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6, 2000 April, 2000

Highlights—April 9, 2011

  • The Miscellany News (Vassar College): IBM not fulfilling its responsibility to Poughkeepsie. By Hannah Blume. Excerpts: In 1924, when a traveling salesman named Thomas J. Watson founded IBM in Endicott, N.Y., he cultivated what he called the "IBM family." In its earliest years, the company steadfastly provided unrivaled health benefits and free daycare. Watson's biggest pride, however, was a company country club, which hosted family dinners three nights a week to relieve IBM wives of their cooking duties.

    When IBM moved to Poughkeepsie in the early 1940s, Watson wasted no time getting cozy with his new workers, personally selecting the site for the IBM Country Club—complete with tennis courts, swimming pools and a clubhouse—on South Road. The company struck a deal with local schools to provide free technical training for employees. IBM even erected Spackenkill Heights—a sprawling subdivision exclusively for IBM employees—that offered options from a basic house with a carport to a four-bedroom complete with a garage.

    It was bliss: IBM was stable and loyal; Poughkeepsie was home. The two were inseparable. The people of Poughkeepsie were part of the IBM family.

    That's why it was such a low blow when IBM announced last week that they plan to invest $50 million in their Poughkeepsie site, which, in part, will settle a lawsuit with the Town of Poughkeepsie that will cheat its citizens out of millions of tax dollars. In 2009, when IBM bombarded the Town with a string of lawsuits, alleging their property assessment was too high, they threatened to abandon the city IBM has called home for half a century: "The Poughkeepsie site is in competition with other sites for its ongoing mission," one IBM spokesperson threatened. In an attempt to bully the Town into lowering its tax rate, company officials referenced the $6.3 million they paid last cycle compared to the $1.6 million for their Rochester, Minn. plant.

    IBM executives called in the Dutchess County Industrial Development Agency to help cut a deal. They approved a PILOT—an acronym for payment in lieu of tax—agreement wherein the Town would essentially chop off $50 million from the property's assessed value of $159.8 million. Essentially, IBM sued Poughkeepsie to pay fewer taxes—and won. ...

    Reader comments on The Poughkeepsie Journal website suggest that many Town of Poughkeepsie citizens, whose tax burden will undoubtedly increase as a result of the deal, feel betrayed by IBM. One referred to the company as "blood sucking." Another bitterly pointed to the hefty bonus of an extra 30 percent that IBM CEO Sam Palmisano took this year. Many residents questioned, 'Where is my PILOT plan?' Another warned that "properties around here will soon turn into slums" if the Town does not "stop catering to greed." And another noted that IBM would deserve a tax break had they not wreaked "havoc" on Poughkeepsie, adding, "They should be put in prison." ...

    Not when, in 2001, IBM received a $9 million government grant to build a new chip plant in the area, creating 5,348 jobs, before proceeding to significantly downsize their microelectronics division in 2003. Not when IBM enjoyed paying zero property taxes on their East Fishkill facility and $156 million in other tax exemptions in a span of 10 years. And certainly not when Dutchess County funded two thirds of a $23 million project to build a 13-mile pipeline that IBM needed to supply their plant with water needed for production. ...

    Some have suggested that when Watson moved IBM to the Hudson Valley, he put Poughkeepsie on the map. But, in truth, it was Poughkeepsie residents who assembled world-renowned mainframe computers. It was Poughkeepsie's women who built Browning automatic rifles, which were sent to Europe in the 1940s. It was Poughkeepsie's architects who designed the first-ever, fully functioning automatic production line for transistors. And it was Poughkeepsie's engineers who first conceived of today's world's fastest microprocessor. Poughkeepsie put its hard work and faith into IBM. Now, IBM needs to do the same for Poughkeepsie. At least, that's what family should do.

  • USA Today: CEO pay soars while workers' pay stalls. By Matt Krantz and Barbara Hansen. Excerpts: CEOs didn't have to cry poor for long. The heads of the nation's top companies got the biggest raises in recent memory last year after taking a hiatus during the recession.

    At a time most employees can barely remember their last substantial raise, median CEO pay jumped 27% in 2010 as the executives' compensation started working its way back to prerecession levels, a USA TODAY analysis of data from GovernanceMetrics International found. Workers in private industry, meanwhile, saw their compensation grow just 2.1% in the 12 months ended December 2010, says the Bureau of Labor Statistics. ...

    The sizable pay hikes came even though the economy's recovery remains frail, unemployment is high and corporate profits last year were roughly flat, up 1.5%, from where they were in 2007 when the stock market peaked. ...

    The big increases in executive compensation are difficult for workers to swallow, given that many Americans are struggling just trying to find a job or make ends meet, says Alan Johnson of executive pay consulting firm Johnson Associates. "The fact this makes us all squirm is true." ...

    Gains come from cost cuts and layoffs. Yet the fact that CEOs' pay is rising along with stock prices underscores the disconnect between pay and companies' true underlying performance, Lazonick says. While companies in the S&P 500 boosted profit 47% last year, much of that was due to cost-cutting and layoffs, not from the creation of businesses and growth, Lazonick says. Revenue, a gauge of the money flowing into businesses for selling goods and services, grew at a much slower pace than profit — and ended the year up just 7%.

  • USA Today: 2010 CEO pay chart, sorted by total. Editor's note: IBM CEO Sam Palmisano was the sixth highest paid CEO in the nation in 2010:
    Salary Bonus Stock & options Total Chg from '09 Stock return
    $1,800,000 $9,000,000 $13,319,450 $25,180,681 19.0% 14.3%
  • AlterNet: 10 of the Biggest Corporate Tax Cheats In America. By Joshua Holland. Excerpts: If you or I were running a small business and we kept one set of books showing how much money we were making and a second set for the IRS that painted a picture of an enterprise on the brink of bankruptcy, we'd end up behind bars.

    But that's standard operating procedure for corporate America. In fact, public corporations have to do it -- the law requires that they keep one set of books for their shareholders, and another for the IRS. As tax journalist David Cay Johnston explained, "Many corporations routinely tell investors they incur millions in corporate income taxes, while the financial records they give the IRS show they owe nothing or are due refunds."

    In the records kept by the IRS, corporations cook the books "by using tax shelters, offsetting income with losses from years ago, and employing countless other devices that make them look like paupers to the IRS but money machines to investors."We got a peek into this process last week, when the New York Times revealed that multinational giant GE is not only avoiding corporate income taxes this year, but is taking a "tax benefit" of $3 billion. According to the Times, the company's "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." ...

    #7. IBM. CEO: Samuel Palmisano (He also serves on Exxon Mobile's board of directors. Palmisano ranked 21st on Forbes' list of CEO pay, pulling down a tidy sum of over $25 million last year.)

    2010 Pre-tax Profit: $19.7 billion

    How IBM avoids paying US taxes: Over three years in the early 2000s, the company exploited "a litany of tax breaks" that allowed it to slash its taxes by 95 percent! Bet you wish you could do that.

    IBM fun-fact: According to Reuters, IBM has cut 30,000 US jobs since 2003, which is good news for Indian tech workers – the company added 69,000 jobs in India over the same period.

  • Yahoo! IBM Retiree Information Exchange message board: "Beneath the Dancing Elephant - The Story of Two IBMs" by "thirtyyearibmer". Full excerpt: I have just retired as of March. Retirement though just means continuing to work on my passion of understanding IBM.

    I believe there are two IBMs today.

    There is what many retirees know as "The IBM". This is "The IBM" of the Watsons. There is also a very different "IBM" being experienced by new employees. These employees are coming from new hires, international hires and some 30+ acquisitions just within Software Group alone. Some are the sons and daughters of retirees on this bulletin board. These sons and daughters are trying to reconcile "The IBM" of their mothers and fathers with "IBM" they live in.

    Much of the conflict I see today between IBMers is failing to distinguish which IBM is being discussed.

    So from a humble IBMer a "Look Back" at "The IBM" is offered off my web site http://www.BeneathTheDancingElephant.com. I know there will be a lot of perspectives and a lot of opinions expressed, but I believe "The IBM" encouraged and expected such a dialog - of course with respect and dignity for the individual expressing their thoughts.

    Too many times I see comments that "these are tough times for business." Well for business, these aren't even close to the times of the Great Depression when upwards of 10,000 banks failed in the first year...not the hundreds of today. "The IBM" has survived the Recession of 1921, the Great Depression and 17 recessions since "the big one."


