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Highlights—December 11, 2010

  • InformationWeek: IBM Workers To Receive Federal Aid. DOL says Big Blue services employees who lost jobs to offshoring can receive benefits under the Trade Adjustment Assistance program. By Paul McDougall. Excerpts: Workers laid off from IBM's operations on behalf of The Hartford insurance company in Connecticut are eligible to receive benefits under the government's Trade Adjustment Assistance program, according to a notice published Monday in the Federal Register. Under the program, the workers can get government subsidized training for new jobs, income supplements, healthcare tax credits, and other benefits.

    The Hartford began paring down its IT staff after outsourcing a number of tech and back office jobs to IBM in 2007. 110 IT staffers were initially let go, and IBM subsequently laid off a number of former Hartford workers that were transferred to Big Blue under the outsourcing deal as the company moved a number of the positions offshore.

  • InformationWeek: IBM Workers Could Lose Outsourcing Protection. Many ex-IBMers are counting on a federal program to make it through tough times—but trade adjustment benefits for tech services workers are set to expire. By Paul McDougall. Excerpts: As IBM shifts more of its production offshore, an increasing number of its former employees have turned to a federal program that provides benefits to workers displaced by foreign competition for job training support and income assistance. But their eligibility for such help could be short lived. IT and other services workers were added to the Department of Labor's Trade Adjustment Assistance program under the 2009 stimulus bill, which is set to expire Dec. 31. With Congress pre-occupied with the Bush tax cuts and other issues, many fear the program will lapse.

    Under TAA, workers who've lost their jobs due to offshoring can get government subsidized training for new occupations, income supplements, healthcare tax credits, and other benefits.

    Workers laid off from IBM facilities in Plano, Texas, and Oklahoma City filed for TAA assistance last month, according to a notice published Wednesday in the Federal Register. That follows a notice on Monday that said former workers on IBM's Hartford Financial Services contract have been declared eligible for TAA help. An IBM spokesman declined to provide details on the job cuts at those locations.

    IBM workers and contractors laid off from operations in Armonk, NY, Cambridge, Mass., Columbia, S.C., Research Triangle Park, NC, Cambridge, Mass, Piscataway, NJ, and other locations have also have been deemed eligible for TAA assistance in the past year, according to federal records. IBM reduced its U.S. workforce from 115,000 to 105,000 between 2008 and 2009, according to the IBM employee group Alliance@IBM. IBM employed 134,000 U.S. workers as recently as 2005.

    Many IT vendors, from HP to Microsoft, have moved some work to foreign locations, but IBM clearly has made offshoring part of its corporate DNA. At one point, it even tried to patent the process.

  • Pittsburgh Post-Gazette: Highmark moves ahead on outsourcing. Employees observed to see which jobs can go. By Bill Toland. Excerpts: Highmark Inc. has asked some of its employees to be observed this week by outsourcing specialists who will determine which of their job responsibilities can, and will, be sent overseas in the coming year. Downtown-based Highmark, the state's largest health insurer, has been internally debating which of its back office, enrollment and tech positions to outsource since 2009. Earlier this year, the company began off-shoring some technology work to India through an overseas work center run by Houston-based Accenture.

    This new round of outsourcing talks involves IBM, the American tech and computer company. It has an outsourcing subsidiary in India, called IBM India, as well as its newly re-branded international business outsourcing unit, IBM Global Process Services.

    According to Highmark employees, the IBM scouts are, at least for now, tailing "business operations" workers whose jobs involve enrollment and membership responsibilities, among others. (When a new customer signs up for a policy, for example, the particulars of that policy must be keyed into a computer database.) ...

    One Highmark employee, who declined to be identified in this story for fear of losing her job, said employees at the company's Downtown headquarters were rattled. "I am so worked up at my desk. I was sitting up there crying," she said. She also said some employees considered it insulting that they were being observed by representatives of the very company that will be asked to replace some of their job functions. "We were all appalled," she said. "That's like adding insult to injury." ...

