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Highlights—March 26, 2011

  • Fortune: IBM exec: Culture is your company's No. 1 asset. By Patricia Sellers. Excerpts: Culture. Now that's a subject that most leaders would be wise to pay more attention to. Ginny Rometty speaking at an IBM event. One boss who does: Ginny Rometty at IBM.

    And to her benefit. Currently in charge of sales and marketing and strategy at Big Blue--and No. 8 on Fortune's Most Powerful Women list--Rometty is mentioned in Fortune's current cover story about IBM as a possible successor to CEO Sam Palmisano. ...

    Hey, it works. This sort of culture-carrying throughout the organization has helped propel IBM near the top of Fortune's Most Admired Companies list. And it has helped propel Rometty's career as well. Now that she's close to the top, she believes more than ever: "Culture has to come from the bottom up."

    Selected reader comments concerning this article follow:

    • I was "RA'ed" recently. I trained my replacements on the accounts they were going to run. The replacements are located in Argentina and India. On one of the accounts that I was working on the personal in Argentina falsified an e-mail from a Project Executive (PE). Indicated they had received permission to do some work on the account with the PE's approval. I noticed that the time stamp was wrong. It reported it to my manager and nothing was done. The PE was not aware. This is an small example of what the out-sourcing people are doing. They can not do the work correctly and generate fake email to cover their mistakes. I have seen this more than once.

      I had sat in on a manager meeting. Our manager told us that the SAS70 auditors were killing them. He stated that IBM was working deals on accounts that showed poorly in a SAS70 audit. Trying to keep them out of the final report and make the SAS70 audit look better.

      Also, when working with my replacements in India. I was amazed on how little they knew about the service they were taking over. I was fielding calls all hours of the day and night to keep the account going because of low amount of training they had received in India.

      I feel sorry for any account that does not have in the contract "US only or American only" people to work the accounts. This would save the clients loads of money and time.

      Bottom line is Greed for the top people and talented people are being let go here.

    • http://tech.fortune.cnn.com/2011/03/04/ibms-sam-palmisano-a-super-second-act/. Both these articles are too ironic. Inspiring and motivating at the top, then scroll down to the comments to see the real-life issues employees are facing. Are these articles meant for investors alone? Or does employees actually do have a say?
    • Of course I'll be posting anonymously because IBM has the caustic dishonest culture of 'smile and shutup'. People who dissent and raise valid but uncomfortable issues are punished. There is only one open door for you - its the one into the street. If the culture here at IBM is so good, why are people leaving in droves for our competitors in other consulting companies. It's for the salary, bonuses and respect they no longer get from IBM. Yes those companies also have high demands and long hours, but at least they are paying and differentiating people more fairly.
    • The title of this fairy tale so funny and yet so sad. I don't know if I should laugh or cry. As an employee of IBM for more than 30 years I think Ms. Rometty's revelation comes about a decade too late.

      IBM now has a culture of instilling fear and mistrust throughout the halls of it's establishments. Is that it's # 1 asset?

      The quote about Ford is particularly ironic. "CEO Alan Mulally rallied faithful followers. And in turn, the entire organization refocused on Ford's core value: quality."

      Outside the gilded confines of the Armonk headquarters Sam Palmisano will not find many faithful followers left in IBM. Neither would he have a clue as to where to focus their resources even if he did find them.

      Trust, Loyalty, Ethics were all Core values that IBM and IBMers wee known for. No longer. The employees Trust in management has been obliterated. Employee Loyalty has been shaken. Most employee actions appear to remain ethical but the same can not be said for many management practices.

      If Culture is a company's # 1 asset then IBM is bankrupt.

    • On the one side it is what Ginny Rometty believes and likes to recognize. And it is on the other side what the employees have to do and how they think the culture of IBM is in reality. Lots of us are frustrated and demotivated. Salaries are decreasing, while the shareholder takes it all. The success is by pressing and controlling, each and everybody.
    • If IBM has such a great culture, why doesn't its profit sharing work its way down to those who are on the ground making money for the company? The executives made a killing this year in bonuses, and the rest of us were left out in the cold because we didn't make arbitrary targets. All rewards are being cut so that Sam and Ginni can drive the stock price higher and make more on their stock options.
    • I echo all the comments made so far. The culture as an IBM employee (or "Resource Units" as we're referred to) is FUD... Fear, Uncertainty, and Doubt. Layoff and outsourcing is how they keep revenues up and the investors happy. They have little interest in keeping employees happy.
    • Executive speak coming from IBM to the public certainly doesn't seem to match the internal reality at IBM, at least not where I am. Coming from a potential successor to Sam Palmisano, is as disheartening and counter to our values as the oppressive, Darwinist, command and control culture we actually have.
    • Gee Ginny. You talk to anybody in ANZ? That's not how it works here! IBM dialogue is a one way street, Top of the hill down.
    • Hey Ginny - Who is John Galt?
    • Now I'm relatively new here, I will admit. But it seems that in this department at IBM Hursley at least there's a good culture. We have a good relationship with out (sic) manager and I can get involved in a lot of extra 'giveback' activities. Sometimes It's hard work and there's tough deadlines, but when you achieve there seems to be real potential for reward.
    • I worked for PwC and IBM...the latter bought out the consulting business of PwC. There was a distinctive people- oriented culture at PwC which was absent at IBM. IBM's focus was meet your targets at all cost irrespective of the damage that would do to careers and motivation.
    • Seriously? The IBM management culture is horrible, and does not seek to respect the employee. If Ginny really believes what she says, why doesn't IBM participate in Great Places to Work survey? Execs hand-pick the participants when there are round tables. Listen to your employees Ginny...that's what will propel IBM forward.
    • Sam Palmisano is a thug who has outsourced thousands of jobs in his tenure while collecting millions in salary and stock. There is no culture at ibm , who is she kidding, no one feels secure from the axe wielded by Sam and his henchmen (and women).
    • "Most importantly, 'You have to rethink the way you treat and talk to employees,' she added." IBM has rethought how it treats its employees. IBM's value proposition used to be "respect for the individual." Now it is to treat them like a commodity. For example, if the commodity costs less in India then lay off the US employees and replace them with cheaper Indians. IBM might be one of the most admired companies by investors, but it is a completely different story from the employee perspective.
    • Actually, there are two cultures at IBM. For the senior executives, the culture is do whatever it takes to make their bonus. Anybody below them is just fodder for the next quarterly report cannons. For the average employee (at least those in the US, Canada, and Europe), the culture is one of fear, being laid off at any moment, and despise for the executive culture.
    • She is right, it has to come from the bottom up. Too bad at IBM it will take a long time for it to reach the top. Plenty of good at the staff level despite it's lacking at the executive level.
    • Rometty's culture and ethics made it all the way to AIG, where she is / was a board member on their comp committee. Nice gal, no doubt (NOT!)
    • I too agree with the observations made here. As Fred said 'If Culture is a company's # 1 asset then IBM is bankrupt.'. I am a 15 year IBM'er. The past 10 years have been dominated by a culture of fear and domination. Managers have become like robots, reading a script proscribed by upper management whenever we meet. Dissent or open discussion is suppressed. It all reminds me of the oppression that is making the people in the Arab world rise up.
    • This and other fluff pieces in the U.S. business press has the same flavor as a Soviet-era article in Pravda. And, IBM is modeled after the old Soviet Union political system where all the top-level executives (politicians) extol the virtue of the company (country) while the employees (populace) know the real truth.

      Middle level managers, like their Soviet counterparts, are selected for their allegiance to their superiors, not because of their skills or successes.

      Employees (like Soviet citizens) live in fear for their jobs (lives in the USSR). They are treated like a number...their only worth is in making the numbers for the quarterly plan. (Well, the Soviets had ten-year plans...IBM never looks more than a quarter out.)

      Anyone that's good quits and moves to another company (in the USSR they would try to immigrate to another country). Long-term employees who are close to retirement eligibility try to hang on for dear life to get a reduced pension. (Lou and Sam stole much of our pensions to drive up earnings in the 90's and 00's. Just as with the USSR and eastern Europe, eventually IBM will collapse on its heap of lies and deceit, but long after Sam, Ginny, Randy and the rest of the Politburo have cashed out on the backs of the company's employees and customers.

    • There is no question that IBM executives are seriously out of touch with their employees. I cannot remember the last time an executive visited the site(RTP). If one did, they were surrounded by select, hand picked managers who filter everything that employees attempt to communicate. There is NO transparency. Everyone tells everyone, up and down the chain everything is perfect, quality is rock solid and on schedule. It's mostly bull and they know it. IBM forgot how to deal with the truth. They forgot how to value their number one asset. It's so sickening to see an icon crumble. She's wounded and coming down.
    • IBM culture is to treat employees like replaceable widgets. The culture in IBM is that an employee is not a human being; the employee is a work unit resource.

      It is no longer in IBM's culture to stick by an employee.

      It is in IBM's culture to permanently terminate without cause (RA) an employee who worked for IBM for over 25 years and had developed serious health issues that forced the person to be on a medical leave disability. While on disability leave the person also was not given a pay raise when IBM Human Resources mentioned that all employees with a like appraisal would get one. When the person returned to work the very same day was resource actioned, was told not to report to work at the office at the employee's work location by the IBM Director (for unspecified "physical security reasons"), given 30 days to find another job, was turned down without any consideration by a possible hiring manager in IBM once told that the employee was on the RA list, and ended IBM career after the 30 days.

      Sounds like a good culture IBM practices? Don't believe this story? Well, it really did happen...to me.

    • IBM definitely needs to bring an outsider in to manage it, for many reasons. If corporate culture is indeed what is valued, that person should be from the HR profession.
    • I am a 23 yr IBM Employee. The last two projects I worked on were in "red" due to the customer being profoundly displeased with the quality of the work performed for them by IBM. The root cause of these troubled projects? Lack of skills of the offshore teams doing the work.

