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Highlights—June 16, 2012

  • I, Cringely: An IT labor economics lesson from Memphis for IBM. By Bob Cringely. Full excerpt: My recent series of columns on troubles at IBM brought me many sad stories from customers burned by Big Blue. I could write column after column just on that, but it wouldn’t be any fun so I haven’t. Only now a truly teachable lesson has emerged from a couple of these horror tales and it has to do with U.S. IT labor economics and immigration policy. In short the IT service sector has been shoveling a lot of horse shit about H1B visas.

    The story about H1B visas is simple. H1B’s are given for foreign workers to fill U.S. positions that can’t be filled with qualified U.S. citizens or by permanent U.S. residents who hold green cards. H1Bs came into existence because there weren’t enough green cards and now we’re told there aren’t enough H1B’s, either. So there’s a move right now in Washington to increase the H1B limit above the current level of approximately 65,000 because we are told the alternative is IT paralysis without more foreign workers.

    Says who?

    Who says there will be chaos without more foreign IT workers and are they correct?

    Cynics like me point out that foreign workers are paid less and — more importantly — place much less of a total financial burden on employers because they get few, if any, long term benefits. I tend to think the issue isn’t finding good workers it’s finding cheap workers. But the H1B program isn’t supposed to be about saving money, so that argument can’t be used by organizations pushing for higher visa limits. All they can claim is a labor shortage that can only be corrected by issuing more H1Bs.

    To test this theory let’s look at Memphis, TN, where IBM has recently lost two big customers. One of them — Hilton Hotels — dumped IBM only this week. The other company is ServiceMaster.

    Hilton just announced they are canceling almost all of their contracts with IBM less than two years into a five-year contract. This includes global IT help desk, all data centers, and support of “global web” (hilton.com and all related systems).

    According to my sources at Hilton, the IBM contract was a nightmare. IBM couldn’t keep Hilton’s Exchange servers running. The SAN in the Raleigh data center hasn’t worked right since it supposedly came up in January, with some SAN outages lasting more than a day. IBM couldn’t monitor Hilton’s servers in the IBM data center. Hilton had to tell IBM when the servers were running low on disk space, for example.

    Now IBM is gone, replaced by Dell, and Hilton has a new CIO.

    If there’s one point I’d like you to keep in mind about this Hilton story it’s IBM’s apparent inability to monitor the Hilton servers. More about that below.

    ServiceMaster is the other former IBM customer I know about in Memphis. Among its many beefs with IBM, ServiceMaster also had a server monitoring issue. In this case it was the company’s main database that was going unmonitored. IBM was supposed to be monitoring the servers, they were paid for monitoring the servers, but in fact IBM didn’t really monitor anything and instead relied on help desk trouble tickets to tell it when there was a problem. If you think about it this is exactly the way IBM was handling server problems at Hilton, too.

    Now to the part about labor economics.

    When ServiceMaster announced its decision to cancel its contract with IBM and to in-source a new IT team, the company had to find 200 solid IT people immediately. Memphis is a small community and there can’t be that many skilled IT workers there, right? ServiceMaster held a job fair one Saturday and over 1000 people attended. They talked to them all, invited the best back for second interviews, and two weeks later ServiceMaster had a new IT department. The company is reportedly happy with the new department whose workers are probably more skilled and more experienced than the IBMers they are replacing.

    Where, again, is that IT labor shortage? Apparently not in Memphis.

    About that database monitoring problem, ServiceMaster hired DBADirect to provide their database support from that high tech hotbed, Florence, KY. The first thing DBADirect did was to install monitoring tools. Remember IBM didn’t have any monitoring running on the ServiceMaster database.

    How can a company 1/100,000th the size of IBM afford to have monitoring? Well, it seems DBADirect has its own monitoring tools and they are included as part of their service. It allows them to do a consistently good job with less labor. DBADirect does not need to use the cheapest offshore labor to be competitive. They’ve done what manufacturing companies have been doing for 100+ years — automating!

    Even today IBM is still in its billable hours mindset. The more bodies it takes to do a job the better. It views monitoring and automation tools as being a value added, extra cost option. It has not occurred to them you could create a better, more profitable service with more tools and fewer people. When you have good tools, the cost of the labor becomes less important.

    Which brings us back to the H1B visa issue. Is there an IT labor shortage in the USA that can only be solved with more H1B visas? Not in Memphis and probably not anywhere else, either.

    There’s certainly a shortage of imagination, absolutely a shortage of integrity, and neither shortage is saving anyone money.

    Selected reader comments follow:

    • Former IBM Employee says: I used to work on a lot of outsourcing jobs for IBM, particularly in server and storage management. Although the “billable hours” mindset and foreign labor issues are important, the more immediate issue is having a competent staff in the first place.

      Although IBM has a lot of warm bodies, the simple fact of the matter is that IBM does not have enough competent staff to deliver on all its outsourcing contracts. When I left the company a few years ago, there were just a handful of people (I was one) that were capable of implementing, configuring and troubleshooting a SAN. Most people within the company at the time had no idea what a SAN was, and probably still wouldn’t know today.

      Server and database management is in a similar position. In order to adequately monitor a database, you need to know what parts of the database to monitor, how to set it all up, and an action plan when the monitoring detects a problem. IBM has the tools, but it does not have the depth within its outsourcing staff to adequately implement and utilize them. The needed skills in database and systems management are simply not there in sufficient quantity.

      In most companies, this level of competency is ingrained in its employees using formal training classes, plus supplemental learning in test labs as well as on-the-job training.

      At the time I left the company, the only training that IBM was offering to the outsourcing staff were basic project management courses. The test labs were being disbanded, with equipment (servers, workstations, etc.) either being sent to India or sold on the open market. Some items like SAN switches and storage devices never really existed in quantity — the management didn’t want to spend the money.

      To add insult to injury, IBM outsourcing employees no longer had access to IBM’s software collection. Software products like AIX, DB2, Tivoli and Websphere were once easily downloadable by employees for internal use. At the time I left, this access was disabled. In order to get this software, you had to requisition the software via official requisition channels, and provide a funding source. That’s right — IBM outsourcing employees had to BUY the software just like any customer.

      So when I hear about customers dumping IBM for stuff like not monitoring the servers or performing the backups properly, I’m utterly saddened but not a bit surprised. This outcome was baked into the cake long ago. Although it’s tempting to blame the problems on H1Bs or laying off workers or whatever, the customers are leaving for a much simpler reason. All too often, IBM is proving itself to be incompetent to perform the work for which it has signed up.

    • Greener Pasture Dweller says: I left IBM not long ago for a much better opportunity. I was in the technical ranks during my entire tenure with the company and I witnessed first hand the diminishing skills across the organization.

      In the end, my summation was pretty simple: the executive leadership within IBM, and therefore the culture itself, always looked down on the technical side of the equation, often referring to those folks as ‘the techies’ in quite derogatory tones. Since the exec ranks had absolutely NO understanding of how important technical skills and expertise were to any I/T deal, they diminished their importance, falsely thinking that ‘anyone could do the technicals’, heck we could just pull them off the streets of Bangalore, or Pune, or Buenos Aires, or Sao Paulo and turn them loose on a Client system. They don’t need any training or mentoring, we don’t need to spend any money on test systems and tools.

      The thought was (and still is) to throw any cheap technical skill at the job and then surely our stellar leadership can project manage any issues that come up. But in the end, without adequate technical ‘expertise’ it becomes a moot point.

      When I came into IBM quite a while ago, it was a classy organization with good people and competent leadership. In the end, it was a cesspool being run by a bunch of profit pirate goons. Welcome to the new IBM.

    • Arthur says Bob, Remember that America is a land of immigrants and used to welcome them. There was that song dedicated to John Lennon in the seventies “there was a time when strangers were welcome here”. The number of immigrants coming in on work visas is not so high and immigrants in moderation can really enrich a country, particularly if they are young and well educated.
    • Jim says Arthur, The problem is that H1B people are not *immigrants*, they are guest workers. I’d feel better if they were immigrants…in this case they’d be making a permanent contribution to our society, would pay property taxes, educate their children here, and so on. But they’re not immigrants, they’re guest workers. They have to go home when their H1B visa expires. (Admittedly, a few do go on to get a green card and ultimately citizenship, but this is rare.) Guest workers drive down wages for permanent residents and citizens. And, the fact that the H1B visa is tied to a company means that H1B guest workers don’t have the ability to compete for better jobs elsewhere in the U.S.
    • Fred says: The company I worked for outsourced all programming to IBM who used programmers in India. Over half of our very large IT department was terminated including all programmers, DBA’s, computer operations, much of security and network support. H1B workers were then brought in from India to do the work of the Americans that had been fired. This type of action is destroying the American dream.
    • No longer in IT and loving it says: I’m one of the many IT people Hilton fired when they were entering the contracts with IBM and other outsourcing companies. I have 30+ years of IT experience, and I assure you I could have managed any project they needed managed. I really hate to say it, but I’m glad to hear they are paying a price for their blatant disregard for people. The really disgusting thing is that the man that made all of those decisions just left, I’m sure to move to another company and do the same thing. He made millions of dollars to create the mess he has left behind, and will continue to do the same elsewhere. Why are these seemingly smart people so short-sighted? How did they think they could improve service levels by dismissing their intellectual assets? Thousands of years of knowledge walked out of those doors, and there is no way it could be replaced by IBM or anyone else. DUH! Maybe they will learn from this experience…one can only hope!
    • Was There says: I’m a former IBMer and was actually on the ServiceMaster project for a short time. One thing you got wrong, Bob, was the idea that the project was staffed by H1B visas. As has become common in recent years, IBM relies much less on H1B visas in favor of L1 visas. L-1A visas are for executives and managers, and L-1B are for workers with “specialized knowledge.” (See http://en.wikipedia.org/wiki/L-1_visa).

      What IBM does is to bring people from IBM India to work on projects in the U.S. (Keep in mind that the employee population of IBM India is *significantly* larger than that of IBM U.S.) I can attest that not only were the “worker-bees” at ServiceMaster IBM India employees, nearly all of the management staff was, too. You had to get to a third-line manager to get an IBM U.S. manager on the project, and none of them were on-site at ServiceMaster full time.

      Furthermore, the bulk of the support work was done by employees in India. The group in Memphis was a small front group that worked with the much larger India-based team.

      I was on the engagement a long time ago, but even then it was evident that the ServiceMaster “business people” hated IBM, and that they were constantly being stonewalled. Of course, part of the problem was probably the contract…IBM’s attitude was that it would provide service to the letter of the law, and no more. ServiceMaster, when they had their own I.T. shop were accustomed to having their I.T. people go beyond the call of duty.

      By the way, none of the L1 IBM India employees had “specialized knowledge.” The work they were doing had been done in the past by ServiceMaster employees. These were not high-level I.T. jobs.

    • Was There says: I should add that an advantage (to corporate America, not to its workers) to the L1 visa is that there are no limits on how many are issued, unlike the H1-B visa.
  • BusinessInsider: Some Of IBM's Most Loyal Employees Feel Screwed. By Julie Bort. Excerpts: Since we first began reporting on how IBM was quietly reducing its workforce, we've heard lots of stories from current and ex-IBMers. ...

    But this one, from a wife of a long-time IBM employee, seems particularly insightful ... and sad.

    A woman who we'll identify as the wife of an IBM employee in the New York area, shares the story of what it's been like for her and her husband. Her husband is a career IBMer since the 1970s, and loves the company, she said. But for the past few years, she feels like the company has been treating him like an indentured servant.

    A stacked-against review system. IBM employees are given a four-point rating. (1, 2+, 2, 3). These ratings determine bonuses and other stuff. Employees believe that management predetermines how many 1s they can give, and how many 3's to give, to help justify the number of layoffs they have been told to implement.

    All work, no vacation: 12-14 hour workdays are normal for the husband, as are weekend hours. And she says he's unable to use his vacation because they always call him back into work -- or they've loaded him up with so many projects his vacation doesn't get approved. But he also fears that "taking time off probably would make him a target as well," for a layoff. He took three days off for Memorial Day and "those were the first days completely work free he’d had in the past five months, including weekends," she says.

