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Highlights—October 20, 2012

  • I, Cringely: So sue us! Why big companies like IBM aren’t afraid of H-1B lawsuits. Excerpts: While I was being a domestic god a reader passed to me this blog post by John Miano, a former software developer, founder of The Programmers Guild, now turned lawyer who works on immigrant worker issues as a fellow at the Center for Immigration Studies (CIS) a supposedly nonpartisan think tank in Washington, DC. I don’t know Miano and frankly I hadn’t known about the CIS, but he writes boldly about H-1B visa abuses and I found that very interesting.

    Here’s what I found to be the important section of the post:

    An American IBM employee sent me an e-mail chain among the employee, IBM hiring managers, and IBM HR that shows how IBM flagrantly violates the law in regard H-1B usage and immigration status discrimination.

    First a little background. IBM has a built-in source to import foreign labor. IBM’s Indian subsidiary (IBM Global Services India) is one of the largest importers of foreign workers on H-1B visas.

    When IBM is staffing projects in the United States it can hire locally or use imported labor on H-1B visas provided by IBM India.

    Now let me set the stage for the e-mail chain. An American IBM employee in the United States had been working on a software development project for a customer that had recently ended. The employee needed to find another project to avoid being laid off, as it is easier to lay off people who are not working on projects.

    The American IBM employee was on an internal IBM mailing list for employees who were available for a new project. The IBM employee received a timely mass e-mail through this list from IBM HR with a job description that started out:

    We are urgently seeking Business Analyst resources with Test experience for two positions on the Alcatel-Lucent account.

    A lengthy job description and instructions on how to apply followed this introduction. (IBM uses the term “resource” throughout to refer to employees.) The job was located in the United States and the American IBM employee lived close to the project.

    The American IBM employee responded to the job posting with a cover letter explaining how the employee’s qualifications matched the posted job requirements, the additional information requested in the job posting, and a resume.

    This is the IBM hiring manager’s complete response to the American IBM employee’s application (The IBM employee provided translations of acronyms that I have indicated in square brackets.):

    Thank you for your interest in the eBusiness Analyst position on the Alcatel-Lucent account. We are in the process of gathering resumes for this position and will send you a follow-up response once we have had an opportunity to review your qualifications.

    Please understand the clients first preference is IGSI [IBM Global Services India] landed resource, then local US candidates, then remote, so these candidates will be in the second group to be considered. (sic)

    This manager was forcing Americans to get in line for jobs behind “landed resources” from IBM India. In case you are wondering — yes, this is illegal. See 8 USC § 1324B.

    So how can IBM so flagrantly violate the law?

    The reason IBM can get away with this disgraceful behavior is that discrimination enforcement requires a complaint. An employee considering a complaint has to weigh the probability of the government prosecuting the case and winning adequate compensation against the risk of retaliation and damage to his or her career. Many companies make severance packages contingent upon employees signing away rights to file such a complaint.

    IBM has no fear of the U.S. legal system.

    This hearkens back to my last column about regulatory abuse. IBM has the largest internal legal department of any corporation anywhere. IBM has more lawyers on staff than most governments. And IBM’s legal department has been over the years a great profit center, especially through enforcing intellectual property rights. If you decide to sue IBM for violating your patent, you can be sure their first response will be to find half a dozen or more IBM patents that you might have infringed, too. Just the threat of protracted legal action is enough to make most such problems simply go away, IBM is so aggressive.

    And so we’ve reached a point where, as this Miano post describes, IBM appears to not even pretend anymore to be in compliance with H-1B immigration law. Why should they?

    Selected reader comments follow:

    • John Oakley says: October 16, 2012 at 5:54 am. Bob, are you sure they are abusing H1B visas? As an ex-IBM UK employee I did several assignments in the US on an L1 intercompany visa. IBM used to have blanket authorization to use L1s i.e. there was no quota. An L1 visa allows companies to transfer employees between their own subsidiaries or partner companies. http://en.wikipedia.org/wiki/L-1_visa Not that I condone using this for cheap labor but if you must throw stones then perhaps getting the facts clear might improve the message.
    • Rupert Pupnick says: October 16, 2012 at 7:03 am. From the hiring manager’s email extract: “Please understand the clients first preference is IGSI [IBM Global Services India] landed resource” Talk about a big whopper of a lie…
    • Mr Windows says: October 16, 2012 at 10:35 am. Probably because the contract they signed has incentives for them to utilize ‘off-shore’ resources, or ‘Global Resources’. The company I (American) work for (Indian) has similar language in many of its contracts. We are always ‘encouraged’ to use off-shore resources. Whether this is mainly because they want to employ as many Indians as possible or they want to pinch pennies is up for debate. They clearly want to limit the number of on-shore resources they need to have.
    • Francis says: October 16, 2012 at 9:31 am. IBM must hate you.
    • Robert X. Cringely says: October 17, 2012 at 12:37 pm. IBM doesn’t UNDERSTAND me. An organization like that, where most of management has never worked anywhere else, is always focused inside. Look at the terminology. IBM uses language like the military uses language — they make up their own terms and insist on their proper usage. The very inability to understand what an IBMer is even talking about labels you as an outsider and therefore suspect. And as an outsider I don’t matter. No, they don’t hate me, but they find me annoying. But if I haven’t made it clear before they are also very, very stupid because IBM is destroying itself from the inside, with each CEO in turn trying to be the last one before the structure collapses completely.
    • Val B says: October 16, 2012 at 5:52 pm. Heck – not being hired because an H1-B visa holder is bad – but I was RA’ed so that an H1-B holder could take my position. It all seems so wrong.
    • frankman says: October 17, 2012 at 4:51 am. You heard in the debate about how both candidates want to bring manufacturing back to the US and therefore the associated jobs. Neither want to address the topic referenced in this note. Tens-of-thousands of high skilled tech jobs are being lost to less expensive off shore resource. This is not just an IBM issue. All the tech companies are doing it. Businesses are looking for the cheapest contract possible, and that requires RFPs to have 90+% non-US resource. Companies like Accenture, Wipro, and Infosys are pushing 100% non-US solutions. Businesses are also relaxing the requirement to have the resource work in the US, as it is much cheaper to have off-shore vs. landed. Within the organization I work for, we are over 80% non-US resource on our way to 100% ! My job will be eliminated within the next 2 years and there is nothing I can do about it. Has nothing to do with my competence and everything to do with my address. The only way this issue gets fixed is if legislation is passed that will level the playing field – something like, all contracts for companies based in the US must have at least 50% US workers.
    • Eileen says: October 18, 2012 at 9:27 am. I worked for IBM for 23 years after I became a widow with three children my manager called and let me know my job was outsourced to India. IBM actually had me train the folks in India for my job. I wonder how many other IBMers out there have lost their job due to outsourcing?
    • Former IGS Employee says: October 19, 2012 at 4:17 pm. I can attest that the scenario outlined in this article is not a one-off. I had exactly the same situation happen to me. The language used in IBM’s communication is nearly identical to what I received from my manager while I was on the “bench” and saw a posting on the internal jobs system. I was a perfect match for the position, yet was told that the opening was for “landed resources” only. I’m so glad to be out of IBM now. It was no fun to be “just another resource.”
  • Wall Street Journal: IBM's Limited Margin for Error. By Rolfe Winkler. Excerpts: Even after disappointing third-quarter results knocked 5% off the stock Wednesday, International Business Machines shares are worth nearly 13 times 2013 earnings. Microsoft trades at nine times though its revenue is rising much faster, at an average annual rate of 7% through 2014 compared with IBM at 1%. Plus, Microsoft has net cash of $51 billion on its balance sheet versus IBM with net debt of $19 billion. Strip out the former's cash, and its valuation looks even lower.

    Investors' attraction to IBM has in part been a result of steady bottom line performance. It has consistently delivered earnings-per-share growth north of 10%, even through the recession. In part, that is thanks to continued improvement in profit margins as IBM has generated a bigger share of revenue from high-margin software sales.

    But items below the operating-profit line have also stoked earnings growth. This past quarter, earnings were 7% higher due to an asset divestiture. Stock buybacks have provided a big boost as well. Last quarter, for instance, IBM spent nearly all of its free cash flow buying back shares. Though that added just 1% or so to EPS in the quarter, over time the boost has been significant. From 2006 to 2012, nearly 40% of IBM's projected earnings per share growth can be explained by its lower share count. ...

    Meanwhile, as part of the road map, IBM says it can deliver $100 billion of free cash flow over five years, of which it will spend $20 billion on dividends and $50 billion on buybacks. Yet in the first two years of the road map, IBM is likely to average about $17 billion of free cash flow. So to hit its target, IBM will have to see a sizable increase in the next three years. If revenue growth doesn't pick up, IBM may feel pressure to cut costs more aggressively to make up the difference, argues ISI Group analyst Brian Marshall. That could undercut sales further.

    Selected reader comments follow:

    • Just like socialists who eventually run out of other people's money; IBM will eventually run out of high wage employees to fire to keep its EPS higher.
    • Firing high wage executives that aren't performing (or aren't worth their salary, in terms of pay for performance in tangible terms) is one thing. Firing engineers and customer facing project leads that produce is another. Many tech companies are guilty of keeping highly paid executives and throwing out senior producers. Yahoo just hired a COO with a $60M pay package. Many engineers have left the company. The trend there is not a good one, and shareholders need to start to voice their concerns sternly to these companies, if not take outright consolidated action.

      On IBM specifically: Where is the CEO? Why does she get a pass on not appearing in the media and taking questions? This is ridiculous. Shareholders and the media should be questioning the negative revenue growth trend

    • "...it is a good thing that IBM has returned cash [by way of share buybacks] to shareholders." Prove to me that shares were actually retired rather than simply recycled through the options handed to the very people who approved the buybacks.
  • Financial Times: Currency moves trim IBM revenues. By April Dembosky. Excerpts: The fall in revenues, down 5 per cent on the same period last year to $24.7bn and below analysts’s expectations, sent the company’s stock down 3.4 per cent in after-hours trading.

