Welcome to IBM Employee News and Links

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform

• Wall Street Journal: Consumers Cut Health Spending, As Economic Downturn Takes Toll. By Vanessa Fuhrmans. Excerpts: In a survey by the National Association of Insurance Commissioners last month, 22% of 686 consumers said that economy-related woes were causing them to go to the doctor less often. About 11% said they've scaled back on prescription drugs to save money. Some of the areas being hit include hip and knee replacements, mammograms, and visits to the emergency room, according to a survey conducted by D2Hawkeye Inc., a Waltham, Mass., medical data analytics firm, on behalf of The Wall Street Journal. ...

  "It's just a little too expensive right now," says Mr. Pye, 32 years old, who says he can't afford to have his family on the company health plan or to pay up front for the visits. This month, Mr. Pye is canceling his own insurance, hoping the $56 he'll save in weekly premiums will pay for the exams of his boys, ages 3 and 4, later. Health-policy experts say that patients' short-term care cutbacks could lead to more medical problems and higher spending down the road. As more people forgo screenings or wait until minor medical problems blow up into serious complications, hospital and emergency-room admissions could eventually spike. ...

  Speaking at an investor conference this month, Walgreen Co. Chief Executive Jeffrey Rein said the U.S. is experiencing the "tightest prescription market" in his 27-year career, as more cash-strapped patients skip their pills or take half doses. He said the company has looked at different ways to get people to fill prescriptions. For example, pharmacists are reaching out to patients through phone calls and emotional appeals such as, "Do they want to be around when their kids grow up, or their grandkids?" Mr. Rein said.

• Henry J Kaiser Family Foundation: Premium, Out-Of-Pocket Costs for U.S. Workers To Increase by 9% in 2009, According to Study. Excerpt: he combined average premium and out-of-pocket costs for health coverage for a U.S. worker are projected to increase by nearly 9% in 2009, to $3,826 per year, according to an annual study by Hewitt Associates, the Chicago Tribune reports. For the study, Hewitt evaluated data on employer-sponsored health plans from more than 300 major businesses with an average of 16,000 employees, encompassing more than 13 million health plan members.

  According to the study, premium contributions for workers enrolled in individual plans are expected to increase by 8% to an average of $1,946 per year, or $162 monthly, and out-of-pocket costs are projected to increase by 10.1% to $156 per month. The study also projected that health insurance costs for companies will increase by 6.4% in 2009 to $8,863 per employee.

• Urban Institute's Health Policy Center: An Analysis of the Obama Health Care Proposal (PDF).
• Urban Institute's Health Policy Center: An Analysis of the McCain Health Care Proposal (PDF)

News and Opinion Concerning the U.S. Financial Crisis

• New York Times Op-Ed: Cash for Trash. By Paul Krugman. Some skeptics are calling Henry Paulson’s $700 billion rescue plan for the U.S. financial system “cash for trash.” Others are calling the proposed legislation the Authorization for Use of Financial Force, after the Authorization for Use of Military Force, the infamous bill that gave the Bush administration the green light to invade Iraq. There’s justice in the gibes. Everyone agrees that something major must be done. But Mr. Paulson is demanding extraordinary power for himself — and for his successor — to deploy taxpayers’ money on behalf of a plan that, as far as I can see, doesn’t make sense. ...

  But Mr. Paulson insists that he wants a “clean” plan. “Clean,” in this context, means a taxpayer-financed bailout with no strings attached — no quid pro quo on the part of those being bailed out. Why is that a good thing? Add to this the fact that Mr. Paulson is also demanding dictatorial authority, plus immunity from review “by any court of law or any administrative agency,” and this adds up to an unacceptable proposal.

  I’m aware that Congress is under enormous pressure to agree to the Paulson plan in the next few days, with at most a few modifications that make it slightly less bad. Basically, after having spent a year and a half telling everyone that things were under control, the Bush administration says that the sky is falling, and that to save the world we have to do exactly what it says now now now. But I’d urge Congress to pause for a minute, take a deep breath, and try to seriously rework the structure of the plan, making it a plan that addresses the real problem. Don’t let yourself be railroaded — if this plan goes through in anything like its current form, we’ll all be very sorry in the not-too-distant future.

