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6, 2000 April, 2000

Highlights—July 23, 2011

  • When Fridays Were Fridays: A Former Beauty Queen Receives Her Sentence for Insider Trading. By Colette. Excerpt: Danielle Chiesi, who pleaded guilty earlier this year in the Galleon Insider Trading Case, has been sentenced to 30 months in prison. As the femme fatale who reportedly flirted her way to luring secrets from top technology executives, including Bob Moffat (formerly with IBM), Chiesi will now have to put away her stylish wardrobe for a prison uniform.
  • New York Times DealBook: Chiesi Sentenced to 30 Months in Galleon Case. By Ben Protess. Excerpts: Danielle Chiesi, a former beauty queen turned hedge fund trader, got a thrill from pumping insiders for information and snaring secret tidbits about companies. “It’s a conquest,” she said in a call recorded by the government. “It’s mentally fabulous for me.” But her passion has landed her in prison. ...

    “For Danielle Chiesi, cultivating corporate insiders to gain an illegal trading edge was the ultimate elixir,” Preet Bharara, the United States attorney for Manhattan, said in a statement. “She was the vital artery through which inside information flowed between captains of industry and billionaire hedge fund managers, and she reveled in the conquest.” ...

    In January, Ms. Chiesi pleaded guilty to three counts of participating in the conspiracy. She acknowledged leaking information about I.B.M., Advanced Micro Devices and Sun Microsystems. Her activities, prosecutors have said, earned her hedge fund $1.7 million. ...

    Ms. Chiesi, 45, became known on Wall Street for her colorful personality and robust Rolodex. Her specialty was the technology world, in which she built a network of sources whom she prodded for corporate secrets. Her tipsters included Robert W. Moffat Jr., a former senior executive at I.B.M., who has since pleaded guilty to participating in the scheme.

  • The Register: IBM profits hum along nicely in second quarter. By Timothy Prickett Morgan. Excerpts: The name is International Business Machines, and perhaps better than any other company in the corporate IT sector, 100-year-old Big Blue is able to follow growth wherever it is on the planet, and capitalize on it. In the second quarter ended in June, IBM raked in $26.7bn in sales, up 12.4 percent, and brought $3.66bn to the bottom line, up 8.2 per cent. Yes, net income did not grow as fast as revenues, but IBM has taught Wall Street and its own employees to care only about growth in earnings per share – and that rose by 14.9 per cent to $3 a share in the quarter, thanks to $3bn in share repurchases.

    The Global Services behemoth continued to generate the largest portion of IBM's revenues in the quarter, with $15.1bn in sales, up 10 per cent from the year ago quarter. But everything is not rosily perfect in Global Services: the bulk of the $160m in "workforce rebalancing" (IBMese for layoffs) that the company did in the quarter was focused on Global Services, predominantly in Europe.

    Mark Loughridge, IBM's chief financial officer, said in a call with Wall Street analysts that this kind of rebalancing would simply be the norm at Big Blue going forward – although he did not confirm that quarterly layoffs that stay under the radar and that are spread across IBM's many geographies and divisions have been, in fact, the norm for many years.

  • Financial Times: Bribery: Lines less blurred. By Henny Sender. Slush funds distributed via travel agencies to pay for sightseeing trips abroad. Shopping bags stuffed with bank notes handed over in parking lots. Those were just two of the ways that IBM of the US greased the palms of government officials in Asia during a number of years, according to the Securities and Exchange Commission.

    In March, the computer multinational paid a $10m fine to settle civil charges brought by America’s markets watchdog of violating the Foreign Corrupt Practices Act in its efforts to secure state purchases of its hardware in China and South Korea.

  • Yahoo! IBM Employee Issues message board: "IBM HR Sr. VP recent testimony" by "sby_willie". Full excerpt: From the testimony:
    "Five years ago, we voluntarily reclassified seven thousand of our highly educated computer employees to non-exempt because we could not be certain whether they met the 1990 criteria for the FLSA's computer employee exemption. These workers had salaries averaging $77,000 per annum (and some up to $150,000). We lowered their base salaries by 15% to account for potential overtime and to maintain market-based compensation for similar non-exempt jobs. Not surprisingly, nearly half of them contested their reclassification!"

    A PAY CUT is a PAY CUT! It's more of a pay cut when you can't work any OT since IBM divisions have limited or stopped all OT authorization for work over 40 hours a week. I thought this was a PAY REMIX? No mention of this anymore.

    Has anyone on the Government Subcommittee come to the aid of those that got an unfair cut in pay and questioned what was the real motive for a 15% reduction in pay? Any mention of the OT lawsuit (IBM vs. Rosenberg et. al.) IBM settled that precipitated this 15% pay reduction in the first place?

    Isn't it clear that Randy wants to remake the FLSA so it is a broad PAY CUT for USA IBMers? So that is the answer to grow or retain USA IBM employment by reform of a law that protects USA workers.

  • Yahoo! IBM Employee Issues message board: "Anyone know about repayment for ALAP" by "Chuck". Full excerpt: Hi Guys, Need your help.. I was a part of the US ALAP (Degree work study program).I had to sign the repayment agreement which says I need to stay with IBM for 2 years after graduation else I will have to return the money. For last 5 years there has been no promotion and very low/no salary hikes. Since I graduated there is no change so I am now desperate to move out.. My question is that will IBM come after me for the repayment? I know legally they can as I signed the repayment contract...Has anyone been in similar situation or know of someone who has been through this? Thanks Preeti.
  • Yahoo! IBM Employee Issues message board: "Re: Anyone know about repayment for ALAP" by Michael Novak. Full excerpt: If you can't manage to position yourself for a package, you need to talk to other people. Transfer to GBS/GTS/ISSx and then say you can't travel. Then you don't owe and get 2 weeks for every year at IBM and 30 days to find something else.
  • Yahoo! IBM Employee Issues message board "Re: Anyone know about repayment for ALAP" by "Tiger M". Full excerpt: Thanks folks for your feedback. My problem is that I have a wonderful opportunity in hand which is 40% higher than my current pay.. But if I have to repay IBM all those gains will be wiped off.. I want to know if IBM will be willing to negotiate to a lesser amount than what I owe them. It is so frustrating to be stuck at one position for 5 years. I checked with my lawyer he says legally I will have to pay them back. Anyone been in the ALAP program who had to decide something like this?
  • Yahoo! IBM Employee Issues message board: "Re: Anyone know about repayment for ALAP" by "workforlife". Full excerpt: Getting yourself fired for cause will not get you out of the ALAP agreement. When you sign an ALAP contract you agree to it's terms. Leave in so many months you own IBM x dollars. Leave between this month and that month you owe Y dollars. IBM spends a lot of money to get you a master's or PhD and they expect a return on their dollars. It is not an easy program to get into and you know the cost/benefits up front.
  • Yahoo! IBM Employee Issues message board: "Re: Anyone know about repayment for ALAP" by "madinpok". Full excerpt: The gains will be wiped out over what period? Surely, not the rest of your career. If it is a good opportunity, take it, even if it means breaking even in the short term. What have you got to look forward to in IBM? No raises? No promotion? No bonuses? Getting laid off? Really now, why would you want to stay?
  • Yahoo! IBM Employee Issues message board: "Re: Anyone know about repayment for ALAP" by "uturn2who". Full excerpt: I'd tend to agree. You got to look at the short and long term. A 40% increase, assuming you are talking about salary, and not a one-time bonus, is hard to come by in this economy. Based on your comments it sounds like something you'd like to do, so what are you waiting on?
  • Yahoo! IBM Employee Issues: "Re: IBM workers strike in Argentina threatened 7/28" by "bits_bytes_and_bugs". Full excerpt: It varies greatly depending on the account and team. Yes, the procedures are supposed to be documented and simplified, but often owners of the procedures are dumped by IBM before this work is completed.

