"IBM does not discuss its staffing plans publicly," IBM spokesman Douglas Shelton said last week. "However, we are constantly managing resources across a base of more than 400,000 employees as client demands evolve." That count is global. The company stopped reporting its United States head count as of March 2010, when it would normally have reported the 2009 count. The company's last formal reported employee count was 115,000 in the United States for 2008. An executive told Congress in late 2009 that it was then 105,000. "IBM does this in order to hide the declining population numbers in the U.S.," suggested Lee Conrad, national organizer for the Alliance. "I believe we're well under 100,000 in the U.S." ...
The jobs are mostly in the United States but may include some in Canada, Conrad said, based on comments received from Canadian employees. He said people losing their jobs have often reported that their work is being shifted to other nations. One of the newer ones is Argentina, he said, and other countries gaining work include the Philippines , India and Brazil. Details of where in the nation the cuts are being made and how many in a given area are not provided in the packages.
In International Business Machines Corp. v. Visentin, Case 11 cv 399, Judge Loretta Preska of the U.S District Court for the Southern District of New York ruled against IBM and denied its motion for a preliminary injunction to prevent Visentin from working for HP for one year. The court specifically noted that IBM's fact witnesses "failed to provide specific examples of confidential or trade secret information that could actually be used to IBM's detriment if Mr. Visentin were allowed to assume his new position at HP." Judge Preska also noted that some IBM employees who worked with purported trade secret information were not bound by any non-compete or confidentiality agreements, weakening IBM's claim that it took reasonable measures to maintain confidentiality. The judge also took note that an IBM employee testified that the non-competition agreements are "retention devices" intended to pressure IBM's employees from leaving their jobs.
So in that picture, where don't you see layoffs and cuts in pay, bonus, awards, benefits, pension, etc???
Sam and upper management met their goals and thus should get paid more and make more off their stock options. How did you (and I) contribute to those goals? Oh look our Salary's went up 1-2% and we still cost IBM in terms of our Bonus checks. We should be punished further.
As they say, the beatings will continue until morale improves...
Large print for media consumption: "IBM GIVES EMPLOYEES $1K BONUS"
Small print - The 1K 'bonus' isn't payable for 4 years and will be taken out of this year's (and following years?) GDP. You have to wait 4 years for $ you earned over the previous 4 years, gee thanks!
POK ISC had 'whackings' this week also. Lost 1 person in my dept. Mfg group I work with lost about 24 heads under the 3rd line. I know a bunch of them and many were retiring this year anyway (including a married couple). I almost think that management did them a favor by whacking them (but somehow I doubt it).
I look at my org chart and see 9 'managers' from me to Sam. I see that IBM still has a helicopter and at least 2 Gulfstream jets. But still has to F* the American worker. How I despise these people
It's getting close to release of the PDF of the annual report and the shareholder's proxy. I highly recommend the part of the proxy dealing with executive compensation. Last year's covered almost 10 pages.
I also was one of the one's who found an internal IBM job prior to being RA'd by Global Services. I was denied the job unless I had a transfer or a 2-year contract. What baloney. I appealed to corporate HR (Randy) and was shifted to upper HR in GS where HR finally admitted that the job was marked to be offshored. And a twin-job that had a multi-year expert in it was also marked for offshore, so that person ended up being RA'd as well. So the RA are clearly not a skills rebalancing or better matching skills to jobs. It is all cheap labor. I was also denied a job at an account because, as I was emailed by IBM's resource deployment manager, the account was first considering people in group "A" - landed resources. Americans were in group "C". So it is pretty clear - all about cheap labor and IBM long ago stopped hiding that fact contrary to what they tell the media.
When Sam Palmisano writes his memoirs (you know they always do), may I suggest that Mr. Palmisano title his book, "The Soulless New IBM".
To be successful in today's IBM, managers have to be soulless. Beryl, I applaud you for getting out before the company and/or alcohol destroyed you.