      I don't know how long it is going to take but in the not so distant future, IBM is going to fail because they can't deliver on projects and there will be no customers hiring them for project work due to IBM's poor reputation for quality. All the really skilled experienced employees were fired or run off. All that is left are offshored employees that have taken a 2 week class and put on projects to perform jobs they are not qualified for. Sad state of affairs at IBM these days.

      It is embarrassing to me to be part of IBM anymore when I see the shoddy work being delivered. The culture? There is no culture at IBM, unless it's a third world one.

    • IBM has a terrible culture - it's a toxic workplace rife with a lack of trust in the leadership. Employees are not valued despite that IBM is the #2 brand in the world because of "The IBMer". In a year, 2010, when IBM exceeded it earnings target and executive pay increased significantly (Sam's pay is up over 30%), the regular employees received only 25% of the bonus amount advertised as the target. Ginni's comments are right, culture is the No. 1 attribute of successful companies - too bad IBM's is very badly broken. Remember Sam "Culture eats strategy for breakfast. Leadership - that's just a snack". Think about that as you drive for $15 EPS by 2015. You may not have the required talent to execute by then. Have lunch with Lou Gerstner and forget everything you learned from John Akers.
    • There's little doubt in my mind that the culture at Armonk is as rosy as this article describes. Out here in the real world, the rest of us at IBM take great comfort in knowing that the people running the show here have their heads completely shoved in the sand (among other places).
    • I could barely finish reading this article for the sense of outrage welling up in me - this (perfectly correct) message from Ginny to the outside world is so ABSOLUTELY opposed to the reality of what it is to be an IBM employee in 2011, the hypocrisy is choking.

      When I joined IBM I was enormously proud to work for the company, and my good fortune was the envy of my university friends. IBM had an amazing culture, a real personality, so much more than the sum of its parts. It was genuinely a fantastic place to work. Sam, Ginny and their ilk have utterly and completely destroyed that culture. Being an IBMer is no longer something anyone should envy - pity would be a more appropriate emotion.

      In order to meet Sam's EPS 'roadmap' he, Ginny and their little gang of merry uber-Execs have stripped the heart out of the company, destroying value and the ability to create new value, instead focusing solely on short term results achieved by out of control cost cutting and share buy-backs ($18 billion in 2010 alone). IBM's 'strategy' is completely unsustainable, (skilled, experienced) employees are treated as nothing but an unwelcome and unnecessary cost burden and exist in an atmosphere of menace and in constant fear of being 'resource actioned' (an IBM-special adjective meaning 'given the boot').

      The only interest groups benefiting from this strategy are Sam/Ginny level Execs and shareholders (and then only those interested exclusively in short term value - if there is such a thing as a shareholder interested in long term business value they should be very afraid).

    • In my simple mind running a business needs to manage three interest groups - clients, employees, and shareholders. If any one of these groups 'fails', the business has no long term future (without a major strategy change). Today IBM has completely - completely - alienated its once extraordinarily loyal and dedicated workforce, and clients are constantly impacted by this and many other manifestations of short-termism. Shareholders interested only in short term gain I'm sure worship at little Sam and Ginny shrines every night, but these people are destroying the company. Their public pronouncements are so utterly at odds with IBM reality they beggar belief, and while we are all currently supposed to be wearing our party hats and 'celebrating' IBM's 100 year anniversary, I don't know any IBMer who feels the company will be here in its current form to celebrate 125 years, unless there is a dramatic change in direction and a rebalance of the three critical interest groups in the very near future.

      Which raises the question of who will succeed Sam when he retires later this year. Ginny is one of the most spoken-about successors. I know no-one inside IBM who views that possibility with anything other than dread.

  • Associated Press, courtesy of Forbes: Judge orders Indiana to turn over documents to IBM. Excerpts: A judge on Tuesday ordered Indiana to turn over documents sought by IBM in lawsuits stemming from the state's cancellation of a $1.37 billion contract the computer company received to modernize Indiana's welfare system. Marion Superior Judge David Dreyer ruled that documents the state said were privileged were not and should be turned over to IBM for review, The Indianapolis Star reported. The documents include emails from state employees, including Gov. Mitch Daniels. The Star reported the documents would not be made public. ...

    The state is suing IBM to recover more than $400 million it paid before Daniels canceled the 10-year contract in 2009 amid complaints about the automated welfare system. IBM's countersuit says the state still owes the company about $100 million.

  • Talking Points Memos (TPM): IBM In All-Out War With Mitch Daniels Over Indiana Legal Dispute. By Benjy Sarlin. Excerpts: The toughest rhetoric against potential presidential candidate Mitch Daniels so far isn't coming from his rivals. Computer giant IBM is launching a scathing attack on the Indiana governor over a pair of high-stakes lawsuits concerning a contract with the state that he cut short in 2009.

    Daniels canceled a 10-year $1.37 billion contract with IBM to update the state's social services system three years in after numerous complaints and critical articles about its effectiveness. Indiana then sued IBM to recover over $400 million it had already paid.

    IBM responded with its own suit demanding the state pay about $100 million for equipment already provided to Indiana. Now the company is demanding Daniels and his chief of staff give sworn depositions in the case and claiming that Daniels is betraying his campaign promises about transparency in government by refusing to comply.

    "It's been hypocrisy from the beginning," IBM spokesman Clint Roswell told TPM.

  • InformationWeek: IBM Seeks To Depose Indiana Governor. By Paul McDougall. Excerpts: IBM has asked a judge to order Indiana governor Mitch Daniels to make himself available for a deposition in a lawsuit over the state's outsourcing contract with the tech services giant, which Daniels terminated in 2009. Daniels' "refusal to be deposed and his attempt to hide public documents casts doubt on his credibility," an IBM spokesman told the political blog Talking Points Memo. "He expects transparency and openness from everybody but himself," the spokesman said.

    Indiana's Family and Social Services Administration tapped IBM in 2006 for a ten-year, $1.3 billion revamp of the creaky systems it was using to process applications for Medicaid, welfare, food stamps, and more than 160 other public assistance programs. IBM was also to handle a number of back office functions related to the services. The arrangement called for about 1,500 state employees to be transferred to IBM.

  • Austin American-Statesman: Texas to rebid IBM's data center contract. State contends Big Blue failed to fix persistent problems, but company disagrees. By Kate Alexander. Excerpts: Texas will begin looking for new companies to finish the data center consolidation work that IBM Corp. was hired to do almost four years ago, state officials said Tuesday. Though IBM's day-to-day obligations under the $863 million contract have not changed, the state is now taking the lead on the project, said Thomas Johnson, spokesman for the state's Department of Information Resources. ...

    The move probably signals the end of the seven-year contract between IBM and Texas to merge the data centers of 28 state agencies into two streamlined and secure facilities. The consolidation was supposed to be completed by December 2009 but is still only 12 percent complete. ...

    A month ago, the state warned IBM about several contractual violations and "chronic failures" with the project, which is far behind schedule and has been plagued by equipment failures, service complaints and other problems. The 30-day deadline for fixing those problems has now come and gone. Johnson said that "was their last chance to have the contract as it was, and they failed."

    IBM spokesman Jeff Tieszen said the company disagrees with the state's accusations of contract violations and the contention that IBM could be terminated for cause. Tieszen added that IBM is "hoping to continue a constructive dialogue."

    Selected reader comments follow:

    • IBM's problem here was human capital. They could not hire nor retain the skills needed to do this. IBM has laid off 10's of thousands of skills in the US to build skills in China, India, and Brazil, and the result is an inadequate bench in the US to perform properly on contracts of this size. For IBM to blame this on the state is ridiculous, this is IBM's lack of insight in managing human capital.
    • I'm shocked! Shocked, I say! All the politicians that told us private industry could just walk in and do such a better job. What happened? It's not so easy, is it? When IBM got in there and figured out that so many business decisions are made by either existing laws, rules, or a legislator's phone call for that matter, they pouted because they couldn't control everything. Hey...welcome to government, IBM. Wasn't so easy was it. Now, everyone stop wasting taxpayer's money.
    • Do we really have to guess at this outcome?? The state is going to pay IBM to go away, just like they do with bad employees, and IBM will take it and laugh all the way to the bank. IBM has already made more money off of this deal than they ever anticipated because the state only knows how to keep wasting OUR tax dollars. Reminds me of the cost saving ventures with welfare/Accenture and the backup/disaster center in West Texas. Oh well, some politician got their money - who cares about the rest of us.
    • Privatize! Privatize! Privatize! Oops!
  • Globes (Israel): IBM to pay employee let go due to age. By Chen Ma'anit. Excerpts: The Tel Aviv District Labor Court last week ordered IBM Israel Ltd. to pay a fired 62-year old employee NIS 192,000 in compensation, after ruling that he had been fired because of his age, and that the hearing process was flawed. Judge Ravit Sadik said that she found no genuine reason for firing the employee, and concluded that it was a case of age discrimination that contravened the Equality of Opportunities In Labor Law (5748-1988).

    Judge Sadik said, "When employing an elderly employee, whose advanced age makes it difficult to find another job, we believe that being fired at 62 is tantamount to the end of the road for that employee… In view of the fired employee's age, we believe that IBM should have actively sought to find a suitable alternative for the employee, who will reach retirement age in a few years."

    Judge Sadik ruled that there were flaws in the firing procedure of the employees, including a sudden summoning to a hearing, after being told only to "attend a meeting", thereby preventing him from preparing a proper response. The judge ordered IBM Israel to pay the employee eight monthly salaries, amounting to NIS 142,000, in compensation for these flaws.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM is self insured." by "madinpok". Full excerpt: In many (most) cases, the health care "provider" that you think you are signed up with is simply doing the administrative work of processing claims and providing the network of doctors and hospitals to IBM. IBM reimburses the insurance provider for all the bills paid to the doctors and hospitals. The health care provider does not have any profit or loss at stake in the care you receive. Although the contract with IBM probably gives them some sort of incentive to keep costs down.

