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6, 2000 April, 2000

Highlights—October 30, 2010

  • Associated Press, courtesy of Forbes: IBM authorizes $10B stock buyback. Full excerpt: IBM says its board approved an additional $10 billion in stock buybacks, representing nearly 6 percent of the computer company's outstanding shares. IBM Corp. says the new buyback authorization adds to $2.3 billion remaining from a previous authorization.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Retiree Medical Enrollment information delayed" by "ranheimchas". Full excerpt: Whenever I read questions and responses on this forum, it makes me sad to see how IBM has changed over the years. I remember the days when you could ask IBM directly any question, and get an accurate answer. Now, with the Fidelity Firewall in place, we can no longer get answers to questions that have a real effect on our lives. Many retirees worry about how they will pay for the next increase in our medical plans. This is a very real problem for those who counted on IBM's word about our retirement expense, and did not save enough to make up for the big increases that come every year.

    It's too bad we have to ask each other what may be in store for us in the future, while IBM has the answers on their fingertips, but will not share it with us anymore on a personal level. We went from an asset to a liability to IBM when we retired, but we still have feelings and needs like anyone else. I certainly thank those who share what information they can scrape up.

  • Wall Street Journal: IBM Adds $10 Billion to Buyback. By John Kell. Excerpt: With its shares trading near all-time highs, International Business Machines Corp. said it set aside an additional $10 billion to repurchase shares and plans to reserve more money for buybacks in April. The technology giant said the funds are in addition to about $2.3 billion remaining at the end of September from the $8 billion buyback approved this past April. IBM, which repurchased $3.7 billion shares during the third quarter, has a market capitalization of about $177 billion.
  • The Register: Big Blue's Big Sam gets $10bn for bonus stock boost. By Timothy Prickett Morgan. Excerpts: IBM needs to hit at least $11.40 in earnings per share for the company's top brass to get their 2010 bonuses, so on Tuesday its board of directors gave Sam Palmisano, Big Blue's president, CEO, and chairman, the means to engineer that number with a $10bn bag of cash.

    The board declared a dividend of 65 cents per share on IBM's stock while also authorizing the company to spend an additional $10bn to take them off the market and "return value to shareholders" — the IBM euphemism for not giving employees a pay raise.

    IBM has $2.3bn remaining in prior authorizations to buy back its own shares from the open market. That's a pretty big pile of cash to throw at stock to artificially boost earnings per share (EPS), as many companies do, especially when you consider that IBM has only $11.1bn in cash and marketable securities on hand as of the end of September, and that it has $27.5bn in debt. ...

    It is not clear where IBM has its cash stored, but given that IBM doesn't touch it and that it even went so far as to borrow money to do a massive buyback a few years ago, you have to believe that a large portion of it is locked up in overseas subsidiaries where Uncle Sam's tax hounds can't feast upon it.

    And thus, IBM has been burning through the cash it generates each quarter to satisfy its share-buyback habit. IBM has generated $12.7bn in cash from operations in the first nine months of the year, and thus far has spent $11.8bn on its shares and another $2.37bn on dividends in those three quarters.

    This from a CEO who balked last year at the $5.6bn net-of-cash price for Sun Microsystems, and who admits that the acquisition has made Oracle the biggest headache IBM faces in its future. ...

    With IBM's shares trading at an all-time high (and one would argue from that relatively rosy five-year plan), one might argue that stock buybacks are the worst possible way to return value to shareholders. Building businesses that are profitable is tough, and to one way of thinking about it, IBM really screwed up by getting out of the hardware business (except in data centers), and missed the entire consumer IT revolution that's now underway. Apple generates almost as much revenues as IBM at this point, throws off more cash each quarter, and is on a steadily rising wave of consumer enthusiasm for its products.

    The IBM that Larry Ellison says he admires is the one run by Tom Watson Jr — the one that hated Wall Street. That company only went to the Street to borrow money because the revolutionary System/360 mainframe line that defined corporate computing, launched in 1964, needed $5bn in investment to create — and that was at a time when IBM's annual sales were $3bn. ...

