The deal is the latest in a series of high-profile tech services engagements that IBM has either been let go or walked away from. Sources said that in March, Disney handed off a $100 million contract, which had previously been with IBM, to Indian outsourcer HCL. IBM was also terminated from a contract to provide services to Indiana's Family and Social Services Administration, prompting a lawsuit and countersuit between the parties that remains ongoing.
IBM rewarded employees generously, with few layoffs but plenty of large picnics and Christmas parties. Many employees stayed there for their entire careers. "It was a really great place," says Jeff Trachey, who worked there from 1974 to 2011. ...
While it has re-established itself as a technology leader, the company no longer has the "big family" atmosphere, many long-term employees say in interviews. There is little expectation of life-time employment and regular layoffs keep workers anxious.
The most recent action came in late February, when 900 employees companywide, and perhaps 160 in Rochester, were laid off. Employees are reluctant to comment, but poor morale was evident on online comment boards. ...
IBM offered few details on the layoffs, as has been its policy. It hasn't released employee numbers at the Rochester site since 2008, when employment was 4,200. Given the waves of layoffs since then, some estimate employment at the site is perhaps 3,200 today.
Selected reader comments follow:
Rochester management seems to spend the bulk of its time figuring out what work can be sent to China and then setting up loads of education sessions for the Chinese workers...workers here in the US never got that kind of intense education.
Do we really want our companies (banks, insurance companies...) running software that is written in a country we know is not our ally and has been linked to serious long term cyber spying? Ask your bank what systems/software they run on and if they know where it is being developed, just like you look at Made in .... tags.
I spent my last 5 1/2 years in the finance group there. 3 of those were without a raise and had a really hard time being recognized for any good work I did. Their business plan is to be just a half of a step ahead of Buenos Aires and Bangalore. The pay is only that much better, too. There area a lot of excellent employees that they are losing to better companies in the cities. I recently took a job in Eagan- taking a 65% pay increase. I know that the cost of living up here isn't THAT much higher. Some day these corporations will realize that they cannot push their employees around. We need to stand up and revolt. Viva la revolution- we are the 99%
Please- if your child/grandchild is looking for a job- do not send them to IBM, or Rochester for that matter. There are much better opportunities for them. Short term and long term.
The PROBLEM is that CEO's and their cronies making 25Million and up per year and not treating employees fairly is killing America. Those CEO's figure out how to not pay taxes thru loop holes, and the workers go on the system because they don't have a job or make so little to feed their families they qualify to not pay taxes.
Instead we borrow money to keep us going. Romney needs to come out with a plan that whacks the super rich. Not the 250K per year 2 income family....the CEO of a corporation that has done nothing other than get a Harvard degree and get promoted and is jacking American workers and making 25Million + per year in income and stock.
When IBM announced it was opening a site in Rochester in the 1950s, it quickly became the place to get a job. "Every valedictorian from every small town around here applied at IBM. They got the pick of the litter, … the very best of what southeast Minnesota had to offer," says Stewart.
Retirees recall company picnics larger than most county fairs, including midway rides and entertainment. The star of the "Lone Ranger" TV show appeared at the 1962 picnic. Employees received engraved silver spoons for the arrival of a new child. There were massive Christmas parties where every child got a present. ...
With its shining blue exterior, the complex was filled with loyal employees wearing suits with white shirts and ties until the 1980s. Think "Mad Men" without the alcohol. ...
President Tom Watson Sr. and later his son, Tom Watson, Jr., fired or laid off employees only in extreme circumstances. They called it the Full Employment Practice. Both Watsons often spoke of the value of the individual at IBM and a loyalty to their employees.
"No subject occupies more executive time at IBM than the well-being of our employees and their families," Watson Jr. is quoted as saying in 1958. ...
Jeff Trachey, who started at IBM in 1974, says the company always worked hard to find the right fit for workers, including offering extensive education and re-training. "If you didn't perform well, maybe you were not in the right job," he says. "Attrition was really low." ...
The first large-scale example of the change was a company-wide round of layoffs/early retirements of 60,000 employees in 1993 under the watch of CEO Lou Gerstner Jr. Most industry watchers still consider it the largest tech layoff in modern history.
In Rochester, about 1,600 to 2,000 people lost their jobs at IBM during that time.
Gerstner is widely hailed as the man who kept the company from becoming obsolete and brought it back into the game. However, he is also known as the man who wiped out much of what the Watsons created in order to save the company.
"He basically destroyed the IBM culture. Two years into his reign, the IBM culture as we knew it was gone, … finished. It never really recovered," says Bob Djurdjevic of Hawaii-based Annex Research, a longtime technology analyst and expert on IBM. "IBM just became another girl on the street, where before it used to be very special." ...
“The technology giant has been steadily building its work force in India and other locations while reducing the number of workers based in the U.S.,” read a Wall Street Journal story about a March 2009 layoff action. “Foreign workers accounted for 71 percent of Big Blue's nearly 400,000 employees at the start of the year, up from about 65 percent in 2006.”
Some employees, speaking anonymously, say life at IBM today is uncertain, with people worried about their jobs. They say it became even more dispiriting when IBM stopped publicly discussing layoffs and then employment numbers at individual plants.
Instead of the tight-knit family of the past, many describe IBM's campus today as a train full of anxious passengers. People are asked to get off at each stop, but no one knows which stop theirs will be.
Bob Cringely, a well-known technology columnist and PBS contributor, has been vocal in his criticism of this IBM. "It is a heartsick company today," he says. "There are a few people working there who are happy. The ones that are happy work in sales."
There was a time that all corporate income that wasn't reinvested into growth within a reasonable time was made subject to a Federal Income Tax surtax. That was blue-penciled out, and the money is used for buy-backs that support executive stock option plans.
There was a time that stock option growth before the optionee exercised was fully taxed, and ALL that tax income went into the Federal coffers. Now, thanks to lobbying, ALL of those taxes paid are returned to the issuing Corporation as a credit.
There was a time when corporations paid a 52% Federal tax rate. That meant that Uncle Sam was effectively paying 52% of the bill for employee benefits. As the tax rate went down, so did those benefits
There was a time when the capital gains tax rate - at 50% of ordinary income tax rate - was 36%. Now, it's 15%. And Wall Street wants it reduced to zero.
There was a time that the Federal government generously reset the basis of business and personal wealth, - at the time of death. As a result, the inheritors would pay a stiff 55% tax for inherited wealth that hadn't been previously taxed, and they would essentially come out even. Lobbyists have been active over the past twenty years to remove that corrective inheritance tax.
There was a time when wall street speculators paid the full ordinary income tax rates for trades that round-tripped in a year or less. Now, those speculators are called hedge fund operators, - their computerized trades are conducted in milliseconds, - they disrupt the market, - and they pay only 15%.
And, I've only described a few of the ways that the laws have been warped to rape the individual taxpayer and citizen.