    Will it survive the coming 17 recessions of the next century? Will it survive when this recession truly ends? When men and women of true talent can find a job elsewhere with another corporation - what then?

    Loyalty of the employee launched "The IBM" out of the Great Depression under a full head of steam. Loyalty kept people working on the System 360 until it became a success. Loyalty kept people working on the AS/400 until it was so rock solid, small to medium sized business could depend on it.

    Will IBM of today accomplish the same over the next century? Cheers, Pete.

  • Wall Street Journal: India Graduates Millions, but Too Few Are Fit to Hire. By Geeta Anand. Excerpts: India projects an image of a nation churning out hundreds of thousands of students every year who are well educated, a looming threat to the better-paid middle-class workers of the West. Their abilities in math have been cited by President Barack Obama as a reason why the U.S. is facing competitive challenges.

    Yet 24/7 Customer's experience tells a very different story. Its increasing difficulty finding competent employees in India has forced the company to expand its search to the Philippines and Nicaragua. Most of its 8,000 employees are now based outside of India. In the nation that made offshoring a household word, 24/7 finds itself so short of talent that it is having to offshore. ...

    Business executives say schools are hampered by overbearing bureaucracy and a focus on rote learning rather than critical thinking and comprehension. Government keeps tuition low, which makes schools accessible to more students, but also keeps teacher salaries and budgets low. What's more, say educators and business leaders, the curriculum in most places is outdated and disconnected from the real world.

    "If you pay peanuts, you get monkeys," says Vijay Thadani, chief executive of New Delhi-based NIIT Ltd. India, a recruitment firm that also runs job-training programs for college graduates lacking the skills to land good jobs.

    Muddying the picture is that on the surface, India appears to have met the demand for more educated workers with a quantum leap in graduates. Engineering colleges in India now have seats for 1.5 million students, nearly four times the 390,000 available in 2000, according to the National Association of Software and Services Companies, a trade group.

    But 75% of technical graduates and more than 85% of general graduates are unemployable by India's high-growth global industries, including information technology and call centers, according to results from assessment tests administered by the group. ...

    Mr. Singh and several other engineering graduates said they learned quickly that they needn't bother to go to some classes. "The faculty take it very casually, and the students take it very casually, like they've all agreed not to be bothered too much," Mr. Singh says. He says he routinely missed a couple of days of classes a week, and it took just three or four days of cramming from the textbook at the end of the semester to pass the exams.

    Others said cheating, often in collaboration with test graders, is rampant. Deepak Sharma, 26, failed several exams when he was enrolled at a top engineering college outside of Delhi, until he finally figured out the trick: Writing his mobile number on the exam paper. That's what he did for a theory-of-computation exam, and shortly after, he says the examiner called him and offered to pass him and his friends if they paid 10,000 rupees each, about $250. He and four friends pulled together the money, and they all passed the test. "I feel almost 99% certain that if I didn't pay the money, I would have failed the exam again," says Mr. Sharma. ...

    Trying to bridge the widening chasm between job requirements and the skills of graduates, Tata has extended its internal training program. It puts fresh graduates through 72 days of training, double the duration in 1986, says Tata chief executive N. Chandrasekaran. Tata has a special campus in south India where it trains 9,000 recruits at a time, and has plans to bump that up to 10,000. Wipro runs an even longer, 90-day training program to address what Mr. Govil, the human-resources executive, calls the "inherent inadequacies" in Indian engineering education. The company can train 5,000 employees at once.

  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM IT Architect in Toronto, ON (Canada): (Current Employee) "From Great to Good to Average to..." Pros: My experience is specific to IBM Global Business Services in Canada and I can not speak to other divisions of IBM.

      Let me start by saying that IBM and IBM management over the years have been great to me. I started as a new grad in 2005 in Global Business Services, worked hard and my efforts were recognized by the management. In 4 years I got 2 promotions, not very common for a new grad, and was given a few different awards between 2006 - 2009. Early in my career (2006-2009) there were many opportunities for learning, mentoring and networking. IBM also started a program called Corporate Services Corps through which IBM employees had the opportunity to go to different developing countries and work with a local NGO on a development project. I participated in this program, I truly believe this was perhaps on of the most rewarding experiences I had at IBM.

      Overall IBM is a good place to start, you can learn a lot if you are on customer facing projects, however you have to be proactive about your own career at IBM.

      Cons: My experience is specific to IBM Global Business Services in Canada and I can not speak to other divisions of IBM.

      Over the last few years IBM has changed significantly. More focus has been put on the services business and a result more emphasis has been put on utilization and billable hours of employees. In addition IBM has cut down on various costs significantly and the impact has been directly on the employees. Overall the employee satisfaction I believe is at the lowest since 2005.

      In terms of cost cutting measures, following are a few examples:

      • Managers use to have a fair budget for rewarding high performing employees, the budget has virtually disappeared. Within my first 3 years at IBM I got half a dozen of such awards and since then I have received none
      • Bonus payouts have gone down: IBM provides bonuses to high performing employees, the system by which IBM calculates payouts has changed several times, the current system takes in to consideration the performance of IBM GBS globally and since IBM's GBS has been missing it's targets for the last few years, the payout has been reduced to almost nothing.
      • Salary raise: Salary raise and promotion rates have dropped significantly, from 10% to 6%
      • Education: With more focus on utilization and billable hours, education budget has decreased significantly. There used to be 80 -120 hours of education allocated for each employee, although officially these buckets are still around but education rarely gets approved due to high focus on billable hours.

      Overall IBM seems to have shifted focus from long term to short term quarterly reports. Employees at GBS are almost treated as sub-contractors and a lot of folks are not happy about this.

      Advice to Senior Management: Get Employees involved, make them feel they are part of the bigger picture, communicate goals clearly. Increase Employee Recognition, help employees feel good about the effort they are putting into IBM. Invest in Employee Education