    IBM also sent consultants to Highmark's West Virginia affiliate, Mountain State Blue Cross Blue Shield, on a similar scouting mission. County commissioners in Parkersburg, W.Va., sent a letter to Highmark, asking it to reconsider outsourcing West Virginia jobs to India, according to the Parkersburg News and Sentinel.

  • Yahoo! IBM Pension and Retirement Issues message board: "IBM Medicare Choices" by "marmorco84". Full excerpt: I started a blog in 2009 regarding IBM's Medicare choices. Hope it is helpful for those of you on medicare: ibmmedicare.blogspot.com
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: FHA package from NC anybody?" by "mel_zimowski". Excerpt: I also live in Northern California. You are correct about the cost of Kaiser coverage, but did you also notice that the coverage has changed? The copay for seeing a specialist is now $30 rather than $20, the cost for prescription drugs has increased by $5, the cost for home delivery of generic prescription drugs has tripled (from $10 to $30), the copay for outpatient surgery has increased from $20 to $100. There are other differences as well, but these are the ones that will affect me the most.
  • When Fridays Were Fridays: The End of An Era – Mourning the Loss of the IBM Country Club. By Collette Martin. Excerpts: A letter arrived in the mail a couple of weeks ago, notifying us that the Casperkill Recreation Center in New York’s Hudson Valley would be closing its doors at the end of this year. The Poughkeepsie Journal also reported the closing triggering a flood of nostalgic memories.

    You see, before it was the Casperkill Recreation Center, it was the IBM Country Club. In the sixties, seventies, and eighties, IBM prided itself on being family-oriented. The company held annual family outing days, provided Christmas gifts and holiday parties for children of employees, and provided a recreation facility for families to gather and spend their summer days. IBM employees in the Hudson Valley were automatically members of the IBM Country Club. This was a class-blind facility, not just for managers and executives. Every employee and their family members could use the facilities, free of charge. ...

    The IBM Country Club was a benefit that most of us took for granted as employees, and some may not have appreciated it until it was taken away. Over the years, changes were made to make the club more self-sustaining. First, employees were asked to contribute to their annual membership; this started as a modest fee (I recall less than $10 per year) that jumped to a couple hundred dollars per year over time. But IBM couldn’t afford to keep the facility.