    Share buybacks are what companies do when their stock is in the gutter because their business is on the rocks, and when they have a lot of cash sitting around. It is what companies do when they can't figure out what else to do to feed the Wall Street beast. Perhaps the answer is to let it starve and instead go and create great technology.

  • Selected reader comments concerning The Register article follow:
    • No surprises there. Stop They've just cut car allowances, apparently to encourage you to magically make your car more efficient. Oh hang on a minute, maybe it's a company-wide pay cut for everyone. Ah, that'll be it.
    • Oh yes they have cut car expenses. Here in the UK we already pay additional tax (benefit in kind) for less efficient vehicles, the IBM mileage rates do not currently cover the costs per mile of my 2 litre diesel vehicle so it costs me to visit customers, and now IBM would claim back an additional £20+ per month from my comp nay car allowance under the excuse of encouraging staff to go green. Further erosion of my benefits so the guys at the top can get their bonuses. And thanks IBM for pushing me out of the final salary pension scheme, lost out on that this year too but at least you're keeping your shareholders happy.
    • Not sure I understand the anger. Timothy seems to have a bug up his backside regarding IBM. I don't understand the constant carping about share buy backs. There are two ways that a company can return profits to shareholders - dividends obviously put money directly into the shareholders pocket, but if you accept that a stock's street price is related to EPS, then buying shares will drive the price of the stock up, giving the shareholder value.The advantage of the latter approach is that the stockholder gets to choose when the profits are taxed whereas dividends are taxed immediately.

      I guess the third way is to invest in the business to come up with new stuff to sell, thereby growing the business long term. On that measure, Apple and IBM had about the same revenue last quarter. Apple spent 464 million on R&D, IBM 1.4 billion. I guess it is cheaper to invest in shiny.

    • From inside Big Blue it's worrying... It's worrying because that's all the executives seem to be focusing on. Strategic share buy-backs are fine but (as Timothy noted in an article about a year ago) IBM seem to be addicted to the damn things. We started down this road something like three or four years ago and it doesn't show any sign of stopping.

      There's only so much manipulation the market will take before it says, "Sorry we're not playing any more," and the stock tanks. Restrict the supply of shares too much; and you reach a tipping point where the market judges you to be over-valued. With an IBM where costs are cut to the bone and (certainly in my area) R&D is being hampered, this is a real concern.

    • Loss of focus. I think that large parts of IBM, including much of upper management has lost the focus that was found under Lou Gerstner, who had to dig into the core of what IBM was/is to make it survive, IBM is a technology driven company.

      Now I think that selling off the PC business and the hard disk business were the right thing to do, but they (upper management) haven't been able to replace the revenue with organic growth. Sure IBM have been buying up lots and lots of smaller software companies and a few hw companies, to increase revenue that way. But IMHO that has been kind of defensibly. They haven't been doing gutsy "expand the business into a new market" kind of buys.

      HP has by buying EDS, Oracle have bought SUN, SAP have bought Sybase...

      And to be honest I think that the investors would rather have seen IBM use the 10 billions on entering or re-entering a marked, rather than pumping up the stock. I mean double the 10 billions and IBM could have bought Juniper networks. That would have been a strategic move, with CISCO entering the server market.

      This buying up stocks is top management trying to force the stock up high enough so that they can make a stock split, that normally also will benefit the stock. It's the same problem with companies around the world, upper management isn't thinking about what is best for the company but what is best for their stock options.

    • Whilst they've treated me well, there are a lot of pissed off IBMers at the moment. Costs are still being controlled to the penny, raises and bonuses for many are minimal, other benefits are being cut. And then they go announcing massive profits, share buybacks and the like.

      It rubs you up the wrong way after a bit. Why should they spend 10 billion on shares when I could do with a new laptop and haven't had a decent raise for a couple of years due to the company moaning about hardship?