• New York Times Op-Ed: The Fleecing of America. By Roger Cohen. Excerpts: World leaders converge on a battered New York this week for the United Nations General Assembly and my advice to them is: think Damien Hirst. It’s not that I expect them to dwell on the British artist’s giant tanks of dead sharks and piglets at a time when the U.S. economy is being socialized to the tune of $700 billion ($2,000 for every man, woman and child in the country) as a result of a giant mortgage-related Ponzi scheme.

  Let’s be clear: this is an American mess forged by the American genius for new-fangled financial instruments in an era where the mantra has been that government is dumb and the markets are smart and risk is non-existent. The responsibility for undoing the debacle is chiefly American, too.

• Senator Bernie Sanders: The Middle Class Must Not Be Forced to Bail Out Wall Street Greed. Excerpts: For years, as a member of the House Banking Committee and now as a member of the Senate Budget Committee, I have heard the Bush administration tell us how "robust" our economy was and how strong the "fundamentals" were. That was until a few days ago. Now, we are being told that if Congress does not act immediately and approve the $700 billion Wall Street bailout proposal these "free marketers" have just written up, there will be an unprecedented economic meltdown in the United States and an unraveling of the global economy.

  This proposal as presented is an unacceptable attempt to force middle income families (and our children) to pick up the cost of fixing the horrendous economic mess that is the product of the Bush administration's deregulatory fever and Wall Street's insatiable greed. If the potential danger to our economy was not so dire, this blatant effort to essentially transfer $700 billion up the income ladder to those at the top would be laughable.

  Let us be clear. If the economy is on the edge of collapse we need to act. But rescuing the economy does not mean we have to just give away $700 billion of taxpayer money to the banks. (In truth, it could be much more than $700 billion. The bill only says the government is limited to having $700 billion outstanding at any time. By selling the mortgage backed assets it acquires -- even at staggering losses -- the government will be able to buy even more resulting is a virtually limitless financial exposure on the part of taxpayers.) Any proposal must protect middle income and working families from bearing the burden of this bailout.

  I have proposed a four part plan to accomplish that goal which includes a five-year, 10% surtax on the income of individuals above $500,000 a year, and $1 million a year for couples; a requirement that the price the government pays for any mortgage assets are discounted appropriately so that government can recover the amount it paid for them; and, finally, the government should receive equity in the companies it bails out so that when the stock of these companies rises after the bailout, taxpayers also have the opportunity to share in the resulting windfall. Taken together, these measures would provide the best guarantee that at the end of five years, the government will have gotten back the money it put out.

• Petition letter to Secretary of the Treasury Henry M. Paulsen from U.S. Senator Bernie Sanders. Excerpts: As a representative of the Bush Administration, you have proposed a financial bailout program of $700 billion – over $2,000 for every man, woman, and child in the country. We are appalled that your proposal puts the cost of this bailout on average Americans; that it contains no provisions reversing failed deregulatory policies; that it allows executives at these failed institutions to continue to make exorbitant salaries and bonuses, and that your proposal contains no help for average Americans who themselves are facing severe economic hardships.

  While the Administration has quickly rallied to help Wall Street, it has ignored the needs of the declining middle class. Since President Bush has been in office the wealthiest people in this country have made out like bandits and have not had it so good since the 1920s. The top one-tenth of one percent now earn more income than the bottom 50 percent of Americans and the top one percent own more wealth than the bottom 90 percent. Incredibly, the richest 400 people in our country saw their wealth increase by $670 billion during the Bush presidency.

  Having mismanaged the economy for 8 years while continually insisting that, “The fundamentals of our economy are strong,” the Bush Administration, six weeks before an election, wants the middle class of this country to bail out Wall Street to the tune of one trillion dollars. Meanwhile the wealthiest people, those who have benefited most from Bush’s policies and are in the best position to pay, are being asked for no sacrifice at all. This is absurd.