  • LinkedIn's The Greater IBM Connection: I actually miss working at IBM. Selected postings follow:
    • I left at my own discretion after 30+ years. I miss the people who struggled around a merger or acquisition they had to support with no tools and their management running and hiding leaving us on the front lines to "Take the pain". Sorry I could not be more positive but I am glad I have left such a controlled environment where you couldn't have an opportunity to make a suggestion because you were then "changing the process" especially when it resulted as an advantage for the customer and the IBM'er.
    • When I left IBM in early 1992 the company was falling apart and I did not give a dime for it. But after all these years I am still in touch with many old coworkers from manufacturing, marketing and sales. And even my old managers. When I talk to younger IBM'ers they are always surprised as they can't imagine to have such long relationships with their current colleagues. Seems like old IBM was a different company. And some days I think I miss it a little...
  • Knowledge@Wharton: The 'Silver Tsunami': Why Older Workers Offer Better Value Than Younger Ones.
  • Glassdoor IBM reviews. Selected reviews follow:
    • “If IBM acquires your company, get out now!!!” Pros: Can work from home; 6% match on 401(k); probably a great place for someone just out of college who wants to learn a lot and put a lot on their resume, and who doesn't know any better. Cons: In return for "work/life balance" (i.e.,the option to work from home), they expect you to do the job of 3 people; nearly impossible to get merit raises; local IT help nearly non-existent - you have to set up everything yourself when you get your laptop, and it can take days; one-size-fits-all processes that don't work; ridiculous demands and deadlines; massive layoffs in acquired companies after a year or two, with replacements hired overseas; the company is incredibly cheap and very paranoid. Advice to Senior Management: "Work/life balance" is a joke. Your mantra, "Dedication to every client's success" is also a joke, as you constantly lay off experienced people (from acquisitions) who know the products and replace them either with people who have skills but know nothing about the products or with college interns. Customers are getting far less and far lower quality support than they did before we were acquired by IBM.
    • IBM Anonymous in Toronto, ON (Canada): (Current Employee) “Great respect as an IBM employee in the eyes of others. And that's where it all ends...” Pros - Great to have on your resume. - Work from home option. - Treated as an adult (without managers looking over your shoulder). - Benefits are above average. Cons - Jobs are outsourced, and outsourced employees are not held accountable. - Too much red tape which does not allow for any innovation. - Putting in extra hours is expected of each employee as departments are always understaffed and employees are expected to pick up the work load. - Almost impossible to get things done as everyone hides behind policies! - Perks do not really exists unless you're in sales, promises of salary alignments to market value etc never usual show up. - Work life balance, that term doesn't exist. Advice to Senior Management: When I joined IBM I was all excited to be part of the team. However, my feeling after the years of employment is that management feels that employees are cheap labour to be found anywhere. Also make sure employees feel like they have a future with the company. It seems my next job role will be which ever department needs help with because my "Band" is not good enough for positions in IBM! (Ironically I've been interviewing externally for similar or the same positions with success).
    • IBM Senior Managing Consultant: (Current Employee) “IBM is a Career Killer.” Pros: Plenty of resources (if there' money in the budget.) Decent name in industry, ok for resume. Cons: TONS of frustrated employees. Old boy network still exists. Layoffs every year (while Sam tells Obama he's keeping jobs in US.) Promotions few and far between. Poor management, really poor. Just a real career killer. Serious unethical practices. Advice to Senior Management: Get rid of middle management and take better care of the employees that make this company run. Also, take a pay cut and give the difference to the employees who don't see any raises or bonuses.
    • IBM IT Architect in Miami, FL: (Past Employee - 2008) “See The World and Learn How The Big Boys Do It.” Pros: Access to cutting edge technologies, process and development methodologies as well as Fortune 50 clients. Personal and professional growth. Open communication channels. Cons: Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel Travel. Advice to Senior Management: To retain top talent you must 1) motivate your resources 2) challenge your resources 3) compensate and recognize your resources accordingly
    • IBM Anonymous: (Current Employee) “You have to weigh the Pros and Cons.” Pros: Work/Life Balance really is taken seriously. Education opportunities are good. Huge company with many different things to do - lots of variety in where you want to take your career. Cons: Salaries are barely competitive - increases are minimal and bonuses are very small - expense controls are tight - all the money is being given to shareholders (expense controls boosting profits, share buybacks) in an effort to raise the stock price. After a certain point there is not much opportunity. There are very, very, very few positions available above a first line manager. You can move around a lot as an "individual contributor" but it's very tough to move up beyond that. Advice to Senior Management You can't keep leaning on your people to deliver market growth, there has to be some sense of satisfaction by employees that their success is being rewarded.
    • IBM Solution Architect: (Past Employee - 2009) “For a company as large as they are, it really felt like very limited opportunities.” Pros: technology exposure world class operations. Cons: lots of off shoring of US based jobs, short term profitability for wall street performance. Client service was risked with transitioning skills from US based to off shore. Educational funds were stopped even though certification was nearing completion.
    • IBM IT Specialist in Paris (France): (Current Employee) “Trying to push Innovation inside IBM.” Pros: There were a lot of good reasons to join IBM in the past. Nowadays, it is limited and senior management is selecting managers not for their experience and originality, but to look similar to them, reducing opportunities for innovative people. The long-term performance seems to be guaranteed though. Cons: Lack of innovation, weakness of middle management, syndrome of "not invented here", too much US-centric despite its globally integrated enterprise strategy. Jobs in emerging countries are booming while decreasing in the US/Europe. Advice to Senior Management Driving innovation without accepting criticism is never going to make it. Manager selection process is not reflecting the IBM value about innovation. The higher managers go, the less they listen to employees and the more they use authority.
    • IBM Senior SAP Consultant: (Current Employee) “Good for Lateral entry.” Pros: Good opportunities in terms of work. Work Life balance is superior. Facilities are quite good. IBM is best for lateral entries. Cons: Poor Management. Low Appraisal. No Promotions. No Career Growth. Never look for employees. No Appreciations. Very bad payouts. HR is worst. Advice to Senior Management: Change the HR Policies and look into your employees. Look for employee satisfaction after all employee is the key in IBM. Look for employee benefits and Pay.
    • IBM IT Specialist: (Current Employee) “Expect Nothing, you wont be disappointed.” Pros: Fellow professionals are great. 1st line managers are good people. Opportunity to do interesting work. Cons: 1st line managers are not really managers, they are spreadsheet jockeys and have zero authority. The real managers lurk in the USA, and senior managers in the UK hide underneath the aprons of their US masters. As an experienced hire they will give you a decent starting salary, but within 2 years you will be underpaid. Advice to Senior Management: Wake up and smell the tea! Be men (or woman) and stand up for the UK. Stop kowtowing to the US!
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 12/06/10: Interesting tidbit about the assumed "older workers on the old pension plan get out or get converted"... Heard this from a well informed person (even tho I'm ex-IBM, I still have some good friends on the inside) that IBM backed off this plan primarily (solely?) because when they looked at the targets, they saw that doing this would crater GTS because of the massive number of "older" workers there and would kill the GTS business. So you want a powerful group to help form the core of a union IBM would pay attention to? Focus on getting GTS workers signed up! To: I Won't Be Invited - 500 employees along with the other luminaries to be invited? So in other words, it's a full US workforce party then :-/ Sorry, just HAD to get that in... -RAed Jan 09-
    • Comment 12/07/10: Palmisano has cut thousands of jobs yet the Republicans and some turn coat Democrats want to give him and other wealthy CEO's a tax cut because they are the job creators? In India maybe. Working people sold down the river again. -hadit-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
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  • Wall Street Journal: Republicans Block 9/11 Health-Care Bill. By Devlin Barrett. Excerpts: Long-stalled legislation to provide health care for sick Ground Zero workers failed a key test vote in the Senate Thursday, as Republicans remained united in opposition to the measure until after the passage of a massive tax-cut package. The vote was 57-42, short of the 60 votes in favor needed to proceed under Senate rules. Prior to the vote, Democratic Sen. Charles Schumer sought the two Republicans votes needed to win passage. “I beg, I plead, I implore two brave colleagues from the other side to join us. Put aside the political considerations,” Schumer said. ...