    Mark Loughridge, IBM’s chief financial officer, blamed currency volatility for the fall.

    However, he revealed that several contracts in the company’s otherwise strong software business had fallen through late in the quarter while the company had rejected some services contracts because it thought the profit margin too low. ...

    However, the lacklustre performance in those areas surprised some analysts, raising concern over IBM’s strategic direction. “The era of the big deals has gone,” said Chris Ambrose, an analyst at Gartner. “There is a lot more multi-sourcing on contracts and a lot more competition out there.”

  • CNN/Money: IBM sinks on sales miss. By James O'Toole. Excerpt: Tech giant IBM posted third-quarter earnings Tuesday in line with expectations, though shares sunk in after-hours trading as the company reported a dip in sales. The Armonk, N.Y.-based firm's revenue slipped 5.4% versus a year ago, coming in at $24.75 billion. Earnings per share, excluding special items, were $3.62.

    Selected reader comments follow:

    • Looks like managers will be having another one of those sad but serious talks with their employees right before they inform them of another year of 0% increases. I am so glad I no longer work for this awful company.
    • Hey, all those senior exec perks and bonuses for doing a lousy job running the company have to be paid for somehow. Take it out of the folks who do all the actual work.
    • 0% increase is a huge problem in IBM's affiliate in Japan. Japanese companies normally raise every year. Some guys have not gotten any raise for several years. But everybody works every hard in Japan. There is no mercy in the management officers. It is not easy to switch company in Japan, so many employees are being very patient with what they receive. On the other hand, IBM USA is promoting brutal layoffs while they make huge profits. I will tell Japanese students to avoid IBM's affiliates in the recruit seasons for sure.
    • As a seasoned Database Admin. I had offers from IBM in Columbia MO and there offers were always 10-20k below the norm. Their modus operandi is to look for folks and offer them way below the going rate and then whine they can't find domestic IT support so they can import cheap Indian IT folks. I even had a manager tell me this.
    • IBM, The biggest SCREWER of American Jobs in History. They have eliminated over 200K jobs in America over the past 10 years and continue to Layoff and move jobs overseas. No Respect for ANYONE in their workforce. I will never Buy IBM Equipment or services.
    • IBM is one of the biggest outsourcing company. IBM looks green from outside but from inside there is a big hole. I hate IBM.
    • IBM is full of cheap labor and employ cheap guys it is full of politics they screw projects big time. The managers just shout and know the art of stupid talking no respect for IBM.
    • I work for IBM's affiliate in Japan. I totally agree with you. I remember a guy committed suicide in our building. They keep laying off in the most brutal manners while their profit is surging.
    • I work for an IBM's affiliate directly controlled by the IBM USA. Lay off tactics are very ugly. No major Japanese company lays off an employee while its profit is positive. Even if its profit is in negative, they try to keep all employees by work sharing or decreasing salary. IBM is making huge profit, but is laying off many right now just to raise value of the stocks. An infamous human resource program will give an employee a large amount of boring tasks like translating manuals into Japanese or English and the program forces each employee to report the progress very often. The goal of each boring task is set very high, so many employees eventually get tired of this torturing and quit the company. But the ugliest tactic I have heard of so far is called "lock out layoff". An employee is called by a boss and he is told to step out of the office at the end of the office time. After that, he can never enter the office and his phone call is never transferred to any department. This is so ugly, because this gives an employee no option to fight, like joining a labor union. Regular targets of layoffs are mentally/physical ill employees and old guys who after contributing many years to the company are now senile to do good works. This is not USA. This is Japan where companies normally do not lay off employees and the society in which once you lose job, it is hard to find another proper employment. American leaders do not care. My colleague is saying bright guys don't come to IBM these days in the recruit season. Yeah sure. That is because employed and fired people are complaining to the general public of the cruelty of the company. I hope American government does something to stop such corporate cruelty.
    • I left IBM (Global Services) last year, the handwriting on the wall was terribly clear. Layoffs, no raises, brutal mgmt tactics. The company was basically being run by a bunch of heartless goons doing whatever they could to manufacture financial results. What many may not know is that IBM has been on a very aggressive acquisition binge, buying companies trying to pump up revenues which they cannot grow organically. Yet look at the revenue continuing to fall. History shows all too well that you cannot cut your way to growth, you must invest in your business and in an IT services company in particular, your people. The only people IBM invests in live in India. Hey Ginni, the trend is not your friend!
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Kodak Cuts Means Crisis for Thousands" by "test2btrue". Full excerpt: Colleagues, In all the written documents that IBM sends us whether you are retired or working, IBM reserves the right to change its Health Care Plans. That means it legally can terminated them any time it wishes. It can elect to terminate the plan for employees and pay the fine per ObamaCare. If it terminates the plan for retirees, there is no penalty or cost associated with such a termination. IBM does not have to go through bankruptcy to terminate its plans. A retired IBMer.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Kodak Cuts Means Crisis for Thousands" by "fhawontcutit". Full excerpt: You can go to the files section of this board to view a copy of About Your Benefits - Future Health Account Document number: USHR 117 Effective date: January 1, 2011.
    IBM reserves the right, at its discretion, to amend, change or terminate any of its benefits plans, programs, practices or policies, as the company requires. Nothing contained in this summary shall be construed as creating an express or implied obligation on the part of IBM to maintain such benefits plans, programs, practices or policies. Your benefits at or after retirement may be different from those described herein due to changes made to the IBM Future Health Account or the termination of the plan.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Kodak Cuts Means Crisis for Thousands...oh well..." by "divaberyl". Full excerpt: I voluntarily retired last year as a senior manager and parroted company lies until I learned differently. This happens once you reach 2nd and 3rd levels of management and hear what the executives say in those '"quiet rooms". IBM, as a company, stopped caring about their "most valuable assets" somewhere in the 1990s. Employees are liabilities to IBM now. MANY managers hate what is happening at IBM but they are hanging in there because they don't feel they have a choice.

    I'm a second-choicer, prepared relatively well, and expect to weather financial storms but I know that I was fortunate (blessed). I didn't have a health problem or unexpected family crisis which no level of preparation could prevent bankruptcy. Therefore, I got (most of) mine but I do give a $%#£ about those who were hurt even more than I was. I'm wired that way and realize there are many people who are not. Not all of them are managers. Beryl.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Kodak Cuts Means Crisis for Thousands...oh well..." by "willbefree25". Full excerpt: divaberyl, I'm glad to hear it. Many others here, mostly managers or former managers (oh, I most certainly and personally know there are many IGMs who are not managers/former managers but the most egregious offenders were in 1999 and are still today), don't have a heart. I'm glad you do. I'm glad to see you type these very truthful words: "parroted company lies." How about that, the truth is dribbling out, after 13 long years of FUD. Thank you, Beryl.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Kodak Cuts Means Crisis for Thousands...oh well..." by "lastdino1". Full excerpt: Diva I pretty much took the same journey and remember all of the "quiet room" meetings and propaganda. We all knew even the employee's how to separate the BS from the truth so the future was pretty predictable. Then there were the ones who were somewhat naive but as much as you would tell them to plan for the future they said IBM will take are of them. After the 1st massive layoff in 1993 it was apparent that the future changed and you'd better watch your back. That was the shot heard across the bow and if ignored then you got what you got. My compassion left and it was time to refocus on my career and family. So goes it and I made my own decision to leave on my terms. Just as simple as that. Life is Great IGM
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Kodak Cuts Means Crisis for Thousands...oh well..." by "nowwicked". Full excerpt: lvin, a very to the point and rational response. Wish there were more out here. You are absolutely correct. Many people in all walks of life have their head in the sand. Whether intentionally so or by circumstance isn't relevant. It takes planning, daily enforcement of that planning.

    I know that I for one, never really planned well. Yes I have a 401k, something of a pension, but I spent my money as you will on the SUV's, the new TV's, etc. It was my choice to spend my money that way and in the end I will pay for it one way or another in my old age. I have friends in IBM who did things differently, made less money than I did and spent lots less. They own their homes, their 401K are triple the size of mine, and they have no other debts. They can walk out the door anytime and be happy if they like.

    My decisions have caused me to be in a different boat.

    And I do not blame IBM, the politicians, the economy for it. It is my fault.

  • Yahoo! IBM Retiree Information Exchange: "Re: On COBRA - Will I Still Participate in Open Enrollment?" by "teamb562". Full excerpt: I know this has been discussed here or elsewhere but with the healthcare landscape continuing to change, I was wondering if anyone has any fresh insight or opinion. I am in a similar situation to copperskiier. Only difference is I got kicked-to-the-blue-curb so I got one year paid medical. In March of 2013 I will have to decide whether to pay out of pocket for 6 additional months of Cobra or go on retiree medical (FHA).

    I will have 8 years to get to 65 so obviously my goal is to stretch FHA. The big fat variable is PPACA(Obamacare) and how it may affect we retirees. Does anyone have any idea whether we'll know anything in regards to PPACA effects by March 2013 in order for pre-65, ibm retirees to make a more informed decision? Paying for 6 months of Cobra will likely be expensive and I'm unsure if it's really worth it to get me just 6 months closer to 65. Thank you all.

  • Yahoo! IBM Retiree Information Exchange: "Re: On COBRA - Will I Still Participate in Open Enrollment?" by "madinpok". Full excerpt: You will almost certainly exhaust any FHA funds before you reach age 65 and will have to pay out of pocket for FHA coverage after that. Given that the FHA premiums are much more expensive than the COBRA premiums (for about the same level of coverage), in my opinion you will be better off sticking with 6 more months of COBRA even though you have to pay out of your own pocket. In the long run, that is likely to save you money overall.

