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6, 2000 April, 2000

Highlights—December 19, 2009

  • The Business Insider: Prosecutors Want More Time To Bring Indictment Against IBM's Moffat And Others. By Erin Geiger Smith. Excerpts: Will there ever be indictments against the four people arrested along with Raj Rajnaratnam? Earlier today we noted that the indictments handed down by the federal grand jury yesterday named only Raj Rajnaratnam and Danielle Chiese.

    The U.S. Attorney's office had until today to indict IBM's Robert Moffat (pictured), Intel executive Rajiv Goel, McKinsey executive Rajiv Goel, and senior executive at New Castle Funds, Mark Kurland. Today the government asked for 30 more days within which to file the indictments.

    As always, it could mean the parties are discussing a plea agreement, or it could mean that the government is trying to get its indictment totally in order or decide not to bring one at all. Moffat's attorney, Kerry Lawrence, told The New York Times on Tuesday that his client was "engaged in discussions" with the government but that he was not cooperating.

  • Wall Street Journal: Executives Enjoy 'Sure Thing' Retirement Plans. By Ellen E. Schultz and Tom McGinty. Excerpts: Jacqueline D'Andrea last year lost more than 60% of the 401(k) savings she built over a decade as a Wal-Mart Stores Inc. manager, she says. The 1.2 million employees in the retailer's 401(k) retirement plan lost 18% as the market plunged, corporate filings show. Top executives at Wal-Mart didn't face such risks. Thanks to a guaranteed 6.6% return, Chief Executive Officer H. Lee Scott Jr. had gains of $2.3 million in a supplemental retirement-savings plan, bringing its total savings to $46.7 million. "We're proud of the benefits we offer to our hourly associates" which include bonuses, 401(k) and profit sharing contributions, and merchandise discounts, said a Wal-Mart spokesman, who confirmed the plans' figures.

    One-quarter of top executives at major U.S. companies had gains in their supplemental executive retirement-savings plans in 2008, even as employees had sizable losses in the companies' retirement accounts, according to a Wall Street Journal analysis. The gains in executive retirement accounts often stemmed from guaranteed fixed returns on executive-savings plans.

    The disparity underscores a fact of life in America's corporate-pay scene. It's not just bigger paychecks that have led to a growing wage gap—it's the different levels of risk that executives and rank-and-file employees face in their retirement plans. That difference rarely has been more evident than the past year, when 50 million employees lost a total of at least $1 trillion in their 401(k) plans, according to the Center on Retirement Research at Boston College.

  • Yahoo! IBM Pension and Retirement Issues message board: "Summary Annual Report - 2008" by Kathi Cooper. Full excerpt: I just received the Summary Annual Report for 2008, ending on 12/31/08. A few items of note:
    • 401(k) plan: decrease in assets - 8 billion.
    • Retired Employees Benefits Plan: decrease in assets - 382 million.
    • Medical and Dental Benefits Plan: decrease in assets - 12.2 million.
    • Medical Disability Income Plan: decrease in assets - 771 thousand.

    I sure am glad the recession is now over and we are all restored again. Yes, it might have taken a few RA's to recover the bucks but I feel good knowing all the CEO's pay is safe now, as well as our trust fund. Kathi (sarcasm off)

  • Editor's note: I received the following e-mail from a friend, a person who is well known to readers of this Web site and to anyone that has followed IBM's pension and retirement takeaways over the past ten years. I'm not using her name here since her e-mail was sent to me (and other friends of hers), not to a public message board. However, I was moved by her message (especially in light of the damage that IBM has done to her and other employees) so thought I would include it in this week's highlights. Here it is:
    I've never started a chain e-mail but I'm starting this one. Go to this site. https://huffingtonpost.causecast.org/ and start Christmas shopping.

    Each item is meant for those in need. And since the people in whose name you give the gift will immediately be notified via an eCard, these "pay it forward presents" are perfect last-minute gifts. Plus, your gift is tax-deductible. So buy it before the stroke of midnight on New Year's Eve, and you can write it off on this year's taxes. Among the items available at the store:

    • A $10 box of nails that will help Habitat for Humanity build a home for a low-income family.
    • $10 also buys 20 bags of groceries for hungry families (via Feeding America).
    • A $25 care package (valued at $75) to be sent to a U.S. soldier (via the USO).
    • $100 buys a share of a newly-dug well that will provide water for a family of five for 20 years (via Charity Water).