The rest of us are tracked to the "growth from year year". The growth was up but not enough to meet the target. Like all IBM targets, it is set to make sure we know where we stand...at the bottom.
Sam got 2X from last year. A couple of other execs did real well from what I have read in the finance sections.
Cons: It seems more and more evident that everything at IBM comes down to "the bottom line" (money/revenue). Earnings per share (and the resulting Executive compensation) seems to have become more important to the corporation than their employees.
The company cuts back costs (staff, equipment, contract services) at the expense of the workers. Meaning we are expected to "do more with less." This mentality seemed reasonable at first, but it has perpetuated into a vicious cycle where we expect more and more (and more!) out of our people. Many/Most people are overworked, and work-life balance seems to be a distant memory.
While the culture has traditionally supported employee career development, in harder economic times managers can be reluctant to let their good employees pursue opportunities, for fear of losing the head count - Finance will see it as a chance to save money (and not allow you to backfill the position)... So if somebody leaves your group, more likely than not, one of the existing team members will just have to absorb the additional work... again adding to the overworked staff.
There are MANY corporate practices/processes that have been put in place over many years. Most (not all) of these processes were meant to make sure that the teams delivered a high quality product that met certain industry standards/regulations. Though we cut back on staff, and we have to do more with less, we never seem to cut back on process. This is a double-edges sword... Cutting back on some of these practices/process may cause us to deliver a poorer quality product, or to not meet certain standards/regulations... But not cutting back on process means that more and more of our time is spent navigating process. Spending time on this, and trying to get your "real work" done adds to the problem of an overworked staff.
While there is a system in place to compensate based on merit, over the years the differentiation between the best employees and the average employees has become laughable (corporate funding for these programs seem lower than expected, especially considering reported company earnings). The minuscule difference between compensation for the best and the average employees have made many people question the point of working so hard (If you can put in less effort and get compensated the same, why kill yourself working 60 hour weeks???).
Finance seems to be making many decisions which they are not qualified to make. All they care about revenue versus expense. They have been given power to dictate our expenses, though they do not understand the impact of cutting certain expenses. Penny pinching today may cause you revenue for the next few years if we don't have enough resources to put out a product.
Advice to Senior Management: Most of the lower level managers are just trying to get by (survive) in an environment where we are expected to "do more with less." Upper level management (Executives) need to realize that we are at a breaking point and we can continue down this path. Many of our good people will look for opportunities to leave the company as soon as the economy gets better.
Cons: Can be difficult managing work life balance - many of us are bogged down by a utilization number that we need to aim towards - but the system is flawed because the number goes down when we go on vacation, get sick, etc, so we are bound to work more hours on average just to keep our utilization up. This makes work life balance hard because we are constantly thinking about our utilization when we are working and on the bench. It can be argued that this is used to improve productivity - but I feel work morale is low from it, and gives us more stress than needed.
Pay can also be higher :) -IBM isn't as generous to the employees as one may think, bonuses also aren't very high. Also getting promoted is quite a difficult process from what I hear (cannot say for sure since I have not tried yet though).
Advice to Senior Management: I think we need to improve work morale - make work life enjoyable. This may include setting up a social committee and going out once in a while to get to know each other, or taking the new employee out to lunch as a team. Make people feel like they aren't just working numbers.
Greg Anrig outlines the ten reasons to not cut Social Security benefits:
"The baby boomers will be the first generation that will do worse in retirement than their parents," said Teresa Ghilarducci, an economics professor and retirement specialist at the New School for Social Research in New York. "And the next generation of retirees will do a lot worse; they fall off a cliff," largely because so few of them will have the traditional pensions that many of their parents and grandparents had.
Americans planning to retire in five to 10 years could see their golden years tarnished by a confluence of circumstances, including depressed housing prices, soaring health costs and a fitful stock market that has pummeled 401(k) plans. Not only that, company after company has frozen or eliminated its pension plan, and many members of Congress are pushing to scale back Social Security benefits — even though half of the nation's retirees receive at least 90 percent of their income from Social Security. Its benefits average $14,000 a year. So perhaps it should not be surprising that 45 percent of America's baby boomers are "at risk," without enough to maintain their living standards after they retire, according to the nation's leading center on retirement studies, the Center for Retirement Research at Boston College. ...
