Why can't Sam take the $29,277,000 in proceeds from his option exercise and buy more IBM stock with it? Or at least some stock with it? Now wouldn't that show some confidence in his leadership and actions IBM is doing or would it get him in trouble with the SEC (i.e. having them question the stock buy based on maybe having too much insider information)?
|Aug 1, 2011||Samuel J Palmisano||300,000||Direct||Option Exercise at $97.59 per share||$29,277,000|
|Aug 1, 2011||Samuel J Palmisano||32,944||Direct||Sale at $180.64 - $180.9 per share||$5,955,000|
|Aug 1, 2011||Samuel J Palmisano||8,989||Direct||Sale at $183.58 - $183.63 per share||$1,650,000|
|Aug 1, 2011||Samuel J Palmisano||15,361||Direct||Sale at $183.06 - $183.54 per share||$2,865,000|
|Aug 1, 2011||Samuel J Palmisano||17,539||Direct||Sale at $182.36 - $182.76 per share||$3,202,000|
|Aug 1, 2011||Samuel J Palmisano||15,147||Direct||Sale at $182.04 - $182.34 per share||$2,760,000|
|Aug 1, 2011||Samuel J Palmisano||15,972||Direct||Sale at $180.91 - $181.98 per share||$2,898,000|
|Aug 1, 2011||Samuel J Palmisano||39,213||Direct||Sale at $180.45 - $180.63 per share||$7,080,000|
|Aug 1, 2011||Samuel J Palmisano||29,520||Direct||Sale at $179.93 - $180.17 per share||$5,315,000|
|Aug 1, 2011||Samuel J Palmisano||33,254||Direct||Sale at $180.18 - $180.44 per share||$5,996,000|
|Aug 1, 2011||Samuel J Palmisano||33,970||Direct||Sale at $182.77 - $183.04 per share.||$6,195,000|
|Aug 1, 2011||Samuel J Palmisano||34,024||Direct||Sale at $179.00 - $179.9 per share||$6,106,000|
|Aug 1, 2011||Samuel J Palmisano||23,898||Direct||Sale at $178.72 - $178.99 per share||$4,274,000|
I was reading an article by Joab Jackson earlier, and it struck me that this is an attempt by IBM to offshore even more jobs from high-wage economies to places where wages are lower.
In the article, Mr. Jackson does his usual professional job of reporting the facts, and staying away from commentary or personal interpretation. I, on the other hand, have no such instinct.
IBM is assigning 200 of its researchers to the help the company manage its customers' business systems with more scientific precision.
The idea...is to "automate labor-based processes, make them more repeatable, more predictable, and work on business outcomes with our clients."
Hmm, sounds like a laudable aim. Science. Precision. Rigor. Repeatability... These are doubtless key goals of the research project. They're also key to successful outsourcing of a workflow to a low-wage economy. And by "workflow" I mean your workflow -- managing IT systems.
A common theme of complaints I hear about outsourced IT workers is the lack of ability to think outside the box. Outsourced jobs -- at least outsourced IT jobs -- are most successful when they are well documented, repeatable, unambiguous, and measurable.
However, when there are grey areas, ambiguity, or the need to go "off script," my experience is that the offshore team typically struggles to cope. Naturally, customer satisfaction plummets -- be they external or internal customers. Typical outsourced teams simply can't cope with these sort of situations.
Note that this isn't a stereotype of any particular culture or geography. Neither is it an implied statement that "all western IT people are brilliant."
The need for an unambiguous workflow is a natural human response to being treated like a "resource" instead of a valued individual team contributor. It's also a symptom of needing to prove oneself in an organizational culture that doesn't permit one to say, "I don't know" or "I need help me with this."
So what's IBM's solution? Is it to find out how to cope with natural ambiguity? Or is it to teach managers to stop dehumanizing people? What about working out how to persuade a low-wage worker to ask for help, even though there are thousands wanting their job?
Nope; not a bit of it. Instead, this project seeks to do the same things that currently don't work, but better. Trying harder to force every possible situation into a tightly focused, unambiguous box, so it can be documented, repeated, and measured. ...