FYI, I'm an IBM retiree on IBM's dental plan. Just removed two wisdom teeth, and had previously exceeded my deductible. My bill was $675. IBM's payment - - promptly given, - - was $73.
Fortunately for me, by 1970, having been lied to by IBM management at length on other issues, - I engaged in other income-generating activities, including saw-and-hammer, bricklaying and electrical, restoring houses. Skills I had developed before my Rensselaer engineering degree and Wharton MBA. And, my employment by IBM as cannon fodder during its crash entry into computers.
My most recent rent check paid IBM's obligation to me, - and my obligation to my endodontist.
Just assume that you're dealing with thieves and liars, and you'll come out all right. Mike.
Why was IBM in trouble during the early 90's? One was because decisions were made in the mid and late 80's to exchange the continuous and repetitive gold rental dollar for a one-time paper two dollar bill purchase transaction. It was because of failure to replace that revenue stream. IBM sold off the lease/rental business of almost 11 billion per year growing at double digits for pennies on the dollar and "forecast and spent" like they were going to be a 100 billion dollar company. (again in the interest of disclosure, I was hired during this "boom.") This was done over the objections of product managers I have talked to that could see the end result coming - they were right. There was no plan to replace this revenue other than IBM Credit Corporation that failed to achieve that level of revenue stream, even to today.
Would IBM have folded? Did Gerstner save IBM? Well, look at the charts... He came in at the end of a major recession, managed IBM during one of the greatest stock market bull runs, IT spending was the largest it ever was in world history and then left before the next recession hit. Good timing if nothing else. He deserves credit for keeping the IBM company together, seeing a strategy for software-hardware-services, focusing back on the mainframe as a profit center; but also should receive an annotation in history as being at the right place at the right time as Chief Executive Officer and recognition of his impact on employee morale. Unfortunately you won't find this acknowledge with any humility in his book "Who Says Elephants Can't Dance" or in any Forbes article on IBM.
So just look at the charts and decide for yourself - revenue did not climb but profits did, especially when he extracted the years of imbedded value in the IBM employees pension plan.
Yet we defend it because some small amount of those capital gains "trickle-down" to us in our 401Ks. We have reached a tipping point where the GDP of China is beginning to overtake the US GDP. It overtook Japan last year for the #2 spot.
Investment does not create jobs. Well-remunerated, healthy, educated Middle-Class folks consume goods and that creates demand. Demand spurs investment, and job positions are created. If we can just debunk some of the nonsense of the "job-creators" that still need more money before they'll create jobs... China would do well to leave us a few crumbs lest their best customer nation slowly withers away.
You may be right that the main objective of corporations is profit. Many of them, though, are ethical enough to realize that they are guests of a society that treats them on sufferance. And, until they became large and remote, they had realized that they would be facing their victims daily in local societies.
The country club, the gated community, and the planned mansion community changed all that.
We see that in the "commerce clause" of the US Constitution. That clause retains to the national government to regulate that commerce and prevent it from descending to unethical and destructive ends. You need to remember that all corporations in this country are creatures of state action. There are charters and laws regulating their activities, and the Federal & State governments can literally put them to death by revoking their charters. That's what a constitutional republic is empowered to do, in order to prevent its conversion into an empire, as occurred in Sparta, Rome, the Ottoman Empire, and the Habsburg Empire.
I'd like to point out here that we aren't a "capitalist society".
The US is a constitutional republic which allows capitalism to flourish as long as the corporations adhere to the founding principles of capitalism. Those principles include such things as: open competition, freedom of entry, proper formation of contracts and respect for them, proper payment of taxes for services rendered, illegality of contracts for mandatory servitude and restraint of trade, favoring of the nation that allowed for their creation, - and hundreds of others.
The postings on this board and other boards deal with those abuses, - especially those performed by IBM in the past and present.
Nobody should be proud that a corporation is acting as a rogue, violating the spirit of free market economics, and weakening the economic, cultural and social fabric of this nation. Much less you.
Finally, "We" didn't ask for this. Much of the pain of the past ten years was caused because large corporations, acting unethically, perverted the laws meant to protect US citizens from rogue corporations. Mike.
How come the "too big to fail" institutions took risky chances with "other peoples' money" and bundled debts to hide them in "derivatives" and still some of the 1% involved became more rich in this practice?
The 1% greedy rich are now hoarding their wealth. They see the start of the global economic meltdown. They are hell bent on staying greedy rich, no matter what the cost. They continue to find novel ways to stay greedy rich. Greed always consumes those involved and those not involved in it.
The 99% will continue to suffer, and largely the middle class who thought that if they worked hard, saved, and used astute and sound judgement would preserve their standard of living or maybe even increase it (and even possibly get to be in the 1%) are now finding their standard of living and existence largely going down. You can't really make money if you have little or no money. That is what the 99% are realizing and lamenting.
Once the middle class is no longer viable capitalism falls on it's own weight. It will be extinct as a dinosaur for that society, country(s) affected.
IBM is a case in point. IBM is considered "too big to fail". They are doing risky practices with little regards to the consequences as I compose this. They are going all out (or should I say all in at the capitalist poker table) to get to 2015 with their EPS target. Just think if IBM can get to 2015 with their EPS target and only have IBM executives on the payroll? Now that would make the 1% proud and even more greedily beyond filthy rich.
The biggest fear of uncontrolled capitalist of our founding fathers, namely Jefferson, is now coming to fruition.
LIFE IS GOOD for the 1%. But for how long?
WAKE UP! The incessant greed that permeated the thinking of Wall St and its counterparts throughout the world brought us all 2008. And yet you apparently concur with that type of thinking, which still hasn't been dropped by all of them. Think of JP Morgan as a prime example of that utter callousness and gross greed that is still ingrained in them because we have yet to properly punish those who caused so many to lose so much as a result.
In the case of the pensions, the fund was already well-enough funded that the changes were not even necessary. But the money went somewhere - if you say Capital gains and dividends, you may be right, but 90% of all capital gains are earned by only 400,000 people. The top 0.1%. That's POINT ONE percent. So Middle-class pensions wound up in the hands of a handful of people. And this is a continuous and unsustainable trend.
Eventually our greed tanks us, and rest-assured Sam, we will be collateral damage. In 2009, record layoffs and record profits. Just a coincidence or some pet theory of a radical fringe of economists drunk on high-octane koolaid? Why with record profits is your stock not above 2008 levels? Why isn't YOUR koolaid working, I'm waiting to catch a buzz from it while I fight to keep my job!
As the pension was originally formulated, a 66K a year salary and a 30 year career would give you about $600,000 in pension benefits over 20 years of retirement. Not to mention the retirement medical plan that helped make that $600,000 go a lot further. If you make 100K+ a year, great, you should be able to save enough for retirement. Let's not also forget many had pensions frozen very near to retirement age when the major increase in pension occurs. The curve of growth is steepest from 24 years to 30 years.
