"Seizing upon Avantor's decision -- and fully aware that, given the competitive pressures of Avantor's industry, and the specialized demands of its customers, Avantor could not tolerate any disruptions in customer service -- IBM represented that IBM's 'Express Life Sciences Solution' ... was uniquely suited to Avantor's business," the lawsuit states. "The Express Solution is a proprietary IBM pre-packaged software solution that runs on an SAP platform."
But Avantor discovered a different truth after signing on with IBM, finding that Express Life was "woefully unsuited" to its business and the implementation brought its operations to "a near standstill," according to the suit.
IBM also violated its contract by staffing the project with "incompetent and reckless consultants" who made "numerous design, configuration and programming errors," it states.
In addition, IBM "intentionally or recklessly failed" to tell Avantor about risks to the project and hurried towards a go-live date, the suit alleges.
"To conceal the System's defects and functional gaps, IBM ignored the results of its own pre-go-live tests, conducted inadequate and truncated testing and instead recommended that Avantor proceed with the go-live as scheduled -- even though Avantor had repeatedly emphasized to IBM that meeting a projected go-live date was far less important than having a fully functional System that would not disrupt Avantor's ability to service its customers," the suit states.
The resulting go-live, which occurred in May, "was a disaster," with the system failing to process orders properly, losing some orders altogether, failing to generate need paperwork for U.S. Customs officials and directing "that dangerous chemicals be stored in inappropriate locations," the suit states.
Avantor has suffered tens of millions of dollars in monetary damages, as well as taken a hit to its reputation among partners and customers, the suit states. ...
"IBM, meanwhile, has already pocketed over $13 million in fees from Avantor for a systems implementation project it mismanaged and was unable to perform properly," the lawsuit states. "Incredibly, IBM is now seeking to profit from its misconduct by demanding millions of dollars in additional fees to redesign and rebuild the defective System it implemented."
IBM said it disagreed with the claims and will defend itself against them vigorously. "We believe the allegations in the complaint are exaggerated and misguided and are surprised that Avantor chose to file suit," a spokesman said via email. "IBM met its contractual obligations and delivered a solution that Avantor continues to use in its operations." ...
"Numerous" IBM workers have told Avantor personnel that IBM failed to manage the project correctly and use SAP "best practices," according to the complaint. IBM workers even called the project the worst SAP implementation they'd ever seen, it adds.
“An economy is only as good as its supply of talent,” explained Bernard Meyerson, International Business Machine Corp.’s vice-president of innovation and relations with universities. “Physical infrastructure is nice to have, but without good people, you get awful results.” ...
“We need to get back to treating technologists as rock stars,” he said. “The engineer who writes the code that speeds up computing by a factor of 10, that’s one of the heroes. … They should get the same level of rewards as rock stars.”
Selected reader comments follow:
IBM is all show when it comes to talking to the press but in practice, they have been terminating their best talent (highest paid) to reduce their salary costs while retaining mediocre personnel (lowest paid) in the higher band levels (8, 9, 10).
The saying about IBM is true, "IBM attracts the best talent but ends up with mediocrity."
Tip for IBM. Stop treating your talent like a server or a box of software (aka widget) and start treating them like people.
IBM purchased PricewaterhouseCoopers in 2002/03 to transform itself into a 'business consulting' services but in the end, IBM will always be considered nothing more than a glorified technology company.
This beta also signals the point where Notes and Domino will join IBM's other software products in sporting only the IBM name, which the company feels is a stronger brand than Lotus, according to Brill.
I was eligible for the FHA as I was 40 years old and had 1 year of service on June 30, 1999. I was RA'd in March of 2010, at which time I lost my FHA account. I was rehired in July of 2010 and had the pleasure of being RA'd again in April 2012. I am currently 53 years old. I reached 30 years of service in March 2012, so when I left in April I was considered a retiree. I received my retiree "badge" and a personal fact sheet stating the retiree health plans I was eligible for. Since I was eligible for subsidized medical for 12 months I enrolled in that plan and then enrolled on the retiree plans for dental and vision.
Today I called in to basically keep the same plans and was told that I am not eligible for any retiree plans, even though I was told I was and have been enrolled in them since May 2012. Starting on 1/1/13 I will be enrolled in the TMP plans, then once the medical subsidy ends in April 2013, I will be in COBRA until my 18 months runs out and then I am not eligible for anything after that.
The ESC has opened up a case with their research group to see how this happened, but I am expecting the response I already received from the insurance group, which is the scenario I just described. I was hoping someone may be able to shed some light as to how I can "retire" after 30 years of service and not be eligible for any retiree health benefits, even I was given a package stating that I was eligible for all retiree health plans ! Thank you.
My concern is that your break in service somehow voided your eligibility and in some IBM document written in very small fine print ... IBM stated that your eligibility would be void ... and you in fact may be screwed.
I think the clause that IBM will quote to deny you the FHA funds is from section 1.4.4 of USHR117 - About Your Benefits - Future Health Account. You can find a copy in the files section of this group in the IBM Retiree Benefit Info folder.
Section 1.4.4 says:
If you leave IBM before age 55 or with less than 15 years of service, you will forfeit your account and will not be eligible to receive any benefits from the Future Health Account.
Since you were not 55 at the time of your layoff and did not yet have 30 years of service, IBM will claim that you forfeited your account balance. Then when you were re-hired, it didn't matter, since the account balance had already been lost.