• New York Times: Experts See a Need for Punitive Action in Bailout. By Peter S. Goodman. Excerpts: “At first it was, ‘thank goodness the cavalry is coming,’ but what exactly is the cavalry going to do?” asked Douglas W. Elmendorf, a former Treasury and Federal Reserve Board economist, and now a fellow at the Brookings Institution in Washington. “What I worry about is that the Treasury has acted very quickly, without having the time to solicit enough opinions.” The common denominator to many reactions is a visceral discomfort with giving Treasury Secretary Henry Paulson Jr. — himself a product of Wall Street — carte blanche to relieve major financial institutions of bad loans choking their balance sheets, all on the taxpayer’s bill.

  There are substantive reasons for this discomfort, not least concerns that Mr. Paulson will pay too much, thus subsidizing giant financial institutions. Many economists argue that taxpayers ought to get more than avoidance of the apocalypse for their dollars: they ought to get an ownership stake in the companies on the receiving end. But an underlying source of doubt about the bailout stems from who is asking for it. The rescue is being sold as a must-have emergency measure by an administration with a controversial record when it comes to asking Congress for special authority in time of duress.

  “This administration is asking for a $700 billion blank check to be put in the hands of Henry Paulson, a guy who totally missed this, and has been wrong about almost everything,” said Dean Baker, co-director of the liberal Center for Economic and Policy Research in Washington. “It’s almost amazing they can do this with a straight face. There is clearly skepticism and anger at the idea that we’d give this money to these guys, no questions asked.”

• New York Times: Trust Me. The nation’s financial mess was caused to a great degree by a culture of lax regulation and even less oversight, in which ordinary Americans were told to trust the government and Wall Street to do the right thing. President Bush’s proposed solution, which he wants Congress to authorize immediately, tells taxpayers to write a check for $700 billion and trust the government and Wall Street to do the right thing — with inadequate regulation and virtually no oversight.

  We agree with Senator Barack Obama that the administration’s plan lacks regulatory muscle, and we agree with Senator John McCain when he said: “When we’re talking about a trillion dollars of taxpayer money, ‘trust me’ just isn’t good enough.”

• New York Times: A Second Opinion? By Bob Herbert. Excerpts: Does anyone think it’s just a little weird to be stampeded into a $700 billion solution to the worst financial crisis since the Great Depression by the very people who brought us the worst financial crisis since the Great Depression? How about a second opinion? ...

  The treasury secretary, Henry Paulson — heralded as King Henry on the cover of Newsweek — has been handed the reins of government, and he’s galloping through the taxpayers’ money like a hard-charging driver in a runaway chariot race. “We need this legislation in a week,” he said on Sunday, referring to the authorization from Congress to implement his hastily assembled plan to bail out the wildly profligate U.S. financial industry. The plan stands at $700 billion as proposed, but could go to a trillion dollars or more. ...

  With all due respect to Mr. Paulson, who is widely regarded as a smart and fine man, we need to slow this process down. We got into this mess by handing out mortgages like lollipops to people who paid too little attention to the fine print, who in many cases didn’t understand it or didn’t care about it.

  And the people who always pretended to know better, who should have known better, the mortgage hucksters and the gilt-edged, high-rolling, helicopter-flying Wall Street financiers, kept pushing this bad paper higher and higher up the pyramid without looking at the fine print themselves, not bothering to understand it, until all the crap came raining down on the rest of us. ...

  I agree with the economist Dean Baker, co-director of the Center for Economic and Policy Research in Washington, that while the government needs to move with dispatch, there is also a need to make sure that taxpayers’ money is used only where “absolutely necessary.” Lobbyists, bankers and Wall Street types are already hopping up and down like over-excited children, ready to burst into the government’s $700 billion piñata. This widespread eagerness is itself an indication that there is something too sweet about the Paulson plan.

  This is not supposed to be a good deal for business. “The idea is that you’re coming here because you would be going bankrupt otherwise,” said Mr. Baker. “You’re coming here because you have no alternative. You’re getting a bad deal, but it’s better than going out of business. That’s how it should be structured.” ...

  Mr. Paulson himself was telling us during the summer that the economy was sound, that its long-term fundamentals were “strong,” that growth would rebound by the end of the year, when most of the slump in housing prices would be over. He has been wrong every step of the way, right up until early last week, about the severity of the economic crisis. As for President Bush, the less said the better. The free-market madmen who treated the American economy like a giant casino have had their day. It’s time to drag them away from the tables and into the sunlight of reality.

