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6, 2000 April, 2000

Highlights—December 4, 2010

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: FHA package from NC anybody?" by "madinpok". Full excerpt: The FHA (Future Health Account) rates appear to be the same as in all parts of the country. If you are already eligible for retirement, you should be able to log on to NetBenefits and see them there, even though you haven't retired yet. In the Hudson Valley, these are the monthly rates:
    FHA Plan Rates Self Self+1
    IBM EPO $750.42 $1,500.84
    IBM Hi Ded PPO w/HSA $632.13 $1,264.25
    High Ded PPO $547.64 $1,095.28
    Med Ded PPO $654.95 $1,309.89
    Low Ded PPO $824.29 $1,648.57
    Oxford EPO $1,136.58 $2,273.63
    Cigna DMA $32.78 $61.43
    Dental Basic $27.00 $54.00
    Dental Plus $34.41 $68.82
    IBM Vision Plan $10.12 $19.24
  • Yahoo! IBM Retiree Information Exchange message board: "Re: 2011 Annual Benefits Enrollment Information" by "orsonbear". Full excerpt: Here are my numbers for 2011. I am a non-Medicare eligible retiree living in upstate New York. I am curious if these are nationwide numbers or vary with geography. If anyone has significantly different numbers, can you post them? Hard to make columns line up when Yahoo uses proportional fonts. The first numeric "column" below is Self Only. The second column is Self + 1 Non-Medicare Dependent. (Editor's note: The rates shown in this table apply to older IBM retirees who are on the "old" retiree medical plan, not the new Future Health Account plan.)
    "Old" Plan Rates Self Self+1
    IBM EPO $266 $1067
    IBM Hi Ded PPO w/HSA $201 $876
    High Ded PPO 0 $411
    Med Ded PPO $234 $933
    Low Ded PPO $367 $1247
  • Yahoo! IBM Retiree Information Exchange message board: "Re: 2011 Annual Benefits Enrollment Information" by "Dave BTV '92". Full excerpt: Here are my numbers, both on medicare, Naples FL.
    "Old" Plan Rates for Retirees on Medicare Self Self+1
    IBM Medical Supp 0 0
    IBM Pres. Drug Supp $179.00 $589.00
    IBM Med/Pres Drug Supp $35.00 $204.00
    Above Plus $171.00 $570.00
    Aetna Trad. Choice Medicare Plan A $25.00 $95.00
    Aetna Trad. Choice Medicare Plan B $12.00 $46.00
    Aetna Medicare Plan PPO - B $27.00 $137.00
  • Finacial Times (United Kingdom): Multinationals cash in on EU funds. By Cynthia O’Murchu in London and Jan Cienski in Poland. Excerpts: At €20m the European structural funding that IBM has been granted for its operations in the Polish city of Wroclaw represents just a fraction of the company’s $96bn (€68.7bn) turnover last year. But IBM’s funding is emblematic of a trend. Across Europe some of the biggest beneficiaries of the EU’s biggest regional aid programme – its structural funds – are multinational companies. ...

    Structural funds are supposed to be directed at small and medium companies, which provide the backbone of many economies in the 27-nation bloc. But multinationals are also eligible for funding and officials say the structural funds programme has become an element of competing in a global marketplace where companies are often courted by countries eager for their investment.

  • sys-com media: Galleon’s Rajaratnam Fails to Get Wiretaps Suppressed. Rajaratnam, a self-made billionaire out on a $100 million bail bond, is looking at spending the rest of his life in prison. Excerpt: Galleon founder Raj Rajaratnam Wednesday lost his bid to suppress all that delicious wiretap evidence the government collected in 2008 for its insider trading case against him and IBM's now jailed former server chief Robert Moffat's sweetie Danielle Chiesi. Their trial was expected to begin early next year. However, the judge has now ruled that all the conspiracy counts against them can't be heard in a single trial.
  • Wall Street Journal: Pensions: the Lump-Sum Gamble. Most Workers Opt for a Single Payout. Here's Why That May Be a Bad Move. By Ellen Schultz. Excerpts: More than 90% of employees opt for a lump-sum payout from their pension plan when given the choice. That could be a mistake. Under rules that became effective in 2008 and that affect millions of workers, companies such as AT&T Inc., Chevron Corp., and Dow Chemical Co. have been quietly changing the way they calculate lump-sum payouts from their pension plans—phasing out their use of a Treasury-bond rate to calculate lump sums and replacing it with a higher composite corporate-bond rate.

    The result: substantially lower payouts to employees who are changing jobs, being laid off or retiring—anywhere from 10% to 60% or more, depending on age and other factors.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Ellen Schultz WSJ: Pensions: the Lump-Sum Gamble" by Janet Krueger. Full excerpt: Don't forget to read the "Comments" section of this article, found on a tab at the top of it. Some of those that wrote in don't understand how the 'screw' really takes a life of its own. One person even stated that he would take the lump sum because he can pass it on to his heirs after he dies. I guess that's OK if his children like chump-change and he doesn't need any of it to live on in the interim.
  • LinkedIn's The Greater IBM Connection: I actually miss working at IBM. Selected postings follow:
    • What I miss most is the first manager I worked for - and I miss him on purpose whenever I can. The first annual report I received included "...needs to gotten global variations of the English Language..." - I have it framed. I do miss the professional measured approach, with that splash of innovation.
    • I have to admit I have missed some parts, particularly when those commercials roll on TV. Then I remember the cliques, the politics, the constant fight against utilization and quota...the recurring fear that RDM's would call me not to wish me happy holidays but rather one of those resource "actions" since they were too chicken to call them layoffs.

      But I do miss my colleagues, my road warrior brethren and crown-room co-conspirators. I miss my shiny blue eight bars on my business cards which gave me instant street cred (even at a night-club in Prague once).

  • Washington Post: Good reasons to be uneasy about retirement security. By Ezra Klein. Excerpts: The late 20th century saw a great shift in risk, in which uncertainty that had been borne by employers and the government was shunted onto individuals. And in our efforts to solve our deficit and economic problems, we must be careful not to make our retirement problem worse.

    Consider the 401(k): When Congress created the provision in 1978, lawmakers didn't realize they were going to transform the American pension system within a generation. But that's what happened. Previously, employers had defined-benefit systems in which they had to worry about saving enough to pay for the retirement of their workers; the 401(k) - and similar defined-contribution systems - let them push that responsibility onto the workers.

    By 1995, there were more 401(k)s plans than traditional pension plans. Now there are about twice as many. And they're not working out that well, Robert Hiltonsmith, a policy analyst at the think tank Demos, shows in his paper "The Failure of the 401(k)." The failure, experts say, basically, is this: The typical worker approaching retirement needs about $250,000 in a 401(k). Most don't come close. The average is closer to $98,000 - only a bit more than a third of the recommended amount. ...