I wish you luck in your battle over this. Please let us know how it turns out.
The secrecy surrounding the IBM deal is remarkable, even by Nova Scotia standards. What we’ve been told is this: the province has entered a 10-year deal outsourcing SAP operations to IBM, starting at $8.4 million a year, which is said to be the exact cost to the province of operating SAP with unionized government workers. That annual payment will increase using a “cost of living index” used by the IT industry, says the Finance Department. ...
“IBM is a gigantic company,” says Lee Conrad, an organizer with Alliance@IBM, a Communications Workers of America enterprise that purports to represent IBM workers. IBM does not recognize any union, including the CWA.
“IBM has decided it can’t make any money selling its core products,” continues Conrad, “so it has to make money by getting companies to outsource services. They’ve been writing contracts for decades, and know how to get everything they need.”
“They’ll run circles around Nova Scotia’s lawyers,” says another provincial employee.
It also owns EyeMed another managed vision care company. Whether or not it "runs" Blue Vision -Anthem is open to question. Judging from the latters "network list" which includes Lenscrafters, Pearle Vision, Sears, Target etc which are all either owned outright by Luxottica (i.e. Lenscrafters and Pearle Vision) of partnered with Luxottica, "run" might actually be factual.
Sixty minutes recently had a good segment on Luxottica which left the inescapable conclusion that this company was the primary "price maker" of vision wear throughout North America, Europe and Asia.
Leslie Stahl interviewed the CEO and asked him what his US competition was...the only one he thought worthy to mention was Costco...nevertheless leaving the impression that Costco's market share was really not worth the bother.
I also agree that shopping around is smart. I have to leave my doctor because her office refuses to take Blue View. Not cool because I have very strange eyes and having a history with a doctor is better for me. Like Costco and most places, they still take VSP.
(I hate that IBM has so much control over my health care.)
Cons: - Finance runs the company to the point of non-sensibility. - No value of staff or motivation to retain talent. Contractors are downright abused. - Matrix management (everyone is your manager) especially the 'profile holding' structure is horrid in terms of your annual performance rating (i.e. person rating you has no real direct involvement in your day-to-day activities); - Pay is terrible. No overtime pay for anyone; yet overtime is expected. This is true for pretty much all levels of full-time employees. Contractors are hired and forced time-off (furlough) regularly to meet finance directives. - Benefits are mediocre. - Offshoring of local resources is rapidly increasing to overseas Delivery Centers; there will be little onshore talent left unless IBM's customers specifically demand so.
Advice to Senior Management: - Treat your employees with respect. Attract talent, not drive it away. - Respect and leverage the local resources *smartly* to reduce cost; rather than shipping everything overseas.
Cons: The pay was below market value, and either no raise, or 1 percent, well below inflation and cost of living. Bonus program not meaningful as well, so no incentive to exceed, as no reward in the end.
Morale is terrible, the people are good, just don't care as the life has been taken out of them. Company does not seem willing to try to increase it either, even the smallest things might help, but management would never get it approved if they wanted.
Too difficult to focus on work, as company throws too many road blocks at employees, smallest change requires a lot of paperwork and process to get through.
Too many new processes coming in, which are not properly implemented and poor tools. Process owners do not even understand the processes they are implementing.
Would not recommend to a person who wants a long term career with IBM, a few years is more then enough. Get some experience working on some projects or enterprise software and systems, and then move on. Anymore and you will be doing your career a disservice as no way to advance or even make enough to support your family over the long run.
Advice to Senior Management: Care about your employees. I went to a new place, that cares, and makes the world of difference. Work way harder then I have in the last 5 or 6 years at IBM and I love it. Small things make the difference. Also reexamine your pay, as it is woefully low for technical people, and when the economy turns around, IBM might no longer be able to attract local people, as they struggle right now. Can't do everything from India.
Cons: My position pertained to selling the smarter commerce suite of applications which are well accepted in the market place. If you are a seasoned sales person and truly do not like to cold call then you will fail. IBM is NOT a marketing company and depends almost exclusively on each seller to build the field product buzz on their own. You have 12 month to do that and make your numbers before your accounts are thrown back into the hat and you start almost from 0.
Advice to Senior Management: Spend the money on local marketing by providing your SBU executives with a budget that can give a shot in the arm to the sellers. This is 2013...IBM needs to wake up and understand that products just do not sell themselves any more...even if the have an IBM logo on them
Cons: Progression and promotions can be a bit slow. IBM is careful to avoid promoting people too quickly and uses a variety of controls to ensure that only those who are already performing at the next level get promoted. For young talent this may be a drawback because advancement seems to be encumbered by bureaucracy. However, IBM is working to streamline these processes to make career development more flexible.
Advice to Senior Management: Continue streamlining HR processes (career development processes, specifically). Give first line managers more flexibility and power to keep top talent. IBM does a good job of keeping the workforce in the top 50-80th percentile, however the ability to keep the top 20% (at least in the consulting business) is limited. In my time with IBM the top 20% were more likely to leave. I attribute this to an inability or unwillingness to dynamically adjust pay, promotions, and career opportunities commensurate with performance. IBM relies too much on employee loyalty and its many other strong employer brand qualities, rather than offering market competitive pay.
It is a more limited version of similar initiatives for hatching new ideas that have long existed in Silicon Valley. The most well-known of those is Google's "20% time," which allows employees to spend up to a fifth of their time on projects outside their normal responsibilities. ...