    No raises. This wife says that although her husband typically gets a 2 or better on his review, he hasn't gotten a raise in years because he's topped out on IBM's internal salary chart.

    Selected reader comments follow:

    • I watched this company and worked for this company when Lou Gerstner came in and saved them from themselves. Only to be replaced by Sam Palmisano and become an arrogant, ignorant, right wing arm of the Bush Administration. They care nothing for their employees, only "Shareholder Value". You think the employee's are treated poorly, think about their "customers". Once Lou Gerstner turned Global Services into a power house, jettisoned their telecommunications arm, got rid of the IBM fight song and pledge of allegiance and started allowing Vodka on the company jet the company emerged with Power, AIX and some innovative server technologies.

      Then they jettisoned the ThinkPad and C Division to Lenovo and all those execs received their pensions plus current salaries and ran for the exits. Criminal.

      All of these activities precluded the hazing and disturbing practice of purging high band talent, seasoned and loyal employees who had weathered the Watson days and began replacing it with young, low band kids out of college.

      IBM is not the same company, but neither is the industry. They are now a commodity, like pork futures. IBM is the largest employer in India, now. They have abandoned many loyal and talented individuals to the scrap heap for "shareholder" value. The hazing will continue because it's legal. Is it right? Has it been good to the American worker? You decide.

    • Sorry, but Cookie Monster Gerstner was the beginning of the end of IBM. No investment in new technology and the wholesale move to a body-shop business model spells "O V E R". The joke is now the move back to the "cloud" could mean more mainframe sales if they had the operating system designed to handle it and not that retreaded OS/360/MVS/XA/Z invented back in Don Draper's day. I'm typing this on a ThinkPad - yet another example of great design and reliability pitched overboard by the Nabisco brain trust. The Chinese and Indians are laughing their assess off.
    • The discrimination and bias against older workers is happening throughout the high-tech and Aerospace industry. The American standard of living has fallen 40% just in the past three years. Younger employees resent having to pay into a pension that they will NOT themselves receive.

      Globalism, fractional reserve banking and allowing brokerages to become more like banks are some of the major reasons why. Ironically corporations are rich and manage to pay very little in taxes. They are currently gutting employee health care plans from a strong desire to dump them onto the coming Federal Govt plan. Ironically they support socialism and are against competition and free markets and even their own employees. Someone (in the toilet) wrote about this predictable capitalist cycle but i forget his name...

    • IBM, ITT and the rest of BIG business in America treats their workforce like slaves. The man referred to in this article needs to learn to say "NO" I will not work 12 to 14 hours a day, I will not work Saturdays and Sundays and he should take his vacation and TURN OFF THE Telephone. Grow some balls sir, let them lay you off or better yet fire you. You should be keeping very detailed records, recording conversations with your superiors and those who review your job performance. Then you will have some ammunition for the legal fight for wrongful termination. Look either way IBM is going to shove you out the door, you might as well go fighting. Who knows they might simply pay you off rather than fight a loosing battle.
  • Hudson Valley Times Herald-Record: Schumer backs jobs legislation. By James Walsh. Excerpts: Sen. Charles Schumer, D-NY, gave his support Wednesday to legislation to reward companies for bringing outsourced jobs back to U.S. shores. The Bring Home Jobs Act sponsored by Sen. Debbie Stabenow, D-Mich., would provide a 20 percent tax credit that businesses could use to offset the costs of moving production lines, trade or other business functions back from overseas. "We know that it's becoming hard for companies to have businesses overseas, especially in China," Schumer said yesterday during a news conference, citing increasing wages and security concerns outside of the United States.

    New York companies, including IBM, could be eligible for the program, which Schumer said attempts to reverse the flow of jobs sent to other countries.

  • Yahoo! IBM Employee Issues message board: "You have to love the newbie" by "workforlife". Full excerpt: During a rah rah meeting it was announced that there will be no Market Based Adjustment. Only the highest performers will get any type of raise.

    After the meeting the newbie asked what the heck that meant. Seems he was informed verbally that he was hired at a lower salary than the market but due to IBM,s policy of Market Based Adjustments he will catch up to the market with raises while the those at the 100% would get less. Imagine his surprise to find out he was lied to!!!! LMAO.

    We tried to tell him that if the first line's lips are moving he/she is most likely lying.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Hidden 401(k) Fees: The Great Retirement Plan Rip-Off" by "dave49_98". Full excerpt: No one is more critical of the blue pig than i am; but, when it come to 401K they have one of the best plans period. IBM, the last I read, covers the entire administration costs of the plan. They have ultra low funds to pick from in the core and charge almost nothing if you use the Fund Window. This plan does not replace stolen pensions or health care but as far as 401Ks go this is a Cadillac plan.
  • New Jersey Online: Landmark Prudential, GM deal seen as opening floodgates for U.S. pension transfers. By Ed Beeson, The Star-Ledger. Excerpts: The Detroit automaker said it will move $26 billion of pension liabilities off its balance sheet by the end of the year. It will do this largely by transferring the plan to a group annuity operated by Prudential. Most of the 118,000 retirees and their beneficiaries affected by the move will join the annuity, with about 42,000 of these workers being given the option of a lump-sum payout instead. The deal, a common practice in Great Britain, is expected to be the largest pension-risk transfer made in the United States, industry analysts say. And it’s also expected to be the catalyst for more deals to come. ...

    Mallett said MetLife also expects more companies, starting with the healthiest ones, will take steps to remove pension-fund risk from their balance sheets, likely through a series of smaller, tailored deals that target specific segments of their retired workforce. Of the GM deal, she said, "It’s kind of a bellwether."

  • Yahoo! IBM Employee Issues message board: "Re: Contract?" by "fstephens". Excerpt: If you were an IBMer and got out before 1988, all is very fine. If you got out before 1999, things are fine. If you got out in the last few years, IBM things are screwed. You may be doing OK, but if you had been able to retire with the "REAL" old plan:
    • Your retirement pay would have been in the 60% of high five salary years instead of 28%;
    • You would have had your 401K as an extra, not part of the retirement escalation;
    • You would have had FREE MEDICAL for the whole family, not an FHA calculated to run out in under 7 years if used to pay 100% of Medical costs for just you.
  • Yahoo! IBM Employee Issues message board: "Re: Contract?" by Paul Sutera. Full excerpt: Final pension is exactly 28% of my last 5 years pay average. Uncanny calculating job!

    I think the 7 years of medical on the FHA for an individual is probably high, at this point. If the cost under the FHA for an individual is $1000 a month, then figure it will be less than 3 years of medical coverage. And that figure drops as the medical premiums rise, and the FHA treads water or adds a few hundred a year to its balance. We get dumped into the old-folks insurance pool when we begin to use the FHA, and that may include folks in their 70s. So you will have less health insurance but after leaving IBM, you might have fewer health problems though when you do leave. I'm not sure what the monthly premiums are for an individual. Maybe they are still under $1000.00 a month. Some thanks for giving IBM your best years. The old plan was better, though the salaries of many folks who retired in the early '90s were nothing great.

  • Yahoo! IBM Employee Issues message board: "Re: Contract?" by "divaberyl". Full excerpt: Retired 2011, 2nd choicer, no J&S, pension is 30%. FHA should last 4 years or so after Cobra runs out. (Thankfully, I'm healthy requiring no meds.)

    I'm not at all pleased that IBM removed benefits "promised" me when I joined in 1982. We should have had a contract.

    I was a senior manager (Band10, 2nd/3rd line manager) in Services. I believed I was one of the good middle managers in that I had a lot of employees and customers who asked for me once I moved on to something new. I'd often bring my best employees with me and returned to bail out former customers a couple of times. I granted LOAs and personal time when employees needed a break and avoid getting calls from ER due to stressed out IBMers and having IBMers dropping dead from over-work.

    Ridiculous edicts were sent down from the Execs and I worked the system to maximize customer and employee benefits. When the Execs passed down a "zero over time" mandate and limited US resources needed to solve customer problems, I forced the Execs to decide to either face the customer ire or pay for the OT. Most of the time they paid but when they preferred to provide service on the cheap (resulting in failures), they rarely did it again -- to my teams -- on my watch.

    There were a lot of good IBM managers but many have jumped ship over the last few years. Too many of the employee motivating levers have been removed from the management tool box. Some good managers remain but too many of brown-nosers make it hard on everyone. After begging in vain to be laid off for 18 months, I left on my own accord. (Oddly, the brown-nosers are often the first ones offered packages.) I now enjoy life outside of the asylum and I thank GOD (not IBM) for that.

  • Yahoo! IBM Employee Issues message board: "Re: Contract?" by "Mike C". Full excerpt: For 3-1/2 years, - in IBM's business commercial analysis (read: Business Intelligence ) unit, I took apart the FUD and product claims of competitors, so that the marketing field was made more honest.

    You mentioned in your post that young IBMers hire in with the expectation of leaving in a few years to pursue real careers. In that, you're right. For the past 13 years, a number of these groups and the union site have been describing the downside realities of a job - or career - with IBM. During the first three of those years, members of the business press and Federal regulatory agencies were lurking. I had back channel conversations with two of them, during that period.

    Employees who organize to prevent or redress grievances needn't go to the point of union recognition, in order to be effective. By spreading the reality of their existence as employees of IBM, they can adversely (and properly and legally) affect the quality of its input of professional talent. Perhaps, that's why old-timers fing themselves leading newbies by the hand. And, perhaps that group activity results in IBM's going overseas to meet its business commitments.

    So, you see, - payback and control by employees can take a number of forms. Mike.