Karen Friedman, executive vice president for the Pension Rights Center, a nonprofit group, is urging Congress to create what are often called guaranteed retirement accounts, to which employees and employers would contribute, with each giving perhaps 3 percent of an employee's pay. She also said the federal government should provide a tax subsidy to give workers, especially low-income ones, an incentive to contribute. "Congress," Ms. Friedman said, "shouldn't be focusing on cutting Social Security — that's the part of the retirement system that works best — but on strengthening the private side of the system to make sure everyone has adequate and secure benefits for retirement."
My 32-year-old son, however, is RABIDLY anti health-care reform of the sort being offered, and doesn't want toe government to touch health-care in any way. We can't even have a discussion on the issue!
The president told the nation's governors on Monday that he supported a bipartisan bill — sponsored by Senators Ron Wyden, Democrat of Oregon, Scott Brown, Republican of Massachusetts, and Mary Landrieu, Democrat of Louisiana — that would allow states to fashion solutions right from the start of full-scale reform in 2014, rather than waiting until 2017, as the law requires.
The catch is that a state's plan must cover as many people as the federal law does, provide insurance that is as comprehensive and affordable, and not increase the deficit. That won't be easy for the governors to accomplish, and House Republicans seem unlikely to pass the bill to let them try. They would much rather repeal the reform law — or have it declared unconstitutional by the Supreme Court — than join Mr. Obama in improving it. ...
The president's new olive branch is not apt to change the legal arguments over whether the mandate in the reform law is constitutional. But it can't hurt to bring forcefully to everyone's attention that there are alternatives to the mandate if states want to pursue them. Republicans ought to rise to the challenge.
Community pharmacists in New York are lobbying state lawmakers to pass legislation that would prevent health plans from requiring patients taking medications for chronic ailments to fill their prescriptions through the mail.
While some plans had shifted to mail delivery long ago because it was often cheaper for both employers and consumers, drugstores have been offering more competitive prices and pushing lawmakers to level the playing field by ensuring that people can still visit their local pharmacy for their drugs.
The new site, called healthcareandyou.org, is intended to steer clear of the heated politics behind the legislation and focus instead on what the plan means for consumers. People who log on to the site can click on their state, their age group, and their circumstances — like whether they're a small business owner or not — and find explanations of the law's intricacies and a timeline pointing out when various provisions will take effect. ...
But the site, which began on Tuesday, faces something of a challenge: studies show that many Americans who think they understand how the law works are thoroughly misinformed, and some are not even aware it is still in effect. ...
The National Council on Aging last year also found that 42 percent of seniors believed, incorrectly, that the law would cut their basic Medicare benefits, while another 37 percent said they did not know how it would affect their coverage. ...
Six other groups, in addition to the family physicians' academy and AARP, make up the coalition that created the site. Among them are the American Medical Association; the American Nurses Association; the Catholic Health Association; the National Community Pharmacists Association; the American College of Physicians; and the American Cancer Society's Cancer Action Network. Several of these groups supported the health care law itself.
"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.
And there are clear justifications for doing so, from practicality to fairness. Though many multi-millionaires fancy themselves self-made men (and women), the truth is that they all have profited from investments that American taxpayers have made over the decades, and even centuries.
For instance, President Dwight Eisenhower's inter-state highway system enabled companies to move their goods more cheaply; President John Kennedy's space program spurred the growth in computer sciences; the Pentagon created the Internet (yes, with critical support from Al Gore when in Congress), which revolutionized commerce and spread information. ...
An even-stronger tax justification applies to Wall Street, where the greed and gambling of bankers tipped the economy into a severe recession just three years ago, costing millions of Americans their jobs and homes. To avoid an even worse outcome – a new depression – the federal government and Federal Reserve authorized trillions of dollars in bailouts. To further calm Wall Street, the authorities essentially gave the bankers a "get out of jail free" card. Not a single prominent player in the sub-prime securities scandal has been prosecuted or forced to surrender much in ill-gotten gains.