When it comes to culture among technology companies, Apple is still an outlier. Its managers have long ignored standard Silicon Valley perks, such as free lunches, believing the opportunity to work at the company and on its popular products compelled people to stay.
In the first quarter of this year, some 2.2 student loan borrowers were age 60 and older, a three-fold increase from 2005. Together, they owed $43 billion in student loans. ...
It isn’t clear how many retirees and near-retirees took out loans for their own education (perhaps returning to school for better job opportunities during the recession) or to pay for their children’s or grandchildren’s tuition. The government doesn’t track that information.
In the early 80s, as we watched companies by the dozens start freezing and terminating these "pension" plans, it became clear to most of us that the newly minted "401(k) plans" were going to become the sole vehicle that the industry would count on to provide retirement security for millions of Americans. ...
Most of us should be deferring/saving between 10% and 15% of earnings to be able to retire and live on 75%-80% of the income we were earning when we turned 65.
Exceptions to this statement include situations where your parents/grandparents or rich uncle passed away and left you millions of dollars (good for you!). However, most American's don't inherit anything and save just a fraction of the amount necessary to afford themselves sufficient income in retirement to live comfortably. This is especially true when considering the tens of thousands of dollars that medical insurance and out of pocket costs add to this equation (Putnam Investments leads the industry in the research they've done in this area). Putnam Investments estimates these costs in retirement years to be in excess of $150,000.
And when boomers find out how much they’re likely to need to cover those medical costs—typically, about a quarter of a million dollars, the experts say—they might wish they hadn’t asked. “All those plans for cruises go out the window if you don’t have adequate coverage,” said Alexis Abramson, a New York based gerontology expert. But understanding what kinds of costs and calculations lie behind that number can make it less intimidating, and help you prepare.
Fidelity Investments, which oversees some 12 million 401(k) accounts, has been a bellwether in setting expectations on this topic. This spring, for example, it released a study saying that an average 65-year-old couple retiring in 2012 would need to have saved up $240,000 to pay for out-of-pocket health-care costs in retirement.
And that’s $240,000 in today’s dollars, so a couple retiring in 10 years would need the inflated-adjusted equivalent in the year 2022. (In its 11 years of doing this study, Fidelity has found the rate of health-care inflation to average 6% per year; assuming that rate stayed constant, a 2022 retiree would need about $430,000 set aside.) ...
In fact, of all the money spent on health care for people 65 and over, Medicare accounts for just 59%, according to an EBRI analysis of actual expenditures; out-of-pocket spending covered 13% and private insurance paid for 14% (the rest was covered by Medicaid and other sources). ...
Fidelity’s study also assumes that the couple doesn’t have any employer retiree health benefits—these still exist, especially among the largest companies—and that the man lives to age 82 and the woman to age 85. Here’s a breakdown of where their $240,000 goes: 32% goes to premiums for Medicare Parts B & D, which cover doctor visits and drugs, respectively; 23% goes to prescription drugs expenses not covered by Medicare Part D; and 45% goes toward Medicare cost-sharing provisions, including copayments, deductibles, other services not covered by Medicare, and any optional Medigap policies purchased.
The news comes from a UCLA study released in late October, just before employers begin to unveil their 2013 coverage offerings to workers with the now routine trends of rising costs or reduced benefits.
"The job-based system has reached its limit," said Shana Alex Lavarreda, director of health insurance studies at the UCLA Center for Health Policy Research. ...
At a Ventura County job and career center where people searched online for job leads, conversations settled on the cost of health insurance. A woman with a job said she went on extended disability and ended up on Medi-Cal because she couldn't afford the premiums.
Doctors were not able to determine why Mitisek, a 30-year-old schoolteacher, lost consciousness. Still, the bills for the ambulance and the diagnostic testing and other care came to $5,800. Mitisek’s group health plan had a $5,600 annual deductible, on which she and her husband, Mark, had already paid $800. Their share of the $5,800 bill before their insurance kicked in was $4,800.
In general, the higher a health plan’s deductible, the lower the premium. “Taking that gamble is appealing,” Mark Mitisek says of the choice to pay lower premiums and hope to avoid needing pricey medical care. “But when you lose the gamble and you’re stuck with that expense, it makes you think twice.”
“People get caught all the time,” says Martin Rosen, co-founder of Health Advocate, a company that helps consumers resolve medical billing problems and provides support for health-care decisions. “If you come from a traditional health plan and you paid a flat $100 co-pay for a visit to the emergency room, the assumption is that you’re going to pay the same in a high-deductible plan.” ...
“When people are considering a high-deductible plan, I always say, ‘Could you come up with the whole deductible all at one time?’” says Amelia Haviland, an associate professor of statistics and health policy at Carnegie Mellon University who has published studies on the effect of high-deductible health plans on health-care spending. “If it’s going to keep you from going to the emergency department when you really need to go, don’t choose that plan.” ...
Proponents of high-deductible health plans say that requiring consumers to pay a larger share of their own health-care costs helps reduce spending on unnecessary care. But the Rand study and others have found that when people have to pay more out of pocket for their care, they also skimp on care they need, such as preventive cancer screenings.
The Tea-Party Conservative types get it embarrassingly wrong when they call it a “government takeover of health care.” Likewise, Progressive Obama-supporters are deluded in accepting it as the most sweeping healthcare reform since Medicare. (Side note: I wish the word ‘sweeping’ could be retired from politics until it actually means -sweeping.)