My pension was frozen at 24 years, causing me to lose more than 25%. If I had children in college, saving the extra $200,000 to make up for the loss would have been very difficult. I was able to save the money, but I am able to put myself in someone else's shoes, Sam, and until they give me a heart-ectomy
WE? You speaking for all those who were screwed in 1991, 1995, and 1999?
WE? You speaking for all those THOUSANDS who were FIRED by IBM in the 2000's?
WE? You speaking for all those who couldn't divert most of their money because they actually had to use their pittance of a salary lowered by lies about 'additional compensation' to live and support their families?
WE? You speaking for all those who believed the lies about getting the pension they were promised when they were hired and the retiree medical they were promised when they were hired and now have to put a great big portion of their much lowered pension towards the high medical premium or pay for medical outright if their Future Hell Account has run out?
So, Manager Sam, you speaking for those WE's? Or do you have a mouse in your pocket? Thanks, Manager Sam, for being the voice of management. The troops appreciate the perspective of those at the top who 'got theirs'.
I suggest everyone read "Retirement Heist" by Ellen Schultz if they haven't read it yet. It's all true and scary. Being forewarned is forearmed.
I remember my second line manager with over 30 years in saying to me back in the summer of 1999 to not get upset since the CB plan looks like a good change for younger employees. Yeah, I hear ya ... HAHAHAHA. I told him why would IBM change a good time proven benefit like the defined benefit pension plan that has survived for decades? I just got a blank stare from Mr. Second Line IBM Mgr. I also told him was he aware his pension was changed ever so slightly in 1995 (i.e. the Service and Earnings Benefit Formula change) which loses him some pension benefits and is not a good change for him. He said I was wrong on that and it's still the unchanged defined benefit pension plan IBM promised for him. So he is part of that "I've got mine" naivety.
I would just like to know how come folks born and employed a few months or a year or so later by IBM can get the defined benefit plan. can get retiree medical, and yes, do get a chance to retire, and us younger folks: many IBM veterans of 15-25 years who might have been 39 years 11 months and 29 days old at the conversion tome will never get those benefits or even a chance to retire? I guess we are biologically different or something? Considered inferior? Not hard working enough? Not entitled/privileged? Or just plain unlucky of the "they got theirs, we lost ours" ilk?
Simply born at the wrong time and employed at the wrong time. That's all this dino can conclude.
Yep, it is not beyond the realm of possibility the "I've got mine" crowd might be joining us shortly, like before 2015 ya think? And since these folks most likely are no longer IBM employees anymore will have no fight left in them to attempt what happened in 1999 to try to protect that which was promised to all of us for our retirement pensions. I'm not sure pity will help them then.
If by chance the older defined benefits folks get to keep what they got, they still owe Kathi Cooper a real Thank You, as well as Janet Krueger and others in and around the Alliance for taking up the fight and raising the awareness that made IBM Think Twice about pension modifications.
Think of playing a game and then about halfway through the game the rules and playing field changes.
You think you are winning at halftime and now find yourself tied or now trailing and losing by no fault of your own.
I know many who had like 15 years of IBM service, contributed at least to the contribution max to the 401k, had stocks, etc. and a real IBM pension before 1999. THEN after 1999 when they were not yet 40 years old IBM changed the game with forced CB conversion. How do you plan for that?
Most folks considered the pension plan the safe, protected, promised investment IBM made as part of their overall compensation package. After all we were all IBMers and all equal with RESPECT FOR THE INDIVIDUAL.
At least that was what was told and most were lead to believe.
One never thought of the pension plan changing so drastically.
Then those folks had to drastically play a catch up. Get more aggressive and some unwisely, riskily, overly aggressive with their 401k investment choices and stock portfolios and now pray SS stays solvent. Most investors say stick to a long range plan but these folks had to change the plan at halftime which is now not such a long term plan anymore. And due to the the present global economy, they still can't make up the loss of pension benefits with the CB plan to get close to where they were before.
The CB is and always will be a joke; A cruel frozen farce. It is only paying a 1.1% return. Do you foresee interest rates going up? Like maybe to the 6% that was the CB growth assumption? The T-bill rate going up specifically? That tells you what these folks saddled with the cash pittance plan are up against soon in their Golden Years.
Well, it's 1.1% this year but sure to be less than 1% next year.
Those IBMers that were not totally foolish didn't buy the portability feature one bit as a selling point for the cash balance conversion. This dinosaur didn't agree one bit about what IBM was forcing down my reptilian throat as a pension conversion. The cash balance plan is not a pension.
And IBM had the nerve to say the cash balance conversion was "cost- neutral". They even told me Watson Wyatt verified it for them before they decided to do the conversion (Watson Wyatt were a bunch of paid liars for Gerstner and IBM).
So how come IBM saved millions in administration costs by the cash balance conversion? How does that equate to cost neutrality?
Cost-neutral? To who? me? IBM? Not even close to being cost neutral to the defined benefit pension plan especially when the assumption for yearly growth of the cash balance plan was and still is with the NetBenefits calculator still at 6%.
An employee contract could bring some semblance of cost neutrality to a cash pittance plan masquerading as a pension plan.
Just for grins, I looked at my personal benefits statement from 1989. I had been with the company for several years by then. In the retirement income section there is a table that lists my estimated annual retirement income based on retirement age and estimated salary growth (three sectors - 0% growth, 4%, 6%). I did a few calculations, and 6% average salary growth is just about dead-on accurate to my salary today. So I looked at the 6% section of the table.
It only contains single-life basis numbers, but that's OK because the new estimator only gives you single life numbers (so far).
If I were to retire and begin receiving benefits at age 60, my 1989 statement estimated my annual retirement income from IBM from the retirement plan (NOT including TDSP or Social Security or any other income source) would be $84,000. $7000 per month.
This is interesting because when I get on the new estimator and look at my estimated retirement income, assuming I get 2.75% annual pay increases (doubtful) and 5% annual bonuses (not credible) between now and when I retire, my "new" income rounded to the nearest hundred is $3500.
I know there are a few discrepancies that make this not quite apples to apples - old table age was 60, new estimator age is 58, old table assumed 6% raises til I'm 60, new one estimates 2.75% from now til I'm 58, no performance bonuses in the old tables.
But even correcting for these, there wouldn't be much difference (I would have more than 30 years in at either age 58 or 60). And in fact I expect that in reality I would get even less than what the new estimator is telling me now.
This is just a stark reminder that it has not been just one or two actions that have slightly reduced your pension. Take 1991, 1995, 1999, etc. and total them up, and you will see that you have lost a whole lot. I lost half, if not more. The additional $400-500 a month I may get if the 401K actually brings in 8% per year growth (seen the returns there lately?) hardly makes up the difference.
In my early days with the company, I expected that if I did a good job and was loyal, I would get a good pension when I retired - $7000 a month is pretty good, eh? And the company was sending out yearly reminders of that pot of gold at the end of the rainbow to incent us to excellence. Til about 1991, when they started emptying the pot. Then those reminders stopped. Don't want all the leprechauns finding out how much gold is missing from the pot.