    Here it is again: https://huffingtonpost.causecast.org/, This site is for last minute gifts that keep giving back, and forward too. PLEASE PASS ON TO YOUR EMAIL LIST

New on the Alliance@IBM Site
  • Job Cut Reports
    • Comment 12/16/09: -ANON- A fact: with IBM an RA is always a possibility..and at any time. Conventional wisdom would seem to point that if there was a layoff left for this year it would have been announced on 12/1/2009 so those given the 30 day death march would not be on the payroll on 12/31/2009 so IBM management would be able to pocket of keep those growth driven pay (GDP) that these folks would be owed for a PBC 2 or higher. If IBM is forecasting a soft 1st QTR 2010 then, yes, watch out for RA's. It would be a 100% probability IMHO. I think it is very plausible that the Alliance has done a great job in uncovering the 10,000+ IBMers who have been let go in the USA so far this year. Maybe it has hit just a tiny nerve with IBM. IBM is probably cooling their jets a bit for the remainder of this year and then will have a whole head of RA steam for 2010 once people forget about the 2009 job cuts (which with most people doesn't take much time). It (RA's) I feel has all to do with the almighty EPS target and the inherent and incestuous greed that goes with IBM executive management. -da_facts-
    • Comment 12/17/09: 25 contractors were let go this past week from IBM Canada (Toronto) - Some left on the same day as notice was given and some were given 2 weeks notice. Rumours are that there were 100 let go over Canada. January is when they will lay off perm staff in IGS. -DM-
    • Comment 12/18/09: There are tons to go in early January in Canada I see mention of IGS Canada but there will be all areas, STG ibm.com teams, Client ibm.com. Shifting this business to Business Partners. All areas will be hit again as expense budgets for all areas have been cut big time. -More to go in 2010-
    • Comment 12/20/09: ibm.com in Atlanta is laying off about 80 folks that have the inside GB client rep position. IBM is transforming that position into something that works even more closely with business partners. There are currently 12 job posts open for this new position, which these 80 folks are permitted to interview for. These 12 openings may grow up to around 40 I am told. Merry Christmas. -dilbertisreal-
  • General Visitor's Comment page
    • Comment 12/12/09 Sorry Alliance@IBM I can't become a member. I am sending a $20 bill today as I did in the past; postmarked from Poughkeepsie. I urge others; if you appreciate getting updates from Alliance@IBM please donate, five dollars, ten dollars or whatever you can to Alliance@IBM/CWA Local 1701, 435 Main Street Johnson City, NY 13790 for their staff, great work and website. Happy holidays -Help Alliance@IBM-
    • Comment 12/14/09 As many of you know, IBMers and former IBMers are rating IBM on http://glassdoor.com (if you're not a member all you need to do is post your own rating to join for free). By default, when anyone checks out a company's reviews the list is sorted by Date + Helpful, with the most recent comments that members found the most "helpful" popped to the top. I'm writing to encourage you to take a moment (if you're a member) to view these four recent ratings and click on "Yes" by the "Helpful Review?" prompt at the bottom of each review so they get promoted to the top of the list new visitors see. It's essential that any perspective employees (especially Americans) know that IBM is no longer the kind of place anyone in their right mind should attempt to make a career.

      Oh, and while you're at it (if you've read my glassdoor.com comment), skip over to jobvent.com and check out the IBM reviews there, then post one of your own. I did, and I also posted on on glassdoor.com when IBM laid me off in February. Here's a few choice reviews from jobvent that you might wish to comment on so the authors know someone's listening.

    • Comment 12/14/09 This is the 2nd, different, class action suit against IBM that I've received notice of. I was first afraid to participate the 1st time around but this has me wondering - what are the risks of taking part - does the company have any way of finding out who jumped on the bandwagon? Am I worrying for no reason? -Pondering-
    • Comment 12/14/09 I received a notice for another class action lawsuit similar to the one from a couple years ago (that triggered a 15% pay cut for 8K of us). I didn't sign up for that one and apparently missed out on a 5 figure settlement check. I think I'll join the bandwagon on this one as I meet the criteria. Anybody else received this? Not exactly sure how it differs from the first one - at a relatively quick glance, it seemed to cover some similar aspects. Also, I noticed that IBM is not admitting fault, but rather than pay for all the legal proceedings, they're "settling".... -anonymous-
    • Comment 12/15/09 I've tried twice to post reviews on glassdoor. Each time they mysteriously disappear. I gave IBM very poor marks but the comments listed in the pros/cons were honest. It wasn't some hate diatribe against IBM, just an honest picture of what life is now like there. I hope it eventually shows up as I put an hour of my time into writing it. -Incognito-
    • Comment 12/16/09 To Incognito - If GlassDoor removes a post, they put a notice that the post was removed. If you don't see the notice where your post should have been, I would have to guess your post did not upload. *Always* copy your post to the clipboard before hitting the Submit button (*not* that I ever remember to do this myself ). Also, please vote on the posts, especially the kool-aid drinkers who post 5-star reviews about how it is the best place they ever worked. -Gone in 96-
    • Comment 12/16/09 Instead of worrying about the RA rumor mill for 2010 why not make a New Year's resolution for yourself and join the Alliance@IBM? RA's can at the very least be tempered with a contract and collective bargaining contract. By joining the Alliance more folks could be spared a RA. Indeed, more RA's will come in 2010 if you continue to do nothing to stop them from happening. -sby_willie-
    • Comment 12/16/09 I also received the class action notice. Sent back already! IBM is paying the settlement whether or not you join the suit. Might as well get my share of the settlement. -anonymousibm-
    • Comment 12/16/09 I participated in the Rosenburg OT lawsuit. I received two checks totaling about $13,000. At first I was afraid to opt in, as I was afraid of retaliation by IBM. I discussed my fears with another IBM'er that put the following perspective on it: "The Exec's don't have time to worry about who opted in. The money that has been set aside for payment is already off IBM's books. IBM is settling the suit and the money has been written off, they don't care who gets any of it." That made sense to me so I decided to opt in.