  • Yahoo! IBM Employee Issues message board: "Re: Contract" by Lee Conrad. Full excerpt: Frankly it is the US we are trying to save. Offshoring has severely damaged our economy and the lives of workers and their communities. 50,000 manufacturing facilities moved offshore in the last 10 years, 600,000 workers lost their jobs and millions of service and information tech workers losing or will lose their jobs. IBM is a part of this."
  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM Senior Consultant in Markham, ON (Canada): (Past Employee - 2012) “Bloated, Bureaucratic, and Extremely Political” Pros: Good benefits package, 4% matching pension contribution in particular. Con:s: -Multiple layers of bureaucracy ensure that getting approval for even the simplest things is a long and involved process. -Managers often brought in from other business lines. Don't actually have any experience in the area they're responsible for. -Borderline pathological emphasis on billable hours, at the expense of EVERYTHING else. -Absolutely no regard for work/life balance -Due to functional managers often being in different cities/countries, possible to never meet the people you report too (I didn't actually meet my last manager face-to-face despite working for them for over a year). Advice to Senior Management: There's no point giving any advice. It's an incredibly inflexible organization, and "The IBM way" is the only way that things are ever done.
    • IBM Technical Support Engineer in Austin, TX: (Current Employee) “IT Help desk Analyst” 0 of 1 people found this helpful Pros Genuinely appreciated equal standards across the board, to explain what I mean. I reside in a at will state, however IBM believes that all employee should be govern equally. The rules that applied to the employees that didn't reside in a at will state also applied to employees that didn't reside in a at will state. Cons I honestly have nothing negative to say about this company. I was hired, one week before having a major car accident. IBM paid all my bills and was totally supportive and accommodating all the years employed there. If you ever receive the opportunity to work for this company. Stay there as long as you can. You've made a excellent choice. Advice to Senior Management Keep up the excellent work.
    • IBM Software Engineer: (Past Employee - 2008) “Really smart people developing great products but weighed down by excessive bureaucracy and politics.” Pros: Smart folks who really know what they are doing and are capable of collaboration. Cons: Takes a mountain to get anything done. Finger pointing abounds. Risk taking NOT encouraged, Advice to Senior Management: Remove some of the big blue obstacles to let people do their best work.
    • IBM Senior Server Admin: (Past Employee - 2010) “dissatisfied over all” Pros: you can learn because they squeeze. Cons: low salary, no growth, less facility compare to other company, more work pressure. IBM Stands for its process. only thing i liked. Advice to Senior Management: clear above issue.
    • IBM Applications Developer in Pune (India): (Current Employee) “A Great experience of learning technology and the Business etiquettes” Pros: There are lot of learning opportunities. Many many new technologies, business ethics and great experience enhancement. Cons: There are pretty youngsters working in IBM. Many people work in for years. Hence there are some people expecting unnecessary respect. Advice to Senior Management: Thank you for guiding new learners like us.
    • IBM IT Analyst in Hyderabad (India): (Current Employee) “Decent work environment.” Pros: IBM, as a brand, has been there for over 100 years now. As such, it has diversified into a lot of different industries. IBM Hyderabad is a wonderful location to work for. The work culture is good, stable working hours and flexibility, managers usually listen to what one has to say, and the work that is being done here is exciting to say the least. Cons: Very hard to get ahead in terms of career. Moving from a business unit to another is extremely difficult, and getting into higher echelons of management take forever. A lot of bureaucracy involved as well. Advice to Senior Management: IBM is losing out to organizations that have a flat organization structure. It would be incredible if some form of this structure is seen at IBM
    • IBM Technical Support Engineer in Austin, TX: (Current Employee) “IT Help desk Analyst” Pros: Genuinely appreciated equal standards across the board, to explain what I mean. I reside in an at will state, however IBM believes that all employee should be govern equally. The rules that applied to the employees that didn't reside in a at will state also applied to employees that didn't reside in a at will state. Cons: I honestly have nothing negative to say about this company. I was hired, one week before having a major car accident. IBM paid all my bills and was totally supportive and accommodating all the years employed there. If you ever receive the opportunity to work for this company. Stay there as long as you can. You've made a excellent choice. Advice to Senior Management: Keep up the excellent work.
  • Alliance for Retired Americans: Friday Alert (PDF). This week's articles include:
    • Romney's Health Plan: Perfect for the Healthy and the Wealthy
    • Recession-hit Seniors Forced to Draw from Social Security Early
    • Over Half of Seniors Now On-Line, Study Says
    • President Declares June 15th as World Elder Abuse Awareness Day
    • Colorado Alliance Education Fund Holds Convention, Elections
    • Florida Alliance for Retired Americans (FLARA) Holds its Annual Conference
  • New York Times: Many Employers Clueless About 401(k) Fees, G.A.O. Finds. By Ann Carrns. Excerpt: Many employers are clueless about the fees they and their employees pay for operation of their 401(k) plans, a recent report from the Government Accountability Office finds. Understanding 401(k) fees is important, because they can make a big difference in the amount workers eventually have available for retirement. New rules from the federal Department of Labor, requiring mutual fund companies and other retirement plan administrators to disclose more information about fees, are scheduled to take effect this summer.
  • New York Times: Planning a Financial Tuneup. By Ron Lieber. Excerpt: There comes a point in most people’s lives when the pile of undone financial tasks — the un-automated bills, the out-of-balance retirement accounts, the out-of-date budget, the under-optimized rewards programs — becomes large enough to provoke a sort of low-grade anxiety.

    This quality or state of not having your act quite together lacks its own word in the dictionary. It is something short of discombobulation, but the mild, mental chafing is irritating enough to demand a remedy.

    Thankfully, there is one: the financial tuneup.

  • PlanSponsor: Employees Would Exchange Salary for Retirement Income Guarantee. Excerpts: When asked about the desire for a guaranteed source of income during retirement, 82% of employees would be willing to give up 5% of their salary if it meant having reliable income to help them live comfortably during their later years, according to Bank of America Merrill Lynch’s 2012 Workplace Benefits Report. Forty-two percent said they would be willing to give up 10% or more of their salary.

    Kevin Crain, head of institutional retirement and benefit services for Bank of America Merrill Lynch, told PLANSPONSOR he found these survey results “very surprising, but in a very good way.” “I think if the employees are pushing for [retirement income], you will see a push on employers,” he said. “Plan sponsors are really going to jump to the cause. Employees are getting very aggressive in their attitudes about this.”

    Editor's (sarcastic) comment: Gee, Isn't this what IBM told us in the 70's and 80's about our salary? Then they screwed us in 1991, 1995, and 1999 with changes to the pension plan and the revocation of retirement medical!

  • Wall Street Journal: Hey, Thanks for Working for Us. Here’s a Blender. By Melissa Korn. Excerpts: Remember the days when loyal employees got a gold watch or a fancy plaque to mark 10, 20 even 30 years’ service with a firm? Turns out, those days aren’t so long gone.

    Selected reader comments follow:

    • dgdevil wrote: After 20 years, I got $1,000 worth of vouchers (to spend at Amazon, other retailers), and a heavy hunk of engraved perspex with an unreliable clock affixed. The funny thing is: It wasn’t really 20 years. They were going by the date I had randomly chosen when filling out my HR documentation.
    • JimInBoulder wrote: At one time the company I worked with gave Rolex watches to its retirees. I retired after more than 30 years and was offered choices from a gift catalog of junk that was work well under $100, nothing that I wanted. It’s a large computer company that’s become infamous cheating its employees out of long-promised pensions and retirement medical benefits.
    • Parrot Nation wrote: 20 years of service. I got a box of chocolates that cost nine dollars at a big box store.
  • U.S. News & World Report: How to Use New 401(k) Fee Reports. Excerpt: Next month, more than 30 years after 401(k)s began to appear, employers with plans will finally receive standardized and detailed information from plan administrators about how much they pay in fees. Within the following 60 days, and no later than the end of August, plan investors will get their own reports showing these costs.

    How much is this new rule needed? Many 401(k) investors have said in polls that they believe the investment programs are free. Even the people at their employers who oversee the plans are often clueless about fees and other 401(k) matters, according to a recent study by the U.S. Government Accounting Office.

New on the Alliance@IBM Site
  • Job Cut Reports
    • Comment 06/09/12: **What did you do with your weekend, I have an issue with what IBM demanded of its employees today. There was a similar request in December.**
      "We're declaring Saturday June 9th as an AMS work day and asking for your active participation, we're calling this day, "Client Value Day". This is an ADDITIONAL and consistent workday across AMS to provide capacity for our teams to provide additional value to our clients, equally, this is an opportunity for our efforts to contribute to incremental Q2 billing and utilization. As with all regular work days, it is up to your Leadership Teams and your individual efforts on how and if you will utilize the day to maximize team objectives.

      The intent is to provide you with this additional day of opportunity to meet your account and individual targets while providing client value. This will also help you achieve or exceed your billable utilization to close off the 1st half of the year. No challenge is without some recognition, obviously the priority is for our clients, and our value is the incremental revenue to complete the work to help us attain our targets - our top 10 chargeable utilization employees who helped drive incremental revenue may be get an award."

      Sent in many forms by multiple layers of management including the director. -ResignedNotWorkingSaturdays-

    • Comment 06/11/12: This is not a cut, yet, but I've been asked to train someone, who's nationality I've yet to determine, on the product I use and support. I've requested they confirm they are a US citizen and alluded that if they are not there may be legal issues with the transfer of this knowledge. Feedback? -Anonymous- Alliance Reply: You have no authority to object to ANYTHING or REFUSE to do anything IBM asks you to do, as long as you are an 'At Will Employee' (no union contract). IBM WILL target you for dismissal, if you do not fulfill their request. You might want to contact your state's department of labor with your concerns also.
    • Comment 06/12/12: I took the Transition to Retirement program - my mgr pretty much told me it was a good idea - i.e., I was gonna get laid off soon. Only 2 of 10 people in our area took it. -TRRparticipant-
    • Comment 06/12/12: -TRRparticipant- I hope you don't agree with your manager even with your decision. Of course your manager is following Randy MacDonald's folly. Are you an Alliance member or are you going to join to protect your retirement benefits? -anon-
    • Comment 06/13/12: To -ResignedNotWorkingSaturdays-: I thought IBM couldn't stoop any lower but this wins the prize. All the cost cutting and overtime reducing efforts have cut into productivity. The quality of the work is decreasing. This is their new tactic to beat the slaves into working more hours for free. This is just disgusting. -dun-4-
    • Comment 06/13/12: My company was acquired by IBM a little while ago, and are currently in transition via 'blue washing'. I haven't been able to find much info/detailed accounts about the actual process that IBM undergoes with an acquisition, and more importantly, its employees. Since IBM has steadily been acquiring more and more companies, can some of you (if you're lurking around here) share your story? Because the current comments seem to pertain mainly to non-acquired IBMers, and/or IBMers who've been with the organization for decades. -soon2bacquired-
    • Comment 06/14/12: -soon2bacquired- If your company was a small acquisition with niche, leading edge technology you're okay for now job wise. I would say: IBM is buying you as resource intellectual capital that IBM wants. Don't expect much help or much training in the transition, you're likely going to have to figure out how "big blue" does business and what will be expected of you. Also don't expect IBM to give you your old benefits in your former company if they were better than what IBM offers or give you the seniority as an IBMer. But that being said, you will be an IBMer once acquired. But if IBM only offers you only a contractor instead of an employee then you better start looking for your next full employment gig. Contractors in IBM are generally short-timers who only fill gaps and cracks in the IBM business and cheaply at that. Ask anyone who worked for Lotus before IBM "blue washed" them. Contact those in IBM who were consulting in Price Waterhouse Coopers who were acquired by IBM. Seriously, most folks acquired by IBM are not too happy when finally assimilated. Once you see your former management chain that is now in IBM get pruned or purged then you have an idea where your job status in IBM is going to be. You go from being intellectual capital to unneeded expense or surplus. Good Luck to you! Please join us in the Alliance too! -bought-
    • Comment 06/14/12: To -soon2bacquired-: I was was working for Rational Software when IBM bought us. I think many who post here were acquired by IBM. Expect to spend increasingly more of your time doing unproductive things, like "blue washing " your products and development tooling, and expect to have less time to spend actually improving your products the way your customers expect. Expect this to culminate in your products losing market-share and being increasingly viewed as obsolete. Expect IBM to buy another product in your space, or to develop their own alternative, and for your product to increasingly be maligned within IBM, and for you developers to be painted as the problem. Expect that when IBM says they develop software in an "agile" manner, that what they mean by "agile " is "run as fast as you can! " But they don 't usually actually mean agile, they mean some ineffectual hybrid of waterfall and agile; you 're supposed to be agile-productive, but be waterfall-planned. Expect IBM to pay lip-service to supporting open-source products and tooling, but expect to need a lawyer's approval before you can use any open-source product not already on the official approved list.

      Expect that to take months, and the answer likely to be "no". Expect the software on the official approved list to very out-of-date. Expect everything good that you liked about your old employer to go away. Expect everything about developing software to become more difficult. Expect to learn more acronyms than you ever thought existed. Expect to learn how little that "reviews" -- also known as"PBC reviews " -- mean in IBM; your manager will now have a quota of people they must rank as "underperforming ", and the list of those ranked poorly often bears little resemblance to the people who actually do under perform. Expect people that your old employer knew should never be placed in charge of people, to become managers. Expect the most hideously abusive managers in your group to be promoted. All of this isn 't going to happen overnight. The blue wheels grind exceedingly fine, but not quickly. Expect it to take about a year or two before it begins to so obviously suck, that you will remember what I 've said. -irRational-

    • Comment 06/14/12: To -soon2bacquired-: IBM may say many things (and perhaps even make promises) but none of them will be in writing. You are not an asset. The patents and products of your company will be squeezed out for what they are worth, but the employees are a cost they can do without. Read the postings here back through the beginning of 2009. You'll see how IBM treats its workers. Plenty of people here were brought into IBM through acquisitions and outsourcing. -Backslash-
    • Comment 06/15/12: -TRRparticipant- Well, good luck... cross your fingers. If IBM demands you work 24.1 hours for a week due to needs of the business then IBM is asking you to violate your labor terms. File a complaint with your local Dept. of Labor. If we had our union in IBM the Alliance could enforce this for you with a contract labor agreement. -TRRed-
    • Comment 06/15/12: Hard to believe I've been out of that pit for 5 years now. Difference between IBM management and my current management: IBM - "You're getting a PBC 3 for all your hard work and free overtime." New management: "I wish we had 5 more like you, here is your raise." I do hope those of you that are left wise up and move towards unionizing. IT's the only thing you can do if you want to continue working at IBM. Just remember, when the axe falls in your direction, and it will, there is life after big blow. -Gone_in_07-
    • Comment 06/15/12: The Transition to Retirement brochure states that on "June 14-15: Managers personally communicate decisions to employees". It's the 15th 4:30PM and that is not happening. A call to HR and they stated they had no clue that was the plan. Their response when asked why not, was told that some divisions are still making decisions. Final decisions and communications are expected to happen next week via an email. Hope this is not a sign of things to come for those of us who applied and eventually get accepted, that other "commitments" documented in the brochure get retracted/axed..... -Drank the TtoR coolaid-
    • Comment 06/16/12: When I was at ServiceMaster, the company hated IBM. They had laid off nearly all their IT people and replaced them with IBM. The IBM team was mostly in India, with a few Indians on L1 visas located in Memphis. Even the managers and PMs were from IBM India. Besides myself, I think there were maybe three other IBM U.S. employees on the gig. I'm surprised it took them this long to kick IBM out.