      Not that good people leaving really bothers big blue, they'll just buy in more. In fact I think that's the plan - buy products, sell them for all they're worth but put as little investment into them as possible, watch people leave and the product stagnate. Buy another one, repeat. Anonymous posting for pretty obvious reasons.

    • I won't be anonymous... Yes, I have escaped the blue pig aka borg. Thumbs up for the author's article which is very well written and spot on.

      IBM is treating their employees like crap because they can. Go ahead and leave. They will replace you with an offshore resource, if they can, or they'll hire in someone more desperate for a job that has a pulse. Since you left, they don't have to worry about giving you a package as you exit, where they would if they made you redundant.

      The problem with share buybacks is that its an artificial pop in price. But if the street doesn't buy it, then your share prices will still take a hit. (A double screw to the employee who didn't get a bonus and holds IBM stock.)

      As to IBM's mystery source of money... its out there... where the US Tax Man can't get it. IBM is run by bean counters and they will play accounting tricks when they can.

    • Somewhere along the line directors started thinking of themselves as *owners* WTF? Not the highest paid *employees* of a company. This move is excellent for people on performance related bonuses but likely to do *nothing* for long term business value. Will the stockholders *do* anything about it? They are the *real* owners after all. Probably not.
    • Ahah. So that's where my salary increases have gone for the last six years. Must get myself a new job, IBM has long since been a decent place to work.
    • The money-go-round. Big Blue regularly buys shares back and regularly gives out options as executive bonuses, down to quite a low level of 'executive'. (Must be low, since it used to include me.) So actually there is a money-go-round that IBM always wins from*, and it does keep the staff who are in line for options dancing in their own shadows, which is part of the goal.

      *because they only buy shares back when they're undervalued, and it's the employees who pay tax on the options, if they (the options) aren't in the toilet as usual.

  • Poughkeepsie Journal: IBM buys back more stock. By Craig Wolfe. Excerpt: IBM Corp. will buy back an additional $10 billion worth of its own stock in the market over the coming months, even though the stock is near all-time highs. The company's board of directors authorized the move Tuesday. The timing of the decision is unusual in that companies typically use buybacks to take advantage of low stock prices, but IBM's stock has been setting all-time highs.
  • Yahoo! IBM Employee Issues message board: "IBM share buyback" by "sby_willie". Full excerpt: An easy way to hit those EPS targets. Period. An easier way for the rich stockholders and optioneers (like IBM executives and IBM board members) to get richer in a down economy. Who would get or take the blame if the stock loses market value after this latest buyback?

    Instead of stock buybacks (and this one is curious since IBM stock is near an all time high), rampant cost cutting and RAs, little, if any raises, for the employees, and unable to truly innovate and create new trend setting products like Apple can, wouldn't a better use of this buyback money be to truly invest and grow in the core business and the people who run and produce the products and services with it instead to get a leg up on the competition?

  • Market Ticker: Dumb Defined: IBM. Excerpts: This is idiotic. This is about 7% of their float in aggregate. Why is it stupid? Because a buyback says two things:
    • Our stock is trading historically cheap to value.
    • We can't find anything we can spend our corporate cash on that will grow the business prospects - that is, we are unable to find a way to expand sales with our money in a fashion that will return at least the margin that we earn now.

    That latter statement is not good. ...

    This move smells like a desperation move to keep EPS where it is (or "meet expectations") into declining actual earnings in nominal dollar terms.

