I live only thirty miles from Aurora so the tragic deaths and injuries suffered at the Batman midnight movie hit close to home. I offer my heart-felt condolences to the victims, their families, and the community of Aurora as a whole. I cannot begin to understand the pain and grief of the victims, and their friends and family. I am thankful for the public servants, our police, firefighters, emergency medical service professionals, and the doctors and nurses who have cared for the victims and their families. I hope and pray for the day when these kinds of tragedies cease to occur.
If you work from home that connection with co-workers rarely exists and without the Alliance you are left in the dark.
To IBM workers the message is clear: no one in Armonk is listening or cares about your concerns.
The concern of corporate executives is to maximize profit for the benefit of corporate officers and large stockholders. Welcome to "Roadkill 2015".
So who can you turn to? You turn to the Alliance@IBM, the only organization that advocates for IBM workers and exposes what is really going on inside IBM.
It is the Alliance that notifies IBM employees, the media and government when resource actions are taking place.
IBM no longer does that.
It is the Alliance that reports the number of IBM employees in the US, now at 94,000 and declining.
IBM no longer does that.
It is the Alliance that reports the jobs being offshored and actively fights for workers job security.
IBM hides the fact that they are offshoring jobs, makes you train your offshore replacement, then fires you.
It is the Alliance job cut reports board that gives employees needed information (and some venting) as job cuts happen and new job cut schemes are developed by IBM HR.
It is the Alliance that talks about the real issues affecting workers inside IBM.
IBM tells you to keep quiet if you value your job.
It is the Alliance that takes action and speaks to political leaders about legislation that impacts IBM workers and IT workers.
IBM tells political leaders to change laws to benefit the corporation not workers.
The Alliance is here, and has been since 1999, and we will not be quiet.
If you want an advocate for your concerns then join us and be part of the movement to gain dignity and respect for IBM workers
Join us to and help spread the word that the Alliance is YOUR voice inside IBM.
Membership is confidential. IBM will not see your name. Join at our web site today www.allianceibm.org
I've spoken to so many nervous, on-edge, worried people. Unlike the 1991-1994 mass-firings there will be no pause in the action this time. Get your head out of your laptop for a minute and take a walk down the hall. You're working so hard, you are incredibly skilled, experienced, talented, ingenious, dedicated and loyal, yet, in the end, your career and future benefits are mere cannon-fodder to our IBM's upper management unless more of us band together and join the Alliance.
If you are nearly retired, join anyway, you will need the help of the Alliance to protect your pension, your benefits, and the rest of your career. IBM management is not "IBM". We the employees are IBM. We are not a mere resource, we ARE the IBM company!! Paul Sutera
The foreign workers — who are physically located at state agency offices in Albany but work for an Indian subsidiary of IBM — have been key to the success in IBM being awarded massive amounts of state business, such as a $52 million contract with the state Department of Labor to upgrade its unemployment insurance system.
Although it is unclear exactly how many foreign workers IBM employs at state agencies, the company's Indian subsidiary, IBM India Private Ltd., has been the most active company in the Capital Region bringing in foreign workers using the federal government's H1-B visa program.
Since 2010, IBM has secured nearly 350 H1-B visas for foreign workers in Albany — most of whom are computer programmers and analysts making between $60,000 and $70,000 a year, according to data from the U.S. Department of Labor. ...
IBM spokesman Michael Corrado has repeatedly failed to respond to questions from the Times Union about how many workers IBM India Private Ltd. employs at New York state agencies. IBM has been sensitive to the issue of outsourcing and replacing workers in the U.S. with those from India and elsewhere as it has come under fire from labor groups about the practice. As a company policy, IBM will not reveal how many employees it has in any particular location — even how many workers the Westchester-based company has in New York state.
Using campaign fund contributions, IBM managed to get huge amount of NY tax payers money to do business in NY as usual which is considered OK by the employed IBMers under new capitalism.
But I still think that these crony capitalism is still alive because majority common working class voters are careless and think that it will not affect and will hurt to them.
Staff aside from those in the outsourcing delivery unit may also be facing cuts, including employees from the Software Group in the UK and Ireland.
IBM is doing well considering the global economic conditions - but bosses appear to desire increased productivity and improved profit margins. In order to achieve these, IBM told its people that redundancies were likely to be a part of the consultation. ...
The tech giant has continued to make good profits throughout the economic doom and gloom, but its roadmap demands that the company hits at least $20 earnings per share by 2015. IBMers have complained that the target is being achieved by killing raises or laying off staff. ...
Asked for comment on the looming redundancies, Big Blue representatives told The Reg in an emailed statement:
"Change is constant in our industry and transformation is a permanent feature of our business model. Consequently, some level of workforce remix is an ongoing part of our business. Given the competitive nature of our business, we do not publicly discuss the details of our staffing plans."
Selected reader comments follow:
If you listen to the financial reports. IBM's sales are down. With respect to consulting, you don't look at current quarter's revenue, but the size of the backlog. And guess what. Its down 6% when you look at it in terms of US currency.
Then when you add in flat to down in SWG. Sorry, IBM isn't growing.
The only way they are making the profits is in making higher cost employees redundant and buying back stock so that the earnings per share looks more attractive. (You're shrinking the float w the buy back.)
James has it right. Senior execs want to hit their incentive targets at the expense of the longer term outlook for the company.
What do they care? They will be able to retire on their bonuses alone.
Europe has known these redundancies were coming as earlier this year they said (and I'm paraphrasing), "We've allocated this cash to make European staff redundant." Guess where the jobs are going? That's right India and China.
I know a few folk who left during the last round of redundancies and they all walked into jobs with better pay. I intend to do exactly the same this time. Bring it on.
Of course, those who went turned out to have been needed so they were replaced with people with less experience and fewer skills, at more competitive salaries. Pay day for recruiters.
Still, there's probably a good few years worth of assets to strip before the bubble bursts.
In a four-month string of increasingly frustrated emails to IBM officials, obtained by the American-Statesman through an open records request, city officials paint a picture of missed deadlines, broken promises and general shoddiness on the company's part. ...
Austin Energy, which handles all city utility billing, says most of the problems with the $55 million system have been fixed or are being worked around — largely thanks to additional city staffers hired on the public dime — and that newer difficulties are of the internal record-keeping variety.
Utility executives say that between the billing system's problems and the additional staffing, Austin has lost more than $8 million at last count.
"I understand for a multibillion dollar (company) that may not be a significant loss, but to the citizens of Austin and our small $1 billion (electric utility), these losses are very significant," Alan Claypool, Austin Energy's chief information officer, wrote in a mid-June email to Julie Romero, director of energy and utilities for IBM Global Application Services.
A month later, Claypool wrote to Bridget van Kralingen, an IBM senior vice president: "We have grave concerns this passive-aggressive culture ... is prevalent in the IBM operations and the City of Austin will continue to suffer financial losses as a result." ...
It's not clear how Austin's partnership with IBM will end, given the tensions, but both sides said they hope the project will be finished in the near future. "What we don't want is what happened with the state and Cleveland," which also had problems with IBM implementing the same billing system, Claypool said in a Friday interview. "It has not been easy, but we feel IBM will get the job done."
IBM said in a statement Friday: "As is the case in any large-scale change program, there are shared responsibilities and accountability for outcomes. It is important that Austin Energy carries out its responsibilities under the project plan requirements to ensure the success of this implementation." IBM did not elaborate on those responsibilities. ...
The tensions were evident in a three-page email exchange between Claypool and IBM's Romero. Claypool notes on June 11 that city officials were concerned with "no timelines, project information, estimates, etc." for finishing the work. "It now appears IBM, again, will not make a due date, thereby continuing the losses" for the city.
Romero replied that the city had misassigned work and had not verbally agreed to many of the terms and schedules Claypool said IBM employees had: "Regarding your statement that the city has suffered $8 million in losses ... we have no facts of or insights to evaluate your statement, nor would it be appropriate or productive to do so. Many of the implementation challenges we experienced were expected and typical for a system of this nature. ... The city has been conducting its business on the system since October 2011 and has recognized numerous benefits."
To which Claypool replied as part of a longer email: "We can provide you the very detailed loss statements if IBM is interested in providing a rebate to our citizens."