Instead, many of the top Wall Street bankers are lining up again for massive paydays in the tens of millions of dollars, essentially skimming off profits that were achieved only because the U.S. government poured vast sums of public money into the financial sector. Yet, many of these same bankers insist that their taxes remain at historically low levels.
Other wealthy Americans have enriched themselves through holdings in multinational corporations that fattened their bottom lines by laying off middle-class Americans and hiring cheaper replacement workers overseas. Not only did these American workers see their lives damaged by the exporting of their jobs but they face the indignity of helping to foot the bill for the gigantic U.S. military which protects the global interests of these multinationals. ...
But today's U.S. political/media dynamic makes any discussion of higher taxes on the rich a non-starter. Instead, the debate is all about handing out more tax breaks to the rich, slashing government spending, canceling transportation projects, abandoning environmental goals, and busting unions that represent teachers and other public workers. ...
Already, most of us scramble to make ends meet, with fewer protections in the work place as unions shrink, with the 40-hour work week disappearing, with cell phone and e-mails putting us on call virtually 24/7, and with retirements postponed sometimes indefinitely. This era's great irony may be that an earlier generation thought that technology would create so much wealth and comfort that life would be easier for the human race, giving us more time to play with the kids, to read a book, to travel or to just take it easy. ...
While the middle- and working-classes have seen the American dream recede for them, the upper stratum of the super rich has watched the benefits of the high-tech global economy flow disproportionately into their stock portfolios and trust funds. The tiny fraction at the top – the richest 0.01 percent – has raised its collective income by 400 percent, adjusted for inflation, over the past two decades, while seeing tax rates for the rich decline.
But it wasn't teachers, fire fighters, policemen, and college students that caused the economic recession that has devastated government budgets — it was Wall Street. And as middle class workers are being asked to sacrifice, the rich continue to rig the system, dodging taxes and avoiding paying their fair share.
In an interview with In These Times, Carl Gibson, the founder of US Uncut, which is organizing some of today's UK-inspired massive demonstrations against tax dodgers, explains that while ordinary Americans are being asked to sacrifice, major corporations continue to use the rigged tax code to avoid paying any federal taxes at all. As he says, if you have "one dollar" in your wallet, you're paying more than the "combined income tax liability of GE, ExxonMobil, Citibank, and the Bank of America." ...
In the coming months, politicians across the country are going to tell Americans that the only way to stave off huge deficit and balance the budgets is by gutting programs for the poor, eviscerating support for the middle class, eliminating labor rights, and decimating the government's ability to serve the public interest. This is a lie. The United States is the richest country in the history of the world, and income inequality is higher now than it has been at any time since the 1920′s, with the top "top 1 percentile of households [taking] home 23.5 percent of income in 2007."
But across the border from Wisconsin in Minnesota, Democratic Governor Mark Dayton has proposed an alternative idea: Raise taxes on the rich to help close the budget gap. Dayton's budget plan would increase taxes to 10.95 percent on Minnesota families earning over $150,000 a year (or single adults earning more than $85,000). He would also add an additional 3 percent surtax on the superrich - those earning more than $500,000 - for the next 3 years.
Even raising taxes on the rich to these levels would only cut Minnesota's budget deficit in half, and Dayton has also proposed cutting the state workforce by 6 percent and removing 7,200 childless adults from Minnesota Care, moves that should be fought by progressives. Nevertheless, Dayton's "Tax the Rich" plan shows that there is nothing inevitable about the limited option of breaking public unions proposed by Scott Walker and some other GOP governors. ...
According to Tea Party activists and others on the right, they are just harkening back to the vision of the Founding Fathers and the Constitution, standing up for individual liberty in the face of government tyranny. Never mind that perhaps the biggest concern of many early American leaders was the negative effects of concentrated wealth on liberty and democracy.