    Selected reader comments follow:

    • Well it's not stupid if you are part of IBM's management and hold a ****load of stock options.
    • Hey if I'm the ceo and my bonus is tied to stock price and the board and the market let me borrow money for near zero percent, why the hell not. This is what zirp does.
    • Ding ding... I talked to a guy that knew someone that worked in IBM doing accounting. At the time he was buying IBM with both hands and he told me two things. 1 - that IBM loves accounting games and management didn't care how you got to the number, just that you got to the number they wanted and 2 - Management was all looking to retire soon and they were heavily invested in IBM stock and wanted to bail at the top. Hearsay I know but it does paint a nice picture with what's going on...
    • I work for this company. IMHO, it's a giant ponzi based on constantly making software acquisitions and marking up the revenue and capitalizing the R&D. They can juggle stream vs point revenue to make their EPS whatever they want. I just got my Q3 bonus and it was the worst since I've been there, including 2008. Not good.
    • This is just more confirmation that the Wall Street game is business as usual. Set expectations low, beat low expectations and profit handsomely by extracting millions of equity and bonuses for Executives. Wash, rinse, repeat....You would never know that risk even matters- give the appearance of growing earnings at any cost has been and is still the game.

  • Seattle Times: Intel to spend up to $8B on US manufacturing. By Jordan Robertson. Excerpt: Intel Corp. on Tuesday revealed the scope of its latest infusion to keep its factories cutting-edge and push the chip industry's pace: an investment of up to $8 billion to build a new factory in Oregon and upgrade four existing plants in Arizona and Oregon. In all, the projects will create up to 8,000 temporary construction jobs and up to 1,000 permanent positions in Oregon when that factory opens in 2013.
  • Wall Street Journal: Out of Work, Out of Options and Over the Hill. By Emily Glazer. Excerpts: After 20 months without a job, 55-year-old Henry Dietz has nearly drained his 401(k) retirement plan. He already has used up his personal savings, borrowed extensively, switched to a catastrophic health plan, which only covers medical emergencies, and even skipped family funerals because of travel expenses. If he doesn't find a job soon, he may not be able to make his mortgage payments and the family may have to "move back with Mama," says the married father of three from Raleigh, N.C., who was laid off from an advertising agency.

    Mr. Dietz's situation may be extreme, but many people are facing a similar dilemma: over 50, unemployed and running out of options. With no job prospects long before they can afford to retire -- and Social Security benefits still years away -- many unemployed workers in their 50s and early 60s are struggling to pay the bills, the mortgage, health-care expenses and college tuition. It's a scenario that was unimaginable to many just a few years ago.

    Of the 14.9 million unemployed, more than 2.2 million are 55 or older, according to the U.S. Labor Department. And almost half of those have been unemployed six months or longer. The unemployment rate in that age group is a record high 7.3%.

  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM Anonymous: (Current Employee) “Good to work for but good luck with promotion.” Pros: * Exposure to interesting/cutting edge technology * Immediate colleagues great to work with * Opportunity for travel * Decent benefits. Cons: * HR is overly reliant on rigid and overly complicated PDF process for advancement, which causes many good people to either stagnate or leave * Several people have had to leave the company then come back to advance (No loyalty premium given to those who stay.) * Easy to get lost in the company * Management sometimes doesn't do a good job at aligning individual educational/development goals with corporate direction/expected pipeline. Education one of the first things to be cut when it comes to meeting targets. Advice to Senior Management: * When it comes to promotion, personal contribution and potential should get a higher priority than whether or not someone can cross all the t's and dot the i's in a 40 page promotion package that does nothing more than waste multiple people's time to compile and review. The same effort could be re-directed to actually contributing to the intellectual capital of the company or to skills development, which would improve the overall productivity of the organization and likely morale, as well.
    • IBM Anonymous: (Current Employee) “Project Managers.” Pros: Diversity and knowledge base, people and focus. Cons: Long hours, little training, travel and too many meetings. Advice to Senior Management: Focus on work/life balance
    • IBM Band 7 Hardware Engineer in Research Triangle Park, NC: (Past Employee - 2010) Pros: Good people. Einsteimer. Access to leading edge tools. Cons: Layoffs. Low pay. Lack of product roadmap. Advice to Senior Management: none
    • IBM Anonymous: (Past Employee - 2008) “Not my father's IBM.” Pros: Fairly good at maintaining some worklife balance...you can work from home. Cons: Worklife balance...the silent expectation that even when on vacation or attending personal events you should be able to access your workload remotely...anytime, anywhere. Benefits and salaries have diminished as workloads have increased. Pervasive sense that you are only as good as that day's work...people are no longer IBM's most valued asset. Don't invest in training employees anymore...need to come fully trained/educated. Advice to Senior Management: Execs should read the Glassdoor site and be the trendsetter corporation that takes a lead on re-investing in ways to show employees how important they are to IBM's bottomline...not just the stock value or the Sr. Execs bonuses.
  • Forbes: When Employees Blast Your Company Online. By Alexander F. Brigham and Stefan Linssen. Excerpts: In 1999 the Internet still felt new. People were setting up e-mail accounts, the BlackBerry lay in the future, and the dot-com craze was on. People were beginning to perform more and more everyday activities online, from booking flights and ordering books to researching stocks and making investments. Half a decade before the inception of Facebook, communities were springing up largely facilitated by the invention of the simple message board. A trend quickly developed among those communities that disturbed and frightened corporate executives. Employees started logging on to their favorite forums and treating them like the office water cooler. All of a sudden they were hanging out their dirty laundry and sharing rumors and suppositions, sometimes wildly inaccurate, sometimes under the cloak of anonymity. ...