    If nothing changes with Obamacare, I don't think you will have access to any other coverage. My interpretation of the health care exchange option is that it would only be available if you have no access to other coverage. In your case, the FHA would provide that access. (Editor's note: The poster is incorrect. Search through archives of this site and you'll see that even though you are eligible to buy health insurance through IBM as a retiree, you will still be eligible to take advantage of Obamacare health care exchanges.)

    If Romney wins and follows through on his promise to repeal Obamacare, I don't see where anything he would do would provide any other options.

  • Yahoo! IBM Retiree Information Exchange: "Re: On COBRA - Will I Still Participate in Open Enrollment?" by "teamb562". Full excerpt: As always, thanks Mr. Mad. I'm really struggling with the thought that I might have to pay (out of pocket) say $1000+ a month for FHA (just because I have access to that coverage) when I'd be able to get PPA "exchange" coverage maybe for free or perhaps a couple of hundred a month at most(determined by your income). I just cannot fathom that we'll be forced to stay with IBM/FHA coverage while it could easily cost 500% more. Thank you again sir.
  • Yahoo! IBM Retiree Information Exchange: "Re: On COBRA - Will I Still Participate in Open Enrollment?" by "copperskiier". Full excerpt: Thanks madinpok - yep, I'll check with the ESC, but last I checked, it was much more advantageous for us to stay with Aetna PPO via COBRA, as it is a zero deductible. The retiree plan we're looking at is a $5,000 deductible!
  • Pension Rights Center: “De-Risking” Pensions Could be Risky to Pensioners. Excerpts: In the wake of moves by several large companies to “de-risk” their traditional pension plans, the Pension Rights Center is calling for a moratorium on such actions until Congress can look into the risks posed by these strategies to workers and retirees. Just yesterday, Verizon joined GM in announcing that it is transferring the pensions of certain retirees to an insurance company. In addition, GM, Ford, and several other companies have made lump-sum buyout offers to certain retirees and former employees. The Center is concerned about the impact of both approaches on current and future retirees.

    “These employers are looking to cut costs and reduce long-term liabilities to make their companies more attractive to investors, but ‘de-risking’ can be risky for workers and retirees,” said Karen Friedman, the Center’s executive vice president and policy director. “Insurance company annuities backed by State Guaranty Associations could leave retirees with less protection than the pensions provided by their companies backed by the insurance provided by the Pension Benefit Guaranty Corporation. Also, lump sums place the burden on individuals to ensure that the money lasts throughout retirement. We need to stop, take a breath, and make sure that the retirement security of the people affected by these moves is fully protected.”

    The Center plans to ask Congress to take steps to put a temporary stop to pension offloading and lump-sum buyouts to give policymakers time to examine whether these strategies could result in sellouts of retirement security.

  • Glassdoor IBM reviews. Selected reviews follow:
    • Decent place” Former Software Developer in Lenexa, KS. Pros: Flexible work hours, nice people, freedom to pursue career of choice. Cons: Not highly compensated, not many team building/motivational activities.
    • IBM, Not what you think” Former Technical Support Engineer. Pros: Great place to train and learn. Cons: Poor salary, archaic management style, high employee turn-over because of poor work conditions and overbearing managers. Advice to Senior Management: They act like they know everything...does not pay to advice them.
    • Technology Sales” Current Sales Specialist in San Francisco, CA. Pros: Work with a wide range of solutions and customers. Cons: Salary is below market, focus on current week/month attainment. Span of control and compensation are siloed. Customer set is limited by corporate direction, not relationships. Management and account coverage matrix turn-over is annual or more sometimes more frequent. Just when you get into an account, because you haven't closing anything, you may be taken off. Advice to Senior Management: Value of customer relationships is completely ignored. Customers buy from people they know and trust, especially for complex solutions. This is completely ignored at all but the largest accounts.
    • Subpar New Consultants fresh out of B-School” Former Managing Consultant. Pros: Variety of business challenges you see as a consultant. Flexibility of consulting lifestyle. Cons: Consulting lifestyle without the consulting compensation typical of more focused consultancies. Instead of getting the best of both worlds (consulting and corporate environment), you get the worst. Corporate red tape and lower compensation with constant travel and political incompetence. Advice to Senior Management: Implement 360 degree evaluations or something that will allow consulting teams to evaluate the partners and associate partners that manage engagements. Keep an eye out for patterns of dissatisfaction by asking your resource deployment managers which partners/associate partners have gotten a bad reputation.
    • IBM working hours” Former Employee. Pros: Really flexible, encourage to work from home, great for mums. Cons: Expect you to pay for your own internet and phone bills.
    • Great...but declining each year” Former Employee in Ontario, CA. Pros: IBM hires great people—positive, hard-working and bright, so the people and teams are great. IBM supports and even promotes telecommuting or working from home which allows for work/life balance. IBM offers lots of training and education and a chance to move to many areas of the business. IBM hires good management who have good people-management skills. IBM trusts its employees and has good policies in place between management and staff IBM values are excellent.

      Cons: The company has changed over the years. It used to reward its employees with trips, motivational awards, company outings etc. This has all but stopped completely. Quotas were challenging but attainable, allowing one to earn a really good income. That has all but stopped and the environment as of late has been driving employees to meet unrealistic quotas. Lots of pressure on employees. Junior employees are micro-managed with all actions tracked. Top-performing senior sales people are not adequately paid. Job satisfaction has dropped among my colleagues. The famous IBM culture is not the same as before, sadly.

    • Regret having worked for IBM” Former Advisory Software Engineer in Durham, NC. Pros: -Overworking means that you're able to learn a lot of new things: I'd think 1 year at IBM is equivalent to ~2 years at another company: experience-wise; -Exposure to customers and designing customer solutions; -Flex time, can work any time you want.

      Cons:

      • Complete lack of respect for employees by management—no loyalty to employees.
      • Unrealistic exceptions for EPS/profit that when failed to meet, is then used as excuse to mistreat employees.
      • Long work hours for no benefit.
      • Inedible cafeteria food.
      • Less pay: I actually didn't feel like I 'wanted' more money, but the job I took after IBM paid >30% more than IBM.
      • Currently very low morale: In the last 3 years or so all the 'water cooler' talk and been negative and depressing.
      • Lack of long term friendships: Because of all the turnover and layoffs and moving around people, 100% of my friends had since come and gone.
      • Embarrassing to say work at IBM. Because of all the Cons, it got to a point where it was embarrassing to say I worked for IBM when speaking with neighbors.

      Advice to Senior Management: I don't think management cares.

    • IBM Global Services Salary Comparison” Former Employee in Tampa, FL. Pros: Easy on-boarding, lot's of self autonomy, strong compensation packages, great benefits, liberal vacation policy.

      Cons: Too many required conference calls, slim resources through management for training, unrealistic annual goals, too many re-orgs and down-sizings only to re-hire again. Management is aloof and doesn't engage with reports, hard to get internal information, have to rely on the rumor mill. IBM thinks when you walk in the client's door for the first time the sale is 50% over on name recognition. Discontinuing products without fair warning to sales team.

      Advice to Senior Management: Clean some of the old guard who aren't producing but work the system to stay employed. Move them to challenging positions so they can't snooze on the job. Develop a better employee review process beyond 1 person's view. Ease travel restrictions for professionals, too much accounting time in expense reports. Get better control of HELP desk for communication equipment issues.

    • Good job to start your career” Former Employee in Kraków, Lesser Poland (Poland). Pros: A good place to start but after 2-3 yrs not enough possibilities to develop. Good atmosphere with colleagues, if you are lucky. Cons: Terrible management, no perks, not enough opportunities to develop skills and move up the company ladder.
    • The acceptable average” Current Employee in Vác (Hungary). Pros: - respectable brand company, shows good in your CV; - offers well defended job, if you won't do really big mistake, not needed to afraid about firing; - good place for career-starters, you can learn a lot. Cons: - big company, big crassitude; - rigid problem solving; - low-average salary; - no real motivation. Advice to Senior Management: – motivate your employees! create lame excuses ( for exp.:your salary is higher than the market reference point, so no way to increase it for years) is really demoralizing.
    • Great employer” Former Sales in Tongzhou, Beijing (China). Pros: IBM really has competence and you will got trained worked for IBM, you will gain a lot of experience and skill for any industry. Cons: IBM is too processed, they has very complex process for everything, you have to stand it. Advice to Senior Management: The IBM management is very experience and professional, they really follow rules and policies to get job done.
  • Alliance for Retired Americans: Friday Alert. This week's articles include:
    • Social Security Beneficiaries to Receive 1.7% COLA in 2013
    • Alliance Members from Massachusetts Call in to Talk with Elizabeth Warren
    • FLARA President Fransetta Speaks on Behalf of Obama’s Medicare Plan on TV
    • Washington Post Writes about Effects of Raising the Retirement Age
    • Alliance Members Protest Paul Ryan in Syracuse - and Walmart in Washington State
    • Another Myth De-Bunked: FDR Never Promised Social Security Would be Voluntary
    • New South Carolina Alliance President
  • Business Insider: Making 401(k) Plans The Foundation Of Old-Age Income Is A Joke. By David Cay Johnson. Excerpts: Making self-directed retirement savings plans like the 401(k) the foundation of old-age income is as economically inefficient as making pins one at a time.

    Specialization makes for economic efficiency. We do not all know how to wire our homes for electricity or plumb them to carry fresh water in and wastewater out without spilling a drop. Using self-directed investment through 401(k)-type plans is the economic equivalent of expecting every worker to be her own roofer and surgeon.

    Most people lack the necessary time, knowledge and highly specialized skills to manage investments and time in order to accumulate enough wealth to sustain them from the day they stop working until they die. The result of creating a population of financial do-it-yourselfers is proving to be shocking and painful, leaving people worse off than need be.