    • IBM Anonymous in Pune (India): (Current Employee) "Not very good." Pros: If you want to come at any time and want to go at any time then this company is good for you. Nobody is recording your in/out time. You can have work life balance. Infinite sick leave is the best thing here. People have gone for 9 months of sick leave without any problem. Work from home facility. If you get a chance to go to onsite (USA only) then it is gr8. Cons: Not very talented or challenging people here. Most of them are lazy. They are ready to point finger to someone else. No increment for new joinees for 2 years. After 2 years you will get maximum 6-7% hike after all hard work and great rating. Variable is just to show on ur offer letter. You get only 10% of that. Advice to Senior Management: Give some hike to people. Improve management. Most of the manager have no sense and leadership skills (only few show management skills).
    • IBM Anonymous: (Current Employee) "Great for your career - but not long term." Pros: Tons of opportunity - in any area of systems, software, consulting, IT. Cons: IBM is downsizing US workforce... always under pressure to cut... Advice to Senior Management: Take a realistic assessment of whether moving all the jobs to India is really working or causing more expense and inefficiency elsewhere
    • IBM Anonymous in Austin, TX: (Current Employee) "Driven by the bottom line, but tons of lip service." Pros: The benefits are good, and there are really a lot of smart people to learn from. Cons: Salaries and bonuses are out of sync with the industry. I'm a 2+ performer and got a <$1000 bonus after almost 10 years at IBM. Layoffs happen twice a year until you're so overloaded with work that you threaten to quit. That's when they get you a resource in India who's harder to work with than a local intern (and this resource will quit to find another job). Executives make a lot more and love spewing pearls of wisdom on the overloaded worker bees. No camaraderie because everyone "works from home", so if you're social and prefer to be able to break the monotony of your cube, you'll have nobody but the janitors to talk to. Advice to Senior Management: Improving the expense:income ratio by outsourcing jobs to India, laying off people, and cutting budgets for travel, development, marketing and research is a very short term way to fix things. Look at the flux of people leaving IBM and recognize that things are very, very unhealthy. Please get an anonymous survey of employees to measure satisfaction (I've never seen one in almost a decade working here). Oh, and a $1000 reward that vests in 6 years (plus a dozen strings attached) as a thank you to employees for a great 2010 is simply pathetic!
    • IBM Anonymous in Rochester, MN: (Current Employee) "Selling out American workforce, which built the company to where it is." Pros: Work life balance, decent declining benefits, pay. Cons: Constant layoffs, management cannot be trusted, greedy executives, offshoring American workforce. Advice to Senior Management: Recall respect for the individual.
    • IBM Senior IT Specialist in Minneapolis, MN: (Current Employee) "Big Bureaucratic Mess." Pros: There is a prestige associated with working for IBM, some of which is deserved. The wealth of knowledge available, though hard to sift thru sometimes, is impressive. Working for a global company is apparent -- with teams made of diverse geographic locations, not only across the US, but internationally. Cons: Management communication is (I guess) hit-or-miss, and mine missed. Little or no feedback, very little information unless something goes wrong. The red-tape to get things done administratively is sometimes overwhelming. If you need face-to-face time with co-workers, or management, look elsewhere.
    • IBM Long Term Supplemental Role in East Lansing, MI: (Current Employee) "Disappointing and discouraging." Pros: Decent health insurance (if you pay for the step-up plan.) Well known company. Access to all documentation. Access to self-paced training on a variety of topics. Cons: Low salaries in comparison to the market. Employees are micromanaged. Experienced professionals are treated like children. Attendance is taken. Employees (might) have one square yard of work space in the office. Employees are discouraged from working from home, even when their clients request it. Long term supplemental employees are not allowed to post for "regular" jobs for 18 months from when they were hired. Advice to Senior Management: If you have a problem that affects the employees (like you need to show bodies in seats to clients when they visit), ask the people affected for suggestions on solving the problem. Don't assume that you have all of the answers. People will support you, if you are interested in their opinion.
    • IBM Network Engineer in Cincinnati, OH: (Past Employee - 2010) "Disillusioned Top Performer." Pros: Great name recognition, lots of "self-help" resources. Cons: Senior management seems to be bent on eliminating any technical personnel in North America. Quarterly headcount reduction goals, particularly in Strategic Outsourcing means that whatever size your group is today, that's as much help as you will ever have. Remaining employees are overworked, not invested in, and left to their own devices to succeed however they can manage to on their own.
    • IBM Former IBM GBS Manager: (Current Employee) "People = Cost." Pros: This list has dwindled dramatically from what would have been here 15 years ago. Benefits - used to be very good, but expect continued erosion. Eduction/Training - used to be excellent, plenty available online, if you have the time for it. Bright/Motivated People - IBM attracts people in the top 40 percentile of talent because of its reputation. Expect this to change in the next 10 years with accelerating talent and institutional knowledge leaving in this transition period to offshore. Great Teaming - existing employees are strongly self motivated to perform and IBM has a strong teaming culture, but intense focus on short term results, diminishing morale, and off-shoring will impact this. Strong Brand and Reputation - expect this to continue some time with it's large ongoing investment in marketing, however, as the above changes so will IBM's ability to deliver (IBM rarely if ever hits the news with botched projects and disputes with clients - not now)


      • Work/Life Balance - way out of balance (anyone who does have good balance today it won't last or can probably expect a resource action somewhere in their future) targets increase every year requiring one to now make up for vacation/illness, expectation to be available for calls/meetings 7 a.m. eastern to 8 p.m. pacific time.
      • Career Path - nearly disappeared - not even an "Up or Out" model exists, since there is little Upside (bonus, pay increases, promotions), with a deliberate strategy to drive attrition in the western countries in favor of increased staffing in the BRIC+ countries. Managers are indirectly incented to hold onto headcount limiting employee growth and opportunity, leaving employees perpetually in same or similar roles within a practice area.
      • Constant Cutting - bonuses, pay, travel, education, software, laptops. Pay for performance or merit pay has effectively disappeared, replaced by downward skewed distribution curve on relative performance evaluation and embarrassingly low payout for those at the top of the curve. Worse, re-baseline hourly pay each year to hours actually worked to reveal massive pay deflation.
      • Declining Camaraderie - everyone is mobile, works from home. No travel budget to have occasional face to face. Sametime is poor substitute for team building
      • Process Overridden - multiple and frequent meetings about internal checkpoints, multiple reviews and signoffs required for even small deals, multiple reviews and forms to fill for delivery, multiple follow ups for all the above. How much incremental improvement each of these meetings or reports contribute to delivery, quality, results versus take time away from same?

      Advice to Senior Management: The executives are blinded by their bonuses and in meeting their quarterly results. If they choose to look, they might see that internally IBM is operating like a company in decline, plenty of fear, lots of platitudes but no substance or concrete evidence about value of employee, constant cuts.

      Mixed messages are provided to employee about how great IBM is doing (see the stock price, executive bonuses), and about how bad IBM is doing (business unit doing poorly...again) - translating to low bonus/pay raise, expense cuts, and so on.

      Seem to be in a rush to offshore, but seem to think that botched projects are due to not following process when root cause is having lost some of the talent/knowledge and lack of investment (money and time) in building talent. Front line managers scarcely know more than the regular employee but have to represent all the above to them with a positive motivating spin. Internal culture is one of survival.

      With work pressures, lack of opportunity, and particularly lack of reward, talent are looking for the right time to make their move while the getting is good.

    • IBM Consultant in Chicago, IL: (Current Employee) "Undergrad university hire straight for college and had higher expectations for IBM as a top consultancy." Pros: Working for a big, global company, participation on Smarter Planet projects, resource manager helps you find projects, leveraging previous IBM assets and tools make work easier and quicker, some big offices (Chicago, NYC, DC, Boston, Dallas) have a good sense of community and plan social events. Get to keep all your frequent flier miles and hotel points.

      Cons: Utilization heavily counted for performance evaluation, most projects only allow 40 hours max be billed to the client (regardless of how many hours over 40 were actually worked). Promotions only happen once per year. have to write long project assessments (2-5+ pages) about each role on every project to be included in end of year evaluation. No compensation for continuing education (whether it be for an advance degree, or just attending lectures, conferences, etc). Only associate partners and higher and sales people get mobile access to their email. We are given out-of-date or used laptops and then expected to re-image them ourselves if it crashes. Meal allowance is per city and must report actuals (not allowed to expense flat per diem)

      Advice to Senior Management: Too heavy reliance on utilization yet can only bill 40 hours max to client (even if you actually work more than 40 hours).

    • IBM Hardware Engineer in Research Triangle Park, NC: (Current Employee) "Slow and steady." Pros: No pressure. Nice work place. Very nice people. Cons: Low growth potential. Very old technology and tools. US jobs going to India and China. Useless patents on everything. Advice to Senior Management: Update the tools and equipment and bring the jobs back to the US. The stock price is not the only indication of a good company.
    • IBM Anonymous: (Past Employee - 2011) "Disappointing place to work these days." Pros: Telework is a great option due to traffic congestion in this region. Company provides a lot of vacation time. Flexible work schedules are available. Cons: No career advancement. Poor communication from management. Resource reductions every year despite great business results. Formerly great benefits reduced over the years but pay never increased to compensate. Advice to Senior Management: Continual resource actions, even when the company is doing well, are having a serious negative impact on morale. Remaining employees are being worked to the bone.
    • IBM Anonymous: (Current Employee) "Hard work is recognized but compensation does not follow." Pros: Flexibility of work at home. Challenging work. Autonomy. Work life balance. Cons: Compensation - Raises and Bonuses Globally Integrated enterprise - work being moved to low cost countries without proper support organization in place. People in US have to "clean up" issues. Wall Street is dictating expense cut. Company is trying to meet quarterly projections at the expense of employees. US business is shrinking and employees are not given alternate career paths or training to reinvent themselves. Advice to Senior Management: Good employees are leaving. There will be huge departure of employees nearing retirement in the next few years. Who will be left to run the company?
    • IBM Anonymous in Rochester, MN: (Past Employee - 2011) "Excellent for a lot of years, but experienced employees are not appreciated after 25 years." Pros: Flexibility, current technology, salary, responsibility. Cons: Resource actions, workload can be excessive, hard to move between jobs.
New on the Alliance@IBM Site
  • IBM Global Union being formed! Full excerpt: A network of IBM unions worldwide, including the Alliance@IBM CWA Local 1701, will meet in Switzerland in May to form the IBM Global Union Alliance.