    Our account's operational procedures are written such that someone with a basic knowledge of the platform should be able to do them. These are basic, routine and repetitive "steady-state" operations.

    New hires would not have this platform knowledge right out of school. We have found it impossible to simplify procedures to the point where they are goof proof.

    IBM should run them through the platform's operations and system admin classes before they get assigned to the account, but they don't, probably because IBM India doesn't want to pay for the "on the bench" time while getting trained. Just make the client pay as the new hire gets trained OJT and making mistakes along the way.

    Like any new hire, regardless of nationality, there is a learning curve - for the technical skills, the IBM processes like change and problem management, and the account specifics. To be productive with basic operational things takes about 4-6 months, to get to be a competent system admin it takes about 18 to 24 months of OJT. With the turnover rate, there often is no one left with experience enough to train the new hires. That's where the retention issue bites.

  • Yahoo! IBM Employee Issues message board: "Re: IBM workers strike in Argentina threatened 7/28" by "thekanck". Full excerpt: Thank you bits! That matches my experience with the "Global Delivery Framework". the USA-based GDF employees seem to stay on a bit longer, probably because they have fewer other options at present, while the off-shore workers are able to find better offers due to their lower starting wages and growth prospects. TK.
  • Yahoo! IBM Employee Issues message board: "J. Randall McDonald appears before House Committee on July 14" by "fhawontcutit". Excerpt: From http://edworkforce.house.gov/News/DocumentSingle.aspx?DocumentID=251328: On Thursday, July 14 at 10:00 a.m., the Subcommittee on Workforce Protections, chaired by Rep. Tim Walberg (R-MI), will hold a hearing entitled, "The Fair Labor Standards Act: Is It Meeting the Needs of the Twenty-First Century Workplace?" The hearing will take place in room 2175 of the Rayburn House Office Building.

    Enacted in 1938, the Fair Labor Standards Act (FLSA) sets forth employment rules concerning minimum wages, maximum hours, and overtime pay. The Department of Labor estimates more than 130 million workers are affected by the FLSA. Despite the broad impact of the law on the American workforce, it is largely outdated and does not accurately reflect the realities of modern technology or today's economy. The law has also created an environment of uncertainty with employers facing a patchwork of conflicting interpretations of the law and employees facing difficulty understanding their rights under the law.

    As the committee continues to review laws and regulations affecting American workers, Thursday's hearing will give members an opportunity to examine the effects of the Fair Labor Standards Act on the American workforce. To learn more about this hearing, visit www.edworkforce.house.gov/hearings.

    WITNESS LIST J. Randall MacDonald Senior Vice President, Human Resources IBM Armonk, NY Testifying on behalf of the HR Policy Association.

  • Yahoo! IBM Employee Issues message board: "Looking for a New Job- Sound Advice Requested" by "In". Full excerpt: I am tired of hearing that I should be Happy I am employed. I have been beaten/ignored/humiliated/pigeonholed and it is affecting my mental and physical health. My manager never speaks to me unless it is to assign more work. They spoke to me in Mar to give me my Vpay and end of Jun for my 2% raise. Both phone calls were held to a few min as they needed a bio break. We have not had a dept meeting in 3 years. We have weekly group meetings to go over NUMBERS.(period) We have meetings MWF to project the WEEKLY meeting group metrics. TL has weekly 1/2 hour meetings (3 of us at a time)(TL does that for a whole day) to see our individual numbers are good.

    I have 3 choices: 1) Do nothing. 2) Find a new job. 3) Retire

    Ques 1: Has any had any Success using the Internal Marketplace tool? Has anyone had any Actual job success of crossing Divisions? (STG-SWG-etc) Do you just target/scatter the postings with applications? (I have NOT ST'ed my manager that I want a new job)(My assumption is they would be cc'ed on any application) IF I tell them I am looking, my fear is I would be put on short list for next RA round.

    I have confided in a couple of different managers that I am looking and to keep me in mind but they have no openings. Any factual sage insight would be appreciated.

  • Yahoo! IBM Employee Issues message board: "Re: Looking for a New Job- Sound Advice Requested" by "David". Full excerpt: Hi I can relate very strongly to your situation. Regarding the "global Opportunity Marketplace" internal jobs tool I believe it is not a shop window for good jobs within IBM. Good jobs are created usually with an idea of who should fill them. Postings on GOM simply to tick a process box. I have never known any of my staff or colleagues be successful in attaining a new role only via the GOM.

    It costs you nothing to try however.

    Secondly I must support some of the other advice given to you: Your job should not be so important to you that it defines whether you are happy or sad. Times when I have been a PBC1 performer and felt " satisfied" with my work, it demanded so much that I almost lost my family as a consequence.

    Do enough to remain useful to IBM, take your pay but hurl most of your life force into the stuff OUTSIDE work. It'll repay you far better than the greasy pole at IBM. Bless you.

  • Working In These Times: Abuses in Tech Industry in China Exposed. By Michelle Chen. Excerpts: The Information Age once promised a new industrial revolution, in which ugly smokestacks and Third World sweatshops would be overwritten by antiseptic roboticized assembly lines, ceaselessly pumping out state-of-the art electronics. But the promise of modernity didn't stop a few young factory workers from throwing themselves off of ledges last year. Working-class misery, it seems, has just gotten rebranded.

    A new report by China Labor Watch (CLW) peers inside Sweatshop 2.0, describing conditions at 10 factories where investigators found widespread patterns of abuse. Violations of both international labor standards and China's domestic laws appear to be common, suggesting that government authorities are either unwilling or unable to curb the market forces they've unleashed. Meanwhile, at the global post-industrial vanguard, companies often follow the same path as their Dickensian antecedents, constantly gunning for faster, larger-scale and cheaper production processes. ...

    The names involved include Dell, Salcomp, IBM, Ericsson, Philips, Microsoft, Apple, HP, and Nokia. The production is generally managed by partner firms like Taiwan-based Foxconn, which was scandalized by worker suicides last year. Other links in the chain involve the manpower agencies that recruit and supply workers and the avaricious local officials who encourage exploitative practices. After everyone takes their cut, just a few dollars of each $600 i-gadget reaches the pocket of a young migrant laborer in Shenzhen.

  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM Senior Consultant in Bangalore (India): (Current Employee) “The last company to work.” Pros: Work from home, flexibility in timings, work-life balance. Cons: Pay scale not at par to the market. Revise the pay scale and retain the experienced skilled employees. The experienced employees are the asset to the company. Management should think about this and revise the policy. Advice to Senior Management: Give better pay scales competitive to similar positions in market to experienced employees and retain them.
    • IBM Anonymous: (Current Employee) “Very mixed but willing to give it more time.” Pros: I wouldn't dream of working for a direct IBM competitor. IBM's legacy and present abilities are best-of-breed so why go to a second place company. Usually you get to work with smart, energetic people and depending on the side of the business you are in, politicking has not been an issue. The IBM brand reigns supreme and is a fantastic place to learn, grow and succeed if you are willing to stick it out. Now read the cons...

