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6, 2000 April, 2000

Highlights—February 9, 2013

  • Yahoo! IBM Employee Issues message board: "Checking that I have this right - 2nd "3" appraisal" by "donovake". Full excerpt: I hope this wasn't already covered in a post above (I didn't see it but could have missed it.) I just got my 2nd "3" appraisal and my manager told me I have 2 choices:
    • Resign within 30 days and I'll get 13 weeks pay, or
    • Choose to to resign and I can try to prove to his satisfaction that my work is a solid consistent "2". He went on to say he's never seen it done. He said if I chose this and he doesn't give me a 2 I'll be fired within days of the review. I would have 60 days to earn the 2.

    Note in either case I can not come back as a contractor since it's a performance based separation.

    I've worked for IBM for 36years. Gotten 5 promotions over that time.

    Can someone tell me if I have this correct? Is there any advice? Thanks! Kevin

    P.S. Verbally, my manger said he put me in for a "2" and that 6 of the 11 people that work for him got "3"s. But...that's not in the paperwork.

  • Yahoo! IBM Employee Issues message board: "Re: Checking that I have this right - 2nd "3" appraisal" by Susan Crayne. Full excerpt: Yes, that's correct. At least your manager told you the real story -- that this did not happen because of your performance. Option number 2 is not a good idea. Take the money and run.
  • Yahoo! IBM Employee Issues message board: "Re: Checking that I have this right - 2nd "3" appraisal" by "pvsutera". Full excerpt: Well I know you won't get unemployment if you resign. I believe if you are fired, IBM will not contest unemployment. Also you can get paid for 30 days, and then get a 3 month severance - so that's 4 months pay but no unemployment. Versus 60 days pay, a lot of aggravation where you are basically being told, you won't get out of this one with a "2" appraisal. But unemployment for however long that lasts...subject to shortening from the current timeframe, and subject to your state's unemployment - amounts and terms differ from state to state.

    As a complicating factor, your severance won't include a 401K contribution, but since you are eligible for retirement, you would get anything IBM contributed during time actually worked, upon date of retirement. In resign option, that's 30 days of employer contributions. In the "fight for 60 days" options, that's 60 days of employer contributions. So get out a piece of paper and a calculator. Then also figure in your health and stress levels into the mix.

    4 months pay, 30 days employer match, no unemployment - Resign option 2 months pay, 60 days employer match, unemployment - Fight option Someone correct me if I'm wrong so I don't steer Kevin the wrong way!

  • Yahoo! IBM Employee Issues message board: "Re: Checking that I have this right - 2nd "3" appraisal" by Sam Cay. Full excerpt: Sorry but he answered your question for you. If you re-read number 2. then you know the answer. He will not improve your rating based on what he said to you. Also for him to say he put you in for a 2 is just a way for him to try to make you feel good. It is unfortunate after all of these years that this has come to pass. He is not your friend but your manager who is doing what he had been directed to do.
  • Yahoo! IBM Employee Issues message board: "Re: Checking that I have this right - 2nd "3" appraisal" by "fstephens". Full excerpt: After 36 years you should know you have the proverbial TARGET on your back. It is a no win situation, even if you get the 3 changed, it will be back, worse.

    RECOMMENDATION: Write an acceptance letter for the 29'th or 30'th day of your wait period. During the 30 days, get your boat in order and get a new job (outside of IBM) if you can. Companies will pay big to get you from IBM, but will not want to touch you once IBM lets you go. If possible make sure the acceptance date after a new month has started. This will get you more pay and help in your retirement calculations. Put the MAX you can into your 401K for the last month. Since you should be over 55 the year you retire, you have full access to your 401K monies, immediately. Be sure and take this fact into consideration. The 13 week payment should offset any extra money you put into your 401K. You won't get any IBM MATCH, so forget about that.

    I don't know your personal situation, so there may be many other "things" that make leaving hard on you. Make sure you have at least 6 months and better yet 12 months of living current expenses available (remember you have access to your 401K with no penalty). Start to cut back on your monthly expenses immediately (the saved amount will last longer). GOOD LUCK !!!!!

  • Yahoo! IBM Employee Issues message board: "Re: Checking that I have this right - 2nd "3" appraisal" by "bk2006pc". Full excerpt: Let do our soul searching and think i.e. are we living in a real democratic country? How IBM can claim a shortage of technical experts and keep laying off her own experts and keep cutting employee benefits without any question or investigations from the politicians? Why current employees do no complain or pass real information to the politicians?

    Why do these employees have to work for the IBM and experience such unfair treatment? I still remember my layoff day. Once I got the papers, majority of my IBM coworkers stayed away from me. Few close friends took few minutes and offered help to clean up. Even my manager, one time used to be my coworker, treated me like a criminal. Even after more than 5 years, I still remember that worst day of my life.

    I still ask myself, why did I call myself IBMer and lived with that illusion for more than 25 years! Is this a reality under US capitalism where corporation can exploit workers to squeeze last drop of blood from them?

    I think I would prefer to work as a fixed term contractor, subject to renew on yearly basis. That way I will never attach myself to the corporation and I know my last day on job. Today majority IBMers are constantly living under gun and fearful of their layoff.

  • Yahoo! IBM Employee Issues message board: "Re: Checking that I have this right - 2nd "3" appraisal" by "kramrengaw". Full excerpt: I think your manager has misrepresented option "1" slightly. This should be considered a "Management Initiated Separation" and should be governed by Document USHR119. The particular part of this document that would apply in your situation is the Individual Separation Allowance Plan (ISAP) and specifically the Minimized Separation Allowance. Read this document carefully as it spells out for you exactly what benefits you are entitled to.

    One important point specific to possible unemployment benefits is that this is a separation being initiated by IBM management that you are "accepting". This is slightly different than you just resigning. Again, go get USHR119 and read it carefully. You may also want to send a copy to your manager. You would be surprised how ignorant most IBM managers are of the actual details of these benefits that you are entitled to. And it won't hurt if he knows you are informed.