    For many years IBM unions, including the Alliance, have worked together as a network of information and cooperation. The new Global Union Alliance, under the umbrella of the International Metalworkers Federation (IMF) and Union Network International (UNI) takes that network to another level and will include many more IBM unions. This past year new IBM unions have formed in Bulgaria, Chile and Argentina. In a statement from the IMF and UNI about the new Global Union to IBM unions:

    As IBM has set itself up as a truly global company, trade unions also need to set up a truly global alliance cooperating to the maximum extent for the benefit of their members and IBM employees. This meeting creates an IMF/UNI Global Union Alliance at IBM of trade unions with members working for companies owned by IBM or companies in which IBM has a significant interest.

    The purpose is to express the determination/commitment of trade unions at IBM to work together at global level based on shared values and objectives to strengthen communication and cooperation and to implement action coordinated by IMF/UNI global union.

    The objectives are:

    • To engage IBM in dialog at global level.
    • To pursue agreements with IBM at global level to improve working conditions of IBM employees worldwide.
    • To raise levels of trade union membership at IBM.

    The partners of the Alliance will work together with the aim of protecting and furthering the interests of IBM employees throughout the world.

    The partners will take concrete action to enlarge the network by improving contacts with unions in countries where employees are unionized and make every effort to organize unorganized plants/locations.

    The Alliance@IBM looks forward to the forming of this new organization for IBM employees and their unions.

    As many of you know, we have lost many members due to job cuts at IBM US.

    Please help us build the American section of the new IBM Global Union Alliance. If you are not a dues paying member of the Alliance, please consider joining today at: https://afl.salsalabs.com/o/4004/donate_page/alliance-join

  • 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 4/06/11: Tax department in Southbury getting the boot. Exit date is 7/31. I believe the operations is moving to Argentina. -Anon-
    • Comment 4/07/11: It is certainly disgusting when the lack of morals and lack of ethics is exposed for executives and Sam, but I don't see the positive out come of that changing their morals or ethics because they have none. You have to be human first to have these virtues. -Morals-Don't-Start-At-the-Top-
    • Comment 4/08/11: I can tell you first hand that there is definitely a NO HIRE list and you are on it once you are RAed from Big Blow. I applied to several positions after getting RAed. Once they find out you worked for Big Blow you are screwed. -gone from big blow-
    • Comment 4/09/11: . To -gone from big blow- : There is not a list per say but a notation on your file that was made by your manager who RA'd you. depending on why/how you were RA'd would either let you back as a S/C or a supplemental or not at all. If you got 1 or 2 PBC 3's then you would usually not be brought back as any type of employee. If you made a deal to get RA'd or if the manager felt you could be brought back then it was noted. Usually your attitude as perceived by the manager ends up as the last word on the exit papers. When you apply for a job your name is checked to see if you were an IBM'er and how/why you left. They only hire back safe people. -wasa1stlinenowra'd-

      Alliance Reply: How about a definitive list of what determines or defines "safe" people? Really.....would you send us that? I'd love to see that whole management perspective, reduced to a list. It may even be worth posting here. Every manager that ever worked for IBM must know that list by heart. How about it?

    • Comment 4/10/11: to alliance: As you would expect there is not a written document describing what a "safe" employee is. Managers look at the attitude as the key indicator to determine if someone could be brought back. Things like, are they bitter or bad mouthing coworkers or managers and if there are signs of threats or sabotage. You know when someone is pi$$ed and you don't want them on site. There isn't a check list that a manager runs through just general observations. As you can imagine it is subjective; so if you and your manager get along then if you are RA'd you stand a good chance of coming back as a S/C or something else. The basic safe employee is someone who does their job and doesn't make waves. That is the way of life in IBM. Look at it this way I was dumped but I hold no grudge. I don't know if there is a flag on my name but I suspect not. Regardless, I don't plan on going back. -wasa1stlinenowra'd-

      Alliance Reply: So basically, employees should never complain or object; because they would be labeled as trouble-makers? In the end your 'subjective' posture simply encourages 'butt kissing', keeping your head down and being quiet; which doesn't guarantee squat when it comes to keeping their job OR your job... That's basically the sub-definition of "At Will Employment"; which is the BEST reason for employees to organize and fight for a contract that protects them from management's 'subjective' evaluations and punishment. Management never actually values employee skills and abilities at all. I know you'll disagree; but that's what a labor dispute is all about. :-) Thanks for your input.

    • Comment 4/10/11: to alliance: I wouldn't necessarily disagree with you . Your comments are pretty much on target. As a past manager I was an employee before and an employee after so I viewed it from both sides. I always remembered the old saying that "IBM liked wild ducks as long as they flew in a row". I've mentioned it before that 'butt kissing' usually helped but was not a guarantee. Then again if you were too assertive/confrontational it could be a career detractor. All I can say is watch your back.-wasa1stlinenowra'd-

      Alliance Reply: Thank you for your candid comments. Your "...watch your back" comment is EXACTLY the reason that IBMers should form a union and fight for a contract. I agree with you, BTW. It's just a very simple concept to understand, in my opinion. If only more IBMers that visit this site would realize that what you say is spot-on, and what we advocate is the best solution; we'd be part of a group of skilled IT workers in IBM that finally could have some security and stability at their jobs; while we 'watch out for each other'. Thanks again.

    • Comment 4/10/11: I got along with my 1st level manager, my customers, and my peers just fine. Unfortunately my 2nd level manager hated me because I questioned some of his decisions. I worked for IBM for many years and was a solid 1 and 2 performer. I am now working for a competitor of IBM and doing just fine. I have a good attitude. But when I see things wrong with management as were issues with my 2nd level manager I am not afraid to speak out. This is the only way to improve the system. Unfortunately this particular 2nd level IBM manager got even with me in his mind and RAed me. This stuff wouldn't happen with a Union. Support the Alliance. A Union would support on your side. I had no one to help me save my job at IBM. -gone from big blow-
    • Comment 4/10/11: I was RAed on a hawked up PBC 3 and became a contr in less than 30 days. I know 4 others that were RAed as PBC 3 ... same story. It was almost like a "secret" agreement took place. Completely wrong to RA us and we lose our benefits, then work us as contr. What are our choices? Yeah! If some ex-mgr on here to explain that crap. Please have at it. -RAed PBC 3-
    • Comment 4/11/11: TO>>-RAed PBC 3->>Use some common sense. Prepare your finances for survival and get a job with someone else. You don't HAVE TO work for IBM, unless you are unqualified to work for others. If you got 2 or more PBC 3's , you were well aware of your situation after the first PBC 3. You either ignored the facts or refused to accept them. Get educated, get financially prepared and work for someone you enjoy working for. Learn to separate WANTS, from NEEDS, from NECESSITIES and your life will become a better place. -NO_KY-
    • Comment 4/11/11: Actually, it is possible for an IBM senior executive to be RAed, although it requires committing a felony. Of course I'm referring to Robert Moffat. But it took IBM way, way too long to act. -Minor Correction-
    • Comment 4/12/11: I was RAd last year with my last day of 03-31-10. Yes, I have to admit I was somewhat devastated when it happened. I was fortunate that my manager bridged me till my birthday and so I met the (55/15 yrs). So, I took my 401K and ran as far as I could get from IBM. I am very happily employed at another company in which I will probably also retire and work another 10 years! I learned a lot of good skills from IBM and am happy that I could take those skills to another job! The net is... there ARE OPTIONS! Who would want to go back to work as a contractor for a company that dumped them? Life is full of options - so take advantage of them! -life outside of IBM-
    • Comment 4/12/11: There is a reason why certain people survive RA after RA, year after year. It's called favoritism. IBM has a policy against it. My manager was a serious abuser and when I pointed out how much favoritism he had towards certain people he moved me to a new group and manager. The butt kissers are the ones that stay, not usually the hard workers. The ONLY way to survive in a company like this and not be a victim of favoritism is to be part of a UNION. In IBM you must organize, band together and Unionize. There is no other way to survive in a jungle like this. Sit back and do nothing, and you'll soon see what I mean. -Gone_in_07-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • New York Times "Time for Debate": Can Private Insurers Fix Medicare? Introduction: Paul Ryan's budget proposal would substantially reshape Medicare. The House Republicans are putting forward a plan, drafted by Representative Paul Ryan, chairman of the House Budget Committee, to cut federal spending by $4 trillion over the next decade.