      Cons: If you are unlucky, for instance in a place like GBS consulting the politics can be very bad with all type A personalities climbing over each other, not to mention blatant kissing up. There are sub-cultures within IBM and some of them stink. You are going to find your share of lazy, incompetent people everywhere but the company usually is able to get rid of them in time. Perhaps the worst thing about IBM is the HR function. These people embody the extreme bureaucracy of the company and it doesn't take long to realize that they don't work for you. Plus most of the incompetent people are concentrated in HR - so, bureaucracy + incompetence = Watson's rolling in their graves.

      Advice to Senior Management: 1. Put the Human back into Human Resources. 2. Don't play compensation games (also related to HR)

    • IBM Senior Software Engineer in Manchester, England (United Kingdom): (Current Employee) “Not the company it used to be.” Pros: Freedom to plan my time. Ability to work from home. (These are not true in all divisions.) Cons: Ruthless and have dropped all the values that once made it a great company. Don't give decent pay-rises once you join. New joiners are often paid more at the same level.
    • IBM Manager in Boulder, CO: (Current Employee) “IBM has much to offer and has some terrific talent, but the focus should be to leverage the talent not lay them off.” Pros: To develop great skills, works with some of the brightest minds, and support some of the biggest companies in the world. Cons: The constant focus on layoffs impacts employee motivation and performance. IBM was once the best of the best and has reduced itself to a commodity. Advice to Senior Management: The disconnect between profit centers (project offices) and cost centers (service delivery centers) creates real problems in profitability and performance. There are too many layers of non-value-add management. It would be better to layoff 10% per year according to a schedule and be continually hiring than to have an unpredictable layoff approach.
    • IBM Managing Consultant: (Current Employee) “IBM culture has been changed a lot in past 10 yr.” Pros: good for technical learning and expose to different clients and industries. Cons: tough to balance work and life in consulting. Advice to Senior Management: promote remotely working to save cost for clients and to balance work & life for employees
    • IBM Technical Consultant in Houston, TX: (Current Employee) “Needs Improvement.” Pros: Well, you gotta go with the flow and be a yes man to survive. Cons: Rule 1. The Boss is always right. Rule 2. If you this you are right, suggest that you look up rule 1. Advice to Senior Management: Try and be flexible in your approach. Rigidity breaks down.
    • IBM Senior Telecommunications Representative: (Past Employee - 2009) “I was extremely satisfied about how IBM balanced work and home life for employees.” Pros: Allowed flex time for employees. Respect for individual. Cons: Sends jobs overseas. Difficult to advance. Pay OK but not great. Advice to Senior Management: Better assist employees in advancing to the next level. Many employees have left the company because they could not advance their career. Also, consider not sending so many jobs overseas. This puts so many Americans out of work. Please also make sure that men and women are paid equally for equal skills and education. The managers did a good job addressing employees individual needs.
    • IBM Staff Software Engineer in San Jose, CA: (Current Employee) “There are ups and downs, and it's sure to end with one big down.” Pros: There are some good employee discounts with large partners. Some good perks include public transportation passes, recreation areas (at least at my site), and flexible work-at-home schedules. Cons: There are about 300,000 fewer American employees in IBM than there used to be, and you can expect that number to grow. Compensation lags competitors and won't be improving. Some of the cost-cutting measures over the last several years are ridiculous, such as reduced trash collection. Advice to Senior Management: You can't make money without good employees. The best non-executive ones I know have been leaving for our competitors over the last couple years.
    • IBM Managing Consultant in Washington, DC: (Current Employee) “OK Place - Salary and Bonus is Poor.” Pros: - Flexible work arrangements, can work from home depending on project or job; - Name recognition for resume; - Exposure into how a corporate entity operates. Cons - Salary and Bonus is downright poor now. IBM sr mgt believes staff are commodities. They pay/reward below market. - Since salary has become poor, a new mediocre class of employees are being hired. I guess these are the ones that couldn't get a higher offer somewhere else and it shows! - Seasoned partners are leaving...lots of middle managers with no skills left. - No more education reimbursement (MBA). Advice to Senior Management: You better start thinking long term retention of employees. Sammy is setting himself up for retirement then someone is going to be holding the bag when you have lost of your employees with any skills or knowledge.
    • IBM Anonymous in Armonk, NY: (Current Employee) “IBM was great until it began tilting East.” Pros: Great, knowledgable colleagues. Very professional workplace climate. Feels good to be associated with the global leader in our sector (technology services.) Smart management. Cons: Low morale and declining engagement (so much so, HR killed the engagement survey) If you're in a staff position in the US or any G-7 country, i.e., Finance, HR, IT, Marketing, etc., your job is going to China or India this year or next. Advice to Senior Management: Remember that 79% of your revenue still comes from major markets.
    • IBM Anonymous in Atlanta, GA: (Current Employee) “Great career opps, OJT and learning; good compensation, flex work environment, no collaboration, demanding.” Pros: Best practices, learning software from acquisitions, work from home and flexibility is great, graded on results, you make a meaningful impact, measurements to every action, stellar reputation that is earned. Technical skills and management skills of people you work with are top notch - you definitely feel energized at the end of the year. Cons: Many jerks, type A personalities make for personality conflicts, the more demanding and demeaning you are the more likely you will rise up to executive level, speak up or get out! As in rest of US, almost non-existent raises and bonuses. Advice to Senior Management: You can make the numbers and treat people respectfully. I'm not talking about diversity, I'm talking about human dignity. Employees WANT to contribute and be useful, please treat them that way. Main feedback is that cost cutting in US - "starving the beast" - will mean less innovation and opportunity - the opportunities now outnumber the ability to get everything done - revenue and innovation ideas are being left on the table with no one to implement them - at least prioritize goals and staff properly for fewer goals.
    • IBM Advisory Software Engineer: (Current Employee) “IBM was once the place to work, but now its just a stressful environment.” Pros: Early year promotions were great along with the bump of salary. Ability to move within divisions to develop new skills was great. Time off program is great . Salary for education level is great. Cons: Was proud to be an IBM until yearly layoffs occurred. Need balance of workers between US and abroad increase the retirement health benefits so older employees is retire and make room for younger ones. Currently employed young workers are frustrated due to long periods between raises and promotion opportunities. Movement opportunities are open to some employees and not others. Specialize skill knowledge in one area is not good thing to have. Need to be a good multi-tasker. Advice to Senior Management: Stop the layoffs in the States. Understand better the right mix of US and oversea employees to continue the drive of today's IBM. You need both! The CEO and his team have made great decisions, but killing the US workers isn't the best path.
    • IBM Advisory IT Architect in Bangalore (India): (Current Employee) “IBM is loosing its charm. Pros: - Flexibility; - Technically possible to get any challenges; - Be here in start of your career for 2 years or at senior level. More technical experts are here than anywhere. So. you will learn more. (comparing in service industry). 100 years old so expert in management. - Onsite chances are more. Cons: - Since flexibility is there, management also has flexibility to keep you working day and night; - No proper guidelines for professional growth; - Salary is always at least 30% less. seems to follow year of exp = no of lakhs; - If you are workaholic then its good for them; - HR and Delivery is not related. Means you may not get more if you work more; - Mid career crisis. Advice to Senior Management: Don't apply management funda everywhere. Losing resources will keep your job (managing work) but will make hell other life (leads and developer). There is difference in Horse and Donkey. Share holder are import but your people are also important. Why other Giants are not dieing for shareholders and even their share holders are happy. What is contribution to society for an IT company? There are NGOs for that.
  • Bloomberg/Newsweek: Investing Insights For Baby Boomers - The Hour It Is Getting Late. By Howard Silverblatt. Excerpts: For over seventy years, the relationship between employee and employer not only encompassed the exchange of services for compensation, but extended to obligations in the form of pensions and Other Post Employment Benefits (OPEB), specifically medical care. These benefits are staples of the American dream and marketplace with their related expenditures built into the cost of products and services. As U.S. economic dominance has shifted, the ability of U.S. companies to pass along the costs — which many foreign competitors do not have — associated with retirement to consumers has significantly diminished to a level that endangers many companies’ competitiveness. The bear markets of 2000-2002, and 2007-2008 drastically reduced private funds’ pension fund reserves, while the bull markets of 2003-2007, and 2009 to the present added some of the amounts back, although the funds remain significantly underfunded. The current recovery in S&P 500 earnings — which are matching pre-recessionary levels and are expected to post a record for 2011 — combined with the 2010 record level of both cash-flow and free cash-flow, have resulted in a record level of available cash, which by historical comparisons drastically exceeds current needs, at a time when income is still increasing. The result is that even with massive underfunding, S&P 500 pension costs have now become a reasonably-controlled expense to corporations, with costs and outflows fitting well within income and assets levels, as well as, cash-flow. S&P Indices® however, believes that the current state of the regulated pension system includes archaic accounting regulations that distort the financial position of pension funds and their sponsors, in addition to, a pay-as-you-go OPEB system with very little funding or legal guarantees. ...