But earnings topped forecasts as Big Blue benefited from rising profit margins in its global services unit, and the company raised its full-year earnings forecast. The news was enough to extend a stock price rally that had been felt across the technology sector earlier in the day, adding a further 3 per cent to the company’s share price in after-market trading.
Mark Loughridge, chief financial officer, sought to shift attention away from the broader economic environment as he stressed the resilience of IBM’s business model in producing steadily rising earnings and cash flow despite the conditions.
Senators voted 56 to 42 to proceed to final consideration of the Bring Jobs Home Act, falling short of the 60 votes necessary in order to proceed. The White House expressed strong support for the measure, which is packed with proposals from Senate Democrats facing reelection and eager to demonstrate efforts to shore up the nation's struggling manufacturing sector.
The bill would eliminate tax deductions that companies may take when moving workers and equipment overseas, but establish a new 20 percent tax deduction for companies that do the reverse.
Republicans objected to the bill in part because Senate Majority Leader Harry M. Reid (D-Nev.) blocked GOP amendments to the bill, including a proposal to repeal the 2010 health-care reform act. Senate Republicans this month also attempted to amend a small business tax cut bill with language repealing the health law. Some GOP senators also complained that Democrats bypassed the normal committee process and quickly introduced the bill for election-year political purposes.
Democrats note that roughly 2.4 million American jobs have been transferred overseas in the last decade as global firms outsource more positions to cheaper markets."
The source also admitted that the real IBM workers, not the manager-types, will do more than expected of them on their, ahem, 'days off'. They won't relax, they will continue to be good, loyal, hard-working IBMers until the bitter end.
So IBM will get from the real IBMers exactly what they planned when they came up with this Roadkill Map to nowhere.
It remains to be seen what genius diabolical plan IBM has next in store for the real IBM troops, who by the way need a written contract. Hopefully, it will be before the next mind game.
I worry especially because they were the quiet worker-bee geniuses that got fired in a massive R/A and the number as I recall was closer to 10,000 IBMers who lost their careers, and up to 3000 contractors.
I like to think most IBMers did the math and were not fooled into thinking this was a good deal money-wise. I hope they did it for the right reasons but for some it was a poor choice, of running scared and opted for the no-man's land of a holding pen rather than be put out to pasture.
Maybe if I took the TTRP, I would just spend a whole day reading those business conduct guidelines, and just read the government section too, you never know if you are going to get a Federal account. You already did a great job being Lenovo's testers for some of the crappiest laptops T-60 being about the worst. Enjoy the transition, just don't look too happy :-).
It is amazing how much "overhead" there is in IBM that does not contribute to the bottom line. I use to do those non-value task on the weekends and nights and not I need to cram them all in T-Th.
For over 3 decades, my job was my priority. I had a work ethic. Of course, I balanced my real life, but my job came first, so if I had to be on the road at midnight, at my own expense, I was. I didn't mind, because my customers appreciated it, and so (I thought) did IBM. One or two of my managers actually did, but they weren't lying scum like my last manager and her lackey team leader.
I enjoyed my work and until 1999, I thought IBM valued me. Silly me. In 1999, IBM screwed me. But you know all that.
So, when I started working for the manager and team leader from hell, and had to be available around the clock, seven days a week, I was. Was I appreciated? By my poor customers, yes. But not by IBM or my manager from hell or her lackey team leader. Was I compensated? Guess.
But again, because of MY work ethic (unlike some who took the Roadkill Map), I still gave 110%. It took a toll on me, on my health, and on my life. But I decided to hold out until I got severance, and even though I was part of the mass Black Thursday firing at IBM, I wasn't ready to go and I didn't like the way my gutless manager fired me - over the phone. And when I told her so, she had her lackey team leader threaten me on her behalf.
But hey, that's neither here nor there. Life is better after the evil that is IBM, but I hope I've helped you understand why some aren't able to slack off at IBM, whether on full pay or on the Roadkill Map plan.
Isn't it nice not being at IBM anymore? Don't you feel badly for those who still are and are under the pressure that the evil that is IBM still exerts on them? Don't you hope they wake up and get a WRITTEN contract?
Can you think of any other company that is so greedy that they promise a doubling of EPS in 5 years without a blip in revenues? And this lofty but empty goal will be fulfilled by smashing lives.
Great for me, that I saved, but I FEEL for the others. There's a guy in my town, lost his job in Jan 2009, smart guy figured out some technical stuff that was giving me fits. Not the most outgoing guy. I see him with his daughter, in town, buying her a taco. No dinners out for him, cut off at the knees, a degree in engineering, top-flight technical guy, thrown out of job just so Sam Palmisano could show rising profits without organic growth of the company. And for what? How's the world economy look after all those record firings/profits? Pretty shaky. Don't get too comfortable, we already saw 401Ks drop to 211Ks. Don't think that the Stable Value (it now has a different name) is guaranteed income for life.
These people at the top must be fought with our every last breath. Lest they send the economy, our savings, our pensions into a tailspin the likes of which we haven't yet seen. Enjoy your life, do your thing, retire if you want to, but recognize that greed and hubris is an unquenchable evil that you can't turn your back on just because your nest egg looks good. The barbarians are at the gate, human history is full of pillage and plunder.
Your choices could be affected by whether you have health coverage from a current employer, are covered by a spouse's plan or have retiree health coverage from a former employer. Changes under the Obama health-care overhaul have made Medicare more attractive, which also could influence your choices.
If you aren't careful, you could face a gap in coverage and pay higher premiums, potentially costing you thousands of dollars.
The Medicare website provides the details, but it contains so much information that it can be difficult to navigate. Here is the very least you need to know, along with what you should expect if you still are working when you file.
That is the tricky choice thousands of former General Motors Co employees must make by July 20. It is also a decision that many more workers will make as other companies move expensive pension plans off their balance sheets. Rival Ford Motor Co, for example, will begin offering pension buyouts this summer to 98,000 white-collar retirees and former employees who are vested in its pension, potentially cutting roughly one-third of Ford's U.S. pension liability.
Cons: Where do I start? As a writer, I had shoddy equipment, was subject to endless red tape and having to get access to a succession of restricted areas to do my job.
I was stuck in a team that regarded promotion as just not feasible - my manager actually laughed at a colleague of mine who asked her how she would go about getting a promotion. Our team passed information down the line only when absolutely necessary; very frustrating.
Oh, and then there's that atrocious IBM software - Lotus Notes and Symphony - which we had to use. Nobody in their right minds would choose them over the MS alternatives.
Finally, there's the PBC system, on which salary increases and, indeed, one's job ultimately depend. Managers are forced to choose a certain number of employees as under-performing, regardless of whether they're actually doing their job properly. This selection is on a competitive basis, but employees are not allowed access to information on how the decisions are made.
Advice to Senior Management: Drop the PBC system, which causes stress and resentment. Drop Lotus Notes and Symphony if you're not going to improve them - they're an industry joke. Have a more transparent system for advancement.
Cons: – Corporate leadership has become focused on shareholder satisfaction and profit to a fault. Low pay with virtually no possibility for increases. History has shown that annual raises are nearly extinct. Internal employees are not even compensated when moved into positions of higher responsibility and salary grade. IBM expects employees to take new positions at their existing salary and band regardless of the nature of the job role. It is an amazingly ridiculous practice but seems to be deeply ingrained in management. Over worked and underpaid sums it up.
IBM's goal is to develop its operations in developing nations where cheap talent is plentiful while reducing its workforce in the United States. It is sad that a company that owes its early success to the New Deal is selling out Americans for corporate greed.
Cons: – Like every big company they have process, too many ... I heard it was one of the worst. It is really boring to follow every steps, to have to fill tools with information, to get approval for every € spend. There is also a lake of creativity, we do every the same kind of event and activity, because of all the process we don"t have enough time to create. And we work a lot with agencies which are here to deliver creativity. The do not hire even if you succeed being the best of your open space...no way. When you arrive you really have to be proactive, work don't come by itself you must look for it, ask for it. My experience is great as I said but many of my fellows are disappointed, they do nothing or uninteresting tasks as excels files, they are really bored. As an apprentice we are really not paid well 1100...
Advice to Senior Management: – I am really well managed, everything was explained to me when I arrived and after. But It's so not the case of the other trainees or apprentices, they are quite alone, they have someone to manage them who is appointed but they often don"t have time to care about the new one. They really should be aware of where are the needs in order to not waste an apprentice / trainee.