Meanwhile, here in the UK IBM is currently embroiled in the Law Courts because the IBM Pension Trustees (essentially an IBM-appointed body who look after the interests of IBM pensioners) is seeking clarification of why IBM is now saying 'NO' to retirement at age 60, when employees have, for twenty years, never been denied that capability.
The whole notion of the pensioners being in court with IBM is bizarre. (Although the small print has always said that retirement at 60 was 'subject to company approval' - it was always cited as benefit for, as you say' motivational reasons').
But that was in the days when it was proud to be 'the best company to work for' and close to top of the 'best benefits' league. Now it is not even in the league.
It might be appropriate to recall the approach that IBM adopted in those world-wide expansion years back in the 1950's , 1960's and 1970's. At that time IBM was proud to follow a policy whereby headcount was broadly in line with the proportion of world-wide revenue that was being generated in the 100 plus countries in which it operated.
Thus, in the UK, Germany, France and Italy, for example, where IBM generated a great deal of revenue, there were a very large number of IBM jobs, in sales and service, manufacturing and laboratories. There were even basic research activities, not concerned with immediate product design goals. It was, within the U.K. a balanced business - that submitted its profits to the U.S. At the same time, anyone who passed through Heathrowe airport at that time would have seen advertising from IBM boasting how IBM was investing one million pounds EVERY DAY of the year in the UK to generate that profit.
IBM UK was proud to think of itself, and behave as, a British company, employing British people, paying British taxes, albeit American owned.
More than half of IBM's income came from outside the US. However, even under the arrangements as described, the U.S. headcount was more than half the total.
In today's world the whole worldwide headcount distribution is totally different.
It does not however mean that ALL IBM jobs should be in the U.S.
I thought a reminder of that earlier, fairer?, system might be appropriate here.
A further comment on IBM's rational decision making under conditions of uncertainty: I absolutely do believe that the company's analysis is faulty, due to the short term viewpoint, and the general failure of our accounting systems. Treating the human resource like shit is a policy that is *already* catching up, but the costs are hidden (turnover and its consequences, quality of service, customer sat, loss of contracts, the general demotivation of the work force and consequent lackluster performance, etc.) and thus escape the financial models. Maybe he "5 year" by OP prediction is correct... I don't know. My experience is with IGS, and my conclusion is that in actuality, IBM either wants out of that business, or is just flat blind to what is going on. We lose contracts, and that's just the way business goes. When we get a new one, oh my, what a great job we've all done!
Maybe winning a few games of Jeopardy will sell some big iron, but that will not be enough to stop this snake from eating its own tail.
Now that the commission checks have vanished and the skip policies are in place, there is no benefit to being the "resource" that busts their ass. Average performance, for average pay with the constant threat of job terminations have removed all desire to be an excellent performer.
My management constantly teases us with "additional duties", the recognition it brings but the facts are:
These and how the rest of the world has changed is what prompts me to point out that we all need to change to the mercenary model. Whether we like it or not, approve it, think it is amoral isn't even relevant. It is the reality of this current world order.
Around 42,000 of its 118,000 salaried retirees would have the option of taking a one-time payment rather receiving monthly checks, similar to a plan Ford Motor Co. disclosed last month. GM, which was advised by Morgan Stanley, sought bids from several insurance companies before picking Prudential Financial, said people familiar with the matter. ...
GM, by year end, will have eliminated traditional pension plans for all current salaried employees. Newly hired hourly workers already receive a 401(k), though veteran factory workers still get a traditional pension.
My analysis: When it comes to pensions, when it rains, it pours. These 'landmark' deals are all about shifting pension risk from companies to employees and they are setting a dangerous precedent, one that will bring about widespread pension poverty.
Go back to listen to comments made by HOOPP's President & CEO, Jim Keohane, at last week's Walrus HOOPP debate on pensions. These historic pension deals only prove that the U.S. and the rest of the developed world need to tackle the retirement crisis with radical new thinking.
"We would like to get back into the category where this is sort of a non-issue for us," GM's Ammannis quoted in the first article above. Couldn't agree more except I don't like the way GM and Ford are going all about it. The real winners in these pension buyouts are the companies and insurance companies, not the employees.
Retirees who take the lump sum will have to figure out how to make the money last in retirement on their own – not an easy task. Retirees who end up with an annuity from Prudential will no longer be protected by the Pension Benefit Guaranty Corporation, which insures pensions up to specified limits when underfunded plans terminate. Instead, their private annuities will be backed by State Guaranty Funds, which provide more limited protections when insurance companies fail.
In the golden years of the last century, corporations such as GM, IBM, etc," adopted a covenant with their workers. We train you, you work for us 40 hours a week for 30 years, and we provide you with a reasonable pension after your retirement. Yes, it does cost us some profit--but we still make enough profit to sustain our company. Cutting worker benefits to increase our profit margins would be greedy and inhumane. We're a team.
We all know how the last thirty years have seen a devolution in these corporate agreements and in companies' support of their employees. Even without outsourcing, private sector workers today face layoffs, unemployment, stolen or lost pension funds, brutal work hours and expectation, and a climate of fear and exploitation. Instead of turning against the corporate moguls and their Wall Street and Congressional henchmen, struggling and suffering private sector workers are being manipulated (by the corporately-owned media and politicians) to vent their anger towards those who are still fortunate enough to serve the public such as police, nurses, teachers, firefighters, etc,"; fellow 99%ers who have made many sacrifices for the common good and are still fortunate enough to have advocates such as unions for their rights and working conditions.
And 29 percent of nonretirees surveyed said that rising health care costs had reduced their ability to save for retirement, and about 12 percent said that was a factor in delaying their retirement. ...
The results show the challenge that low rates are posing for retirement nest eggs, when core inflation is about 3 percent a year and safe investments like certificates of deposits are yielding less than 1 percent interest, said Karen Wimbish, director of retail retirement at Wells Fargo, in a prepared statement. “The volatility of the market over the past five years has really scared people away from it,” she said. But relying on low-interest rate options means they are losing purchasing power.
Here’s a summary of the findings of this study:
But a small cache of emails survived, including some that have never publicly surfaced surrounding Mr. Romney's efforts to pass his now-controversial health-care law. The emails show the Republican governor was closely engaged in negotiating details of the bill, working with top Democratic state leaders and drafting early copies of opinion articles backing it.
Mr. Romney and his aides, meanwhile, strongly defended the so-called individual mandate, a requirement that everyone in Massachusetts have or buy heath insurance. And they privately discussed ideas that might be anathema to today's GOP—including publicly shaming companies that didn't provide enough health insurance to employees.
Mr. Romney signed the bill April 12, 2006, and that night sent an email thanking a top aide, saying the law would help "hundreds of thousands of people. ...