  • Yahoo! IBM Employee Issues message board: "Re: Checking that I have this right - 2nd "3" appraisal" by "trexibmer". Full excerpt: IBM is notorious for not putting anything they are not required to by law in writing. They routinely sanitize documents to avoid potential lawsuits and cover or obfuscate suspected improprieties. The PBC is one document which is a prime example.

    I'm not saying IBM can't be totally trusted: I'm saying IBM is not a fair partner: they play by their rules.

    Yes, make sure you have your case well documented in verbose writing with undeniable facts and examples.

    Ask to see your employee jacket with all recommendation letters, key employment milestones, awards and bonus history, salary grid info., any stock options, etc. and any "desk notes" your manager might have about you. When I asked to see all this when I got the 30 day boot to RA I never got a reply from my manager or HR. Good Luck.

  • Yahoo! IBM Employee Issues message board: "Re: Checking that I have this right - 2nd "3" appraisal" by "donovake". Full excerpt: Thank you all for sharing your thoughts here. Knowing I'm not alone helps!

    I did spend $500 to speak to a labor lawyer.."Craig M. Bonnist" in White Plains area NY. He has dealt with IBM so that's why I picked him.

    He said it's a clear layoff since employees are being removed and the work divided up among those that are left. But the question is do I want to spend years and major bucks to fight that? Still deciding. Hope that's helpful!

  • Glassdoor IBM reviews. Selected reviews follow:
    • No longer innovative company but large gigantic outdated entity” Former Advisory Software Engineer. Pros: Globally recognized brand, flexible working hours, opportunity to participate in different roles and work with large customers, networking.

      Cons: IBM is destroying geeky high tech environment and instead is replacing with endless chains of management. I’ve seen many enthusiastic highly skilled technical talents leaving IBM just because of use of outdated and old technologies and lack of technological challenges. I don’t feel like I am working in world leading innovative IT Company anymore. The systems I have worked on and have seen developed by IBM looked very outdated, really can’t understand how customers are paying large amount of money and getting rubbish systems. And the sad part is the procedures and bureaucracy has killed all the motivation to make something better. And even if you are willing to change surely nobody will recognize that.

      Products are not cutting edge technology anymore and stuck in 90's. No freedom for innovations. Employees are rated not by their talent and dedication but how they follow the procedures. Bureaucracy is destroying from inside out. If things will continue to progress in same direction surely IBM will start feeling deficit of innovative people. If you speak in binary then you should seek for more flexible and innovative company.

      Advice to Senior Management: Value real professional, give freedom to innovate, bring back talents

    • Was outsourced to IBM, and was good for the first year then it all went down hill.” Former Senior IT Specialist in Denver, CO. Pros: Benefits, good 401k match, employee discounts. Cons: Pension dissolved, mass layoffs, low raises, deduction in pay while the work load get bigger because of the mass layoffs
    • It's an okay company” Current Software Sales in Markham, ON (Canada). Pros: ability to work from home, job stability, able to change jobs every two years. Cons: Extremely under paid, long hours, working evenings and weekends, poor work/life balance, high turnover rate. Advice to Senior Management: make your employees happy, they will work hardier for you in return.
    • Was good, starting to lose focus on keeping a motivated workforce” Current Employee. Pros: Stable business, with long history. Good reputation in the marketplace. Good salaries. Good ethics & workforce collaboration. Cons: Too much bottom line management (vs. top line growth focus). Policies getting more bureaucratic in last few years. "Feel good" benefits progressively getting curtailed. Advice to Senior Management: Think bigger, think growth!
    • Senior Consultant” Former Senior Consultant in Herndon, VA. Pros: Global brand name recognition in technology. Cons: Pay is not competitive, heavily bureaucratic company structure, too many management layers, not quite a meritocracy. Performance assessments are geared towards appearing to find "fault" rather than growth opportunities. Legend has it that. Advice to Senior Management: Align talent with projects that utilize their core competencies. Turnover is high due to dissatisfaction with nature of project challenge and fuzzy career advancement.
    • Long exhausting hours” Former Systems Specialist in Armonk, NY. Pros: You don't need much experience. Lack of certifications in any product/technology was never an issue. Great company for recent grads with no experience. Cons: Certain IBM positions entail working long exhausting hours. Very little training if any. In my opinion, after the company requested and received US bailout money, the number of US positions that were lost to India increased. Advice to Senior Management: Some managers are great, some are not. My advice to management is to learn from the managers that command respect. Poor Managers find it hard to be loyal to US Support, but those are the people you manage and should care about. Emerging markets should be secondary.
    • Good company but hard time now.” Former Sales Specialist in Tokyo (Japan) . Pros: IBM Japan has a good customer base, good pay, good support for employees, (especially for women). Work life balance is not bad. Cons: In Japan, a lot of people have left these days. Thus, the motivation is going down and most of people are thinking about changing job.
    • Good first job out of school” Current Consultant in Washington, DC. Pros: Stable work environment, reputation of company, a focus on team work rather than cut throat consulting culture. Cons: Unless working at headquarters, in consulting role if you are billable, you could work for 20+ years and never get noticed or have many opportunities. Advice to Senior Management: Happy with new CEO choice
    • It's a good start” Current Systems Administrator in Boulder, CO. Pros: Looks great on your resume; Ability to learn a lot. Cons: Lots of turnover which leads to lots of various errors in tools/processes/procedures; Moving up could take 2-4 years; Work environment is way too industrial/slightly depressing at times. Advice to Senior Management: Define careers paths in the department so it is more clear what ones next move should be and what one should get familiar with in-order to advance.
    • The worst company I have ever worked for—sweatshop” Former IT Consultant in London, England (United Kingdom). Pros: - A good name to have on the CV; - A good place to network and meet new people; - And then leave like everyone else does.

      Cons: - Resourcing managers make your life hell when you are on the bench and try to push you on whatever project suits them without asking your opinion or considering your personal circumstances; - Arrogant (micro-)managers with big egos who are full of themselves and expect to be sucked up to; - No work-life balance; you are expected to put your life on hold; - Number of hours you spend at work matters (face time culture), not the results; - regardless of what they tell you IBM DOES NOT CARE ABOUT ITS EMPLOYEES; - Rigid and hierarchical organisation; - They only win projects because of their brand and size, but customers are rarely satisfied due to poorly delivered work by offshore resources; - Bad reputation as an IT software implementation partner.