    There are some exceptions to this, mostly with HMOs, where IBM actually pays a premium to the HMO.

    IBM also determines what drugs are on the formulary list and the co-pays for the Medco drug plan. But in the case where IBM pays premiums to an HMO, the HMO sets what is on the formulary list.

    A friend of mine had an issue with the amount that was paid when he used an out of network surgeon. It was way below what he thought the "usual and prevailing" charges should be.

    He called the insurance provider and they told him that the rate was determined by IBM. He tracked down the person who was in charge of the medical plans in IBM and called them. They claimed that the insurance provider set the rates and IBM had nothing to do with it. After about a year of finger pointing back and forth, IBM finally admitted that, yes, IBM does set the rates. Ultimately, IBM sent him a refund check for the underpayment.

    It was a good lesson in how IBM tries to use a 3rd party as a firewall between IBM and the employee. Someone less persistent would have not received a refund.

  • Yahoo! IBM Pension and Retirement Issues message board: "COLA Promises" by "danmayerinetport". Full excerpt: I was employed by IBM for nearly 35 years and was a manager from 1992 thru 2005 and participated in many HR prep sessions for resource actions, in Boca Raton and in Austin. Never as an employee or manager did anyone ever say to me or give me a presentation saying or implying that COLAs would be part of the pension plan. Even back to my early career, I don't remember any presentations or Annual Benefits statements saying anything about COLAs. I do remember being told in an mid-1970s HR presentation that retirement was a 3-legged stool: pension, social security, and employee savings. I heard variations of that statement repeatedly through my career.

    Like most, I didn't pay attention to retirement financial planning until relatively late. At around 25 years, by running the estimator program multiple times with different inputs, I became aware of the enormous amount of pension payout at stake by staying with IBM for the next few years. That prompted me to wade through the details of the pension plan document. Once I understood the formulas and tables, the mysteries of the estimator program's answers went away and I was able to plan effectively for retirement. And of course the pension plan document speaks to a constant payout and does not promise COLAs.

    Because it seems that a lot of people have memories of COLA promises from HR or upper management that don't correspond to my experiences, I'm wondering if this was something that was site-specific.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: COLA Promises" by "ibmmike2006". Full excerpt: I have a question Dan Mayer. Would you feel the same, had you been one of those who were RA'd before your pension maximized in your later 50's or early 60's?

    I think you are pretty uninformed when it comes to what happens to someone, say 51, who is "RA'd" or forced out only to hire a 20 something or send the job to India.

    The 50 something especially if you experienced the RA in the mid to late 90's, lost the time value of money to make up the loss in retirement. The average 65 year old has $55,000 in their IRA.

    If you had 35 years and got a pension, you were one of the few and not one of the 150,000 older IBM employees who were RA'd and lost the maximization of their pensions in the five years ending in the 90's.

    Faced with Age Discrimination in the workforce, which is real and many, I know, many were never able to recover what they lost.

    So, I think you have no right to say people should move on crap. You do not know one bit how the force out of people, the systematic force out program of Human Resources at IBM put forth under the direction of the 60 something executives, really had on older IBMers and their families.

    Just consider yourself lucky, that you "played the game" and did not let your morals get in the way of your job and you retired at 35 years, as many did NOT.

    You are putting yourself on high, but you need to step down from that pedestal and look around at some of those, you RA'd to see how most faired. Not just the successful some but all if you have the guts to do that.

    Gerstner stole $40 billion from the IBM pension plan and older employees lost 50% of their pensions and Lou walked away, after 9 years at IBM as one of Fortune 400 Richest, tooted as a "self made man" as part of the club having more wealth than 150 million Americans. He took $2.4 Billion with him. Anyone can become Rich stealing.

    THINK about it.

  • Bankrate.com: A tale of two pension plans: regular vs. CEO. By Barbara Whelehan. Excerpts: Corporate promises for a traditional pension benefit can be easily broken for the average worker, but not so for the top brass.

    Traditional pension plans for the average Joe are creeping into the Ice Age, as more companies have announced the decision to deep-freeze their pension plans to current or new employees -- or both. General Motors Corp. and Alcoa are among the latest to jump on the frozen-pension bandwagon that includes IBM, Verizon, Sears, Circuit City, Hewlett-Packard, Lockheed Martin, Motorola, Aon Corp. and NCR. Most of these companies are not on the verge of bankruptcy, mind you.

    This freeze phenomenon spells disaster for boomers who had been promised a pension and who have 10 years or more left till retirement. That's because benefits under the traditional pension formula ordinarily accrue at accelerated levels for older employees as they approach retirement. The last 10 years are absolutely crucial. With frozen plans, benefits stop building up altogether. ...

    But the retirement plans of highly paid executives are not affected at all by these trends. That's because they're a different breed. I mean the retirement plans, not the execs, though I suppose that statement could apply to either. Most top executives have so-called "supplemental executive retirement plans," or SERPs, that are governed by a different set of rules, because they're nonqualified plans.

    Qualified pension plans have tax benefits for both employer and employee and have to pass rigorous IRS nondiscrimination tests that ensure some semblance of fairness among highly compensated employees and those that are not highly compensated. Nonqualified plans have no tax benefits and no such fairness standards. ...

    Just how lavish are the retirement deals for top execs? It's not all that transparent because current rules allow their retirement packages to be obscured from investors, financial analysts, the media and everyone else. That might change in the future, as the Securities and Exchange Commission last month proposed that disclosure requirements be improved concerning executives' pay, including their retirement benefits.

    As it stands now, shareholders rarely get wind of just how generous executive retirement packages can be until it's too late -- when the executive already starts drawing payments. This information is not included in the summary compensation tables required under current law that are readily available to the public.

  • Wall Street Journal: Google Is No. 1 on List Of Desired Employers. By Joe Light Excerpts: One in four young professionals wants to work at Google Inc., according to a survey by Universum, a consulting firm that helps companies improve their attractiveness to prospective employees. Nearly 25% of survey respondents picked Google, almost twice as many as chose Apple Inc., which ranked second. Walt Disney Co., the U.S. State Department and Amazon.com Inc. rounded out the top five.

    See the complete ranked list of companies here. (Editor's note: IBM is ranked #30 with 3.51% of the vote.)

  • Glassdoor IBM reviews. Selected reviews follow:
    • BM Consultant in New York, NY: (Current Employee) "Promotion system is not always working." Pros: Benefits are not bad, flexible environment if you don't have work at the client site. Cons: Performance review process needs to be revised. It's a numbers based company, quality of work and work ethic does no longer matter if you don't meet utilization targets. Salary out of par with market ranges if you have been with a company for a longer period of time. Advice to Senior Management: Review the promotion and performance review process.
    • IBM IT Specialist in Costa Mesa, CA: (Current Employee) "IBM is a fantastic place to work." Pros: Quality people and a fast paced environment that will help you maximize your potential. Great flexibility of work/life balance. Even with all the changes in the world, and even some negative ones at IBM, IBM still manages to make the work experience a model for the rest of the world to look up to. Cons: Small fish in a big pond for sure, but these are merely by-products of the environment. Your challenge is not to complain about them but to adapt and become successful in the framework that exists. Advice to Senior Management: Amazing job in making and keeping IBM the quality organization that it is through and through. I couldn't be happier to be a part of it, and Thank You for the experience.
    • IBM Software Developer in Bangalore (India): (Current Employee) "Very dissatisfied. No support from management. HR and other support functions are faceless." Pros: WFH option. good for beginners to get a corporate exposure. Flexibility. No attendance marking. ISL IRL etc have cream of techies. Cons: All support functions are hopeless. No employee friendly environment. Transport department is a hell. Employee Manager relation is completely missing. Advice to Senior Management: You need to think about your employees. Do something for them, instead of putting graphs and figures in PPTs. Seriously rework on compensation part.
    • IBM Anonymous: (Past Employee - 2009) "Excellent opportunities for professional growth." Pros: - Work life balance; - opportunity to work on multiple assignments; - recognition for great work; - possibility to change jobs without changing company. Cons: Very difficult to find downside. It is an honour to work in this great organisation - i will look forward to joining back! Advice to Senior Management: Track and quickly hire back your Top Talent - do not let valued resources go to competition or other companies.
    • IBM IT Specialist in East Fishkill, NY: (Past Employee - 2009) "No longer a great place to work." Pros: online education readily available (but most likely have to do it on your own time); good salary; flexible work start times. Cons: little job security (employees are always on edge about the next job cut); global company means global work hours; many jobs going offshore. Advice to Senior Management: retain more US jobs as talent is diminishing due to offshoring of jobs
    • IBM Senior Managing Consultant: (Past Employee - 2011) "Services: Excessive Focus on Short Term, Killing Morale, Losing Talent." Pros: Top tier in image, and mind share in industry. Strong, respected brand name (based on inheritance of prior decades). So continues to be notable on a resume. Great (theoretical) potential for career based size and coverage. Pay is okay (not rock bottom, yet). Benefits are good (but are declining). Available online training is broad and mostly okay. Smart, talented people - team oriented.

      Cons: Software is IBM's main profit generator. Services (GBS) is waning in importance. Implication: Software gets the new investment, leaving fewer career opportunities in Services.

      Simple rule: Biggest cost for services is people, so either reduce people or reduce the cost of people. Implications for current / potential new employees:

      • Long term focus to reduce US based headcount in favor of off shore or "landed" resources. Ask yourself why IBM will not publish its US population numbers anymore
      • Extremely limited education and training (now nearly 100% on your own time, almost exclusively with online training)
      • Downward pressure on pay. Maybe starting pay will be good (hires are treated better than current staff), but low increases/bonuses for top performers. Cheap college hires may not notice this until about five years when reality hits
      • Benefits are a cost versus a attraction/retention of good talent. IBM has been at the "cutting edge" in the pension reform.
      • If you are a professional hire, at a senior level, know that your tenure is short. It is unsustainable versus the low cost replacement headcount, especially when coupled with increasing performance bar (now, lower band levels are expected to do work that was once the responsibility of those one or two levels higher). College hires are now hired into lower band levels than in the past decade.