Aside from the more publicly known parts of this bill, it also reduced the amount that corporations pay into an already grossly underfunded pension system. The way it achieved this is with a complex equation factoring in interest rates, changes in how businesses calculate what they must contribute to retirement premiums, and how these contributions are tax deductible. The end result of this opaque process of number crunching is that, according to the Society of Actuaries, employer pension contributions will be reduced overall from a mandatory $80 billion to $45 billion this year alone. Next year this amount will be slashed by $73 billion. ...
It is another example of a pattern of how politicians have enabled corporations to minimize their responsibility towards their employees’ pensions to the point where the entire system is in danger and the dream of a comfortable retirement is approaching collapse. ...
There are numerous examples of how big business and their two parties, the Democrats and Republicans, have colluded to erode their legal responsibility to fund pensions.
The Pension Protection Act of 2006 enabled pension funds to partner with high-risk speculators, resulting in massive loses to the system in 2008-2010. Corporations have been allowed to declare phony bankruptcies in order to dump their pensions on the PBGC. They are also allowed to divert funds that should go into pension funds towards covering health care costs as well as buying back company stocks and making dividend payouts to stockholders. The list could go on for the ways the political system lets the corporations off the hook at the cost of threatening workers' retirement. The effect of these measures is to starve the pension system in order to fatten corporate profits. ...
Earlier this week, I covered the topic of why this new pension law is worrisome as it will only accelerate the inexorable trend toward pension poverty. Democrats and Republicans are united when it comes to bipartisan pandering toward their corporate masters. President Obama basically 'pulled a Mitt Romney' and not one major news channel reported on this bill.
Desperate budget officials often see public pension funds as an almost irresistible pool of money. One common way of “borrowing” pension money is not to make each year’s “annual required contribution,” the amount actuaries calculate must be set aside to cover future payments. Despite its name, there is usually no enforceable law requiring that it be paid. ...
The report highlights a big part of the reason behind the pathetic state of state pension funds. Desperate public officials often see public pension funds as an almost irresistible pool of money, borrow from these pensions and neglect topping them up. The compounded effect of such actions has led to massive pension shortfalls.
By the way, before you condemn this as yet another example of public profligacy, let me remind you that things aren't better in the private sector. The WSJ reports that S&P 500 companies posted a record level of underfunding for pensions and other post-employment benefits in 2011. Defined pensions were underfunded by $354.7 billion in 2011, an increase of over $100 billion from the end of 2010.
During the good years, companies used investment gains from their pension plans to pad their earnings and outright steal from pensions, but now that option has vanished. With interest rates hitting record lows, pensions have become a liability, prompting companies to cut them or offload the risk to insurance companies. ...
After reading the above, you shouldn't be surprised that pensions are under attack in America. Once again, it is the common worker in the private and public sector that gets royally screwed as companies and states look to trim "soaring" pension costs.
And if you ask Robert Benmosche, AIG's CEO, there is no retirement crisis. All you have to do is raise the retirement age to 80 and we can fix the problem. Luckily, much wiser and more informed academics are sounding the alarm, pleading for new thinking on the retirement crisis.
Insourcing IT on that scale will require GM to go on a hiring binge for software developers, project managers, database experts, business analysts, and other IT pros over the next three years. As part of that effort, it plans to create three new software development centers, all of them in the U.S. IT outsourcers, including GM's one-time captive provider, EDS, face the loss of contracts once valued at up to $3 billion a year.
This dramatic move away from outsourcing is just one piece of the "IT transformation" Mott is leading, which includes consolidating data centers and applications, centralizing IT planning and execution, and getting a better grip on GM's customer and production data. GM's IT transformation doesn't emphasize budget cuts but instead centers on delivering more value from IT, much faster. In many ways, the foundation Mott is laying is similar to the one Ford started laying four or five years ago as part of its One Ford/One IT initiative.
One story early on was about financial advisors trying anything to get names of eligible folks. The advisors want to offer to invest the lump sum so they can earn a management cut each year. Almost like sharks circling the chum.
The Detroit Free Press reports that those who have analyzed the GM lump sum offers versus the annuity conclude that it is not possible to use the lump sum to purchase open market annuities that pay as much as the annuities GM is buying from Prudential.
There are some folks planning to take a lump sum and purchase an annuity in the future after interest rates have increased. Assuming they don't need the income now and can avoid touching the lump sum, this may pay off. (My personal belief is that interest rates must go up some day, but I have no idea when and by how much.)
While the idea of suddenly having a large sum of money is tempting, this is a decision that you will have to live with for the rest of your life. Any retiree who accepts the lump sum offer will immediately lose the benefits of a lifetime income and will be responsible for taking care of their own investments and making sure the money lasts through retirement.
Most experts say that, for most retirees, a guaranteed stream of income for life is a better option than a lump sum. The only situations in which a lump sum should be seriously considered are...
Understandably, after years of serving the company and being promised a pension for life, many of these retirees feel frightened, betrayed and confused. GM's decision to off-load their pension plan has put this group of retirees in the agonizing position of having to make a decision that will impact them for the rest of their lives, at a time when they are most vulnerable. While anger and distrust might fuel the temptation for retirees to take the lump of cash and run, the reality is that taking the annuity will be the far better and safer option for most retirees.
Studies show that retirees with ongoing monthly pension payments are more secure than those without them, better able to pay for housing, health care and daily necessities. Also, those with predictable monthly income, unaffected by the whims of Wall Street, can sleep better at night knowing that they have a stable income for life, no matter how long they live, and that their spouse will be protected, too.
"But it seems clear that if retirees want security, they should stick with the monthly lifetime payments and say "no" to the lump sums."
Here's hoping that they, like the Second Choicers who knew they were being bamboozled in 1999, say NO to the lump sum. A choice that was given to the Second Choicers, lest anyone forget, only through the efforts of Janet et al.
Whatever their choice, heaven help them all, and us, when IBM tries out this scam on the retirees.
Ms. Miller spent much of the past half-century organizing women in the workplace and within unions that, in her view, had long neglected the particular needs of female members, such as wage parity, parental leave and child-care services.
She was a committed feminist but, she insisted, a trade unionist first. “There is no greater road to equality,” she said, “than to be covered by a union contract.”
Arther Laffer, in an op-ed today titled in the paper (but not online), State's fix: Cut tax rate, enact right-to-work law, gives us the old "make us more business-friendly" argument. Apparently if we become more like China -- China is very "business-friendly" -- and give business owners everything they want, the businesses will move to put-name-of-state-here. (Except, we won't benefit because the environment will suffer, we won't have a say, and a few at the top end up with everything.) ...
My local newspaper, like most, regularly feeds its readers these right-wing "you should work for less so the rich can be even richer" and "if you tax the rich you won't have jobs" op-eds. They also feed readers a steady diet of "public employees make too much money and shouldn't get pensions." Since the alternative viewpoint is almost never presented, people over time come to accept it. ...
(*A "right-to-work" law out to be named a "law-that-lowers-your-pay" because it weakens unions, keeps them from collecting dues, and other restrictions. Several southern states have used these laws to break up unions and now Republicans in several other states are passing them. The result of the decline of unions has been a decline of wages and benefits, and the hollowing-out of the middle class.)
I know - I've worked for both IBM and for two IBM partners.
So, don't believe that they respect their employees; don't believe that they will assign an employee to projects that will use the employee's skills; especially don't believe that they don't require 100% travel. Honestly, depending on the partner firm, don't believe that they will pay your salary as agreed. Especially steer clear of Section 8(a) stars firms, who are small, disadvantaged firms. Do not believe what they say - the person listed as the CEO or owner will stop by the office for an hour or so on Monday, just to check timecards. Also, don't claim actual hours worked, even if you have an hourly contract.
I'm not sure whether this is an argument to stay with IBM - if you have the option - or just a reflection of how the job market works today. Regards. -IBM Partner-
Want to know whether your health insurance company is required to provide a rebate? Today, on HealthCare.gov, we’re launching a new tool that will allow you to enter your state and health insurance company information and see the average rebate your insurer is required to pay. See the sample screenshots below...
Selected reader comments follow:
Though the law is projected to raise more than $800 billion in taxes, fees and penalties over a decade, 40% comes from about 3.5 million households with adjusted gross incomes above $200,000. Employers, insurers and health care providers are slated to fork over much of the rest.