    So how should companies manage and protect their secrets and reputations in today's social media world? They should take a multifaceted approach--not simply churn out lawsuits and pink slips. ...

    Have a genuine open-door policy. Companies with strong ethical cultures make sure their employees feel comfortable raising concerns and grievances without fear of retribution. If you have such a policy, it is important that you always follow up and let employees know what action or resolution is taken when a concern has been raised. Otherwise your open-door policy will seem hollow and fall into disuse. ...

    Listen and monitor. An ethical company always treats its employees fairly, and the best way to stop anonymous employee Internet critics is by depriving them of reasons to complain in the first place. You do that by providing a fair, respectful working environment and a meritocracy. Naturally there will be outliers in any organization who will complain no matter what, but absent an obvious pattern, such criticisms should be taken lightly or ignored by other stakeholders, such as current and future employers, customers and partners. Should a pattern of broad and consistent criticism emerge, however, companies can ignore it only at their own peril.

New on the Alliance@IBM Site
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  • To Alliance@IBM supporters: The Alliance is the only organization that advocates and supports IBM employees and ex-employees. In fact, there are few like it in the Information Technology field. It is always difficult to keep an organization like this alive, but as a supporter you know how important it is that we exist. We are calling on you today to help keep us alive another year by joining as a member or associate member. See our online forms below. As our membership has dropped, it is imperative that we gain new members or this organization and web site will cease to exist. Help us keep our organizing and advocacy work alive!
  • General Visitor Comments: Due to a lack of membership growth the comment sections will be closed until we see sufficient growth in full membership, associate membership or donations. Many of you that visit our site have not yet joined, but seem to value its existence. The only comment section that will remain open will be Job Cuts Reports. If you have information that you want the Alliance to know about please send to ibmunionalliance@gmail.com. Information of importance will be put on the front page of this web site. To join go here: Join The Alliance! or here: Join The Alliance!
  • Job Cut Reports
    • Comment 10/24/10:To anonymous who said "The plan is to offshore jobs to whomever will do them the cheapest with enough quality so IBM can keep contracts. It does not matter to IBM where in the world that is. The name after all IS International Business Machines. They will remain a " US " corporation on paper" ----

      You are wrong about one thing. Quality does not matter. It's the perception of quality, what they can make customers believe and buy into that matters. What you need at IBM now are good powerpoint skills and the ability to pinpoint who has the power, and the lack of spine that is necessary to agree with them (lest they crush you).