      If you are a senior consultant IBM UK Global Business Services is not a good place to work. Don't waste your time, go somewhere else!

      Advice to Senior Management: Treat your people better and be less arrogant. You think that you are something special as you work for IBM but you are not.

    • Only stay 5-7 years there” Former Financial Analyst in Armonk, NY. Pros: Lots of people with 25+ years of experience who are a great resource to tap into. Cons: The raises are so slow (even as a top performer) that after 5 - 7 years, you're doing triple the work you were hired to do at the same time, new hires have caught up and surpassed your salary. On a "good" year, a promotion is a 5% raise!!!! Advice to Senior Management: By giving your top performers 1-2% raises and bonuses, you're not giving them incentive to work hard and as the job market improves, you'll lose that top talent
    • IBM is an incredible place to work with unique global collaboration.” Former Communications Manager in New York, NY. Pros: There are many reasons to work at IBM. Here are but a few: the opportunities for advancement, global collaboration, and fast-paced business environment. The people are fantastic - intelligent, committed, and innovative. The compensation and benefits are unparalleled, and IBM is a great place for women to work. There is a lot of work-life balance which is invaluable to working parents. Although many people don't realize it, IBM offers employment opportunities for employees with a wide range of educational backgrounds besides technical... such as medical, scientific, quantitative, legal, financial, and communications.

      Cons: So much work is being moved out of the United States, so there is a lot of pressure on U.S. managers and employees. There is constant reorganization, so your job is routinely changed and work consolidated to the near breaking point.

      Advice to Senior Management: Take a more truly global look at your workforce. Understand the value, commitment and dedication U.S. workers bring to the table, and hire within the U.S. again. I think it is extremely short-sighted to move so many aspects of the business to much less politically and economically stable world regions. Also, provide equal pay to men and women with the same jobs!

    • Amazing company to work for” Current Manager in Dallas, TX. Pros: IBM has excellent processes, solid management and excellent work-life balance for employees. IBM has good focus on employees development and offers great training opportunities for employees, if they choose to take them up. As always, career development is up to you, so more work you put in, better results you will get at IBM. Cons: Processes can mean slower response time sometimes, especially working across international boundaries. It's hard to avoid this for a large corporation, especially since each geography has its own operating company (due to legal and regulatory requirements). Advice to Senior Management: Keep the focus as you have on profit growth - continue to acquire high-margin / high- potential start-ups and IBM will continue to dominate the marketplace.
    • Not professional for people management” Current Sales in Bangkok (Thailand). Pros: - Good luck to be IBM brand over 100 years with a bunch of customer base that can up selling for old customer; - Good knowledge base/tools/training to enable skill for staff and market; - Big team work to support complex requirement from customer; - Good for new graduate people to work and learn IT knowledge.

      Cons: - Office culture not match with dynamic of IT market: too much elegant, big team with low services mind between team, too much monitor/check point to delay sales cycle that effect direct to customer satisfaction; - Work live balance is negative with choice to choose family or work; - Old style to work office as base even staff is mobile user. Very low technology to work as remote Web conference to make job done. Keep call face to face meeting for whole team. Waste time for travel back and forth with traffic. - Not so good to work for dynamic/skill/initiative person because of current culture is not support

      Advice to Senior Management: - To improve manager skill of people management. Need more mutual for manager level that too much personal mood driven; - Make sure that all manager apply for open door practice without bias; - Current customer was ignore to consider up-selling (Services, new solution offer); - HR just messenger and administrator; - With above point, high turnover that outside new professional staff can not survive, culture will getting older with old team, old mind set, hard to find new initiative from new blood to win new market and keep loosing customer.

    • Disappointed at working well under my capacity and capability” Former IT Executive in London, England (United Kingdom). Pros: Can be well paid. There can be opportunities to move and expand experience. It is very collegial, and they do take good care of people especially in an emergency or crisis. The company does do a very good job of communicating with people the state of the business, current issues and plans.

      Cons: The culture is all embracing and overwhelming. It is fundamentally run by Finance, with sales people being revered. Working internally as I did is neither appreciated or valued. I worked for a global team for years yet it never met in person due to a complete ban on travel expense for internal people. In 8 years I never did any training, never met any clients, never was able to go to any trade shows (even IBM run ones). There are no doubt some excellent managers and leaders though unfortunately I never worked for any. A lot of the people there joined as graduates and have only ever worked for IBM - these people occupy most if not all of the senior roles.

      Advice to Senior Management: There is not much point giving advice to management - the firm has been around 100 years and is very set in its ways, especially on how it manages and motivates people.

    • Great company to work for!” Former Managing Consultant in Dallas, TX. Pros: IBM is definitely a great company to work for. There are plenty of opportunities for advancements and lateral moves also. There is an excellent careers site, which allows one to regularly monitor career opportunities across the entire company. Company allows many people to work out of their homes. Cons: As a consultant, I had to travel to client sites outside of my home state. One of the minor hassles was that I had to keep track of days when I worked outside the home state and file the adjustments. Advice to Senior Management: Keep up the great work!
  • Alliance for Retired Americans: Friday Alert. This week's articles include:
    • In Group Letter, Alliance State Presidents Urge President Obama to Protect Seniors
    • On February 14th, Valentine’s Day, Tell Congress to Have a Heart!
    • If a Hospital Classifies Your Visit as an “Observation Stay,” You May Get a Big Bill
    • Saturday Postal Delivery to End in August - to the Detriment of Seniors and Others
    • “The Union Edge” Radio Show Reaches beyond the Labor Community
    • Affordable Senior Health Insurance to Supplement Medicare
  • AARP: CEOs Want You to Work Till You’re 70. By Carole Fleck. Excerpts: Financial planners have been urging us to work longer to save more for our retirement. Now a group of CEOs is pushing for a plan that would hike the retirement age to 70, meaning you wouldn’t be eligible for full Social Security benefits and Medicare until then. ...