    The new reality replaces the American dream of a golden retirement for soon-to-be baby boomers, which based on their available resources, leaves few options for a comfortable retirement, and there are fewer years for boomers to significantly add income to their retirement resources - outside of working longer. Even with a 15% equity return and a market recovery of over 45% over the past two years, S&P 500 companies still could not put a dent into the pension underfunding situation. Underfunding slightly improved to a US$ 245 billion shortfall, from a shortfall of US$ 261 billion in 2009; 1999 was a $280 billion surplus. Pension funding rate increased to 83.9% from 81.7%. Discount rate declined to 5.31% from 5.81%. Expected return rate declined to 7.73% from 7.83%, 10th consecutive annual decrease Funds transfer equity profits to reallocate asset positions, maintaining a reduced equity allocation of 51%. Companies have shifted a considerable amount of the risk associated with pensions to the individual.

  • truthOut: The Case for Defined Benefits and Retirement Security. By Willie L. Pelote Sr. Excerpts: In America, anybody who works for a living should be able to afford to retire. That's why shunting newly hired and/or existing civil servants into defined contribution or 401(k)-style plans to save taxpayers money, as a new report by the Kellogg School of Management and the Simon School of Business suggests doing, is a bad idea. Doing this will actually cost taxpayers more money and severely weaken retirement security for all Americans.

    This is because 401(k)-style plans are inferior to, and less efficient than, traditional, defined benefit retirement plans or pensions. Inferior because few individuals have ever saved enough money through stock market investments in a 401(k) to finance an adequate retirement. Inefficient because 401(k)-style accounts are more expensive to maintain than traditional, defined benefit plans. Money managers who administer 401(k)-style plans can collect commissions and administrative fees on the money sitting in the accounts, regardless of whether or not a trade or transaction occurs. These practices routinely devalue 401(k) style retirement savings by at least 20 percent. That's why individuals with 401(k)-style plans usually have less than half the benefits of traditional, defined...

  • Huffington Post: 3.5 Billion Reasons Why Your 401(k) Plan Is a Loser. By Dan Solin. Excerpts: A recent Barron's article discussed the estimated $3.5 billion paid by mutual funds to brokers, insurance companies and other advisers to 401(k) plans. These payments are euphemistically called "revenue-sharing." In reality, they are legal bribes paid to plan advisers, who extract them as the cost of letting these funds gain admission to the investment options in the 401(k) plan. PIMCO's Total Return Fund pays $145 million a year. The Growth Fund of America pays $75 million and the Dodge and Cox Fund pays about $20 million a year.

    The securities industry considers these payments a "win-win," claiming they reduce overall plan expenses. I believe they are a "win-win," but not for plan participants. The mutual funds win because they are paying a small price to gain access to a huge pool of assets. More assets mean more fees for them. The advisers win because they pocket a big hunk of change for doing nothing -- unless you consider selling out plan participants doing something.

    For hapless plan participants, this system is a disgrace, which should be illegal. It would be if our dysfunctional Congress really had the best interest of its constituents in mind. I guess it depends on how you define "constituents." Their real interest is in pleasing the securities industry which adds to their reelection coffers. No other reason could justify sanctioning this practice.

  • Computerworld: Fired IT workers file lawsuit claiming H-1B workers replaced them. Workers file suit against Molina Healthcare and its outsourcer, Cognizant. By Patrick Thibodeau. Excerpts: Eighteen IT workers in California have filed a lawsuit against their former employer claiming they were replaced by H-1B workers from India and then laid off in violation of the state's anti-discrimination laws. In the lawsuit, the 18 workers say that IT managers at Molina Healthcare Inc. increasingly catered to the Indian workers while leaving U.S. workers, mostly security analysts and programmers who earned at least $75,000 a year, feeling excluded prior getting laid off last year. ...

    The laid off IT workers used anecdotes to make part of their case. For instance, the workers describe an IT department that took to celebrating Indian holidays, while Indian managers "actively discouraged U.S. workers from celebrating U.S. holidays and traditions, such as Christmas, the Fourth of July and Thanksgiving, by assigning mandatory work that, in order to be timely completely, required work during holidays traditionally celebrated in America." ...

    It also charges that the IT management team only hired and promoted Indian nationals. Some meetings that had long been conducted in English, would "on many occasions" be conducted in "the native language of Indian employees," the lawsuit contends. ...

    "The IT department was known as little India," said James Otto, an attorney for the 18 former Molina IT employees. The 18 workers were among 40 that were laid off in January, 2010. The 18 workers that filed suit claim the layoffs were made to make room for H-1B workers. "They just wanted to fire the Americans, and that's what happened. It wasn't a downsizing, it wasn't an outsourcing, it was bringing in foreigners onto American soil to replace American workers. That [was] the scheme and it's going on around the country," said Otto.

  • PC World: SAP-IBM Payroll System Woes Fouled up Nurses' Pay. By Chris Kanaracus. Excerpts: Problems with an SAP software implementation led by IBM consultants have resulted in six months of erroneous paychecks for nurses in Nova Scotia, although now officials say the issues have been resolved. ...