    Look at it this way: if investing was something just anybody can do, the average job on Wall Street would pay average wages. But stockbrokers, investment advisers and others who become expert at subtle concepts like the time value of money, asset allocation and risk and opportunity costs make more than most people because those skills add value by reducing inefficiency and increasing returns.

    The Labor Department publishes data going back to 1989 comparing investment returns of traditional pensions and 401(k) plans through 2008. The professional managers of traditional pensions performed better than individuals in their 401(k) plans in fifteen of twenty years. In every year when the stock market was down, the pension plans lost less than the 401(k) plans, numbers that reflect the steady hand of professional money managers as opposed to the less informed and sometimes panicked hands of individual amateur investors.

  • Washington Post: There’s nothing ‘courageous’ about raising the Social Security retirement age. By Ezra Klein. Excerpts: In an interview with Dylan Matthews, Nobel laureate economist and Social Security expert Peter Diamond unloads on those who think the simplest and fairest way to “fix” Social Security is to raise the retirement age, which would particularly hurt seniors who retire early at age 62.
    What do we know about the people who retire at 62? On average, they have a shorter life expectancy and lower earnings than people retiring at later ages. If anyone stood up and said, ‘Instead of doing uniform across the board cuts, let’s make them a little worse for people who have shorter life expectancies and lower earnings,’ they’d be laughed at.

    Of course, those who say we should raise the Social Security retirement age — either the age of eligibility or the age for full benefits — don’t get laughed at. It’s considered a very thoughtful, courageous effort to deal with our entitlement programs. People who mention it often make a joke of how brave they’re being. For instance, here’s New Jersey Gov. Chris Christie (R) at an American Enterprise Institute event:

    You are going to have to raise the retirement age for Social Security! Whoa! I just said it and I am still standing here. I did not vaporize into the carpeting.

    Big applause, of course.

    This is one of Washington, D.C.’s more disagreeable conceits. The people wandering around calling for a higher retirement age will never feel the bite of the policy. Think tankers and politicians and columnists don’t retire at age 62, or even age 65. They love their work, which mostly requires sitting down in air-conditioned rooms. They stick around pretty much until they’re about to die. ...

    Meanwhile, you could do more to erase Social Security’s shortfall by simply lifting the payroll tax cap. A lot more. According to the Congressional Budget Office, raising the federal retirement age to 70 would solve about half of Social Security funding problem, while lifting the payroll tax cap would solve all of it.

  • New York Times: A Risky Lifeline for the Elderly Is Costing Some Their Homes. By Jessica Silver-Greenberg. Excerpts: The very loans that are supposed to help seniors stay in their homes are in many cases pushing them out.

    Reverse mortgages, which allow homeowners 62 and older to borrow money against the value of their homes and not pay it back until they move out or die, have long been fraught with problems. But federal and state regulators are documenting new instances of abuse as smaller mortgage brokers, including former subprime lenders, flood the market after the recent exit of big banks and as defaults on the loans hit record rates.

    Some lenders are aggressively pitching loans to seniors who cannot afford the fees associated with them, not to mention the property taxes and maintenance. Others are wooing seniors with promises that the loans are free money that can be used to finance long-coveted cruises, without clearly explaining the risks. Some widows are facing eviction after they say they were pressured to keep their name off the deed without being told that they could be left facing foreclosure after their husbands died.

  • AARP Public Policy Institute: Proposed Changes to Social Security’s Cost-of-Living Adjustment: What Would They Mean for Beneficiaries? (PDF) By Gary Koenig and Mikki Waid. Abstract: As policymakers debate ways to reduce the federal budget deficit, several proposals have included a change to the way that inflation is calculated in Social Security. A new cost of living measure (chained-CPI), which grows more slowly than the current calculation (CPI-W), would reduce spending on Social Security as well as other federally administered programs such as Supplemental Security Income and pensions for veterans.

    Changing the cost-of-living adjustment (COLA) would have a detrimental impact on the economic wellbeing of older and disabled Americans and their family members who receive benefits from Social Security. Small reductions to the annual COLA will accumulate over time so that the largest reductions in benefits will be on the oldest beneficiaries and the long-term disabled. For example, 92- year-old beneficiaries who were on the program for 30 years would see an 8.4% cut in benefits. Disabled children could face even larger benefit cuts over their lifetime. Oldest Americans are the least able to absorb cuts to their benefits as they are more reliant on Social Security for their income and have higher out-of-pocket medical spending and a higher poverty rate than younger Americans.

  • Work Day Minnesota: Where did all our pensions go? By Jackie Tortora. Excerpts: A total of 84,350 pension plans have vanished since 1985. This figure shocked Pulitzer Prize-winning authors Donald L. Barlett and James W. Steele, who just released their latest book, "The Betrayal of the American Dream."

    Their chapter on retirement chronicles the heist of the American Dream's secure retirement by the financial elite and is a very important section of the book, said Steele, who spoke with the AFL-CIO about the retirement crisis.

    Steele said there is another number we should pay attention to: $17,686. That's the median value of 401(k) accounts in 2011. For most working people, the amount in their 401(k) account would pay them less than $80 a month for life.

    "What's happening with retirement is almost parallel to what you see happening in other parts of the economy," he said.

    “The elite has its agenda to eliminate pensions with the shift to 401(k)s, which cost companies less,” he noted. “Now, there's a revenue stream for Wall Street and an obligation shift to people with little or no experience understanding how to deal with their own retirement issues....This is typical of all the other things the economy elite has been doing for decades with deregulation, unrestricted free trade and tax cuts—these things are all related.

  • Yahoo! IBM Employee Issues message board: "Re: Where did all our pensions go?" by "trexibmer". Full excerpt: But the SERPs (Supplemental Executive Retirement Plans), other "Top Hat" plans, and retention deferred compensation ("unfunded" style company plans) for the top brass remain stronger than ever. Corporations even pitch they need stockholders to approve millions of $$$ for these to "remain competitive" and "keep and retain the best executive talent" (like where is a 25-30+ year executive lifer going to go in this economy?), even at the expense of the bottom line and maybe even costing a penny more against the EPS, and even when revenues go worse than flat, and only know the way to drive a profit is to do permanent layoffs to the top talent employees and other cost cutting measures (e.g. even cutting out supplying coffee urns or the hot water for them).
  • Investment News: Pension advocacy group calls for temporary halt to lump-sum buyouts. Spinning off pension liabilities may help investors, but hurt retirees. By Mary Beth Franklin. Excerpts: Over the last few months, several large companies, let by auto giants Ford and GM, announced plans to spin off their traditional pension plans by transferring their liabilities to an insurance company or offering lump-sum payouts to retirees and certain former workers.

    Verizon was the latest corporation to hop on the de-risking bandwagon, prompting calls from a leading pension advocacy group to halt such actions until Congress can review the impact on workers and retirees.

    “These employers are looking to cut costs and reduce long-term liabilities to make their companies more attractive to investors, but 'de-risking' can be risky for workers and retirees,” said Karen Friedman, policy director of the Pension Rights Center in Washington. ...

    The Pension Rights Center has fact sheets on its website (www.pensionrights.org) about what happens when a pension is transferred to an insurance company and on deciding between a lump sum or an annuity . In addition, the Pension Benefits Guaranty Corporation has a list of frequently asked questions on plan terminations under the “workers and retirees” section of its website (www.pbgc.gov).

  • Reuters: What's your rate of return on Social Security? By Mark Miller. Excerpts: Is Social Security a good deal? Many Americans worry that they will put more money into the system via payroll taxes during their working years than they will ever get back in benefits - and their concerns help fuel the ongoing push by Republicans to transform Social Security into a privatized system of personal accounts.

    Mitt Romney has supported privatization in the past (see his book, "No Apology"), and running mate Paul Ryan argued for it as recently as last week's vice presidential debate: "Let younger Americans have a voluntary choice of making their money work faster for them within the Social Security system."

    Could workers make their money grow more quickly with personal accounts? The actuaries at the Social Security Administration (SSA) ran an analysis recently that simulated real (after inflation) annual rates of return on payroll tax contributions for beneficiaries who were born between 1920 and 2004.

    It showed that some workers might beat Social Security's returns in some years if they took risks in the stock market. But over a lifetime, Social Security's consistent, risk-free and inflation-adjusted returns would be very tough to beat.

New on the Alliance@IBM Site
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  • Job Cut Reports
    • Comment 10/17/12: When will Big Blew understand the simple fact that you can't cost cut your way to prosperity. More job cut RAs will not work. They never really have. No revenue growth means no earnings and sustainable biz. Anyone can turn a profit by saving with cost cuts. Once IBM fails to turn a profit then the Armonk glasshouse will finally cave in without any rocks being thrown at it. -anonymous2015-
    • Comment 10/18/12: IBM Management "command and control" must agree to relocate to Dublin or Singapore by 10/31/2012, or look for a new job. Got this from my old boss who said no to Dublin. -Anonymous-
    • Comment 10/18/12: With the IBM stock price in free fall Big Blow has to go all out in 4th QTR otherwise their Roadmap is leading to a big dead end. Expect more RAs to try to recoup 3rd QTR revenue loss imperiling 4th QTR potential. I would organize/unionize to protect yourselves NOW. Otherwise you might just get nothing (no severance, etc.) on the next RA-go-round. Look what happened to Google today..IBM that far behind?!? -ouija-
    • Comment 10/18/12: @anonymous2015, IBM doesn't care about the employees, it is as simple as that. It does not cost IBM a dime to fire 1 person in the the US that costs $60K a year and be able hire 5 people over seas to replace that ONE PERSON AND STILL SAVE THOUSANDS OF US DOLLARS in benefits and taxes. Your only hope is to band together with a Union and stand up to the 10 thousand pound gorilla. I am a former IBMer whom decided to leave before the slaughter. The bottom line is, not you. So stand up and fight if you believe in yourself over the bottom line which is the almighty dollar for now. best wishes. -Just-A-Number-
    • Comment 10/19/12: Another quarterly report...Revenue down, profit up. IBM is in ketosis. -gadfly-
    • Comment 10/19/12: IBM Management "command and control"??? Who are these types? IBM has so many new layers of management it is a joke how many levels I am below Ginni CEO now. More so now than when I started in IBM in the 1980's. I guess the RAs now hit bloated excess management hard since their are no more employees to cut? -Anonymous-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
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  • New York Times op-ed: Death by Ideology. By Paul Krugman. Excerpts: Last week, speaking to The Columbus Dispatch, Mr. Romney declared that nobody in America dies because he or she is uninsured: “We don’t have people that become ill, who die in their apartment because they don’t have insurance.” This followed on an earlier remark by Mr. Romney — echoing an infamous statement by none other than George W. Bush — in which he insisted that emergency rooms provide essential health care to the uninsured.