• Century Foundation's Taking Note group blog: Does Anyone Still Want to Privatize Social Security? By Beverly Goldberg. Excerpts: One good thing to emerge from this week’s market turmoil is that it lays waste to the argument that privatizing Social Security is in everyone’s best interest. Ask yourself how you would feel if your retirement took place during a bear market like the one we are now in. Why would you want to gamble with your future security when you can have the assurance of a steady fixed income from Social Security as it is now structured to supplement anything you manage to save and any private pension to which you are entitled—a private pension that is subject to market whims?

  You would not want to take the risk, but those who push for privatization must have reasons for doing so. Well, Dean Baker of the Center for Economic and Policy Research reports that “according to a recent World Bank analysis, the financial industry pocketed 15-20 percent of the money paid into the privatized Social Security system in Chile, which has often been held up as a model by privatizers in the United States. Given the losses that the millionaire Wall Street bozos have incurred with the housing crash,” it is clear that privatization would help those “very rich needy.”

• New York Times: In Bailout Furor, Wall Street Pay Becomes a Target. By Steve Lohr. Excerpts: Congress wants Wall Street to feel it where it hurts: the wallet. The stratospheric pay packages of Wall Street executives have become a lightning rod issue as Congress shapes a $700 billion bailout for financial firms. Proposals circulating on Capitol Hill vary, but they all would impose some limits or approval authority on salaries of executives whose firms seek help.

  But Wall Street, its lobbyists and trade groups are waging a feverish lobbying campaign to try to fight compensation curbs. Pay restrictions, they say, would sap incentives to hard work and innovation, and hurt the financial sector and the American economy. “We support the bill, but we are opposed to provisions on executive pay,” said Scott Talbott, senior vice president for government affairs at the Financial Services Roundtable, a trade group. “It is not appropriate for government to be setting the salaries of executives.” ...

  Wall Street has been the top tier of the corporate pay range, with executives earning eight-figure salaries. Its bonus system, which rewards short-term trading profits, has been singled out as an incentive for Wall Street executives to expand their highly profitable business in exotic securities and ignore the risks. “This financial crisis is a direct result of the compensation practices at these Wall Street firms,” said Paul Hodgson, a senior analyst at the Corporate Library, a governance research group.

• New York Times: Upheaval on Wall St. Stirs Anger in the U.N. By Neil MacFarquhar. Excerpts: Wall Street and the Bush administration’s record of financial oversight came under attack at the United Nations on Tuesday, with one world leader after another saying that market turmoil in the United States threatened the global economy. “We must not allow the burden of the boundless greed of a few to be shouldered by all,” said President Luiz Inácio Lula da Silva of Brazil in an opening speech that reflected the tone of the gathering. ...

  With a pillar of American power — its financial leadership — so badly shaken, there was a certain satisfaction among some of the attendees that the Bush administration, which had long lectured other nations about the benefits of unfettered markets, was now rejecting its own medicine by proposing a major bailout of financial firms. ...

  But for some leaders, the Bush bailout plan seemed hypocritical given the tough course Washington has often advised struggling nations to take. “What you are seeing here is the letting off of some political steam,” said Mark Malloch Brown, a British cabinet minister and former senior United Nations official. “They are all remembering the very hard, unforgiving advice that they got from American financial institutions” to “deflate your economy, let your banks go to the wall,” he said. “There is a resentment at what they would see as a further evidence of double standards.” ...

  Mr. Sarkozy also said that at a news conference he had talked with Wall Street bankers, but that they claimed not to know who was responsible for the mess. When banks and hedge funds hand out fat bonuses, they are all willing to gloat about their success, Mr. Sarkozy said, “but when there are deficits we don’t know who is responsible.” ...

  Yet doubts were being raised not just at the United Nations but farther afield, with Germany’s chancellor, Angela Merkel, among the most outspoken. She said that at last year’s meeting of the Group of 8, she had strongly urged both the United States and Britain to be more rigorous in supervising financial activities, and even offered specific proposals to be applied to banks and other institutions. But the United States was not interested, she said. She also seemed to express a certain exasperation that the United States was now asking Europe for help, after inflicting damage on the rest of the world that could have been avoided.