    The plan by the Business Roundtable, an association of CEOs from some of the largest U.S. companies, would raise the age for Social Security and Medicare for people who are age 54 and younger. Those 55 and older would be protected from the changes. ...

    Meanwhile, a recent survey of 2,000 people age 21 and up found that most say they value Social Security for its ability to provide stability and security for millions of retirees and other recipients.

    The survey by the nonpartisan National Academy of Social Insurance (NASI) wanted to assess people’s preferences about how to strengthen Social Security. Interestingly, the findings revealed a deep division between what Americans say they want and changes lawmakers are considering.

    An overwhelming 84 percent say they don’t believe Social Security provides enough income for retirees. Seventy-five percent say we should consider raising benefits to provide a more secure retirement for people.

    Among the preferred options favored by more than two-thirds of those polled:

    • Eliminate the cap on earnings taxed for Social Security ($113,700) gradually over 10 years
    • Raise the Social Security tax rate from 6.2 percent to 7.2 percent, also gradually and over 20 years
    • Increase Social Security’s minimum benefit
    • Hike Social Security’s cost-of-living adjustment to reflect more accurately the level of inflation experienced by older adults
  • Tacoma News-Tribune: Take another look at your 401(k) and maybe get a second opinion. Your employer retirement plan may be Frankenstein. When Mary Shelley penned her novel in the early 1800s, she had no idea about the need for workers to save money to fund retirement. But the premise of the book is that a scientist creates life and is horrified by what he has made. By Gary Brooks. Excerpt: One iteration of the code came in 1978 when section 401(k) was created allowing tax-deferred retirement savings. Of course, this also paved the way for more employers to stop offering pension plans and start shifting responsibility for retirement income to the individual. Deeper scrutiny of 401(k) plans over time has caused many people to be horrified at how poorly they’ve helped the average worker build financial security. Maybe horrified is a stretch, but it’s true that the 401(k) is an experiment that has been pieced together with many adaptations over the years, most of which have not done enough to help people replace their income in retirement.
New on the Alliance@IBM Site
  • Job Cut Reports
    • Comment 02/04/13: If you think you're going to be RA'd, up your 401K as much as you can. It's too late once you get notified. You can always cut it back later. Also: To those about to be RA'd, see my comments in Jobcut Archive2 dated 5/12/08. It may be a little dated but it can get you started. -Neal Watkins-
    • Comment 02/06/13: My Predictions for 2013. 1. IBM will RA people who will be shocked that they were selected. They will come to the Alliance website to rail against IBM and try to get others to join them in suing IBM. They never joined the Union because they felt it was beneath them, because after all they were so much better and more important than the people they worked with. IBM would never get rid of them. And they had a really close relationship with their boss. They will then ask a lot of questions about severance pay and benefits from the Union people they did nothing to support before they were wronged by IBM.

      2. Almost everyone left will be sympathetic while secretly being oh so glad it was not them. Those left will, for the most part, not join in the effort to organize because they really do have a great relationship with their boss and really are far too important to be let go.

      3. This madness will continue until everyone from prediction 2 becomes someone in prediction 1 or until the prediction 2 people wake up and join the union. -Exodus2007-

    • Comment 02/09/13: re: -Exodus2007- I have spoken with several IBMers from other locations that have been RA'd and some who are still employed. They have said the RA's are random and nobody has a clue who is going to be cut. They've seen top performers and bottom feeders get the boot. You are right though, today they won't say anything because they are putting on the BS face at work, but once let go they will start posting their rants. -lacrosssux-
    • Comment 02/09/13: With regard to the 401k contribution question: The last several years I had been maxing out my 401k early in the year (taking hardly a paycheck) because I had been in different groups where there were layoffs (resource actions) at about the end of Q1. So basically I packed my financial bags "just in case" Sure enough, last year I was the mole in Whack-A_Mole and was hit at the end of Q1. Because of severance and unemployment I was so very glad that at least I had preserved the 401k tax advantaged space. I would do it again in a heartbeat. I advocate hope for the best but plan for the worst.

      As to whether or not to take the package, I say once more, find a lawyer that specializes in your home state's employment law and have them review the situation. If you already have the package then just get it to your lawyer. If you don't have the package yet then remember that word of mouth means NOTHING and you may not count on either your management nor HR to tell you the truth and back it up. So if they are just saying on a phone conversation that you have a choice, ASK FOR IT IN WRITING. -beentherebefore-

    • Comment 02/09/13: To those of you wondering to go on the 30 improvement plan or take the severance plan, take the money and run. The 30 day Improvement plan is part of the process to fire someone for lack of performance. If you fail to meet the goals, you are fired. -Gettin-Hosed-
    • Comment 02/09/13: Any change IBM makes affecting the employee will hurt the employee unless the employee tries to stop IBM from following through on it. IBM will always try to further and protect it's interests; why not protect your employee interests by joining this union and getting an enforceable labor contract through collectively bargaining? -WhyNot?-
    • Comment 02/09/13: Here is another person who disagrees respectfully with Neal. If you are RAed and not retirement eligible you might need the money you want to contribute to the 401(k) even without the match along with the severance. Do you have a viable savings account to dip into or do you have it all tied up? IBM treats the severance as a lump sum payout and it taxed like 40% or so as tax reserve. Getting a new job quickly is not a guarantee. -anonymous2013-
    • Comment 02/10/13: People are going to start getting cautious about posting. IBM has announced they are using one of their supercomputers to scan social media, sites like this, and any other site to collect data on employee activity. They are going to begin using this information against employees.

      In my area, most everyone has been rated a 2. There are literally no 1's or 2+'s. They search for the most useless, single piece of info to "explain" a lower rating. I was told I was being rated a 2 because managers complained that I would not break US accounting practices and processes established by CHQ. I demanded that to be entered in my rating. The manager would not.