      Later, after having received my checks, when the 15% pay cut was announced, I fully expected to be hit, as others I knew that had opted in the lawsuit were hit. (They were also made non-exempt) For reasons that I'll never know, I was NOT hit with the 15% pay cut, nor was I made non-exempt. There were a few others in my department that had opted in, received approximately as much money as I did, and did not have their pay cut either. I also knew a guy who did not opt in the Rosenburg lawsuit, therefore he did not receive any money, and he suffered the pay cut.

      When the checks arrived, they had been cut by IBM as they had IBM's address of 1701 North Street, Endicott NY on them. So IBM definitely knew I had opted in the lawsuit. Also, my manager eventually told me that he had received a list of names in his department that had received money from the lawsuit. I was an IT Specialist in Global Services. -Retired-

    • Comment 12/16/09 As a service driven company IBM should realize the cardinal rule...do someone right, they tell 3 people, do someone wrong, they tell 7. The odds are growing against the company as they source work overseas. They will die a slow death as everyone that's been RA'ed says they will never work or ever recommend IBM again. -Anonymous- (moved from Job Cuts Reports)
    • Comment 12/17/09 To Incognito - I just wanted to take back what I said earlier about GlassDoor not deleting posts. I recently made a couple of posts that never appeared, and now believe they must have put in place a moderator who simply doesn't publish them if s/he deems them unacceptable. Doesn't stop the management hacks and wannabes who flame the critical posters though... -Gone in 96-
    • Comment 12/17/09 Re new class action lawsuit. I didn't even know about the first lawsuit and obviously wasn't a part of it. BUT, my pay got cut 15% AND I got no raise that year despite being a 2+ because "my wages were too high for an hourly employee" (*sigh*). Which means I'd NEVER get another raise. Didn't matter too much as my dept got RAed the following February. But I recently received a package for a new lawsuit for those of us who were reclassified? Am I opting-in this time? You bet. Nothing to lose here, and the company certainly hasn't done anything to inspire MY loyalty after working for IBM over 20 years. It's a sad postscript to my career. -RAed 02/2009-
    • Comment 12/17/09 I ran into a co-worker who had been RA'd shortly after the Rosenberg payouts. I asked if he'd filed and he looked at me and said 'Why would I do anything that hurt my employer?' Needless to say, with 27 years under his belt his employer let him go, backfilling him with offshore labor (though several others on his team that were let go were brought back converted to contractors). The bottom line is we all tend to put human motives on the corporate decisions. IBM isn't doing RAs because they don't like Us workers, they're doing what corporations always do: Maximize profit margins.

      The problem is the strategy is short sighted and doesn't account for the degradation of service as more skilled workers are replaced by cheap warm bodies. I work in ITD, and right now the group think at the upper management level is that the art of IT support can be boiled down to a set of canned procedures and by mandating compliance and awareness outages can be reduced to zero. This general dumbing down of their business offerings will pay dividends when customers start to realize the IBM brand is a costly but empty shell. Like they say, 'You can get better service, but you can't pay more!' -IBM Tool-

    • Comment 12/18/09 With regard to the class action suit, it will take a while from the time you're first asked if you want to opt in until you see money. I was notified in April of 2007, and had to return the card by a specific date in May. (If I hadn't, it was assumed I was not interested and I would be opted out.) In July of 2007, the case was reviewed by a judge as to the fairness of the settlement for all parties concerned. The judge ruled it was a fair settlement, so we were told there was a three month rescission period where IBM had the opportunity to change it's mind. If they did not (which they didn't) in November the checks would be cut and mailed. A week prior to Thanksgiving two checks arrived in the U.S. Mail.

      As noted earlier, IBM will know if you opt in. Trying to determine how much you might receive from the pamphlet notifying you of the case is impossible. I had no idea what amount I would get. Imagine my surprise when two checks arrived for a total of $12K. Please do not assume this suit will yield an amount like that. It could more, it could be less. I was not notified of this new suit, so I have no idea what the second suit is about. I'm only relating what happened to me with the IBM vs Rosenburg Overtime lawsuit.

      My advice is to go ahead and opt in. The reason IBM cut many people's pay was because if they did not make those effected non-exempt the problem the lawsuit was based upon still existed. Of course, IBM then said since you're all non-exempt now, we're cutting your pay by 15%. That, they did NOT have to do, but you know IBM..... -Anonymous-

    • Comment 12/18/09: TO: -Anonymous- (moved from Job Cuts Reports) In my new job I am in charge of IT and purchasing. We "had" all IBM servers at this place. As it came time to refresh hardware the IBM servers were replaced with HP. My choice! IBM called me from Brazil to renew maintenance contracts. Sales people called me to sell me new IBM servers. I laughed at all of them. What you say is true. I will not buy or recommend IBM to anyone. Now I have the power!