• New York Times: The Buck Stopped Then. By James Grant. Excerpts: No other nation ever had it quite so good. Before the dollar, the pound sterling was the pre-eminent monetary brand. But when Britannia ruled the waves, the pound was backed by gold. You could exchange pound notes for gold coin, and vice versa, at the fixed statutory rate. Today’s dollar, in contrast, is faith-based. Since 1971, nothing has stood behind it except the world’s good opinion of the United States. And now, watching the largest American financial institutions quake, and the administration fly from one emergency stopgap to the next, the world is changing its mind.

  “Not since the Great Depression,” news reports keep repeating, has America’s banking machinery been quite so jammed up. The comparison is hardly flattering to this generation of financiers. From 1929 to 1933, the American economy shrank by 46 percent. The wonder is that any bank, any corporate borrower, any mortgagor could have remained solvent, not that so many defaulted. There is not the faintest shadow of that kind of hardship today. Even on the question of whether the nation has entered a recession, the cyclical jury is still out. Yet Wall Street shudders.

• The Independent (United Kingdom): Fury at $2.5bn bonus for Lehman's New York staff. By David Prosser. Excerpts: Up to 10,000 staff at the New York office of the bankrupt investment bank Lehman Brothers will share a bonus pool set aside for them that is worth $2.5bn (£1.4bn), Barclays Bank, which is buying the business, confirmed last night.

  The revelation sparked fury among the workers' former colleagues, Lehman's 5,000 staff based in London, who currently have no idea how long they will go on receiving even their basic salaries, let alone any bonus payments. It also prompted a renewed backlash over the compensation culture in global finance, with critics claiming that many bankers receive pay and rewards that bore no relation to the job they had done.

  A spokesman for Barclays said the $2.5bn bonus pool in New York had been set aside before Lehman Brothers filed for chapter 11 bankruptcy in the United States a week ago. Barclays has agreed that the fund should continue to be ring-fenced now it has taken control of Lehman's US business, a deal agreed by American bankruptcy courts over the weekend

• Christian Science Monitor: Beyond a Bailout, Wall Street Needs New Rules. Pay plans that pushed CEOs to 'roll the dice' must go. By Andy Zelleke. Excerpts: The financial calamity that has befallen the United States quite obviously reflects Wall Street failures in leadership and risk management. But we couldn't have arrived at this crisis point without a fundamental failure of government. That failure must be owned up to and rectified in the weeks ahead, or even the planned $700 billion bailout will end up being just a band-aid.

  Capitalism relies on markets to make the world go round. But as Nobel Prize-winning economist Douglass North has articulated, it's the government's responsibility to ensure a legal and institutional context that is conducive to well-functioning markets. "Rules of the game" distinguish a healthy free market from a destructively chaotic one.

  The inadequacy of Wall Street's rules has now been revealed beyond argument. The full magnitude of this calamity has yet to sink in. The financial services industry was supposed to be one of the remaining sectors of US competitive advantage in a globalized economy. Instead, its malfunctioning has further jeopardized the economic security of the American people.

  So as Congress considers a massive bailout intended to relieve firms of the toxic securities on their balance sheet, it must also pledge to rewrite the rules of the game. It's unacceptable to put Wall Street's recklessness on the taxpayers' tab without an ironclad guarantee that business as usual is over. But what should the new rules look like? A comprehensive answer – including the contours of the new regulatory regime that's needed – is beyond the scope and deadline of the immediate bailout. Still, a few of its essential elements are clear. ...

  The most objectionable aspect of CEO compensation isn't primarily the unfairness of the few at the top taking more than their appropriate share, nor that CEOs could cash in their personal gains based on ephemeral financial value, nor even the absurdity of massive "golden parachutes" paid out in cases of failure. The worst affront to the national interest is that these compensation arrangements created incentives for CEOs to "roll the dice" in search of the biggest possible scores for the company (and, not coincidentally, themselves), with too little regard for the downside risk if they bet wrong. And with no appreciation for the potentially dangerous consequences of such gambles, in the aggregate, for the economic security of the American people.