Is it surprising that IBM has outsourced this work to its overseas workers? Although the project's director is based in IBM's T.J. Watson Research Center in New York, his "resources" will be based wherever IBM pleases. What hope do onshore IT people have that their skills will be valued over the next few years? Not much, if IBM has its way.
This is really part of a larger trend that has been happening in IT for years. Pretty soon there won't be much left, as there aren't any jobs being created at home to replace the ones being lost and shipped overseas. I personally believe that if these companies that offshore and/ or use H1B, L1, etc. lost all their US tax breaks, that maybe then they might start making an effort to keep jobs here at home. It makes no sense to use government revenue (tax breaks) to reward companies that ship American jobs overseas. Lastly, our governments (federal, state and local) should never be using contractors who use foreign talent. It makes no sense whatsoever to use our own tax dollars to help support shipping US jobs overseas.
IBM has, in general, made a disproportionate investment in the emerging markets. Four years ago, we changed the way we allocate budgets. We formed a separate growth markets unit so that we could fund it, invest in it, measure it. We didn't let it get dragged down by managing the rest of the portfolio for productivity. The growth markets are now a central peg of the four initiatives that form the company today. Growth markets is first, smarter planet is second, cloud is another and analytics is the fourth. But the better piece of that strategy is really around the growth markets. ...
One of the attractive things about the growth markets is that you are dealing with companies that are not dragging a huge legacy, so they are able to skip entire generations of technology. Some of the most advanced delivery that we do is in the growth markets. It is not like we spend time in the US doing these really complicated things and bring in a dumbed-down version into the growth markets. It is working the other way. We are doing our most advanced work in the growth markets and bringing some of that capability back to the major markets.
I wasn't a director but I was a 2nd and 3rd line mgr. I can't tell you how many low paid top performers that I tried to give money and couldn't. We couldn't promote anyone above Band 8 so we didn't have promo $$$. They cut education funding so we couldn't make IT Architects -- a job family with a higher pay range. The only thing I could do was try to give out awards until they cut that too!
Band 8s had it the worse (especially the first line managers and exempt Service Delivery Managers). However, some of the non-exempt band 8s (like those in account management) made out well because they had to do OT. If we are contractually required to do something, the execs rather pay OT than penalties. I love watching those Band 8s making more than me and some execs.
According to the latest data, profits of U.S. corporations are at record levels even as the U.S. economy gasps for air. Profits have been totally divorced from the economic fortunes of the American people. ...
Corporate profits now account for the largest share of gross domestic product since 1950 — 12.6%. Wages and salaries account for the smallest share of GDP since 1955 — 54.9%. ...
With unemployment still in the stratosphere, wages and salaries are depressed. Fewer people are working, and the ones who are working aren’t getting raises. According to separate report released Friday by the Bureau of Labor Statistics, wages in the private sector have increased just 1.7% in the past year, only half as fast as prices have been rising.
Workers' advocates say that if big tech companies are having a tough time finding qualified employees it's only because they are limiting their searches to younger, less expensive workers.
"Experienced IT workers who are over 40 years old have a hard time even getting noticed by companies like Microsoft," said Rennie Sawade, communications director for WashTech, an affiliate of the Communications Workers of America. "They're really after the younger, more inexpensive workers."
Sawade also rejects claims by Microsoft and other high-tech employers that more experienced IT workers are not getting hired because they lack skills in hot new areas like cloud and mobility. "I doubt the ones they are bringing over on H-1B visas necessarily have those skills. They give them a three-week crash course and then call them a Java programmer."
Cons: Less technical work for engineers...more of management processes. More of process work. Employees are pushed for more non-core activities. Bad hikes. Bad Rating system...no 180/360 degree feedback..one person (manager?) decides ratings/hikes! (for that they call it as TBDM!) No respect for employees though employees are the people who generates revenues. (Management managing employees in "Labour model"....where employee's area of expertise is not valued/never considered! Company values have no respect towards employees. Value system clearly projects all benefits are for employers only! No feeling of 'employee is important' for company. There are many Cons...never ending! All I can say is IBM has lost its charm!