Mr. Romney once trumpeted the overhaul as his signature achievement as governor, but he has since played it down amid GOP attacks on the 2010 federal health-care bill signed by President Barack Obama, which bears similarities to the Massachusetts plan. Both contain individual mandates that require residents to buy health insurance. ...
In Massachusetts, Mr. Romney didn't include an individual mandate in his original proposal, but soon adopted the idea. The emails show his aides later came to champion it, even amid uncertainty from some Democrats. At the time, the mandate was a favored policy of the right, with the left instead pushing for government-run insurance programs. ...
According to the emails, Mr. Romney personally drafted an op-ed article published in The Wall Street Journal the day before he signed the legislation. The draft, written on a Saturday, also defended the individual mandate, in different language from the final version of the piece as published. Using an argument deployed today by the Obama administration, Mr. Romney defended the mandate by noting that taxpayers generally foot the bill when the uninsured seek health care.
The employer: General Electric, one of the largest companies in the world. High-deductible health plans, once deemed a last-resort, “catastrophic” alternative for those with few resources, have gone Fortune 500. ...
Supporters say the plans can contain health costs. Patients who have to pay for care up front will take better care of themselves and shop more carefully, the thinking goes, seeking lower-cost providers or asking whether tests are necessary. High-deductible plans, known as “consumer-driven” insurance, may partly account for a recent slowing in the upward spiral of medical spending, analysts say, although reluctance to buy health services in a poor economy is also a factor.
Critics say high-deductible insurance is just a way for corporations to shift costs onto workers, especially those dealing with chronic illness such as diabetes and arthritis. Further, consumers aren’t prepared to shop for treatment because reliable information on price and quality is difficult, if not impossible, to find. High deductibles, they say, boost chances that patients will delay seeking care until ailments become acute. Still, high-deductible plans, long promoted by Republicans as a way to bring market forces to medicine, are here to stay no matter how the Supreme Court rules on the 2010 health-care law, experts say. ...
For severely ill patients or families coping with chronic illness, switching to high-deductible insurance can be the equivalent of a large pay cut. “I’ve always hated the term consumer-driven health plan,” said Oberlander, the health policy professor. “If we want to describe them accurately, they should be called employer-driven health plans for less comprehensive health insurance.”
That’s when Schuler turned to a solution more post-50 Americans are considering as healthcare costs continue to rise: medical tourism.
Once only something done by the incredibly wealthy, medical tourism is "really turning into something people understand," said Josef Woodman, CEO of Patients Beyond Borders, which produces guidebooks on medical travel. The organization estimates that in 2012, 600,000 people traveled abroad for treatment -- a number anticipated to grow 15 to 20 percent annually as boomers age. ...
Most of the people deciding to go abroad for treatments that are unaffordable in the United States are paying out of pocket. But with the cost of a round-trip ticket (or two, if they decide to bring along a companion), treatment and hotel accommodations, is it really that much cheaper? The answer is a resounding yes, say experts, doctors and patients like Schuler.
A survey conducted by Patients Beyond Borders shows the jaw-dropping differences in cost. In 2011, you could pay $88,000 for a coronary artery bypass graft in the U.S., or $9,500 in India (which saw the highest average savings, at 65 to 90 percent). For a hip replacement in Mexico, it’s $12,500 instead of $33,000 on average in the States.
Fortunately, we have a well established, uniquely American model in place, one that meets the legal test. A program that already takes care of the 40 million Americans over 65. That has the added benefits of being universal in coverage and far more cost efficient than our present system.
It's called Medicare. And it's been working well for nearly 50 years, and remains wildly popular, even among those hate "Obamacare."
How do we fix our health care system? Easy, and we don't need 2,700 pages either. Just open up Medicare to cover everyone, regardless of age. It's a step we should take, no matter how the court rules.
"If the law is struck down, there will be a high level of chaos and confusion the very next day, especially in Medicare," predicts Bonnie Washington, senior vice president of Avalere Health, a health policy consulting firm. "Every single provider payment that Medicare makes now has been modified one way or the other by the Affordable Care Act." ...
The most immediate change would hit seniors who enter the "doughnut hole" in Medicare's Part D prescription drug program - the gap in coverage that starts if total annual drug spending by a senior and his or her insurance company exceeds a certain level. In 2012, coverage stops when spending reaches $2,930, and resumes at $4,700. ...
Last year, 3.6 million seniors hit the gap and saved a collective $2.1 billion due to the health care law, according to the U.S. Department of Health and Human Services. In the first four months of 2012, more than 416,000 people saved an average of $724 on prescription drugs bought after they hit the cap, for a total of $301.5 million. Last year, 3.6 million seniors entered the gap and saved $2.1 billion, the health department says. ...
Medicare's new free annual wellness visit and other screening services also could disappear.
However, not all young adults have parents with health plans they can join, and many still experience gaps in coverage and face medical bill problems and medical debt. Nearly two of five (39%) young adults ages 19 to 29 went without health insurance at some time in 2011, and more than one-third (36%) had medical bill problems or were paying off medical debt. Of those who reported problems with medical bills or debt, many faced serious financial consequences such as using all of their savings (43%), being unable to make student loan or tuition payments (32%), delaying education or career plans (31%), or being unable to pay for necessities such as food, heat, or rent (28%). ...
The report findings suggest that young adults are likely to enroll in health plans in large numbers when new affordable options become available under the Affordable Care Act in 2014. In addition to millions of young adults enrolling in their parents’ policies over the past year, nearly two-thirds of working young adults ages 19–29 who were eligible for coverage through their jobs enrolled in their employers’ health plans. The main reasons for not taking up employer coverage included being covered under a parent’s or spouse’s policy or not being able to afford the coverage. Just 6 percent of young adults said they did not need coverage.
When health care reform became law in March 2010, 28 percent of Americans aged 18-25 did not have health insurance. During the first quarter of this year, that rate had fallen to 23 percent. Obama's law allows people under age 26 to remain on their parents' insurance plans, which has provided health benefits to a population that historically has been less likely to have coverage. ...
Overall, 16.9 percent of Americans have no health insurance, Gallup reports. The Census Bureau estimates that almost 50 million people in the U.S. are uninsured. Young adults continue to have higher rates of uninsurance than older Americans. Because Medicare covers anyone aged 65 or older, just 3 percent of senior citizens had no health insurance during the first three months of this year. The uninsured rate for working-age adults between 25 and 64 years old was 19.6 percent in the first quarter, which is almost five percentage points higher than in January 2008, according to Gallup.
"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.
So the Republican electoral strategy is, in effect, a gigantic con game: it depends on convincing voters that the bad economy is the result of big-spending policies that President Obama hasn’t followed (in large part because the G.O.P. wouldn’t let him), and that our woes can be cured by pursuing more of the same policies that have already failed.
For some reason, however, neither the press nor Mr. Obama’s political team has done a very good job of exposing the con.
What do I mean by saying that this is already a Republican economy? Look first at total government spending — federal, state and local. Adjusted for population growth and inflation, such spending has recently been falling at a rate not seen since the demobilization that followed the Korean War.