• Communications Workers of America: 2006-2007 Compensation for Executives who Benefited from McCain/Gramm Deregulation. Full excerpt:

  Company	CEO	Total 2006 & 2007 Salary, Bonus, & Other Compensation	2006 Salary, Bonus, & Other Compensation	2007 Salary, Bonus, & Other Compensation
  AIG	AIG Martin J. Sullivan	$130,125,414	$17,955,736	$112,169,678
  Countrywide	Angelo R. Mozilo	$29,228,140	$5,900,000	$23,328,140
  Bear Stearns	James C. Cayne	$38,349,678	not available due to merger	$38,349,678
  Fannie Mae	Daniel Mudd	$22,865,531	$11,635,332	$11,230,199
  Freddie Mac	Richard F. Syron	$32,922,638	$18,289,575	$14,633,063
  Goldman Sachs	Lloyd C. Blankfein	$114,101,484	$70,324,352	$43,777,132
  Indymach Bancorp	Michael Perry	$12,626,896	$1,398,417	$11,228,479
  Lehman Brothers	R.S. Fuld Jr.	$104,836,918	$40,610,297	$64,226,621
  Morgan Stanley	John J. Mack	$39,931,558	$2,402,458	$37,529,100
  Washington Mutual	Kerry K. Killinger	$24,871,313	$10,625,454	$14,245,859
  		$549,859,570	$179,141,621	$370,717,949

• New York Times editorial: What About the Rest of Us? Excerpts: Many of the assets that Mr. Paulson wants to buy with the $700 billion have gone sour because they are tied to mortgages that have defaulted or are at risk of default. Unless homeowners get some help — and its a pittance compared to what Mr. Paulson wants to give to bankers — the downward spiral of defaults, foreclosures and tumbling home prices will continue, which could push down the value of those assets even further. We could make a strong moral argument that the government has a greater responsibility to help homeowners than it does to bail out Wall Street. But we don’t have to. Basic economics argues for a robust plan to stanch foreclosures and thereby protect the taxpayers’ $700 billion investment.

  Mr. Paulson has long opposed what is probably the best way to help Americans stay in their homes: allowing a bankruptcy court to reduce the size of bankrupt borrowers’ mortgages. Unfortunately, but predictably, drafts of the bailout plan circulated late Thursday do not mention that relief.It is simply outrageous that every type of secured debt — except the mortgage on a primary home — can be reworked in bankruptcy court. The law was designed to protect lenders, who have obviously and disastrously abused that protection. There would be no favors dispensed in bankruptcy proceedings. Lenders would have to accept less of a payback and borrowers would have to submit to the oversight of the bankruptcy court for years.

• BusinessWeek: Main Street's Rage at the Financial Crisis. Working folks are outraged about the government's proposed Wall Street rescue. By Susan Berfield. Excerpts: Allentown, Pa., is in some ways a profoundly ordinary place. Like cities and towns all over America, it has been shaken by economic changes seemingly beyond its control: the churning of industries, the dislocation of workers. Many residents just sigh at the mention of Billy Joel's anthem to the gritty, struggling Allentown of the 1980s, when the once-great Bethlehem Steel mill went into a death spiral: "Every child had a pretty good shot to get at least as far as their old man got. But something happened on the way to that place." ...

  The latest details of the government's proposed $700 billion rescue plan was not the main story in the local paper, The Morning Call, on Sept. 23 (an article about the end of a teachers' strike was). But it is on people's minds. For many of Allentown's residents, the rescue is an occasion for anger, even if that feeling is at times blunted by fatigue and resignation. They dislike what goes on in Washington, but those ill feelings are nothing compared with their view of Wall Street. "People see that the chief executives of these finance companies are making millions on the backs of taxpayers," says Ed Pawlowski, the Democratic Mayor of Allentown. They are worried about how the next generation will fare in an America that many feel has mixed up its priorities. ...