    Central to that plan is a proposal to end traditional Medicare, which now directly pays most of the health care bills for elderly and disabled Americans. It would turn Medicare for those currently under 55 into a "premium support" plan where beneficiaries would choose a private insurer and the government would provide subsidies to pay the premiums, about $15,000 a year, with bigger payments for those who are poorer or sicker.

    Is such an approach a good idea? Is it feasible? Can it help reduce costs? Read the discussion.

  • New York Times: G.O.P. Blueprint Would Remake Health Policy. By Robert Pear. Excerpts: The proposal to be unveiled by House Republicans on Tuesday to rein in the long-term costs of Medicaid and Medicare represents a fundamental rethinking of how the two programs work, an ambitious effort by conservatives to address the nation's fiscal challenges, and a huge political risk. ...

    For future Medicare beneficiaries — people now under 55 — Mr. Ryan's proposal calls for the federal government to contribute a specified amount of money toward the premium for private health coverage. Under the traditional Medicare program, the government reimburses doctors and hospitals directly. ...

    But if, as many economists predict, health costs continue to rise at a rapid clip, beneficiaries of these programs would be at risk for more of the costs. Mr. Ryan said his Medicare proposal was similar to one he advanced in November with Alice M. Rivlin, a budget director in the Clinton administration. Analyzing that plan, the Congressional Budget Office said, "Federal payments would tend to grow more slowly under the proposal than projected costs per enrollee under current law." As a result, the budget office said, "enrollees' spending for health care — and the uncertainty surrounding that spending — would increase."

  • New York Times editorial: The Budget Battles: The Threat to Medicaid and Medicare. Excerpts: Representative Paul Ryan's proposals to reform Medicare and Medicaid are mostly an effort to shift the burden to beneficiaries and the states. They have very little reform in them.

    They certainly won't solve the two most pressing problems in the nation's health care system: the relentlessly rising cost of care and the shamefully high number of uninsured Americans — now hovering around 50 million. Mr. Ryan is also determined to repeal the new health care reform law. Never mind that the law would make real progress on both fronts, covering more than 30 million of the uninsured and pushing to make health care delivery more efficient and effective and less costly.

    One of Mr. Ryan's most damaging ideas is to change Medicare and Medicaid from entitlement programs — covering everyone who is eligible for a defined set of services. Instead, Washington would contribute set amounts that would almost certainly grow more slowly than medical costs. You will hear a lot about how squeezing outlays will mean more efficiency. The real result is that the most vulnerable — the elderly, the poor, the disabled — will have to pay more for care or forgo treatment. ...

    For decades the Republicans have made clear their antipathy toward Medicare and Medicaid. Now they are trying to use the public's legitimate concerns about the deficit to seriously cripple both programs. This isn't real reform. If it moves forward, Americans will pay a high price.

  • AlterNet: The Republicans' Incredible Bait-and-Switch -- Truly Trying to Screw You When You Get Older. Within ten years, most Americans would be spending all of their Social Security income to pay for their health care or going without coverage. By R.J. Eskow. Excerpts: Back when I analyzed health plans and other benefits for a living, I asked a famous CEO what his goals were for the corporation's employee benefit plan. "I want to give them less and make them think it's more," he said.

    The new Republican budget proposes to radically restructure the country's relationship with its citizens. They're using bogus economics to confuse people into thinking these extreme cuts will somehow leave them more money. But they're really offering less - much less.

    We'll deal with the politics later. The policy is astounding enough. But we'll throw in a little context: The top 25 hedge fund managers made a collective $22 billion last year. If they had been taxed under the same rules as cops, firefighters, nurses, and teachers, and if the President's proposed tax changes for the wealthiest earners had passed, these 25 people alone might reduced the Federal deficit by more than five billion dollars in a single year! But Rep. Ryan and his party prevented that from happening. "Party of deficit reduction"? Gosh, I don't think so.

    Since all the specifics aren't in, we ran some rough preliminary numbers. Here's what we found: Within ten years of this plan taking effect, most Americans would be spending all of their Social Security income just to pay for their health care or going without coverage. ...

    The new budget was presented by Rep. Paul Ryan, based on a proposal he co-wrote with economist (and long-time "entitlement" opponent) Alice Rivlin. It would dismantle Medicare and Medicaid starting in 2021, when Medicare's system of guaranteed, comprehensive health coverage would be replaced with "vouchers" under what's known as a "defined contribution plan" - exactly what that CEO foisted upon his hapless employees.

  • Political cartoon by Barry Deutsh.
  • truthOut: Ryan Turns Knife on Medicare, Medicaid. By Margaret Flowers. Excerpts: Ryan would change Medicare from a guaranteed benefit program to a limited spending program which pushes more seniors into the private market. Similar to the new federal health law, seniors would be given a defined amount of money that they could use to purchase private insurance on an exchange. Such subsidies are expected to grow more slowly than overall health care costs, so that as insurance premiums rise, seniors would be pushed into skimpier plans that would leave them unable to afford needed care and financially vulnerable should they have a serious accident or illness.

    The dismantling and privatization of Medicare, which would be completed by 2022, would actually lead to higher overall health care costs and poorer health for our Medicare population. Health care costs would be higher because of the added private-insurer expenses of profit and inefficient administration. For example, Medicare Advantage plans, run by the insurers, currently cost about 10 times more to administer than the traditional Medicare program.

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 editorial: Cutting Out the Middleman. For six years, Doug Stafford was a lobbyist for the National Right to Work Committee, an anti-labor group financed by business and conservative interests. His job changed last year but his duties did not when he became the chief of staff to Senator Rand Paul, Republican of Kentucky. Mr. Paul is a chief sponsor of the National Right to Work Act, which he said would end forced unionization and "break Big Labor's multibillion-dollar political machine forever."

    Brett Loper's career path is a similar one. When he was an executive for the Advanced Medical Technology Association, an industry group, he lobbied hard against President Obama's health care reform. Now, as the chief policy adviser for Speaker John Boehner, he is helping to organize the effort to repeal the health care law. The only difference is that the taxpayers are paying his salary.

    There has long been a regular shuttle service between Capitol Hill and Washington's K Street, but the numbers now are striking. Since last year's Republican victories, nearly 100 lawmakers have hired former lobbyists as their chiefs of staff or legislative directors, according to data compiled by two watchdog groups, the Center for Responsive Politics and Remapping Debate. That is more than twice as many as in the previous two years. ...

    In many cases, those hiring lobbyists were Tea Party candidates who vowed to end business as usual in Washington. As The Washington Post reported, when Ron Johnson ran against Wisconsin's Senator Russ Feingold, he accused Mr. Feingold of being "on the side of special interests and lobbyists." Now that he is a senator, Mr. Johnson has hired as his chief of staff Donald Kent, whose firms have lobbied for casinos, defense industries and homeland security companies.

    Ethics laws put limits on elected officials who move to lobbying firms. But there is nothing to stop lobbyists from getting immediately hired on Capitol Hill. This year's class of staffers argues for a tough ban. After collecting millions from industries or unions or others, lobbyists should not be allowed to turn around and write laws that favor these special interests.

  • The Nation: Debt, Austerity and How to Fight Back. By Frances Fox Piven and Cornel West. Excerpts: Wall Street Banks, American corporations and their political allies have declared a one-sided war on the American people. This war is being waged at our schools and colleges, the workplace and in our communities.

    Today, Americans are working harder and earning less while corporate profits soar. As homeowners, consumers and students we see our wealth being stripped away by banks. Our government plunges into debt waging trillion-dollar wars. Meanwhile, our infrastructure erodes and climate change proceeds unchecked. Schools, daycare centers, senior citizen facilities, clinics, parks and firehouses are starved for funds so that corporations and the rich can get billions in tax breaks!

    Corporate America's unprovoked assault on working people has been carried out by manufacturing a need for fiscal austerity. We are told that there is no more money for essential human services, for the care of children, or better public schools, or to help lower the cost of a college education. The fact is that big banks and large corporations are hoarding trillions in cash and using tax loopholes to bankrupt our communities.

    Spending on social needs is not the reason governments at all levels are facing massive budget short falls. Our debt and deficit problems are a direct result of corporate tax rollbacks, and the extortionist policies of banks and financial institutions that are engaged in a coordinated and massive wealth transfer from the American people to their own coffers.