      To -Retired- : I also opted into that lawsuit. The other sheep on my team did not for fear of retaliation. My manager targeted me and one other opted in person for the first round of ra's. I know the manager knew I opted in. The company gave them that list to help them target people. After I left the company and got another job the checks came. It was bitter sweet to me. The sheep that stayed went through hell with 15% pay cuts and were eventually all ra'd anyway and got no money. Good for them. -Gone_in_07-

    • Comment 12/18/09: -Gone in 96- I did some more digging and that is exactly what Glassdoor has done. If you go under My Account then select Reviews, you can see if your review was rejected. They don't tell you why but they do let you edit and resubmit it. I think mine was rejected as I did have a line in about IBM repeating the problems of the early 90's and being overloaded with management (all DPE, BAM, and RDM positions could be removed with little or no impact to company). I've removed that line and re-submitted it, so let's see if this one makes it. :) -Incognito-
    • Comment 12/18/09: "The odds are growing against the company as they source work overseas." You think Sam and his pals care about the future of IBM? They're only interested in looting all they can then leaving before the hollowed out remains of IBM crash and burn. You would think the stock holders would care but I guess they have the same short term, 'get mine now and screw everyone else' mind set. We are now living in an age where criminals have taken over most of our institutions (government, business, religious, etc). Future generations will hate us for allowing it to happen. -anon-
    • Comment 12/18/09: Hard to believe that people would not opt in to a class action lawsuit because the 'don't want to hurt their employer.' The same employer that abuses them daily. That's why this union will never fly. Way too many mindless sheep at IBM now. I don't even feel sorry for people like this, just disgusted. At this point they deserve everything they get. -anon-
    • Comment 12/18/09: I realize, this isn't relevant to IBM, per se. However, on this evening's NPR (public radio) broadcast, there was a story about furniture manufacturing moving from NC to China, over the past several years. The NC employee made either $15 or $30 per hour - I think it was $15, which is perhaps $30K per year (plus any benefits). The China employee makes 70 cents per hour. She states she is very happy (was the factory or party steward standing by?) because she no longer has to work in the sun on her subsistence farm. And, she and her husband live in a small (apartment, or room - I didn't catch that detail). They sleep on a box spring; apparently no mattress. And they are happy. And there was discussion as to whether this is slave labor? I would say, well, yes. Except the business owners - in the US - Do Not Care. -Hmmm-

      Alliance reply: Actually, it is relevant to IBM. IBM Endicott announced to its site employees that they were building a plant in China that would be making thin-film technology circuit cards (SOTA). The employees would be housed in work camps and work at the new IBM facility 12-16 hour days. They would be paid $30.00 per month.....PER MONTH. Their pay would be sent to their families. That project was begun around the year 2000; in Shanghai, China. Believe it.

    • Comment 12/18/09: Nice to see fine upstanding American corporations such as IBM bringing back that wonderful institution from the 16th century, indentured servitude. I soon expect the US government to legalize outright slavery. Why not, they already legalized torture -anon-
  • Pension Comments page
  • Raise and Salary Comments IBM CEO Sam Palmisano: "I am pleased to announce that we will not only be paying bonuses to IBMers worldwide, based on individual performance, but that they'll be funded from a pool of money nearly the same size as last year's. That's significant in this economy -- and especially so, given the size of the 2007 pool. Further, our salary increase plan will continue, covering about 60 percent of our workforce. As always, increases will go to our highest performers and contributors. We should all feel good about the company's ability to invest in people in these very concrete ways."
    • Comment 12/16/09: Salary = €30800 / $50000; Band Level = 7; This Yr-PBC = 1; Job Title = Advisory sales operations; Years Service = 4; Location = UK; Message = I started in IBM on €25k and have had 2 band promotions since then - understand from my manager that my salary is at 50-60% market salary... and interestingly he said that virtually no one will ever get to 100% (or close) .. which makes a mockery of having 'market competitive salaries'! -UK Ibmer-
  • PBC Comments
    • Comment 12/13/09: Question - "Measured Mile" ... In the old days a poor appraisal (3) would get you put on the "measured mile" where you had XX amount of time to shape up or get kicked out .... can anyone describe the current treatment of those folks appraised as 3's? How long have you got is there any standard? -Anon-
    • Comment 12/15/09: Band Level = 8; Years Service = 19; Prior Yr PBC = 2; This Yr PBC = 3; This Yr Bonus = 0; Prior Yr Bonus = 4%; Message 1 = Anon, it depends. If your organization has a goal to reduce headcount, you could be gone that same quarter (count on being on the RA list - especially if you had at least a 2 appraisal previously). If you manage to make it thru the year, ask for regular feedback from your manager. Honestly, in this environment, with even 2's being managed out, once you've hit the 3 level I'd recommend getting the resume ready as you'll soon be out the door.