How is that possible? Isn’t Mr. Obama a big spender? Actually, no; there was a brief burst of spending in late 2009 and early 2010 as the stimulus kicked in, but that boost is long behind us. Since then it has been all downhill. Cash-strapped state and local governments have laid off teachers, firefighters and police officers; meanwhile, unemployment benefits have been trailing off even though unemployment remains extremely high.
Over all, the picture for America in 2012 bears a stunning resemblance to the great mistake of 1937, when F.D.R. prematurely slashed spending, sending the U.S. economy — which had actually been recovering fairly fast until that point — into the second leg of the Great Depression. In F.D.R.’s case, however, this was an unforced error, since he had a solidly Democratic Congress. In President Obama’s case, much though not all of the responsibility for the policy wrong turn lies with a completely obstructionist Republican majority in the House.
That same obstructionist House majority effectively blackmailed the president into continuing all the Bush tax cuts for the wealthy, so that federal taxes as a share of G.D.P. are near historic lows — much lower, in particular, than at any point during Ronald Reagan’s presidency.
As I said, for all practical purposes this is already a Republican economy.
As an aside, I think it’s worth pointing out that although the economy’s performance has been disappointing, to say the least, none of the disasters Republicans predicted have come to pass. Remember all those assertions that budget deficits would lead to soaring interest rates? Well, U.S. borrowing costs have just hit a record low. And remember those dire warnings about inflation and the “debasement” of the dollar? Well, inflation remains low, and the dollar has been stronger than it was in the Bush years.
Put it this way: Republicans have been warning that we were about to turn into Greece because President Obama was doing too much to boost the economy; Keynesian economists like myself warned that we were, on the contrary, at risk of turning into Japan because he was doing too little. And Japanification it is, except with a level of misery the Japanese never had to endure.
So why don’t voters know any of this?
Part of the answer is that far too much economic reporting is still of the he-said, she-said variety, with dueling quotes from hired guns on either side. But it’s also true that the Obama team has consistently failed to highlight Republican obstruction, perhaps out of a fear of seeming weak. Instead, the president’s advisers keep turning to happy talk, seizing on a few months’ good economic news as proof that their policies are working — and then ending up looking foolish when the numbers turn down again. Remarkably, they’ve made this mistake three times in a row: in 2010, 2011 and now once again.
At this point, however, Mr. Obama and his political team don’t seem to have much choice. They can point with pride to some big economic achievements, above all the successful rescue of the auto industry, which is responsible for a large part of whatever job growth we are managing to get. But they’re not going to be able to sell a narrative of overall economic success. Their best bet, surely, is to do a Harry Truman, to run against the “do-nothing” Republican Congress that has, in reality, blocked proposals — for tax cuts as well as more spending — that would have made 2012 a much better year than it’s turning out to be.
For that, in the end, is the best argument against Republicans’ claims that they can fix the economy. The fact is that we have already seen the Republican economic future — and it doesn’t work.
The reason for these staggering numbers — and for the growing imbalance between the parties — is that the vast financial power of the business world has been loosed as a political tool by the federal courts. In pursuit of lower taxes and less regulation, businesses, led by the United States Chamber of Commerce, are determined to remove President Obama from office and return full control of Congress to the Republican Party. Executives and companies are the principal source of the unlimited checks that are fueling the rise of these outside groups.
Many of the executives are giving money to “super PACs,” which have to disclose their names. But because businesses usually don’t want the public to know of their political activity, they prefer to launder their political contributions through the Chamber or through “social welfare organizations,” which can keep the names a secret.
The law that permits these undisclosed contributions also puts explicit limits on these organizations’ activities. Tax-exempt social welfare groups, known by their Internal Revenue Code section number as 501(c)(4)’s, cannot be organized for the “primary” purpose of political activity. So far, the I.R.S. is looking the other way.
But if not political activity, what is the primary purpose of a group like Crossroads GPS, the 501(c)(4) organized by Karl Rove, which plans to spend more than $100 million this year? It has already run at least a dozen ads this year, 11 of which accuse President Obama of breaking promises or committing serious policy errors. “Obama added almost $16,000 in debt for every American,” says the latest, a classic in misleading political hyperbole.
As Jeremy Peters recently reported in The Times, that ad is part of a $25 million campaign that was based on 18 focus groups and field tests conducted by Crossroads, all to determine the most effective attack lines against the president. Is that the action of a tax-exempt social welfare group not primarily active in politics?
It is more likely that negative feedback loops are again taking over as falling incomes lead to falling confidence, which leads to reduced spending and yet further declines in income. Financial strains hurt the real economy, especially in Europe, and reinforce existing strains. And export-dependent emerging markets suffer as the economies of the industrialized world weaken.
The question is not whether the current policy path is acceptable. The question is, what should be done? To come up with a viable solution, consider the remarkable level of interest rates in much of the industrialized world. The U.S. government can borrow in nominal terms at about 0.5 percent for five years, 1.5 percent for 10 years and 2.5 percent for 30 years. Rates are considerably lower in Germany and still lower in Japan. ...
So, what is to be done? Rather than focusing on lowering already epically low rates, governments that enjoy such low borrowing costs can improve their creditworthiness by borrowing more, not less, and investing in improving their future fiscal position, even assuming no positive demand stimulus effects of a kind likely to materialize with negative real rates. They should accelerate any necessary maintenance projects — issuing debt leaves the state richer not poorer, assuming that maintenance costs rise at or above the general inflation rate. ...
There is, of course, still the question of whether more borrowing will increase anxiety about a government’s creditworthiness. It should not, as long as the proceeds of borrowing are used either to reduce future spending or raise future incomes. Any rational business leader would use a moment like this to term out the firm’s debt. Governments in the industrialized world should do so too.
The findings come amid increasing shareholder complaints at annual meetings in the US and Europe over the past two months that bank staff are being awarded a too high share of profits.
The FT data has measured trends at 13 big international banks, examining the proportion of an overall pot – comprising net profits and staff costs – allocated three ways: to dividends, staff pay and retained earnings.
Dividends comprised just 4.5 per cent of the allocation last year, down from nearly 15 per cent in 2006, the last full year before the onset of the financial crisis.
At the same time, staff costs accounted for more than 81 per cent of the total, compared with a pre-crisis tally of 58 per cent. Aggregate staff costs have risen by an average annual rate of 7 per cent to hit $259bn last year.
Consider the Federal Reserve. Again and again we hear Federal Reserve officials say that an outbreak of inflation could undermine the Fed’s hard-earned credibility and threaten its independence from Congress. But why is the Fed only worried about inflation? Why aren’t officials at the Fed just as worried about Congress reducing the Fed’s independence because of high and persistent unemployment?
Similar questions can be asked about fiscal policy. Why is most of the discussion in Congress focused on the national debt rather than the unemployed? Is it because the wealthy fear that they will be the ones asked to pay for monetary and fiscal policies that mostly benefit others, and since they have the most political power their interests – keeping inflation low, cutting spending, and lowering tax burdens – dominate policy discussions? ...