      So, I wrote down what I was told, asked my manager to verify and confirm what I wrote down, and entered that in the response section of the PBC. I immediately sent a note to CHQ detailing what has been taking place and why I am being scapegoated for it. I expect to be RA'd soon. However, now that it is documented, I have the necessary documentation for a lawsuit. -Concerned-

      Alliance Reply: If Alliance members and/or visitors to this comment section request anonymity, our policy is to grant it. No personal or private information is EVER divulged on this site, without expressed consent from the members and visitors. IBM cannot discern whether any commenter on this site is, or is not an IBM employee. Here is our privacy-policy.

      The Petition to reverse the 401(k) decision by IBM, has been signed by over 1000 people. Their names are available to view, because the signers provided a name, themselves. There is no way for IBM to prove that the names on the petition are of current IBM employees. Is there an exposure there? Possibly. But without speaking up about what and how IBM is abusing their employees and systematically removing matching funds that IBM committed to provide in 1983, when the 401(k) plan was initiated; IBM employees will continue to be RA'ed and abused as a normal practice by IBM Management.

      Fighting back requires an investment and a commitment from all employees in IBM US, that want to speak up and do something to bring IBM Management to the table and win a collectively bargained contract for the employees. Consider joining Alliance@IBM.

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
Minimize
  • Huffington Post: Why Americans Pay So Much for Health Care: Friends in High Places (Just Not Your Friends). By Wendell Potter. Excerpts; If you wonder why we spend more money on health care than any other country but have some of the worst health outcomes, you need look no further than the halls of Congress to it figure out.

    And you need look no further back than the recent "fiscal cliff" drama for compelling proof of how decisions are often made, not based on protecting the public's interest and bringing costs down but on protecting the profits of pharmaceutical companies, insurance firms and other special interests that grease the palms of our elected officials.

    Drug makers have long had cozy relationships and outsized influence on lawmakers in Washington. That's why Obamacare barely touches that industry. Big Pharma essentially blackmailed members of Congress and the White House by threatening to bankroll a huge PR and lobbying campaign to kill health care reform if serious consideration was given to allowing Medicare officials to negotiate for lower drug prices.

    We hear constantly from lawmakers about how unsustainable the Medicare "entitlement" program is, yet when they had a chance to make a difference in how much Medicare has to shell out to drug makers, they looked the other way. Taxpayers could save billions of dollars a year if Medicare didn't have to pay so much for drugs, but drug companies have much more clout on Capitol Hill than taxpayers.

    So much clout that one big drug company -- Amgen -- was able to get language quietly inserted in the fiscal cliff bill that will cost the Medicare program millions of dollars.

    Buried deep in the legislation is language that delays long-proposed price restraints on a class of drugs used to treat kidney dialysis patients. That paragraph allows Amgen to sell one of its high-priced drugs, Sensipar, with no government controls for two more years -- at a cost to the Medicare program of an estimated $500 million.

    As reported first in the New York Times, this Congressional gift to Amgen, which employs 74 lobbyists in Washington, came just two weeks after the company pleaded guilty in a federal fraud case. It's likely the public would never have been aware of the company's windfall if its CEO hadn't reported it right away to Wall Street investment analysts, the stakeholders most dear to publicly traded companies like Amgen and the insurance companies I used to work for.

  • The Health Care Blog: The Gold Plated Health Care System: What the New Numbers Tell Us about the State of the Economy. By Jeff Goldsmith. Excerpt: There is no question that the recession’s 7-million increase in the uninsured depressed cost growth. But the main reason health cost growth has been slowing for ten years is the steadily growing number of Americans — insured or otherwise — that cannot afford to use the health system. The cost of health care may have played an unscripted role in the 2008 economic collapse. A 2011 analysis published in Health Affairs found that after accounting for increased health premium contributions, out-of-pocket spending growth and general inflation, families had a princely $95 more a month to spend on non-health items in 2009 than a decade earlier. To maintain their living standards, families doubled their household debt in just five years (2003-2008), a debt load that proved unsustainable. When consumers began defaulting on their mortgages, credit cards and car loans, the resultant chain reaction brought down our financial markets, and nearly resulted in a depression.
  • Huffington Post: Part-Time Employee Health Care Rare Ahead Of Obamacare: Study. By Jeffrey Young. Excerpts: Just 8 percent of part-time workers are enrolled in their company health insurance plans, according to a report released Monday that underscores the reasons for and the challenges created by President Barack Obama's health care reform law. ...

    The ADP Research Institute analyzed data from about 300 large employers covering 2 million workers and dependents. Among the employers studied, 23 percent of their workers are part-time but only 8 percent get company-sponsored health benefits. Just 15 percent of part-time workers are even offered health insurance.

  • The Smirking Chimp: Being American Is Bad for Your Health. By Marty Kaplan. Excerpts: "Americans are sicker and die younger than people in other wealthy nations."

    That stark sentence appears in the January 2013 issue of the Journal of the American Medical Association, and it comes from the authors of a landmark report -- "Shorter Lives, Poorer Health" -- on differences among high-income countries.

    You probably already know that America spends more on health care than any other country. That was one of the few facts to survive the political food fight pretending to be a serious national debate about the Affordable Care Act.

    But the airwaves also thrummed with so many sound bites from so many jingoistic know-nothings claiming that America has the best health care system in the world that today, most people don't realize how shockingly damaging it is to your wellness and longevity to be born in the U.S.A. ...

    Compare the health of the American people with our peer nations -- with Britain, Canada and Australia; with Japan; with the Scandinavian countries; with France, Germany, Italy, Spain, Portugal, Austria, Switzerland and the Netherlands. Side by side with the world's wealthy democracies, America comes in last, and over the past several decades, it's only gotten worse. ...

    With few exceptions -- like death rates from breast cancer -- we suck. Our newborns are less likely to reach their first birthday, or their fifth birthday. Our adolescents die at higher rates from car crashes and homicides, and they have the highest rates of sexually transmitted infections. Americans have the highest incidence of AIDS, the highest obesity rates, the highest diabetes rates among adults 20 and older, the highest rates of chronic lung disease and heart disease and drug-related deaths. ...