      Message 2 = Some advice to those of you who want to challenge your PBC rating. Choose the path where peers review, DO NOT let your 2nd line run the review. What the 2nd line will do is coordinate with HR and the 1st line to justify the rating. I went thru this last January before getting tagged in the March RA. My previous manager was dumb enough to leave his calendar open so I was able to see all the materials they were sharing between themselves and HR (I could have reported the lack of care with confidential data). What really ticked me off was the 2nd line went to people who did not provide any feedback to me during the year (not part of the Career Point assessment). The 2nd line did not even contact the people who had given me tremendous feedback via the CP process. So what I learned is the 2nd line will do what it takes to back up the 1st lines rating. When this happens, make sure the resume is ready as you'll soon be moved out. -Incognito-

    • Comment 12/16/09: "Everyone fight to be a 2+" A PBC 2+ does not mean you will be spared from an RA. I was a PBC 2+ for my last PBC and was 2+ before that and was RA'ed this year. A PBC 1 is probably not totally immune from an RA either. Who knows the real criteria for an RA based on the PBCs. -sby_willie-
    • Comment 12/16/09: Young Lady - To fight a PBC 2: It's HARD, maybe harder than a diamond to do but the only way is to be able to out state and out write your accomplishments better than your manager and 2nd line can do so the statements in your PBC are hard facts that you can back up with added documentation you can supply at a peer review. Now don't exaggerate, but then again don't belittle any accomplishments either! I suggest documenting as much as you can, save all letters saying you more than met your goals, that your customers love your work, that you are bringing in $$$ to IBM that they would have a harder time doing without you, etc. You have to have irrefutable evidence of "WIN-EXECUTE-TEAM". Even then you might not be successful at a PBC where peers review it. But at least you really tried. Good Luck. -anonymous-
    • Comment 12/16/09: A main reason more folks are getting a PBC "2+" when they used to get a PBC "1", PBC "2' when they used to get a PBC "2+", PBC "3' when then got a previous PBC "2" is complacency. IBMers need to consistently and passionately jump over the assessment process obstacles placed in front, back, and to the side of them and leap over the IBM management's raised bar rhetoric by rising to the challenge. If you accept what is dished out to you by IBM management then IBM management considers that acceptance that you agree in your PBC assessment.. If most IBMers do not accept their PBC rating and fight for their fair PBC rating then this trend of lower PBC's should end. -da_facts-
    • Comment 12/16/09: Folks, without a union contract, you are basically at the mercy of IBM management. Once they pushed "relative contribution" to the top of the PBC process, employees became totally powerless. How would you feel to exceed every target in your PBC goals, have fantastic feedback in CP, perfect customer sat, and had a 112% utilization rate to find out in January that you are a 3 because of relative contribution. Employees have no control over it or visibility to it. What it is is one more tool management can use to force you out. Sign up now, get a contract, or you'll be next. And a side comment for the sheep that are left in the SEA&T organization. 40% were hit in March, all of the PBC 3's and half of the 2's are gone. How are you gonna feel when it is you forced into those ratings. Don't believe me? Wait until January when the comments here light up. Join, get a contract, or shut up and take it once again. -Incognito-
    • Comment 12/18/09: Band Level = 4; Years Service = 4; Prior Yr PBC = 2+; This Yr PBC = 2; This Yr Bonus = squat; Prior Yr Bonus = 1700; Message = <rant>The entire PBC system is all smoke and mirrors. Management knows well in advance who is getting what. As many others have stated, it's all about who you are buddies with, it is almost never based on performance unless you have just moved to another group, division, or manager. I am currently in process of writing up my PBC for this year, but I am almost positive I will receive a 3 this year. I do not follow suit kissing ass by laughing at stale jokes or cleaning my managers fish tank.

      Being in the support center, they constantly are hammering us about the metric's. They want you make the customer believe their issues can be resolved by updating firmware. If R&D were given the proper resources and time, we wouldn't be supporting equipment that was pushed out the door to beat HP and Dell to the market. Instead we have pissed off long time customers who have vowed to never buy another Blade Server from IBM.

      More and more of the IBM system admins on critical accounts are being sent to IBM India or Argentina. 2 different countries on 2 different continents can speak a total of 6 phrases in english combined. These are the people who are directly supporting IBM's customers. I am told they are doing this because they can hire 3 admins in Argentina for same pay of 1 in the US. It is a matter of time before ALL of IBM is overseas, leaving only the top 10 in Endicott in the US. </rant> -getting hosed-

  • International Comments
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • New York Times editorial: The Million-Dollar Man. First, Senator Joseph Lieberman — the former Democrat, current independent from Connecticut — rejected the so-called public health care option. Then he threatened to torpedo the entire health care reform bill if it allowed people over 55 to buy Medicare plans. The aim of that idea, like the public option, is to provide more choice for consumers and more competition for the private insurance industry. And that industry, you will not be surprised to hear, has been very, very good to Mr. Lieberman.

    What makes it all the more hypocritical is that Mr. Lieberman claims to want health care reform. And way back in September, the senator was publicly championing a Medicare buy-in. In an interview with The Connecticut Post, he said he had been refining his views on health care for many years and was “very focused on a group post-50, or maybe more like post-55” whose members should be able to buy Medicare if they lacked insurance. This week, when there actually seemed to be a compromise on health care that did not focus on Mr. Lieberman, he announced that he would block the package if the Democrats included a terrible idea — allowing people between 55 and 65 to buy Medicare. ...

    Mr. Lieberman has taken more than $1 million from the (insurance) industry over his Senate career. In his 2006 re-election campaign, he ranked second in the Senate in contributions from the industry. He doesn’t seem to have forgotten that.