    The deficit-reduction plans under consideration will accelerate this trend. Under current law, an average -income worker (that's someone making about $43,000 a year) is projected to get the inflation-adjusted equivalent of about $15,000 a year in Social Security benefits in 2050. Under the Simpson-Bowles plan, that would drop to about $12,700. That's not nothing, but it's not much. In fact, neither amount is very much. Social Security is not a generous program. It's actually among the least-generous of any developed nation, and in making it less so, we raise the question of what, exactly, seniors with insufficient retirement savings are supposed to do. ...

    Age discrimination is rampant. Employers know that younger workers are often more productive, and always cheaper, so they push out older workers or refuse to hire them. And once unemployed, it's particularly hard for older workers to find new jobs. It's something that's become all too clear in the current recession, which has seen a startling rise in long-term unemployment among older workers.

  • US News & World Report: The Million-Dollar Retirement Plan. Here is what retirement with a seven-figure portfolio looks like. By Emily Brandon. Excerpts: Achieving millionaire status is a noteworthy financial goal. But saving $1 million doesn’t necessarily mean you are ready to retire or that you will be able to afford a lavish retirement lifestyle. Here’s what it takes to save that amount over a working career and how much income you can expect a $1 million nest egg to provide in retirement. ...

    Making your first million. Many people should be able to save $1 million for retirement if they start saving early enough. A worker who saves $5,500 per year beginning at age 30, gets a $1,500 401(k) match each year, and earns 7 percent annual returns will have $1,014,640 by age 65. However, someone who waits until age 40 to start saving will have to tuck away closer to $14,000 a year to reach $1 million by age 65, assuming the same 401(k) match and investment returns. ...

    We associate the word "millionaire" with luxury. Spread out over a 30-year retirement, $1 million will likely make you comfortable in many parts of the country, but not especially wealthy. "I have clients who have got a million dollars in retirement and they don't feel wealthy," says Jay Hutchins, a certified financial planner for The Wealth Conservatory in Lebanon, N.H. "It's not enough that you can put it in the bank and draw half a percent of income and live off it. You have to invest it and you have to take on risk." If you draw down 4 percent of your $1 million nest egg each year, you will receive about $40,000 annually for 30 years, before adjusting for inflation. To that amount you can add any Social Security or pension income you expect to receive. But you will likely need to subtract taxes, especially if most of your savings is in tax-deferred accounts including 401(k)s and IRAs, and account for inflation.

    Selected reader comments follow:

    • 7% per year--good luck. I have done all of the saving--and then some--suggested in this article. I used an investment allocation appropriate to my age, i.e., heavily weighted in equities. And I have been burned by two major market crashes during the course of my 20 year working career, in 2000-01 and again in 2008. Basically, what I have is the principal amount that I invested, with a very small investment return. The main value of this article is conveying that, even if you do manage to accumulate $1 million at age 65, you will not be rich. That figure sure ain't what it used to be.
    • Should be titled the Million-Dollar Retirement Myth. What is this national propaganda from the rich day? The Wall Street Journal has a story on how the poor are addicted to being poor and secretly desire it and then this? A million is simple... all you have to do is save $5500 a year (about 20% of the median individual income), THEN get a 401K match that few companies are willing to do, THEN get a 7% return for 35 years hoping the market does not tank like it did in 2008 and put you back to square one with nothing again. Seems like a lot of effort on the part of the wealthy just to make themselves feel better about about cutting social security benefits and raiding the trust fund.

      A million dollars is easy? My wife and I make well over $100,000 a year and are 35 years or so from retirement age and we've calculated it will be difficult to get to $1 million. We save AND live modestly AND have no children AND have zero credit card debt. We are better off than probably 80-90% of the country and getting to that figure between the two of us if we keep our current jobs until we retire will be a great struggle. There's no way on Earth the average American who is riddled with debt and can not rely on a 401K match or pension can come anywhere close to that figure. U.S. News is lying to you. It's a scam to rob you blind and get you to feel good about letting it happen. The top .01 have more accumulated wealth than the bottom 40% of the country and the top 1% has more accumulated wealth than the bottom 90% of the country. That's reality. This article is pure Horatio Alger myth fantasy.

      Don't believe the hype. Fight like hell when they come after social security (and they are coming after it). If you think you're retiring with $1 million and you only make $45-$50K a year you are most likely kidding yourself. I am saying this because I know my family will struggle to get there and we have many advatages most Americans don't have, so to insinuate this can happen for most is a lie. They are just hoping you will roll over when they come after your social security hoping you will buy into this "I will have $1 million waiting" fantasy and not put up a fight.

  • Washington Post: Let's talk turkey about privatizing Social Security. By Allan Sloan. Excerpts: Thanksgiving is upon us, making this a perfect time to go searching for turkeys - the financial variety, of course. But this year, rather than looking backward at inept deals or government programs, let's try to find future turkeys.

    And the biggest one is . . . privatizing Social Security. Yep, privatizing Social Security, slaughtered when George W. Bush proposed it five years ago, seems about to rear its foul head again. You'd think that the stock market's stomach-churning gyrations - two 50 percent-plus drops in just over a decade - would have shown conclusively the folly of retirees' having to bet their eating money on the market. But you'd be wrong. Stocks have been rising the past 18 months, and you can bet that we'll see a privatization push from newly elected congressmen and senators who made it a campaign issue.

  • Philadelphia Inquirer editorial: A retirement deficit that's only deepening. Social Security reductions would accelerate a crisis. By Karen Friedman. Excerpts: Before the members of President Obama's deficit commission reveal their recommendations, which they are scheduled to do this week, it should be noted that any cuts to Social Security benefits will do nothing to reduce the long-term federal deficit. By law, Social Security is self-financing and prohibited from going into debt. Social Security reductions would, however, increase another deficit: the retirement-income deficit that millions of Americans are already facing. ...

    A proposal released by the co-chairmen of the deficit commission, former White House chief of staff Erskine Bowles and former Wyoming Sen. Alan Simpson, recommends a range of substantial cuts to Social Security. Among them are cost-of-living reductions for all current and future beneficiaries, including those receiving disability and survivor benefits as well as those receiving retirement benefits. The proposal would also reduce initial benefits for future retired and disabled workers and their families, as well as the families of deceased workers. And it would increase the normal and early retirement ages to 69 and 64, respectively.

    As a result, today's retirees would see their benefits reduced as health-care costs are rising. And the commissioners' grandchildren would be living on Social Security benefits that have been decreased by as much as 36 percent. ...

    Meanwhile, true pensions - employer-paid plans that guarantee benefits - are disappearing. In 1980, two out of three American workers participated in traditional pension plans with guaranteed lifetime benefits. Now that figure is one out of five and falling. Employers are canceling such plans, rescinding promises to workers, and turning to do-it-yourself 401(k)s. ...

    It's hard to see how this situation will get better for future generations. Employers have made it clear that they don't want the responsibility of contributing to retirement plans, and do-it-yourself approaches haven't worked.