That leaves only a few taxes that will fall partially on middle-income taxpayers...
Now that the Court has upheld healthcare reform, entrepreneurs have moved on to spluttering threats about how they plan to gum up the works in 2014, when healthcare-reform provisions compel them to either offer health insurance to workers or pay a penalty. ...
Smart business owners will be gathering all the facts they can to figure out how to make this change work for them. Smaller businesses — those with fewer than 50 full-time workers — are exempt from the penalty. If that’s you, you could stand out by offering coverage nonetheless, or perhaps leverage that economic advantage to gain some ground against bigger competitors.
No question there will be winners and losers here — and the smart business owners are expending their energy now figuring out how to come out on the up end, not issuing threats.
More people with healthcare — which is what happened with Massachusetts’ healthcare law – means fewer sick days for workers. It should mean more healthy customers, too.
Nobody’s factoring that upside into the equation when they bluster about how healthcare reform will be the death of their business.
A quarter of the residents of Texas, 6.3 million people, are uninsured, by far the highest percentage in the country. (That number includes more than a million children.) Texas ranks last in prenatal care and finished last on a new federal assessment of overall health quality that examined factors like disease prevention, deaths from illnesses, and cancer treatment.
Yet Gov. Rick Perry — strangely puffed up as he was so often in his presidential bid — recently told the Obama administration that he would proudly refuse a huge infusion of Medicaid money that would significantly reduce those shameful statistics and cover 1.7 million more people. The same indifference to suffering that pushed Texas to the bottom is now threatening to keep it there. ...
Many mainstream Republican governors are taking a different approach. In a letter to the president last week, Gov. Bob McDonnell of Virginia, the chairman of the Republican Governors Association, said states should think carefully before they reject Washington’s money. Though he remained quite critical of health reform and Medicaid, he also noted that refusing the expansion would create “a significant gap in coverage” for low-income people.
For now, at least, Virginia recognizes an obligation to its weakest citizens. It’s time for Texas, Florida, South Carolina, Wisconsin, Iowa and Louisiana to do the same.
The Issue: The aging of the U.S. population is posing challenges to the Medicare program. Policymakers have proposed a variety of measures to reduce spending, including shifting beneficiaries to a defined contribution plan. Commonwealth Fund researchers argue that when exploring options for sustaining coverage for the 65-and-older population—as well as for expanding coverage for those under age 65—policymakers need to consider the experiences of people covered by Medicare, employer-based health plans, and individual market plans. In this study, the researchers used data from the Commonwealth Fund 2010 Health Insurance Survey to compare individuals’ experiences.
"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.
New Federal Reserve data analyzed by both Allegretto and Josn Bivens at the Economic Policy Institute shows that the Waltons now hold as much wealth as the bottom 40 percent of Americans combined. ...
At the same time that the Waltons have amassed an ever larger fortune, Congress decided to cut the estate tax, a policy for which the Waltons have been pushing for years. And now that the estate tax cut is in place, conservatives are doing everything they can to ensure it doesn’t go away, allowing the Waltons to amass even larger amounts of wealth.
After explaining how the market was rigged, he was asked what the government should do about it. "You need to send out a slew of indictments, all at once, and at 3pm on a sunny day, have federal marshals perp walk 300 Wall Street executives out of their offices in handcuffs and out on the street with lots of cameras rolling," he said. "Everyone else would say: 'If that happened to me, my mother would be so ashamed.' "
But when the most recent global economic crisis struck Uncle Sam took a different route. Rather than punish those who'd brought the system to its knees they rewarded them with billions of dollars in bailout money. For George W Bush this was consistent both with his philosophy and the interests of his base. But Barack Obama stood as a "transformative candidate" and this was a pivotal moment. Popular anger at the finance industry was strong and the banks were weak.
Just a couple of months into his presidency he called a meeting of banking executives. But instead of representing the interests of those who voted for him and had been hardest hit by the crisis – the poor, union members, black people and Latinos – he sided with those who funded him and precipitated the crisis: "I'm not out there to go after you," he told them. "I'm protecting you."
The findings will be aired Tuesday when senior HSBC officials are scheduled to testify before a Senate subcommittee looking into the matter. In a nearly 400-page report, the subcommittee detailed a regulatory culture at the bank where some officials allegedly engaged in risky behavior in pursuit of profits.
The report said that HSBC did little to clean up operations that should have raised concerns, including its Mexico bank. That bank had a branch in the Cayman Islands with no offices or staff but held 50,000 client accounts and $2.1 billion in 2008, the report said. ...
HSBC Mexico's top antimoney-laundering official, as he prepared to leave the bank, told an official from HSBC's London compliance office in 2008 that he believed there was "a culture [of] pursuing profits and targets at all costs" and that it "was only a matter of time before the bank faced criminal sanctions," according to the report. ...
In separate instances, HSBC and officials in its U.S. bank were informed of concerns that one bank official had been named in a list of alleged al Qaeda financial benefactors; that another bank had provided an account to a terrorist organization; and that a third bank was partially owned by terrorist organizations, according to the report. "Another striking feature of these accounts is the fact that a decision by one HSBC affiliate to terminate a relationship with a bank due to terrorist financing concerns did not always lead other HSBC affiliates to follow suit,'' the report said. When a compliance officer declined to approve one of the accounts, her bosses replaced her, it said.
Before the Watergate scandals — for those who may not recall — money ran wild in American politics. One man, W. Clement Stone, gave more than $2 million to President Richard M. Nixon’s 1972 reelection campaign. The Watergate break-in was financed with secret campaign contributions. Fat cats plunked down cash for ambassadorships, and corporations for special treatment. The scandal led to landmark campaign finance reforms, enacted in 1974. For many years since, Republicans and Democrats broadly supported the idea of full disclosure.
That consensus has broken down and thrown the country back to the unruly days before Watergate. We seem to have created the political equivalent of secret Swiss bank accounts. The Supreme Court’s 2010 Citizens United decision opened the door to unlimited donations by corporations, wealthy individuals and labor unions. The sheer size of the donations flowing into groups sponsoring political advertising is alarming enough. But the secrecy is also corrosive for democracy. Who is writing checks for $10 million or $1 million at a single throw, and what do they want? We don’t know, and this shadowy bazaar undermines our political system. ...
Credibility is a precious thing. In their lust for contributions, in cozying up to the moneybags of this era, candidates and political operatives in both parties seem to be forgetting that they put their own credibility at risk. There is a very good chance that when some government decision or vote comes along next year, responsible politicians will find themselves haunted by the secret money of the 2012 campaign.
Is it really worth it? Do these donors deserve to remain hidden? Why can’t they handle a little sunshine? We’d like to see a few courageous Republicans rise in the Senate on Monday and declare: Enough is enough.
The SEC alleges that he was negligent by failing to tell buyers that Citigroup had selected some of the assets and placed a $500m bet against them. The SEC is seeking disgorgement of profits and penalties from Mr Stoker. Unless a settlement is reached, jury selection is to begin Monday. ...
The SEC has been criticised for charging Mr Stoker and others with negligence rather than intentional misconduct. The SEC need only prove by a preponderance of evidence that Mr Stoker had reason to know important facts were withheld from the documents, but went ahead with the disclosures anyway.
The Massachusetts-based Sensata Technologies has announced it plans to close the Freeport plant and outsource more than 150 jobs to China.
Sensata is owned by Bain Capital, a private equity investment firm co-founded by Romney in 1984. Romney served as CEO of the company from 1984 until 2002, according to SEC filings. ...
Dear Gov. Romney,
We work at Sensata Technologies in Freeport, Illinois — a company owned by Bain Capital, which you started, ran, and still profit from.
Our jobs are about to be outsourced to China. More than 150 of us will lose our jobs — and some of us have worked here for over 40 years. The worst indignity is that many of us are being asked to train the Chinese workers who are taking our jobs.
It’s not right that our good American jobs are being sent to China. It’s not right that you stand to get even richer off of our loss and pain.
What’s clear from a review of the public record during his management of the private-equity firm Bain Capital from 1985 to 1999 is that Romney was fabulously successful in generating high returns for its investors. He did so, in large part, through heavy use of tax-deductible debt, usually to finance outsized dividends for the firm’s partners and investors. When some of the investments went bad, workers and creditors felt most of the pain. Romney privatized the gains and socialized the losses.