      There is a serious degradation in quality. Most people are doing precisely what is needed to keep their jobs. Make no mistake it is no longer a career but a job. The only jobs left that are NOT in third world countries will be: SALES - PROJECT MANAGERS - and EXECUTIVES. Every other job has been divided and categorized into a massive "jobs" schema.

    • Comment 10/26/10: 10 years, solid sales record, Golden circle, numerous other awards. 2+ rating 2009. Got a package today. What a joke! -IGF- Alliance Reply: Sorry for your job loss. When you don't have a contract, then IBM plays the 'joke' on you. Others should learn from your experience; but it seems to continue to happen. IBMers trust IBM with their careers and their life. That's their first mistake. Organize and fight for a contract. It is THE only pro-employee option.
    • Comment 10/27/10: IGF, what group are you part of? There has been rumours of RA, but it has all been quiet. Any other groups getting hit? -Confused-
    • Comment 10/27/10: So, many here say a company wide RA in Nov. How wide? Anyone have insight into LOBs? Div? Our department has been pinching pennies tighter than I have ever seen it before... -hmmmm-
    • Comment 10/27/10: To -justanumber- Project managers have been outsourced to Argentina. And I know first hand how skill less & annoying they are to deal with. My team leads & colleagues pretty much all agree that it was a retarded move. But on a more serious note, there are plenty of folks that turn down Service Delivery Manager roles, project roles, etc. because they don't provide any monetary benefit & the workload quadruples. So who gets the jobs, you guessed it, offshore folks. Just to give you an idea of how people internally regard offshore replacements, I personally trash every email I get from them asking me for anything. When they sametime me, I may or may not reply. They have ZERO power & nobody takes them seriously. But the backside of doing that is of course, that an exec will shit talk you behind your back to your manager, but if you're a contractor like me, who really gives a shit?

      Alliance reply: We suggest that the most constructive way to changes things for the better is to organize and negotiate a contract. Working conditions in IBM are such because workers have no say and no power. That can be changed. The Argentina IBMers understood that and formed a union. And yes we do care about what is happening to contractors.

    • Comment 10/28/10: To try to better understand the randomness and insanity of RA selection, read or see the short story called "The Lottery" by Shirley Jackson. IBM RAs are very similar to getting the paper with the black dot. It does not matter what awards, patents, sales record, PBC, job skills, etc. you have. IBM RAs USA employees to shed operation costs so IBM has more money in profits for stock buybacks and to make Sam and his cronies richer. -da_facts-
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.

  • Cato Institute: Who's To Blame for the Massive Deficit? By Daniel J. Mitchell. Excerpts: The temporary increase in the national debt ceiling approved this month — combined with the prospect of a huge trillion-dollar-plus increase early next year — has once again prompted criticisms of President Obama for runaway spending and record deficits. All this borrowing is only necessary, we are told, because Obama ran up $1.4 trillion of debt in his first year.

    It's true that the White House is pushing big spending items, not least of which is his multitrillion-dollar scheme for government-run health care. But many critics, either out of ignorance or malice, are blaming Obama for deficits that are not his fault.

    Some Republicans, for instance, complain that Obama tripled the budget deficit in his first year. This assertion is understandable, since the deficit jumped from about $450 billion in 2008 to $1.4 trillion in 2009. As this chart illustrates, with the Bush years in green, it appears as if Obama's policies have led to an explosion of debt. But there is one rather important detail that makes a big difference. The chart is based on the assumption that the current administration should be blamed for the 2009 fiscal year.

    But there is one rather important detail that makes a big difference. The chart is based on the assumption that the current administration should be blamed for the 2009 fiscal year. While this might make sense to a casual observer, it is largely untrue. The 2009 fiscal year began Oct. 1, 2008, nearly four months before Obama took office. The budget for the entire fiscal year was largely set in place while President Bush was in the White House.

    So if we update the chart to show the Bush fiscal years in green, we can see that Obama is mostly right in claiming that he inherited a mess. ...