    Social Security cuts would only aggravate matters. Policymakers must work to protect and strengthen the program and to create a modern pension system on top of it, with the responsibility shared by employers, employees, and the government. We need a comprehensive retirement policy that protects future generations of retirees.

  • AlterNet: Higher Wages, Profit Sharing and Greater Flexibility Benefit All Employees -- And the Company Bottom Line Too. Costco is so certain that its policy is sound that it has kept paying better wages than rivals, even as Wall Street has pressured the company to conform to industry standards. By Joan Blades. Excerpts: As the economy slowly recovers, it's no secret that companies would like to boost productivity and profits. Many think the best way to do so is to slash costs. As an entrepreneur and business owner, though, I'd like to suggest another idea: Pay your employees more. ...

    Certainly, in tough times, higher wages, profit-sharing and training seem like optional perks. But here's the other side of the story: When you invest in people, they respond by performing well. In her rigorously researched book, Profit at the Bottom of the Ladder, Jody Heymann presents a well-documented lineup of businesses that have flourished in large part because their management practices include respecting and empowering their lowest-paid workers. Jenkins Brick, a major U.S. brick manufacturer in Alabama, credits higher wages and profit-sharing with increased productivity and quality, as well as reduced turnover and lowered accident rates. Dancing Deer, a Boston-based high-end baked goods company, opens the financial books, and makes training and stock options available to all employees because they are convinced that this gives the firm a competitive advantage. Specifically, management credits these practices with improving sales, boosting productivity and helping them attract talent. ...

    Perhaps a more well-known example is Costco. The company pays more for an entry-level position than Sam's Club (Wal-Mart's wholesale branch), gives even part-time workers at least a week's notice about their schedules and offers all employees the option of getting on the management track. Costco also makes thousands of dollars more per employee than Sam's Club, which suggests their investment pays off. Costco is so convinced that its policy is sound that it has kept paying better wages than rivals, even as Wall Street has pressured the company to conform to industry standards. ...

    Yet despite the strong evidence we have that an employee who is paid fairly and treated respectfully will significantly outperform an employee who is underpaid and ordered around like a child, too many employers are unable to resist the apparent bargain of paying less per hour or buck the traditions of an authoritarian work culture.

  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM Anonymous: (Past Employee - 2008) “IBM Too busy with profit margins to care about anything else.” Pros: Looks good on resume, if you can make it there...you can make it anywhere. Ability to learn and take your skills elsewhere. Cons: Jobs constantly being sent to India and Brazil, have to deal with a lot of broken English. Anyone close to getting a full pension gets resourced so they can pay them half of what would be due in less than five years. Contractors everywhere, getting the job done for the least amount of money, it doesn't matter who they have to step on. Advice to Senior Management: Look for creative ways to save money through better products and utilization instead of taking away what some have worked for their whole lives so yo ca make better quarterly numbers
    • IBM Customer Service Representative: (Current Employee) “Good and bad.” Pros: Size of IBM allowed for very competitive heatlth benefits packages making premiums more affordable than most other employers of smaller size. Loved the paid time off program. Can be very flexible depending on location within organization. Cons: IBM is known for layoffs. Contract workers. All about bottom dollar. Advice to Senior Management: Most managers do a great job of working to improve employee knowledge and strength within the position. other managers need to step back and not micro manage so much.
    • IBM Consultant: (Current Employee) “Could be so much better.” Pros: Supportive colleagues (everybody knows they could be the next one asked to leave.) Flexible working. Good support for people who do voluntary work. Cons: A company that really can manage its way out of a paper bag - in fact it can and does manage everything to the nth degree. But if it's leadership you want forget it. An almost infinite number of management levels. Constant throwing away of people for no good reason. Review process is a joke - this year it will not include work done in December. And distribution of rankings is decided in USA (so the results are given to fit this distribution irrespective of what people's performance merits.) Advice to Senior Management: Be honest about no longer wanting most (all?) UK staff. Instead of sitting on a huge cash mountain, put it to good use (e.g. saving some jobs and increasing salaries.) It's not just about shareholders, employees count for something too.
New on the Alliance@IBM Site
  • 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 12/01/10: This is my wish for this Holiday Season that IBM does not execute another RA before 2010 is finished. Nothing is gained by another IBM resource action (RA) in the USA.. I wish I was still an IBMer (I am an Alliance member since 1999 and was RAed back in 2009) so I could continue to support my union and get IBM to play more fairly in the USA workplace and economic recovery by not cutting, but growing, real honest USA paying IBM jobs. Sadly, I don't think Samuel Palmisano or his hand picked IBM board of directors is interested in hiring. Sam and the board are only interested in their own self interests. Hence the execution of continued USA RAs to IBMers with >5,5,10,15,20,25,30+ years of experience. I need you and others still in IBM to take up the fight to have IBM ADD real USA jobs at competitive wage, instead of outsourcing them abroad. -sby_willie-
    • Comment 12/01/10: -To Shocked.....talking about the fox in the hen house, I couldn't believe when I learned this. IBM will mark the 100th "Century" anniversary next year 2011. Sam is throwing a big ever in IBM's history lavish and expensive party for his senior executives, executive retirees, vice presidents, VIPs, outside associates and families, and about 500 IBM employees who will receive an invitation for an all expense paid trip to...the United Arab Emirates. Why in the world would IBM want it's special 100th celebration in Dubai, when it should be taking place in IBM's birthplace, of course, in Endicott, New York which is also home to IBM Alliance office. -I won't be invited- Alliance reply: Thanks for the reference, but the Alliance@IBM office is no longer in Endicott. This is interesting news though.
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Workforce Management: Number of Uninsured Adults Climbs. Thirty million adults went without coverage for more than 12 months, up from 28 million in 2008. Excerpt: More than 59 million people in the U.S. lacked insurance for at least part of 2010, up from about 56 million in 2008, according to the CDC. The number of adults who had no health insurance for at least part of the past 12 months grew by roughly 1.1 million per year, and about half were considered middle income.
  • Workforce Management: Lobbyist Warns About Potential Health Care Reform Pitfalls. Excerpts: Lobbyist Warns About Potential Health Care Reform Pitfalls Executive vice president for ACE Group Holdings Inc. says with restrictions, such as the ban on pre-existing condition exclusions, in place, healthy people in some cases would wait until they were sick to buy coverage, resulting in adverse selection and ultimately forcing insurers to significantly boost premiums, she warned.

    If the individual mandate, which takes effect in 2014, were removed and other provisions remain, such as the ban of the denial of coverage for pre-existing conditions, “it would be a disaster,” said Patricia Henry, executive vice president and deputy general counsel for commercial property and casualty insurance company ACE Group Holdings Inc. in Philadelphia.

    Delivering the keynote address Nov. 10 at the 20th World Captive Forum in Scottsdale, Arizona, Henry likened such action to allowing people to buy homeowners insurance while their house was burning down. With restrictions, such as the ban on pre-existing condition exclusions, in place, healthy people in some cases would wait until they were sick to buy coverage, resulting in adverse selection and ultimately forcing insurers to significantly boost premiums, she warned.