Advice to Senior Management: Learn to respect at least 'lateral hires'...and as a whole respect employees...they are the people who are driving your revenues. Putting them into the system and generating the revenue is not the only goal. Employees need to be developed, should be given ample growth he/she deserves as per his/her competence and experience and skills. Give feedback (constructive one) on time and every time. Don't behave like referees...ss managers you guys should be very proactive in communicating to employees. Don't dump bad schedules on employees and push employees unrealistic goals...which creates absolute 'no work Life Balance' situation.
Cons: Tech company completely run by accountants and sales. Virtually no technical backgrounds in senior leadership. No emphasis on creating truly world class technology. With massive job cuts in the US workforce in recent years, it's nearly impossibly to move around in the company, which was previously a big positive.
Advice to Senior Management: Stop trying to follow everyone else and be 2nd or 3rd to market. Go back to your roots and lead the way. Managers also need to voice opinions other than 'yes' ... there are far too many bad ideas that resources are spent upon that should have been squashed early, but managers seem reluctant to stand up to up-line managers
Cons: Extremely poor compensation. HR's sole focus is on reducing $ per head and this is reflected in the treatment of employees with respect to salary, pay increases and bonus payments. Penny pinching approach to cost savings. An example of this can be seen in the removal of any coffee or biscuits from the office kitchens. Dysfunctional management - senior management appears to have no idea how to improve sales performance and staff morale beyond offering the same bland statements quarter after quarter.
Advice to Senior Management: To make this company great once again, more emphasis needs to be placed on staff morale - a motivated team will grow sales. A little money spent there will go a long way. Remove the internal barriers to sales. Finally, remove the company management from the Bean Counters and place it back in the hands of people that know the technology, marketplace and products.
I do not consider this path to be inherently wrong. Indeed, if everyone thought as I did, society would have more difficulty functioning. But the company man approach to life has two major problems.
First and unfortunately, being a company man has become increasingly difficult. Think of all of the problems that have sprouted up in the last few years: massive unemployment, deep uncertainty about the future, and a “new normal” for all workers. The United States is close to insolvency, and all of the debt issues (student loans, credit cards, underwater mortgages) mean that the traditional path, while not impossible, is sure a lot less viable.
The second issue related to being a company man is that, well, even though you have followed the correct path, you do not have ultimate control over your future. That control ultimately lies with the people you are working for.
It’s hard to accept that regardless of what one achieves in one’s career, it’s for someone else to reap the benefits and determine its value. But that’s the way things are. Moreover, these people may not have your best interests at heart. Hopefully they do, and many people do have a concern for those they employ. But too often loyalty on your part is not reciprocated.
I think a lot of what people term “mid-life crisis” is actually awakening to the reality that the path laid out by others just isn’t what it was cracked up to be. This can lead to severe disillusionment. What was it for? What was the positive result of the struggle and hard work and sacrifice? ...
The point of this article isn’t to decry the entire social system or to advocate some anti-capitalist manifesto. The point of this article is to empower individuals when their companies or their countries may let them down. Keep your options open.
“People tend to look at email as a private form of communication,” Pulido said. “It’s not. Anything you put in an email, you should be willing to say to the entire company, because it might go to the entire company.”
I have no idea if that self-selecting system actually lets anyone get through the lines faster. But it occurred to me that if there were such a thing as a black-diamond lane for technology, I’m probably in it.
I’ve been racking up about 70 round-trip flights a year, so I know this space pretty well. I’ve got the tech part of it down to a science. Here’s what I’ve learned along the way—tips for maximum flying efficiency and minimum misery.