Here’s why. The PPACA does nothing to restructure the health insurance industry, anymore than the Dodd-Frank Act restructures the banking industry. This means everything else it attempts to do, positive or negative, will be vastly overshadowed by an industry accelerating to morph itself into a acquisition machine in order to circumvent anything that even smells like a restriction, including laws that exist and ones to come.
How? By doing the same thing energy and telecom companies did after they were deregulated in 1996, and that banks did after they were summarily deregulated (after moving that way for decades) in 1999. They are merging, consolidating, eliminating competitors, and controlling their domain. They are manufacturing power.
Investment bankers are roaming the world to exploit this hot new opportunity. That’s one reason insurance companies don’t even call themselves that anymore. Now, they are ‘managed health care’ companies. Call yourself a managed health care company, and you can buy everything from other insurance companies to hospitals to clinics to doctors. The more consolidation, the more fees bankers rake in, and the more premiums and medical reimbursements and health care procedures, each company can control. ...
You know who else is similarly too big to fail? The insurance industry. UnitedHealth Group, the nation’s largest health insurer covers 50% of the insurable population in over 30 states. Blue Cross-Blue Shield, covers 100 million people through a constellation of 38 sub-companies. They, and other insurance companies are growing in breadth. When companies consolidate, the result is less transparency, less competition, and more possibility for fraud and shady behavior. Every. Single. Time.
The return on that investment was not so good. But that doesn't mean insurers have come to accept that Obamacare must be implemented as Congress intended. On the contrary, even more of your premium dollars are about to be spent on a propaganda campaign to get the law changed to protect profits.
Even as insurers were helping to bankroll their friends' campaigns they were publicly expressing support for the reform law. AHIP president Karen Ignagni said in April 2010, a month after the president signed the Affordable Care Act, that her group was "strongly committed" to its "successful implementation."
What she really meant is that insurers were committed to the parts of the law they like -- such as one that requires us to buy coverage from them -- but not so much to the ones that might negatively impact their bottom lines. Like those that will end the abusive practices that have enabled them to pad those bottom lines.
When Ignagni and insurance company executives speak, it is important to parse their words to understand what they are really saying. That's just as true now as it was in 2010. ...
One of the most important consumer protections in Obamacare prohibits insurers from charging older people more than three times as much as younger people. Insurance company lobbyists have persuaded many state lawmakers to allow them to charge older folks five times as much as younger folks, and some states have no restrictions at all. As a result, many Americans in their 40s, 50s and early 60s can't possibly afford coverage.
Insurers have no problem with that. As we age, we have greater need for medical care, and insurers would rather not have to pay for it. They much prefer to sell skimpy policies with relatively low premiums to young people who are less likely to get sick.
The pizza chain head has made his views on the Affordable Care Act clear in recent months, claiming the new health care law will cost his business about $5 to $8 million per year. To compensate Schnatter's said he will likely raise pizza prices and cut back some workers’ hours so he doesn’t have to insure them.
Caleb Melby of Forbes has graciously done the math on Obamacare’s cost to Papa John’s and according to his analysis, to cover the cost of Obamacare, the pizza chain would have to raise prices by 3.4 to 4.6 cents per pie -- way less than the 11 to 14 cents Schnatter claims he needs. ...
We're guessing Obamacare won't impact life at Schnatter's lavish home, a 40,000 square-foot mansion in a tony suburb of Louisville, Kentucky, that features several swimming pools, a private golf course and a 22-car garage among other amenities, according to CelebrityNetworth.com.
We’re not alone. Workers who get health insurance through their employers have seen the average deductible nearly double over the last six years, a new analysis from the Kaiser Family Foundation finds.
But health insurance?
Joan Swope, 62, moved recently from Cathedral City, just down the road from Palm Springs, to nearby Palm Desert.
She informed her insurer, Anthem Blue Cross, of the change of address. A few weeks later, Anthem responded with a notice stating that, because of the move, Swope's monthly premium on her individual policy will increase to $524 from $418.
That's a more than 25% rate hike. For a move of less than 10 miles.
"It's ridiculous," Swope told me. "I'm going to the same doctor. I'm going to the same facilities and the same drugstore. Nothing has changed."
Nothing except her ZIP Code. And in the actuarial world of insurance, that's a sufficiently life-altering event to justify an extra $1,272 in annual payments — on top of a $5,000 deductible.
Growth in the average total health benefit cost per employee slowed from 6.1% last year to just 4.1% in 2012. Cost averaged $10,558 per employee in 2012. Large employers – those with 500 or more employees – experienced both a higher increase (5.4%) and higher average cost.
The backlash from AARP members and liberal groups that oppose changes in the program was enormous — and this time around, as Washington debates how to tame the ballooning federal debt, AARP is flatly opposed to any benefit reductions for the nation’s retirees. ...
Republicans say scaling back Social Security and Medicare, the largest drivers of future government deficits, is necessary. President Obama has previously been open to benefit cuts.
But for lawmakers who would have to vote for such changes, AARP’s 37 million members and $1.3 billion budget are a force to be reckoned with. In the past eight months, AARP has sponsored a series of candidate debates, run television ads, circulated questionnaires and held more than 4,000 meetings around the country to mobilize its legion of supporters to oppose any cuts.
Under the slogan “You’ve earned a say,” the group has been building opposition to entitlement changes. A recent poll by the organization found that 70 percent of Americans 50 and older think Medicare and Social Security shouldn’t be part of the upcoming fiscal debate. ...