    The project's problems may stem from the use of junior IBM consultants on the job, Pazahanick said. In fact, all SAP payroll project failures have the same characteristics, he said. "The common thread is junior consultants and weak testing."

New on the Alliance@IBM Site
  • IBM Chile Union and IBM sign collective bargaining agreement! On Tuesday July 12th, the IBM Chile Union SNTI, and IBM negotiated and signed a union contract. The vast majority of IBM Chile union members approved the offer and a strike has been averted. Congratulations to our brothers and sisters in the IBM Chile union for this historic event! A copy of the agreement will be emailed to Alliance@IBM CWA Local 1701 members and associate members.
  • Job Cut Reports
    • Comment 7/21/11: -RA's_a_coming-: Workforce REBALANCING? Where was the workforce balance in the first place needed to now do continuous rebalance acts? What a joke. Whatever happened to IBM job RETRAINING and REDEPLOYMENT? Now that would not be a joke but a good thing that would make a lot of sense to keep IBM strong for the next 100 years. -soBlue-
    • Comment 7/20/11: Sadly no one needs a friend in HR or a crystal ball to know RA's are coming. They come every year. Multiple times a year as more offshore sites come online. If anyone still is surprised when an RA happens shame on them. If they are only surprised that it happened to them then double shame on them. Reading this forum and archives should tell even the staunchest anti union IBMer that ratings and past glory count for nothing. One performers who exceeded quota and have multiple awards and are in the golden circle have been RA'd in the very year they accomplished these lofty goals. The only thing that will give anyone peace of mind and job security is a legally binding contract like all the Executives have. They even get bonuses for poor performance. Gotta pay em, Its in their contract! -Exodus2007-
    • Comment 7/20/11: ..Rumor has it GTS ESD is pulling back some RSD folks.....Looks like things are not going well.... -tired-
    • Comment 7/19/11: I agree with 'thywillbedone' – the Chileans proved that if you’ve got guts and go for it, you can win. So get out of blab-o-sphere and go for it! Randy Mac can get all the laws passed he wants, but what scares him the most is if his employees have a legally binding contract. So if the new FLSA says paying overtime is not required, but the employees’ contract says overtime is to be paid then too bad, Randy – pay up, because the contract is supreme. So why cast your fate to the wind, IBMers and leave it to corporate politicians who don’t represent your interests? Don’t agonize - organize, and get it in a contract! -GetItDone-
    • Comment 7/19/11: this Sunday night had dinner with a senior HR partner friend....... He confided to me that he has to work the whole month of September because there's a plan of another resources action. don't think that last may's RA was the the only one or the last one for 2011. -Gotta spill the beans for STG-
    • Comment 7/19/11: To -ANA- of course, Randy was a childhood friend of LouG and he was instantly hired when LouG took in charge of IBM. -Was here when LouG became IBM boss-
    • Comment 7/19/11: IBM has another glowing quarterly report. Wonder why they always pull this off?: Loughridge reported that the company's spending on "workforce rebalancing," or job cuts, was up by $160 million, mostly in Europe. Analysts questioned the expense. David Grossman of Stifel, Nicolaus & Co. asked, "Can you help us better understand the need to take another rebalancing action in Europe after a similar action taken in the first quarter?" Loughridge replied, "Our business is a business of resources and capability, and we're constantly refining that mix of capability through workforce rebalancing. That's simply a part of our business model in the ongoing equation, and that will continue through all businesses in all years, I think." So there you go. -RA's_a_coming-
    • Comment 7/18/11: To -ANA- who worked in HR: I was in HR for 12 years and always a very good performer. I had several jobs before that in IBM as well. Interestingly enough, when I hit my 25th year anniversary, my job had suddenly gone away--or was a least cut in half. What amazed me over the years was the change in HR from people who were typically employee advocates to a bunch of little cowards who bent over every time one of the execs told him or her to do so.

      I have no regrets about getting RA'd even though it took me a while to retrain and start a new career. Happily, now I am already 5 years into another retirement--which will be much better than the one from IBM as it is with a union that still believes in decent monthly pensions, not just 401K. What also amazed me during the time I was going through the '30 day' period of trying to find another job (yeah, right), that so many wonderful, employee advocate HR people who were very close friends turned their backs on me. I guess they were scared and also cowardly.

      I used to bristle at Randy McDonald's name when I first left--can't believe at one time when he was sick that I volunteered to give blood for him!!! I guess that at the time I didn't realize that he'd turn out to be such a greedy louse. Hang in there--you will find something better. My advice is to avoid corporate America for the time being unless it is with a really good company that respects its employees and values them. Otherwise, take civil service tests, or retrain to teach--if you worked at IBM you probably have a wealth of skills and knowledge.

      I'm making less money now but have a 15-minute commute, much better health and dental benefits, and a future that will include the same kind of retirement IBM told all of their employees they would receive years ago. Forget about Randy. What goes around, comes around... I think that one day when he realizes how many people suffered with his and Sam's great need to offshore in order to stuff their own pockets, he'll be sorry. Very sorry. -anon-

    • Comment 7/18/11: A bunch of contractors in Canada have been asked to take 2 weeks off unpaid between now and September. -Whatever-
    • Comment 7/18/11: Did you notice on the testimony witness list, that Randy represents Corporate America? And he offered to help write the law revisions? And there is no major labor - employee union - group represented? The only bright light I saw was the video on Rep. Kucinich asking the witnesses a simple question on what the minimum wage should be. Remember the bumbling and lying witnesses on tobacco harm or on the use of steroids by baseball players? -Anonymous- Alliance Reply: The Alliance was contacted by a member of the committee and we submitted information.
    • Comment 7/18/11: I worked in H/R for IBM and was recently RAed. Randy McDonald has no degree in H/R and is not SPHR certified. HE is only in that position because of political reasons. He should be not talking about unemployment insurance. Without his political connections and IBM management favoritism, he too, would be in the unemployment line or working a min wage job. IBM needs a union to stop all this BS. -ANA-
    • Comment 7/17/11: "The latest from IBM HR - Senior VP of HR Randy McDonald testified before congress Thurs. that we should do away with min. wage and overtime laws because they are a "job killer" and gives “U.S. employers another reason to invest elsewhere.” Really, folks, if you can't see where this is headed and join the union NOW, where do you think you'll be in another 5 years? "Do you want fries with that server?"-Anon-" Wow, I really don't know who is worse for IBM, Sammy or Randy. They are the ones killing jobs. They are the ones screwing loyal IBMers by laying them off in search of cheap labor overseas. They are the ones killing jobs in America. What a joke with Randy trying to pin the problem on the minimum wage law. I'm sure Randy has a nice big fat salary and is living the high life. What a no good for nothing slime ball. -No Like Randy-
    • Comment 7/17/11: http://democrats.edworkforce.house.gov/blog/2011/07/minimum-wage-overtime-protecti.shtml Actually, Mr. MacDonald, the real “job killer” is the out-of-control compensation that you and other executive managers are receiving. For example, during 2011 alone, based on publicly available SEC filings, you exercised IBM stock options on 17 Feb 2011 and sold this stock on the same day realizing a net profit of around $2.5M. Six days before that on 11 Feb 2011, you exercised options on 53,620 shares of IBM stock, again selling these shares the same day, which resulted in proceeds of around $8.8M. The granting of these excessive and exorbitant stock options dilutes shareholder value, and necessitates stock buybacks using money that should be spent on developing and acquiring new technologies, and “organically” growing IBM’s business, not providing further undeserved compensation for the minimal value you are returning to IBM.

      http://biz.yahoo.com/t/36/4114.html. Moreover, you provide compelling arguments as to why workers in other countries need the same protections as U.S. workers. Obviously, “U.S. employers [have] another reason to invest elsewhere” only because workers in many other countries have no safety, fair-labor, or environmental protections whatsoever, and sadly, in some countries are de facto “slave labor”. U.S. workers are among the most productive in the entire world. We can compete head-to-head with workers anywhere provided we have a “level playing field” – and the way to level that playing field is to provide reasonable and necessary protections for workers in other countries, not eliminate hard-won, long-held protections for U.S. workers.