  • The Smirking Chimp: When Pigs Rule. By David Michael Green. Excerpts: The top one percent in this country used to, before the regressive onslaught that began with the Reagan election thirty years ago, account for twelve percent of all national income. Today, they pull down more than twice that, 25 percent. They used to control a third of all national wealth. Today they control forty percent. That's just one percent of us, one person out of one hundred.

    How could this have happened? Is it possible, for example, that the wealthiest amongst us are working twice as hard as they used to? Is it possible that all the rest of us have grown vastly lazier over the course of this past generation. ...

    What is far more likely - and, indeed, what is precisely the case - is that the rich bought off lawmakers to make laws that favored their interests. At precisely the same time that the rich got infinitely richer and the rest of us got steadily poorer, darned if a whole boatload of regressive-backed public policies didn't change in exactly the way that would lead to just that outcome. Tax burdens have been shifted from rich to poor. Services provided by the government have been slashed. Trade policies that undermine the bargaining power of American workers have been adopted. Labor relations policies have decimated unions, such that where a third of workers used to be represented by organized labor, now about seven percent are. Privatization has given away publicly-owned assets. The well-connected have written into law gigantic subsidies, creating corporate welfare on a massive scale. Wars based on lies have enriched the few while saddling the rest of us with trillions of dollars in debt. Deregulation followed by taxpayer-financed bailouts have allowed any plugged-in economic actor to do just about anything, including crash the global economy in the raw pursuit of unfathomable greed, and never pay a penalty for their actions. ...

    Incomes for the top one percent have risen 18 percent over the last decade, while for all the rest of us, they've been falling. The United States today has a Gini coefficient - the standard measure of national income inequality, where zero is perfectly equal and 100 is perfectly unequal - clocking in at 40.8. That means we're tied with Turkmenistan and Ghana when it comes to the inequality of the distribution of wealth in America. I'm not shitting you about this. These are real numbers. The good news is that we came in (just slightly) ahead of Senegal and Cambodia. Whew! There's a relief! We wouldn't want to be like some sort of banana republic or anything, would we? The bad news? There is less income inequality today in Mali, Malawi and Burkina Faso than in the good old US of A. Oh, and about 70 other countries in the world (out of about 195 or so, total), too. How's that for your American exceptionalism, eh pal?!

    I don't know if the rich are working twice as much as than they used to (just a wild hunch, but I suspect not), but what I do know is that the non-rich are working a lot more than they used to. It takes two incomes today to support a middle class family that could be supported by one back when "Leave It To Beaver" was on the air. And many people are working more than forty hours a week - indeed, a lot of people, working a lot more hours - in an increasingly desperate attempt to stay one step ahead of their creditors, one step ahead of medical insolvency, one step ahead of (the new, draconian) bankruptcy laws, one step ahead of foreclosure, one step ahead of eviction, one step ahead of living out of their cars, presuming they're lucky enough to be one step ahead of repossession, and one step ahead of all the damage these horrible strains do to marriages and families. ...

    Since 1980 (or perhaps 1972), they (the Democrats) retreat, they deceive, and they sell out their constituents. That is the case in almost every policy domain, from Middle East foreign policy to global warming to civil liberties to health care. If that latter claim sounds ridiculous, remember that Barack Obama's much derided health care plan was essentially the same one proposed by Bob Dole in 1996, and virtually the same one implemented by Ken Doll "Dick" Romney in Massachusetts just a few years back. And remember that the president began the process by cutting a secret deal behind closed doors with the insurance and pharmaceutical industries. And remember that that deal called for them to profit massively, for the president to renounce single payer, and for him to lie outright (as was documented by his pal, Tom Daschle) to his liberal base, pretending to favor a public option while actually scuttling it from the get-go. ...

    Fortunately, however, there is still some good news out there. The number of billionaires in the world grew by 199 in the past year, according to Forbes magazine's annual survey. Now there are 1,210 of them. And they possess a combined wealth of $4.5 trillion. Awesome, dude! The even better news is that that figure is up from $3.6 trillion - a mere 25 percent growth - in just one year's time. And what a year, too! Who says there's a massive, devastating, killer recession going on? Sounds to me like it's nothing more than a boatload of whining from a bunch of lazy, low-achiever, can't-cut-it, non-billionaires!

  • New York Times: Gauging the Pain of the Middle Class. By Robert H. Frank. I call it the toil index. It measures the number of hours that median earners must toil each month to be able to rent a house in a school district of at least average quality. (Could the median earner aspire to any less?) Unlike per capita G.D.P., which, apart from brief recessions, grew at a strong and steady rate from the end of World War II until the recent downturn, the toil index has been much more volatile. Its movements suggest that recent increases in income inequality have imposed substantial economic costs on middle-income families.

    From 1950 to 1970, incomes grew rapidly and at about the same rate — almost 3 percent annually, on average — for families at all income levels. From 1970 to 2000, however, that pattern changed sharply. Incomes of the top 1 percent grew more than threefold, while median household income grew less than 15 percent.

    Although conventional wisdom has long held that a widening income gap is a problem, there has never been a practical way to measure its actual costs. The toil index tackles that issue.

    The index rejects the standard economic assumption that well-being depends primarily on absolute consumption. Instead, it assumes that the context of that consumption is often far more important. Context matters because the brain requires a frame of reference to make any evaluative judgment. ...

    By 2000, the median worker had to work 67.4 hours a month to put his or her family into the median home. The toil index thus fell by 2.4 percent from 1950 to 1970, but rose by 62.4 percent from 1970 to 2000. Yet all the while, steadily rising per capita G.D.P. painted a substantially rosier picture.

  • Washington Writer's Group, courtesy of the Denver Post: Dionne: The end of progressive government?. By E.J. Dionne. Excerpts: On Tuesday, Rep. Paul Ryan, R-Wis., announced the House Republicans' budget plan, which includes cuts in many programs for the neediest Americans. The Ryan budget's central purpose is not deficit reduction but the gradual dismantling of key parts of government. Remember that Ryan wants both to preserve the Bush tax cuts and, over the long run, to enact more breaks for the wealthy, including the elimination of the capital gains tax.

    Ryan's plan includes steep Medicaid cuts, disguised as a proposal to turn the program into a "block grant" to the states. The net effect would be to leave even more Americans to the mercies of the private insurance market.

    In deference to the GOP's success in turning last year's health care law into "Obamacare," let's call this proposal Ryancare — and let's make sure we look carefully at its impact on the elderly and the disabled, the main beneficiaries of Medicaid.

    Put the two parts of the Ryan design together — tax cuts for the rich, program cuts for the poor — and its radically redistributionist purposes become clear. Timid Democrats would never dare embark on class warfare on this scale the other way around.

  • Milwaukee Journal-Sentinal: No degree, little experience pay off big. By Daniel Bice. Excerpts: Just in his mid-20s, Brian Deschane has no college degree, very little management experience and two drunken-driving convictions.

    Yet he has landed an $81,500-per-year job in Gov. Scott Walker's administration overseeing environmental and regulatory matters and dozens of employees at the Department of Commerce. Even though Walker says the state is broke and public employees are overpaid, Deschane already has earned a promotion and a 26% pay raise in just two months with the state.

    How did Deschane score his plum assignment with the Walker team?

    It's all in the family.

    His father is Jerry Deschane, executive vice president and longtime lobbyist for the Madison-based Wisconsin Builders Association, which bet big on Walker during last year's governor's race.

    The group's political action committee gave $29,000 to Walker and his running mate, Lt. Gov. Rebecca Kleefisch, last year, making it one of the top five PAC donors to the governor's successful campaign. Even more impressive, members of the trade group funneled more than $92,000 through its conduit to Walker's campaign over the past two years.

    Total donations: $121,652. That's big-time backing from the homebuilders. The younger Deschane didn't respond to questions about his job. ...

    But his father said he doesn't think his group's financial support of the first-term Republican helped his son in his job search. ...

    Deschane's father said that during the gubernatorial contest he might have reminded Keith Gilkes, Walker's campaign manager and now chief of staff, that his son "was out there and available." "I put in good words for every one of my children in their jobs," said the elder Deschane. "But that would be the extent of it."

  • New York Times editorial: The Budget Battles: Prosperity for Whom? Excerpts: If the House Republican budget blueprint released on Tuesday is the "path to prosperity" that its title claims, it is hard to imagine what ruin would look like.