      Cringely got one thing wrong. IBM doesn't use many H1B visa holders anymore. Instead they hire people into IBM India (or IBM China, etc.) then they bring them here under L1 visas. Unlike H1B visas, there is no restriction on the number of L1 visas allowed. Theoretically, L1 visas were supposed to be for senior managers or skills that are unavailable in the U.S., but as this article confirms (and I can confirm, too, based on my experience) that requirement is ignored by IBM and not enforced by the government.

    • Comment 06/16/12: -Drank the TtoR coolaid-: It's all going to depend on the almighty 2rd QTR results when ANY real decision of SUBSTANCE is made. A call to HR? LOL! They don't know anything. Haven't since the John Opel days.. Evil HR Director Randy MacDonald is probably playing golf on a Friday afternoon anyhow and will enjoy his Father's Day why most of IBM fathers work this Sunday.. I bet if not enough drank the koolaid then they have to push up the next RA numbers. If more folks did drink up then IBM has to decide who to keep and who to deny and I bet they don't have a clue at that. IBM had to have a ballpark figure of who they thought would fall for the TtoR. But if it is off just a bit, it is a screwball they can't hit with a whiffle bat. Like I say it all depends on the 2nd QTR which is drawing to a close to what the verdicts will be. And to all who were not offered the TtoR figuring you don't have to worry about your job. You better. It will affect some of you. -anonymous-
    • Comment 06/16/12: The target for the Transition to Retirement was 8%. 1% signed up. -Tony Soprano-
    • Comment 06/17/12: How do you know 1% signed up? I would certainly sign up if I were retirement age and received the letter, in a heartbeat. Of course, I work in IBM GBS (IGA) - the armpit of IBM. -Anonymous-
    • Comment 06/18/12: It is not surprising that IBM is losing accounts. I have heard that RA'd folks are anonymously emailing the Directors/VP's/Board...anyone that'll listed, about what is REALLY going on in the day-to-day ops. Monitoring was offshored a while ago, as well as TSM so these two BASIC services are in shambles. It takes forever to get a backup configured on a new server and sometimes they are missed altogether. Same for monitoring. -I_know-
    • Comment 06/18/12: My mgr talked to me over a week ago and I received my official notification email today (accepted). -TRRparticipant-
    • Comment 06/18/12: To "Drank the TtoR coolaid": The brochure statement about managers personally communicating to their employees was only if you were being denied. It also says all applicants will receive notice the week of June 18th. I think everyone got those notices today. In other words, you would have only heard something last week from your manager if the answer was no. Hopefully by now you've received the acceptance note (as I have). -CJ-Roc-
    • Comment 06/18/12: "The target for the Transition to Retirement was 8%. 1% signed up." So a 7% RA of the USA IBM workforce should happen this summer and fall. 3.5% at a time since HR can't keep up with the execution numbers. -fuzzy_math-
    • Comment 06/18/12: April 2009, 5000 jobs were cut. Global Business Services Systems Engineering Architecture and Test Practice, My position was an engagement architect. Team to train was formed in August 2008. They shadowed us until we were cut. -Linda P-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Financial Times: Romney to champion healthcare market. By Stephanie Kirchgaessner. Excerpts: A Mitt Romney administration would support the expansion of health insurance plans that make patients pay more out-of-pocket expenses as part of a broad effort to bring down the cost of healthcare in the US. But some experts fear the rapid growth of such plans in the private sector and changes to how people buy healthcare would adversely affect Americans’ health.

    Mr Romney, the Republican presidential candidate, has not directly discussed the plans, which are called high-deductible health insurance plans, but he has emphasized the importance of making consumers of healthcare savvier shoppers – a key element of such schemes. ...

    “Governor Romney will replace Obamacare with genuine reforms that increase market competition and consumer choice,” said a spokeswoman for the Romney campaign. “High-deductible health plans, which the president opposes, can play an important role in achieving those objectives.” ...

    Proponents say that making patients know the cost of the services they receive – which is exceedingly difficult in traditional healthcare schemes because prices are not transparent and are automatically covered by insurance – will make healthcare more competitive and ultimately bring down costs. In an interview with the Financial Times, Scott Atlas, a healthcare adviser to Mr Romney and fellow at the Hoover Institution think-tank, endorsed the plans. “It makes people aware of what you are spending, because you are actually paying. It leads to value-based decision making on what you buy,” he said. ...

    But the Rand study also pointed to risks with the expansion of high-deductible schemes: families enrolled in the plans mostly saved money because they had fewer encounters with health care providers or spent less per visit. The families also saw fewer specialists, used more generic drugs and had fewer elective visits to the hospital. “What we don’t yet know is whether the cutbacks in care the [plans] trigger could result in poorer health or health emergencies down the road,” says Amelia Haviland, the study’s leader.

  • Milliman Insight: Benefits Perspectives, June 2012 - Health insurance exchanges and early retiree health coverage. By Jordn Ge. Abstract: This issue of Benefits Perspectives examines how the Patient Protection and Affordable Care Act (PPACA) may change the landscape of retiree health coverage, especially for early retirees (those age 55 to 64). An increasing number of employers have capped the subsidies for coverage of early retirees or provided only access to coverage without cash subsidies. Employers that provide early retiree healthcare coverage will have to weigh the advantages and disadvantages of maintaining these benefits. In addition, the outcome of the U.S. Supreme Court’s still-pending decision in the legal cases challenging the PPACA could present additional challenges.
  • New York Times: Obama Was Pushed by Drug Industry, E-Mails Suggest. By Peter Baker. Excerpts: After weeks of talks, drug industry lobbyists were growing nervous. To cut a deal with the White House on overhauling health care, they needed to be sure that President Obama would stop a proposal intended to bring down medicine prices.

    On June 3, 2009, one of the lobbyists e-mailed Nancy-Ann DeParle, the president’s health care adviser. Ms. DeParle reassured the lobbyist. Although Mr. Obama was overseas, she wrote, she and other top officials had “made decision, based on how constructive you guys have been, to oppose importation” on a different proposal.

    Just like that, Mr. Obama’s staff signaled a willingness to put aside support for the reimportation of prescription medicines at lower prices and by doing so solidified a compact with an industry the president had vilified on the campaign trail. Central to Mr. Obama’s drive to remake the nation’s health care system was an unlikely collaboration with the pharmaceutical industry that forced unappealing trade-offs. ...

    In a statement, the Pharmaceutical Research and Manufacturers of America, the drug industry lobby known as PhRMA, called its interactions with the White House part of its mission to “ensure patient access” to high-quality medicine: “Before, during and since the health care debate, PhRMA engaged with Congress and the administration to advance these priorities,” the lobby statement said.

  • Physicians for a National Health Program: UnitedHealth's spurious generosity. UnitedHealthcare Voluntarily Extends Important Health Reform Protections Regardless of Upcoming Rulings by Supreme Court. Excerpts: UnitedHealthcare, a UnitedHealth Group (NYSE: UNH) company, will continue to offer important health care insurance protections that were included in the 2010 health care reform law, no matter how the U.S. Supreme Court rules in cases currently pending before the Court. UnitedHealthcare will continue provisions related to coverage of preventive health care services, coverage of dependents up to age 26, lifetime policy limits, rescissions and appeals. ...

    A reader comment follows:

    Comment: By Don McCanne, MD You have to hand it to UnitedHealth's public relations department. No matter how the Supreme Court rules on the Affordable Care Act (ACA), this press release establishes UnitedHealth as a leader in patient advocacy, or at least it would seem so.

    If ACA is upheld, this press release means nothing since these are already requirements of the Act. If ACA is struck down, these are very popular measures that are quite inexpensive and thus will not drive up premiums to non-competitive levels. The most expensive measure is the coverage of dependents up to age 26, but that adds only about one percent to the premiums. Besides, other insurers will likely follow suit in order to more effectively market to a greater number of young, healthy families. So no matter what happens, UnitedHealth takes credit for taking the lead.

    UnitedHealth used one example of a policy that they will not follow, indicating that they will not unilaterally provide patients with some of the more important protections required in ACA. They are correct when they say that they cannot cover children with preexisting conditions unless the entire industry cooperates in distributing those higher cost risks. If one insurer generously accepts those risks, then their costs would skyrocket and they would be forced out of the market by the death spiral of insurance premiums.

    UnitedHealth has remained silent on some of the more important requirements not yet in effect that could be overturned by the Supreme Court decision. Insuring preexisting conditions for adults in addition to children, guaranteeing issue of coverage to all individuals regardless of projected costs, and setting premiums based on community rating - driving up premiums for lower-cost, healthier patients - are more significant measures that could impair their competitiveness if they acted unilaterally. We won't see these policy changes unless ACA is upheld and all insurers are required to comply.

    Also they are silent on keeping administrative costs and profits down to a level that complies with the medical loss ratios dictated by ACA. Turn ACA over then there would be no federal requirement to comply, though that would still be the prerogative of the states. States under the political control of anti-government, free-market advocates would likely leave medical loss ratios to the insurers and their Wall Street promoters (where low medical loss ratios - spending less on patients- is a business activity that is rewarded with higher stock valuations).

    UnitedHealth's "generosity" in conceding the very modest positions they listed in their release applies only to the individual and small group markets - a relatively small proportion of their business. Most plans for large employers will be grandfathered, and most of the ACA provisions will not apply - certainly not the requirements specific to the exchanges since large employer plans will not be included in the state exchanges. Also, many large employers are self-insured, and for them UnitedHealth provides only administrative functions, while specific benefits are determined by the employers.

    We can't blame UnitedHealth for trying to protect its market position, but we can blame our elected representatives for adopting policies that perpetuate and expand an industry which must comply with market demands for lower prices - a demand that can be met only by strategic decisions to avoid market segments such as children who are ill.

    Is that what America is about? Let's take care of the kids, even up to age 26, but not the sick ones? What other country does that?

  • National Journal: Exclusive: AHIP Gave More Than $100 Million to Chamber's Efforts to Derail Health Care Reform. By Chris Frates. Excerpts: The nation's leading health insurance industry group gave more than $100 million to help fuel the U.S. Chamber of Commerce's 2009 and 2010 efforts to defeat President Obama's signature health care reform law, National Journal's Influence Alley has learned. During the final push to kill the bill before its March 2010 passage, America's Health Insurance Plans gave the chamber $16.2 million. With the $86.2 million the insurers funneled to the business lobbying powerhouse in 2009, AHIP sent the chamber a total of $102.4 million during the health care reform debate, a number that has not been reported before now.

    The backchannel spending allowed insurers to publicly stake out a pro-reform position while privately funding the leading anti-reform lobbying group in Washington. The chamber spent tens of millions of dollars bankrolling efforts to kill health care reform. ...

    The news that insurers gave more than $100 million to help fuel the chamber's efforts to derail health care reform comes as the nation girds for a Supreme Court decision this month that is sure to reignite the health care reform debate on Capitol Hill and the campaign trail.