  As to how a multibillion-dollar bailout will come to affect her generation, she says: "I'm intrigued that the government is willing to pump money into corporations who have successfully pumped money into CEOs' pockets." She, too, regards this as further evidence of the strange, distorted reality that prevails on Wall Street. "It was supposed to be that if you worked hard, you would benefit. And if you worked harder, you would benefit more. Now it seems to be the reverse. If you break your back working 60 hours a week, you make $12,000 a year. And if you work in a penthouse overlooking Central Park and take long lunches, you make $12 million."

• BusinessWeek: The Trouble with Paulson's Bailout. The Treasury Secretary's $700 billion initial plan fails to give financial firms the incentive to reform and risks rewarding those who made the biggest mistakes. By Peter Coy. Excerpts: But there's growing concern that the plan offers a small bang for big bucks. Hard-won experience in the U.S. dating as far back as The Great Depression—and in other countries as diverse as Japan, South Korea, and Mexico—shows that the kind of approach that Paulson and Bernanke are pushing could fail to get the U.S. economy moving again. That is a scary prospect. Because if all $700 billion buys is a bunch of weak financial institutions that have enough money to survive but not thrive, there will be a wave of anger from the taxpaying public that will make today's mounting restiveness seem mild.

  Forget the heated debate over whether failed bankers should be forced to disgorge their bonuses. That's chump change. The real problem with the plan, many economists argue, is that it attempts to be something that's a contradiction in terms: a free-market bailout. By scooping up securities with no strings attached, it fails to give financial firms the right incentives to get healthy. "It may not refloat the system," says Raghuram G. Rajan, a former chief economist of the International Monetary Fund who is a professor at the University of Chicago Graduate School of Business. Adds Rajan: "We should be putting more capital into the well-capitalized entities, not the people who made the biggest mistakes."

New on the Alliance@IBM Site

• Spotlight: BTV, POK and East Fishkill Manufacturing Workers UNITE Against pay cuts and FOR a union contract! Union representation authorization form here. Authorization form is Union confidential. IBM will not see it.
• Job Cuts Status & Comments page
  • Comment 9/20/08: I took my early retirement back in 2005 with 25 years of service and I know you do not get the full pension--I worked in HR. My 'pension' is pitiful. Since I am single with a daughter, my accountant advised me to take it out in cash because he figured that with the cash that was there I would have to live at least 15 years before I collected it all monthly, and with no surviving spouse to leave the payments to, I'd lose it all if I died earlier! My child would get nothing--so instead we took it out and put it into an IRA. That way if something happened to me, she would still have something and IBM would NOT get away with keeping what was mine. Also, I know that the pension formulas were changed a few times during the last 10 years I was there. Doesn't anyone remember when they took the estimator tool down so nobody could see what they had????? -aon-
  • Comment 9/22/08: "Doesn't anyone remember when they took the estimator tool down so nobody could see what they had?????" Yes, one day it was gone and no one would tell me anything as to where it went. I called HR and they wouldn't tell me anything. Bottom line is that IBM can change the rules whenever they want when there is no Union to fight back. They will keep changing the rules to suit them until there is a Union. The people that think IBM treats them well now will see what I'm talking about. IBM is like a mean dog. Some days it will be nice and let you pet him but one day it will bite back and take your hand off. People, wise up and stand up to this corporate mean dog and support the Alliance! :-) -Harry Shaft-
  • Comment 9/22/08: How long before a riot, that is what I am wondering. With the bailout of these banks that's going to put tax pressure on all of us--pressure that will hurt the middle class even more, how can they still even consider paying the executives such exorbitant salaries? I think there is going to come a time when a disgruntled former employee snaps as he hears about the exec payouts while he wonders how he'll pay his mortgage and feed his family. I'm amazed that no employee has yet grabbed a manager or an exec by his tie and given him (or her!) a good black shiner. Being Italian, I'd prefer two broken legs but I try to live my life in peace. However, I think riots are on the near horizon, both inside and outside offices! It's getting to the point where that is a last resort--get rid of these greedy losers once and for all!! Jail is the real place most of them should be, and for many years. They are willingly ruining the country and the lives of its citizens. -anon-
  • Comment 9/23/08: What infuriates me is if any of us go higher risk in our 401k"s and lose it all to a market fall we are told tough luck. That's why it pays better sometimes. It is higher risk and no one bails us out. The first rule and regulation they MUST put in place before a penny is spent bailing anyone out is NO GOLDEN PARACHUTES. If an executive does a decent job his bonus money should be plenty for him or her to save towards retirement. Furthermore. Any company bailed out cannot pay ANY executives a bonus at all until the bailout is repaid. If they had done their jobs properly they would not be reaching into my pocket.