    In case you're tempted to blow off these bleak statistics about American longevity by deciding that they don't apply to someone like you -- before you attribute them to, how shall we put it, the special burdens that our racially and economically diverse and culturally heterogeneous nation has nobly chosen to bear -- chew on this: "Even non-Hispanic white adults or those with health insurance, a college education, high incomes, or healthy behaviors appear to be in worse health (e.g., higher infant mortality, higher rates of chronic diseases, lower life expectancy) in the United States than in other high-income countries." And by the way, "the nation's large population of recent immigrants is generally in better health than native-born Americans."

  • New York Times: Federal Rule Limits Aid to Families Who Can’t Afford Employers’ Health Coverage. By Robert Pear. Excerpts: The Obama administration adopted a strict definition of affordable health insurance on Wednesday that will deny federal financial assistance to millions of Americans with modest incomes who cannot afford family coverage offered by employers.

    In deciding whether an employer’s health plan is affordable, the Internal Revenue Service said it would look at the cost of coverage only for an individual employee, not for a family. Family coverage might be prohibitively expensive, but federal subsidies would not be available to help buy insurance for children in the family.

    The policy decision came in a final regulation interpreting ambiguous language in the 2010 health care law. ...

    The law specifies that employer-sponsored insurance is not affordable if a worker’s share of the premium is more than 9.5 percent of the worker’s household income. The I.R.S. said this calculation should be based solely on the cost of individual coverage, what the worker would pay for “self-only coverage.”

    “This is bad news for kids,” said Jocelyn A. Guyer, an executive director of the Center for Children and Families at Georgetown University. “We can see kids falling through the cracks. They will lack access to affordable employer-based family coverage and still be locked out of tax credits to help them buy coverage for their kids in the marketplaces, or exchanges, being established in every state.”

    In 2012, according to an annual survey by the Kaiser Family Foundation, total premiums for employer-sponsored health insurance averaged $5,615 a year for single coverage and $15,745 for family coverage. The employee’s share of the premium averaged $951 for individual coverage and more than four times as much, $4,316, for family coverage.

    Under the I.R.S. rule, such costs would be considered affordable for a family making $35,000 a year, even though the family would have to spend 12 percent of its income for full coverage under the employer’s plan.

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 editorial: A Million Jobs at Stake. Excerpts: With enormous struggle, the sluggish economy managed to create 2.2 million jobs last year. But beginning at the end of this month, at least half that amount — more than a million jobs — will start to disappear because of a mindless government austerity program that no one in Washington seems able to stop.

    From the armed forces to the Federal Bureau of Investigation, every program except for most safety-net benefits is about to be cut by an arbitrary process known as the sequester, instigated by the 2011 Republican rampage against government. Over the next seven months alone, the cuts will reduce defense spending by $55 billion and nondefense discretionary spending by $27 billion. ...

    Congress should be thinking about ways to accelerate the economy, instead of remaining preoccupied with a short-term deficit. Nonetheless, the coming job losses could be sharply reduced if half or more of the spending cuts were replaced by revenue increases, as President Obama and Congressional Democrats have demanded. That would lower the amount of spending pulled out of the economy to bring down the deficit, replacing the cuts with taxes from the rich or companies with high cash reserves that are less likely to spend it.

    The money could be raised by eliminating tax loopholes for energy companies, hedge fund managers and other high-end recipients of federal largess, but Republicans won’t even consider the idea. “The tax issue is finished, over, completed,” Mitch McConnell, the Senate Republican leader, said recently.

    In other words, bring on the unemployment. The first jobs to go will be in the defense sector, but the losses will soon spread as contracts to states and cities are cut, education and police grants are cut, and payments to Medicare providers are cut. Even the aid just approved for victims of Hurricane Sandy will fall under the sequester’s ax. Americans are about to find out what happens when an entire political party demands deficit reduction at all costs, because those costs will be enormous.

  • New York Times: Tax Loopholes May Be Next, Obama Says. By Mark Landler. Excerpts: President Obama said in a televised interview on Sunday that he could foresee a budget deal in Congress that did not include further increases in tax rates but instead focused on eliminating loopholes and deductions. ...

    “Can we close some loopholes and deductions that folks who are well connected and have a lot of accountants and lawyers can take advantage of so they end up paying lower rates than a bus driver or a cop?” Mr. Obama said in the 10-minute interview in the White House. “If you combine those things together,” Mr. Obama said, a budget deal could reduce the deficit “without raising rates again.”

  • Bloomberg: Levin Corporate Loophole Plan in U.S. Raises $200 Billion: Taxes. By Marc Heller. Excerpts: Senator Carl Levin’s push to close tax loopholes will target corporate deductions for stock options and rates on investment income known as carried interest, seeking to raise at least $200 billion by one estimate.

    In a memo to Democratic Senate committee leaders on Friday, the Michigan Democrat described proposals to end what he called excessive corporate tax deductions, scrap the blended tax rate for derivatives such as commodity futures and strengthen enforcement of the tax code, Bloomberg BNA reported. ...

    In the memo, which his office provided to Bloomberg BNA, he said corporations pay an effective tax rate of 15 percent due to various deductions and loopholes even though the top marginal rate set in the tax code is 35 percent.

    Thirty of the largest U.S. multinational corporations, with combined profits of $160 billion, paid no corporate income tax at all from 2008 to 2010, according to Levin’s summary. “U.S. multinational corporations can use a myriad of tax loopholes to keep their taxes far lower than their domestic competitors,” Levin’s office said in the memo.

  • Huffington Post: 14 Reasons to Rise Up - For Jobs, and Against More Spending Cuts. By Richard Eskow. Excerpts: We Americans must be a remarkably patient people. It 's been four years since Wall Street ruined the economy, we're nearly nine million jobs behind where we need to be, and for years our politicians have debated how much less - not how much more - they'll do about it.

    We've patiently endured lectures about 'tightening our belts' while most Americans watched their wages decline. We've stood by as corporate forces manipulated politicians and the press into a manufactured sense of deficit hysteria,watched several rounds of spending cuts make our problems worse, and seen their austerity idealogies discredited by events.