      Lastly, you really should consider your own job security when making such uninformed statements. There are plenty of fat, ignorant, bald-headed HR Directors with delusions-of-grandeur in BRIC countries who would gladly do your job for a minute fraction of your present compensation, and who could undoubtedly perform at a level that is far superior to the appallingly poor performance you have turned in during your tenure at IBM. --Anonymous--

    • Comment 7/17/11: It used to be the "war for talent" was IBM HR mantra. Now it is the"war to stay competitive" (i.e. the race to labor bottom). IBM cares little about hiring the best employees. The best employees for IBM are the ones that are the cheapest. -labored-
    • Comment 7/17/11: Yep, That's our boy Randy ( so what's wrong with slave labor) MacDonald. Another one cut from the mold of 3 finger Lou, Slimy Sammy and If I want loyalty I'll buy a dog Moffat. How low does your buying power and standard of living have to slip before you step up to stop these users and abusers? -Exodus2007-
    • Comment 7/16/11: The latest from IBM HR - Senior VP of HR Randy McDonald testified before congress Thurs. that we should do away with min. wage and overtime laws because they are a "job killer" and gives “U.S. employers another reason to invest elsewhere.” Really, folks, if you can't see where this is headed and join the union NOW, where do you think you'll be in another 5 years? "Do you want fries with that server?" -Anon-
    • Comment 7/16/11: US IBMers have worked in fear, hopes dashed, distraction, belittlement, criticism, and attack; yet their fellow Chilean worker bees decided that they would end that abuse, in their workplace. They risked their jobs, their reputations, and maybe even their lives, and kept fighting until they won. It can be done! Join the Alliance and organize here in the US. IBM caved and now the Chilean IBMers have a contract. This is what you can have too, if you're willing to fight for it. I'd say the time has come for less talk about PBC's, raises, FHA, promotions, respect, bands, and mean, stupid IBM executives and managers and how they sleep. Now is the time to take some REAL action. You have a real chance to fight back and win. Yes, I said WIN. Just Do It. -thywillbedone-
    • Comment 7/15/11: Congratulations on a job well done to the Union Members in Chile. See? Collective bargaining does work. IBM didn't go out of business. The world didn't end but workers in Chile know exactly what they are entitled to under their contract. They can now say they are as smart as IBM executives because they have a contract also. -Exodus2007-
    • Comment 7/14/11: OK, everyone. Please follow my lead. I just joined the Alliance as a voting member. Let's organize and get what we need/deserve from our employer. It's time to stand up for what we believe! -Dave-
    • Comment 7/14/11: -Anonymous- Ahhhh, yes, the "what's in it for me" question. The real question is "what do you want, and how hard are you willing to fight to attain that?" The prize is not just a union it's having collective bargaining rights, and that is something that is ONLY available to members of an NLRB certified union. If one takes the time to browse various union websites, they often list the gains from collective bargaining contract negotiations. You can find things like limitations on layoffs, improvements in pay, retirement, medical coverage, better separation packages, etc. If IBM'ers organize and fight back, it's quite possible they can win improvement in their situation too. OTOH, if they continue to keep their heads in the sand and don't organize, there's no way they'll ever win anything at all. And the Alliance is right, UNION begins with U. -Dave- Alliance reply: Thank you, Dave. Well said. We appreciate your comment. It can't be said any better.
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Wendell Potter: Insurance Exchanges Tilted Toward Health Insurers, Not Consumers. Excerpts: The insurance industry made it abundantly clear this week that it is in the driver’s seat—in both Washington and state capitals—of one of the most important vehicles created by Congress to reform the U.S. health care system. The Affordable Care Act requires the states to create new marketplaces— “exchanges”—where individuals and small businesses can shop for health insurance. In the 15 months since the law took effect, insurers have lobbied the Obama administration relentlessly to give states the broadest possible latitude in setting up their exchanges. And those insurance companies have been equally relentless at the state level in making sure governors and legislators follow their orders in determining how the exchanges will be operated.

    When Health and Human Services Secretary Kathleen Sebelius announced the proposed federal rules governing the exchanges on Monday, insurance executives must have been doing high fives all over the country. ...

    Nowhere are consumer groups more dismayed by the Obama administration’s proposed rules than in Colorado, where lawmakers passed a bill that explicitly prohibits the state exchange from negotiating with health plans and where the governor and legislators have just packed the exchange board with industry executives and allies. I can’t say I’m surprised with most of these developments. During a visit to Denver in March, I heard a member of one of the legislative committees that helped draft the bill say at a public forum that Colorado’s exchange should offer the state’s residents “bad choices as well as good ones.” The state had no obligation, in her view, to inspect all the apples in the health insurance barrel and throw out the bad ones. A majority of her colleagues agreed with her. As the bill worked its way through the legislature, free market ideology trumped the real world need to protect the state’s residents from unscrupulous and profit-motivated insurers.

    I was surprised, though, when Gov. John Hickenlooper, a Democrat, joined Republican legislators in appointing industry executives to the exchange board. Hickenlooper got to appoint five of the nine board members, and several of his appointees, actually, tilted the board solidly in favor of insurers.

    Five of the nine board members appointed by the governor and legislative leaders have either direct or indirect ties to the industry. Of the other four, one is an accountant and another is a doctor who has been a vocal critic of health care reform and the very idea of state exchanges. (As you might guess, he was appointed by a Republican, Senate Minority Leader Mike Kopp, who also was opposed to creating a state exchange.) Only two of the nine have been active proponents of reform and champions of consumer interests.

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: Letting Bankers Walk. By Paul Krugman. Excerpts: Ever since the current economic crisis began, it has seemed that five words sum up the central principle of United States financial policy: go easy on the bankers. This principle was on display during the final months of the Bush administration, when a huge lifeline for the banks was made available with few strings attached. It was equally on display in the early months of the Obama administration, when President Obama reneged on his campaign pledge to “change our bankruptcy laws to make it easier for families to stay in their homes.” And the principle is still operating right now, as federal officials press state attorneys general to accept a very modest settlement from banks that engaged in abusive mortgage practices.

    Why the kid-gloves treatment? Money and influence no doubt play their part; Wall Street is a huge source of campaign donations, and agencies that are supposed to regulate banks often end up serving them instead. But officials have also argued at each point of the process that letting banks off the hook serves the interests of the economy as a whole.