AARP opposes raising the age for Medicare eligibility on the grounds that it would increase costs for younger seniors while driving up premium costs for older ones. The group opposes efforts to shrink Social Security cost-of-living increases, which it says would cost older seniors thousands of dollars in benefits. ...
“You have people in their 40s and 50s who are cascading toward a terrible retirement,” said Eric Kingson, a Syracuse University professor who co-chairs Strengthen Social Security, a coalition that has joined AARP, organized labor and others in opposing any benefit cuts in the program. ...
LeaMond, AARP’s top lobbyist now, said that Medicare savings can be found by slowing the growth in health-care costs and that Social Security can be strengthened without cutting benefits, though she did not say how. She said AARP members care deeply about the long-term solvency of the programs even if they don’t want to bear the brunt of the cost of fixing them.
“If the critics spend anytime with our members, you cannot help but be struck by their powerful sense of legacy,” she said. “They want to leave Medicare and Social Security as strong for their kids and grandkids as for them.”
"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.
So President Obama has to make a decision, almost immediately, about how to deal with continuing Republican obstruction. How far should he go in accommodating the G.O.P.’s demands? ...
Because Republicans are trying, for the third time since he took office, to use economic blackmail to achieve a goal they lack the votes to achieve through the normal legislative process. In particular, they want to extend the Bush tax cuts for the wealthy, even though the nation can’t afford to make those tax cuts permanent and the public believes that taxes on the rich should go up — and they’re threatening to block any deal on anything else unless they get their way. So they are, in effect, threatening to tank the economy unless their demands are met.
Mr. Obama essentially surrendered in the face of similar tactics at the end of 2010, extending low taxes on the rich for two more years. He made significant concessions again in 2011, when Republicans threatened to create financial chaos by refusing to raise the debt ceiling. And the current potential crisis is the legacy of those past concessions.
Well, this has to stop — unless we want hostage-taking, the threat of making the nation ungovernable, to become a standard part of our political process. ...
Meanwhile, the president is in a far stronger position than in previous confrontations. I don’t place much stock in talk of “mandates,” but Mr. Obama did win re-election with a populist campaign, so he can plausibly claim that Republicans are defying the will of the American people. And he just won his big election and is, therefore, far better placed than before to weather any political blowback from economic troubles — especially when it would be so obvious that these troubles were being deliberately inflicted by the G.O.P. in a last-ditch attempt to defend the privileges of the 1 percent.
So let's begin with this so-called "Grand" Bargain, and when I say "begin," take that as "keep the government's hands off of our Social Security, Medicare and Medicaid," if you get my drift. There is no crisis. Let's try it again together: there is no crisis. No fiscal cliff or whatever the buzzwords are in the Beltway today.
The rather slight budgetary issues can be fixed in the blink of an eye, by addressing real problems such as our lack of revenue and propensity for wasting money on things to go BOOM that the military doesn't even want.
But few politicians agree. And so the days and weeks after elections are heavy with arguments about who has a mandate, and for what. The latest debate is about whether President Obama, who ran a campaign explicitly promising to raise taxes on high earners and who beat a candidate explicitly promising to refuse any and all tax increases, has a mandate to raise taxes.
Speaker John Boehner says he doesn’t. “Listen, our majority is going to get reelected,” he said the day before the election. “We’ll have as much of a mandate as he [President Obama] will … to not raise taxes.”
Boehner’s logic is, on its face, sound. House Republicans have been as clear in their opposition to new taxes on the rich as Obama has been in his support for them. And House Republicans were reelected. They have as much right to claim a popular mandate as the president does.
Or they would if they’d actually won more votes. But they didn’t. House Republicans did the equivalent of winning the electoral college while losing the popular vote. ...
What saved Boehner’s majority wasn’t the will of the people but the power of redistricting. As my colleague Dylan Matthews showed, Republicans used their control over the redistricting process to great effect, packing Democrats into tighter and tighter districts and managing to restructure races so even a slight loss for Republicans in the popular vote still meant a healthy majority in the House.
That’s a neat trick, but it’s not a popular mandate, or anything near to it — and Boehner knows it. That’s why his first move after the election was to announce, in a vague-but-important statement, that he was open to some kind of compromise on taxes.
Fortunately, the president knows foolishness when he sees it. He has been toughened by four years of unremitting Republican opposition and has behind him both a large electoral college victory and an advantage of about 3 million popular votes. The word “mandate” is overused — just ask George W. Bush. But Obama was absolutely clear during the campaign about his insistence that taxes on better-off Americans need to rise as part of any deal on the budget deficit and “fiscal cliff.” ...
The voters clearly heard what Obama was saying during the campaign. According to the media exit poll, only 35 percent of voters said taxes should not be increased. Fully 47 percent of all voters supported raising taxes on Americans earning $250,000 or more, including 66 percent of Obama’s voters. An additional 13 percent, of all voters and Obama’s, said taxes should go up for everyone.
If Republican leaders in Congress want to pretend that Obama’s reelection means absolutely nothing, the president seems willing to let all the Bush tax cuts expire. This is the only way to deal with recalcitrance, reflected in the fact that Senate Minority Leader Mitch McConnell didn’t even let the president make his case on Friday before issuing a flat statement rejecting any tax increases. Obama can only hope that he can break more reasonable Senate Republicans away from their hard-line leadership. ...