Question: Maxim I. Novikov 21 Jul 2011 at 04:04 AM EDT Hello Victoria. Carrying out of such conferences is very useful and I always like IBM for this openness in working background, when we have feedback with higher management, staying in touch with future plans, growth and opportunities. Nevertheless I want to support Vishal here, because I have same situation. I had 2/2+/2+ during my working years with IBM, and my salary grown on 1%. I am not kidding, exactly on 1%))). I heard same stories from my colleagues, from all over the world, because I am working in Global Services and they all have the same problem, even worse for some. Like it was told by manager in
Quest1 : "We always moving to high value...". This is not bad actually, in our capitalist world may be the only way. But why not make value for employees? We(employees) also having our values in this challenging world, we have to plan our future and think about future generation and aging generation. Does price for stocks making more sense? Sometimes I really do not understand why people, who making all job done by their hands and minds, are staying always somewhere behind... When I started to work at IBM, my colleague gave me a book of Buck Rogers : "The IBM way", and I was really impressed of its content and how highly he rated IBM capital - our People - he wrote, I and started to believe that many things will change in my life from that moment, but after 3 years of successful job I am getting more and more confusion. Regards, Maxim Novikov. -Soon2BxIBMer-
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Then, it dawned: The story was set in London, where there’s universal coverage. No one there has to make life decisions based on getting or keeping insurance.
This will be true for almost all Americans in 2014, if the Affordable Care Act is not repealed or unraveled in court. That’s when online health-insurance marketplaces called exchanges are supposed to be up and running in each state, offering private policies at reasonable rates to the uninsured — regardless of their medical histories — with subsidies available to help low-income buyers.
The Department of Health and Human Services this month released guidelines on how to set up exchanges, and more than half the states already are taking steps to build them. Once they’re up and running, you’ll be able to quit your job at Large Company X and start that plumbing or carpentry business, that mom-and-pop restaurant or barbershop, without putting your family’s health or finances at risk. You can open that dance studio, play in that band, live off savings while you write or paint or launch the tech venture that could make you the next Bill Gates or Mark Zuckerberg.
There’s nothing more American than starting a business. Yet contrary to our self-image, most developed countries have larger small-business sectors than the United States does. The Affordable Care Act could help close the gap — and spur the economy — by removing an obstacle to business creation and self-employment. ...
Some studies have found that job lock — people who don’t change jobs for fear of losing health insurance — reduces voluntary turnover by 25 percent. How many of those people would quit to start their own businesses if they didn’t have to worry about insurance? At least two studies have found that people whose spouses have health insurance are more likely to start businesses. The most recent, a RAND study published last fall, found that 4 percent of all men earning wages or salaries start a business. For those with employer health insurance, the rate was 2.9 percent. Among those with insurance through a spouse, the rate was 6.6 percent.
The RAND study also found that the business-ownership rate among men rises in the month they turn 65 and can rely on Medicare. The rate doesn’t change in birthday months at any other age between 55 and 75. “It appears that what’s happening is that when they qualify for Medicare, they decide it’s a good time to start a business,” said economist Robert Fairlie, one of the authors. “One of the big constraints to starting a business is gone. They know they’ll have health insurance.”
"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.
Despite having run on the promise of “Read my lips: No new taxes,” when the deficit started spiraling to dangerous levels under his presidency, Bush agreed to a compromise with Democrats to raise several taxes, along with spending cuts, as part of a 1990 budget deal that helped to pave the way for the prosperity of that decade. It definitely hurt his re-election, but he did it anyway. ...
On the economy, the G.O.P. has gone from the magical thinking of Vice President Dick Cheney — who argued that “Reagan proved deficits don’t matter” and used this argument to help run up the deficit to its current astronomical levels with huge tax cuts — to an anti-tax cult that spurned a “Grand Bargain” with President Obama because it would have not only cut $3 trillion in spending over the next decade but also involved $1 trillion in tax increases. Somehow, the G.O.P. has forgotten that even Ronald Reagan didn’t believe deficits don’t matter and he raised taxes when our fiscal stability demanded it. As for prudence today, well, the willingness to risk a default on America’s financial obligations by refusing to raise the debt ceiling may be many things, but it is not prudent. ...