    These are remarkable statements. They clearly demonstrate that Mr. Romney has no idea what life (and death) are like for those less fortunate than himself.

    Even the idea that everyone gets urgent care when needed from emergency rooms is false. Yes, hospitals are required by law to treat people in dire need, whether or not they can pay. But that care isn’t free — on the contrary, if you go to an emergency room you will be billed, and the size of that bill can be shockingly high. Some people can’t or won’t pay, but fear of huge bills can deter the uninsured from visiting the emergency room even when they should. And sometimes they die as a result.

    More important, going to the emergency room when you’re very sick is no substitute for regular care, especially if you have chronic health problems. When such problems are left untreated — as they often are among uninsured Americans — a trip to the emergency room can all too easily come too late to save a life. ...

    How many deaths are we talking about? That’s not an easy question to answer, and conservatives love to cite the handful of studies that fail to find clear evidence that insurance saves lives. The overwhelming evidence, however, is that insurance is indeed a lifesaver, and lack of insurance a killer. For example, states that expand their Medicaid coverage, and hence provide health insurance to more people, consistently show a significant drop in mortality compared with neighboring states that don’t expand coverage. ...

    So there’s no real question that lack of insurance is responsible for thousands, and probably tens of thousands, of excess deaths of Americans each year. But that’s not a fact Mr. Romney wants to admit, because he and his running mate want to repeal Obamacare and slash funding for Medicaid — actions that would take insurance away from some 45 million nonelderly Americans, causing thousands of people to suffer premature death. And their longer-term plans to convert Medicare into Vouchercare would deprive many seniors of adequate coverage, too, leading to still more unnecessary mortality. ...

    So let’s be brutally honest here. The Romney-Ryan position on health care is that many millions of Americans must be denied health insurance, and millions more deprived of the security Medicare now provides, in order to save money. At the same time, of course, Mr. Romney and Mr. Ryan are proposing trillions of dollars in tax cuts for the wealthy. So a literal description of their plan is that they want to expose many Americans to financial insecurity, and let some of them die, so that a handful of already wealthy people can have a higher after-tax income.

  • Morningstar: Improving Your Finances Debating the Pros and Cons of Health Savings Accounts. Enthusiasts point to tax benefits and flexibility; detractors point to high costs and lackluster investment options. By Christine Benz. Excerpt: Year-end means "open enrollment" season, when employees will have a chance to make decisions about their health-care insurance coverage, among other elections. Increasingly on employee menus? High-deductible health-care plans, or HDHPs. Nearly 70% of large employers expect to have a high-deductible plan on the employee health-care menu by 2013, according to a recent Towers Watson survey. To help defray their out-of-pocket health-care costs until the deductible is satisfied, employees can use tax-advantaged health-savings accounts. Not only are HSA contributions tax-deductible, but earnings on gains won't be taxed from year to year, and qualified withdrawals for medical expenses are tax-free. ...

    If you're debating whether to participate in a high-deductible plan--or if that's the only option you have--the thread is a must read.

  • Tampa Bay Online: Shift is on for health plans as reform takes effect. By Mary Shedden. Excerpts: Accepting the status quo could be costly for consumers re-enrolling in a workplace health insurance plan for 2013. Private insurance offered by employers seems to get more expensive and complicated every year. For nearly a decade, painful premium increases have elicited groans and complaints at annual enrollment meetings, held in October at many Tampa workplaces.

    In 2013, workers will see an increase, but it will be a smaller bump up front than usual for most: an average 4 percent annual increase versus 10 percent or more each year in the past decade. The Employer Health Benefits Survey has been taken every year since 1999 by the Kaiser Family Foundation and Health Research & Educational Trust. ...

    An estimated 149 million Americans who are 64 and younger are enrolled in private-insurance plans at employers large and small. On average, families paid $15,745 in annual premiums in 2012 for coverage. Individuals spent $5,615, according to the Employer Health Benefits Survey.

  • Bloomberg: Medicare Premiums Would Rise for 59% With Ryan Plan. By Alex Wayne. Excerpt: Elderly people in Florida would have paid more than $200 extra for traditional Medicare if a system similar to Paul Ryan’s proposed overhaul of the program was in place in 2010, according to the Kaiser Family Foundation.

    Ryan, the Republican vice presidential nominee, wants to transform Medicare into a “premium support” system in which beneficiaries get a fixed payment from the government for their insurance, rather than guaranteed benefits. Such a plan would lead to wide variations in Medicare costs across the country, according to the study today by the nonprofit Kaiser group.

  • Deloitte Center for Health Solutions: The Health Care Reform Debate: 10 Myths (PDF). Excerpts:
    1. Myth: Most Americans like our current system. They want the current system protected at all costs...
    2. Myth: Most Americans understand the U.S. system and think it’s better than others. ...
    3. Myth: There’s not enough money in the U.S. health system. ...
    4. Myth: Government health care programs—Medicare and Medicaid—are poorly managed and need overhaul. ...
    5. Myth: There is a shortage of primary care physicians. ...
    6. Myth: The major driver of health costs is unhealthy lifestyles, and the Affordable Care Act (ACA) doesn’t address this at all. ...
    7. Myth: The ACA does nothing to lower costs. ...
    8. Myth: Most of the care that’s recommended is necessary. And most of what the system spends is therefore appropriate and unavoidable. ...
    9. Myth: The health insurance industry is the problem, and its fate uncertain. ...
    10. Myth: Health reform is about the future of the ACA.
  • The Commonwealth Fund: Health Care Reforms in the USA and England: Areas for Useful Learning. By David Blumenthal, M.D., and Jennifer Dixon, MbChB. Synopsis: Synopsis Two landmark health reform bills recently passed in the United States and England have similarities in their approaches to financing, organizational structure, and information technology—enabling policymakers in both countries to compare the results of one another’s efforts and extract lessons. For example, both countries are experimenting with bundled payments and with instituting value-based purchasing, which reward hospitals for improved quality of care and penalize low-performing institutions. In addition, England’s early adoption of electronic health records (EHRs) and the country’s use of data to measure clinical outcomes provide instructive guidance for the U.S. as it promotes the use of EHRs in hospitals and physician offices.
  • Washington Post: Some employers offer aid to retirees after cutting their health insurance. By Michelle Andrews. Excerpt: In the past 20 years, the number of companies that provide retiree health coverage has dropped dramatically, leaving seniors with the difficult task of choosing among a variety of plans to supplement their Medicare benefits. It is a choice that can be confusing and has large financial implications.

    But a move by some employers is softening the blow. They are contracting with companies that operate insurance marketplaces, called exchanges, where Medicare-eligible retirees can enroll in plans to replace what they used to get from the employer. Working with a counselor, retirees can figure out what coverage best meets their needs — determining, for example, whether to buy Medigap and prescription drug plans or to join a Medicare Advantage plan. (Counselors typically rely on salary but sometimes other sales incentives may factor in their compensation.)

  • Huffington Post: Medicare Under Siege, Yet Stronger Than Ever. By Senator Harry Reid, Senate Majority Leader. Excerpts: Over the next seven weeks, it will be increasingly clear that Medicare is strong, and that Congressman Paul Ryan's plan to end guaranteed health benefits for seniors is the wrong prescription for America. ...

    Medicare began in 1966. And now, thanks to the Affordable Care Act (ACA), its health coverage is better than before. Under the ACA, savings from cutting wasteful spending and fraud will extend the solvency of the Medicare trust fund by an additional eight years.

    A lot has changed since Medicare went into effect. New technologies have developed that keep Americans healthier and help them live longer. Medicine has changed. But one thing hasn't: seniors need affordable care. In fact, the rising cost of health care today means seniors need Medicare's protection more than ever. ...

    Keeping quality health care affordable was one of our top goals in writing the Affordable Care Act in Congress. Since it passed in 2010, Medicare Advantage premiums have fallen by 10 percent and enrollment has increased by 28 percent. ...

    Turning Medicare into a voucher program, as Congressman Ryan proposes, would increase premiums for most seniors, according to a nonpartisan study released today by the Kaiser Family Foundation. By 2022, the Congressional Budget Office estimates his plan would cost seniors an extra $6,400, on average, for health care.

  • The Fiscal Times: Study Shows Higher Costs for Seniors with Premium Support. By Merrill Goozner. Excerpts: Nearly six out of ten seniors on Medicare would have paid higher out-of-pocket costs for insurance had the government adopted the premium support plan offered last year by Rep. Paul Ryan (R-Wis.) and endorsed by Republican nominee Mitt Romney, a new study shows.

    The Kaiser Family Foundation used the third and most generous premium-support proposal offered by the Republican Party’s vice presidential candidate, which was co-authored by Sen. Ron Wyden (D-Ore.). Under premium support, the government gives seniors a fixed amount of cash to buy insurance policies on the private market. ...