    After the Sept. 11, 2001 terror attacks, a government-backed compensation fund provided nearly $6 billion for those injured or killed. But eligibility for that program ended in 2003, before many of the illnesses developed that advocates now say were caused by exposure to the toxic World Trade Center dust and debris. The most recent death blamed on Ground Zero exposure was retired NYPD detective Kevin Czartoryski, 46, who died last week after a battle with lung disease.

  • USA Today: Executives keep health perks while workers' benefits are cut. By Gary Strauss. Excerpts: Though millions of workers face rising health insurance costs and dwindling benefits in 2011, many CEOs will retain employer-paid medical plans and health benefits worth thousands of dollars. Hundreds of top corporate managers get medical benefits and supplemental coverage far beyond what's offered to rank-and-file employees. Benefits include "executive" physicals and reimbursements for out-of-pocket costs, deductibles and co-payments, according to corporate filings.

    "The great hypocrisy is this is going to the people best able to pay for this stuff," says Nell Minow of The Corporate Library. "Executives should pay for this on their own or be covered by the same plan as everyone else at the company."

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: A Modest Proposal to Transition to a "Cater to the Rich" Economy. By Dan DiMaggio. Excerpts: In an article in The New York Times titled "Some Very Creative Economic Fix-Its," New York University economics professor Andrew Caplin calls for workers to put their stakes in a "cater to the rich" economy.(1) According to Caplin, growing inequality is a fact of life in the future of the US and global economy - "some people will succeed and others will not." Rather than judging this to be bad or good, the poor and middle class would do best by trying to "understand the needs" of the wealthy and attempting to provide services to meet their demands.

    Rand Paul recently expressed a similar sentiment in the immediate aftermath of his Senate victory. "We're all interconnected in this economy," he told CNN's Wolf Blitzer. "There are no rich, there are no middle class, there are no poor. We all either work for rich people or sell stuff to rich people." For Paul, the "cater to the rich" economy is already here. The key now is to expand it, starting with extending tax cuts for the wealthiest to spur their spending and investment and create more jobs.