Where have all the adults in this party gone? Where is Dick Lugar, John McCain, Lindsey Graham, Colin Powell, Hank Paulson and Big Business? Are you telling me that they are ready to fall in line behind Michele Bachmann, Grover Norquist, Rush Limbaugh and Sarah Palin? Are these really the pacesetters of modern conservatism?
Start with the economics. We currently have a deeply depressed economy. We will almost certainly continue to have a depressed economy all through next year. And we will probably have a depressed economy through 2013 as well, if not beyond.
The worst thing you can do in these circumstances is slash government spending, since that will depress the economy even further. Pay no attention to those who invoke the confidence fairy, claiming that tough action on the budget will reassure businesses and consumers, leading them to spend more. It doesn’t work that way, a fact confirmed by many studies of the historical record.
Indeed, slashing spending while the economy is depressed won’t even help the budget situation much, and might well make it worse. On one side, interest rates on federal borrowing are currently very low, so spending cuts now will do little to reduce future interest costs. On the other side, making the economy weaker now will also hurt its long-run prospects, which will in turn reduce future revenue. So those demanding spending cuts now are like medieval doctors who treated the sick by bleeding them, and thereby made them even sicker. ...
In the long run, however, Democrats won’t be the only losers. What Republicans have just gotten away with calls our whole system of government into question. After all, how can American democracy work if whichever party is most prepared to be ruthless, to threaten the nation’s economic security, gets to dictate policy? And the answer is, maybe it can’t.
Many months ago, when Republicans first demanded spending cuts and no tax increases as a condition for raising the debt ceiling, the President could have blown their cover. He could have shown the American people why this demand had nothing to do with deficit reduction but everything to do with the GOP’s ideological fixation on shrinking the size of the government — thereby imperiling Medicare, Social Security, education, infrastructure, and everything else Americans depend on. But he did not.
And through it all the President could have explained to Americans that the biggest economic challenge we face is restoring jobs and wages and economic growth, that spending cuts in the next few years will slow the economy even further, and therefore that the Republicans’ demands threaten us all. Again, he did not.
These last few months, much of the country has watched in horror as the Tea Party Republicans have waged jihad on the American people. Their intransigent demands for deep spending cuts, coupled with their almost gleeful willingness to destroy one of America’s most invaluable assets, its full faith and credit, were incredibly irresponsible. But they didn’t care. Their goal, they believed, was worth blowing up the country for, if that’s what it took.
Like ideologues everywhere, they scorned compromise. When John Boehner, the House speaker, tried to cut a deal with President Obama that included some modest revenue increases, they humiliated him. After this latest agreement was finally struck on Sunday night — amounting to a near-complete capitulation by Obama — Tea Party members went on Fox News to complain that it only called for $2.4 trillion in cuts, instead of $4 trillion. It was head-spinning.
All day Monday, the blogosphere and the talk shows mused about which party would come out ahead politically. Honestly, who cares? What ought to matter is not how these spending cuts will affect our politicians, but how they’ll affect the country. And I’m not even talking about the terrible toll $2.4 trillion in cuts will take on the poor and the middle class. I am talking about their effect on America’s still-ailing economy.
America’s real crisis is not a debt crisis. It’s an unemployment crisis. Yet this agreement not only doesn’t address unemployment, it’s guaranteed to make it worse. (Incredibly, the Democrats even abandoned their demand for extended unemployment benefits as part of the deal.) As Mohamed El-Erian, the chief executive of the bond investment firm Pimco, told me, fiscal policy includes both a numerator and a denominator. “The numerator is debt,” he said. “But the denominator is growth.” He added, “What we have done is accelerate forward, in a self-inflicted manner, the numerator. And, in the process, we have undermined the denominator.” Economic growth could have gone a long way toward shrinking the deficit, while helping put people to work. The spending cuts will shrink growth and raise the likelihood of pushing the country back into recession.