  • New York Times op-ed: Pass the Bill. By Paul Krugman. Excerpts: A message to progressives: By all means, hang Senator Joe Lieberman in effigy. Declare that you’re disappointed in and/or disgusted with President Obama. Demand a change in Senate rules that, combined with the Republican strategy of total obstructionism, are in the process of making America ungovernable. But meanwhile, pass the health care bill. ...

    Yes, the filibuster-imposed need to get votes from “centrist” senators has led to a bill that falls a long way short of ideal. Worse, some of those senators seem motivated largely by a desire to protect the interests of insurance companies — with the possible exception of Mr. Lieberman, who seems motivated by sheer spite.

    But let’s all take a deep breath, and consider just how much good this bill would do, if passed — and how much better it would be than anything that seemed possible just a few years ago. With all its flaws, the Senate health bill would be the biggest expansion of the social safety net since Medicare, greatly improving the lives of millions. Getting this bill would be much, much better than watching health care reform fail.

    At its core, the bill would do two things. First, it would prohibit discrimination by insurance companies on the basis of medical condition or history: Americans could no longer be denied health insurance because of a pre-existing condition, or have their insurance canceled when they get sick. Second, the bill would provide substantial financial aid to those who don’t get insurance through their employers, as well as tax breaks for small employers that do provide insurance. All of this would be paid for in large part with the first serious effort ever to rein in rising health care costs.

    The result would be a huge increase in the availability and affordability of health insurance, with more than 30 million Americans gaining coverage, and premiums for lower-income and lower-middle-income Americans falling dramatically. That’s an immense change from where we were just a few years ago: remember, not long ago the Bush administration and its allies in Congress successfully blocked even a modest expansion of health care for children. ...

    Look, I understand the anger here: supporting this weakened bill feels like giving in to blackmail — because it is. Or to use an even more accurate metaphor suggested by Ezra Klein of The Washington Post, we’re paying a ransom to hostage-takers. Some of us, including a majority of senators, really, really want to cover the uninsured; but to make that happen we need the votes of a handful of senators who see failure of reform as an acceptable outcome, and demand a steep price for their support. ...

    Again, history suggests the answer. Whereas flawed social insurance programs have tended to get better over time, the story of health reform suggests that rejecting an imperfect deal in the hope of eventually getting something better is a recipe for getting nothing at all. Not to put too fine a point on it, America would be in much better shape today if Democrats had cut a deal on health care with Richard Nixon, or if Bill Clinton had cut a deal with moderate Republicans back when they still existed. ...

    Beyond that, we need to take on the way the Senate works. The filibuster, and the need for 60 votes to end debate, aren’t in the Constitution. They’re a Senate tradition, and that same tradition said that the threat of filibusters should be used sparingly. Well, Republicans have already trashed the second part of the tradition: look at a list of cloture motions over time, and you’ll see that since the G.O.P. lost control of Congress it has pursued obstructionism on a literally unprecedented scale. So it’s time to revise the rules. But that’s for later. Right now, let’s pass the bill that’s on the table.

  • New York Times op-ed: A Dangerous Dysfunction. By Paul Krugman. Excerpts: Unless some legislator pulls off a last-minute double-cross, health care reform will pass the Senate this week. Count me among those who consider this an awesome achievement. It’s a seriously flawed bill, we’ll spend years if not decades fixing it, but it’s nonetheless a huge step forward. It was, however, a close-run thing. And the fact that it was such a close thing shows that the Senate — and, therefore, the U.S. government as a whole — has become ominously dysfunctional.

    After all, Democrats won big last year, running on a platform that put health reform front and center. In any other advanced democracy this would have given them the mandate and the ability to make major changes. But the need for 60 votes to cut off Senate debate and end a filibuster — a requirement that appears nowhere in the Constitution, but is simply a self-imposed rule — turned what should have been a straightforward piece of legislating into a nail-biter. And it gave a handful of wavering senators extraordinary power to shape the bill. ...

    The political scientist Barbara Sinclair has done the math. In the 1960s, she finds, “extended-debate-related problems” — threatened or actual filibusters — affected only 8 percent of major legislation. By the 1980s, that had risen to 27 percent. But after Democrats retook control of Congress in 2006 and Republicans found themselves in the minority, it soared to 70 percent.

    Some conservatives argue that the Senate’s rules didn’t stop former President George W. Bush from getting things done. But this is misleading, on two levels.

    First, Bush-era Democrats weren’t nearly as determined to frustrate the majority party, at any cost, as Obama-era Republicans. Certainly, Democrats never did anything like what Republicans did last week: G.O.P. senators held up spending for the Defense Department — which was on the verge of running out of money — in an attempt to delay action on health care.

    More important, however, Mr. Bush was a buy-now-pay-later president. He pushed through big tax cuts, but never tried to pass spending cuts to make up for the revenue loss. He rushed the nation into war, but never asked Congress to pay for it. He added an expensive drug benefit to Medicare, but left it completely unfunded. Yes, he had legislative victories; but he didn’t show that Congress can make hard choices and act responsibly, because he never asked it to.