  • Kaiser Health News: Kaiser Permanente's Ross: There's No Effective Substitute For The Mandate. Excerpt: Murray Ross, director of the Kaiser Permanente Institute for Health Policy, believes that the health law’s requirement that most Americans have coverage by 2014 or pay a fine is necessary. By design, says Ross (who is also a vice president in the part of the company that sells health plans), the "individual mandate" would attract both the healthier and sicker individuals to balance risk and the cost of coverage. (Note: KHN is not affiliated with Kaiser Permanente).
  • Kaiser Health News: Vladeck: Deaths Will Increase If SCOTUS Strikes Health Law Down. Excerpt: Bruce Vladeck, who ran Medicare and Medicaid for four years under President Clinton, forecasts "chaos" in the health care delivery system and increased deaths if the Supreme Court strikes down the health law. Killing the law would "save a fortune" for the government, but at the expense of "gutting Medicaid," says Vladeck, who is now a senior advisor for Nexera, a New York hospital consulting firm. Here is an edited transcript of the interview:
  • Kaiser Health News: Medicare Drug Discounts At Risk If Court Strikes Health Law. By Susan Jaffe. Excerpt: Billions of dollars in drug savings for Medicare beneficiaries may come to an end if the Supreme Court overturns the 2010 federal health law, a drug industry spokesman said Tuesday.

    The law provides "the necessary legal framework" for drug companies to slash brand-name drug prices by half for seniors and people with disabilities when they enter a coverage gap in their Medicare drug plans, said Matthew Bennett, a spokesman for the Pharmaceutical Research and Manufacturers of America. Eventually the discounts grow so that the gap, known as the doughnut hole, is closed by 2020. But if the law goes, the discounts may go, too. "Without that legal framework, there are many questions that arise about whether the discount program could continue," he said.

  • Consumer Watchdog Campaign: Health Insurance Companies Will Hike Rates As Much As 24% for Small Businesses With More Than One Million Employees. Pending California Ballot Measure Would Make Health Insurers Publicly Justify Rates and Get Approval Before Imposing Increases. By Carmen Balber & Jamie Court. Excerpt: Health insurance companies will increase rates as high as 24% in July and August for small business customers with more than one million employees, but state regulators currently have no power to reject those increases that can’t be justified. A pending ballot initiative would require health insurance companies to publicly justify rate increases and get approval before they take effect. In April, the Department of Insurance found that another rate hike proposed by Aetna for small business policyholders was excessive, but Aetna imposed the increase despite the Department’s finding.
  • The Commonwealth Fund: Geographic Variation in Access to Care—The Relationship with Quality. By David C. Radley, Ph.D., M.P.H., and Cathy Schoen, M.S. Excerpt: The study found that where a person lives matters. The proportion of uninsured adults (ages 18 to 64) ranged from 5 percent in Massachusetts’ three local areas to more than half in two local areas in Texas. Wide variation was also seen in the proportion of adults who went without care because of cost (5% to 33%) and among adults age 50 or older or with a chronic disease who visited a doctor in the previous two years (67% to 95%). Although the uninsured were at greatest risk, among the insured there was wide variation in having a regular source of care and receipt of recommend preventive care across the country. For example, the percentage of adults age 50 or older who received recommended screenings for cancer and other preventive care ranged from 31 percent to 58 percent among insured adults across local areas, and the percentage of insured adult diabetics who received recommended care for their condition ranged from 28 percent to 71 percent. The authors note that findings indicate that health insurance alone is not sufficient—comprehensiveness and affordability of coverage, as well as access to primary care, are also important.
  • New York Times: Budget Office Director Says Health Law Hasn’t Hit Economy. By Rebecca Berg. Excerpts: As a Supreme Court ruling on the health care law nears, theories abound as to what the economic effects of the court’s decision will be. On Wednesday, Douglas W. Elmendorf, director of the Congressional Budget Office, wasn’t eager to enter that fray – but he disputed the view pushed mostly by Republicans that the health care law has, to this point, hurt employment. Speaking to reporters at a Christian Science Monitor breakfast on Wednesday, Mr. Elmendorf said, “We don’t think that the health care law is having a significant impact on the economy today.”

    affect the employment of only a sliver of the labor force, perhaps just 0.5 percent of workers, he said. Under the law, Mr. Elmendorf said, most job loss would be incurred by people exiting their jobs voluntarily because they would be able to obtain health insurance outside of work.

  • Financial Times: Fears for US health reform. By Anna Fifield. Excerpts: Lee Hasselbring is one of the few Americans who know what it is like to have access to a universal healthcare system. A science teacher at an American school in northern England, he uses the UK’s National Health Service. He is seeing the American system up close for the first time in years, as his 38-year-old son battles a variety of cancers.

    “This hospital has amazing facilities and huge numbers of specialists,” says Mr Hasselbring, listing the many treatments Tim has had as he takes a break from his son’s bedside at the renowned Johns Hopkins University hospital in Baltimore. He has no idea, he adds, how people cope without health insurance.

    “I just read this,” Mr Hasselbring says, pulling a clipping from the morning’s USA Today newspaper from his pocket, in which he has circled and underlined what could happen if the Supreme Court overturned President Barack Obama’s healthcare reforms later this month.

    “Thirty million Americans won’t have insurance?” he asked. He is referring to the possibility that the court will repeal the “individual mandate”, a provision that compels most people to buy some sort of insurance and which the Obama administration says would extend coverage to tens of millions of people. ...

    “If you’re 40 years old and you have a high-paying job and you want immediate medical care, I suppose you’d prefer to live in the US system with all the other people who can afford stuff,” Mr Hasselbring said. “But the better thing would be for everyone to have something like the NHS.”

  • Washington Post: Romney outlines plan to make health-care system like ‘consumer market’. By Philip Rucker. Excerpts: Addressing supporters in Orlando, Romney fleshed out a plan that he proposed earlier, one that would apply free-enterprise principles to the nation’s health-care system rather than operate it like a “government-managed utility,” letting competition drive down prices and increase quality. He also vowed to divert federal Medicaid money and other federal funding to state governments, making them responsible for covering the uninsured. And he promised that his plan would help cover people with preexisting conditions, one of the more popular components of Obama’s law.

    Romney attacked what he and other Republicans have labeled “Obamacare.” The presumed GOP presidential nominee said that if the Supreme Court does not overturn the law in full, he would work to repeal whatever remains of it on his first day as president by granting a waiver to all 50 states to opt out of the legislation’s restrictions. ...

    Romney first laid out a plan to replace the health-care law in a speech in Michigan in spring of last year, before he formally began his campaign. But he avoided detailed discussions of health care during the Republican primaries, partly because the Massachusetts law he championed and signed as governor is so similar to the federal law and drew sharp criticism from many conservatives in his party.

  • Washington Post opinion: Health-care reform is a middle-class program. By Jonathan Bernstein. Excerpts: More importantly, establishing a working market for insurance beyond employer-offered plans is a huge benefit for the middle class, many of whom haven’t had good options previously. That’s especially true of those with preexisting conditions, but generally buying insurance on your own has been a disaster; assuming ACA works as intended, that should become ancient history.

    Such a market is especially important for any employee at a large company (who therefore probably has excellent coverage right now) who is thinking of starting her own firm. That’s a middle-class problem, and that’s really, more than anything else, what reform targets.

    Of course, there's a lot more to the Affordable Care Act, but most of the experiments in better delivery and cost controls will help everyone, from the very rich all the way down, if they pay off. Or, I suppose, they'll hurt everyone if they don't; if conservative skeptics are right and costs soar, then the nation as a whole will be hit. But the core programs? Those are intended to help those who want to buy health insurance right now and either can't quite get access or can't quite afford it, as well as those who are paying for it but are getting a terrible deal. That's not the poor.

  • Kaiser Health News: Costs Of Raising Children Grows, And Health Care Is A Big Reason. By David Schultz. Excerpt: The USDA released its annual report Thursday on how much it costs to raise a child. The grand total for a child born in 2011 is $234,900 — $295,560 if inflation is factored in — for all child-related expenses, from birth to age 17. That’s a 3.5 percent increase over last year.

    The USDA has been keeping track of this since 1960. In that time, how parents have spent their money has changed. One of the two main drivers of the increase is health care costs, which include health insurance premiums not paid by an employer as well as doctors’ visits and prescription drugs not covered by insurance. In 1960 health care costs represented 4 percent of all child-rearing expenses. This year, it represents 8 percent.

  • Kaiser Health News: N.Y. Insurance Co. Exec: 'Life Will Go On,' Expensively, Without Individual Mandate. Excerpt: If the Supreme Court strikes down the health law, New York would be in a somewhat unique position, according to David Abernethy, a senior vice president of EmblemHealth. Its companies, Group Health Inc. and HIP Health Plan, insure almost 3 million people in the state. Abernethy says unlike other states, New York already requires insurers to cover all applicants, regardless of health status– that’s known as "guaranteed issue." Here's an edited transcript of the interview:
  • Smirking Chimp: Big Money In Politics Harmed Healthcare Legislation. By Dave Johnson. Excerpts: Why is the health care law so messed up, and why didn't it include at least a public option? Because big money in politics corrupted the process and nullified the wishes and interests of the public. Once again we learn that the public good is thwarted for the benefit of a very few by the influence of big money.

    From National Journal's Influence Alley: Exclusive: AHIP Gave More Than $100 Million to Chamber's Efforts to Derail Health Care Reform. (click through for links, etc.)

    The nation's leading health insurance industry group gave more than $100 million to help fuel the U.S. Chamber of Commerce's 2009 and 2010 efforts to defeat President Obama's signature health care reform law, National Journal's Influence Alley has learned.

    During the final push to kill the bill before its March 2010 passage, America's Health Insurance Plans gave the chamber $16.2 million. With the $86.2 million the insurers funneled to the business lobbying powerhouse in 2009, AHIP sent the chamber a total of $102.4 million during the health care reform debate, a number that has not been reported before now.

    The backchannel spending allowed insurers to publicly stake out a pro-reform position while privately funding the leading anti-reform lobbying group in Washington. The chamber spent tens of millions of dollars bankrolling efforts to kill health care reform.

  • Washington Post: Washington state provides case study on effects of heath-care reform. By Sarah Kliff. Excerpts: If the Supreme Court overturns the health-care reform law’s individual mandate — a decision that could come as soon as Monday — it won’t be totally unknown territory. For Washington state, it would be quite familiar. In 1993, Washington state passed a law guaranteeing all residents access to private health-care insurance, regardless of their health, and requiring them to purchase coverage.

    The state legislature, however, repealed that last provision two years later. With the guaranteed-access provisions still standing, the state saw premiums rise and enrollment drop, as residents purchased coverage only when they needed it. Health insurers fled the state and, by 1999, it was impossible to buy an individual plan in Washington — no company was selling. ...

    “There are seven states that tried this in the mid-1990s and, in every case, it was a disaster,” said MIT health-care economist Jonathan Gruber, who worked on Massachusetts’ health-insurance law and the Affordable Care Act. “It became pretty clear that, if you want a market to work, you need a mandate.”

  • Washington Post opinion: Liberal activists and the disappearing public option. By Jonathan Bernstein. Excerpts: The history of the public option is, in my view, fascinating. Four years ago, it was a relatively minor point in the Democrats’ health-care rhetoric. By summer 2009, liberals were adamant that the public option was central to health care reform, to the point that some wound up opposing health reform when the voters weren’t there to include it. And now? It’s apparently been forgotten. ...

    I’m not generally a big fan of Glenn Greenwald’s political analysis, but what he said today was exactly right: If liberals don’t agitate for the policies they prefer, they won’t get them from Democratic politicians. That’s the story of issues important to gay men and lesbians during the Obama administration, and it’s the story – in the other direction – of where we are with the public option and with, among other things, issues regarding detention and civil liberties. While people can disagree on best tactics, there’s very little room for disagreement that if Democratic-aligned activists and organized groups don’t work to get Democratic politicians to care about these issues, it won’t happen.