In reality, the efforts of Gov. Walker, the Koch brothers, Beck, and others are aimed at taking us back to the 19th century era of the Robber Barons. The Kochs, who the Center for Public Integrity's Charles Lewis likened to "the Standard Oil of our times," are shrewder (and richer) than railroad magnate Jay Gould, who famously remarked, "I can hire one half of the working class to kill the other half." But their divide-and-conquer strategy of pitting private-sector workers against the public sector reveals a similar spirit. And just to make sure that we understand the comparison, Indiana's Deputy Attorney General tweeted a helpful call for the police to "use live ammo" on protesters in Wisconsin's Capitol Building.
Unfortunately, the attempts to go back in time by the Koch brothers and right wing, while pathetic, are far from "feeble." The forces arrayed against working people in the US and globally have been strengthened enormously over the past three decades thanks to the concerted political efforts of big business, along with increased global competition for profits. The Democratic Party has largely gone along with this process, seeking to position itself as the more far-sighted and responsible party of 21st century capitalism, against the more rapacious and narrow-minded Republicans. ...
If we want to see budget deficits dealt with through raising taxes the rich rather than hammering the poor and working class, that will mean hitting the streets. The Koch brothers know this. Jane Mayer quotes one of the Kochs' closest allies, Matt Kibbe, president of the Tea Party group Freedom Works, in her New Yorker expose of the billionaire brothers: "We read the same literature Obama did about nonviolent revolutions - Saul Alinsky, Gandhi, Martin Luther King. We studied the idea of the Boston Tea Party as an example of nonviolent social change. We learned we needed boots on the ground to sell ideas, not candidates."
It turns out that the only income group among those polled by Gallup that favors the governor's proposal to roll back public employee bargaining rights are those who make over $90,000.
The median average in the United States is around $50,000. The average salary for a Wisconsin public school teacher is around $48,000. ...
Months ago, Politico reported that conservatives were supremely confident they'd be able to make "political targets out of what was once a protected liberal class of teachers, cops, and other public servants." The idea was to make public employees scapegoats for the nation's dramatic economic downturn, which seemed to go hand in hand with a time-honored political PR tactic of identifying a group, demonizing it and making it the enemy as part of the long-term game plan to either defeat it or destroy it.
But they may not be such easy targets after all. What may change in the landscape is a growing realization that the more accurate divide in the conservative war against unions isn't political or ideological, but economic. In public reaction to the events in Wisconsin, one finds a strong bipartisan consensus among most income groups that Walker's proposal goes too far and that demonizing the likes of teachers, nurses, peace officers and firefighters may come with a political price. Indeed, several GOP governors have already begun to back away from the most onerous of anti-public union proposals.
Governor Walker continues his obdurate opposition to the state's public employee unions' right to collective bargaining, despite a willingness on their part to concede pension and health givebacks he claims would help close Wisconsin's alleged deficit. Meanwhile, there has been a decided increase on the sleaze end of the cheese vs. sleaze quotient, as evidenced in part by the prank phone call to the governor in which an online newspaper editor impersonating right wing billionaire David Koch elicited from Walker a proposed scheme to lure back, then double cross Democratic state senators who have prevented a quorum by retreating to Illinois. ...
But of course, this isn't really about saving taxpayers money but consolidating political power. Walker and such leading lights of the GOP leadership as Governor Chris Christie of New Jersey and Ohio Governor John Kasich, among others, have decided that public employee unions make great punching bags, effective scapegoats for an outraged electorate and a satisfactory diversion from the real culprits of this grim, economic melodrama -- the Simon Legrees of banking and finance who got us into this meltdown mess in the first place. ...
As Josh Dorner reported on the progressive ThinkProgress website this week, "Instead of making the tough choices necessary to help their states weather the current crisis with some semblance of the social safety net and basic government services intact, Republican governors are instead using it as an opportunity to advance several longtime GOP projects: union busting, draconian cuts to social programs, and massive corporate tax breaks. These misplaced priorities mean that the poor and middle class will shoulder the burden of fiscal austerity, even as the rich and corporations are asked to contribute even less." ...