What’s less clear is how his skills are relevant to the job of overseeing the U.S. economy, strengthening competitiveness and looking out for the welfare of the general public, especially the middle class.
Thanks to leverage, 10 of roughly 67 major deals by Bain Capital during Romney’s watch produced about 70 percent of the firm’s profits. Four of those 10 deals, as well as others, later wound up in bankruptcy. It’s worth examining some of them to understand Romney’s investment style at Bain Capital.
Americans don't resent wealth. They resent a rigged system. Ordinary people have to play by the rules, but the lesson of the financial meltdown is that plutocrats don't.
One of the rules of running for president is that you have to release your tax returns. It's not a law, but that doesn't mean it's not a rule. There's no law that a presidential candidate has to debate, either, but that's the way we do it in America.
Romney reeks of entitlement. He thinks it's up to him to decide whether his financial life should be transparent. It doesn't even occur to him that he owes this to voters -- that it's an obligation, not an option.
This is Mitt Romney's true world. As the founder of Bain Capital, Romney became a brilliant LBO buccaneer who specialized in buying up firms by taking on a lot of debt, using the target firm as collateral, and then trying to make the firm profitable -- often by breaking it up or slashing jobs -- to the point where Bain and its investors could load up the firm with even more debt, which Bain would then use to pay itself off. That would ensure a profit for Bain investors whether or not the companies themselves succeeded in the long run. Often, burdened by all that debt, these bought-out companies did not succeed, costing thousands of jobs as they were downsized, sold off and shuttered. Other times they did phenomenally well, as in the case of Sports Authority and Domino's Pizza.
But job creation is irrelevant to Bain's business model, which is all about paying back investors. Nor does the long-term fate of the companies that private-equity firms buy up matter crucially to Bain's bottom line (though of course success is better). The only real risk for Bain is that these companies fail to make enough initial profit in order to permit Bain to pile on more debt and extract a payout, so that it can make back its investment quickly.
Though he started off dabbling in less profitable "venture capital," Romney quickly saw the high-return, low-risk potential of LBOs in the mid-1980s and ultimately was involved in about 100 such deals, which made him a true Wall Street tycoon. He then maximized his take further by socking away his gains in offshore shelters from Bermuda to the Caymans and using capital gains tax breaks and loopholes to reduce the rate of his 2010 tax return (the only one he's released) to 13.9 percent, a far lower rate than the one paid by middle-class Americans. Many of Wall Street's big dealmakers do the same with their profits, employing whole teams of international tax accountants.
But none of these dealmakers has ever run for president. This is perhaps the main reason for Romney's reticence: It's not just that being honest about Bain's real business pulls back the veil from the ugly heart of financial capitalism. It's also that this may be the hardest year since 1932 for a Wall Street big-shot to make a bid for the White House: The former Masters of the Universe remain unpopular because of the historic recession they did so much to create. So it's hardly a surprise that Romney won't dwell on practices that his onetime GOP primary opponent, Texas Gov. Rick Perry, labeled "vulture" capitalism. ...
This is the same Romney who declared during the hard-knocking primaries that the $350,000 he earned in speaking fees wasn't a lot of money, who said that his wife drives a "couple of Cadillacs," who grinningly bet Rick Perry $10,000 on a whim, and who boasted that even wealthy Ted Kennedy had to "take a mortgage out" to beat him. And those are moments when Romney was trying to be one of the guys. What has become clear is that he is part of a world of super-elites who live in a universe apart from most Americans. Romney may well make a very good president. But we should know who we're getting.
During times of crisis it is often a smart strategy to give virtually unlimited access to the media in order to push out your message aggressively and satisfy reporter curiosity so that the issue can be pushed off the front burner. John McCain famously did this well earlier in his career when dealing with his own Keating Five controversies.
Unfortunately for the Romney Campaign, the slew of TV interviews did little to satisfy the media. In times of crisis, a strong candidate will come up with answers that satisfy the basic questions surrounding the controversy and will make people want to move on to another subject. Romney, however, could not seem to come up with basic messages that resolved the controversies. Many of his answers seemed evasive or overly legalistic. The biggest problem for Romney is that all of his interviews have only increased the questions that political observers, voters and the media have regarding the subject of Bain Capital.
Specifically, Romney is going to have to answer the following 35 questions before this issue subsides.
1. Are you contending that an individual can simultaneously be the CEO, president, managing director of a company, and its sole stockholder and somehow be “disassociated” from the company or accurately classified as someone not having “any” formal involvement with a company?
One industry in particular — the financial sector — has used its power to gain an enormous advantage at public expense persuading the government to dismantle much of the federal regulatory structure. The Financial Crisis Inquiry Commission, a 10-member bipartisan panel appointed in 2009 by congressional leaders of both parties, reported in January 2011 that “from 1997 to 2008, the financial sector expended $2.7 billion in reported federal lobbying expenses; individuals and political action committees in the sector made more that $1 billion in campaign contributions” to achieve what the commission described as “deregulation redux.”
The greatest danger is that high inequality creates a society in which wealthy ‘crony capitalists’ dominate corporate and government policies and use their wealth to subvert market competition and to corrupt democracy in order to maintain their position atop the income hierarchy.
Campaign contributions are among the most important weapons deployed by new corporate elites. The finance industry, for example, has given more money, $19 million, to the Romney campaign than any other sector, quadrupling its nearest competitor, real estate, which contributed 4.8 million. ...
Not only would Romney’s tax, regulatory and spending proposals reinforce the leverage over public policy now exercised by the affluent, but he would leave untouched the post-Citizens United campaign finance regime that gives corporations, unions and billionaires unlimited opportunities to shape election outcomes.
Nor would Romney reform the Washington lobbying community that now amounts to a fourth branch of government, staffed by former Senators, Congressmen and executive branch officials, who work for clients equipped to pay fees of $200,000 or more a year.
The overwhelming majority of the $3.3 billion spent annually on lobbying goes to preserve and expand the market-distorting corporate “rents” granted by Congress and the executive branch, ranging from agribusiness subsidies to an array of special breaks that allow companies like G.E. to pay little or no federal tax. ...
The super PACs enabled by Citizens United and related lower-court decisions are overwhelmingly tilted in Romney’s favor and supportive of the Republican Party in general: Conservative super PACs have so far spent $125 million, while liberal groups have spent less than a third of that, $35.2 million. ...
As reasonable as Romney’s endorsement of a “merit-based opportunity society” may appear on the surface, what he is really calling for is a society that rewards hard-hearted, relentless competitors and disregards the losers. It is precisely this aspect of his campaign that has made him vulnerable to Democratic attacks. ...
Romney, however, is the willing prisoner of a radically evolving Republican Party, a party perhaps best described by Thomas Mann and Norman Ornstein in their recent book, “It’s Even Worse Than It Looks: How the American Constitutional System Collided With the New Politics of Extremism”:
One of the two major parties, the Republican Party, has become an insurgent outlier —ideologically extreme; contemptuous of the inherited social and economic policy regime; scornful of compromise; unpersuaded by conventional understanding of facts, evidence, and science; and dismissive of the legitimacy of its political opposition. When one party moves this far from the center of American politics, it is extremely difficult to enact policies responsive to the country’s most pressing challenges.
Mr. Romney’s descriptions of when he left Bain have been erratic and self-serving. In 2002, when he needed to show he was still a Massachusetts resident, he denied he had quit in 1999, saying he had taken a leave of absence to run the Olympics committee. A series of documents filed with the Securities and Exchange Committee show that Bain certainly didn’t describe him as absent after 1999.
A former Bain managing director, Edward Conard, said on MSNBC Sunday that Mr. Romney remained C.E.O. “legally” so he could negotiate his generous exit deal.
But now that Bain has been accused of helping other companies outsource jobs overseas, laying off steel company employees and wiping out their pensions, Mr. Romney says he had no management role after 1999. A Kansas City steel plant that Bain bought in 1993 under Mr. Romney’s control, for example, went bankrupt in 2001, costing 750 workers their jobs and pensions. After the Obama campaign made an ad featuring several of the angry workers, the Romney campaign said he couldn’t be blamed because he left Bain in 1999.