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

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

  • The Smirking Chimp: The Economy Is Not A Board Game. By Dave Johnson. Excerpts: The elites who make policy, write about it, have dinner parties where they cluck their tongues about it, mostly have good-paying jobs, health care and secure retirements. They are not affected by it. The elite commissions don’t include unemployed people. The Congressional hearings don't hear from regular people. The news shows don't spend a lot of time talking to regular people. The newspapers don't run op-eds written by regular people because the corporate-conservative think tanks don't hire regular people regular people to write them.

    So the elites think about what is happening in the economy like it is a video game, a TV show, an academic exercise. ...

    Unemployment, low wages, union-busting, foreclosures, refusing to prosecute elites for real crimes -- all of these have real consequences for real people and for our country. This is not a board game. The elites should get their heads out of their board-game asses and look at what is happening out here in the real world that exists outside of DC and NY and the high-end malls.

    Just drive around the midwest, going from one former manufacturing town to the next. Jeeze, drive around Detroit. We are becoming a third-world country, except where the elites live. The elites would never let that happen where they live, and they move when it starts to happen. But they never fix it -- because it doesn't effect them, and because the rules of the board game say it can't be happening.

  • Washington Post opinion: Government is the solution. By E.J. Dionne Jr. Excerpts: Why don’t Democrats just say it? They really believe in active government and think it does good and valuable things. One of those valuable things is that government creates jobs — yes, really — and also the conditions under which more jobs can be created.

    You probably read that and thought: But don’t Democrats and liberals say this all the time? Actually, the answer is no. It’s Republicans and conservatives who usually say that Democrats and liberals believe in government. Progressive politicians often respond by apologizing for their view of government, or qualifying it, or shifting as fast as the speed of light from mumbled support for government to robust affirmations of their faith in the private sector. ...

    The case for government’s role in our country’s growth and financial success goes back to the very beginning. One of the reasons I wrote my book “Our Divided Political Heart” was to show that, from Alexander Hamilton and Henry Clay forward, farsighted American leaders understood that action by the federal government was essential to ensuring the country’s prosperity, developing our economy, promoting the arts and sciences and building large projects: the roads and canals, and later, under Abraham Lincoln, the institutions of higher learning, that bound a growing nation together. ...

    Decades of anti-government rhetoric have made liberals wary of claiming their legacy as supporters of the state’s positive role. That’s why they have had so much trouble making the case for President Obama’s stimulus program passed by Congress in 2009. It ought to be perfectly obvious: When the private sector is no longer investing, the economy will spin downward unless the government takes on the task of investing. And such investments — in transportation and clean energy, refurbished schools and the education of the next generation — can prime future growth. ...

    Yet the drumbeat of propaganda against government has made it impossible for the plain truth about the stimulus to break through. It was thus salutary that Douglas Elmendorf, the widely respected director of the Congressional Budget Office, told a congressional hearing last week that 80 percent of economic experts surveyed by the University of Chicago’s Booth School of Business agreed that the stimulus got the unemployment rate lower at the end of 2010 than it would have been otherwise. Only 4 percent disagreed. The stimulus, CBO concluded, added as many as 3.3 million jobs during the second quarter of 2010, and it may have kept us from lapsing back into recession.

    So when conservatives say, as they regularly do, that “government doesn’t create jobs,” the riposte should be quick and emphatic: “Yes it has, and yes, it does!”

  • The Fiscal Times: Romney’s ‘Jobs Plan’ Gets Hammered by Economists. By Merrill Goozner. Excerpts: Mitt Romney’s top economic advisers last week painted a clear portrait of the policy initiative the Republican presidential hopeful plans to use to restore robust growth to the U.S. economy. In a phrase: more tax breaks for business. ...

    The two advisers accused President Obama of failing to understand business when he said the president’s job is “not simply to maximize profits.” They said, “Jobs are sustainable only when profits are sustainable….The American economy was built on the profits earned by serving consumers, and it will only be saved by earning profits.”

    Gramm and Hubbard make an obvious point. Businesses that fail to make money not only don’t hire new employees, they dismiss workers when revenues fall. Business profits plummet in recessions and payrolls follow shortly thereafter.

    But to suggest that President Obama has somehow held back business profitability during what has been a tepid recovery from the Great Recession simply ignores what is taking place on corporate balance sheets. According to an analysis by Moody’s Analytics for The Fiscal Times, profitability in non-financial firms surged in recent quarters to 15 percent, a level not seen since the late 1960s.

    The rating firm’s survey of the 1,100 non-financial companies it follows also found that they were sitting on cash hordes in excess of $1.24 trillion last December. Apple alone was sitting on nearly $100 billion. The entire corporate sector had over $2 trillion in cash. Alas, robust hiring has not followed in the wake of surging profits. “Giving more tax breaks to corporations that are awash in cash is not going to lead to anything,” said Joseph Stiglitz, a Nobel Prize-winning economist at Columbia University after serving as President Clinton’s chief economic adviser and top economist at the World Bank. “It’s a lack of demand that’s really impeding investment.” ...

    Millions of Americans who never lost their jobs during the downturn have gone years without a raise. Others remain on short hours. If self-employed, they find less work. Millions more, especially in the public sector, are seeing sharp cutbacks in their pensions and benefits, which leads them to cut back on discretionary spending. Most householders have seen declines in their home values and retirement accounts, triggering a negative “wealth effect” that also holds down spending. ...

    New books such as Stiglitz’s The Price of Inequality: How Today's Divided Society Endangers Our Future and New Republic writer Timothy Noah’s “The Great Divergence: America’s Great Inequality Crisis and What We Can Do About It” paint the income gap as the major roadblock to renewed prosperity. They also say it is undermining democracy.

    The nation’s wealthiest citizens, unleashed by the Citizens United decision, are pouring enormous sums of cash into this year’s political campaigns. Last month, Romney outraised the president, the best campaign fundraiser the Democratic Party has ever known. “There is a connection between economic inequality and political inequality,” Stiglitz said.

  • Financial Times opinion: Why I was won over by Glass-Steagall. By Luigi Zingales. Excerpts: I have to admit that I was not a big fan of the forced separation between investment banking and commercial banking along the lines of the Glass-Steagall Act in the US. I do not like restrictions to contractual freedom, unless I see a compelling argument that the free market gets it wrong. Nor did I buy the argument that the removal of Glass-Steagall contributed to the 2008 financial crisis. The banks that were at the forefront of the crisis – Bear Stearns, Lehman Brothers, Washington Mutual, Countrywide – were either pure investment banks or pure commercial banks. The ability to merge the two types was crucial in mounting swift rescues to stabilise the system – such as the acquisition of Bear Stearns by JP Morgan and of Merrill Lynch by Bank of America.

    Over the last couple of years, however, I have revised my views and I have become convinced of the case for a mandatory separation. ...

    The third reason why I came to support Glass-Steagall was because I realised it was not simply a coincidence that we witnessed a prospering of securities markets and the blossoming of new ones (options and futures markets) while Glass-Steagall was in place, but since its repeal have seen a demise of public equity markets and an explosion of opaque over-the-counter ones.

    To function properly markets need a large number of independent traders. The separation between commercial and investment banking deprived investment banks of access to cheap funds (in the form of deposits), forcing them to limit their size and the size of their bets. These limitations increased the number of market participants, making markets more liquid. With the repeal of Glass-Steagall, investment banks exploded in size and so did their market power. As a result, the new financial instruments (such as credit default swaps) developed in an opaque over-the-counter market populated by a few powerful dealers, rather than in a well regulated and transparent public market.

    The separation between investment and commercial banking also helps make the financial system more resilient. After the 1987 stock market crash, the economy was unaffected because commercial banks were untouched by plummeting equity prices. During the 1990-91 banking crisis, securities markets helped alleviate the credit crunch because they were unaffected by the banking crisis. By contrast, in 2008 the banking crisis and the stock market crisis infected each other, pulling down the entire economy.

    Last but not least, Glass-Steagall helped restrain the political power of banks. Under the old regime, commercial banks, investment banks and insurance companies had different agendas, so their lobbying efforts tended to offset one another. But after the restrictions ended, the interests of all the major players were aligned. This gave the industry disproportionate power in shaping the political agenda. This excessive power has damaged not only the economy but the financial sector itself. One way to combat this excessive power, if only partially, is to bring Glass-Steagall back.

  • New York Times: In Era of Cheap Money, Consumers Are Shut Out. By Nathaniel Popper and Tara Siegel Bernard. Excerpts: Michael Shreve, a 57-year-old science teacher in Marysville, Wash., has watched helplessly as mortgage rates have fallen. He said that despite his stellar credit score, no bank had been willing to let him trade in his 6.35 percent 30-year mortgage because his house was now worth less than when he bought it. “At some point,” he said, interest rates are going to go up again, “and I should have been able to get those low rates. It’s not fair.”

    As interest rates have been dropping to new lows seemingly by the week, American companies have been taking advantage of the cheap borrowing costs, but consumers have been largely left on the sidelines. ...

    And as in the case of Mr. Shreve, the lack of borrowing by American families was not always by choice. Another recent Fed report shows that while more consumers are interested in buying homes or refinancing existing mortgages, banks remain hesitant to extend credit to them.

    Consumers are also getting squeezed on the investing front. Wary of the volatile financial markets and worried about the continued weakness in the economy, they have been putting more money into ordinary savings accounts, the new data shows. But those accounts are paying an average of 0.1 percent, according to Bankrate.com. ...

    But the new data underscores the polarizing impact of the central bank’s policy of pushing down interest rates on different segments of the American economy. While low rates are supposed to encourage Americans to take more risks, ordinary Americans have been unwilling or unable to take advantage of them.

    Policy makers have worried that, until Americans do show a willingness to borrow, the housing market is unlikely to get back on a solid footing. Through last year, the rate at which Americans were shedding debt was slowing, but in the first quarter it began to speed up again, ticking up 0.4 percent, the new Fed data showed. American businesses, by contrast, increased their debt by 5.2 percent in the first quarter.

  • New York Times: Family Net Worth Drops to Level of Early ’90s, Fed Says. By Binyamin Appelbaum. Excerpts: The recent economic crisis left the median American family in 2010 with no more wealth than in the early 1990s, erasing almost two decades of accumulated prosperity, the Federal Reserve said Monday.

    A hypothetical family richer than half the nation’s families and poorer than the other half had a net worth of $77,300 in 2010, compared with $126,400 in 2007, the Fed said. The crash of housing prices directly accounted for three-quarters of the loss.

    Families’ income also continued to decline, a trend that predated the crisis but accelerated over the same period. Median family income fell to $45,800 in 2010 from $49,600 in 2007. All figures were adjusted for inflation. ...

    Families with incomes in the middle 60 percent of the population lost a larger share of their wealth over the three-year period than the wealthiest and poorest families. One basic reason for this disproportion is that the wealth of the middle class is mostly in housing, and the median amount of home equity dropped to $75,000 in 2010 from $110,000 in 2007. And while other forms of wealth have recovered much of the value lost in the crisis, housing prices have hardly budged. ...

    Ranking American families by income, the top 10 percent of households still earned an average of $349,000 in 2010. The average net worth of the same families was $2.9 million.

  • BuzzFeed: Jeb Bush: No Place For Father, Reagan In Today's GOP The “dysfunction” is “disturbing,” says the former Florida governor. A pox on both parties. Excerpts: Former Florida Governor Jeb Bush said today that both Ronald Reagan and his father George H. W. Bush would have had a difficult time getting nominated by today's ultra-conservative Republican Party.

    "Ronald Reagan would have, based on his record of finding accommodation, finding some degree of common ground, as would my dad — they would have a hard time if you define the Republican party — and I don’t — as having an orthodoxy that doesn’t allow for disagreement, doesn’t allow for finding some common ground," Bush said, adding that he views the hyper-partisan moment as "temporary."

    "Back to my dad’s time and Ronald Reagan’s time – they got a lot of stuff done with a lot of bipartisan support," he said. Reagan "would be criticized for doing the things that he did."

    Bush cited, in particular, "the budget deal my dad did, with bipartisan support — at least for a while — that created the spending restraint of the ‘90s," a reference to a move widely viewed now as a political disaster for Bush, breaking a pledge against tax increases and infuriating conservatives. It was, Bush said, "helpful in creating a climate of more sustained economic growth."