    The plan would condemn millions to the ranks of the uninsured, raise health costs for seniors and renege on the obligation to keep poor children fed. It envisions lower taxes for the wealthy than even George W. Bush imagined: a permanent extension for his tax cuts, plus large permanent estate-tax cuts, a new business tax cut and a lower top income tax rate for the richest taxpayers.

    Compared to current projections, spending on government programs would be cut by $4.3 trillion over 10 years, while tax revenues would go down by $4.2 trillion. So spending would be eviscerated, mainly to make room for continued tax cuts.

  • truthOut: The Peasants Need Pitchforks. By Robert Scheer. The delusion of a classless America in which opportunity is equally distributed is the most effective deception perpetrated by the moneyed elite that controls all the key levers of power in what passes for our democracy. It is a myth blown away by Nobel Prize winner Joseph E. Stiglitz in the current issue of Vanity Fair. In an article titled "Of the 1%, by the 1%, for the 1%" Stiglitz states that the top thin layer of the superwealthy controls 40 percent of all wealth in what is now the most sharply class-divided of all developed nations: "Americans have been watching protests against repressive regimes that concentrate massive wealth in the hands of an elite few. Yet, in our own democracy, 1 percent of the people take nearly a quarter of the nation's income—an inequality even the wealthy will come to regret." ...

    Even though most Americans accept that the political game is rigged, we have long assumed that the choices we make in the economic sphere as to career and home are matters that respond to our wisdom and will. But the banking tsunami that wiped out so many jobs and so much homeownership has demonstrated that most Americans have no real control over any of that, and while they suffer, the corporate rich reward themselves in direct proportion to the amount of suffering they have caused.

    Instead of taxing the superrich on the bonuses dispensed by top corporations such as Exxon, Bank of America, General Electric, Chevron and Boeing, all of which managed to avoid paying any federal corporate taxes last year, the politicians of both parties in Congress are about to accede to the Republican demand that programs that help ordinary folks be cut to pay for the programs that bailed out the banks. ...

    In one of the best studies of this growing gap in income, economists Emmanuel Saez and Thomas Piketty found that during Clinton's tenure in the White House the income of the top 1 percent increased by 10.1 percent per year, while that of the other 99 percent of Americans increased by only 2.4 percent a year. Thanks to President Clinton's deregulation and the save-the-rich policies of George W. Bush, the situation deteriorated further from 2002 to 2006, a period in which the top 1 percent increased its income 11 percent annually while the rest of Americans had a truly paltry gain of 1 percent per year.

  • truthOut: Why We Must Raise Taxes on the Rich. By Robert Reich. Excerpts: Here's the truth: The only way America can reduce the long-term budget deficit, maintain vital services, protect Social Security and Medicare, invest more in education and infrastructure, and not raise taxes on the working middle class is by raising taxes on the super rich. ...

    The vast majority of Americans can't afford to pay more. Despite an economy that's twice as large as it was thirty years ago, the bottom 90 percent are still stuck in the mud. If they're employed they're earning on average only about $280 more a year than thirty years ago, adjusted for inflation. That's less than a 1 percent gain over more than a third of a century. (Families are doing somewhat better but that's only because so many families now have to rely on two incomes.)

    Yet even as their share of the nation's total income has withered, the tax burden on the middle has grown. Today's working and middle-class taxpayers are shelling out a bigger chunk of income in payroll taxes, sales taxes, and property taxes than thirty years ago.

    It's just the opposite for super rich.

    The top 1 percent's share of national income has doubled over the past three decades (from 10 percent in 1981 to well over 20 percent now). The richest one-tenth of 1 percent's share has tripled. And they're doing better than ever. According to a new analysis by the Wall Street Journal, total compensation and benefits at publicly-traded Wall Street banks and securities firms hit a record in 2010 — $135 billion. That's up 5.7 percent from 2009.

    Yet, remarkably, taxes on the top have plummeted. From the 1940s until 1980, the top tax income tax rate on the highest earners in America was at least 70 percent. In the 1950s, it was 91 percent. Now it's 35 percent. Even if you include deductions and credits, the rich are now paying a far lower share of their incomes in taxes than at any time since World War II.

    The estate tax (which only hits the top 2 percent) has also been slashed. In 2000 it was 55 percent and kicked in after $1 million. Today it's 35 percent and kicks in at $5 million. Capital gains – comprising most of the income of the super-rich – were taxed at 35 percent in the late 1980s. They're now taxed at 15 percent.

    If the rich were taxed at the same rates they were half a century ago, they'd be paying in over $350 billion more this year alone, which translates into trillions over the next decade. That's enough to accomplish everything the nation needs while also reducing future deficits.

  • AlterNet: We're Not Broke: Congress -Here's $400 Billion In New Annual Revenue. Posted by Chuck Collins. Government must stop doling out ever-larger tax breaks to the superrich and vast corporations. Excerpts: "Our country is not really broke," said Cynthia Carranza who directs a food pantry in Niles, Illinois. Carranza witnesses the growing number of hungry people at her food pantry door even as government support for her program is slashed. "We're an incredibly rich and prosperous nation. But our wealth is skewed to a very few fortunate at the top. We're not broken, just twisted." ...

    There are four revenue raisers that Congress could institute tomorrow that would generate $400 billion a year–or $4 trillion over the next decade. Such programs would restore greater fairness to our tax system and reduce the extreme levels of inequality polarizing our society.

    • Congress could levy a modest financial transaction tax on the transfers of stock, currency, and speculative investments that do little to strengthen the real economy. This would generate $150 billion a year while exempting smaller investors.
    • Lawmakers could reduce corporate tax dodging by closing overseas tax havens and requiring companies to pay U.S. taxes on the profits they actually earn in this country. This could generate as much as $100 billion a year.
    • Congress could establish new top tax rates on households with annual incomes over $1 million, which could generate another $100 billion a year. Under our current tax system, a person earning $374,000 a year pays the same top tax rate as someone earning $10 million a year.
    • Lawmakers could institute a progressive estate tax on fortunes over $5 million, with higher rates on billionaire estates. That would generate $45 billion a year. ...

    Sure, some politicians would rather cut services for children and the mentally ill before they dare to propose tax hikes on millionaires and tax-dodging corporations. But that doesn't mean we're broke. It just means we need to get our priorities straight.

  • Vanity Fair: Of the 1%, by the 1%, for the 1%. By Joseph E. Stiglitz. Excerpts: Some people look at income inequality and shrug their shoulders. So what if this person gains and that person loses? What matters, they argue, is not how the pie is divided but the size of the pie. That argument is fundamentally wrong. An economy in which most citizens are doing worse year after year—an economy like America's—is not likely to do well over the long haul. There are several reasons for this.

    First, growing inequality is the flip side of something else: shrinking opportunity. Whenever we diminish equality of opportunity, it means that we are not using some of our most valuable assets—our people—in the most productive way possible. Second, many of the distortions that lead to inequality—such as those associated with monopoly power and preferential tax treatment for special interests—undermine the efficiency of the economy. ...

    The United States and the world have benefited greatly from government-sponsored research that led to the Internet, to advances in public health, and so on. But America has long suffered from an under-investment in infrastructure (look at the condition of our highways and bridges, our railroads and airports), in basic research, and in education at all levels. Further cutbacks in these areas lie ahead. ...

    The more divided a society becomes in terms of wealth, the more reluctant the wealthy become to spend money on common needs. The rich don't need to rely on government for parks or education or medical care or personal security—they can buy all these things for themselves. In the process, they become more distant from ordinary people, losing whatever empathy they may once have had. They also worry about strong government—one that could use its powers to adjust the balance, take some of their wealth, and invest it for the common good. The top 1 percent may complain about the kind of government we have in America, but in truth they like it just fine: too gridlocked to re-distribute, too divided to do anything but lower taxes. ...

    But one big part of the reason we have so much inequality is that the top 1 percent want it that way. The most obvious example involves tax policy. Lowering tax rates on capital gains, which is how the rich receive a large portion of their income, has given the wealthiest Americans close to a free ride. ...