On Thursday, a Boston Globe article demonstrated Mr. Romney’s continuing ties to Bain through 2002, and Mr. Obama said it raised questions for his opponent. “I think most Americans figure if you are the chairman, C.E.O. and president of a company,” he said, “you are responsible for what that company does.”
And neither group is living in the real world.
First of all, this election really is — in substantive, policy terms — about the rich versus the rest.
The story so far: Former President George W. Bush pushed through big tax cuts heavily tilted toward the highest incomes. As a result, taxes on the very rich are currently the lowest they’ve been in 80 years. President Obama proposes letting those high-end Bush tax cuts expire; Mr. Romney, on the other hand, proposes big further tax cuts for the wealthy.
The impact at the top would be large. According to estimates by the nonpartisan Tax Policy Center, the Romney plan would reduce the annual taxes paid by the average member of the top 1 percent by $237,000 compared with the Obama plan; for the top 0.1 percent that number rises to $1.2 million. No wonder Mr. Romney’s fund-raisers in the Hamptons attracted so many eager donors that there were luxury-car traffic jams.
What about everyone else? Again according to the policy center, Mr. Romney’s tax cuts would increase the annual deficit by almost $500 billion. He claims that he would make this up by closing loopholes, in a way that wouldn’t shift the tax burden toward the middle class — but he has refused to give any specifics, and there’s no reason to believe him. Realistically, those big tax cuts for the rich would be offset, sooner or later, with higher taxes and/or lower benefits for the middle class and the poor.
So as I said, this election is, in substantive terms, about the rich versus the rest, and it would be doing voters a disservice to pretend otherwise. ...
So how can the Obama campaign cut through this political and media fog? By talking about Mr. Romney’s personal history, and the way that history resonates with the realities of his pro-rich, anti-middle-class policy proposals.
Thus the entirely true charge that Mr. Romney wants to slash historically low tax rates on the rich even further dovetails perfectly with his own record of extraordinary tax avoidance — so extraordinary that he’s evidently afraid to let voters see his tax returns from before 2010. The equally true charge that he’s pushing policies that would benefit the rich at the expense of ordinary working Americans meshes with Bain’s record of earning big profits even when workers suffered — a record so stark that Mr. Romney is attempting to distance himself from part of it by insisting that he had nothing to do with Bain’s operations after 1999, even though the company continued to list him as C.E.O. and sole owner until 2002. And so on.
Opponents of such reform have disagreed vehemently. The idea being that money is speech -- and since free speech should be unlimited, so should money.
But until lately, there has always been bipartisan agreement that campaign spending -- limited or not -- should at least be transparent. Even as they've fought against spending limits designed to clean up our elections, many conservatives have solemnly assured the American people that they understood sunlight to be the best disinfectant. (In Minnesota, for example, we've had a long and bipartisan tradition of transparency in our campaign finance system.)
Then, in Citizens United, the Supreme Court overturned a century of precedent to find that the right to have a say over elections wasn't, in fact, reserved for citizens after all -- corporations could enjoy it, too. And in FreeSpeechNow.org v. FEC, the Court found that even the weak limits we'd established to prevent the powerful from completely dominating our elections were unconstitutional. ...
In the 2010 election, these "independent expenditures" by outside groups -- organizations established under obscure provisions of the tax code with names using words like "Future," "Prosperity," and/or "Freedom" in various permutations -- totaled more than $280 million, more than double what they spent in 2008 and more than five times what they spent in 2006. Outside groups spent more than the actual Democratic and Republican party committees.
And already in 2012, we've seen a single individual write multi-million-dollar checks in support of his favorite presidential candidate. We've seen corporations spend tens of millions of dollars on attack ads. We could see $1 billion in outside spending before Election Day.
Worse, there is little sunlight to be found in the post-Citizens United political system. Corporations that want to hide their spending can create shell corporations to contribute unlimited money to a group -- so that when you look at the outside group's fundraising records (which are published only occasionally), you'll see the shell corporation but not the original source of the money.
And that guy who wrote all those seven-figure checks to support his favorite presidential candidate? We only know about that because he announced it himself (adding that some of his future spending would remain secret).
And because none of this spending is transparent, none of these spenders (or the candidates who profit from their spending) can be held accountable. We simply don't know who is wielding all this financial power in this year's elections. We just know it isn't us, the people. That's a system in need of disinfecting.
To put it in perspective, at this point in 2008, about $36 million had been spent on independent expenditures (independent meaning independent of a candidate’s campaign). In all of 2008, in fact, only $156 million was spent this way. In other words, we’ve already surpassed 2008, and it’s July.
In the near term, there’s nothing we can do to reverse this dramatic increase in independent expenditures.
Yet what really alarms us about this situation is that we can’t find out who is behind these blatant attempts to control the outcome of our elections. We are inundated with extraordinarily negative advertising on television every evening and have no way to know who is paying for it and what their agenda might be. In fact, it’s conceivable that we have created such a glaring loophole in our election process that foreign interests could directly influence the outcome of our elections. And we might not even know it had happened until after the election, if at all.
This is because unions, corporations, “super PACs” and other organizations are able to make unlimited independent expenditures on our elections without readily and openly disclosing where the money they are spending is coming from. As a result, we are unable to get the information we need to decide who should represent us and take on our country’s challenges. ...
We believe that every senator should embrace the Disclose Act of 2012. This legislation treats trade unions and corporations equally and gives neither party an advantage. It is good for Republicans and it is good for Democrats. Most important, it is good for the American people. What’s more, every senator considering re-election faces the possibility of being blindsided by a well-funded, anonymous campaign challenging his or her record, integrity or both. The act under consideration would prevent this from happening to anyone running for Congress.
Without the transparency offered by the Disclose Act of 2012, we fear long-term consequences that will hurt our democracy profoundly. We’re already seeing too many of our former colleagues leaving public office because the partisanship has become stifling and toxic. If campaigning for office continues to be so heavily affected by anonymous out-of-district influences running negative advertising, we fear even more incumbents will decline to run and many of our most capable potential leaders will shy away from elective office.
No thinking person can deny that the current situation is unacceptable and intolerable. We urge all senators to engage in a bipartisan effort to enact this critically needed legislation. The Disclose Act of 2012 is a prudent and important first step in restoring some sanity to our democratic process.
The court advised such disclosure in its otherwise disastrous Citizens United decision in 2010, which loosed a new wave of unlimited spending on political campaigns. The decision’s anticorruption prescription has grown even more compelling as hundreds of millions of dollars in disguise have flooded the 2012 campaigns — a great deal of it washed through organizations that are set up for the particular purpose of hiding the names of the writers of enormous checks. ...
Still, the vote was a chance for the public to see who stands for and against such basic transparency in political spending. The answer: not one Republican showed the courage to break ranks and speak up for disclosure.
Republicans have been the main beneficiaries of corporate and independent spending sprees. The party’s lock-step opposition to letting voters see who writes the big checks is an embarrassment to Congress.
Opponents are crying that disclosure violates donors’ privacy and favors unions. This is election-year nonsense to give cover to the aggressively partisan groups that pose as “social welfare” organizations but tip the campaign scales heavily with stealth financing.
The Senate measure would require corporations, unions and any other organization paying for election-cycle messages to disclose expenditures of $10,000 or more within 24 hours and identify donors writing checks of $10,000 or more. It would further require reporting of third-party money transfers, a shadow device to hide contributors.
Earlier Monday, Senate Majority Leader Harry Reid said that if Congress doesn't do something to curb the torrents of money being spent on political campaigns by secret donors, said today, then "17 angry old white men will wake up" on the morning after Election Day, "and realize they've just bought the country."
With that rip-snorting salvo at the wealthy donors who have been giving seven-figure contributions to shadowy political groups and Super PACs, the Senate Democrats opened debate on Monday on the Democracy Is Strengthened by Casting Light On Spending in Elections (DISCLOSE) Act - a measure that would require that political organizations disclose all donors who give them more than $10,000.
The current system permits "legalized political money laundering" that is "a perfect recipe for corruption," said Democratic Sen. Sheldon Whitehouse, the bill's lead sponsor. "Hang on to your wallets. Here come the special interests. And you won't even know who they are."