We are also told that the deficit is too large already, but there’s still plenty of room to do more for the unemployed, as long as we have a plan to address the long-run debt problem. But even if the deficit is a problem, why won’t Republicans support one of the many balanced budget approaches to stimulating the economy? Could it be that these policies invariably require higher income households to give something up so that we can help the less fortunate? Tax cuts for the wealthy are always welcome among Republicans no matter how it impacts the debt, but creating job opportunities through, say, investing in infrastructure?
Forget it. Even though the costs of many highly beneficial infrastructure projects are as low as they get, and even though investing in infrastructure now would save us from much larger costs down the road – it’s a budget saver, not a budget buster – Republicans leaders in the House are balking at even modest attempts to provide needed job opportunities for the unemployed.
The imbalance in political power, obstructionism from Republicans designed to improve their election chances, and attempts by Republicans to implement a small government ideology are a large part of the explanation for why the unemployed aren’t getting the help they deserve.
But Democrats aren’t completely off the hook either. Centrist Democrats beholden to big money interests are definitely a problem, and Democrats in general have utterly failed to bring enough attention to the unemployment problem. Would these things happen if workers had more political power?
The front group for the ad is Crossroads GPS, the sister organization to the super PAC American Crossroads run by Republican political operative Karl Rove.
Because Crossroads GPS is a tax-exempt nonprofit group, it can spend unlimited money on politics -- and it doesn't have to reveal where it gets the dough.
By law, all it has to do is spend most of the money on policy "issues," which is a fig leaf for partisan politics.
Here's what counts as an issue ad, as opposed to a partisan one. The narrator in the ad Crossroads GPS is launching solemnly intones: "In 2008, Barack Obama said, 'We can't mortgage our children's future on a mountain of debt.' Now he's adding $4 billion in debt every day, borrowing from China for his spending. Every second, growing our debt faster than our economy," he continues. "Tell Obama, stop the spending."
This is a bald-faced lie, by the way.
Obama isn't adding to the debt every day. The debt is growing because of obligations entered into long ago, many under George W. Bush -- including two giant tax cuts that went mostly to the very wealthy that were supposed to be temporary and which are still going, courtesy of Republican blackmail over raising the debt limit.
In realty, government spending as a portion of GDP keeps dropping.
As I said, I don't know who's financing this big lie but there's good reason to think it's some combination of Wall Street, big corporations, and the billionaire Koch brothers.
According to the reliable inside-Washington source Politico, the Koch brothers' network alone will be spending $400 million over the next six months trying to defeat Obama, which is more than Senator John McCain spent on his entire 2008 campaign. ...
How can it be that big corporations and billionaires will be spending unlimited amounts on big lies like this one, without any accountability because no one will know where the money is coming from? Blame a majority of the Supreme Court in its grotesque 2010 Citizens United vs. Federal Election Commission decision -- as well as the IRS for lax enforcement that lets political front groups like Crossroads GPS or the U.S. Chamber of Commerce pretend they're not political.
Political pundits will spend the next few days and weeks analyzing the Wisconsin recall election, examining exit polls, spilling lots of ink over how different demographic groups -- income, race, religious, union membership, gender, party affiliation, independents, liberals/conservatives/moderates, etc -- voted on Tuesday.
But the real winner in Wisconsin on Tuesday was not Gov. Scott Walker, but Big Money. And the real loser was not Milwaukee Mayor Tom Barrett, but democracy.
Walker's Republican campaign outspent Barrett's Democratic campaign by $30.5 million to $4 million -- that's a 7.5 to 1 advantage. Another way of saying this is that of the $34.5 million spent on their campaigns, Walker spend 88% of the money. ...
Here's another way of saying that: Walker spent $23 for each vote he received, while Barrett spent only $3.47 per vote.
But the reality is even worse than this, because the $34.5 million figure does not include so-called independent expenditures and issue ads paid for primarily by out-of-state billionaires (like the Koch brothers, Sheldon Adelson, and Joe Rickets), business groups, and the National Rifle Association, which were skewed even more heavily toward Walker. Once all this additional spending is calculated, we'll see that total spending in this race could be more than double the $34.5 million number, that Walker and his business allies outspent Barrett by an even wider margin, and that he had to spend even more than $23 for each vote.
In other words, business and billionaires bought this election for Walker. The money paid for non-stop TV and radio ads as well as mailers. There's no doubt that if the Barrett campaign had even one-third of the war- chest that Walker had, it would have been able to mount an even more formidable grassroots get-out-the-vote campaign and put more money into the TV and radio air war. Under those circumstances, it is likely that Barrett would have prevailed.
In 2006, the biggest spenders running for the House won their race 94% of the time. In 2008 the number was 93%, and in 2010 it was 85%. The numbers for the Senate were slightly lower; in 2006 it was 73%, in 2008 86%, and in 2010 83%.
Carried interest is what managers of different kinds of investment pools – venture capital funds, hedge funds and private equity funds like Romney’s former business, Bain Capital – earn by managing the money they raise on behalf of their limited partners. Those partners – mostly pension funds, endowments and other institutions, or affluent individuals – typically pay the managing partners of a portfolio somewhere in the neighborhood of 2 percent of the fund as a fee each year, plus 20 percent of any profits. The more successful the fund, the higher the fees and the managers’ cut of the profits; some hedge fund managers pocket 40 percent of the returns, as long as their clients are happy with the outsize gains they are generating. ...
It’s not reasonable to expect any of these entities to subordinate their quest for profit to social goals such as job creation. Their job is to maximize returns for both their limited partners and themselves. But when they criticize proposals to raise the tax paid on their “performance fees” as potentially impeding job creation and entrepreneurial activity, it becomes reasonable to question how much of that actually is going on.
It’s perhaps utopian and probably unworkable to suggest that entities that claim the right to a lower tax rate based on arguments that they generate a lot of job growth should be asked to prove that claim. But as the weather and the rhetoric heat up, it may be an interesting exercise to understand which parts of these industries truthfully can claim to have created jobs and wealth for others beyond the narrow circle of their own limited partners.
A month later, however, Jamie’s teapot exploded, blowing a $3 billion hole in the nation’s largest bank… and in Dimon’s reputation. Poor Jamie – why didn’t someone tell him?
They tried. As early as 2009, JPMorgan’s own internal risk managers raised concerns that this out-of-control division was pouring billions of dollars into speculative trades that were too large and too complex even to understand, much less manage. But their caution was dismissed, and Dimon himself pushed for more of these wondrous schemes.
Okay, but where were the federal regulators, who’re supposed to dog banker excess? Shoved aside by Dimon. While more than 100 government inspectors were imbedded in JPMorgan – none were in the reckless investment division. The bank’s big shot boss, who is tightly wired to the top leaders of both political parties, had aggressively pushed against having regulators hovering around his hot investment profit center, assuring the overseers that nothing was happening in there worth watching.