Boehner made clear that preserving low tax rates for the rich remains the GOP’s single highest priority. The speaker said he might support new revenue but only through some vague “tax reform.” But that’s what Mitt Romney offered during the campaign. Boehner is saying he will make a deal with the victorious candidate only on the basis of the program of the defeated candidate. Here’s hoping this is just a bargaining position.
“We will make it very clear we will not be supportive of cuts to Medicare and Social Security,” said Sen. Bernard Sanders (Vt.), an independent who caucuses with the Democrats. “It would be a huge shock and disappointment if the president forgot the reality that he just won a major victory.” ...
“We will give the president and his allies in Congress all the support and cover in the world in the fight for no more tax cuts for the rich. That includes, in particular, supporting the president’s position that it’s better to negotiate past December 31st than do a deal that’s bad for the country,” said a top labor official who spoke on the condition of anonymity to comment ahead of Tuesday’s meeting. “On the other hand, the answer for those who want to cut social insurance benefits in an economic crisis and increase economic insecurity is, ‘Hell, no.’ ”
But let’s assume the Monopoly game doesn’t end there. Let’s assume the broke players keep rolling the dice and keep going around the board. They essentially keep living their lives desperate and broke, using their credit cards and home lines of credit to stay in the game. Maybe they end up in jail. If they’re lucky, they land on Baltic Avenue and can afford to stay a night in the slums.
Meanwhile, the oligarch who owns everything can no longer collect any income. The other players can’t afford to pay rent, they can’t pay utilities, and they can’t ride on the railroads. Eventually, without consumers spending money, the Monopoly oligarch goes broke, too. His properties and businesses disappear and suddenly everyone is broke!
That’s what Monopoly’s version of economic collapse looks like. And it’s very similar to what global economic collapse in the real world looks like, too.
Now put the Monopoly game board away and consider this: Researchers in Zurich, Switzerland have found that there are roughly 43,000 transnational corporations that dominate the global economy. Of those, there are about 1,300 companies that control 80% of all the global revenues for all the transnational corporations on the planet. Now let’s take it a step further. Of those 1,300 core companies, only 147 companies, which all happen to own each other in some way, control 40% - or nearly half – of all the wealth in the entire transnational corporate network. That means 1% of transnationals own 40% of all the world’s business wealth.
In other words, the global 1% has its own 1%. ...
Right now, you can count the number of banks that own half of all the wealth in the U.S. economy on just one hand. There are just five of them and they are the usual suspects: Goldman Sachs, JP Morgan Chase, Wells Fargo, Bank of America, and Citigroup. Their total assets equal 8.5 trillion, which is 56% of our entire economy.
What you need to know:
“These two young, fine senators said it was time to change the rules of the Senate, and we didn’t,” he said, referring to Tom Udall of New Mexico and Jeff Merkley of Oregon, who came up with a plan to reduce filibuster abuse that he rejected. “They were right. The rest of us were wrong, or most of us, anyway. What a shame.”
It was a shame, a missed opportunity that helped give Republicans a big cudgel over the last two years. But now Mr. Reid has a chance to rectify that mistake. In January, at the beginning of the next session of the United States Senate, Democrats can vastly improve the efficiency of Congress and reduce filibuster abuse with a simple-majority vote. This time they need to seize the moment.
The filibuster’s importance is as a last-ditch ploy to prevent a minority party from being steamrolled on the most pressing national issues. It was never intended to routinely require a 60-vote supermajority on virtually every issue the Senate takes up. Yet that’s how Republicans have used it in the last six years, to a far greater extent than Democrats ever did when they were in the minority.
If Obama were serious about being a good steward of the nation’s finances, he’d let them. ...
And so a large number of patriotic Americans, mostly from states won by Mitt Romney last week, have petitioned the White House to let them secede. They should be careful about what they wish for. It would be excellent financial news for those of us left behind if Obama were to grant a number of the rebel states their wish “to withdraw from the United States and create [their] own NEW government” (the petitions emphasize “new” by capitalizing it).
Red states receive, on average, far more from the federal government in expenditures than they pay in taxes. The balance is the opposite in blue states. The secession petitions, therefore, give the opportunity to create what would be, in a fiscal sense, a far more perfect union.
Among those states with large numbers of petitioners asking out: Louisiana (more than 28,000 signatures at midday Tuesday), which gets about $1.45 in federal largess for every $1 it pays in taxes; Alabama (more than 20,000 signatures), which takes $1.71 for every $1 it puts in; South Carolina (26,000), which takes $1.38 for its dollar; and Missouri (22,000), which takes $1.29 for its dollar.
Since the effort gained attention this week, copycats in all but a few states have joined the petition drive. To be fair, White House officials could refuse the secession petitions of states Obama won, such as New York (which gets only 79 cents on its tax dollar), Michigan (85 cents) and Colorado (79 cents). ...
Of course, secession isn’t as easy or as painless as an electronic petition, and Obama couldn’t offer a redress of these petitioners’ grievances even if he wanted to. Nor should he want to: The Union of the Makers would be fiscally healthy but spiritually poor without the Confederacy of the Takers.
Yet would-be rebels from the red states should keep in mind during the coming budget battle that those who are most ardent about cutting government spending tend to come from parts of the country that most rely on it.
Second, understand that this so-called compromise they are talking about in order to avoid this supposed calamity is a trick. In fact, it'll be the greatest robbery in American history. Think about it -- they say they are worried about all those tax increases and spending cuts. But that's not true. The Grand Bargain would dramatically increase spending cuts, not alleviate them. So, in fact, the only thing they care about is paying less taxes, as always.