      Simple rule: Headcount x Utilization = Revenue. Implication:

      • Vacation and work-life balance are almost meaningless. Every year utilization targets go up. Any earned vacation with years of service has to be "made up" to meet your targets. You also have to "make up" for bench time or take a performance hit. At higher bands you will be loaded up with signings, utilization targets, and manage people. The burden is not accounted for, so you will be working late evenings, weekends and your vacation time. For the ambitious one who gambles to take a run at top performer recognition – there is no life.
      • There is no room for Education/Training unless you do it all on your own time and dime.
      • Like a contractor, you are responsible for finding your next gig. IBM will not carry you for long. If you get a poor rating because of missed targets, you will be on the list for cuts.
      • You are more on your own from a personnel point of view. Your manager has less time than ever. You cannot rely on your manager alone for a "fair" performance review.
      • As a manager, you will have to choose between time spent on employees versus time on your targets versus time with your family. Executives will beat you up on all but your family.
    • IBM Channel Marketing Manager: (Current Employee) "It has been a good experience overall." Pros: The respect by management of the need for true work/life balance. I live in a major city with heavy traffic congestion and being able to work from home allows me the ability to start my day earlier and I am far more productive. The greatest assets of IBM are its people, regardless of the role, IBMers are some of the smartest people in the industry. IBM encourages and helps to facilitate opportunities for all employees and the company to give back to the communities in where they have a presence. Cons: I believe that favoritism and nepotism is very much alive and therefore, career advancement is limited. IBM salaries are very conservative compared to its competitors It is impossible to figure out your commission earnings..and that was by design! IBM has completely changed the company recognition events due to the economy and have done away with all kick-offs, trainings etc...all in the name of improving the bottom line to shareholders...but at the expense of company morale. Advice to Senior Management: Sr Leaders need to support and implement funding that would allow mid level managers to recognize employees throughout the year.
    • IBM Anonymous in Somers, NY: (Current Employee) "Nothing like the Good Old Watson time." Pros: IBM is great about Work Life balance, Flexibility to work remotely, benefits are not bad. For a big corporation like IBM, it's actually less cutting throat, and many co-workers are actually very friendly to each other. Cons: No more Job security, many jobs are offshored and it happens quite frequently! Managements are coached by executives to be dishonest to employees. No more encouragement for good performance, no more promotion or raise. Advice to Senior Management: Favoritism is becoming a bad trend in IBM - managers are not good at handling their friendship with their staff. And the executives need to be more friendly to the low level staff, can't use "the director is very shy" as excuse anymore. Please put a stop on the "Corporate Boys Club"!

    Simple rule: Targets rule - they dictate behavior. Into the management and executive layers, it becomes apparent quickly that behavior is shaped by their measurements. This has the tendency to reduce the cooperation between divisions and between sectors within Services, and even managers within service areas. It is hard to articulate the magnitude of the impact of this without going into examples - impossible to do here. Cannot say that this is worse than other companies, but can say that it has become more of a problem of late. Implication:

    • You will feel more like a number than a valued employee, since there is less room than ever to make long term commitments and career plans. Focus is on ute and signings, not your career.
    • You will be positioned for more of the same in your next role. It will be rare to work on something truly "innovative". The safe road is the tried and true and no investment will be made without payback before the calendar year, if not quarter.
    • You will have limited opportunity to move across sectors or divisions - impacts manager's/executive's headcount in the short term.
    • You may be blind sided by the outfall of some squabble or issue between executives - keep an eye out and build multiple relationships (invest yet more of your time) is all you can do.
    • Above all, look out for yourself, as nobody is going to look out for you - it takes too much time and there is no bonus tied to it. In fact, the shareholders are rewarding the current behavior.

    Advice to Senior Management: IBM is so far down the current path, the executives have a vested interest in the current model, and the executives are so disengaged with what is happening on the front line that it will take something disruptive to make a change.

    As I see it the Services model is unsustainable for many reasons articulated above, and in particular because of the burdens on the staff and the management team - consequence of current path is IBM will retain the wrong kind of staff, develop a contractor mentality among the staff, lost company culture. However, this may fit well with the comment/"speculation" by an IBM HR executive a year ago about transitioning to a crowd-sourced based model of staffing in coming years.

    IBM needs to quit with the secrecy. Rules have changed, expectations have changed, don't pretend that performance is measured against the same baseline. Folks were surprised with the downshift in performance ratings the past couple of years. This needs clarity. Come up with a coherent/consistent message about IBM. Folks in the trenches hear that IBM is doing great...record stock value. They also hear that we had a (yet another in a long string of) bad year, therefore bonuses and performance increases will be low if any.

    In another case, people realize that it is a global economy, so no need to hide the transition to off shore. They won't like it, why should they, but they should be told. Consequence of current lack of transparency - lost of trust by employees. IBM is moving too fast to offshore - the impact is felt in many places, in delivery, in support, in administration. One example - never seen Lotus Notes servers "go down" for at all for years, nor web sites...nowadays this is not an unusual thing.

    A lot of ideas stood behind the statement "respect for the individual" back in the day. Seems lost in today's culture. IBM had to change, but did the baby have to go out with the bathwater? History will decide.

  • Wall Street Journal: Retirement 101: How to Figure Out What You'll Need. By Brett Arends. Excerpt: Millions of Americans fear retirement. They fear the unknown. They fear not having enough money to live comfortably. They fear that they are going to end up living in poverty and eating cat food, as the cliché goes. "Americans' confidence in their ability to afford a comfortable retirement has plunged to a new low," says the latest annual Retirement Confidence Survey from the Employee Benefits Research Institute, a respected nonprofit think tank. ...

    According to EBRI, just 42% have even tried to work out how much they'll need. The most popular way of estimating retirement needs is guesswork. OK. Here's Retirement 101. If you're totally baffled, try these six simple steps. It's not a plan. But it's something anyone can do in 10 minutes or less, and it will give you a much better idea where you stand—and what you need to do.

  • BankRate.com: A tale of two pension plans: regular vs. CEO. By Barbara Whelehan. Excerpts: Corporate promises for a traditional pension benefit can be easily broken for the average worker, but not so for the top brass. Traditional pension plans for the average Joe are creeping into the Ice Age, as more companies have announced the decision to deep-freeze their pension plans to current or new employees -- or both. General Motors Corp. and Alcoa are among the latest to jump on the frozen-pension bandwagon that includes IBM, Verizon, Sears, Circuit City, Hewlett-Packard, Lockheed Martin, Motorola, Aon Corp. and NCR. Most of these companies are not on the verge of bankruptcy, mind you.

    This freeze phenomenon spells disaster for boomers who had been promised a pension and who have 10 years or more left till retirement. That's because benefits under the traditional pension formula ordinarily accrue at accelerated levels for older employees as they approach retirement. The last 10 years are absolutely crucial. With frozen plans, benefits stop building up altogether. ...

    But the retirement plans of highly paid executives are not affected at all by these trends. That's because they're a different breed. I mean the retirement plans, not the execs, though I suppose that statement could apply to either. Most top executives have so-called "supplemental executive retirement plans," or SERPs, that are governed by a different set of rules, because they're nonqualified plans.

    Qualified pension plans have tax benefits for both employer and employee and have to pass rigorous IRS nondiscrimination tests that ensure some semblance of fairness among highly compensated employees and those that are not highly compensated. Nonqualified plans have no tax benefits and no such fairness standards. ...

    Just how lavish are the retirement deals for top execs? It's not all that transparent because current rules allow their retirement packages to be obscured from investors, financial analysts, the media and everyone else. That might change in the future, as the Securities and Exchange Commission last month proposed that disclosure requirements be improved concerning executives' pay, including their retirement benefits. ...

    Time Magazine reported last fall on this phenomenon in its cover story, "The Great Retirement Ripoff." The article pointed out that, for example, Leo Mullin, former CEO and chairman of Delta Air Lines, received service credits amounting to 21 years that were added to his actual tenure of about 7.5 years, an allowance that greatly augmented his retirement benefits. And here's the corker: "Under Mullin's stewardship, Delta killed the defined-benefit pension of its nonunion workers and replaced it with a less generous plan," Time reporters Donald Barlett and James Steele noted. What stunning leadership!

  • New York Times: G.E.'s Strategies Let It Avoid Taxes Altogether. By David Kocieniewski. Excerpts: General Electric, the nation's largest corporation, had a very good year in 2010. The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

    Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

    That may be hard to fathom for the millions of American business owners and households now preparing their own returns, but low taxes are nothing new for G.E. The company has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.

    is extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.'s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world's best tax law firm. Indeed, the company's slogan "Imagination at Work" fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress. ...

    A review of company filings and Congressional records shows that one of the most striking advantages of General Electric is its ability to lobby for, win and take advantage of tax breaks. Over the last decade, G.E. has spent tens of millions of dollars to push for changes in tax law, from more generous depreciation schedules on jet engines to "green energy" credits for its wind turbines. But the most lucrative of these measures allows G.E. to operate a vast leasing and lending business abroad with profits that face little foreign taxes and no American taxes as long as the money remains overseas. ...

    The assortment of tax breaks G.E. has won in Washington has provided a significant short-term gain for the company's executives and shareholders. While the financial crisis led G.E. to post a loss in the United States in 2009, regulatory filings show that in the last five years, G.E. has accumulated $26 billion in American profits, and received a net tax benefit from the I.R.S. of $4.1 billion.

    But critics say the use of so many shelters amounts to corporate welfare, allowing G.E. not just to avoid taxes on profitable overseas lending but also to amass tax credits and write-offs that can be used to reduce taxes on billions of dollars of profit from domestic manufacturing. They say that the assertive tax avoidance of multinationals like G.E. not only shortchanges the Treasury, but also harms the economy by discouraging investment and hiring in the United States. ...