    The analysis showed that premium support would have far different results in different parts of the country, with some areas seeing sharply higher rates for most seniors, while others would have similar or even lower rates. In 29 states and the District of Columbia, less than 15 percent of beneficiaries would pay $100 or more in additional monthly premiums. But in states like California, Florida, New Jersey and Connecticut, which have higher costs than other parts of the country, the figure was much different: More than 45 percent of beneficiaries would pay at least $100 more in Medicare monthly premiums than they do now.

  • Changes in Health Care Financing & Organization (HCFO): In Health Care Spending, Americans Who Make the Least Contribute the Greatest Share of Income (PDF). Overview: Health care spending accounted for 17.6 percent of the gross domestic product in 2010, or $2.6 trillion, and this growing expenditure is made up of a combination of public and private funding. Public funding for health care comes from federal, state, and local sources and at all levels is supported by tax revenues paid by families. Private spending incorporates both insurance payments and direct consumer spending. Regardless of whether insurance is purchased privately or through an employer, economic research has demonstrated that individuals ultimately pay for all health care spending.

    In a HCFO-funded study, Patricia Ketsche, Ph.D., associate professor at the Institute of Health Administration at Georgia State University, E. Kathleen Adams, Ph.D., professor at Emory University’s Rollins School of Public Health, and colleagues explored whether the individual burden of health care spending was equally distributed to families across income groups. Within the tax literature equity studies measure the burden of payment relative to ability to pay. A vertically equitable tax system requires that low-income families pay a smaller share of their incomes in taxes than do higher-income families. Taxes that impose a heavier burden on low income families are considered “regressive,” – that is, the share of income paid in taxes decreases as income increases. Taxes that are “progressive” require a greater share of income paid as income increases. In their study, Ketsche and colleagues sought to evaluate the health care financing system in total to determine who truly pays for health care across the public and private funding streams and whether this financing system is equitable.

  • Urban Institute's Health Policy Center: Federal Health Reform Is Largely Market-Based, Despite Contrary Assertions (PDF). By Randall R. Bovbjerg and Stan Dorn. Introduction and Summary: Opponents regularly deride the Patient Protection and Affordable Care Act as a government takeover of American health care. But the ACA relies primarily on the private market to achieve coverage expansion, using public regulation to make the market work.

    The ACA is a direct descendant of the “procompetitive” reform strategy of the Reagan era, which also proposed to structure competition among private health plans to expand coverage and promote better value. After the ACA, as before, the vast majority of Americans younger than Medicare age will enroll in privately operated insurance plans and will receive care from private physicians and hospitals. The ACA will expand coverage from private insurers as well as under Medicaid and CHIP (which also rely heavily on private plans).

    The ACA establishes new ground rules for insurance competition, similar to traditional practices of large employment groups, which require insurers to compete on efficiency, rather than on avoidance of risky or costly enrollees. Starting in 2014, competing private health plans will cover the previously uninsured, both under the new insurance-purchasing exchanges and under states’ Medicaid programs. Most already covered Americans will be largely unaffected, especially in large firms.

    Reform operates mainly by structuring incentives for private actors and states and by giving them new information and coverage options rather than by imposing direct controls on behavior. As a result, the ACA does far more to expand personal choice and autonomy than to reduce them, most obviously for the tens of millions of Americans who are now either uninsured or offered only a single option for insurance coverage.

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

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

  • New York Times: As Romney Repeats Trade Message, Bain Maintains China Ties. By Sharon LaFraniere and Mike Mcintire. Excerpts: The tale of Asimco Technologies, an auto parts manufacturer whose plants dot eastern China, would seem to underscore Mitt Romney’s campaign-trail complaint that China’s manufacturing juggernaut is costing America jobs.

    Nine years ago, the company bought two camshaft factories that employed about 500 people in Michigan. By 2007 both were shut down. Now Asimco manufactures the same components in China on government-donated land in a coastal region that China has designated an export base, where companies are eligible for the sort of subsidies Mr. Romney says create an unfair trade imbalance.

    But there is a twist to the Asimco story that would not fit neatly into a Romney stump speech: Since 2010, it has been owned by Bain Capital, the private equity firm founded by Mr. Romney, who has as much as $2.25 million invested in three Bain funds with large stakes in Asimco and at least seven other Chinese businesses, according to his 2012 candidate financial disclosure and other documents. ...

    As a candidate, Mr. Romney uses China as a punching bag. He accuses Beijing of unfairly subsidizing Chinese exports, artificially holding down the value of its currency to keep exports cheap, stealing American technology and hacking into corporate and government computers.

    “How is it China’s been so successful in taking away our jobs?” he asked recently. “Well, let me tell you how: by cheating.”

    But his private equity dealings, both while he headed Bain and since, complicate that message. ...

    Among the companies in which the Bain funds have invested is a global auto parts maker that is in the process of closing a factory in Illinois and moving most of the equipment and jobs to Jiangsu Province, where the Chinese government has built it a new plant; a Chinese electronics retailer accused by Microsoft of selling computers with pirated software; and a Hong Kong-based Chinese appliance maker that was sued for copying another company’s design for a deep-fat fryer.

  • Rock River Times (Illinois): Sensata workers attack Romney’s profit ‘harvest’ comments. Excerpts: Workers facing outsourcing at Freeport’s Sensata Technologies plant and community supporters held an “Outsourcing Pig Roast” Saturday, Sept. 29, at the “Bainport” encampment, across the street from the Sensata plant in Freeport, where many workers have been camping out for the past few weeks.

    The employees are continuing their efforts to call on Bain co-founder and former CEO and current Republican presidential candidate Mitt Romney to help save their jobs.

    At the pig roast, workers raised concerns about Romney’s attempts to shift the blame for outsourcing to President Barack Obama (D), recent reports of Romney’s tax breaks on his personal Sensata stock, and newly-surfaced video of Romney from 1985 explaining how Bain Capital buys companies to “harvest profits.” ...

    Sensata Technologies, which was created by Bain Capital in 2006, develops, manufactures, and sells sensors and controls for major auto manufacturers such as Ford and General Motors. The company is in the process of outsourcing 170 well-paying jobs from the remaining plant in Freeport, Ill., to China — despite record profits.

    Tom Gaulrapp, who has worked at the Freeport Sensata Technologies plant for 33 years, said: “When I heard Mitt Romney say Bain Capital buys companies, runs them for a few years, and then harvests them for profits, it was like a slap in the face. People ask me why we are focusing on Mitt, and his comments show why: he’s the guy who created the model of harvesting profits by shipping good American jobs to China.”

    The Sensata workers also demonstrated disgust at the news that Romney’s tax returns show significant personal investment in Sensata and a $350,000 tax break for transferring some of his Sensata stock to one of his foundations. Romney served as CEO of Bain from 1984 until 2002, according to SEC filings. Romney, however, has repeatedly said he left the company in 1999. ...

    Bainport (visit http://bainport.com/) is a camp in Freeport Sensata workers set up Sept. 12 in protest of Bain’s decision to ship their jobs to China. The camp is at the Stephenson County Fairgrounds, across the street from the Sensata plant at 2520 S. Walnut, Freeport.

  • Financial Times: US woman takes on banks over Libor. By Caroline Binham. Excerpts: A pensioner whose home was repossessed is taking on some of the world’s leading banks in the first known class-action lawsuit claiming that alleged Libor manipulation made mortgage repayments for thousands of Americans more expensive than they should have been. ...

    The class action, filed in New York, alleges that traders at 12 of the biggest banks in Europe and North America – including Barclays, Bank of America and UBS – were incentivised to manipulate the London interbank offered rate to a higher rate on certain dates on which adjustable mortgage interest rates were reset. This resulted in homeowners paying more between 2000 and 2009, according to the complaint.

    The plaintiffs, who could number 100,000, have lost thousands of dollars each, says their Alabama-based attorney, John Sharbrough. He declined to give a figure on the total damages his clients are seeking. ...

    “This can’t just be dismissed as a kooky lawsuit,” said Dominic Auld, a litigator at Labaton Sucharow, who is not involved in the suit. “Referencing CDOs and subprime mortgages ... really ties together Libor manipulation with the kinds of behaviour that caused the financial crisis in first place.”

  • Washington Post: Ohio voter fraud billboards will stay. By Bill Turque. Excerpts: Clear Channel, the outdoor advertising giant, said Friday that it was a mistake to sell space on dozens of Cleveland and Columbus billboards warning that “voter fraud is a felony” — many in African American neighborhoods — to an anonymous foundation.

    But the company also said it has no plans to take the ads down.

    Civil rights and labor groups have denounced the billboards, which also feature a giant judge’s gavel and a warning of “up to 3 1/2 years and a $10,000 fine,” as an attempt to intimidate minority voters. The ads are appearing in Milwaukee as well, according to Clear Channel. ...

    In a statement, AFL-CIO Executive Vice President Arlene Holt Baker and Ohio AFL-CIO Secretary Treasurer Pierrette “Petee” Talley called on Clear Channel to pull the ads.

    “Every election year we see offensive, underhanded tactics by groups who don’t want everyone to have access to the voting booth,” they said. “This year, intimidating billboards that point out voter fraud are appearing in predominantly African American communities in Ohio, despite little to no evidence that voter fraud exists. … We urge Clear Channel to remove these billboards and replace them with information that will help voters exercise their fundamental right to vote in this year’s critical election.”

  • Smirking Chimp: The National Debt and Our Children: How Dumb Does Washington Think We Are? By Dean Baker. Excerpts: While much of the country is focused on the presidential race, the Wall Street gang is waging a different battle; they are preparing an assault on Social Security and Medicare. This attack is not exactly secret. There have been a number of pieces on this corporate-backed campaign in the media over the last few months, but the drive is nonetheless taking place behind closed doors.

    The corporate honchos are not expecting to convince the public that we should support cuts to Social Security and Medicare. They know this is a hopeless task. Huge majorities of people across the political spectrum strongly support these programs.