Right now, according to the sequester $1.2 trillion in spending cuts are set to take place if nothing happens. Half of that would come from defense. Of course, this is the real problem because there's no way the defense contractors are going to allow that. Whenever people in Washington complain about spending cuts they mean spending cuts that would affect defense contractors. They want to massively increase spending cuts everywhere else in the budget.
“With regards to the young people, for instance, a forgiveness of college loan interest was a big gift,” Mr. Romney said. “Free contraceptives were very big with young, college-aged women. And then, finally, Obamacare also made a difference for them, because as you know, anybody now 26 years of age and younger was now going to be part of their parents’ plan, and that was a big gift to young people. They turned out in large numbers, a larger share in this election even than in 2008.”
The president’s health care plan, he said, was also a useful tool in mobilizing black and Hispanic voters. Though Mr. Romney won the white vote with 59 percent, according to exit polls, minorities coalesced around the president in overwhelming numbers: 93 percent of blacks and 71 percent of Hispanics.
“You can imagine for somebody making $25,000 or $30,000 or $35,000 a year, being told you’re now going to get free health care, particularly if you don’t have it, getting free health care worth, what, $10,000 per family, in perpetuity — I mean, this is huge,” Mr. Romney said. “Likewise with Hispanic voters, free health care was a big plus. But in addition with regards to Hispanic voters, the amnesty for children of illegals, the so-called Dream Act kids, was a huge plus for that voting group.”
Gosh. People who will have health insurance under Obama but would have lost it under Romney voted for Obama. What’s wrong with those people?
But as many commentators have pointed out, Romney was just encapsulating the prevalent worldview on the right. Some of us see an increasingly, radically unequal America, with rising inequality actually reinforced by public policy, with tax rates on the rich lower than they have been in many decades and the overall redistributive effect of government down substantially since the 1970s. But the right sees an entitlement epidemic, in which the big problem is that too many people are getting free stuff.
In a post-mortem call with his biggest donors on Wednesday, Mr. Romney said his team ran a “superb” campaign with “no drama” (well, yes, it was a pretty dull campaign) and that he lost because President Obama showered voters with “gifts.” By voters he meant black, Hispanic, female and young voters. And by “gifts,” he meant government money that is not spent on tax breaks and other incentives for big companies and rich people.
He said Mr. Obama motivated young voters by keeping student-loan interest rates low and by extending dependent health insurance coverage to age 26. According to the Times account of the call, Mr. Romney said Mr. Obama’s health care plan also mobilized African-American and Hispanic voters. “You can imagine for somebody making $25,000 or $30,000 or $35,000 a year, being told you’re now going to get free health care, particularly if you don’t have it, getting free health care worth, what, $10,000 per family in perpetuity, I mean this is huge,” Mr. Romney said.
He is right. It is huge. A hugely overdue and hugely necessary reform of a system that has left Americans at the bottom of the economic ladder with emergency rooms as their source of medical care. How crafty of Mr. Obama to pretend that he was governing when what he was really doing was handing out “gifts” in exchange for votes. ...
Mr. Romney is so irrelevant now that’s it tempting to let his comments gather dust on the remainder table of history. But I thought a few points were worth making. First, none of these examples qualify as actual gifts. Some, like keeping interest rates low on student debt, are smart investments to help young people succeed and become – yes, taxpayers. Others, like health care reform, require Americans to spend money (on insurance, or pay a penalty).
I guess Mr. Romney would not consider oil subsidies a gift. Or a tax system that allows him to pay a 14 percent tax rate. Or his proposal to build warships and warplanes and other fancy hardware that the military doesn’t want or need.
But it's a tactical mistake to even engage in this kind of discussion, because there's really no "slope" either. There's just a law.
John Boehner's law.
Sure, the President agreed to that law as part of a deal to settle deficit talks last year. At the time the Republicans were about to shut down the entire government. The GOP forced this law into existence.
That means the "fiscal cliff" is theirs. They own it
Anyone who opposes disastrous, European-style austerity measures needs to stop talking about this in urgent terms. And nobody should characterize it as anything but what it really is: A deed performed by Republicans in Congress, which the same Congress can easily reverse.
That's not just more accurate. It also places the responsibility for this pseudo-crisis exactly where it belongs.
A Gun to the Head. The motives for the hoax are easy to understand. As a Campaign for America's Future/Democracy Corps poll reaffirmed after the election, the public overwhelmingly opposes any of the fiscal measures being negotiated as the result of this fictitious "crisis." A majority of voters, cutting across party lines, opposes virtually all of the ideas being discussed - including cuts to Social Security and Medicare benefits, and reductions in anti-poverty programs.
Voters strongly support some steps that aren't being debated because of this phony "crisis," like increased investment in jobs and economic growth. These negotiations are likely have the opposite effect instead, leading to more cuts in these programs. In fact, of the many "debt deal" provisions being debated today, only tax increases for the wealthiest Americans have the majority's approval. ...
Here's more proof that both the "fiscal cliff" and the "emergency" deficit talks surrounding it are a fraud: They include two issues that don't belong in a deficit discussion at all. One's Social Security, which is forbidden by law from contributing to the national deficit.