  • Financial Times: Jeb Bush laments Republican partisanship. By Anna Fifield. Excerpts: Former Republican presidents Ronald Reagan and George H.W. Bush would have had difficulty being nominated by today’s more conservative GOP, according to Jeb Bush, the latter’s son. Republican politicians seeking office at any level, from the presidency to local school boards, are being forced to the right by the Tea Party movement, which takes a no-holds-barred approach to conservatism and bipartisanship.

    “Ronald Reagan would have, based on his record of finding accommodation, finding some degree of common ground, as would my dad – they would have a hard time if you define the Republican party – and I don’t – as having an orthodoxy that doesn’t allow for disagreement, doesn’t allow for finding some common ground,” Jeb Bush said at a Bloomberg forum on Monday, according to the website Buzzfeed.

    A former Florida governor who has dismissed speculation he might be picked as Mitt Romney’s vice presidential candidate, Jeb Bush described the highly conservative and partisan ways of the Republican party “disturbing,” but said it was only “temporary”.

  • Salon, courtesy of AlterNet: The Right's New Tactic to Pit the Middle Class Against Itself. A new kind of class warfare is emerging in the Heartland. By Dean Bakopoulos. Excerpts: The failed recall attempt of Wisconsin governor Scott Walker comes as no surprise to most of us liberals in the Midwest, though it still stings. It hurts not only because we failed to boot a corrupt and ruthless governor from the state capitol, but also because it underscores a more troubling phenomenon: A new kind of class warfare is emerging in the Heartland, and it is one the Republicans have been so good at orchestrating in order to win elections.

    In the Bible Belt, Republicans have long been able to divide working people (by that I mean anyone who depends on an earned paycheck to stay afloat) on social issues — gay rights and abortion. In the Rust Belt and Grain Belt, that’s been a bit harder, as there is a strong “live and let live” ethic in the Midwest. We like our neighbors and tend to accept, if not value, our differences. We also like our pulpits free of politics; we prefer preachers to be soft-spoken and potlucks are often more important than politics. The overwhelming support for President Obama in Wisconsin in 2008 (he won some very conservative rural counties) proved all that.

    What the deep pockets and political might of Scott Walker — and other Midwestern Republican governors — signal is a troubling new trend: There is now a new way for the rich, ruling class to use fear and envy to divide the American middle class, a strategy that doesn’t even need to use the traditional wedge issue of religion.

    As Wisconsin’s new political landscape so clearly indicates, conservatives have now managed to vilify plain old working people as elitist fat cats. Librarians, teachers, public employees, and union laborers: Basically, people who earn health insurance and decent wages have suddenly become the things that stagnate an economy and raise taxes, when in truth they, and those wages they enjoy, have been the lifeblood of a struggling post-industrial economy.

    But by declaring war on teachers, union laborers, and public sector employees, the well-heeled spinners behind the rise of Scott Walker have managed to make struggling Americans vote against their own best interests out of a sense of fear and envy. Struggling workers — and most comfortable middle-class workers — often to need an identifiable villain, someone who is holding them back from success, in order to vote Republican. If Republicans can present themselves as an enemy of that villain, they win. That’s what happened happened last night in Wisconsin. ...

    He is not the first Republican to suggest that this incarnation of the Republican party would not nominate Mr Reagan, who raised taxes and cut deals with Democrats on fiscal issues and immigration. Mike Huckabee, the former Arkansas and one-time presidential hopeful, has made similar comments, as has President Barack Obama. While criticising the environment created by the rise of the Tea Party over the past four years, he also blamed Democrats and Mr Obama for much of the “dysfunction”.

  • Wall Street Journal: Federal Deficit Narrows as Tax Receipts Rise. By Jeffrey Sparshott. Excerpts: Higher tax receipts and slightly lower government spending have narrowed the federal deficit for the first eight months of the fiscal year compared with a year earlier, Treasury Department figures showed Tuesday. ...

    The Congressional Budget Office is projecting the federal deficit will hit $1.2 trillion for the fiscal year ending Sept. 30, down slightly from $1.3 trillion a year earlier.

  • Wall Street Journal: Adelson Gives $10 Million to Pro-Romney Super PAC. By Alicia Mundy and Sara Murray. Excerpts: Mr. Adelson is chairman and chief executive of Las Vegas Sands Corp., which includes the famous Venetian casino in Las Vegas, as well as casinos in Macau and Singapore. Forbes Magazine has ranked him among the 10 wealthiest Americans with a net worth of more than $20 billion. ...

    On a trip to Las Vegas late last month, Mr. Romney and Mr. Adelson had a private meeting. Afterwards Mr. Adelson attended Mr. Romney’s dessert fundraiser for those who contributed $50,000 or more.

    Mr. Adelson has told friends that he intends to give at least $100 million to conservative causes and candidates this election cycle. He contributed some $250,000 to Republican Gov. Scott Walker of Wisconsin, who just won against a labor union-forced recall election there.

    But he has also told his friends and colleagues that he would prefer to keep his contributions under wraps in order to avoid controversy, and will likely focus donations mostly on non-profits affiliated with political PACS, which don’t have to disclose the names of donors. He is expected to donate to the conservative non-profit Crossroads GPS, which was founded by Republican strategist Karl Rove, a longtime friend of Mr. Adelson, according to Republican fundraisers.

  • Huffington Post: Sheldon Adelson Gives $10 Million To Mitt Romney Super PAC. By Paul Blumenthal. Excerpts: Casino billionaire Sheldon Adelson has given $10 million to Restore Our Future, a pro-Mitt Romney super PAC, according to the Wall Street Journal. The contribution makes Adelson the single biggest donor to the super PAC, which is allowed to raise unlimited sums from individuals, corporations and unions. Adelson and his family had previously pumped more than $20 million into a super PAC supporting one of Romney's rivals for the Republican presidential nomination, Newt Gingrich. After the former House speaker dropped out of the race, Adelson met with Romney in Nevada in late May.

    Restore Our Future has been a critical tool for Romney during his march to the Republican nomination. The group has raised more than $50 million, mostly in chunks of $500,000 or more from some of the wealthiest Americans, and spent more than $40 million during the Republican primary, almost entirely on negative ads attacking Gingrich and former Sen. Rick Santorum.

    Adelson's infusion marks the next stage for the super PAC as it pivots to target President Barack Obama. The billionaire's massive contribution signals that traditional GOP mega-donors will come out to fund the general election efforts of independent groups, from Restore Our Future to the Karl Rove-linked Crossroads groups, the American Action Network, the American Future Fund and others.

  • Connecticut Post: Blumenthal angered by defense contractor bonus. By Charles J. Lewis. Excerpts: WASHINGTON -- Sen. Richard Blumenthal, D-Conn., on Tuesday demanded that Northrop Grumman Corp. "explain to Congress and the American public" the bonus paid to one of its executives right before he quit to become a House Armed Services Committee staff member.

    Northrop, the parent of soon-to-close Norden Systems in Norwalk, paid Thomas MacKenzie a "severance and bonus" of $498,334 in 2011 before he joined the staff of the committee that oversees defense contracts, according to his annual ethics report on file in the House.

    "The company owes that explanation, particularly in light of its decision to close the Northrop plant in Norwalk,'' Blumenthal said. ...

    Blumenthal, a freshman member of the Senate Armed Services Committee, said MacKenzie's bonus "is totally inexplicable.'' At the least, Blumenthal said, "The perception is horrible, at a time when the credibility of Congress is certainly in question. I'm concerned about the integrity of the Defense Department budget if it is tainted by any whiff of a payoff.''

  • Washington Post opinion: Secret money fuels the 2012 elections. By E.J. Dionne Jr. Excerpts: For those who believe money already has too much power in U.S. politics, 2012 will be a miserable year. The Supreme Court’s Citizens United decision, lassitude at the Federal Election Commission and the growing audacity of very rich conservatives have created a new political system that will make the politics of the Gilded Age look like a clean government paradise.

    Americans won’t even fully know what’s happening to them because so much can be donated in secrecy to opaque organizations. It’s always helpful for voters to know who is trying to buy an election, and for whom. This time, much of the auction will be held in private. You can be sure that the candidates will find out who helped elect them, but the voters will remain in the dark.

    We do know that the playing field this year is tilted sharply to the right. Journalists often focus on the world of rich liberals in places such as Hollywood and Silicon Valley. But there are even more conservative millionaire and billionaire donors who hail from less mediagenic places. There is, for example, a lot of oil money in Texas. Then there’s Wall Street. Once a bountiful source of Democratic as well as Republican cash, it has shifted toward the party of Mitt Romney, John Boehner and Mitch McConnell. And then there’s Las Vegas casino mogul Sheldon Adelson, whose $10 million donation to the super PAC supporting Romney was reported Wednesday. ...

    What is to be done? The IRS could and should crack down on political committees legally disguised as “charities.” The Federal Election Commission and Congress could promote disclosure. The Supreme Court could undo its error, or we could do it by embarking on the cumbersome process of amending the Constitution. Ultimately, we need to democratize the money chase by providing, say, 5-to-1 public matches for small donations.

  • Huffington Post: Bill Moyers & Thomas Frank on Jamie Dimon and the Revolving Door Between Congress and Lobbyists (video). Description: Jamie Dimon and Wall Street's wholesale pillage of the American dollar is hot on everyone's mind right now (aka forever), and Bill Moyers wants to get to the bottom of it. Looming above the Dimon testimony to the Senate Banking Committee is the fact that everyone seems to know everyone—and that's not a coincidence. In advance of his airing this weekend, Moyers sat down with Thomas Frank, author of the book What's the Matter With Kansas?, and discussed the dangerously and disservicible intimacy between Congress and lobbyists.

    "This is what's called the 'Revolving Door.' This is how Washington DC works," explains Frank. "People go back and forth, typically from Capitol Hill staffs to working for lobby firms... that have to do with the interests that they used to work on... and then they go back and lobby to their former boss... That's how you get ahead in lobbying."

  • Washington Post: The Wall Street Senate. By Dana Milbank. Excerpts: JPMorgan Chase boss Jamie Dimon has been a scourge of the Obama administration in recent months, but when he appeared on Capitol Hill on Wednesday, Republicans found the head of the country’s largest bank to be alarmingly off-message.

    Dimon had little interest in joining Republicans in complaining that President Obama’s regulations destroyed capitalism as they knew it. In fact, he even had some kind words for the Dodd-Frank financial reforms. And the banker’s most passionate plea to the lawmakers was one that Republicans most emphatically don’t want to hear: Enact the Simpson-Bowles debt proposal, a package of spending cuts and — gulp — increased tax revenue that was largely scuttled by House Republicans.

    “If we had done something remotely like Simpson-Bowles,” Dimon said in response to Sen. Michael Bennet (D-Colo.) at the end of the hearing, “you would have increased confidence in America. You would have shown a real fix of the long-term fiscal problem. I think you would have had . . . a more effective tax system that is conducive to economic growth.” In fact, he said, not enacting such a plan “helped cause a downturn last year.”

    Ostensibly, Dimon went to Capitol Hill to be grilled about his bank’s loss of more than $2 billion on an investment strategy that amounted to a glorified game of craps. Members of the Senate banking committee were to determine whether stronger financial regulations would be needed to prevent such gambling. But tougher regulation is unlikely, given Wall Street’s bankrolling of panel members’ campaigns, and lawmakers acted as though they were wholly owned subsidiaries of JPMorgan.

  • Huffington Post: ...And the Poor Get Poorer. By Alan Grayson. Excerpts: The Federal Reserve just released its Survey of Consumer Finances, the only government survey of wealth in America. The Survey is conducted every three years. This survey, conducted in 2010, is the first one to reflect the effects of the Wall Street Meltdown in 2008.

    How does it look? Bad. Really, really bad.

    The median wealth of American families (meaning half above and half below) dropped from $126,400 in 2007 all the way down to $77,300 in 2010. That's a 39% slide. It puts the median net worth of American families at its lowest level since 1995, fifteen years earlier. ...