News and Opinion Concerning the U.S. Financial Crisis
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: Disaster and Denial. By Paul Krugman. Excerpt: When I first began writing for The Times, I was naïve about many things. But my biggest misconception was this: I actually believed that influential people could be moved by evidence, that they would change their views if events completely refuted their beliefs. And to be fair, it does happen now and then. I’ve been highly critical of Alan Greenspan over the years (since long before it was fashionable), but give the former Fed chairman credit: he has admitted that he was wrong about the ability of financial markets to police themselves.

    But he’s a rare case. Just how rare was demonstrated by what happened last Friday in the House of Representatives, when — with the meltdown caused by a runaway financial system still fresh in our minds, and the mass unemployment that meltdown caused still very much in evidence — every single Republican and 27 Democrats voted against a quite modest effort to rein in Wall Street excesses.

  • New York Times: As Goldman Thrives, Some Say an Ethos Has Faded. By Jenny Anderson. Excerpts: But as President Obama prods the financial industry to do more to help ordinary Americans — he chided “fat cat bankers” on Sunday for increasing their pay — some current and former Goldman executives say Mr. Blankfein has built a money machine that, while it still values its customers, culture and reputation, puts profits above all. Interviews with nearly 20 current and former Goldman partners paint a portrait of a bank driven by hard-charging traders like Mr. Blankfein, who wager vast sums in world markets in hopes of quick profits. Discreet bankers who give advice to corporate clients and help them raise capital — once a major source of earnings for Goldman — have been eclipsed, these people said. ...

    A few months ago, at a meeting of Goldman’s in-house leadership program, known as the Pine Street Group, the bank’s image came up. The group of 30-odd people wrestled with questions like how to talk to family members about Goldman and its role in the financial world. Another question that came up was what to do if someone at a cocktail party started criticizing Goldman. Mr. van Praag, who ran the meeting, suggested that the executives should explain how Goldman made its money. But another Goldman executive offered a different answer: change the subject.

  • Huffington Post: With Wall Street Shorting the Dollar, It is Time for Congress to Pursue Fundamental Change. By David Paul. Excerpts: Just imagine how angry the American public would be if they knew the whole story. For months, we have listened to the whining from Wall Street. U.S. banks are having a record year, and they want to be paid a lot of money. Billions and billions of dollars. Public indignation is deep. After all, over the past year, we have watched as hundreds of billions of dollars of public money has been poured into bank balance sheets. We have--we are assured--taken steps that were necessary to bring our financial system back from the brink. We may not have liked it, but we had no choice. ...

    But what if the public understood the whole story? How is it that the banks are now having one of their most profitable years ever? Given that there is not much lending going on, and that the newly increased credit card fees have only just begun to flow into bank coffers, where is all that money coming from?

    It is coming from proprietary trading. "Prop trading" is the kind of betting with the bank balance sheet that was made illegal for commercial banks back during the Great Depression, when the FDIC and deposit insurance was created. The price of having the federal government guarantee bank deposits was separating the lending and depositary functions of commercial banking from trading and risk activities of investment banking. Thus, in 1935, the commercial bank J.P. Morgan & Company was separated from the investment firm Morgan Stanley.

    But this separation was undone in 1999 to facilitate the creation of the megabanks that we have today. However, while the Financial Services Modernization Act of 1999 ended the separation of activities, FDIC deposit insurance remained in place. And this year, the elite of the financial world--JP, Citi, Wells, BofA, Goldman and Morgan Stanley--have finally emerged for what they are: Gigantic hedge funds backed up by the full faith and credit of the United States of America. Wall Street bankers making big bets with our money, content in the knowledge that if they win their bets, they will pocket the cash. And if they lose, we will all pick up the mess.

    But it really does get better. So exactly how did they make all that money this year? Well, the trade of the moment has been the U.S. dollar carry trade. A foreign currency carry trade is simple in concept. Borrow money where interest rates are low, and invest where interest rates are high. Or simply stated: Short the U.S. dollar. Buy the currency of a country where interest rates are higher. The beauty part is that by continually assuring the world that U.S. interest rates will remain near zero for the foreseeable future, the Federal Reserve has assured traders that they can keep the trade in place for some time.

    So the Wall Street elite, just months removed from their near-death experience, are now making a fortune shorting the U.S. dollar. One year ago, faced with the greatest financial panic in generations, the American people swallowed hard and bailed out the banks. Today, the banks have moved on, and are tearing down the currency of the nation that saved them. But it is nothing personal. It is strictly business.

  • Wall Street Journal: France Plans to Tax Bankers' Bonuses at 50%. Following U.K.'s Lead, Paris Proposes One-Off Levy on Payments Above $40,000; Proceeds Will Fund Deposit Guarantees. By David Gauthier-Villars. Excerpts: The French government plans to tax bonuses awarded to bank employees next year at 50%, taking its cue from Britain in a move aimed at soothing public outcry over remuneration in the financial industry. If approved by Parliament, the levy will apply to bonuses above [euro ]27,500 ($40,000), French Finance Minister Christine Lagarde said Wednesday. The proceeds will help fund the extension of state guarantees on bank deposits. The government said last week that it planned a one-time tax on bonuses, but hadn't announced the details. An aide to Ms. Lagarde said the levy would affect between 2,000 and 3,000 bankers working in France, but that it was too early to say how much the government might raise via the tax. ...