Inflicting more pain on their countrymen doesn’t much bother the Tea Party Republicans, as they’ve repeatedly proved. What is astonishing is that both the president and House speaker are claiming that the deal will help the economy. Do they really expect us to buy that? We’ve all heard what happened in 1937 when Franklin Roosevelt, believing the Depression was over, tried to rein in federal spending. Cutting spending spiraled the country right back into the Great Depression, where it stayed until the arrival of the stimulus package known as World War II. That’s the path we’re now on. Our enemies could not have designed a better plan to weaken the American economy than this debt-ceiling deal.
In March, just months after being sworn in, 22 of them plumped for more military spending in their districts than President Obama requested.
Representative Steven Palazzo, of Mississippi, who campaigned fiercely against earmarks, voted to slash military spending and then voted for an amendment to quietly restore the same money, including $150 million for a warship to be built in his district. Pork? Earmark? No, he insists, saying he merely voted for a package that happened to include that hometown goodie and the Pentagon now must decide how to finance it. ...
Representative Tim Scott, a Tea Party favorite from South Carolina, helped secure the down payment on a $300 million harbor dredging project back home. Not at all pork, said Mr. Scott, pronouncing the dredging a matter of the national interest. In the case of a new bridge in Wisconsin, Representative Sean Duffy reasons it’s no earmark since the legislation listed no specific costs. Representative Michele Bachmann, Minnesota’s three-term incumbent and presidential aspirant, also supports the bridge — and calls for a “redefinition” of what an earmark is. “There’s a big difference between funding a teapot museum and a bridge over a vital waterway,” is Ms. Bachmann’s head-scratching guidance.
So the rich, in a nominal democracy, have a struggle on their hands. Somehow they must persuade the other 99% to vote against their own interests: to shrink the state, supporting spending cuts rather than tax rises. In the US they appear to be succeeding.
Partly as a result of the Bush tax cuts of 2001, 2003 and 2005 (shamefully extended by Barack Obama), taxation of the wealthy, in Obama's words, "is at its lowest level in half a century". The consequence of such regressive policies is a level of inequality unknown in other developed nations. As the Nobel laureate Joseph Stiglitz points out, in the past 10 years the income of the top 1% has risen by 18%, while that of blue-collar male workers has fallen by 12%.
The deal being thrashed out in Congress as this article goes to press seeks only to cut state spending. As the former Republican senator Alan Simpson says: "The little guy is going to be cremated." That means more economic decline, which means a bigger deficit. It's insane. But how did it happen? ...
The movement started with Rick Santelli's call on CNBC for a tea party of city traders to dump securities in Lake Michigan, in protest at Obama's plan to "subsidise the losers". In other words, it was a demand for a financiers' mobilisation against the bailout of their victims: people losing their homes. On the same day, a group called Americans for Prosperity (AFP) set up a Tea Party Facebook page and started organising Tea Party events. The movement, whose programme is still lavishly supported by AFP, took off from there.
So who or what is Americans for Prosperity? It was founded and is funded by Charles and David Koch. They run what they call "the biggest company you've never heard of", and between them they are worth $43bn. Koch Industries is a massive oil, gas, minerals, timber and chemicals company. In the past 15 years the brothers have poured at least $85m into lobby groups arguing for lower taxes for the rich and weaker regulations for industry. The groups and politicians the Kochs fund also lobby to destroy collective bargaining, to stop laws reducing carbon emissions, to stymie healthcare reform and to hobble attempts to control the banks. During the 2010 election cycle, AFP spent $45m supporting its favoured candidates. ...
AFP mobilised the anger of people who found their conditions of life declining, and channelled it into a campaign to make them worse. Tea Party campaigners take to the streets to demand less tax for billionaires and worse health, education and social insurance for themselves. ...
What's taking place in Congress right now is a kind of political coup. A handful of billionaires have shoved a spanner into the legislative process. Through the candidates they have bought and the movement that supports them, they are now breaking and reshaping the system to serve their interests. We knew this once, but now we've forgotten. What hope do we have of resisting a force we won't even see?