Writing in the February 23 Boston Globe, Mark Erlich, executive secretary-treasurer of the New England Regional Council of Carpenters asks, "While there are legitimate and critical public policy issues about education reform, spiraling health costs, and pension liabilities at a time of state and municipal budget deficits, why is the fault laid at the feet of teachers, police, and firefighters? Today's pension obligations are the product of massive investment losses, not excessively generous public pensions that, in fact, average about $19,000 a year. For that matter, a 2010 Economic Policy Institute study showed that, controlled for educational achievement, public sector workers actually earn less than their private sector counterparts."
For example, both are going after the very useful program that helps low-income Americans pay the ever-rising cost of heating their homes in the dead of winter. This budget cut will literally cut off the heat to some of the most vulnerable people in our society. But hey, say Congress critters whose workplace is always kept toasty at taxpayers' expense, everyone must sacrifice.
Well...not really everyone. Washington's ferocious ax-wielders are sparing assorted corporate subsidies. Take the Market Access Program--please! It hands $200 million a year to huge processors and exporters of agricultural commodities like Sunkist and Welch's so they can advertise their products abroad. Hello--these "free enterprise" giants have plenty of money to make their own ads.
Even wackier, this subsidy often is frittered away on pure nonsense. Last year the Cotton Council used a big chunk of its $20 million handout from Uncle Sam to promote U.S. cotton sales in India. India? That country produces twice as much cotton as us and is a major exporter of the stuff, so it has no interest in buying ours.
Nonetheless, such outfits are in line for more federal advertising dollars, while poor folks are literally to be left in the cold. Why? It's the perverse power of political money at work. The corporations getting ad subsidies give more than $8 million a year in campaign donations and spend about $10 million a year on lobbyists.
His report comes on the heels of a similar analysis last week by the investment bank Goldman Sachs, which predicted that the Republican spending cuts would cause even greater damage to the economy, slowing growth by as much as 2 percentage points in the second and third quarters of this year.
Performance reviews corrupt the system by getting employees to focus on pleasing the boss, rather than on achieving desired results. And they make it difficult, if not impossible, for workers to speak truth to power. I've examined scores of empirical studies since the early 1980s and have not found convincing evidence that performance reviews are fair, accurate or consistent across managers, or that they improve organizational effectiveness.
Think about it. Performance reviews are held up as objective assessments by the boss, with the assumption that the boss has all the answers. ...
Under such a system, in which one's livelihood can be destroyed by a self-serving boss trying to meet a budget or please the higher-ups, what employee would ever speak his mind? What employee would ever say that the boss is wrong, and offer an idea on how something might get done better? Only an employee looking for trouble.
Rep. Betty McCollum says her work could save American taxpayers tens of millions of dollars. But Defense Department officials and lawmakers from NASCAR country say the sponsorships help military recruitment, and that the tax breaks could save jobs in the struggling economy.
In an interview Friday, McCollum said it doesn't make sense to keep the benefits for NASCAR teams and track owners when other cuts are being made to community health care, programs for homeless veterans and Head Start.
"I started to look what is in this large defense budget to see what's not related to security that we could redirect to critical supplies or mission support," she said. "Or in the case of racetrack owners, what are some of the special tax perks that some of the special interests are getting?" She plans to file legislation to prohibit Pentagon sponsorships of dragsters, Indy cars, stock cars and motorcycle racing, affecting just about every level of motorsports. ...
Her amendment failed, 281-148.
Meanwhile, racetrack owners received tax breaks worth $45 million in 2010 and 2011, aimed at helping them make improvements to their facilities. A two-year extension of the program was included in the tax cuts compromise that President Barack Obama forged with Congress in December. McCollum said she'll file legislation to repeal the tax benefit. "It's an earmark," she said.