    General Electric has been a household name for generations, with light bulbs, electric fans, refrigerators and other appliances in millions of American homes. But today the consumer appliance division accounts for less than 6 percent of revenue, while lending accounts for more than 30 percent. Industrial, commercial and medical equipment like power plant turbines and jet engines account for about 50 percent. Its industrial work includes everything from wind farms to nuclear energy projects like the troubled plant in Japan, built in the 1970s. Because its lending division, GE Capital, has provided more than half of the company's profit in some recent years, many Wall Street analysts view G.E. not as a manufacturer but as an unregulated lender that also makes dishwashers and M.R.I. machines. ...

    Transforming the most creative strategies of the tax team into law is another extensive operation. G.E. spends heavily on lobbying: more than $200 million over the last decade, according to the Center for Responsive Politics. Records filed with election officials show a significant portion of that money was devoted to tax legislation. G.E. has even turned setbacks into successes with Congressional help. After the World Trade Organization forced the United States to halt $5 billion a year in export subsidies to G.E. and other manufacturers, the company's lawyers and lobbyists became deeply involved in rewriting a portion of the corporate tax code, according to news reports after the 2002 decision and a Congressional staff member. ...

    While G.E.'s declining tax rates have bolstered profits and helped the company continue paying dividends to shareholders during the economic downturn, some tax experts question what taxpayers are getting in return. Since 2002, the company has eliminated a fifth of its work force in the United States while increasing overseas employment. In that time, G.E.'s accumulated offshore profits have risen to $92 billion from $15 billion.

    "That G.E. can almost set its own tax rate shows how very much we need reform," said Representative Lloyd Doggett, Democrat of Texas, who has proposed closing many corporate tax shelters. "Our tax system should encourage job creation and investment in America and end these tax incentives for exporting jobs and dodging responsibility for the cost of securing our country."

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 3/24/11: For those in global services, anyone nearing retirement has a HUGE target, any managers on sick leave = fired, I've seen it happen. If any portion of your team has been transferred to India + GDF = get out. There is no hope once GDF hits, it's all down hill. Your manager will pretend to be your friend, but the reality is quite different, account execs are also in the loop. Please do yourself a favour & find either a different internal posting or starting spreading your resume. Ibm has become a monster of a outsourcing maching, clients want to save money, ibm wants to save money = NA workforce is obsolete .. sorry i see it happen every day. -Anonymous-
    • Comment 3/25/11: -Loophole- IBM has the best loopholes money can buy. Entire law firms work exclusively for Big Blue and no one else. Prove employees over 50 are being discriminated against in rehiring. Even if you can they will tie you up in court for 30 years. Actuarial tables say you will be dead in 25 . IBM lawyers tied the justice department up do long it gave up and dropped the antitrust case. Now that's a loophole. A senior IBM VP pled guilty to insider trading. To my knowledge no further investigation of other execs followed. Think they worry about anyone they already fired once charging them with rehiring discrimination. Not a chance. The only thing might worry them is a union rep duly elected sitting across from them at contract negotiation time. They may not even fear that anymore as they are now so filthy rich they all can just walk away laughing. Sad but true. -Exodus2007-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
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  • GritTV: Michael Moore & Donna Smith: Still Sicko. Excerpt: Sooner or later people are going to realize that decisions about whether one lives or dies should not be predicated on 'How much money can I make off this?'" says Michael Moore, looking back at his film Sicko with Donna Smith of National Nurses United. They both note that it's the health care workers who are leading the fight for a better system for all, even as those workers are under attack themselves.

    To kick off our new series, The Nurses' Station, Michael and Donna joined Laura in studio for a look back at Sicko and a conversation about what has changed since the film was made, and why it's not enough.

  • New York Times: Pre-existing Condition? Now, a Health Policy May Not Be Impossible. By Walecia Konrad. Excerpts: Six years ago, Jerry Garner, 45, a real estate agent in Gowen, Mich., underwent a kidney transplant. He recovered nicely, and thanks to diligent adherence to his drug regimen and frequent checkups, he has been healthy ever since — "a miracle," said his wife, Stephanie.

    But last year, the Garners were starting to believe that their good fortune had run out.

    Mr. Garner's insurer asked that he fill out a survey, but somehow this piece of mail slipped through the cracks at the Garner household. As a result, he lost his health insurance. (Ms. Garner, 44, and three of the children — their oldest child is grown — were covered under a different policy.) But because of his pre-existing condition, Mr. Garner proved impossible to insure. ...

    Finally, after weeks of searching the Internet, making phone calls and praying, Ms. Garner saw a television ad for Michigan's new pre-existing condition insurance plan. P.C.I.P.'s, as they are known, are state and federal programs for people previously deemed uninsurable because of pre-existing conditions. They offer a bridge to 2014, when the new health insurance exchanges, which must accept all comers, are to open.

    Mr. Garner applied to Michigan's plan and was accepted. Now he pays less in premiums than he did under his previous plan, and he receives more comprehensive coverage. ...

    Pre-existing condition insurance plans, required by the new health care law, opened for business in July. The new plans come in two flavors: 27 states run their own plans with federal money, while the rest rely on the federal Department of Health and Human Services to administer the plans within their borders.

  • Washington Post: Future of health care overhaul still in question at 1-year mark: Costs, courts big factors. Excerpts: One year after President Barack Obama signed his historic health care overhaul, the law is taking root in the land. Whether it bears lasting fruit is still in question. The legislation established health insurance as a right and a responsibility. Thousands of families, businesses and seniors have benefited from its early provisions. ...

    Public divisions over the law are still so sharp that Americans can't even agree what to call it. Supporters call it the Affordable Care Act, a shorter form of its unwieldy official title. It's also known as "Obamacare," the epithet used by Republicans seeking its demise. ...

  • Crooks and Liars: Survey: Nine Million More Americans Added to Ranks of Uninsured in Recession. By Susie Madrak. Excerpts: I wonder how many people drained their savings to cover COBRA payments because they thought they'd soon find a new job. That's why the new healthcare law, as flawed as it is, is a big step toward building a safety net:
    The millions of Americans who lost their jobs and their health benefits during the recession often had no way to regain affordable health coverage, leaving them and their families at risk of financial ruin, according to a new report from The Commonwealth Fund.
    The spate of layoffs during the recession catapulted 9 million more Americans — or 57% of those who had had health insurance in a job that evaporated over the last two years — into the ranks of the millions already uninsured. In addition, 19 million people anxiously seeking private coverage over the last three years were either turned down or could not find a plan that was affordable and met their needs, the report found.
    The Biennial Health Insurance Survey also found a whopping 60% increase in skipped care due to cost in the past decade. The survey reported that medical debt problems and out-of-pocket spending costs were on the rise as well, with 29 million Americans using up their entire life savings to pay for medical bills and millions more unable to afford food, heat and rent due to medical payments. ...
    "The silver lining is that the Patient Protection and Affordable Care Act has already begun to bring relief to families," Davis added. "Once the new law is fully implemented, we can be confident that no future recession will have the power to strip so many Americans of their health security."
  • AlterNet: Living the Good Life in Europe: Ex-Pats Enjoy Better Health, Schools. By Alex Henderson. Universal health care, better public education systems, socially liberal attitudes, a frustration with American politics ... there are many reasons to live in Europe. Excerpts: Even with the U.S. dollar's weakness against the euro and the pound, Europe continues to be a major vacation spot for American tourists. But for many other Americans, Europe is more than a place to visit or go on holiday; it is where they live, work, get married and are possibly raising a family. According to the Association of Americans Resident Overseas (AARO), more than 5.08 million Americans (not counting those serving in the U.S. military) are living outside the United States—and roughly 1.2 million of them can be found in different parts of Europe.

    But what are the main things that make American expatriates want to live in Europe permanently or indefinitely? Universal health care, better public education systems, lower crime rates, socially liberal attitudes, a frustration with American politics? The reasons why some American expatriates prefer life in Europe over life in the U.S. can vary, but according to Joanna Hubbs (president and senior editor of the expatriate-oriented website TransitionsAbroad.com and author of the book "Mother Russia: The Feminine Myth in Russian Culture"), the main reason why Americans initially decide to move to Europe is because they fall in love with all the cultural beauty that Europe has to offer. And after they have taken the plunge and become situated, things like universal health care, a social safety net, a strong infrastructure and socially liberal attitudes may encourage them to stay. ...

    Political activist/blogger Avedon Carol, known for her work with the organization Feminists Against Censorship (FAC), is an American expatriate who grew up in Maryland and has lived in London since 1985. Carol has used the U.K.'s National Health Service (NHS) extensively over the years, and she has no major complaints. Comparing the American health care system with socialized medicine in Great Britain, Carol said: "There are many differences, but the only one where the U.S. does better is that doctor's offices have nicer furniture. In every other way, I would say the NHS is superior. ..."

    Angela Carson has high praise for Spain's universal health care system. "I think the Spanish health care system is great," Carson asserted. "It's fantastic. In the States, how many people die each year just from not having health care insurance? That never happens here in Spain. No matter what your status is—whether you are on welfare here or whether you are the richest person—you have great quality health care." ...

    The World Health Organization (WHO), in fact, has said that Spain has the seventh best health care system in the world—and Spain, according to the CIA World Factbook's estimate for 2010, now has a life expectancy of 81 (factoring in both men and women). But the world's best health care system, according to WHO, can be found in France. Linda Lee Hopkins, an American R&B/jazz/gospel singer who was born in North Carolina but has lived in Paris for 20 years, said of the French health care system: "I have nothing to say against this health care system because for me, it has supplied every need I have presented. For example, I needed extensive work done on my teeth because I am an entertainer and it is very important that you present yourself in a certain manner. I had about $8000 worth of work done, and it was all paid for by my insurance. I never have to pay for prescriptions, and I am reimbursed a large part of my doctor visits as well as full payment for my glasses. I don't think that this leaves me much room to complain. I am sure that this would never happen with the health care system in the U.S." ...