  • Slate: McSurance. Crap health coverage wins a regulatory victory. By Timothy Noah. Excerpts: How's this for a deal: You pay me $13.09 a week. In exchange, I will pay your medical bills, but only up to $2,000 a year. Maybe that deal makes sense if you know with absolute certainty that your medical expenses in the coming year will fall between $680.68 ($13.09 each week for 52 weeks) and $2,000. It makes no sense at all if there's the slightest chance you might end up in the hospital. True, if your hospital expenses exceed $2,000 you'll have lowered the bill by about $1,300. But $1,300 won't likely cover even the cost of an ambulance, much less anything that happens after you arrive. You'd be better off using that $13.09 to buy yourself a weekly lottery ticket.

    What I'm describing is an actual health insurance policy. Its technical name is "mini-med plan," but more commonly it goes by the term "crap health insurance." The specific plan described here is what McDonald's offers unmarried new recruits, and the Health and Human Services department just granted it a temporary waiver. McDonald's also offers slightly more generous plans at slightly higher cost: $24 per week for a policy with a $5,000 ceiling and $32 per week for a policy with a $10,000 ceiling.

    Health care reform is all about replacing such bait-and-switch schemes with real health insurance. That should indeed happen in 2014, when state health insurance exchanges start selling federally subsidized policies offering a minimum standard of coverage that will not permit (for example) putting a $2,000 ceiling on payouts.

    But it was supposed to happen sooner. Annual limits on payouts are already being phased out under the health care law; as of Sept. 23, they aren't allowed to fall below $750,000, which is a whole lot more than McDonald's' $2,000, $5,000, or $10,000. But HHS signaled it was willing to grant waivers to mini-meds. Then the mini-meds fell afoul of another pending regulation concerning the "medical-loss ratio"; i.e., how much revenue insurers spend on health benefits as opposed to overhead or dividends to stockholders. The rule requires health insurers to spend between 80 percent and 85 percent of their revenue on medical care. No can do, McDonald's told HHS in an e-mail obtained by the Wall Street Journal's Janet Adamy. The high turnover rate among McDonald's' employees, the company said, occasions lots and lots of paperwork, so we can't keep our administrative costs down relative to our payouts, which—in case you hadn't noticed—are pretty darned low to begin with. On these dubious grounds, HHS granted the mini-meds an exemption through 2011 that could easily stretch to 2014. ...

    Not even the insurance industry considers mini-med plans to constitute real health insurance. The National Association of Health Underwriters says: Mini meds are not intended to replace comprehensive coverage." Then why do employers offer them? Because, the underwriters explain (perhaps a bit too frankly), "Not providing insurance can have a dramatic impact on employee recruiting and retention." If employees don't get health insurance they'll leave. To keep them, employers like McDonald's offer ersatz insurance.

  • Wall Street Journal: Senate Widens Its Probe of Bare-Bones Health Plans. By Janet Adamy. Excerpts: A congressional committee is widening its investigation of bare-bones health-insurance policies to encompass potentially hundreds of plans offered by low-wage employers. What started as a probe into McDonald's Corp.'s insurance plan for store workers is expanding into broad scrutiny of "mini-med" policies that could ensnare large mini-med carriers including Aetna Inc. and Cigna Corp. ...

    In a hearing scheduled for Wednesday, Senate Democrats plan to detail how restaurants, pet-store outlets and hair salons are offering workers health-insurance policies with low caps on annual benefit payouts that leave workers footing the bill for care, according to the Senate aide. Lawmakers also plan to press McDonald's top human-resources executive on the chain's mini-med plan that covers nearly 30,000 restaurant workers. ...

    Democrats on the Senate Committee on Commerce, Science, and Transportation, led by Sen. Jay Rockefeller (D., W. Va.), are looking at whether mini-med plans should face tougher regulations. Committee investigators are building a case that such coverage misleads consumers into thinking they have health insurance when such policies pay out as little as $1,000 a year for hospital visits and contain loopholes. "They're junk plans," said Stephen Finan, senior director of policy at the American Cancer Society Cancer Action Network. "They have the pretense of providing coverage that is unreal. But, unfortunately, virtually all consumers of these products don't realize it until it's too late." ...

    Darren Pound, who lives in Mooresville, N.C., bought a limited-benefit plan from Cinergy Health & Life two years ago after the resort where he works dropped its health-insurance coverage. On Labor Day, Mr. Pound shattered his leg from the knee down while wake-boarding behind a speedboat. His two-week hospital stay, which included surgery and blood transfusions, ran up a tab of more than $200,000. He is checking exactly how much his insurance will cover, but he estimates "it doesn't even make a dent."

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.

  • truthOut: Tax the Rich: A Deficit Plan That Doesn't Hit We, The People. By Dave Johnson. Excerpts: Here is MY deficit-reduction plan. This plan does not reflect the views of anyone but myself -- and maybe half the population. Unlike deficit plans from the "serious people" in DC, this one doesn't annihilate the poor and gut Social Security and the middle class while passing even more of the benefits of our society up to a few at the top.
    1. Restore pre-Reagan top tax rates. We didn't have massive deficits until we reduced the top tax rates.
    2. Income is income. No more reduced capital gains tax rate. The incentive to invest should be to make a bunch of money from a good investment. The reason there is a low capital gains tax rate is that the wealthy get most of their income from capital gains. And the reason they get most of their income from capital gains is there is a low capital gains rate. The resulting income shifting schemes are a drag on the rest of us. (Also applies to dividends.)
    3. Income is income. Inheritance income should be taxed as income, except there should be a "democracy cap" on how much someone can inherit. We decided not to have an aristocracy when we founded this country so we shouldn't have one.
    4. Businesses should be taxed or not taxed, but not taxed AND not taxed. They shouldn't be able to use "double Irish" or "Dutch sandwich" or operate out of PO boxes in Bermuda or the Cayman Islands. (Bonus, this also helps reduce incentives to send our jobs and factories out of the country.)
    5. If you don't pay your taxes We, the People won't pay to provide you with services. We can start by not allowing you to have a driveway that connects to public streets, or water/sewer hookups or mail. Also we won't enforce any contracts for you, including the one that says you "own" your house(s). And no government-developed Internet for you.

      If companies like Google want to "double Irish" and "Dutch Sandwich" us or operate out of PO boxes in tax havens, we shouldn't let them use government services like courts, or the government-developed Internet. See how well they operate without access to roads (that includes for employees to get to go to work.) How about withdrawing the limited liability protection that investors in corporations receive? And of course no protection for "intellectual property" or trademarks. Oh, yeah, no access to anyone who went to a school that used tax dollars. And no government services means no sea-lane protection for your products shipping from Chinese factories, by the way.