    So what's the final score? Let's use an analogy. Obama's FY2009 performance is like a relief pitcher who enters a game in the fourth inning trailing 19-0 and allows another run to score. The extra run is nothing to cheer about, of course, but fans should be far angrier with the starting pitcher.

  • truthOut: Why France Matters Here, Too. By Rick Wolff. Excerpts: Depending on who counts, the French left has repeatedly mobilized between 1.3 and 2.9 million people into action in over 240 cities and towns across the country. Given that the US has five times the total population of France, the equivalent mass mobilization in the US would entail between 6.5 and 14.4 million. No political movement in US history has so far come close to such numbers of mobilized, active participants. This truly mass mobilization in France began with the general strike on September 7. That action garnered a public opinion poll of 70 per cent either "supporting" or "sympathetic to" the strike movement. That level of public opinion favoring the French strikers and demonstrators has held constant to this day despite escalating government and corporate threats, intimidations, and a defiant Sarkozy's barking about never compromising. France's "silent majority" is no longer quiet, thereby exposing the regime as a minority in power that seeks to maintain and exploit its self-serving political and economic positions. ...

    The relevance of all this to everyone in this country should be clear. Average working people in the US have suffered since the crisis began in 2007 much as their French counterparts did; indeed, it hit harder here than there. The same issues that concern the French (unemployment, precarious jobs, declining benefits, huge government bailouts of the rich and well-connected, etc.) likewise agitate most people here. France's experience suggests the potential in other countries for the parallel emergence there of huge left movements opposing policies that burden average citizens with the costs of capitalism's crisis and of bailouts rewarding the same enterprises that contributed to the crisis. France today suggests that when you further push a population to suffer reduced public payrolls and thus government services (in "austerity" programs to pay for overcoming the crisis), you risk provoking a mass left upheaval into the political, cultural, and ideological life of a country. France will not be the same in the future, no matter how this crisis ends.

    The French strikes and demonstrations are coalescing around some basic demands that go far beyond the rejection of Sarkozy's demand for a two-year postponement of retirements for French workers. Contrary to so many US media reports, that particular issue was never what brought out millions of demonstrators and strikers; that was the bare tip of an iceberg. The issue that mobilizes the French is the basic question of who is to pay for (1) the collapse of global capitalism in 2008 and 2009, (2) the ongoing social and personal costs of high unemployment, loss of homes, reduction of job benefits, and the general assault on most citizens' standards of living, and (3) the costs of ending the crisis. The French masses have already absorbed and suffered the costs of (1) and (2). They have drawn the line at (3). That they now refuse.

    Instead, they demand that the costs of fixing capitalism's crisis be borne chiefly by taxes on the banks, large corporations, and the wealthy. Those groups are declared to be (1) those most able to pay, (2) those who benefited most from speculations and stock market booms before the crisis began in 2007, (3) those whose investment and business activities were key causes of the crisis, and (4) those who got the biggest, earliest bailouts from governments subservient to them.

  • The Hill: Report: Social Security benefits would be cut under Republican proposals. By Vicki Needham. Excerpts: new report shows that seniors could lose up to 50 percent of their Social Security benefits under several different Republican proposals designed to reduce the cost of the mandatory program. Social Security's chief actuary analyzed several proposals, including those by House Budget Committee ranking member Paul Ryan (R-Wis.) and Minority Leader John Boehner (R-Ohio), according to the details of the report released Wednesday by House Ways and Means Committee Democrats. ...

    Under Ryan's plan, the report showed that by 2080, the benefit of a medium earner, about $43,000 in 2010, would be 46 percent below today’s wage-indexed amount; the benefit of a higher earner, $69,000, would be 56 percent lower; and the benefit of someone who earns the maximum taxable amount, $106,800, would be 61 percent lower. The reductions include a 7 percent cut in benefits resulting from the increase in the full retirement age that is already scheduled in law. The average Social Security benefits are $14,000 a year for retirees.

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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