    The board of directors should be fired and blacklisted from sitting on any companies board that has been bailed out as they failed to do their primary job and oversee the well being of the company they were paid to direct. As the books are " Uncooked " any executive bonuses paid for erroneous numbers should be repaid to the company towards the bailout debt for the past 5 years or whatever the statute of limitations is. Repayment of said funds or face prosecution as a criminal. Ill gotten gains are ill gotten gains.

    As obviously the average American can not trust the investment firms to properly invest or safeguard their pensions any company that converted to cash balance 401k hybrid type pensions must restore old pension plans. If huge investment firms cannot manage their money and survive Wall street greed how can the Average Joe be expected to. If Wall street and corporate america wants more of our money they must put back one of the pillars of our society, the defined pension. Fund the pension plans with executive bonus and raise money until fully funded. Don't worry. Those fat cat executives will not leave and take a job digging ditches just to spite you. They will cling to their cushy offices in their ivory towers until the playing field levels and the heat is off and they can start collecting bonus money for actual performance. -Exodus2007-

  • Comment 9/25/08: 'Is there anybody alive out there?" I think now I finally understand these Bruce Springsteen words. We are in the midst of the 'biggest' financial crisis--why, because it involves big companies and big executives. If we don't bail them out, it will be a disaster. And it probably will. But what I don't understand is talk about executives receiving cuts in their so-called golden parachutes. Cuts??? Excuse me, cuts??? Why the hell should they be paid at all? If anything, the companies should go after them and take back their salaries for the preceding years. And that is a minimum. Personally, I think they should go to jail.

    All of a sudden, this is a BIG deal because it's BIG companies? Nobody had any concern for the typical worker who was laid off, or had pensions reduced--or eliminated--if you look at the security of many of today's 401Ks you might as well say they were eliminated. Almost everyone who is even reading this website is someone who has been, or is being threatened to be, a 'voluntary' separation from IBM. They have taken personal hits that in some cases resulted in total devastation for themselves and their own retirement goals and also their children. But IBM and the other big shots don't seem to think about that--we don't matter at all. Well, now we do matter.

    Even though most of the execs in this bailout are already financially set for lives, they do have to feel some shame. I'm sure their kids feel it also. For me, though, I'm proud that I left when I did and I'm also prouder of the fact that although I was (as were many employees) always forced to look upon these 'executives' as some type of god, this whole financial catastrophe is proving what I knew all along when I worked at IBM--they are no smarter than any of the rest of us. In fact, they are probably stupider than most.

    Many of us at least managed to survive and did not shame ourselves or our families with our sick greed. So, if there is 'anybody alive out there,' don't you think it is time you got together and maybe joined the union?? Or do you want them to continue to be allowed to make fools of us all--stealing our pensions, etc. Think about it, please. Unless the majority of workers organizes and unionizes, these atrocities will continue. -anon-

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  • Comment 09/21/08: Salary = 50000; Band Level = 7; Job Title = Inside Sales Representative; Years Service = 0; Hours/Week = 40; Location = Texas Message = When I got hired on, I started at 50k. -Mottssauce-
  • Comment 09/27/08: Salary = $43K; Band Level = 7; Job Title = Oracle DBA; Hours/Week = 40 - 45; Message = Almost_Gone, hopefully I'm right behind you. IBM is grossly under paying me for an Oracle DBA. After the pay cut, and no market based adjustment, I've decided this was my last year with IBM. I can't afford to stick around for another pay cut. My manager is great, but as you mentioned "powerless". I have another job lined, but the manager has to wait for HR to make it official. My new pay will be about a 50% increase, and better job security (federal employment). -TimeAboutUp-
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