    And yet here are no uprisings, no mass demonstrations, no demands for jobs now and an end to any further cuts until the economy's working again.

  • Financial Times: Democrats target corporate tax breaks. By James Politi. Excerpts: Senate Democrats want to slash corporate tax breaks in search of new revenue, as an alternative to $1.2tn in impending across-the-board spending cuts, digging in against Republicans who are opposed to higher taxes and stoking calls for a revival of bipartisan deficit talks.

    Harry Reid, the Democrat majority leader in the upper chamber, said tax breaks benefiting oil companies, businesses with international operations, and corporate jets should be considered if a deal is to be reached, calling them “low-hanging fruit”. ...

    The comments – which are bound to worry US business groups – clash with the stance adopted by congressional Republicans, who have said that they do not want to raise any more taxes beyond the hike in individual tax rates for Americans earning more than $450,000 agreed last month. ...

    Mr Reid said companies that “ship jobs overseas” would be in the line of fire, usually code for limiting the ability of multinationals to defer US taxation on foreign earnings. The preferential tax treatment of carried interest – or profits earned by private equity and hedge fund managers – was not mentioned by Mr Reid, but is also often in the crosshairs of congressional Democrats.

  • Huffington Post: Disarm The Austerity Bomb Before We Do What Europe Did To Itself. By Dave Johnson. Excerpts: It seemed like the threats and hostage-taking going on in DC had taken a breather. After a couple of years of crisis-to-crisis hostage-taking Republicans backed off their latest “debt-ceiling” threat to ruin the country’s credit and destroy the economy. People relaxed. The stock market went way up. Now they’re back with a new made-up crisis, and here we go again. Fortunately the Progressive Caucus in the Congress has a plan to save us.

    Here We Go Again — New Pretend Crisis. Here we go again with the shock-doctrine crisis — a drummed up scare designed to stampede us into doing something against our interests. This time it’s the “sequester” — a “crisis” that is entirely a creation of Congress. The sequester is an “austerity bomb” of budget cuts that will hit the economy so hard that a recession is nearly guaranteed — just like what is happening all across Europe as they cut their budgets. And the results will be just like what happened to our own economy last quarter, when we suffered a drop in GDP that was caused entirely by government cuts that have already happened. ...

    The non-military side of the budget has already been cut by about $1.5 trillion since 2011 — the result of all of the hostage-taking to date. It was these hostage-taking and cutting “crises” that helped bring people to the polls to resoundingly declare that they want taxes raised on the wealthy, and not cuts in the things We, the People do to make our lives better. ...

    The deficit is already shrinking dramatically as a percentage of GDP. The deficit is already down 25% since Bush’s 2009 budget in relation to the economy. The deficit is already falling faster than at any time since after World War II.

    We don’t even have a debt crisis. We have a jobs crisis. But the threats and hostage-taking are about cutting government — the things We, the People do to make our lives better. ...

    You only hear about and read about the Tea Party — an entity created and funded by billionaires to push for the interests of billionaires (and oil companies.) Of course, that billionaire money has something to do with why you only hear about the Tea Party, but there are more progressives than Tea Party members.

    There are many, many more progressives in the country. Every poll shows that the public overwhelmingly wants taxes increased on the wealthy and no more cuts in the things We, the People do to make our lives better. But the billionaires spread the money around, and what you hear about is what the billionaires want you to hear about.

    You hear and read about the Tea Party all the time. Did you even know there was something in Congress called the Progressive Caucus?

  • Sydney Morning-Herald (Australia): The four business gangs that run the US. By Ross Gittins. Excerpts: If you've ever suspected politics is increasingly being run in the interests of big business, I have news: Jeffrey Sachs, a highly respected economist from Columbia University, agrees with you - at least in respect of the United States.

    In his book, The Price of Civilisation, he says the US economy is caught in a feedback loop. ''Corporate wealth translates into political power through campaign financing, corporate lobbying and the revolving door of jobs between government and industry; and political power translates into further wealth through tax cuts, deregulation and sweetheart contracts between government and industry. Wealth begets power, and power begets wealth,'' he says.

    Sachs says four key sectors of US business exemplify this feedback loop and the takeover of political power in America by the ''corporatocracy''. ...

    First is the well-known military-industrial complex. ''As [President] Eisenhower famously warned in his farewell address in January 1961, the linkage of the military and private industry created a political power so pervasive that America has been condemned to militarisation, useless wars and fiscal waste on a scale of many tens of trillions of dollars since then,'' he says.

    Second is the Wall Street-Washington complex, which has steered the financial system towards control by a few politically powerful Wall Street firms, notably Goldman Sachs, JPMorgan Chase, Citigroup, Morgan Stanley and a handful of other financial firms. ...

    Third is the Big Oil-transport-military complex, which has put the US on the trajectory of heavy oil-imports dependence and a deepening military trap in the Middle East, he says. ...

    Fourth is the healthcare industry, America's largest industry, absorbing no less than 17 per cent of US gross domestic product. ''The key to understanding this sector is to note that the government partners with industry to reimburse costs with little systematic oversight and control,'' Sachs says. ''Pharmaceutical firms set sky-high prices protected by patent rights; Medicare [for the aged] and Medicaid [for the poor] and private insurers reimburse doctors and hospitals on a cost-plus basis; and the American Medical Association restricts the supply of new doctors through the control of placements at medical schools. ...

    It's worth noting that, despite its front-running cost, America's healthcare system doesn't leave Americans with particularly good health - not as good as ours, for instance. This conundrum is easily explained: America has the highest-paid doctors.

    Sachs says the main thing to remember about the corporatocracy is that it looks after its own. ''There is absolutely no economic crisis in corporate America.

    ''Consider the pulse of the corporate sector as opposed to the pulse of the employees working in it: corporate profits in 2010 were at an all-time high, chief executive salaries in 2010 rebounded strongly from the financial crisis, Wall Street compensation in 2010 was at an all-time high, several Wall Street firms paid civil penalties for financial abuses, but no senior banker faced any criminal charges, and there were no adverse regulatory measures that would lead to a loss of profits in finance, health care, military supplies and energy,'' he says.