  • Wall Street Journal: Fed Emails Are Sought. By Maya Jackson Randall. Excerpts: Sen. Bernie Sanders (I., Vt.) has a slew of questions for Federal Reserve Chairman Ben Bernanke in the wake of new emergency-lending data the central bank released last week. In a letter Monday to Mr. Bernanke, the senator who played a leading role in getting the Fed to unveil the loan data is demanding access to more information—including certain Fed officials' emails and phone logs as well as new details on the securities banks pledged in exchange for cheap loans. Mr. Sanders asked about potential conflicts of interest between bank executives and Fed officials, and he asked the Fed to explain its rationale for lending to foreign banks.

    He also wants to know exactly how much money the Fed lent to millionaires and billionaires during the financial crisis. He specifically asked for information on loans given to businessman H. Wayne Huizenga, billionaire hedge-fund manager John Paulson, Dell Inc. founder Michael Dell and Christy Mack, the wife of former Morgan Stanley chief executive John Mack and dozens of other borrowers.

    "The emergency response appears to any objective observer to have been a clear case of socialism for the rich, and rugged free-market capitalism for everyone else," the Vermont Independent wrote. "Much of the information that you have provided on your website raises bigger questions than it answers, and some of the information mandated by the law appears to be missing."

  • Reuters: Chart of the day: U.S. taxes.

    Excerpts:

    • Federal taxes are the lowest in 60 years, which gives you a pretty good idea of why America’s long-term debt ratios are a big problem. If the taxes reverted to somewhere near their historical mean, the problem would be solved at a stroke.
    • Income taxes, in particular, both personal and corporate, are low and falling. That trend is not sustainable.
    • Employment taxes, by contrast—the regressive bit of the fiscal structure—are bearing a large and increasing share of the brunt. Any time that somebody starts complaining about how the poor don’t pay income tax, point them to this chart. Income taxes are just one part of the pie, and everybody with a job pays employment taxes.
    • There aren’t any wealth taxes, but the closest thing we’ve got—estate and gift taxes—have shrunk to zero, after contributing a non-negligible amount to the public fisc in earlier decades.
  • New York Times editorial: Freshman Party. Excerpts: Adam Kinzinger of Illinois is one of the new Republican lawmakers swept into office last month on a promise to change the ways of Washington. “If we look like we’re doing business as usual,” the congressman-elect told a reporter last month, “then obviously the American people will say, ‘Well, what was that all about?’ ”

    That’s a good question because one of the first things Mr. Kinzinger and many of his fellow freshmen did after examining their new offices on Capitol Hill was to hang out an “open for business” sign to the world of big-money lobbying and corporate fund-raising.

    To pay off his campaign deficit, Mr. Kinzinger held a “debt retirement breakfast” on Nov. 19 at the Capitol Hill Club. Suggested donation: $5,000 for political action committees, and $2,400 for individuals. The political action committee of the National Automotive Dealers gave him $2,500 after the election, among other corporate givers.

    As The Washington Post reported on Monday, several dozen freshman lawmakers have held these fund-raisers around town in the days after the election, raising at least $2 million in just the last month. The high-spending campaign that ended in November was odious enough, but there is something even more unsavory about giving to a candidate after the election, when the outcome is known and the link between power and currying favor is even more evident. ...

    Representative Eric Cantor, the incoming Republican leader who has also vowed to shake up the ways of Washington, is having a fund-raiser this week at Ceiba, a high-end Washington restaurant, to celebrate the Seinfeld-inspired holiday of Festivus. The minimum contribution to Mr. Cantor’s political action committee is $500, although it is free to those who have already maxed out their donations.

  • The Christian Science Monitor: Estate tax deal: worst part of a bad tax compromise. Estate tax provision would exempt first $5 million and charge only 35 percent on the rest of wealthy estates. Excerpts: Remember the virtuous talk of fiscal prudence that washed over Washington for, oh, three days last week. Forget it. Forget as well the promises of change that Republicans (and Obama before them) brought to Washington. This is business as usual and at its worst: You have a bad and expensive idea. I have a bad and expensive idea. Let’s compromise and pass both of our bad ideas. ...