    Let me sum it up for you: In the greatest economic crisis that the United States has faced since the Great Depression, the rich barely lost a nickel. But the poor definitely got poorer. And people in the middle were crushed. If this continues any longer, then we can invite a priest to administer last rites to the American middle class.

  • Huffington Post: Carlos Slim, World's Wealthiest Man, Says Retirement Age For Regular People Should Be Bumped To 70. Excerpt: The world’s richest man says everyone should keep working into their golden years for the sake of the greater good. Billionaire Carlos Slim said that boosting the retirement age to 70 would help to prop up the world’s struggling economies, according to Mexican press reports cited by Forbes. The Mexican telecom mogul argued that the current retirement age was put in place during a time when the typical employee worked a more physical job and people died at an earlier age.
  • Washington Post opinion: What happens if America loses its unions. By Harold Meyerson. Excerpts: Are American unions history? In the wake of labor’s defeated effort to recall Wisconsin Gov. Scott Walker (R) last week, both pro- and anti-union pundits have opined that unions are in an all-but-irreversible decline. Privately, a number of my friends and acquaintances in the labor movement have voiced similar sentiments. Most don’t think that decline is irreversible but few have any idea how labor would come back.

    What would America look like without a union movement? That’s not a hard question to answer, because we’re almost at that point. The rate of private-sector unionization has fallen below 7 percent, from a post-World War II high of roughly 40 percent. Already, the economic effects of a union-free America are glaringly apparent: an economically stagnant or downwardly mobile middle class, a steady clawing-back of job-related health and retirement benefits and ever-rising economic inequality. ...

    When unions are powerful, they boost the incomes of not only their members but also of nonunion workers in their sector or region. Princeton economist Henry Farber has shown that the wages of a nonunion worker in an industry that is 25 percent unionized are 7.5 percent higher because of that unionization. Today, however, few industries have so high a rate of unionization, and a consequence is that unions can no longer win the kinds of wages and benefits they used to.

    Deunionization is just one reason Americans’ incomes have declined, of course; globalization has taken its toll as well. But the declining share of pretax income going to wages is chiefly the result of the weakening of unions, which is the main reason American managers now routinely seek to thwart their workers’ attempts to unionize through legally questionable but economically rewarding tactics (rewarding, that is, for the managers).

  • The Fiscal Times: Why Ronald Reagan Would Not Lead Today’s GOP. By Bruce Bartlett. Excerpts: This week, former Florida Gov. Jeb Bush, heretofore a pillar of the Republican Party, both for his successful governing record and family history as son and brother of presidents, came in for criticism from members of his own party. Americans for Tax Reform president Grover Norquist, who enforces party discipline on tax issues, attacked him for being a “yokel off the bus” who was echoing Democratic talking points.

    Bush’s sin? He suggested that the GOP had moved so far to the right and was so radically opposed to compromise of any kind that his father, George H.W. Bush, and Ronald Reagan couldn’t be nominated by the party today. As Jeb Bush put it:

    "Ronald Reagan would have, based on his record of finding accommodation, finding some degree of common ground, as would my dad — they would have a hard time if you define the Republican party — and I don’t — as having an orthodoxy that doesn’t allow for disagreement, doesn’t allow for finding some common ground." ...

    At the risk of being pedantic, here is a partial list of Reagan’s actions that would have him expelled for treason to conservative principles if he were running for president today.

    • As a Hollywood actor, Reagan had been the head of a labor union, the Screen Actors Guild, and was proud of the higher pay and benefits he negotiated for his members. As president, he praised labor unions, saying, “Collective bargaining…has played a major role in America's economic miracle. Unions represent some of the freest institutions in this land. There are few finer examples of participatory democracy to be found anywhere.”
    • Franklin D. Roosevelt was Reagan’s political hero and he voted for him for president 4 times. As president, he said, “F. D. R. was an American giant, a leader who shaped, inspired, and led our people through perilous times.”
    • As governor of California, Reagan signed into law the largest state tax increase in history up to that time. It increased California taxes by a third, including an increase in the top income tax rate. There were other tax increases as well, which raised the top rate to 11 percent from 7 percent when he took office, a 57 percent increase.
    • Reagan supported an increase in the capital gains tax to 28 percent from 20 percent as part of the Tax Reform Act of 1986. (Editor's note: It is now 15%.) ...

    Former Arkansas Gov. Mike Huckabee: “Ronald Reagan would have a very difficult, if not impossible time being nominated in this atmosphere of the Republican Party.”

    Rep. Duncan Hunter (R-CA): Reagan “would never be elected today in my opinion.” Other Republicans note Reagan’s commitment to compromise and working with Democrats to find solutions to pressing national problems. ...

    Former Sen. Chuck Hagel (R-NE): “Reagan wouldn't identify with this party. There's a streak of intolerance in the Republican Party today that scares people. Intolerance is a very dangerous thing in a society because it always leads to a tragic ending. Ronald Reagan was never driven by ideology. He was a conservative but he was a practical conservative. He wanted limited government but he used government and he used it many times. And he would work with the other party.”

    I worked for Ronald Reagan and believe he was a great president. But he was not a radical who made extravagant claims or sought to destroy government, as most Republicans appear willing to do today. He believed in conservative governance and getting things done, and if bending on principle was necessary, then so be it. I think Republicans would be better off emulating the real Ronald Reagan and less demanding rigid adherence to unachievable principles.

  • Huffington Post: 'Job Killer' Claims Usually Go Unsubstantiated: Study. By Arthur Delaney. Excerpts: The phrase "job killer" is rarely substantiated when it appears in news stories, according to a study published Thursday morning.

    The analysis, conducted by Peter Dreier of Occidental College and Christopher R. Martin of the University of Northern Iowa, examined every occurrence of the phrase or one of its variants, like "kill jobs" or "job-killing," in articles by the Associated Press, The New York Times, the Wall Street Journal and the Washington Post going back to 1984. Of the 381 stories that contained the phrase -- usually in a source's quote -- fewer than 10 percent substantiated it. ...

    The study noted that while legacy papers usually didn't bother to look into job-killing claims, other sources occasionally did, like when PolitiFact.com checked out whether the 2010 health care reform law was as "job killing" as Republicans said it was and found the claim false. It rested on a Congressional Budget Office report (PDF) that found that subsidies in the law would reduce available labor, since some poorer workers won't need to work as much in order to cling to health insurance. ...

    Dreier and Martin found the phrase pops up more frequently during elections and Democratic presidential administrations, with more than half of all mentions in the period studied occurring during Barack Obama's presidency. It is most frequently used by conservatives and business interests and is typically aimed at Democratic policies that would raise taxes or beef up environmental and consumer protections. The study found no correlation between the use of "job killing" and the national unemployment rate.

  • Senator Bernie Sanders (I-VT): A Petition to Support the Saving American Democracy Amendment. Excerpt: Sen. Bernie Sanders has proposed a constitutional amendment that would overturn the Supreme Court decision in a case called Citizens United vs. FEC.

    The Saving American Democracy Amendment states that:

    • Corporations are not persons with constitutional rights equal to real people.
    • Corporations are subject to regulation by the people.
    • Corporations may not make campaign contributions or any election expenditures.
    • Congress and states have the power to regulate campaign finances.
  • AlterNet: How the 1% Is Buying Our Democracy. A handful of very rich people plan to buy our elections. What happened to our democracy? By Bill Moyers and Michael Winship. Excerpts: You can start a super PAC on your own or contribute to one that already exists. Super PACs are available for every kind of race – presidential, congressional or statewide. But there are other ways you can help buy an election. Look at the Wisconsin recall campaign of Republican Governor Scott Walker. At least fourteen billionaires rushed to the support of the corporate right’s favorite union basher. He outraised his Democratic opponent, Milwaukee Mayor Tom Barrett, by nearly eight to one. Most of his money came from out of state. More than $60 million was spent, $45 million of it for Walker alone. ...

    Wisconsin billionaire Diane Hendricks contributed more than half a million dollars on Scott Walker’s behalf. Her late husband built ABC Supply, America’s largest wholesale distributor of roofing, windows and siding. Fearful the United States might become “a socialistic ideological nation,” she’s an ardent foe of unions and, in her words, “taxing job creators.” True to her aversion to taxes, she paid none in 2010, despite being worth, according to Forbes magazine, about $2.8 billion.

    Before he launched his crusade against the collective bargaining rights of working people, Governor Walker had a conversation with Diane Hendricks, in which she asked, “Any chance we’ll ever get to be a completely red state and work on these unions… and become a right to work [state]? What can we do to help you?”

    Walker replied, “We’re going to start in a couple weeks with our budget adjustment bill. The first step is, we’re going to deal with collective bargaining for all public employee unions, because you use divide and conquer.” And so he did. ...

    In Texas, Bob Perry is known for his cozy relationship with the state’s Supreme Court. He once gave money to every one of its nine elected judges. And guess what? Those same nine judges later overturned an $800,000 judgment against his building company for faulty construction. Bob the Builder, who’s naturally eager for help in the cause of tort reform — that is, making it hard for everyday people to sue corporations like his for malfeasance — has so far given four million to the pro-Romney super PAC, Restore Our Future, and millions to Karl Rove’s American Crossroads super PAC. ...

    Let’s not forget cowboy billionaire and born again Christian, Foster Friess, Rick Santorum’s moneyman, who told us about the good ol’ days when women would “use Bayer aspirin for contraceptives. The gals put it between their knees and it wasn’t that costly.” And Louis Moore Bacon, the billionaire founder of the hedge fund Moore Capital – which in 2010 was fined $25 million for attempted commodities manipulation. A big backer of Romney, he, too came to Walker’s aid in Wisconsin. ...

    We could go on and name more, but you get the picture. These are the people who are helping to fund what the journalist Joe Hagan describes as a “tsunami of slime.” Even as they and their chosen candidates are afforded respectability in the value-free world of plutocracy, they can hide the fingerprints they leave on the bleeding corpse of democracy in part because each super PAC comes with that extra special something every politician craves: plausible deniability. When one of their ads says something nasty and deceitful about an opponent — when it slanders and lies — the pol can shrug and say: “Not my doing. It’s the super PAC that’s slinging the mud, not me.”

    And that’s how the wealthy one percent does its dirty business. They are, by the way, as we were reminded by CNN’s Charles Riley in his report, “Can 46 Rich Dudes Buy an Election?” almost all men, mostly white, “and so far, the vast majority of their contributions have been made to conservative groups.” They want to own this election. So if there are any of you left out there with millions to burn, better buy your candidate now, while supplies last.

  • Crooks and Liars: McCain Calls Supreme Court 'Uninformed, Arrogant, Naive' for Citizens United. Excerpts: Former Republican presidential nominee John McCain says he's "worried" that billionaire Sheldon Adelson, who reportedly may contribute up to $100 million in support of GOP hopeful Mitt Romney, and others could have an undue influence on elections as a result of the Supreme Court's Citizens United decision.

    "I'm not only worried about him, I'm worried about many others," McCain told NBC's David Gregory on Sunday. "I've always been concerned about the labor unions who take money from their union members and without their permission, contribute to causes that they may not support. So am I concerned about the incredible amount of money that's washing around? Yeah."

    "Sheldon Adelson makes money from a foreign casino as well," Gregory noted. "You said this week it's tantamount to foreign money getting into the [Romney] campaign."

    "I think there will scandals as associated with the worse decision of the United States Supreme Court in the 21st century," McCain explained. "Uninformed, arrogant, naive. I just wish one of [the justices] had run for county sheriff. That's why we miss people like [former Chief Justice] William Rehnquist and [former Justice] Sandra Day O'Connor, who had some experience with congressional and other races."

  • Business Insider: These 6 Corporations Control 90% Of The Media In America. By Ashley Lutz. Excerpts: This infographic created by Jason at Frugal Dad shows that almost all media comes from the same six sources. That's consolidated from 50 companies back in 1983. ...

    But the fact that a few companies own everything demonstrates "the illusion of choice," Frugal Dad says. While some big sites, like Digg and Reddit aren't owned by any of the corporations, Time Warner owns news sites read by millions of Americans every year. Here's the graphic:

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

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