  • New York Times editorial: The Unemployed Held Hostage, Again. Excerpts: It is hard to believe, as the holidays approach yet again amid economic hard times, but Congress looks as if it may let federal unemployment benefits lapse for the fourth time this year. Lame duck lawmakers will have only one day when they return to work on Monday to renew the expiring benefits. If they don’t, two million people will be cut off in December alone. This lack of regard for working Americans is shocking. Last summer, benefits were blocked for 51 days, as senators in both parties focused on preserving tax breaks for wealthy money managers and other affluent constituents.

    The recession that began in 2007 has led to the worst unemployment in nearly 30 years. We have record levels of long-term unemployment. The jobless rate, 9.6 percent, has been essentially unchanged since May, and nearly 42 percent of the 14.8 million jobless workers have been sidelined for six months or more. ...

    Other opponents would have you believe that the nation cannot afford to keep paying unemployment benefits: a yearlong extension would cost about $60 billion. The truth is, we cannot afford not to. The nation has never ended federal benefits when unemployment is as high as it is now, and for good reason: Without jobs, there is inadequate spending, and that means ever fewer jobs. A wide range of private and government studies show that unemployment benefits combat that vicious cycle by ensuring that families can buy the basics.

    Nor do jobless benefits bust the budget. Just the opposite. They do not add to dangerous long-term deficits because the spending is temporary. And because they support spending and jobs, they contribute powerfully to the economic growth that is vital for a healthy budget. Extending the Bush high-end tax cuts would be budget busting, because they are likely to endure, adding $700 billion to the deficit over 10 years. Tax cuts for the rich provide virtually no economic stimulus, because affluent people tend to save their bounty.

  • New York Times op-ed: Still the Best Congress Money Can Buy. By Frank Rich. Excerpts: The Great Depression ended the last comparable Gilded Age, of the 1920s, and brought about major reforms in American government and business. Not so the Great Recession. Last week, as the Fed’s new growth projections downsized hope for significant decline in the unemployment rate, the Commerce Department reported that corporate profits hit a record high. Those profits aren’t trickling down into new jobs or into higher salaries for those not in the executive suites. And the prospect of serious regulation of those at the top of the top — the financial sector — is even more of a fantasy in the new Congress than it was in its predecessor.

    Wall Street is already celebrating the approach of bonus season by partying like it’s 2007. In The Times’s account of this return to conspicuous consumption, we learned of a Morgan Stanley trader, since fired for unspecified reasons, who went to costly ends to try to hire a dwarf for a Miami bachelor party prank that would require the dwarf to be handcuffed to the bachelor. If this were a metaphor — if only! — Wall Street would be the bachelor, and America the dwarf, involuntarily chained to its master’s hedonistic revels and fiscal recklessness with no prospect for escape.

    As John Cassidy underscored in a definitive article titled “Who Needs Wall Street?” in The New Yorker last week, the financial sector has paid little for bringing the world to near-collapse or for receiving the taxpayers’ bailout that was denied to most small-enough-to-fail Americans. The sector still rakes in more than a fourth of American business profits, up from a seventh 25 years ago. And what is its contribution to America in exchange for this quarter-century of ever-more over-the-top rewards? “During a period in which American companies have created iPhones, Home Depot and Lipitor,” Cassidy writes, the industry reaping the highest profits and compensation is one that “doesn’t design, build or sell a tangible thing.” ...

    It’s an industry that can buy politicians as easily as it does dwarfs, which is why government has tilted the playing field ever more in its direction for three decades. Now corporations of all kinds can buy more of Washington than before, thanks to the Supreme Court’s Citizens United decision and to the rise of outside “nonprofit groups” that can legally front for those who prefer to donate anonymously. ...

    America needs a rally — or, better still, a leader or two or three — to restore not just honor or sanity to its citizens but governance that’s not auctioned off to the highest bidder. When it was reported just days before our election that Iran was protecting its political interests in Afghanistan’s presidential palace by giving bags of money to Hamid Karzai’s closest aide, Americans could hardly bring themselves to be outraged. At least with Karzai’s government, unlike our own, we could know for certain whose cash was in the bag.

  • New Yorker: What Good Is Wall Street? Much of what investment bankers do is socially worthless. By John Cassidy. Excerpts: A few months ago, I came across an announcement that Citigroup, the parent company of Citibank, was to be honored, along with its chief executive, Vikram Pandit, for “Advancing the Field of Asset Building in America.” This seemed akin to, say, saluting BP for services to the environment or praising Facebook for its commitment to privacy. During the past decade, Citi has become synonymous with financial misjudgment, reckless lending, and gargantuan losses: what might be termed asset denuding rather than asset building. In late 2008, the sprawling firm might well have collapsed but for a government bailout. Even today the U.S. taxpayer is Citigroup’s largest shareholder. ...

    In effect, many of the big banks have turned themselves from businesses whose profits rose and fell with the capital-raising needs of their clients into immense trading houses whose fortunes depend on their ability to exploit day-to-day movements in the markets. Because trading has become so central to their business, the big banks are forever trying to invent new financial products that they can sell but that their competitors, at least for the moment, cannot. Some recent innovations, such as tradable pollution rights and catastrophe bonds, have provided a public benefit. But it’s easy to point to other innovations that serve little purpose or that blew up and caused a lot of collateral damage, such as auction-rate securities and collateralized debt obligations. Testifying earlier this year before the Financial Crisis Inquiry Commission, Ben Bernanke, the chairman of the Federal Reserve, said that financial innovation “isn’t always a good thing,” adding that some innovations amplify risk and others are used primarily “to take unfair advantage rather than create a more efficient market.”

    Other regulators have gone further. Lord Adair Turner, the chairman of Britain’s top financial watchdog, the Financial Services Authority, has described much of what happens on Wall Street and in other financial centers as “socially useless activity”—a comment that suggests it could be eliminated without doing any damage to the economy. In a recent article titled “What Do Banks Do?,” which appeared in a collection of essays devoted to the future of finance, Turner pointed out that although certain financial activities were genuinely valuable, others generated revenues and profits without delivering anything of real worth—payments that economists refer to as rents. “It is possible for financial activity to extract rents from the real economy rather than to deliver economic value,” Turner wrote. “Financial innovation . . . may in some ways and under some circumstances foster economic value creation, but that needs to be illustrated at the level of specific effects: it cannot be asserted a priori.” ...

    Since 1980, according to the Bureau of Labor Statistics, the number of people employed in finance, broadly defined, has shot up from roughly five million to more than seven and a half million. During the same period, the profitability of the financial sector has increased greatly relative to other industries. Think of all the profits produced by businesses operating in the U.S. as a cake. Twenty-five years ago, the slice taken by financial firms was about a seventh of the whole. Last year, it was more than a quarter. (In 2006, at the peak of the boom, it was about a third.) In other words, during a period in which American companies have created iPhones, Home Depot, and Lipitor, the best place to work has been in an industry that doesn’t design, build, or sell a single tangible thing.