    One argument that Republicans in the U.S. often make against Europe's social welfare model is the amount of taxation, but Carson felt that tax-wise, she was getting her money's worth in Spain. Carson said that at one point (before the Spanish economy seriously tanked), she was in a high-income tax bracket and was paying a tax rate of about 40%. But those taxes, she said, support a lot of things that she likes about Spain, including infrastructure, universal health care, a quality education system, and a broader social safety net. "In countries like Denmark," Carson pointed out, "people are paying a high amount of taxes. But the benefits they receive are nice. They go to the university for free. I wish Americans could see the benefit of that socialized system instead of just seeing the deduction of another $40 from their paychecks."

  • truthOut: One-Year Anniversary: The Incredible Shrinking Obama Health Care Law. By Kevin Zeese. Excerpts: At its one-year anniversary, the Obama health care law is shrinking while the health care crisis grows. Americans who lack any health coverage still exceeds 50 million, over 45,000 deaths occur annually due to lack of health insurance, and 40 million Americans, including over 10 million children, are underinsured.

    Premiums are rising and coverage is shrinking; a new norm is taking hold in America: "Unaffordable underinsurance." This month, the number of waivers granted to the Obama health law broke 1,000, protecting inadequate insurance plans. The expansion of health insurance to the uninsured is becoming a mirage. The Obama administration has told states they could reduce the number of people covered by Medicaid as well as reduce the services provided. And the centerpiece of the law is under court challenge, - the mandate is the first time ever the federal government has forced Americans to buy a corporate product, private health insurance - heading to a close Supreme Court decision.

    To make insurance premiums affordable, the quality of insurance will need to be reduced, so there is less coverage and more out-of-pocket costs, as Don McCanne MD, senior health policy fellow for Physicians for a National Health Program, writes: "'Unaffordable underinsurance' is rapidly becoming the new standard in the United States." The trend in health insurance is rising premiums and shrinking coverage for many Americans who get their coverage at work as well as on the individual insurance market. ...

    Underinsurance, requiring Americans to pay more of the cost of health care, may become the norm because of the 2010 law. The new law will hasten the current trend toward underinsurance as plans where patients pay an average of 40 percent of their health care bills qualify to fulfill the employers' obligations to provide coverage rather than pay an assessment. Massachusetts, the model on which the Obama reforms are based, recently found that medical bankruptcies have not decreased with the new law. The lesson: it is not just health insurance, but the quality of the insurance that matters. After deriding merely adequate insurance as Cadillac Plans, directed-health-plans>the Obama administration is showing support for high-deductible plan with large out-of-pocket costs that do not provide financial or health security. ...

    The imploding health care law is creating an opening, which may require a reconsideration of health care reform within the next five years. Americans consistently favor simply expanding and improving Medicare to cover all Americans. Terry Dougherty, director of MassHealth, from a state where the model for the Obama law is in place, reached the obvious conclusion: "I like the market, but the more and more I stay in it, the more and more I think that maybe a single payer would be better." He noted that, unlike the insurance industry, government costs less, with much lower administrative costs and he said, "We don't build big buildings. We don't have high salaries. We don't have a lot of marketing." ...

    The failing Obama reforms show that the obvious must be faced: confront the health insurance industry, which makes coverage of all Americans unaffordable. President Obama knew before running for president that single payer was the solution, but after receiving $20 million in donations from the insurance industry, he refused to let the only real solution, improved Medicare for all, be considered. It is time to put in place a single-payer health care program that ensures that all US residents have quality health care at less cost than they currently pay.

News and Opinion Concerning the "War on the Middle Class"
Minimize "It is a restatement of laissez-faire-let things take their natural course without government interference. If people manage to become prosperous, good. If they starve, or have no place to live, or no money to pay medical bills, they have only themselves to blame; it is not the responsibility of society. We mustn't make people dependent on government- it is bad for them, the argument goes. Better hunger than dependency, better sickness than dependency."

"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.

  • New York Times op-ed: The War on Warren. By Paul Krugman. Excerpts: When the 2008 financial crisis struck, many observers — myself included — thought that it would force opponents of financial regulation to rethink their position. After all, conservatives hailed the debt boom of the Bush years as a triumph of free-market finance right up to the moment it turned into a disastrous bust.

    But we underestimated the speed and determination with which opponents of regulation would rewrite history. Almost instantly, that free-market boom was retroactively reinterpreted; it became a disaster brought on by, you guessed it, excessive government intervention.

    There remained, however, the inconvenient fact that some of those calling for stronger regulation have a track record that gives them a lot of credibility. And few have as much credibility as Ms. Warren.

    Household debt doubled as a share of personal income over the 30 years preceding the crisis, and these days high levels of debt are widely seen as a major barrier to recovery. But only a handful of people appreciated the dangers posed by rising debt as the rise was happening. And Ms. Warren was among the foresighted few. More than a decade ago, when politicians of both parties were celebrating the wonders of modern banking and widening access to consumer credit, she was already warning that high debt levels could bring widespread financial disaster in the face of an economic downturn.

    Later, she took the lead in pushing for consumer protection as an integral part of financial reform, arguing that many debt problems were created when lenders pushed borrowers into taking on obligations they didn't understand. And she was right. As the late Edward Gramlich of the Federal Reserve — another unheeded expert, who tried in vain to get Alan Greenspan to rein in predatory lending — asked in 2007, "Why are the most risky loan products sold to the least sophisticated borrowers?" And he continued, "The question answers itself — the least sophisticated borrowers are probably duped into taking these products." ...

    The fact that she's so well qualified is, of course, the reason she's being attacked so fiercely. Nothing could be worse, from the point of view of bankers and the politicians who serve them, than to have consumers protected by someone who knows what she's doing and has the personal credibility to stand up to pressure. ...

    In retrospect, the financial crisis of 2008 was a missed opportunity. Yes, the White House succeeded in passing significant new financial regulation. But for whatever reason, it failed to change the terms of debate: bankers and the disaster they wrought have faded from view, and Republicans are back to denouncing the evils of regulation as if the crisis never happened.

  • Think Progress: Gingrich Says We Should 'Celebrate' Corporate Tax Dodgers, Argues Employees Should Pay Instead. By Scott Keyes. Excerpt: One of the top priorities for Republicans this year has been to preserve and extend corporate tax breaks. This includes GOPers like former Minnesota governor Tim Pawlenty and Rep. Louie Gohmert (R-TX) who have eagerly defended corporations like Bank of America, ExxonMobil, and GE which have avoided paying a dime in corporate income taxes in recent years, but rake in huge annual profits.
  • The Smirking Chimp: High Noon On Wall Street. By RJ Eskow. Excerpts: A new report from from Bloomberg Government confirms that the "too big to fail" banks at the heart of the last crisis and TARP bailout have become bigger since the crisis, not smaller. Bloomberg Government reports that "the number of 'too big to fail banks' will increase by 40 percent over the next 15 years," adding: "Today, the top 10 banks hold 77 percent of all U.S. bank assets, compared with 55 percent of the total assets in 2002."

    Here's another flashing red light: The Federal Reserve's chief bank regulator said 30% of the banks in this country have "less than satisfactory" supervisory ratings. Banks are "stabilizing" overall, said Patrick Parkinson, but banks in this country are "still in the repair and recovery stage." ...

    If one-third of America's airliners had "less than satisfactory" ratings and one-twelfth of them were at risk of failure, they'd shut down every airport in the country. But politicians are all too eager to help banks keep flying the friendly skies, unsafe or not. They'll probably even serve "a complimentary beverages of your choice" if they're asked.

    Take House Majority Leader Eric Cantor, who addressed the American Bankers Association this week and told them "You are at the center of what allows our economy to grow!" (That would explain our current record levels of unemployment and under-employment - 25 million Americans at last count.)

    Cantor added: "We are not overregulated, we are super-overregulated!" Cantor's neologism, "super-overegulated," is reminiscent of "Supercalifragilisticexpialidocious," the made-up word from Mary Poppins that inspires Dick Van Dyke to burst into song. It's like that - but without the intellectual heft.

    Cantor and his fellow Republicans insist that "We don't need more regulation" even as too-big-to-fail banks get bigger and staggering numbers of banking institutions remain fragile, capable of collapsing at any serious external shock to the economic system. And they're backing up their words with a series of measures to repeal (rather than strengthen) the reforms put in place last year. ...

    On one hand, there are the Republicans, whose most eloquent spokesman is Rep. Spencer Bachus: "In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks."

  • BuzzFlash: A Tale of Two Americas: One America Lives on Greed; The Other America Barely Survives to Live. By Mark Karlin. Excerpts: Yes, it's the tale of two Americas. To its no doubt cheering readership, The Wall Street Journal reported today that big CEO bonuses are back - and back big time:
    CEO bonuses at 50 major corporations jumped a median of 30.5%, the biggest gain in at least three years, according to a study of the first batch of corporate CEO pay disclosures by consulting firm Hay Group for The Wall Street Journal.

    Meanwhile, amid a continued unemployment crisis, indications of financial distress and basic subsistence are also soaring:

    From November to December of 2010 487,000 Americans were added to the food stamp program. Keep in mind this all occurred while the stock market continued to soar and has rallied nearly 100 percent from the lows reached in March of 2009.
    Working and middle class Americans barely have enough to pay for the monthly bills so speculating in Wall Street is likely the least of their concerns. The data on food stamp usage usually trails the current calendar date by one quarter. The latest data we have is from December of 2010. However, we are adding roughly 300,000 people per month to the food stamp program called SNAP. If that is the case, as of today we now have 45,000,000 Americans participating in the food stamp program....
    This is the highest percent of Americans on food assistance since the Great Depression when there was no food assistance early on aside from local charities.