    Much of today's inequality is due to manipulation of the financial system, enabled by changes in the rules that have been bought and paid for by the financial industry itself—one of its best investments ever. The government lent money to financial institutions at close to 0 percent interest and provided generous bailouts on favorable terms when all else failed. Regulators turned a blind eye to a lack of transparency and to conflicts of interest. ...

    The Supreme Court, in its recent Citizens United case, has enshrined the right of corporations to buy government, by removing limitations on campaign spending. The personal and the political are today in perfect alignment. Virtually all U.S. senators, and most of the representatives in the House, are members of the top 1 percent when they arrive, are kept in office by money from the top 1 percent, and know that if they serve the top 1 percent well they will be rewarded by the top 1 percent when they leave office. By and large, the key executive-branch policymakers on trade and economic policy also come from the top 1 percent.

    When pharmaceutical companies receive a trillion-dollar gift—through legislation prohibiting the government, the largest buyer of drugs, from bargaining over price—it should not come as cause for wonder. It should not make jaws drop that a tax bill cannot emerge from Congress unless big tax cuts are put in place for the wealthy. Given the power of the top 1 percent, this is the way you would expect the system to work. ...

    The top 1 percent rarely serve in the military—the reality is that the "all-volunteer" army does not pay enough to attract their sons and daughters, and patriotism goes only so far. Plus, the wealthiest class feels no pinch from higher taxes when the nation goes to war: borrowed money will pay for all that. ...

    The rules of economic globalization are likewise designed to benefit the rich: they encourage competition among countries for business, which drives down taxes on corporations, weakens health and environmental protections, and undermines what used to be viewed as the "core" labor rights, which include the right to collective bargaining. Imagine what the world might look like if the rules were designed instead to encourage competition among countries for workers. Governments would compete in providing economic security, low taxes on ordinary wage earners, good education, and a clean environment—things workers care about. But the top 1 percent don't need to care. ...

    The top 1 percent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn't seem to have bought: an understanding that their fate is bound up with how the other 99 percent live. Throughout history, this is something that the top 1 percent eventually do learn. Too late.

  • BusinessWeek: How to Pay No Taxes. Eleven shelters, dodges, and rolls—all perfectly legal—used by America's wealthiest people. By Jesse Drucker. Excerpts: For the well-off, this could be the best tax day since the early 1930s: Top tax rates on ordinary income, dividends, estates, and gifts will remain at or near historically low levels for at least the next two years. That's thanks in part to legislation passed in December 2010 by the 111th Congress and signed by President Barack Obama.

    "This is clearly far and away the most generous tax situation that's existed," says Gregory D. Singer, a national managing director of the wealth management group at AllianceBernstein in New York. "It's a once-in-a-lifetime opportunity."

    For the 400 U.S. taxpayers with the highest adjusted gross income, the effective federal income tax rate—what they actually pay—fell from almost 30 percent in 1995 to just under 17 percent in 2007, according to the IRS. And for the approximately 1.4 million people who make up the top 1 percent of taxpayers, the effective federal income tax rate dropped from 29 percent to 23 percent in 2008. It may seem too fantastic to be true, but the top 400 end up paying a lower rate than the next 1,399,600 or so. ...

    As Warren Buffett likes to point out, since most of his income is from dividends, his tax rate is less than that of the people who clean his office. ...

    The true effective rate for multimillionaires is actually far lower than that indicated by official government statistics. That's because those figures fail to include the additional income that's generated by many sophisticated tax-avoidance strategies. Several of those techniques involve some variation of complicated borrowings that never get repaid, netting the beneficiaries hundreds of millions in tax-free cash. From 2003 to 2008, for example, Los Angeles Dodgers owner and real estate developer Frank H. McCourt Jr. paid no federal or state regular income taxes, as stated in court records dug up by the Los Angeles Times. Developers such as McCourt, according to a declaration in his divorce proceeding, "typically fund their lifestyle through lines of credit and loan proceeds secured by their assets while paying little or no personal income taxes." A spokesman for McCourt said he availed himself of a tax code provision at the time that permitted purchasers of sports franchises to defer income taxes.

  • The Coffee Party USA: DEAR CONGRESS: I Pay Taxes, I Did Not Cause the Recession. Excerpt: Dear Congress, Please remember: you are fighting over how to spend our money. We the People pay 33.7% of the Federal Fund while corporations pay 7.2%. Many corporations pay no taxes at all. Yet your entire focus during this budget battle has been on how much to hurt the people.

    We did not cause the recession, the deficit, or the national debt. We know this, and we need you to know that we are aware of a corrupt system in which corporations spend their vast wealth to lobby and manipulate you.

    We know that's why the tax code so unjustly burdens us while favoring them. We know this is why Elizabeth Warren and the Consumer Financial Protection Bureau are under attack from the US Chamber of Commerce and other powerful lobbyists. We know that is why your policies reward multinational corporations, including those that DID cause the recession, with bailouts, bonuses, and tax benefits.

  • AlterNet: GOP Unveils Radical New Budget Gutting Medicare, Medicaid -- Taking from the Poor, Giving to the Rich. By Karen Dolan. Excerpts: Rep. Paul Ryan, R-Wisconsin, is waging radical class warfare and ideological privatization schemes and selling it as a debt reduction plan. His newly released FY12 budget proposal, The Path to Prosperity, ought to have the subtitle: "A Windfall For the Already Prosperous."

    As Dean Baker of the Center for Economic and Policy Research reminds us, the economic policies of the last three decades, by favoring corporations and the wealthy over average Americans, have achieved the world's most breathtaking upward redistribution of wealth. America's richest 1 percent are getting about $1.5 trillion richer each year. Studies also show that the richest 5 percent hold almost 64 percent of our wealth while and the bottom 80 percent of scrape by on just 12.8 percent of the pie.

    Yet under the guise of debt reduction, the chairman of the House Budget Committee's budget proposal would take from the already poor, give to the already rich and attempt to achieve debt reduction not by cutting real costs, but by privatizing entitlement programs and shifting costs from the wealthy and corporations to struggling states, seniors, disabled, sick and low-income Americans. And the additional revenues necessary for serious debt reduction is glaringly absent, with proposals that would actually decrease tax-revenue from those most able to pay...

    It would devastate lives of the at least 44 million Americans living in poverty by slashing spending on critical human needs to below 2008 funding levels and freezing it there for 5 years. At the same time, it would boost the luxurious lifestyles of the tiny percentage of Americans who are genuinely rich by repealing estate and corporate taxes, slashing the income taxes the wealthiest among us pay and instituting a regressive national sales tax that would most likely increase tax obligations for poor, working-class, and middle-class Americans. ...

    The GOP is right about one thing: We should be serious about long-term debt reduction. Ryan's dangerous and seriously flawed scheme, however, is nothing more than an ideological ploy to shrink government programs that help poor and middle-class Americans while rewarding the already wealthy.

  • Other Words: Fair Taxation Requires More Brackets at the Top. Some of the most affluent Americans actually pay lower effective tax rates than many middle class Americans. Excerpts: Currently, families earning $374,000 pay the exact same federal income tax rates as families with multi-million-dollar incomes, or even the handful who earn a billion bucks every year, such as the heirs of Walmart's founder. The lifestyles of the ultra-wealthy wouldn't change in the least if they had to pay moderately higher income taxes. And it would boost our national economy.

    The Fairness in Taxation Act calls for establishing five new tax brackets for incomes between $1 million and $1 billion, with rates ranging from 45 percent to 49 percent.

    The Illinois Democrat's bill would also address an absurd aspect of our tax system, which wrongly favors wealth over work. Today, money earned through working nine-to-five or the graveyard shift is taxed at a higher rate than money obtained through windfalls. Capital gains, dividends, and other investment income derived from pre-existing wealth shouldn't be taxed at rates lower than income earned through work.

    Three-quarters of all stocks and mutual funds owned by U.S. taxpayers belong to the richest 10 percent of American households. Therefore, some of the most affluent Americans actually pay lower effective tax rates than many middle-class Americans.

    Take, for example, a weasel like Lloyd Blankfein, CEO of Goldman Sachs. He raked in just over $13 million in 2010 (excluding his bonus of some $12 million worth of shares in his company). Of that $13 million, only his base salary of $600,000 will be taxed according to the federal income tax rates. The remaining $12.4 million will be taxed at a top rate of 15 percent. Unfortunately, Blankfein is just one example of the kind of gross inequity that exists in the current tax system.

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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