The other is the scam known as tax "reform" and "tax code simplification" - which, in plain English, means a lowering of top tax rates for millionaires and billionaires - supposedly in return for reduced "tax expenditures" and increased "tax revenues" to be named at a later date.
Why would deficit talks include two ideas that won't reduce the national debt, especially when "tax simplification" will undoubtedly increase that debt substantially? That's an easy one: Because this phony "crisis" has nothing to do with deficits.
It's all part of a long-range plan to scam the public into transferring even more of its wealth to the wealthiest among us: first by giving them lower tax rates, and then by cutting a program the public has already paid into. That way there'll be less pressure to increases taxes on the wealthy later on. (They may also want to raid Social Security's trust fund to pay for the deficits caused by their tax breaks.)
These "deficit" moves would transfer even more of our national treasure to the extremely rich - including those on Wall Street who created our economic crisis in the first place. That, and not a "fiscal cliff," is what's "looming."
To many Americans, the very word "tax" strikes a sense of resentment -- few like to give up a percentage of their hard-earned wages. But let's recall the words of Justice Oliver Wendell Holmes, "taxes are what we pay for civilization." The basic purpose of taxation is to raise revenue needed for the public services we presumably all benefit from, and a purpose of government is to ensure that everyone is paying their fair share. Rarely is the fairness yardstick applied to the biggest culprits of tax avoidance and/or tax evasion -- the corporations. And, given grossly inadequate government tax enforcement budgets on global corporations, "tax evasion" is the proper term to add to the words "tax avoidance" (as the corporate attorneys would prefer, likely adding that it's "perfectly legal".)
Did you know that many large U.S. chartered corporations -- Bank of America, Verizon, GE, to name a few -- did not pay a single dollar in taxes to the United States government in 2010? These are companies that report massive, billion dollar annual profits, but don't contribute a dime of federal income tax to the country that provides them with resources, public services and infrastructure to conduct business. Some of these giant corporations even receive a hefty tax benefit from the federal government. In the years 2008-2010, for example, GE made over $7 billion in U.S. profit, paid zero federal tax, and reaped nearly $5 billion extra from the United States treasury. All they say is "perfectly legal" because of the bloated tax code, with its numerous loopholes, which have allowed crafty tax accountants and attorneys to devise an entire playbook of tactics to avoid paying their way.
Tax avoidance at GE is seen as a systematic profit center with the smartest loophole experts getting bonuses. Consider this: One building in the Cayman Islands -- the Ugland House -- is the legal address of thousands of U.S companies' corporate subsidies. All to avoid taxes. All "perfectly legal".
And right now the most dangerous zombie is probably the claim that rising life expectancy justifies a rise in both the Social Security retirement age and the age of eligibility for Medicare. Even some Democrats — including, according to reports, the president — have seemed susceptible to this argument. But it’s a cruel, foolish idea — cruel in the case of Social Security, foolish in the case of Medicare — and we shouldn’t let it eat our brains.
First of all, you need to understand that while life expectancy at birth has gone up a lot, that’s not relevant to this issue; what matters is life expectancy for those at or near retirement age. When, to take one example, Alan Simpson — the co-chairman of President Obama’s deficit commission — declared that Social Security was “never intended as a retirement program” because life expectancy when it was founded was only 63, he was displaying his ignorance. Even in 1940, Americans who made it to age 65 generally had many years left.
Now, life expectancy at age 65 has risen, too. But the rise has been very uneven since the 1970s, with only the relatively affluent and well-educated seeing large gains. Bear in mind, too, that the full retirement age has already gone up to 66 and is scheduled to rise to 67 under current law.
This means that any further rise in the retirement age would be a harsh blow to Americans in the bottom half of the income distribution, who aren’t living much longer, and who, in many cases, have jobs requiring physical effort that’s difficult even for healthy seniors. And these are precisely the people who depend most on Social Security.
So any rise in the Social Security retirement age would, as I said, be cruel, hurting the most vulnerable Americans. And this cruelty would be gratuitous: While the United States does have a long-run budget problem, Social Security is not a major factor in that problem.
Medicare, on the other hand, is a big budget problem. But raising the eligibility age, which means forcing seniors to seek private insurance, is no way to deal with that problem.
It’s true that thanks to Obamacare, seniors should actually be able to get insurance even without Medicare. (Although, what happens if a number of states block the expansion of Medicaid that’s a crucial piece of the program?) But let’s be clear: Government insurance via Medicare is better and more cost-effective than private insurance. ...
What would happen if we raised the Medicare eligibility age? The federal government would save only a small amount of money, because younger seniors are relatively healthy and hence low-cost. Meanwhile, however, those seniors would face sharply higher out-of-pocket costs. How could this trade-off be considered good policy?
The bottom line is that raising the age of eligibility for either Social Security benefits or Medicare would be destructive, making Americans’ lives worse without contributing in any significant way to deficit reduction. Democrats, in particular, who even consider either alternative need to ask themselves what on earth they think they’re doing.
But what, ask the deficit scolds, do people like me propose doing about rising spending? The answer is to do what every other advanced country does, and make a serious effort to rein in health care costs. Give Medicare the ability to bargain over drug prices. Let the Independent Payment Advisory Board, created as part of Obamacare to help Medicare control costs, do its job instead of crying “death panels.” (And isn’t it odd that the same people who demagogue attempts to help Medicare save money are eager to throw millions of people out of the program altogether?) We know that we have a health care system with skewed incentives and bloated costs, so why don’t we try to fix it?
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