candidates in a number of states, including California, Pennsylvania, among others. Also since the Chamber has been largely successful in seeking to stop oversight of political monies, (in fact, the activities of the Chamber's branch in Russia are conducted in secret) there is no means to independently verify whether or not the Chamber is transferring dues and other payments from its foreign members into its political war chest in the U.S. If any internal firewall exists, the Chamber is not revealing it or its workings even amidst the firestorm these revelations have created.

  • alterNet: Note to Tea Partiers: They Lied — You Don’t Live in a Rich Country. Excerpt: We have the greatest income inequality in our nation’s history, but for some strange reason people are incredibly misinformed about who has the most stuff. Take a look at this chart from “a paper called “Building a Better America One Wealth Quintile at a Time” by Dan Ariely and Michael I. Norton.”

    As you can see, most people, regardless of political ideology or party affiliation or income level, are under the impression that there is a vast middle class (60% of the people) that owns roughly 40% or so of the wealth in America, with the wealthiest 20% owning slightly less than 60%. The truth?

    The richest 20 percent, represented by that blue line, has about 85 percent of the wealth. The next richest 20 percent, represented by that red line, has about 10 percent of the wealth. And the remaining three-fifths of America shares a tiny sliver of the country’s wealth.

    Yet even that doesn’t tell the whole story. Because the highest 1% of income earners in America (income, not total assets) received 75% of the income gains from 2002 to 2006. Everybody else, 99% of Americans, received the remaining 25%. Now look at these pie charts on net wealth from“Wealth, Income, and Power” by G. William Domhoff, a professor of sociology at the University of California at Santa Cruz: ...

    Which is one reason we as a nation have arrived at the sorry state of affairs we find ourselves in, both politically and economically. We have been misled by fools and propagandists posing as honest objective journalists and reporters for too long. And the misinformation and outright lies in many cases to which they have been an active party, have allowed the Wealthy and Big Corporations to corrupt our politics and impose a regimes that is driven us to the brink of collapse, all while they lined their pockets from the public purse and from the inaction of government to oversee their activities and prevent their financial shenanigans (and in many cases outright fraud). That the Democratic Party was for too long complicit in this exercise, trolling for the same lobbyist cash that has always fueled the Republicans, is a failure of epic proportions, for it took decades to set the table from which the rich now feast while the rest of us beg for scraps from their table.

  • alterNet: Corporate Hijacking of Our Elections Is Well Under Way, with Foreign Companies Chipping in to Destroy Our Democracy. The Supreme Court's ill-fated decision to allow unlimited corporate expenditure in our elections is already causing huge problems. By Joshuan Holland. Excerpts: his week, an investigation by the ThinkProgress revealed that the U.S. Chamber of Commerce -- once just a conservative-leaning business group that’s been transformed into a heavy political cudgel for the corporate Right under the leadership of president Thomas Donohue -- has been raising money from overseas companies to defeat American candidates. That’s a violation of the law, but according to the report, “while the Chamber will likely assert it has internal controls,” money “is fungible, permitting the Chamber to run its unprecedented attack campaign. According to legal experts … the Chamber is likely skirting longstanding campaign finance law that bans the involvement of foreign corporations in American elections.” ...

    The Chamber has pledged to spend a whopping $75 million this year to defeat candidates who supported health care reform, new financial regulations and a laundry list of other measures of which the Chamber’s leadership doesn’t approve. On Tuesday, the grassroots advocacy group MoveOn.org asked the Department of Justice to open a criminal investigation into the practice.

  • Wall Street Journal: The Great Mortgage Mystery. By Brett Arends. Excerpts: The big question from the mortgage meltdown isn't why so many distressed homeowners are defaulting on their loans. It's why any of them are still making payments. In the worst-hit areas millions have no equity left, and little hope of seeing any anytime soon. The market value of their homes is far below the size of the mortgage. If they just stop paying, what is going to happen to them? In many cases they may get to live in the home rent-free for months, even years, until the bank gets around to seizing it. If Frank Abagnale—the con man played by Leonardo DiCaprio in the film "Catch Me If You Can"—were operating today, he'd probably be living rent-free in a super-luxury high-rise in Miami.

    Consider the latest revelations. The big banks are so backed up with foreclosures that some of them resorted to hustling through repossessions without the proper paperwork. Some of them—including Bank of America, J.P. Morgan Chase and Ally Financial's GMAC Home Mortgage—have announced a temporary freeze in some states on further foreclosures while they sort through the mess. In one case, a bank employee said she was approving 8,000 foreclosures a month. By my math, that's roughly one for every minute and a half. No, she wasn't reading all the documents thoroughly. (As one wit observed, the banks paid about as much attention to foreclosing on the loans as they did to making them five years ago.) In many cases, thanks to the fallout from securitization, it's not even clear who owns the mortgage. The payments may be due to different financial institutions around the world, some of which have gone the way of all flesh. ...

    Businesses make secured loans against property or collateral all the time. If the loan goes bad, the lender takes the collateral. Nobody expects executives to dip into their own pockets (a fortunate thing, as they never do). Bank executives pocketed tens of millions in the run-up to the financial crisis, directly as a result of the phony profits from reckless lending. Stockholders pocketed billions in dividends for the same reason. If the taxpayers hadn't stepped in, those banks would have collapsed and creditors would have lost a fortune. But they would have had no recourse—absent proof of fraud—against executives or those who owned equity. Look through the financial statements of the big companies involved in the housing market, including major homebuilders and property developers, and you'll find frequent references to all the "nonrecourse financing" they've obtained. It's a boast. "Look," they're telling stockholders, "even if things go bad, the lenders can't touch us."

    Apparently the only people who haven't gotten the memo are the middle class. For how much longer?

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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