“He should release the tax returns tomorrow: it’s crazy,” Kristol, the editor of the Weekly Standard, said on “Fox News Sunday.” “You gotta release six, eight, ten years of back tax returns. Take the hit for a day or two.” Speaking on ABC’s “This Week,” Will, the veteran columnist, agreed, saying, “If something going to come out, get it out in a hurry.” And Dowd, who was the chief strategist for the Bush-Cheney campaign in 2004, said Romney’s refusal to release returns for the years prior to 2010 was a sign of his “arrogance.” ...
It’s only fair to assume that Mitt is doing what he always does: acting on the basis of a careful cost-benefit analysis. Will’s comments on this were spot on: “The cost of not releasing the returns are clear,” he said. “Therefore, [Romney] must have calculated that there are higher costs in releasing them.” But what information could the earlier tax returns contain that would be so damaging if it were brought out into the open? Obviously, we are entering the realm of speculation, but Romney has invited it. Here are four possibilities...
Reports from the Organization for Economic Cooperation and Development and others show that social mobility is greater elsewhere, notably in Denmark, Australia, Norway, Finland, Canada, Sweden and Germany.
What do these countries have in common? Not to put too fine a point on it, all have national policies that are, in right-wing parlance, more “socialist” or (to be precise) social democratic than ours. They guarantee their citizens health insurance. They have stronger union movements and more generous welfare states. They tend to keep higher education more affordable. In most cases, especially Germany’s, they have robust apprenticeship and job training programs. They levy higher taxes.
The lesson from this list is not that cutting back government, gutting unions and reducing taxes on the rich will re-create an America of opportunity. On the contrary, we need more active and thoughtful government policies to become again the nation we claim to be. ...
Actually, liberals are not for “soaking the rich,” unless you consider the Clinton-era tax rates some kind of socialist bath. And as the experience of the more social democratic countries shows, a modest amount of “economic redistribution” — to offset the radical redistribution toward the very rich of recent decades — can begin the process of restoring the kind of mobility we once bragged about.
My challenge to conservatives worried about inequality is to follow the logic of their concern to what may be some uncomfortable conclusions, especially in an election year.
Here, as best as we can figure, is Romney's timeline at Bain...
A new disclosure filing released Sunday night shows that the Republican presidential candidate’s biggest sources of cash in recent months have been top financial firms. Employees of Goldman Sachs Group alone have given $902,000 to Romney Victory, which is a joint fundraising vehicle for Romney and the Republican Party. ...
Employees of Elliott Asset Management, the hedge fund company run by Romney supporter Paul Singer, gave $818,000. People who listed themselves as self-employed investors gave more than $2 million over the three-month period from April through June.
The report shows that Romney Victory brought in a total of $140 million during the past three months. ...
The Romney Victory fund is set up to send money to Romney’s campaign, the Republican National Committee and a handful of state parties around the country. Many financial industry professionals in effect can’t contribute to state parties because their firms would then be banned from managing lucrative financial deals with the states under SEC rules. That means their donations will go to the National Republican Senatorial Committee and the National Republican Congressional Committee instead.
We do not propose to say that there shall be no rich men. We do not ask to divide the wealth. We only propose that, when one man gets more than he and his children and his children's children can spend or use in their lifetimes, then we shall say that such person has his share.
There is no state in the union where someone working a minimum-wage job for 40 hours a week, or $15,080 a year, can afford a two-bedroom apartment at fair market value.
At the opposite end of the financial spectrum, Mitt Romney made $15,080 every 6 hours in 2010, a year in which he grossed more than $21 million in income. It would take a minimum wage worker 1,436 years and 10 months to make what Mitt Romney made in 2010.
If that hasn't sunk in yet, I'll say it differently. To make as much as Mitt Romney made in one year, a minimum wage worker working 40 hours a week for $7.25 an hour would have to start work during the Liang Dynasty and work all the way to the present day. Assuming an average life expectancy of 65 years, since minimum wage workers can't get the same nutrition and health care that everyone else can, that's 22 entire lifetimes of nonstop minimum wage work, from infancy to death, just to make what one man made in one year.
Guys as rich as Mitt Romney make money for having money. He doesn't simply work for a living, but rather acquires wealth from investments already made with previously accumulated wealth. While a minimum wage worker pays a third of his or her income in sales, property, payroll and excise taxes, Mitt Romney pays just a 13.9% tax rate on more than half of his income, because it comes from capital gains, instead of good old-fashioned hard work.
Archived news articles from the early sixties reveal a businessman and politician with a very different approach from that of his son Mitt, who now finds himself in an avoidable scandal over when he actually left his company, Bain Capital.
Mitt’s departure from Bain Capital was far less transparent. When Mitt Romney joined the Olympics organizing committee on February 11, 1999, did he take an official leave of absence with “no involvement in the management or investment activities” at Bain Capital, the private equity and investment firm he founded, or was he a “part-timer with Bain, providing input on investment and key personnel decisions,” as Boston media and a raft of documents filed with the Securities and Exchange Commission seem to suggest? ...
The Obama campaign is quick to point out that Romney has taken credit for job gains by Bain companies from 1999 to 2002, yet has claimed that the outsourcing of jobs and the bankrupting of a steel mill company during those years can not be attributed to him given his supposed lack of involvement with the firm.
The spiraling controversy leaves much to ponder. Why didn’t Romney simply appoint an interim Bain CEO or officially demote himself during his leave of absence in Salt Lake City? If he cut off all involvement with Bain to run the Winter games, as Romney said on Friday in an interview with CNN, why did Romney spend the following years signing documents as the chief executive, while collecting over $100,000 in salary from his old firm?
On the Sunday morning talk shows, even Republicans urged Romney to release more tax returns while wondering what secrets he’s trying to keep. And the campaign’s latest attempt to explain how and when Romney left Bain Capital — he’s supposed to have “retired retroactively” at some unspecified date — became an instant punch line. ...
The only reason anyone cares when Romney left Bain Capital, the private equity firm he founded and ran, is because Romney made a totally unreasonable claim: When Democrats pointed to outsourcing and job cuts at companies Bain owned or controlled, Romney denied any responsibility since these unfortunate developments took place after he left to run the Winter Olympics in 1999.
This was an absurd position to take. Romney has boasted of his prowess at creating jobs by pointing to successful companies in which Bain invested, such as Staples, the office-supply chain that went on to expand and hire tens of thousands of employees. But much of this growth took place after 1999. Romney was trying to take credit for post-departure successes but not for failures.
On such shaky ground, Romney planted his flag. He then tried to insist on another ridiculous proposition, which is that he left Bain suddenly and completely in 1999. This cannot possibly be true. Romney was Bain Capital — chairman, chief executive and sole stockholder. There is no way he could have disentangled himself from the firm so abruptly. ...
If you look at Romney’s signature on those documents and listen to what he’s been saying on the campaign trail, you have to conclude that either he lied to the SEC or he’s lying to voters now. Romney’s defenders have had to fall back to the position that the SEC doesn’t really expect companies to file accurate information. So, all you corporate compliance officers, take the day off!
The Romney campaign says he has released as many returns as candidate John Kerry did in 2004, and cites Teresa Heinz Kerry’s refusal to release any of her tax returns. Neither is an apt comparison. John Kerry actually released returns from 1999 through 2003, and also released tax returns during his Senate runs. As for Teresa Heinz, Romney isn’t the wealthy spouse of a candidate, but the candidate himself. In 2008, John McCain released two years of returns, but he had been filling out financial disclosure forms for decades as a senator. Romney protests that he is not legally obliged to release any tax returns. Of course not. He is no longer in the realm of the private sector, though, where he can comply with the letter of the law with the Securities and Exchange Commission and leave it at that. Perceptions matter.
The tax code rewards American companies for holding profits abroad, while high marginal rates – albeit shot through with loopholes – discourage foreign companies from investing in the US. ...
Opinion polls suggest most Americans seem to think businesses investing overseas are traitors rather than ambassadors, and it is not hard to see why. Ted Alden of the Council on Foreign Relations think-tank noted recently that in the 1990s, US-based multinational companies created 4.4m jobs in the US and 2.7m jobs in overseas affiliates.
But in the 2000s, he wrote: “Those same companies went on adding another 2.6m jobs abroad, but eliminated 2.9m jobs in the United States. The world’s gain became our loss.” Mr Alden adds that Mr Obama’s proposal would probably make this even worse by giving multinationals an incentive to reorganise themselves to escape the new burden. ...