Today, we are a dangerously dis-united society. Elite CEOs and big investors are grabbing all the gains, leaving the vast majority mired in recession and facing falling incomes. Since the recession technically "ended" 18 months ago, corporate profits have zoomed, sopping up an unprecedented 88 percent of America's economic growth. Meanwhile, only one percent of the growth that we all help produce has gone to wages and salaries, which is the source of income for about 90 percent of us.
Yet, those same CEOs say they won't invest in new jobs or raise wages until consumers start buying again. That's like saying, "The beatings will continue until morale improves." Hello – the consumers CEOs are waiting on are the workers whose jobs and wages the CEOs won't increase.
You see, despite the GOP's ideological claptrap about corporate executives being "job creators," it is ordinary Americans who actually create jobs by spending from their paychecks. This is why our obtuse policy makers need to quit pampering the rich and fussing over budgets – and start launching a national, FDR-style jobs program that'll immediately increase paychecks, perk up consumer spending, and generate grassroots economic growth.
Even with the economy in a funk and many Americans pulling back on spending, the rich are again buying designer clothing, luxury cars and about anything that catches their fancy. Luxury goods stores, which fared much worse than other retailers in the recession, are more than recovering — they are zooming. Many high-end businesses are even able to mark up, rather than discount, items to attract customers who equate quality with price.
“If a designer shoe goes up from $800 to $860, who notices?” said Arnold Aronson, managing director of retail strategies at the consulting firm Kurt Salmon, and the former chairman and chief executive of Saks. ...
The luxury category has posted 10 consecutive months of sales increases compared with the year earlier, even as overall consumer spending on categories like furniture and electronics has been tepid, according to the research service MasterCard Advisors SpendingPulse. In July, the luxury segment had an 11.6 percent increase, the biggest monthly gain in more than a year.
Tiffany’s first-quarter sales were up 20 percent to $761 million. Last week LVMH, which owns expensive brands like Louis Vuitton and Givenchy, reported sales growth in the first half of 2011 of 13 percent to 10.3 billion euros, or $14.9 billion. Also last week, PPR, home to Gucci, Yves Saint Laurent and other brands, said its luxury segment’s sales gained 23 percent in the first half. Profits are also up by double digits for many of these companies.
BMW this week said it more than doubled its quarterly profit from a year ago as sales rose 16.5 percent; Porsche said its first-half profit rose 59 percent; and Mercedes-Benz said July sales of its high-end S-Class sedans — some of which cost more than $200,000 — jumped nearly 14 percent in the United States. ...
Apparel stores are holding near fire sales to get people to spend. Wal-Mart is selling smaller packages because some shoppers do not have enough cash on hand to afford multipacks of toilet paper. Retailers from Victoria’s Secret to the Children’s Place are nudging prices up by just pennies, worried they will lose customers if they do anything more.
It’s not just that the threat of a double-dip recession has become very real. It’s now impossible to deny the obvious, which is that we are not now and have never been on the road to recovery.
For two years, officials at the Federal Reserve, international organizations and, sad to say, within the Obama administration have insisted that the economy was on the mend. Every setback was attributed to temporary factors — It’s the Greeks! It’s the tsunami! — that would soon fade away. And the focus of policy turned from jobs and growth to the supposedly urgent issue of deficit reduction.
But the economy wasn’t on the mend. ...
Consider one crucial measure, the ratio of employment to population. In June 2007, around 63 percent of adults were employed. In June 2009, the official end of the recession, that number was down to 59.4. As of June 2011, two years into the alleged recovery, the number was: 58.2. ...
These may sound like dry statistics, but they reflect a truly terrible reality. Not only are vast numbers of Americans unemployed or underemployed, for the first time since the Great Depression many American workers are facing the prospect of very-long-term — maybe permanent — unemployment. Among other things, the rise in long-term unemployment will reduce future government revenues, so we’re not even acting sensibly in purely fiscal terms. But, more important, it’s a human catastrophe. ...