    Instead they hope that they can use their power of persuasion, coupled with the power of campaign contributions and the power of high-paying jobs for defeated members of Congress, to get Congress to approve large cuts in Social Security, Medicare, Medicaid and other key programs. This is the plan for a grand bargain that the corporate chieftains hope can be struck in the lame duck Congress. ...

    To be specific, the reduction in Social Security benefits from the cut in the in the cost-of-living adjustment that is being pushed as part of a grand bargain would have more impact on most future retirees living standards than ending the Bush tax cuts on the richest 2 percent would have on their living standards. While the media have done endless pieces on the impact of this possible tax increase on the wealthy, they have done almost nothing on the impact of cutting the cost-of-living adjustment on the living standards of retirees.

  • New York Times editorial: Mr. Romney Needs a Working Calculator. Excerpts: To the annoyance of the Romney campaign, members of Washington’s reality-based community have a habit of popping up to point out the many deceptions in the campaign’s blue-sky promises of low taxes and instant growth. The latest is the Joint Committee on Taxation, an obscure but well-respected Congressional panel — currently evenly divided between the parties — that helps lawmakers calculate the effect of their tax plans.

    Last month, the committee asked its staff what would happen if Congress repealed the biggest tax deductions and loopholes and used the new revenue to lower tax rates. The staff started adding it up: end all itemized deductions, tax capital gains and dividends as ordinary income, and tax the interest on state and local bonds, along with several other revenue-raisers.

    The answer came last week: ending all those deductions would only produce enough revenue to lower tax rates by 4 percent.

    Mitt Romney says he can lower tax rates by 20 percent and pay for it by ending deductions. The joint committee’s math makes it clear that that is impossible. ...

    Even Fox News isn’t buying it. Ed Gillespie, a senior adviser to the Romney campaign, said on Fox News Sunday that Mr. Romney would work out those details later with Congress. As the program’s moderator, Chris Wallace, pointed out, that’s like offering voters the candy of a 20 percent tax cut without mentioning the spinach they will have to eat. ...

    It is increasingly clear that the Romney tax “plan” is not really a plan at all but is instead simply a rhapsody based on old Republican themes that something can be had for nothing. For middle-class taxpayers without the benefit of expensive accountants, the bill always comes due a few years later.

  • Wall Street Journal: Apple Contractor Hon Hai Says It Hired Underage Workers. By Paul Mozur. Excerpts: Hon Hai Precision Industry Co. acknowledged that it hired underage workers at one of its China plants, in the latest hit to the labor practices of the major contractor for Apple Inc. and other electronics giants.

    The Taiwanese company, which also uses the trade name Foxconn Technology Group, said that it had employed interns as young as 14 at its campus in Yantai, in the northeastern Chinese province of Shandong, for approximately three weeks. Hon Hai said it took "immediate steps" to return the interns to their educational institutions. ...

    Hon Hai has been under scrutiny by labor groups for its work practices. The company has defended its conduct, but earlier this year it agreed to change its labor practices after an outside audit of its Chinese factories found widespread breaches of work rules, including 60-hour workweeks and other health and safety violations.

  • AARP: The Vice Presidential Debate: The Candidates on Medicare and Social Security. Excerpts: It wasn’t the “Thrilla in Manila,” the famous faceoff between Muhammad Ali and Joe Frazier for the Heavyweight Boxing Championship of the World, but tonight’s debate between Vice President Joe Biden and Rep. Paul Ryan, Republican Mitt Romney’s running mate, was nonetheless heavy with political drama.

    The two vice presidential candidates met to debate both foreign and domestic topics at Centre College in Danville, Ky., Martha Raddatz, the senior foreign affairs correspondent of ABC News, moderating.

    One of her questions: “Both Medicare and Social Security are going broke and taking a larger share of the budget in the process. Will benefits for Americans under these programs have to change for the programs to survive?

    Here are the candidates’ responses (followed by a transcript of the entire segment):

  • Washington Post's Fact Checker: Mitt Romney’s ‘new math’ for jobs plan doesn’t add up. By Glenn Kessler. Excerpts: “Let me tell you how I will create 12 million jobs when President Obama couldn't. First, my energy independence policy means more than 3 million new jobs, many of them in manufacturing. My tax reform plan to lower rates for the middle class and for small business creates 7 million more. And expanding trade, cracking down on China and improving job training takes us to over 12 million new jobs.” — Mitt Romney, “in his own words,” in a campaign television ad. ...

    The Pinocchio Test. This is a case of bait-and-switch. Romney, in his convention speech, spoke of his plan to create “12 million new jobs,” which the campaign’s white paper describes as a four-year goal.

    But the candidate’s personal accounting for this figure in this campaign ad is based on different figures and long-range timelines stretching as long as a decade — which in two cases are based on studies that did not even evaluate Romney’s economic plan. The numbers may still add up to 12 million, but they aren’t the same thing — not by a long shot.

    In many ways, this episode offers readers a peek behind a campaign wizard’s curtain — and a warning that job-creation claims by any campaign should not be accepted at face value. The white paper at least has the credibility of four well-known economists behind it, but the “new math” of this campaign ad does not add up.

    As readers know, we tend to judge more harshly claims in prepared speeches or ads that were the result of considered discussion by political aides.

    Clearly, some clever campaign staffer thought it would be nice to match up poll-tested themes such as “energy independence,” “tax reform” and “cracking down on China” with actual job numbers. We just find it puzzling that Romney agreed to personally utter these words without asking more questions about the math behind them.

  • Huffington Post: Republican Senator, Vietnam Veteran Endorses President Obama. Excerpts: As a combat veteran of two tours in Vietnam with twenty-two years of service as a Republican member of the U.S. House and Senate, I endorse President Barack Obama for a second term as our Commander-in-Chief. Candidates publicly praise our service members, veterans and their families, but President Obama supports them in word and deed, anywhere and every time. ...

    This decision is not easy for any lifelong Republican. In 2008 I voted for Barack Obama, the first time I ever voted for a Democrat, because the Republican Party was drifting toward a dangerous path that put extreme party ideology above national interest. Mitt Romney heads a party remaining on that dangerous path, proving the emptiness of their praise as they abandon our service members, veterans and military families along the way.

    What really set me off was Romney's reference to 47% of Americans to be written off -- including any veteran collecting disability like myself, as a post-traumatic stress disorder (PTSD) veteran.

    Behind closed doors with his donors, Romney made clear he'd write off half of America -- including service members and veterans -- because, as he said "I'll never convince them they should take personal responsibility for their lives." But there's no greater personal responsibility than to wear your country's uniform and defend the rights we all enjoy as Americans. We don't sow division between "us" versus "them." The Commander-in-Chief sets the bar for all to follow and fight for the entire country. Mitt Romney fails that test. As a veteran I feel written off. ...

    President Obama ended one war, is ending another and meeting our national security needs with support of our military leaders. He's laid out a clear plan that would reduce the deficit and prevent the mandatory military spending cuts that no one wants. But today's Republican Party, including Ryan who voted for the deal that would trigger the cuts, is willing to bring our country's defenses to the fiscal cliff -- just so a multimillionaire doesn't have to pay a single extra penny in taxes. And the real lack of leadership? Failing to own up to your role in racking up a record debt from two unpaid wars and two massive unpaid for tax cuts. Mitt Romney leads the party that fails this leadership test.

    And as former member of the U.S. Senate Budget Committee, the Senate Finance Committee and Chairman of the then Commerce Committee, I came to know the federal budget in detail. I'm disappointed that just as our troops are returning home after a decade of war, Romney and Ryan might gut by up to 20 percent investments in the Department of Veterans Affairs -- and even suggest privatizing the veterans' health care. Again, they would short change our national security and the education, health care and employment benefits our veterans have earned and deserve just to cut taxes for the wealthiest Americans. ...

    Meanwhile President Obama recognizes our sacred trust with those who serve starts when they take their oath and never ends. He's enacted tax credits to spur businesses to hire unemployed veterans and wounded warriors. He implemented and improved the post-9/11 GI Bill, the largest investment in veterans education since the original GI Bill over sixty years ago. He's proposing a Veterans Jobs Corps that would put returning service members to work as police officers, firefighters and first responders. As part of his achievable plan to keep moving our country forward, the President would use half the savings from ending the wars in Iraq and Afghanistan to help pay down our debt and invest in nation building here at home, putting Americans back to work -- including our veterans -- fixing our roadways and runways, bridges and schools. ...

    And something that hits close to home, President Obama also secured the largest increase in VA investments in decades so our veterans get the care and benefits they earned, like treatment for PTSD and traumatic brain injury. As someone with service-related PTSD, I meet with younger veterans weekly to help them through the treatment and transition to a productive civilian life. It makes a difference for them knowing their President has their back.

  • The Center for Public Integrity: Lobbyists for BP, PhRMA, foreign-owned banks raise big bucks for GOP nominee. By Michael Beckel. Excerpts: Romney, unlike President Barack Obama, has not voluntarily released a list of bundlers — elite political fundraisers who turn to relatives, friends and business associates to raise large sums and then deliver the funds in a “bundle” to the candidate. They are often given perks and special access — both on the campaign trail and once politicians are elected. ...

    Obama, who, as president, has taken a tough stance against lobbyists in his rhetoric and policies, has not taken money from lobbyist-bundlers, according to records. He has voluntarily disclosed the names of everyone who has raised at least $50,000 for his re-election efforts. ...

    Romney has rejected calls from good-government groups such as the Center for Responsive Politics, the Sunlight Foundation, the League of Women Voters and the Campaign Legal Center to release additional information about his top fundraisers, unlike former GOP presidential candidates George W. Bush and Sen. John McCain of Arizona. ...

    Even as Romney has denied requests for increased transparency, he plans to list the names of all bundlers who raise at least $200,000 in a commemorative book after Election Day. Top supporters are also being offered special access to weekly strategy sessions, VIP retreats and signature apparel, according to Politico.