Dimon had extra clout, for not only is he a Wall Street star, but – get this – he also has a seat on the board of the New York branch of the Federal Reserve, which has regulatory authority over Wall Street. Indeed, the New York Fed will now conduct the inquiry into JPMorgan’s disastrous risk-taking. Yes, Jamie the Fed official will investigate Jamie the banker.
This is proof again that these banks are simply too big – too big for managers, regulators, and the public interest. We don’t need yet another regulatory band-aid, we need Teddy Roosevelt to bust ‘em up.
The über-wealthy are allowed to dump unlimited sums of cash into whichever of these beasts is backing their favored candidate. It's okay, declared the Supreme Court, because each superPAC operates entirely separately from candidates themselves. Indeed, the Court banned any coordination between the candidate's campaign and the electioneering of the PAC.
To see how splendidly this is working, visit Suite 555 in an Alexandria, Virginia, office building. You'll find Target Point Consulting there, headed by Alexander Gage, a top staffer in Mitt Romney's 2008 presidential run. This year, Target Point is consulting with the Romney campaign – but it's also consulting with Romney's superPAC. Gage admits that this might look "ridiculous," but he promises that Target Point staff working for Romney are kept separate from those working for Romney's PAC.
Uh-huh, but, what about WWP Strategies, headed by Romney's deputy campaign manager, Katie Gage? Yes, she's married to Alexander, and her firm also is located in Suite 555. Cozy huh?
Then there's Black Rock Group, headed by Carl Forti, who was Romney's 2008 political director. Now, though, Carl is senior strategist for Romney's superPAC. Guess where Forti's Black Rock Group is headquartered? Right – Suite 555.
Mr. Gage explains that while his firm and Ms. Gage's firm are in the same suite, the two principals do not discuss Romney's campaign or PAC with each other. And he points out that while Target Point and Black Rock also share the space, the two firms are separated by a conference room. "It's not like we're a commingled office," he assures us.
There's a word for this: silly. Also, fraud. And, corrupt.
Should the U.S. government give Wall Street banks an advantage over Ohio’s First National Bank of Sycamore? Supporters of truly free markets would say “no.” And yet our nation’s policies favor the trillion-dollar banks, fueling their risky activities. This isn’t free-market economics. And it isn’t fair. ...
This is not how capitalism is supposed to work. It’s Wall Street welfare. And absent decisive action, U.S. taxpayers will continue to subsidize the largest banks. ...
Megabanks should fund themselves the same way that community banks do: by attracting more capital and taking on less debt. Wall Street banks should use investors’ money — not U.S. taxpayers’ money — to make their bets.
It’s time for those who profess the virtues of the “free market” to put their equity where their mouth is. That means an end to the government guarantees that create a “heads I win, tails you lose” Wall Street culture. It means an end to picking winners and losers and an end to corporate welfare that gives trillion-dollar banks unfair advantages over regional and community banks. And it means preventing U.S. taxpayers from ever again being put in the position of having to bail out Wall Street.
Bush claimed (as right-wingers always do) that tax breaks for the rich would create jobs in the private sector. Well, they haven't. There were 110 million private sector jobs in America in 2001. There are 110 million private sector jobs in America today. Despite a population increase of more than 25 million, there are no more private sector jobs today than when the Bush tax breaks for the rich became law. ...
We didn't give tax breaks to the poor; we gave tax breaks to the rich. And for the rich, the past 11 years has been one long party. According to the Paris School of Economics, the top 1% in America saw their share of national income increase by more than 13% from 2001 to 2010. The top 0.1% saw their share of income increase by 20%. The top 0.01% saw their share of income explode by more than 37%, from 2.4% of all of the income in America to 3.3%.
The Bush tax breaks for the rich have yielded the most unequal distribution of wealth in American history, more unequal even than that of 1929, just before the Great Depression.
The irony is that in New York, I’m told, people are interested in power. In Washington, people are interested in money.
Think about it. The White House’s power comes from the money people give the president. He wouldn’t be there if it weren’t for his big donors. He had a Hollywood fundraiser last month at George Clooney’s house where he raised $15 million. Those are the people who count. If the president thought that there was real power in Washington, that the Congress, the diplomatic corps or the journalists could help him in any way, then he and the first lady would surely go out more often. ...
When a senator or congressman walks into a room now, you don’t think power. You think, “Poor guy or gal, what a nightmare life that is.” They are beholden to so many people. They can’t get anything done on the Hill because of the hideous lack of bipartisanship. And they don’t even have the advantage of being treated especially well publicly, because they are not seen as having power. People on the Hill have the power to stop things, to investigate things, but not to get anything done. We used to celebrate the great compromisers. Now, they’re all denigrated. ...
In the New Yorker, Jeffrey Toobin writes that the Supreme Court decision on Citizens United, allowing corporations and unions to spend unlimited amounts of money to support or oppose political candidates, will change things dramatically: “The Roberts Court, it appears, will guarantee moneyed interests the freedom to raise and spend any amount, from any source, at any time, in order to win elections.” There you have it. Money is power. The fundraiser has replaced the Washington dinner party.
That's according to Gary Gensler, head of the Commodity Futures Trading Commission, who said at an industry event on Thursday that a recent proposal from the House Appropriations Committee to cut his agency's funding by 12 percent is evidence that Congress "sides with Wall Street."
This omission distinguishes the former Massachusetts governor not only from his Democratic counterpart but from his two Republican predecessors. Both President George W. Bush, during his two campaigns, and Arizona Sen. John McCain, during his 2008 presidential race, released lists of their key fundraisers and, at least within general parameters, some indication of their hauls. But Mr. Romney’s campaign has repeatedly dismissed suggestions that he follow suit. The campaign has said that it has complied with campaign finance laws, which do not mandate such information except in the case of registered federal lobbyists.
This argument is correct but unconvincing. Bundlers play an essential role in presidential campaigns — Mr. Romney’s in particular. The latest figures show that just 15 percent of the Romney campaign’s May total came in donations of $200 or less, compared with 40 percent of contributions to the Obama campaign. Such hauls of maximum-dollar checks do not happen without the assiduous behind-the-scenes work of well-connected bundlers. ...
A Romney campaign pamphlet prepared for donors details the special perks lavished on those who haul in the biggest bundles: “Stars,” who raise $250,000, and ”Stripes,” who bring in $500,000 or more. “Stripes” receive everything from a “dedicated Romney Victory headquarters staff member” to access to debates to “signature membership pieces and apparel.” Indeed, the campaign promised to publish the information it declines to reveal to the public by listing bundlers’ names in a ”Stars and Stripes Commemorative Book.” The Post reported Friday that the Romney campaign’s “top 100 bundlers — ‘Team 100’ — are heading to a private retreat in Utah on June 22-24 to plot out how to replicate the May success in the months ahead.”
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