The Birchite billionaire Koch brothers and Walker, their gubernatorial hatchet man in the Badger State, have unwittingly done a tremendous favor for our country's progressive movement. Thanks to them, America's workaday majority has been awakened. With eyes wide open, middle-class working folks everywhere now have their attention riveted on Wisconsin, where a plutocratic, autocratic conspiracy between uber-wealthy corporate elites and obsequious GOP politicos has raised its ugly head for all to see.
Even before Walker was sworn in, Koch operatives were working with his transition team on a proposal that would summarily strip state and local workers of their hard-won right to bargain with their governmental bosses. Blinded by their flaming arrogance, the co-conspirators blithely assumed that Wisconsinites would just sit still for this, like sheep being fleeced. Bad miscalculation.
Collective bargaining literally is democracy at work -- not something that working families take lightly. Nor should employers, for the process works, allowing 98 percent of union-employer disputes to be resolved with no strife.
Without it, workers know that they would be reduced to "collective begging," so Wisconsinites saw the governor's no-bargaining bill for exactly what it is: a raw attempt to extend authoritarian executive rule over the workplace, stifling the voice of workers and further shrinking middle-class possibilities in America. ...
Walker is little more than a hireling in the Koch brothers' extremist political enterprise. They invested $43,000 directly into his gubernatorial campaign last year, making them his second largest donor. David Koch also gave $1 million to the Republican Governors Association, a donation that leveraged a $5 million RGA expenditure in the Wisconsin race. In addition, a Koch-funded front group, Americans for Prosperity, pumped hundreds of thousands of dollars into the state in an AstroTurf campaign to benefit Walker.
Just before the election, Koch Industries opened a lobbying office only a few doors down the street from the Wisconsin Capitol. Will it shock you to learn that shortly after taking office, the grateful governor quietly tucked two very special provisions into his union-busting bill that could cause the Koch's political investment to pay off handsomely?
One provides favorable new regulations for pipeline transporters. The second is a stunning proposal allowing the governor to sell, without legislative oversight, publicly owned power plants to private corporations on a no-bid basis. Guess who just happens to be in the pipeline and power plant business? Right. ...
Astonishingly, the governor has tried to rationalize his radical assault on worker rights by claiming that he's merely doing what voters elected him to do. Two problems with this assertion: First, two-thirds of Wisconsinites say they oppose such a power grab, with only 24 percent favoring it; and second, Walker never mentioned a word about gutting bargaining rights during his campaign. If he had, says a recent poll, he would've lost.
It's a lie. ...
The budget "crisis" is a phony construction, the result of right-wing "starve the beast" ideology. There is plenty of money out there--but the pols don't want it. There is no need to lay off a single teacher, close a single library for an extra hour, or raise a single fee by one red cent. Every government can not only balance its budget, but wind up with a surplus. The solution is simple: tax the rich.
Over the last 50 years tax rates for the bottom 80 percent of wage earners have remained almost static. Meanwhile the rich have received tax cut after tax cut after tax cut. For example, the rate paid by the top 0.01 percent--people who currently get more than $6.5 million a year--fell by half (from 70 to 35 percent). Times are tough. Someone has to pay. Why not start with those who can most afford it?
Europe has the world's best food, its best healthcare system and its best vacation policy. It also has one of the fairest ways to generate revenue for government: a wealth tax. In Norway, for example, you pay one percent of your net worth in addition to income tax.
What if we imposed a Norwegian-style wealth tax on the top one percent of U.S. households? We're not talking upper middle class here: the poorest among them is worth a mere $8.3 million. This top one percent owns 35 percent of all wealth in the United States. "Such a wealth tax...would raise $191.1 billion each year (one percent of $19.1 trillion), a significant attack on the deficit," Leon Friedman writes in The Nation. "If we extended the tax to the top 5 percent, we could raise $338.5 billion a year (one percent of 62 percent of $54.6 trillion)." ...