    It doesn’t. The failure to seek real mortgage relief early in the Obama administration is one reason we still have 9 percent unemployment. And right now, the arguments that officials are reportedly making for a quick, bank-friendly settlement of the mortgage-abuse scandal don’t make sense. ...

    The big drag on the economy now is the overhang of household debt, largely created by the $5.6 trillion in mortgage debt that households took on during the bubble years. Serious mortgage relief could make a dent in that problem; a $30 billion settlement from the banks, even if it proved more effective than the government’s modification program, would not. So when officials tell you that we must rush to settle with the banks for the sake of the economy, don’t believe them. We should do this right, and hold bankers accountable for their actions.

  • Wall Street Journal: Dearth of Demand Seen Behind Weak Hiring. By Phil Izzo. Excerpts: The main reason U.S. companies are reluctant to step up hiring is scant demand, rather than uncertainty over government policies, according to a majority of economists in a new Wall Street Journal survey. "There is no demand," said Paul Ashworth of Capital Economics. "Businesses aren't confident enough, and the longer this goes on the harder it is to convince them that they should be." ...

    A recent survey by the National Federation of Independent Business indicates that concerns about demand remain a major obstacle to growth and hiring. When asked the single most important problem facing their businesses, 24% cited "poor sales"—a percentage that remains above highs seen in the recessions of the 1990s and early 2000s.

  • New York Times: Cost-Cutters, Except When the Spending Is Back Home. By Ron Nixon. Excerpts: Freshman House Republicans who rode a wave of voter discontent into office last year vowed to stop out-of-control spending, but that has not stopped several of them from quietly trying to funnel millions of federal dollars into projects back home.

    They have pushed for dozens of projects in their districts, including military programs opposed by the president, replenishing beach sand lost to erosion, a $700 million bridge in Minnesota and a harbor dredging project in Charleston, S.C. Some of their projects were once earmarks, political shorthand for pet projects penciled into spending bills, which Republicans banned when they took over the House.

    An examination of spending bills, news releases and communications with federal agencies obtained under the Freedom of Information Act shows that nearly two dozen freshmen have sought money for projects that could ultimately cost billions of dollars, while calling for less spending and banning pork projects.

  • AlterNet: Why the Wealthiest Americans Are the Real 'Job-Killers.' The top 1 percent takes in more than twice the share of national income today than they did 30 years ago, and that's a big reason why consumers are tapped out. By Joshua Holland. Excerpts: That the wealthy are “job creators,” and therefore have interests that must be defended by the public at large, is a talking-point that, however facile, is so popular it slips effortlessly from the lips of conservatives every day .It can be deployed for any purpose – not only in calling for more tax breaks for the rich, but also when opposing public interest regulation, consumer litigation and worker protections. Rep. Michele Bachmann, R-Minnesota, even used it to deflect attention from the "gay rehabilitation" services her clinic allegedly offers. When asked about it by ABC News, Bachmann merely acknowledged, “we do have a business that deals with job creation.” When pressed, she stuck with it: “As I said, again, we’re very proud of our business and we’re proud of all job creators in the United States.”

    It's also complete nonsense; the opposite of the truth. Sure, the wealthy create a few jobs – people who offer exclusive services or sell them high-end goods. But the overwhelming majority of jobs in this country are “created” by ordinary Americans when they spend their paychecks.

    Consumer demand accounts for around 70 percent of our economic output. And with so much wealth having been redistributed upward through a 40-year class-war from above, American consumers are too tapped out to spend as they once did. This remains the core issue in this sluggish, largely jobless recovery. The wealthy, in their voracious appetite for a bigger piece of the national pie, are the real job-killers in this economic climate. ...

    “If you’re looking for one overarching explanation for the still-terrible job market,” Leonhardt concludes, “it is this great consumer bust. Business executives are only rational to hold back on hiring if they do not know when their customers will fully return. Consumers, for their part, are coping with a sharp loss of wealth and an uncertain future (and many have discovered that they don’t need to buy a new car or stove every few years).” ...

    Paul Buchheit, a professor with City Colleges of Chicago, crunched some numbers using IRS data and found that “if middle- and upper-middle-class families had maintained the same share of American productivity that they held in 1980, they would be making an average of $12,500 more per year.” In other words, because the share of income going to the top has increased so dramatically, ordinary people have $12,500 less in their wallets today. Studies have shown that when wealthy people grab more post-tax income they're more likely to bank it than to spend it, so much of that $12,500 also represents lost demand, and hence less jobs. Wealthy Americans' avarice is a job-killer. ...

    None of this is particularly complex. In 1978, the top 1 percent of the ladder took in just under 9 percent of the nation's income, leaving a bit more than 91 percent for the rest of us. In 2007, the year before the crash, they took in 23.5 percent, leaving just 76.5 percent for the rest of the population to split up.

    They banked most of that income, whereas we would have spent it. The fact that we're broke means that businesses are facing less demand for their goods and services than they otherwise would, and have less need to hire a bunch of employees. And that dynamic explains why it's the wealthiest Americans who are the real “job killers.”

  • The Smirking Chimp: Balance the Budget on the Backs of Billionaires. By David Swanson. Excerpts: The wealthiest nation on earth is not actually obliged to starve our senior citizens. We don't need a military 670% more expensive than the next largest one on earth. We don't need to fund health insurance corporations instead of healthcare. And we don't need tax breaks for billionaires. In fact, we don't need billionaires. That's the message RootsAction is taking to Congress.

    Forbes magazine has been listing the 400 wealthiest Americans every year since 1982. Thirteen billionaires appeared on the original Forbes list. Now all 400 rate billionaire status. These 400, collectively, possess more wealth than the poorer half of America's population put together. Sam Pizzigati explains how we got here. ...

    Only 1 percent of us are millionaires, with an "m". Each billionaire has a thousand times that much money, or more. Sixty-six percent of senators are millionaires, as are 41 percent of House members, but they aren't billionaires. They just work for them.

    Last year a list was leaked of attendees of an important rightwing planning conference organized by Koch Industries. This is an annual meeting at which the servants of plutocracy plot its further entrenchment. Eleven members of this year's Forbes 400 were on the list. These are the hardcore plutocrats. These are the people who personally take the time to destroy our political system for their own short-term gain -- and that of their families if their aristocracy of wealth is allowed to continue. These 11 people pay a fraction of the rate you pay on your income into Social Security and Medicare. They have no need for Social Security or Medicare. And they participate in a political movement that is trying to dismantle those programs. Meet your masters, fellow Americans.

  • New York Times op-ed: Getting to Crazy. By Paul Krugman. Excerpts: A number of commentators seem shocked at how unreasonable Republicans are being. “Has the G.O.P. gone insane?” they ask. Why, yes, it has. But this isn’t something that just happened, it’s the culmination of a process that has been going on for decades. Anyone surprised by the extremism and irresponsibility now on display either hasn’t been paying attention, or has been deliberately turning a blind eye. ...

    Let’s talk for a minute about what Republican leaders are rejecting. President Obama has made it clear that he’s willing to sign on to a deficit-reduction deal that consists overwhelmingly of spending cuts, and includes draconian cuts in key social programs, up to and including a rise in the age of Medicare eligibility. These are extraordinary concessions. As The Times’s Nate Silver points out, the president has offered deals that are far to the right of what the average American voter prefers — in fact, if anything, they’re a bit to the right of what the average Republican voter prefers!