    It's a tale of two Americas: one gorging on gluttony, and one barely able to survive. And the safety net for those in need is being cut with a machete knife as the richest among us get richer.

  • New York Times op-ed: The Forgotten Millions. By Paul Krugman. Excerpts: More than three years after we entered the worst economic slump since the 1930s, a strange and disturbing thing has happened to our political discourse: Washington has lost interest in the unemployed.

    Jobs do get mentioned now and then — and a few political figures, notably Nancy Pelosi, the Democratic leader in the House, are still trying to get some kind of action. But no jobs bills have been introduced in Congress, no job-creation plans have been advanced by the White House and all the policy focus seems to be on spending cuts.

    So one-sixth of America's workers — all those who can't find any job or are stuck with part-time work when they want a full-time job — have, in effect, been abandoned. ...

    In short, we're well on the way to creating a permanent underclass of the jobless. Why doesn't Washington care? ...

    I still don't know why the Obama administration was so quick to accept defeat in the war of ideas, but the fact is that it surrendered very early in the game. In early 2009, John Boehner, now the speaker of the House, was widely and rightly mocked for declaring that since families were suffering, the government should tighten its own belt. That's Herbert Hoover economics, and it's as wrong now as it was in the 1930s. But, in the 2010 State of the Union address, President Obama adopted exactly the same metaphor and began using it incessantly. ...

    So who pays the price for this unfortunate bipartisanship? The increasingly hopeless unemployed, of course. And the worst hit will be young workers — a point made in 2009 by Peter Orszag, then the White House budget director. As he noted, young Americans who graduated during the severe recession of the early 1980s suffered permanent damage to their earnings. And if the average duration of unemployment is any indication, it's even harder for new graduates to find decent jobs now than it was in 1982 or 1983.

    So the next time you hear some Republican declaring that he's concerned about deficits because he cares about his children — or, for that matter, the next time you hear Mr. Obama talk about winning the future — you should remember that the clear and present danger to the prospects of young Americans isn't the deficit. It's the absence of jobs.

  • New York Times: An Advocate Who Scares Republicans. By Joe Nocera. Excerpts: The big banks loathe Ms. Warren, who has made a career out of pointing out all the ways they gouge financial consumers — and whose primary goal is to make such gouging more difficult. So, naturally, the Republicans loathe her too. That she might someday run this bureau terrifies the banks. So, naturally, it terrifies the Republicans.

    The banks and their Congressional allies have another, more recent gripe. Rather than waiting until July to start helping financial consumers, Ms. Warren has been trying to help them now. Can you believe the nerve of that woman?

    At the request of the states' attorneys general, all 50 of whom have banded together to investigate the mortgage servicing industry in the wake of the foreclosure crisis, she has fed them ideas that have become part of a settlement proposal they are putting together. Recently, a 27-page outline of the settlement terms was given to banks — terms that included basic rules about how mortgage servicers must treat defaulting homeowners, as well as a requirement that banks look to modify mortgages before they begin foreclosure proceedings. The modifications would be paid for with $20 billion or so in penalties that would be levied on the big banks.

    Naturally, the banks hate these ideas, too. So the Republican members of the subcommittee had another purpose as well: to use the hearing to serve as a rear-guard action against the proposed settlement. ...

    To listen to the House Republicans, you'd think the financial crisis of 2008 was like that infamous season of the long-running soap opera "Dallas," the one that turned out to be a season-long dream. Subprime mortgages? Too-big-to-fail banks? Unregulated derivatives? No problem! With the exception of their bête noire, Fannie Mae and Freddie Mac, the Republicans act as if nothing needs to be done to prevent another crisis. Indeed, they act as if the crisis never happened. ...

    It's not just the House Republicans either. Already the Office of the Comptroller of the Currency has reverted to form, becoming once again a captive of the banks it is supposed to regulate. (It has strenuously opposed the efforts of the A.G.'s to penalize the banks and reform the mortgage modification process, for instance.) The banks themselves act as if they have a God-given right to the profit they made precrisis, and owe the country nothing for the trouble they've put us all through. The Justice Department has essentially given up trying to make anyone accountable for the crisis.

    Thank goodness, then, for the attorneys general — and for Ms. Warren. On Main Street, where the attorneys general operate, it is pretty obvious that problems persist. During the subprime boom, many states tried to stop the worst lending abuses, only to be blocked by federal banking regulators. Now that the country is dealing with the aftermath of those abuses — the rising tide of defaults and foreclosures — it is the attorneys general who are, once again, put in the position of trying to stamp out abuses, this time of the foreclosure process itself. ...

    As I listened to her on Wednesday, I was struck anew at how clearly she articulates the need for the new bureau. "If there had been a cop on the beat to hold mortgage servicers accountable a half dozen years ago," she said at one point, "the problems in mortgage servicing would have been found early and fixed while they were still small, long before they became a national scandal." ...

    It has been much noted in recent months that President Obama seems unwilling to start a fight with Republicans. Maybe that's why he has shied away from nominating Ms. Warren to a job for which she is so clearly suited. But if protecting financial consumers — and helping the millions of Americans struggling to hold onto their homes — isn't worth fighting for, then what is?

  • Washington Post: GOP freshman Pompeo turned to Koch for money for business, then politics. By Dan Eggen. Excerpts: When Mike Pompeo needed funding for a Wichita aerospace company, one of the places he and his partners went for help was Koch Industries, a hometown firm that is among the world's largest privately held corporations. Last year, Pompeo turned to Koch for help again — this time to support his successful campaign for a seat in the U.S. House of Representatives. Pompeo received $80,000 in donations from Koch and its employees, making him the top recipient of Koch-related money in the 2010 elections. ...

    Often mentioned in the debate over corporate political influence is Koch Industries, a conglomerate with holdings in oil, paper and other interests owned by brothers Charles and David Koch, whose combined net worth is estimated at $44 billion. The longtime conservatives have told supporters that they plan to spend tens of millions of dollars on the 2012 elections, and they have come under attack from Democrats for supporting union-busting Wisconsin Gov. Scott Walker (R).

    Now liberal groups have begun turning their ire toward Pompeo, who hired a former Koch Industries lawyer as his chief of staff and proposed legislation in his first weeks in office that could benefit many of Koch's business interests. The measures include amendments approved in the House budget bill to eliminate funding for two major Obama administration programs: a database cataloguing consumer complaints about unsafe products and an Environmental Protection Agency registry of greenhouse-gas polluters. Both have been listed as top legislative priorities for Koch Industries, which has spent more than $37 million on Washington lobbying since 2008, according to disclosure records.

  • New York Times op-ed: Educated, Unemployed and Frustrated. By Matthew C. Klein. Excerpts: We all enjoy speculating about which Arab regime will be toppled next, but maybe we should be looking closer to home. High unemployment? Check. Out-of-touch elites? Check. Frustrated young people? As a 24-year-old American, I can testify that this rich democracy has plenty of those too.

    About one-fourth of Egyptian workers under 25 are unemployed, a statistic that is often cited as a reason for the revolution there. In the United States, the Bureau of Labor Statistics reported in January an official unemployment rate of 21 percent for workers ages 16 to 24.

    My generation was taught that all we needed to succeed was an education and hard work. Tell that to my friend from high school who studied Chinese and international relations at a top-tier college. He had the misfortune to graduate in the class of 2009, and could find paid work only as a lifeguard and a personal trainer. Unpaid internships at research institutes led to nothing. After more than a year he moved back in with his parents. ...

    The cost of youth unemployment is not only financial, but also emotional. Having a job is supposed to be the reward for hours of SAT prep, evenings spent on homework instead of with friends and countless all-nighters writing papers. The millions of young people who cannot get jobs or who take work that does not require a college education are in danger of losing their faith in the future. They are indefinitely postponing the life they wanted and prepared for; all that matters is finding rent money. Even if the job market becomes as robust as it was in 2007 — something economists say could take more than a decade — my generation will have lost years of career-building experience.

  • Tax.com: Breaking News: Tax Revenues Plummeted. By David Cay Johnston. Excerpts: We take you now to the official data for important news. Federal tax revenues in 2010 were much smaller than in 2000. Total individual income tax receipts fell 30 percent in real terms. Because the population kept growing, income taxes per capita plummeted. Individual income taxes came to just $2,900 per capita in 2010, down 36 percent from more than $4,500 in 2000. Total income taxes and income taxes per capita declined even though the economy grew 16 percent overall and 6 percent per capita from 2000 through 2010.

    Corporate income tax receipts fell 27 percent and declined 34 percent per capita, even though profits boomed, rising 60 percent. ...

    You read it here first. Lowered tax rates did not result in increased tax revenues as promised by politician after pundit after professional economist. And even though this harsh truth has been obvious from the official data for some time, the same politicians and pundits keep prevaricating. Some of them even say it is irrelevant that as a share of GDP, income tax revenues are at their lowest level since 1951, when Harry S. Truman was president.

    No matter how many times advocates of lower tax rates said it, tax rate cuts did not pay for themselves, did not spur economic growth, did not increase jobs, and did not make America better off. ...

    Just as real Mad Men persuaded millions of men to put that greasy Brylcreem™ in their hair and convinced many more that cigarettes make you healthier, pure nonsense about tax cuts spurring growth and paying for themselves gets repeated and replayed and regurgitated as if it had some basis in reality. But Washington is the marketplace of ideas and governance, not the marketplace of products. Lies about taxes sold by people with no regard for facts are at least as dangerous to our society as cigarettes are to smokers.

  • AlterNet: "Tax, Tax, Tax the Rich!" Calls to Tax Wealthy Making Right Wingers Sweat? A simple but powerful chant is now starting to reverberate, all across the country, in protests against budgets cuts gone wild. By Sam Pizzigati. Excerpts: Last week, in the nation's capital, Rep. Jan Schakowsky from Illinois did introduce legislation that would up taxes on income over $1 million, from the current 35 percent to a range of new rates that run from 45 to 49 percent. But the budget debate in Congress still revolves almost exclusively around questions about how much to cut, with no attention at all to the vast untaxed fortunes of America's super rich. In state legislatures, largely the same story.