    As of this morning, I have not seen any revenue estimates, but the leaks suggest the price-tag will be $700 billion to $900 billion. And while the package is being spun as much-needed stimulus, it contains an awful lot that will do little or nothing to boost the economy. Among those provisions that are a waste of money if you are interested in short-term economic growth: extending the patch on the Alternative Minimum Tax, continuing the high-bracket tax cuts, extending dozens of expiring tax provisions, and restoring the estate tax at extremely generous levels. Add it up, and one-third or more of this new “stimulus” will do little if anything to boost growth. ...

    The worst element of the deal is the proposal to resurrect the estate tax, but at a rate of 35 percent. This is unconscionable given the nation’s fiscal mess. Never mind the proposed exemption of $5 million, which is bad enough. If you are among the mega-rich, that is merely a bauble on your Christmas tree of life. The real gift here is the proposal to let the richest of the rich pass on estates to their heirs at an even lower rate than in 2009. Obama now gets to explain to GS-3 federal clerks why they get to take one for the team while those estates of up to $10 million pay no tax and estates of $100 million pass on nearly $70 million free and clear. Restoring the estate tax to 2009 law would increase the national debt by $265 billion over 10 years. This version will cost lots more than that.

  • Washington Post opinion: Obama: On the way to a failed presidency? By Katrina vanden Heuvel. Excerpts: On the economy, the president has abandoned what Americans are focused on - jobs - to embrace what the Beltway elites care about - deficits. His freeze of federal workers' pay, of more symbolic than deficit-reducing value, only reinforced right-wing tripe: that federal employees are overpaid; that overspending is our problem, as opposed to inane tax cuts for the top end; that we should impose austerity now, instead of working to get the economy going. ...

    This is political self-immolation. Blue-collar workers abandoned Democrats in large numbers in the fall; wait until they learn what the trade deal means for them. Seniors went south, probably because of Republican lies about cuts in Medicare; wait until anyone over 40 who's lost their savings hears about Alan Simpson's plan to take it to the "greedy geezers." The $60 billion each year in Bush tax cuts for the richest Americans could pay for universal preschool for America's children, or tuition and board for half of America's college students.

  • AlterNet: How Our Trillion-Dollar Empire Is the Cause of Our 'Deficit Problem.' We could make the budget deficit disappear and fully fund Social Security and Medicare without raising taxes, if we only outspend our biggest military rival by threefold. Excerpts: The United States spends more on its military and security services than the rest of the world combined, yet in the midst of a major debate over our fiscal situation, that enormous drain on our national treasure isn't really "on the table" in any serious way. Obama's deficit commission recommended cutting the Pentagon's purse, but the thrust of its focus was on veterans' pensions and health-care -- rather than, say, maintaining costly bases to defend such imperiled allies as Italy and Germany -- and the spending reductions were largely symbolic relative to the level of bloat that plagues our security budget. ...

    So while next year’s defense spending, narrowly defined, is expected to come in at $711 billion, when you include all the extra dollars hidden away in other parts of the budget, that number will rise to as high as $1.45 trillion. That would represent around 40 percent of next year’s budget. ...

    Nonetheless, America’s elites have coalesced around the idea that in order to keep our tax rates among the lowest in the wealthy world, we’ll need to swallow some painful “shared sacrifice” (which in Washington usually means working people sacrificing some economic security and the wealthy getting another tax cut). But it’s important to recognize that it’s an ideological choice to view the projected “budget gap” as a structural, economic problem driven primarily by the growth of “entitlements” -- it’s not a belief grounded in objective fact. ...

    In large part, the status quo is maintained by the influence of the defense industry -- it lavished $136 million on law-makers last year. It’s almost comical at times, like when money for a new jet engine was forced through Congress over the objections of the Pentagon, which insisted that the costly project was “unnecessary and a waste of money.”