    Yet Republicans are saying no. Indeed, they’re threatening to force a U.S. default, and create an economic crisis, unless they get a completely one-sided deal. And this was entirely predictable. ...

    Put it this way: If a Republican president had managed to extract the kind of concessions on Medicare and Social Security that Mr. Obama is offering, it would have been considered a conservative triumph. But when those concessions come attached to minor increases in revenue, and more important, when they come from a Democratic president, the proposals become unacceptable plans to tax the life out of the U.S. economy. ...

    But there has been no such price. Mr. Bush squandered the surplus of the late Clinton years, yet prominent pundits pretend that the two parties share equal blame for our debt problems. Paul Ryan, the chairman of the House Budget Committee, proposed a supposed deficit-reduction plan that included huge tax cuts for corporations and the wealthy, then received an award for fiscal responsibility. So there has been no pressure on the G.O.P. to show any kind of responsibility, or even rationality — and sure enough, it has gone off the deep end. If you’re surprised, that means that you were part of the problem.

  • truthOut: Six Ways to Liberate America From Wall Street Rule. By David Korten. Excerpts: Despite the financial crash of 2008, the financial assets of America’s billionaires and the idle cash of the most profitable corporations are now at historic highs. Their biggest challenge is figuring out where to park all their cash. Over the past 30 years, virtually all the benefit of U.S. economic growth has gone to the richest 1 percent of Americans. Effective tax rates for the very rich are at historic lows and many of the most profitable corporations pay no taxes at all.

    Corporations are using their stores of cash primarily to buy back their own stock, acquire control of other companies, invest in off-shoring yet more American jobs, and pay generous dividends to shareholders and outsized bonuses to management. Unfortunately, most of those who hold the cash and the corporations they control have lost interest in long-term investments that build and expand strong enterprises. The substantial majority of trades in financial markets are made by high-speed computers in securities held for fractions of a second. Business pundits still refer to this trading as investment. It bears no resemblance, however, to the investment required to put people to work rebuilding a strong America.

    Corporations are using their stores of cash primarily to buy back their own stock, acquire control of other companies, invest in off-shoring yet more American jobs, and pay generous dividends to shareholders and outsized bonuses to management. Unfortunately, most of those who hold the cash and the corporations they control have lost interest in long-term investments that build and expand strong enterprises. The substantial majority of trades in financial markets are made by high-speed computers in securities held for fractions of a second. Business pundits still refer to this trading as investment. It bears no resemblance, however, to the investment required to put people to work rebuilding a strong America.

    This system, which Wall Street interests dismiss as quaint and antiquated, financed the U.S. victory in World War II, the creation of a strong American middle class, an unprecedented period of economic stability and prosperity, and the investments that made America the world’s undisputed industrial and technological leader.

  • Senator Bernie Sanders (I-Vt.): Congratulations Coburn, Crapo and Chambliss: Republican Senators Win Major Victory. Excerpts: Sen. Bernie Sanders today congratulated Sens. Tom Coburn (R-Okla.), Mike Crapo (R-Idaho) and Saxby Chambliss (R-Ga.) on their very significant victory in negotiating a deficit-reduction plan which achieves their long-term goal of dismantling every major social program relevant to working families.

    The so-called Gang of Six plan that the Republican senators negotiated calls for massive cuts in Social Security, Medicare, Medicaid and virtually every program important to working families, the sick, the elderly, the children and the poor. The package also would hurt American workers by giving U.S. companies more incentives to avoid U.S. taxes by shipping jobs to low-tax countries.

    "While I am sure that they did not get everything that they wanted, I think it's fair to say they won about 80 percent to 90 percent of what they fought for," Sanders said. "Despite President Obama's campaign promise not to cut Social Security benefits, the Gang of Six plan, which he apparently embraced, calls for massive cuts in that vitally important program."

    Under the Social Security proposal, a new formula for calculating cost-of-living adjustments would cut a typical 75-year-old's yearly benefits in 10 years by $560. The average 85-year-old would see a $1,000 a year cut in 20 years. Furthermore, the proposal demands that Social Security be solvent for a 75-year period, which could include additional cuts. The proposal also cuts Medicare by $298 billion over 10 years and makes massive cuts to Medicaid. ...

    Sanders, a member of the Senate Budget Committee, has advocated an approach to deficit reduction that matches increased revenue with spending reductions. "At a time when the wealthiest people in this country are becoming wealthier and are paying the lowest effective tax rates in modern history, when corporations are making billions of dollars and paying nothing in taxes at all, Sanders said at least half of a deficit reduction package should come from ending tax breaks and tax loopholes for the wealthy and large corporations. With military spending having nearly tripled since 1997, we must take a hard look at cutting unnecessary and outdated military programs," he said.

  • New York Times op-ed: Bonuses for Billionaires. By Nicholas D. Krisof. Excerpts: The first few times I heard House Republicans talk about our budget mess, I worried that they had plunged off the deep end. But as I kept on listening, a buzzer went off in my mind, and I came to understand how much sense the Tea Party caucus makes. Why would we impose “job-crushing taxes” on wealthy Americans just to pay for luxuries like federal prisons? Why end the “carried interest” tax loophole for financiers, just to pay for unemployment benefits — especially when those same selfless tycoons are buying yachts and thus creating jobs for all the rest of us?

    Hmmm. The truth is that House Republicans don’t actually go far enough. They should follow the logic of their more visionary members with steps like these:

    Republicans won’t extend unemployment benefits, even in the worst downturn in 70 years, because that makes people lazy about finding jobs. They’re right: We should be creating incentives for Americans to rise up the food chain by sending hefty checks to every new billionaire. This could be paid for with a tax surcharge on regular working folks. It’s the least we can do. Likewise, the government should take sterner measures against the persistent jobless. Don’t just let their unemployment benefits expire. Take their homes! Oh, never mind! Silly me! The banks are already doing that.

    Leftist pundits say that House Republicans don’t have a jobs plan. That’s unfair! Granted, the Republican-sponsored Cut, Cap and Balance Act would eliminate 700,000 jobs in just its first year, according to the Center on Budget and Policy Priorities, but those analysts are no doubt liberals. America’s richest 400 people own more wealth than the bottom 150 million Americans, and the affluent would feel renewed confidence if the Republican plan passed. We’d see a hiring bonanza. Each of those wealthy people might hire an extra pool attendant. That’s 400 jobs right there!

    Cut, Cap and Balance would go even further than the Ryan budget plan in starving the beast of government. Sure, that’ll mean cuts in Social Security, Medicare and other programs, but so what? Who needs food safety? How do we know we really need air traffic control unless we try a day without it? ...

    For that matter, who needs socialized police and fire services? We could slash job-crushing taxes at the local level and simply let the free market take over: “9-1-1, may I help you?” “Yes, help! My house is burning down!” “Very good, sir. I can offer you one fire engine for $5,995, or two for just $10,000.” “Help! My family’s inside. Send three fire engines! Just hurry!” “Yes, sir. Let me just run your credit card first. And if you require the fire trucks immediately, there’s a 50 percent ‘rush’ surcharge.”

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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