    So why are cheerleaders for America's rich starting to sweat? They're hearing the rising drumbeat — from labor and community groups the nation over — for new "millionaire" taxes. And they're watching the polls, too. Over 80 percent of Americans, the latest surveys show, want higher taxes on our richest. ...

    In 2008, the most recent year with complete IRS stats available, taxpayers making over $200,000 paid in federal income tax, after exploiting every loophole they could find, just 21.8 percent of their total income.

    That's considerably less than what America's most affluent paid, after loopholes, 50 years ago. In 1961, taxpayers making over $27,000 — the equivalent of about $200,000 in today's dollars — paid, on average, 31.3 percent of their total incomes in income tax. ...

    So what share of their total incomes did 1961's seriously rich end up paying in taxes? Taxpayers with over $135,000 in 1961 income — the equivalent of $1 million today — paid an average 43.1 percent of their income total in federal tax.

    In 2008, taxpayers making over $1 million gave Uncle Sam only 23.1 percent of their total incomes. In other words, the seriously rich 50 years ago paid almost twice as much of their incomes in federal income tax as the seriously rich today. ...

    How much more in revenue could Uncle Sam raise today if our contemporary rich paid the same share of their incomes in federal income tax as 1961's rich? ...

    All these taxpayers would pay a whopping $382 billion more in taxes this year if they had to pay at the 1961 effective tax rate, the rate the rich actually faced on their tax returns 50 years ago after taking advantage of every available loophole.

    That's nearly quadruple the $100 billion conservatives in Congress are trying to cut out of this year's federal budget for everything from Head Start and college student aid to public broadcasting. ...

    The bottom line: Taxing the rich at the actual rates they paid a half-century ago — and doing more to make sure all the rich pay their taxes — would likely this year raise, at the federal level alone, an additional half a trillion or so. Tax, tax, tax the rich indeed.

  • truthOut: Attacks on Public-Employee Unions Undermine the Middle Class. By Dmitri Iglitzin and Carson Glickman-Flora. Excerpts: It's not like we didn't see it coming. At the very start of this year, January 2, The New York Times warned us of the coming battle with a front-page story, "Public Workers Facing Outrage in Budget Crisis." The Economist, in its January 8 issue, gave us, "The battle ahead: confronting the public-sector unions." And the January Time Magazine, "Public Employees Become Public Enemy No. 1." ...

    What has not been clearly noted, however, despite the thousands of barrels of ink that have been spilled about this topic, is the underlying motive behind these attacks. Why, exactly, has the governor of the Badger State made destroying public-sector unions his No. 1 goal? Why are similar efforts being made in numerous other states? Why target public-sector workers and their unions? What put this on the top of the hard right's agenda? Especially because, as The New York Times noted, "A raft of recent studies found that public salaries, even with benefits included, are equivalent to or lag slightly behind those of private sector workers with a similar education." ...

    But there is something more sophisticated at work here than merely the efforts of talk-show hosts, demagogues and right-wing politicians to stir up or even just reflect, an angry, agitated and hostile populace. That is, there is a plan at work here - let's call it, "the Plan" - and that plan is designed to accomplish the following goals:

    1. Defund the Democrats. This is perhaps the most transparent of the goals of the Plan, because Republicans have not been shy about pointing out how, in various states, labor union contributions of both time and money have supplied Democrats with critical support at election time. The actual numbers can be debated and most of the Republican claims of labor union dominance of the Democratic Party are overblown. The failure of Congress, even when Democrats controlled both the White House and both houses of Congress from 2008-2010, to enact any substantive federal labor law reform, is stark evidence of that. But labor generally comes back to the Democrats and Republicans, and other right-wingers recognize that disabling labor unions now will advance their legislative agenda in the long run.
    2. Redefining the Middle Class Downward. Above all else, the attack on public employees and their unions is an effort to eliminate the one substratum of working people who still, to a large extent, maintain a truly "middle-class" existence, a life where the rent or mortgage payments may be paid, health coverage is maintained and retirement savings socked away in defined benefit pension plans, where it will actually still be available upon retirement.

    It is this last motive about which the proponents of the Plan speak the least, but which is perhaps the most important. As long as some workers, those in the public sector, are still being paid decent salaries and benefits, there is an implicit message to all workers, including those in the private sector, that this type of compensation might be something which an adult worker could reasonably expect to attain. If the goal of a middle-class income for public employees can be painted as a mere utopian fantasy, workers in the private sector will lose that dream as well. In the end, it is this downward pressure on our standard of living that should have all of us concerned, and which should inspire all of us to stand next to public employees as they cling to the middle-class dream.

  • truthOut: Tax Revenues Plummet in 2010. By David Cay Johnston. Excerpts: We take you now to the official data for important news. Federal tax revenues in 2010 were much smaller than in 2000. Total individual income tax receipts fell 30 percent in real terms. Because the population kept growing, income taxes per capita plummeted.

    Individual income taxes came to just $2,900 per capita in 2010, down 36 percent from more than $4,500 in 2000. Total income taxes and income taxes per capita declined even though the economy grew 16 percent overall and 6 percent per capita from 2000 through 2010.

    Corporate income tax receipts fell 27 percent and declined 34 percent per capita, even though profits boomed, rising 60 percent. ...

    You read it here first. Lowered tax rates did not result in increased tax revenues as promised by politician after pundit after professional economist. And even though this harsh truth has been obvious from the official data for some time, the same politicians and pundits keep prevaricating. Some of them even say it is irrelevant that as a share of GDP, income tax revenues are at their lowest level since 1951, when Harry S. Truman was president.

    No matter how many times advocates of lower tax rates said it, tax rate cuts did not pay for themselves, did not spur economic growth, did not increase jobs, and did not make America better off. ...

    So how soon will we see Washington journalists holding politicians accountable for what they say about taxes, tax rates, revenues, economic growth, and jobs? Here's some advice: Don't hold your breath. Washington has become a city of ideological marketing, where those who would note that the emperors have no facts are unwelcome in their own newsrooms. It is a city where access matters most and those who ask tough questions don't get access.

  • AlterNet: The Law for Big Bankers Is Different than for the Rest of Us. The new House leadership may not have much success reopening loopholes closed by the Dodd-Frank law. So their new game is simply to leave the reforms underfunded. By William Collins. Excerpts: You may have noticed that laws governing you and me tend to be rather rigidly enforced, whereas laws governing banking and finance are more loosey-goosey. Word is this has something to do with us little guys not putting enough money into political campaigns, which the big guys do. Is that too cynical?

    At any rate, the officials anointed to run the Treasury Department, Federal Reserve, Federal Deposit Insurance Corporation, and White House advisory panels all seem to be from Wall Street, not groups out to make the industry more accountable to us consumers. It makes little difference whether a Democrat or Republican occupies the White House.

    As a result, wealthy citizens get treated with kid gloves while the rest of us have to toe the mark. Even among banks, the big players get bailed out while the small ones get closed out. In one example of that special care, for our benefit Congress passed a law capping credit card interest rates, but left plenty of time for the big banks to jack them up before it takes effect. Thanks a lot. ...

    One clue as to what still lies in wait for us hapless consumers was recently divulged by Rep. Spencer Bachus (R-AL), the new chairman of the House Financial Services Committee. In a moment of careless candor, he observed, "Washington and the regulators are there to serve the banks."

    The Republicans' primary tactic has been prohibiting the use of any funds to enforce existing reforms. This scheme is an especially hot topic in health care, and now looms grimly over financial controls as well. ...

    So as the United States, like Great Britain before us, gradually abandons its manufacturing and service sectors, it focuses more on big finance. That's where the fancy business school grads go nowadays. The big money lurks in schemes and scams -- and in lobbying, making sure they stay protected from government meddling. These big guys are so malicious they even have the nerve to overcharge our soldiers. Banks are now bought and sold like Monopoly properties with a few slick folks at the top siphoning off millions while laying off workers. Better we should all join a credit union.

  • Jim Hightower: Downward Mobility In a Rising Economy. Full excerpt: At last, some uplifting economic news – a sign that the economy is really starting to hum again!

    Forbes magazine reports that there are 199 more billionaires this year than last. Moreover, the combined wealth of the world's 1,210 billionaires now totals $4.5 trillion dollars, up by nearly a trillion dollars from a year ago. So, see, the economy is not stuck in the doldrums, as so many party-poopers keep saying.

    Also, with an average of $3.7 billion in their bank accounts, you can just bet that these über-rich folks will be spending like crazy, and you know what that means, don't you? It means that their vast piles of wealth will soon begin to tinkle down on you and me – just you wait and see!

    And wait. And wait. And keep waiting.

    Workers in our country have been dramatically increasing their productivity since the highly-ballyhooed economic recovery began about 20 months ago, generating billions of dollars in new wealth. Yet, wages have stayed stagnant. Practically none of the increased wealth from worker productivity gains has gone to the workers. Instead, 94 percent of the money has been siphoned off by the corporate powers for such things as fattening profits at a record pace and jacking up CEO pay to exorbitant levels. Also, nearly $2 trillion of the gains have simply been stashed in the corporate vaults, rather than using it for wage hikes or new job creation.

    And even the little bit of job creation that is taking place is "bottom heavy" – 40 percent of the jobs lost in the recent economic crash were higher-paying positions, but 49 percent of the new jobs are low-paying.

    So we see corporations and billionaires wallowing in fabulous new wealth, while productive workers fall out of the middle class. That's not a recovery, it's a robbery.

If you hire good people and treat them well, they will try to do a good job. They will stimulate one another by their vigor and example. They will set a fast pace for themselves. Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will share in its sucess, they will contribute in a major way. The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders. —Thomas J. Watson, Jr., from A Business and Its Beliefs: The Ideas That Helped Build IBM.

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