    And in part, it’s driven by what may be the greatest false dichotomy in our national discourse: that we must choose between cutting our military spending and “maintaining a strong defense.” The flaw in that is a matter of simple math: we not only spend more on our military than the rest of the world combined, we spend six times what second-place finisher China does on its military.That means we could cut our military spending in half -- making the budget deficit disappear in a few years, without raising taxes and while fully funding Social Security and Medicare -- and we’d still outspend our largest rival by threefold.

  • Wall Street Journal: Movies at Home, for $20,000. By Lauren A.E. Schuker. Excerpt: A proposed service aims to bring movies to homes the same day they hit theaters, a milestone that Hollywood has long anticipated with a mixture of fear and fascination. But there's a catch: At the prices currently being discussed by Prima Cinema Inc., the start-up that is touting the service, those movies will reach only world's the best-appointed living rooms. Prima plans to charge customers a one-time fee of about $20,000 for a digital-delivery system and an additional $500 per film. The Los Angeles-based company has around $5 million in backing from the venture arm of Best Buy Co. and General Electric Co.'s Universal Pictures, and hopes to start delivering movies to customers as soon as a year from now.
  • Huffington Post: Why the Obama Tax Deal Confirms the Republican Worldview. By Robert Reich. Excerpts: Excerpts: Apart from its extraordinary cost and regressive tilt, the tax deal negotiated between the president and the Republicans has another fatal flaw. It confirms the Republican worldview. Americans want to know what happened to the economy and how to fix it. At least Republicans have a story -- the same one they've been flogging for thirty years. The bad economy is big government's fault and the solution is to shrink government.

    Here's the real story. For three decades, an increasing share of the benefits of economic growth have gone to the top 1 percent. Thirty years ago, the top got 9 percent of total income. Now they take in almost a quarter. Meanwhile, the earnings of the typical worker have barely budged.

    The vast middle class no longer has the purchasing power to keep the economy going. (The rich spend a much lower portion of their incomes.) The crisis was averted before now only because middle-class families found ways to keep spending more than they took in -- by women going into paid work, by working longer hours, and finally by using their homes as collateral to borrow. But when the housing bubble burst, the game was up.

  • Washington Post: Sen. Bernie Sanders speaks for 8 hours against tax cuts, while Congressional Black Caucus joins opposition. By Paul Kane and Felicia Sonmez. Excerpts: At 10:24 Friday morning, Sen. Bernard Sanders of Vermont took to the floor of the Senate to share a few thoughts about the tax-cut plan brokered by President Obama and Republican leaders. Well after the sun had set and most of his colleagues had flown home, Sanders was still sharing - about taxes, bad trade deals and "the crooks on Wall Street," among many other topics. ...

    Democrats have privately admitted that they were prepared for Obama and newly empowered Republicans to agree to an extension of tax breaks for the wealthy, but added that they never expected the generous estate tax deal and some other provisions in the package.

  • The Smirking Chimp: Watch the Outfielders in Baseball, Watch the Corporate Lobbyists on Taxes. By David Sirota. Excerpts: When I went to Phillies games as a kid, my dad would always remind me that if you want to know what's going on in the game, it's more important to watch the fielders than to watch the ball after the ball is hit. Watching the fielders like Von Hayes and Lenny Dykstra and how they reacted told you if the ball hit by Tim Raines or Ron Gant was going to be a foul, an out, a base hit or a homer.

    It's sorta the same thing in politics -- if you want to know what a bill really does, it's more important to watch corporate lobbyists' reaction than to listen to the politicians pushing the bill. That's because whereas politicians have a vested interest in making themselves look good for purposes of reelection and party advancement, lobbyists jealously represent Big Money, without regard for partisanship or electoral maneuvering.

    It's particularly important to keep this axiom in mind as President Obama now insists that his tax cut "deal" is a big win for average Americans. Because as much as we'd all like to believe the president, the real truth about who this bill serves is embedded in this story from Bloomberg, "Obama Tax Deal Wins Praise From Business-Lobby Critics":

    "President Barack Obama won praise from business groups that have criticized his labor, health and financial regulatory policies after he agreed to extend (all Bush) tax cuts... "
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