    From the end of the Second World War until 1980 or thereabouts, people working in finance earned about the same, on average and taking account of their qualifications, as people in other industries. By 2006, wages in the financial sector were about sixty per cent higher than wages elsewhere. And in the richest segment of the financial industry—on Wall Street, that is—compensation has gone up even more dramatically. Last year, while many people were facing pay freezes or worse, the average pay of employees at Goldman Sachs, Morgan Stanley, and JPMorgan Chase’s investment bank jumped twenty-seven per cent, to more than three hundred and forty thousand dollars. This figure includes modestly paid workers at reception desks and in mail rooms, and it thus understates what senior bankers earn. At Goldman, it has been reported, nearly a thousand employees received bonuses of at least a million dollars in 2009.

    Not surprisingly, Wall Street has become the preferred destination for the bright young people who used to want to start up their own companies, work for NASA, or join the Peace Corps. At Harvard this spring, about a third of the seniors with secure jobs were heading to work in finance. Ben Friedman, a professor of economics at Harvard, recently wrote an article lamenting “the direction of such a large fraction of our most-skilled, best-educated, and most highly motivated young citizens to the financial sector.”

  • Wall Street Journal: Emerging From the Shadow. Canada's strong economic performance has given it a long-sought place in the global spotlight. Now the question it faces: what to do with its new power. By Phred Dvorak. Excerpts: The country has pulled through the downturn in better shape than most of its peers, with the healthiest banking system and strongest economic recovery in the Group of Seven wealthy nations. And that solid performance is fueling a growing assertiveness in a country often known for its reserve. ...

    Canada's six big banks escaped the financial crisis nearly unscathed due to a mix of strict regulation and conservative banking and borrowing practices. They faced fewer defaults and had less in loan losses than did lenders in the U.S. or Europe. Some have posted record profits during the past few quarters, even as peers south of the border struggle. "Canada is attaining the rewards of fiscal responsibility," says Frank McKenna, a former Canadian ambassador to the U.S. who's now deputy chairman at Toronto-Dominion Bank. "The U.S. is paying a price for profligacy."

    Canadian leaders are working hard to parlay that national prudence into international clout. Prime Minister Harper and his cabinet ministers are talking up the country's banking prowess abroad, arguing that Canada's track record ought to give it a greater say in matters of global financial regulation. Earlier in the year, Canadian politicians led a fight against the idea of setting global standards for taxing lenders to stockpile funds in advance of a crisis, arguing that well-regulated banks don't need such a system to keep them out of trouble. Canada's resistance torpedoed the idea, and Canadian officials are lobbying for an alternative proposal, in which banks hold securities that can be converted to extra capital in a pinch.

  • The Guardian (United Kingdom): America's new poor: the end of the middle-class dream. The ideology that drove millions of people into expensive lifestyles on low pay and easy credit is bust. But who will tell them? By Paul Mason. Excerpts: Yet America's middle class is disappearing. A lifestyle sustained for 30 years by rising debt is dissolving as the credit dries up. And the question beyond the crisis is: can it ever come back?

    Figures released last month by the US Census Bureau show it will be hard. Middle incomes are lower, in real terms, than in 1999. The median income, stagnate for a decade, fell by 4.2% once the crisis hit. Since December 2007 more than six million Americans have been pushed below the official poverty line. ...

    In the midterm elections politicians have promised to "do something" for the middle class. The kindest thing they could do is tell the truth: Americans have been living a middle-class lifestyle on working-class wages – and bridging the gap with credit. And it's over.

  • International Business Times (United Kingdom): 'American Dream' withers as tent cities mushroom in promised land. By Jijo Jacob. Excerpts: The nation that once gloated over its ability to feed the entire world is seeing an explosion of poverty: The number of people surviving on food stamps is rising as biting unemployment refuses to abate, personal incomes have been falling while the debt bubble is inflating with each passing day and, in a more startling representation of the grim reality, tent cities are mushrooming as more and more people are pushed out of their ‘underwater’ homes. ...

    And the whole misery is not just a product of the recession which followed the credit crunch, experts say. The root of the troubles goes a long way back indeed, starting from the waning of the nation's industrial might, the closing down of factories and the slow and steady disintegration of the American middle class which started over a generation ago.

    "The United States has lost approximately 42,400 factories since 2001. The greatest economic machine in the history of the world is literally having its guts ripped out, and most of you kept voting in jokers who supported all of this deindustrialization," writes Snyder.

    As American wealth flows to those trade surplus economies every month, efforts to boost domestic jobs are failing flat out. As many 1.41 million Americans filed for personal bankruptcy in 2009, a 32 percent increase over 2008. And the number of homes taken over by banks touched a new record in September when it crossed the 100,000 mark for the first time. The number of homeless people is rising at a staggering pace. ...

    Studies have shown that the fabled American middle class has been shrinking for a long time, and the annual incomes of the bottom 90 per cent of the U.S. households have been essentially flat since 1973 – having risen by only 10 per cent in real terms over the past 37 years. Meanwhile, the income of the top one percent has tripled. "From foreclosures to unemployment to household debt to bankruptcies, the American middle class is under assault -- and America is in danger of becoming a Third World nation," Arianna Huffington wrote in Huffington Post in August.

  • Daily Mail (United Kingdom): America starves as executive pay rockets: 50 million people go hungry while Wall Street fatcats take home millions. By Daniel Bates. Excerpts: A record one in six American families went hungry last year because they did not have enough food, a shock survey has revealed. Some 17.4million U.S. households - 50 million people - were classified as ‘food insecure’ which meant they regularly skipped meals even if they wanted to eat. Others went for entire days without eating and handed round smaller portion sizes to make their meagre offerings suffice.

    The news comes as it is revealed that top U.S. executives saw their pay and bonuses shoot up last year in the face of the worst recession for 80 years. The highest paid bosses received an average of $1.6 million (£1 million) as a bonus on top of their basic remuneration, an increase of 11 per cent.

  • The Guardian (United Kingdom): US Congress aka the millionaires' club No wonder the DC political class has a bad name – it's filthy rich. Here's a revolutionary idea: why not elect some poor people? By Paul Harris. Excerpts: It is one of the great moans of vast numbers of American voters: Washington politicians are just not like them. They are different. They are a breed apart, unable to understand what real life is like for tens of millions of ordinary folks. Well, now an excellent report has emerged to point out one important way America's nationally elected politicians are, indeed, very different from the recession-plagued and foreclosure-fearing masses. Most of them are rich. Often, very, very rich. According to the survey, by the Centre for Responsive Politics, almost half of America's senators and members of the House of Representatives are millionaires. A full 261 one of them, in fact. Meanwhile, a mere 1% of the rest of Americans can claim such exalted status.

    That is a staggering and crucial difference between America's elected leaders and the people who put them there – and in some cases, "millionaire' does even get near describing it. A startling 55 of the congressional plutocrats are worth more than $10m (and the database the CRP used does not even include the value of their homes). The richest is Californian congressman Darrell Issa, whose wealth lurks somewhere around $250m. ...