To turn this disaster around, a lot of people are going to have to admit, to themselves at least, that they’ve been wrong and need to change their priorities, right away. Of course, some players won’t change. Republicans won’t stop screaming about the deficit because they weren’t sincere in the first place: Their deficit hawkery was a club with which to beat their political opponents, nothing more — as became obvious whenever any rise in taxes on the rich was suggested. And they’re not going to give up that club.
But the policy disaster of the past two years wasn’t just the result of G.O.P. obstructionism, which wouldn’t have been so effective if the policy elite — including at least some senior figures in the Obama administration — hadn’t agreed that deficit reduction, not job creation, should be our main priority. Nor should we let Ben Bernanke and his colleagues off the hook: The Fed has by no means done all it could, partly because it was more concerned with hypothetical inflation than with real unemployment, partly because it let itself be intimidated by the Ron Paul types. ...
Well, it’s time for all that to stop. Those plunging interest rates and stock prices say that the markets aren’t worried about either U.S. solvency or inflation. They’re worried about U.S. lack of growth. And they’re right, even if on Wednesday the White House press secretary chose, inexplicably, to declare that there’s no threat of a double-dip recession.
None of that, however, has stopped Republican leaders, who announced this week that they intend to repeat this explosive episode over and over, in perpetuity. With the bad memory still fresh, President Obama should quickly seize the opportunity to make clear that he will not allow it even once more, never mind permanently. Instead of raising the debt ceiling every few years, it’s time to eliminate this dangerous game once and for all.
As this page said in 1961 — not remotely for the first time or the last — the “debt limit does not limit the debt.” It’s an illusion of a law, instituted in World War I, to persuade gullible taxpayers that Congress is exercising responsible oversight over borrowing. Congress already controls spending and taxation, and if it wants a smaller debt it can cut spending or raise taxes at will. To allow the deficit to rise, and then refuse to pay for it months later, is the definition of financial irresponsibility. ...
The 14th Amendment, adopted during Reconstruction, says the validity of the public debt of the United States cannot be questioned. Threatening the economy with calamity to achieve partisan goals does just that. President Obama should use every power at his disposal to fend off Republicans’ irresponsible threats and invite them to meet him in court if they want to resist.
Another common theme, at least among those who are not willfully blind, is that American decline is in no small measure self-inflicted. The comic opera in Washington this summer, which disgusts the country and bewilders the world, may have no analogue in the annals of parliamentary democracy.
The spectacle is even coming to frighten the sponsors of the charade. Corporate power is now concerned that the extremists they helped put in office may in fact bring down the edifice on which their own wealth and privilege relies, the powerful nanny state that caters to their interests.
Corporate power’s ascendancy over politics and society – by now mostly financial – has reached the point that both political organizations, which at this stage barely resemble traditional parties, are far to the right of the population on the major issues under debate.
For the public, the primary domestic concern is unemployment. Under current circumstances, that crisis can be overcome only by a significant government stimulus, well beyond the recent one, which barely matched decline in state and local spending – though even that limited initiative probably saved millions of jobs.
For financial institutions the primary concern is the deficit. Therefore, only the deficit is under discussion. A large majority of the population favor addressing the deficit by taxing the very rich (72 percent, 27 percent opposed), reports a Washington Post-ABC News poll. Cutting health programs is opposed by overwhelming majorities (69 percent Medicaid, 78 percent Medicare). The likely outcome is therefore the opposite. ...
Meanwhile new gifts are regularly lavished on Wall Street. The House Appropriations Committee cut the budget request for the Securities and Exchange Commission, the prime barrier against financial fraud. The Consumer Protection Agency is unlikely to survive intact. ...
“The major political parties borrowed a practice from big box retailers like Walmart, Best Buy or Target,” Ferguson writes. “Uniquely among legislatures in the developed world, U.S. congressional parties now post prices for key slots in the lawmaking process.” The legislators who contribute the most funds to the party get the posts.
The result, according to Ferguson, is that debates “rely heavily on the endless repetition of a handful of slogans that have been battle-tested for their appeal to national investor blocs and interest groups that the leadership relies on for resources.” The country be damned.
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