Business shills whine that America's corporate tax rate--35 percent--is one of the world's highest. But that's pure theory. Our real corporate rate--the rate companies actually pay after taking advantages of loopholes and deductions--is among the world's lowest. According to The New York Times, Boeing paid a total tax rate of 4.5 percent over the last five years. (This includes federal, state, local and foreign taxes.) Yahoo paid seven percent. GE paid 14.3 percent. Southwest Airlines paid 6.3 percent. "GE is so good at avoiding taxes that some people consider its tax department to be the best in the world, even better than any law firm's," reports the Times' David Leonhardt. "One common strategy is maximizing the amount of profit that is officially earned in countries with low tax rates."
FACTS: Wisconsin had a $120 million surplus when Walker came into office in January. Had the newly-elected Republican-dominated Legislature in January not given about $140 million in special tax breaks (also known as "corporate welfare") to business, the state could have had a surplus, according to the Legislative Fiscal Bureau. About two-thirds of all Wisconsin corporations pay no taxes at all, according to the Wisconsin Department of Revenue.
Wisconsin could also save significant expenses by having state-employed fiscal analysts, not Wall Street investment counselors, handle the entire pension investment portfolio. Wisconsin pays about $28 million to state managers to handle about half the portfolio; it pays about $195 million to Wall Street investment brokers to handle the other half, according to the 2010 annual report of the Wisconsin Investment Board.
Noam Chomsky, in an interview with Amy Goodman of "Democracy Now," correctly points out, "the population in the United States is angry, frustrated, full of fear and irrational hatreds. And the folks not far from you on Wall Street are just doing fine. They're the ones who created the current crisis." The Great Recession has cost states revenue, not because of the workers' salaries and pensions but because the values went down because of lax oversight primarily during a Republican administration. Even with the Wall Street crisis, and lower-than-expected revenue, the Wisconsin pension fund is fully funded, able to meet its obligation for several years, according to the independent PEW Center for the States.
Wall Street developed with no regulation. Abuses abounded. Financial markets were corrupt. Then came the 1929 Crash, a wealth destruction event that ended the dreams of an American generation. The Pecora hearings exposed self-dealing and fraud by Wall Street bankers. Wall Street faced ruin. But instead of wiping out Wall Street or nationalizing the banks, we chose to save capitalism and protect investors -- by creating a new system of highly regulated financial markets.
Congress created the SEC to oversee stock exchanges, require honest accounting and disclosure by corporations and broke up (and strictly controlled) the Wall Street banks. In time, this new regulatory framework created the greatest age of economic growth and prosperity in history. Despite periodic recessions and bear markets -- there were no more investor wealth destruction events.
As the U.S. became the world's financial powerhouse, no one got more powerful than the Wall Street banks and their corporate allies. Then they set about undoing the very regulatory framework that had saved them. As politics came to depend on massive infusions of cash, no one provided more of it than corporations and Wall Street banks. They complained that regulation was restricting American competitiveness and economic growth -- our citizenry was seduced by promises of greater growth and prosperity. Government, which had actually been the key to the solution, became portrayed as the problem. They captured Congress. And then came the regulatory teardown. ...
The inappropriate investments that caused these massive pension fund losses were not an accident. The pension fund field caught the Wall Street contagion -- financial corruption. It's called "Pay to Play." The SEC saw it years ago but, controlled by anti-regulation political appointees, it did nothing. So a nationwide system of political contributions to elected officials who sit on fund boards and payoffs and kickbacks to politically well-connected "Placement Agents" to steer fund money to Wall Street became widespread. Not surprisingly, the investments obtained by "pay-to-play" kickbacks and contributions have generated horrific losses. ...
The conservatives will "scapegoat" public employees as a privileged -- protected -- class. But it was not firemen, cops, clerks, or teachers (or their unions) who lost trillions of dollars in risky investments in an under-regulated stock market over the past 20 years. The Wall Street money managers lost it in investments acquiesced in by the pension fund trustees they had wined and dined. It's the same old story. The bankers pocket gigantic fees. The privileged few get fat. Ordinary people get run over. And now are even to be blamed -- even punished -- for a mess they did not create.
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