    No wonder America's body politic can seem to be a little slow when it comes to reflecting the day-to-day concerns of many Americans. No wonder it is currently obsessed with working out a way to keep President George W Bush's tax cuts for the rich in place. No wonder it is seemingly willing to let slide vital unemployment benefits for millions of Americans who are now entering the ranks of the long-term jobless. No wonder it is keen to bail out the financial industry and keep bankers cashing their bonus cheques, even as it shrugs its shoulders at creating jobs for those outside the vaulted halls of the finance industry.

  • The Telegraph (United Kingdom): America: the least generous unemployment system in the world. By Edmund Conway.
  • Der Spiegel (Germany): A Superpower in Decline. Is the American Dream Over? Excerpts: The unemployment rate in the United States is at about 10 percent. But when the people who have stopped looking for work and are not registered anywhere are included, the real number is likely to be closer to 20 percent. For the first time since the Great Depression, Americans have a problem with long-term unemployment. ...

    In a country with a limited concept of social cohesion, laughable from a European perspective, the quiet demise could have unforeseen consequences. How strong is the cement holding together a society that manically declares any social thinking to be socialist? The US economy lost almost 100,000 jobs in September. Is this Obama's fault? ...

    The United States of 2010 is a country that has become paralyzed and inhibited by allowing itself to be distracted by things that are, in reality, not a threat: homosexuality, Mexicans, Democratic Majority Leader Nancy Pelosi, health care reform and Obama. Large segments of the country are not even talking about the issues that are serious and complex, like debt, unemployment and serious educational deficits. Is it because this is all too threatening?

    Gridlock as the American Status Quo. It has become a country of plain solutions. People with college degrees are suspect and intelligence has become a blemish. Manfred Henningsen, a German political scientist who teaches in Honolulu, Hawaii, calls it "political and economic paralysis." One reason for the crisis, says Henningsen, is that the American dream, both individual and national, has in fact always been a fiction. "This society was never stable. It was always socially underdeveloped, and anyone who talks about the good old days today is forgetting the injustices of racist America."

    Agitators like Glenn Beck are "nationalist, racist and proto-fascist," says Henningsen. "They take advantage of the economic situation, almost the way the right-wing intelligentsia did back in the Weimar Republic." Gridlock has become the modern America status quo, and the condition Henningsen calls "institutional idiocy" is especially obvious in the country's most important legislative body, the Senate, which has come to resemble a royal court where nothing has happened in centuries.

  • UK Progressive (United Kingdom): Why the Lame Duck Congress Must Extend Jobless Benefits For Hard-hit Families But Not Tax Cuts For the Rich. By Robert Reich. Excerpts: The long-term unemployed can’t get work because there are still five people needing work for every job opening. And the long-term jobless are often at the end of the job line: Either they don’t have the right skills or enough eduction, or have been out of work so long prospective employers are nervous about hiring them. They’re also a big problem for the economy. Without enough money in their pockets, they and their families can’t pay their mortgages, which keeps fueling the mortgage crisis. Nor can they replace worn-out cars and clothing, or buy much of anything else, which is a drag on the economy. ...

    Extending the Bush tax cuts for the top 1 percent would cost an estimated $120 billion over the next two years. That’s more than another unemployment benefit extension would cost. The unemployed need the money. The rich don’t.

    Moreover, the top 1 percent spends a small fraction of their income. That’s what it means to be rich — you already have most of what you want. So extending the Bush tax cut to them won’t stimulate the economy.

    Yet people without jobs, and their families, are likely to spend every penny of unemployment benefits they receive. That will go back into the economy and save or create jobs.

    A Labor Department report shows that for every $1 spent on unemployment insurance, $2 are spent in the economy. If you don’t believe the Labor Department, maybe you’ll believe Goldman Sachs analyst Alec Phillips, who estimates that if unemployment benefits are allowed to expire, the American economy would slow by a half a percent. ...

    Republicans are still spouting nutty Social Darwinism. Cutting taxes on the rich is better than helping the unemployed, they say, because the rich will create jobs with their extra money while giving money to the unemployed reduces their desire to look for work. Rubbish. The Bush tax cuts on the top never trickled down. Between 2002 and 2007 the median wage dropped, adjusted for inflation. And job growth was pathetic. ...

    Besides, the economic downturn was hardly their (the unemployed) fault. If anyone is to blame it’s the high-flyers on Wall Street who gambled away other people’s money, and the rich denizens of corporate executive suites who have sliced payrolls in order to show higher profits (and get more money from their stock options). So why reward the people at the top with an extension of the Bush tax cut that will blow a hole in the budget deficit? And why fail to extend jobless benefits to hardworking Americans who got the boot?

  • AlterNet: With Wealth Highly Skewed Toward the Top, US Ranks 12th in New Measure of Human Development. We have more inequality today than we had back in 1990, the year the UN Human Development Index first appeared. Excerpts: Twenty years ago, in 1990, the United Nations began publishing an annual Human Development Report. The economists behind this new initiative -- India’s Nobel Prize-winning Amaryta Sen among them -- clearly saw themselves as scholarly subversives. They were openly challenging economic orthodoxy and that orthodoxy’s ultimate yardstick and holy grail, the “Gross National Product.”

    To register social progress, economic orthodoxy held back then, nations needed to simply hike their “GNP,” their sum total of economic goods and services. But real human development, Sen and his colleagues countered, involves much more than economic growth. Real progress, their first Human Development Report in 1990 emphasized, encompasses “the freedom to be healthy, to be educated, and to enjoy a decent standard of living.” ...

    In nations that distribute health, education, and income in a dramatically unequal fashion, this new index recognizes, the national “average” for health, education, and income will tell us precious little about how a nation’s “average” person experiences health, education, and income.

  • michaelmoore.com: Recipe for Riots: Take Cruel Republicans and Wall Street Democrats, Add the Worst Economy in Eighty Years, and Stir. By Michael Moore. Excerpts: Imagine if the U.S. Post Office had just shut down, leaving its almost 800,000 employees without a paycheck. And then imagine Wal-Mart was planning to lay off two-thirds of its workers -- or 1.2 million people -- by Christmas. What would they do? And what would two million more people with no income do to a U.S. economy that was teetering on the edge as it is?

    Well, you don't have to imagine, because that's the situation we're in as of midnight last night. Congress has failed to appropriate money for emergency unemployment benefits for 800,000 Americans. And another 1.2 million people will be in the same boat by the end of December. They'll have no income in the worst economy since the Great Depression -- and with no sign of hope on the horizon.

    (Note that these are NOT the "99ers" -- those who've exhausted 99 weeks of unemployment benefits. There are approximately 3.5 million 99ers. The two million who're now falling through the safety net with them have been unemployed for fewer than 99 weeks, but Congress has refused to appropriate the funding for their benefits.)