    The 30-year achievement of the corporatocracy has been the creation of America's rich and super-rich classes, he says. And we can now see their tools of trade.

    ''It began with globalisation, which pushed up capital income while pushing down wages. These changes were magnified by the tax cuts at the top, which left more take-home pay and the ability to accumulate greater wealth through higher net-of-tax returns to saving.''

    Chief executives then helped themselves to their own slice of the corporate sector ownership through outlandish awards of stock options by friendly and often handpicked compensation committees, while the Securities and Exchange Commission looked the other way. It's not all that hard to do when both political parties are standing in line to do your bidding, Sachs concludes.

  • Washington Post: Justice prepares civil suit against S&P over grading of financial products before crisis. By Jia Lynn Yang. Excerpts: The Justice Department is preparing to file a civil lawsuit against the ratings agency Standard & Poor’s that will allege the company gave its seal of approval to toxic investments at the heart of the financial crisis, according to the company and people briefed on the case. ...

    These ratings have drawn scrutiny because agencies issued top grades to securities tied to shoddy residential mortgages, making them appear safe for investors. When the housing bubble burst and homeowners began defaulting on their loans, these financial products became worthless. The resulting losses on Wall Street nearly took down the entire financial system. ...

    Critics have said the country’s big ratings agencies had a conflict of interest because they were being paid by the very companies whose products they were rating. This created incentives for the agencies to inflate their ratings, according to the final report by the subcommittee on investigations.

    Separately, the Financial Crisis Inquiry Commission concluded in 2011 that the crisis “could not have happened without the ratings agencies.”

  • New York Times editorial: More Jobs, Higher Pay. Excerpts: In President Obama’s first term, the fiscal stimulus and the auto-industry rescue of 2009 created and preserved millions of jobs. But the stimulus ended years ago, replaced with temporary measures that have been insufficient to propel the economy forward. Health care reform in 2010 was a major step in the effort to support the middle class, but its broad effects will be felt only in the years and decades to come.

    In recent years, the administration and Congress have been consumed with deficit reduction, which is antithetical to job creation because it curbs government spending when the economy is weak. Unless Mr. Obama can shift policy away from premature austerity and toward ways to bolster demand and foster investment, job growth will remain sluggish and unemployment high.

    What has been missing for years is a forceful labor agenda — one that calls for more jobs, but also has as its goal rising wages coupled with robust hiring. ...

    In his first term — a time of persistent high unemployment, weak job growth, stagnating wages and rising income inequality — Mr. Obama neglected a basic labor agenda. He now has a chance to take corrective action.

  • New York Times, courtesy of CNBS: S&P E-Mails on Mortgage Crisis Show Alarm and Gallows Humor. By Mary Williams Walsh and Ron Nixon. Excerpts: The executive at Standard & Poor's was clear: "This market is a wildly spinning top which is going to end badly."

    That sober assessment of certain mortgage-related investments, delivered to colleagues in a confidential memo in December 2006, is now part of a trove of internal e-mails and documents that have come to light in a federal suit against S&P, the nation's largest credit ratings agency.

    The correspondence, made public in court documents late Monday, provide a glimpse at the inner workings of an institution that the Justice Department says fraudulently inflated credit ratings, with dire consequences for the entire economy. In a series of e-mails, tensions appeared to be escalating inside the firm's headquarters in Lower Manhattan as it publicly professed that its ratings were valid, even as the home loans bundled into mortgage-backed securities, or M.B.S., were failing at accelerating rates. ...

    Together, the documents show a portrait of some executives pushing to water down the firm's rating models in the hope of preserving market share and profits, while others expressed deep concerns about the poor performance of the securities and what they saw as a lowering of standards.

  • AlterNet: Credit Ratings Agencies Are Pimps of Wall Street: It's Time to Ban Them! Firms like Standard & Poor, charged with fraud by the DOJ, are criminally incompetent and serve no public purpose. By Marshall Auerback. Excerpts: Is Eric Holder’s “See No Evil, Hear No Evil” Department of Justice finally getting serious about investigating fraud on Wall Street? At first glance, it would seem so, given the news that the Department of Justice has filed civil fraud charges against the nation’s largest credit-ratings agency, Standard & Poor’s, accusing the firm of inflating the ratings of mortgage investments and setting them up for a crash when the financial crisis struck.

    On the one hand, there is no question that without the credit rating agencies the Wall Street guys would not have been able to pull off this colossal heist against the American people, and the ratings agencies cannot be excused. In fact, Standard & Poor’s employees openly joked about the company’s willingness to rate deals “structured by cows” and sang and danced to a mock song inspired by “Burning Down the House” before the 2008 global financial collapse, according to the DOJ lawsuit. On the other, the ratings agencies are simply the gift wrappers. DOJ has yet to go after the banksters who created these packages in the first place and who seem to be in the clear as a result of a series of unconscionably low settlements recently reached with the Justice Department. ...

    Of course, that inevitably begets the obvious question: what took you so long and why leave it at S&P? As early as September 2004, the FBI warned that there was an “epidemic” of mortgage fraud and predicted that it would cause a financial crisis if it were not stopped. It was not contained. Everyone agrees that the mortgage fraud epidemic expanded massively after the FBI warning and still not one Wall Street figure of any note has gone to jail.

    Under Treasury Secretary Geithner, and the Keystone Cops of the Department of Justice, led by Eric Holder and Lanny Breuer, we established a doctrine of “too big to jail” for the very institutions which perpetrated massive frauds on millions of Americans. Those who called for regulations that would take even that most minimal of steps necessary to reestablish the rule of law and restore our nation’s democracy and financial stability were essentially ignored. Geithner’s express rationale was that the financial system's extreme fragility made vigorous investigations of the elite frauds too dangerous, in effect giving the banksters a get-out-of-jail-free card and in effect enshrining crony capitalism and imperiling our economy, our democracy, and our national integrity.

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