    Those who raise at least $200,000 between the primary and general election will be honored at the “Stars” level, according to documents obtained by Politico, while those who bundle at least $400,000 enjoy “Stripes” level status.

  • Investment News: Wall Street, advisory firms funneling big bucks to Romney. Investment advice sector follows trend set by big banks, wirehouses in backing GOP presidential candidate. By Mark Schoeff Jr. Excerpts: If Republican presidential candidate Mitt Romney answers a question about the Dodd-Frank financial reform law during tonight's debate with President Barack Obama, he's sure to get the attention of his biggest donors.

    That's because they're all Wall Street firms, according to the Center for Responsive Politics.

    The Goldman Sachs Group Inc. ($891,140), Bank of America Corp. ($668,139) JPMorgan Chase & Co. ($663,219), Morgan Stanley ($649,847), Credit Suisse Group AG ($554,066), Citigroup Inc. ($418,263), Wells Fargo & Co. ($414,750) and Barclays PLC ($403,800) are Mr. Romney's most generous supporters.

    The firms themselves cannot donate directly to Mr. Romney's campaign. Rather, donations come from the companies' employees and political action committees.

  • New York Times op-ed: Triumph of the Wrong? By Paul Krugman. Excerpts: In these closing weeks of the campaign, each side wants you to believe that it has the right ideas to fix a still-ailing economy. So here’s what you need to know: If you look at the track record, the Obama administration has been wrong about some things, mainly because it was too optimistic about the prospects for a quick recovery. But Republicans have been wrong about everything.

    About that misplaced optimism: In a now-notorious January 2009 forecast, economists working for the incoming administration predicted that by now most of the effects of the 2008 financial crisis would be behind us, and the unemployment rate would be below 6 percent. Obviously, that didn’t happen.

    Why did the administration get it wrong? It wasn’t exaggerated faith in the power of its stimulus plan; the report predicted a fairly rapid recovery even without stimulus. Instead, President Obama’s people failed to appreciate something that is now common wisdom among economic analysts: severe financial crises inflict sustained economic damage, and it takes a long time to recover. ...

    For leading Republicans have very much tied themselves to the view that slashing spending in a depressed economy — “fiscal consolidation,” in I.M.F.-speak — is good, not bad, for job creation. Soon after the midterm elections, the new Republican majority in the House of Representatives issued a manifesto on economic policy — titled, “Spend less, owe less, grow the economy” — that called for deep spending cuts right away and pooh-poohed the whole notion that fiscal consolidation (yes, it used the same term) might deepen the economy’s slump. “Non-Keynesian effects,” the manifesto declared, would make everything all right.

    Well, that turns out not to be remotely true. What the monetary fund shows is that the countries pursing the biggest spending cuts are also the countries that have experienced the deepest economic slumps. Indeed, the evidence suggests that in brushing aside the standard view that spending cuts hurt the economy in the short run, the G.O.P. got it exactly wrong. Recent spending cuts appear to have done even more harm than most analysts — including those at the I.M.F. itself — expected. ...

    If Mr. Obama wins, he’ll presumably go back to pushing for modest stimulus, aiming to convert the gradual recovery that seems to be under way into a more rapid return to full employment.

    Republicans, however, are committed to an economic doctrine that has proved false, indeed disastrous, in other countries. Nor are they likely to change their views in the light of experience. After all, facts haven’t gotten in the way of Republican orthodoxy on any other aspect of economic policy. The party remains opposed to effective financial regulation despite the catastrophe of 2008; it remains obsessed with the dangers of inflation despite years of false alarms. So it’s not likely to give up its politically convenient views about job creation.

    And here’s the thing: if Mitt Romney wins the election, the G.O.P. will surely consider its economic ideas vindicated. In other words, politically good things may be about to happen to very bad ideas. And if that’s how it plays out, the American people will pay the price.

  • AlterNet: Romney's Bain Capital Is Sending a Bunch of High-Tech Jobs to China on the Day Before the Election. By Joshua Holland. Excerpts: On the day before an election that's supposed to hinge on jobs, taxes and the middle class, Bain Capital, the company Mitt Romney founded, will close the doors of a factory in Freeport, Illinois, and ship 170 good, high-tech jobs to China. ...

    The employees of Sensata Technologies were forced to train their Chinese replacements, and the American flag that long flew over the factory was reportedly removed while the Chinese engineers were visiting the site. A group of workers have set up camp across from the factory -- calling it “Bainport” -- and some supporters have tried to block the trucks hauling equipment out of the plant. According to Dave Johnson, there have been several arrests.

    Sensata workers have asked to meet with Mitt Romney and hoped to enlist his help keeping their jobs in the United States, but he has refused, instead remaining on the campaign trail where he speaks often about “getting tough” with China.

    The most important part of the story is that Sensata Technologies is profitable operating in Illinois. Net income last year was $355 million, up 16 percent from 2010. The company reported total revenues of $1.8 billion in 2011, up almost 19 percent from the year before. According to a company financial statement, “both 2011 net revenue and adjusted net income represent record levels for the company.”

    So this has nothing to do with “making hard choices” in the process of turning around a failing business, which is how the Romney campaign describes Bain's corporate raiding. Bain's partners are looking for a modest boost in profits by locating the plant closer to the booming Asian automotive market (Sensata makes high-tech automotive parts). They'll get a small tax break for relocating the plant – the one Mitt Romney insisted did not exist during the first debate – and possibly defer taxes on some of the income the company generates.

  • Huffington Post: Mitt Romney Encouraged Business Owners To Advise Employees How To Vote. By Mollie Reilly. Excerpts: In a June conference call hosted by the conservative-leaning National Federation of Independent Businesses, Mitt Romney encouraged business owners to let their employees know which candidate they support and how the election's outcome will affect their business.

    During a telephone town hall with small-business owners, first reported by In These Times, Romney said President Barack Obama's policies have hurt employers, criticizing the president on trade, labor, and his signature health care law.

    "It's an anti-business, anti-job agenda," Romney said.

    At the end of the call, Romney urged business owners to relay their thoughts on the election to their employees.

    "I hope you make it very clear to your employees what you believe is in the best interest of your enterprise and therefore their job and their future in the upcoming elections," Romney said. "And whether you agree with me or you agree with President Obama, or whatever your political view, I hope, I hope you pass those along to your employees."

  • AlterNet: Bill Moyers: The Plutocracy Will Go to Extremes to Keep the 1% in Control. Moyers, Matt Taibbi and Chrystia Freeland explain how the plutocrats have willfully confused their self-interest with America’s interest. Excerpt: The One Percent is not only increasing their share of wealth — they’re using it to spread millions among political candidates who serve their interests. Example: Goldman Sachs, which gave more money than any other major American corporation to Barack Obama in 2008, is switching alliances this year; their employees have given $900,000 both to Mitt Romney’s campaign and to the pro-Romney super PAC Restore Our Future. Why?

    Because, says the Wall Street Journal, the Goldman Sachs gang felt betrayed by President Obama’s modest attempts at financial reform. To discuss how the super-rich have willfully confused their self-interest with America’s interest, Bill is joined by Rolling Stone magazine’s Matt Taibbi, who regularly shines his spotlight on scandals involving big business and government, and journalist Chrystia Freeland, author of the new book Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else.

    Full transcript of the interview below the video...

  • Washington Post opinion: Shrinking the nation’s biggest banks. Excerpts: Vikram Pandit’s reign as chief executive of Citigroup ended Tuesday after what may have been the roughest five years for any Citi boss. Mr. Pandit took over in 2007 on the eve of an epochal financial crisis, which was triggered in part by over-investment in mortgages by Citi and others. Citi survived only with the help of federal aid, including $45 billion in capital and a U.S. backstop for $301 billion worth of toxic assets.

    Taxpayers eventually recouped the aid, plus a profit. But perhaps more than any other institution, Citi — the original financial “supermarket” — epitomized the dilemma of “too big to fail.” The crowning irony was the recent suggestion by Sanford Weill — who first expanded Citi’s business to encompass investment banking and other risky activities — that banks “be broken up so that the taxpayer will never be at risk, the depositors won’t be at risk, the leverage of the banks will be something reasonable.” ...

    As matters now stand, the assets of the six largest U.S. banks equal 62 percent of gross domestic product, compared to 18 percent in 1995. These banks service 56 percent of all mortgages and hold 35 percent of deposits. Given that their deposits are federally insured, it’s small wonder that no one quite believes the specter of “too big to fail” has been banished — and that the giants enjoy cheaper access to market funding as a result. At the second presidential debate, GOP candidate Mitt Romney made that very point.

  • New York Times opinion: The Other Missing Man. Excerpts: With his feigned slights, his constant squabbling over the rules, and his arrogance that he alone has a trust-me-it’ll-work business plan to right the country, Romney was the very picture of a C.E.O. used to getting his way. Meeting over. All opposed, take a hike.

    The Mitt Romney of the second debate, to use Mike Huckabee’s memorable phrase, “looks like the guy who fires you.” He exposed, once again, his biggest fault: that he has no idea what it’s like to be middle-class and struggling in 2012 America.

    To take just a couple of examples, here was Romney explaining the benefits of his tax program, the breaks that you’ll get on your stock dividends and mutual funds. As he outlined it with all the mercenary gusto of the visiting suit with a PowerPoint, Romney said, “Every middle-income taxpayer will no longer pay any tax on interest, dividends or capital gains.” And, a bit later, “If you’re getting a statement from a mutual fund or any other kind of investment you have, you don’t have to worry about filing taxes on that.”

    No kidding. In Romney’s world, and throughout his own tax return, the money earned from money — as opposed to money earned from working — is the chief source of wealth. And it’s already taxed at a lower rate than middle-income earnings. Getting rid of those taxes altogether does nothing for the warehouse manager, schoolteacher or insurance sales person taking home a salary and being taxed at a full rate for making a living. But it’s great for someone living off mutual fund dividends.

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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