Prof Desai says: “It’s easy to believe that the world is a zero-sum game, but the evidence doesn’t support that.” Other countries – notably the UK, Canada and Japan – have recently moved towards a territorial tax system without seeing a disastrous loss of revenue from offshorers, he says.
But he adds that the US needs complementary reforms, such as restricting the abuse of “transfer pricing” rules which allow multinationals to report profits in tax havens rather than where they were actually generated.
But what if it turns out that the selective release of views of analysts is more the rule on Wall Street than the exception?
Gretchen Morgenson reported in The Times this week that a handful of top hedge funds appear to be taking an early peek at views from research analysts, allowing them to trade on the information while other investors are still in the dark. The tips come from surveys that the hedge funds send to research analysts, either monthly or quarterly, asking about possible earnings surprises or the competitive position, management or innovations of companies. ...
Still, what if big investors systematically receive early word of important company developments?
The answer, in brief, is that there are already more than enough reasons that individuals shun the stock market. Serial booms and busts of the last 15 years have cast justifiable doubt on the conventional wisdom of buy-and-hold investing. Serial scandals — insider trading, Ponzi schemes, the flash crash of 2010 — have also eroded trust. At the same time, the S.E.C. and other investor protection agencies must fight for every penny from Congressional Republicans who are hostile to the very notion of regulation. Politicians of both parties, in thrall to financial-industry campaign contributors, have supported legislation to erode investor safeguards.
The result will be a less robust market, a less robust economy and a less wealthy society, as individuals are unable to mass the sums needed for retirement. But until the stock markets are restored to health — with rules and protections that are clearly understood and enforced — individual investors have reason to be wary.
Late Tuesday, after the interview with Romney, the editors of the National Review wrote an editorial arguing that the only question for Romney is “whether he releases more returns now, or later — after playing more defense on the issue and sustaining more hits.”
The editorial adds to a growing chorus of Romney allies urging him to make the additional information public. In response to a reporter’s question at the State Capitol in Austin, Texas Gov. Rick Perry (R) also urged his former White House rival to be “as transparent as you can be,” although he appeared to stop short of calling on Romney to disclose more information.
President Obama raised the issue at a town-hall meeting in Ohio, discussing his proposals for tax credits for manufacturers in the United States to encourage the creation of new jobs. He said this was greatly preferable to Mitt Romney’s support for a so-called territorial tax system, in which the overseas profits of American corporations would escape United States taxation altogether.
It’s not surprising that large multinational corporations strongly support a territorial tax system, which, they say, would make them more competitive with foreign rivals. What they don’t say, and what Mr. Obama stressed, is that eliminating federal taxes on foreign profits would create a powerful incentive for companies to shift even more jobs and investment overseas — the opposite of what the economy needs.
Mr. Romney’s response essentially consisted of a non sequitur. His campaign accused Mr. Obama of “crony capitalism” that uses government resources to reward campaign donors. Republicans pointed out that members of the President’s Council on Jobs and Competitiveness had supported a territorial tax system, which is true, but they failed to note that the council members who endorsed the idea are corporate executives whose multinational firms would benefit from the lower taxes.
n anti-money laundering director who was leaving the bank's Mexican affiliate noted a culture of "pursuing profits and targets at all costs." And the report says that, "in anticipation of revenues of $75,000 to $100,000 per year," U.S. bank personnel "disregarded troubling evidence of possible links to terrorist financing" and opened accounts for two Bangladeshi banks. In other cases, information was stripped from 25,000 of transactions worth more than $19 billion involving Iran – but the motivation may have been to avoid triggering any additional reviews of the transactions that could have caused delays or problems.
Yet a memo from a banker at HSBC Middle East noted the business benefits of keeping the transactions flowing: “It is anticipated that Iran will become a source of increasing income for the group going forward and if we are to achieve this goal we must adopt a positive stance when encountering difficulties," the executive wrote, suggesting "that by working together we can overcome them using means which are perfectly legitimate and in accordance with rules laid down by the relevant regulatory bodies.”
But perhaps the pursuit of money and the constant quest for growth don't entirely explain all the scandals. As University of Chicago business school professor Luigi Zingales, the co-creater of an index measuring financial trust, writes at Bloomberg View, there may be a broader problem underlying the unscrupulous banking behavior: “We are dealing with a drop in ethical standards throughout the business world, and our graduate schools are partly to blame.”
His piece, titled “Do Business Schools Incubate Criminals?,” argues that universities encourage amorality by the way they teach ethics to MBA students: “The way to teach these ethics is not to set up a separate class in which a typically low-ranking professor preaches to students who would rather be somewhere else. This approach, common at business schools, serves only to perpetuate the idea that ethics are only for those students who aren’t smart enough to avoid getting caught.”
First up at a hearing Thursday was Diane Dossin, chief tax office for Ford Motor Co. Ford is the only domestic manufacturer that didn’t require a bailout by the federal government. Last year it posted a robust $8.7 billion profit on $136.3 billion in sales as the automotive industry continued its remarkable rebound from a near-death experience in early 2009.
“A low rate is the single most important thing” the federal government could do to improve the business climate, she told the committee. But when pressed by Rep. Charles Rangel, D-N.Y., to name which corporate tax breaks her company would eliminate in order to lower the overall rate without reducing revenue to the federal government, she demurred. In her prepared testimony, she lauded the research and development tax credit, accelerated depreciation and the special tax break for domestic manufacturing Congress passed in 2004. ...
Ford’s most recent Securities and Exchange Commission filing reveals the extent to which one company can benefit from the current code. The company paid no income taxes last year at either the federal or state level despite nearly $9 billion in earnings. In fact, it enhanced its balance sheet by an additional $11.5 billion from previous losses that gave the company an effective tax rate of negative 141 percent. ...
The taxman’s take doesn’t improve if one looks back three years, all of them profitable for Ford. The company paid a grand total of $592 million in federal and state taxes on $18.4 billion in pre-tax earnings, which is an effective rate of 3.2 percent. That is well below the 39.2 percent tax rate highlighted by Camp in his opening statement (a 35 percent federal rate plus a blended state rate of 4.2 percent). ...
Corning Inc. from upstate New York was the final big company to testify. Vice president Susan Ford echoed her colleagues’ claim that “a substantial reduction in the statutory tax rate is critical . . . A significant rate cut accompanied by a review of existing, often inefficient, tax benefits is in order.”
She also remained silent when the panel was pressed by Rangel to name which inefficient tax breaks to eliminate. Corning paid an effective tax rate of 12.7 percent last year after earning $3.2 billion on $7.9 billion in sales. Its tax rate in 2010 was 7.5 percent on $3.8 billion in profits. And in 2009, the company paid no taxes at all on $1.9 billion in earnings and even carried forward $74 million in unused tax credits.
Yet it’s true: Revenue from selling stamps and other products exceeded the costs of delivering mail by $200 million, the Postal Service’s chief financial officer reported in February. Much has been written about the Postal Service, an institution embedded in our Constitution and actually older than the country. It touches the lives of all Americans, and for six straight years it was named the public’s most trusted federal agency, according to the Ponemon Institute. Yet conventional wisdom about the Postal Service is strikingly misleading. I’d like to provide some context that’s rarely heard. ...
There is indeed red ink, but the reasons are unrelated to the mail. In 2006 Congress required that, within the next decade, the Postal Service pre-fund future retiree health benefits for the next 75 years — a burden no other agency or company faces. That accounts for 85 percent of all of the agency’s red ink since — and more than 90 percent of the $6.46 billion shortfall from the first half of fiscal 2012. Before pre-funding began in 2007, the Postal Service had annual profits in the low billions. It’s this unaffordable payment that the Postal Service is “simply not capable of making” next month, a spokesman said this week. ...
Pre-funding isn’t just bankrupting the Postal Service; it’s also forcing the agency into a panic mode that absorbs energy and resources in a desperate effort to find about $5.5 billion every September for this unique burden. Inexplicably, instead of focusing on how to best meet today’s challenges so Americans can continue to enjoy the world’s best delivery service, Congress has made its top postal priority the funding of benefits for retired workers nearly a century out.
If lawmakers address their part of the problem, the Postal Service could do what it has done for 200 years: develop a forward-looking business plan that adapts to society’s evolving needs, just as it did when the telephone, telegraph and fax machine came along. Each time the agency emerged stronger. Dismantling the network and degrading service isn’t a business plan.
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