    You don't care, you say? You have a job and don't want to hear about these millions of people who suddenly suffered from a mass attack of laziness starting in late 2008? Well, care about this: without these two million spending their unemployment checks, up to another million people will likely lose their jobs, with the total effect stomping on whatever little momentum the economy has. You might be getting a sudden attack of laziness soon yourself.

  • Seattle Post-Intelligencer: Protecting the rich, afflicting the jobless. By Joel Connelly. Excerpts: A Labor Department report, done while President Bush was in office, found that unemployment benefits during the most recent recession preserved 1.6 million jobs per quarter, lowered the unemployment rate by 1.2 percent, and reduced the decline of the gross national product. Alas, in recent years, government policy has allowed the very rich to reap a gold mine in benefits. The middle class and working poor have gotten the shaft. In recent months, Congress has terminated a subsidy that helped unemployed workers pay for health insurance, and ended an extra weekly $25 in benefits added by the stimulus bill. ...

    An extension of the Bush tax cut would jack up the federal deficit $700 billion or so over the next decade. But it would immediately put an additional $1.3 million into the pocket of media mogul (and Fox News boss) Rupert Murdoch, and mean $700,000 for Massey Energy CEO Don Blankenship, in whose West Virginia coal shaft 29 miners perished earlier this year.

    Candidly, these guys can get by: Rupert Murdoch spent $45 million to acquire Laurence Rockefeller's Manhattan digs a few Christmases ago. The jobless work on next month's rent. Why should the latter be held hostage for the benefit of the former? America is, after all, experiencing the worst unemployment levels in three decades. ...

    We're not talking about "rewarding" the indolent, or soaking the rich. But is it asking to much that they shower regularly? The Reagan Administration's budget director, supply-sider David Stockman, gave his answer Monday. The deficit-plagued country needs to put "a higher burden on the upper income," he said.

  • The Huffington Post: Abdicating to the Right: The Ascendant American Aristocracy. By Kathleen Reardon. Excerpts: Income inequality is about to get worse, according to David Segal's article in Sunday's New York Times. Those of us not in the beneficiary column, the article suggests, had better start thinking of which "artisanal services" we can provide. In short, we need to identify what the rich need and start making those widgets tout de suite.

    Paraphrasing Professor Caplin of NYU, Segal wrote:

    "While it's noble to focus on how to spread wealth around, it might be wiser to think of ways the poor and middle class could cater to the economy's biggest winners."
  • Wall Street Journal: SAC’s Steve Cohen Drops $300,000 On Art in 5 Minutes. By Shira Ovide. Excerpts: Sure, SAC Capital might be roped into the government’s massive insider-trading investigation, but that didn’t stop the hedge fund’s honcho, Steve Cohen, from plunking down hundreds of thousands of dollars on art. As Deal Journal colleague Erica Orden reported from Miami Beach (poor girl), Cohen was “in jovial spirits and eager to chat about his fresh art acquisitions,” as he scoured the booths at Art Basel, the lavish art fair.

    Within 5 minutes of the art fair’s VIP preview, Cohen — dressed in sneakers and a Brown University baseball cap (Go Bears!) — had snagged a world map made of tin cans for about $300,000. He also forked over $180,000 for Tim Hawkinson’s “Bike,” a work of collaged inkjet prints, Orden reported.

  • New York Times op-ed: Freezing Out Hope. By Paul Krugman. Excerpts: So freezing federal pay is cynical deficit-reduction theater. It’s a (literally) cheap trick that only sounds impressive to people who don’t know anything about budget realities. The actual savings, about $5 billion over two years, are chump change given the scale of the deficit.

    Meanwhile, there’s a real deficit issue on the table: whether tax cuts for the wealthy will, as Republicans demand, be extended. Just as a reminder, over the next 75 years the cost of making those tax cuts permanent would be roughly equal to the entire expected financial shortfall of Social Security. Mr. Obama’s pay ploy might, just might, have been justified if he had used the announcement of a freeze as an occasion to take a strong stand against Republican demands — to declare that at a time when deficits are an important issue, tax breaks for the wealthiest aren’t acceptable.

    But he didn’t. Instead, he apparently intended the pay freeze announcement as a peace gesture to Republicans the day before a bipartisan summit. At that meeting, Mr. Obama, who has faced two years of complete scorched-earth opposition, declared that he had failed to reach out sufficiently to his implacable enemies. He did not, as far as anyone knows, wear a sign on his back saying “Kick me,” although he might as well have.

    There were no comparable gestures from the other side. Instead, Senate Republicans declared that none of the rest of the legislation on the table — legislation that includes such things as a strategic arms treaty that’s vital to national security — would be acted on until the tax-cut issue was resolved, presumably on their terms. ...

    Whatever is going on inside the White House, from the outside it looks like moral collapse — a complete failure of purpose and loss of direction.

  • Denver Post: Duck! Here comes extension of Bush-era tax cuts. By Mike Littwin. Excerpts: he Democrats are close to losing on what seems like an unlosable issue — doing away with tax cuts on family income above $250,000 a year and keeping the cuts in place for all income under $250,000. Let me recount the Democratic plan for you: Nearly all Americans would keep their tax cuts — in order to address the stagnating income of the middle class, to give those people who actually need the money the chance to help spend our way out of the bad economy and, of course, to pander to the great majority of American voters.

    And the upper 2 to 3 percent of earners, meanwhile, would have to go back to Clinton-era rates — when the economy, if I recall, was working pretty well for them.

    You have to understand, we're talking about marginal tax rates. The taxes don't change until you hit $250,000. If you make, say, $300,000 — and don't you wish? — your taxes go up 3 percent on the $50,000 above $250,000. If you can't do the math — and I'm guessing you can — you can afford to hire an accountant who will do it for you. ...

    In this case, Republicans have one argument. They insist that without the top-earner tax cut, small businesses will be hurt and won't hire. This argument might be more persuasive if, in fact, there had been any real job creation during the life of these tax cuts. Or as Warren Buffett, who opposes keeping tax breaks for people like him, said on CNN: "That has not worked the last 10 years, and I hope the American public is catching on."

  • McClatchy Newspapers: GOP howls after House extends tax cuts for middle class only. By David Lightman. Excerpts: he House of Representatives voted Thursday 234-188 for a tax cut for the middle class and the poor — but not the very rich — a vote meant mostly as a political statement to give Democrats talking points back home. The plan, which would extend George W. Bush-era tax cuts for individuals earning less than $200,000 annually and couples making less than $250,000, is going nowhere in the Senate. A temporary extension of all the cuts for every income class is considered more likely to win enactment by the end of this month; otherwise they expire Dec. 31.

    Republicans were furious that the House Democrats staged the vote. "I'm trying to catch my breath so I don't refer to this maneuver going on today as chicken crap, all right?" said House Republican leader John Boehner of Ohio, who will become speaker of the House next month. "But this is nonsense. All right? The election was one month ago. We're 23 months from the next election and the political games have already started, trying to set up the next election."

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