    In London and Paris, the logic behind the tax is that governments ought to get a cut from bank bonuses, because a large part of the payouts stem from activity that wouldn't have occurred if the governments hadn't bailed out the banking industry. ...

    Ms. Lagarde said the tax was primarily aimed at persuading bank executives to refrain from paying high bonuses on 2009 earnings and, instead, to beef up their capital reserves. The tax will be an "incentive to apply discipline and moderation in the payment of 2010 bonuses," she said.

  • Huffington Post: Curbing Big Banks: Draw the Damn Line. By Robert L. Borosage, Co-Director of the Campaign for America’s Future. Excerpts: Enjoy the health care debate? Wait until the Senate takes on the big banks. It already looks like déjà vu all over again. Democrats, bloodied from self-inflicted wounds in the health care debate, may well commit seppuku over financial reform. The script is in place for a failed sequel. The administration, via Treasury, cobbled together a reform plan that was weaker than it should be. The banks signed up every ambulatory lobbyist in town to gut the central reforms. The House fended off Melissa Bean's attempt to be the Joe Lieberman of financial reform, but ended up passing a bill even weaker than the administration's proposal - with nary a Republican vote.

    And so to the Senate. Senate Finance Committee Chair Chris Dodd put out a remarkably strong reform measure. The bank lobby made it clear that was a non-starter, so Dodd decided to begin a "bipartisan" process in the Finance Committee - think Max Baucus redux -- searching for the elusive Republican moderate. Meanwhile Blue Dog and New Dem Democrats - Bayh, Warner, Bennet and others - are openly casting about for ways to weaken the proposed agency to protect consumers from bank gouging. And we have yet to hear from Joe Lieberman, still focused on torpedoing health care, who no doubt will weigh in with his inimitable combination of pious corruption and treacherous venom. ...

    Voters are furious at a bailout that has provided the bankers that ran the economy off the cliff with record bonuses, while millions remain unemployed. Their fury is stoked as bankers gouge them with credit card and overdraft fees, obscene interest rates, and whatever else they can invent to soak their customers. Americans aren't interested in an incomprehensible debate about clearinghouses for derivatives. We want heads to roll. We don't want regulation; we want shackles on bankers so they don't screw us again. And every poll shows that anger goes across party, race, region and religion. ...

    Why not put forth a strong bill built around simple principles? We will protect consumers from being gouged by big banks. We will insure that no bank is too big to fail, and force each to create "living wills" to prove it. We will shut down the backroom gambling in derivatives and exotica that caused the crash. And we'll tax the big banks to pay for the costs. Then rally 50-55 Democratic Senators, representing 80% of the country's population, to support the bill. Hold a public event and draw the damn line. You are either with this or with the banking lobby. Bring it to the floor. Challenge the Republicans and the New Dems and the montebanks to filibuster against it. Force a vote on cloture. Name names. Who stands with Americans and who stands with the big banks? Force a vote regularly going into the electoral campaign. ...

    This isn't a game. The banks must be curbed if we are to build a new economy that works for most Americans. As finance was deregulated beginning with Reagan, we've experienced a series of financial crisis - with ever greater frequency and severity. Now the big banks are emerging more concentrated than ever, with an explicit promise that they are too big to fail - meaning that they are free to gamble with taxpayers standing by to cover their losses. This is a poisonous stew. We simply can't afford to let the banks dilute the reforms, or let those too conservative or too corrupt to stand in the way. Make the stakes clear. Take the debate out of the back rooms. Draw the damn line.

  • Washington Post: U.S. gave up billions in tax money in deal for Citigroup's bailout repayment. By Binyamin Appelbaum. Excerpts: The federal government quietly agreed to forgo billions of dollars in potential tax payments from Citigroup as part of the deal announced this week to wean the company from the massive taxpayer bailout that helped it survive the financial crisis. The Internal Revenue Service on Friday issued an exception to long-standing tax rules for the benefit of Citigroup and a few other companies partially owned by the government. As a result, Citigroup will be allowed to retain billions of dollars worth of tax breaks that otherwise would decline in value when the government sells its stake to private investors. ...

    The IRS, an arm of the Treasury Department, has changed a number of rules during the financial crisis to reduce the tax burden on financial firms. The rule changed Friday also was altered last fall by the Bush administration to encourage mergers, letting Wells Fargo cut billions of dollars from its tax bill by buying the ailing Wachovia. "The government is consciously forfeiting future tax revenues. It's another form of assistance, maybe not as obvious as direct assistance but certainly another form," said Robert Willens, an expert on tax accounting who runs a firm of the same name. "I've been doing taxes for almost 40 years, and I've never seen anything like this, where the IRS and Treasury acted unilaterally on so many fronts."

  • Huffington Post: Strengthening the Estate Tax to Strengthen the Country. By Bill Gates, Sr., Co-chair, Bill & Melinda Gates Foundation. Excerpts: For eight years I have spoken to anyone who would listen about the importance of creating a strong estate tax, and there is no more critical time for action to be taken by Congress on this matter than now. In a few days the Senate will break for their holiday recess and if they do not act the estate tax will disappear in 2010. The House of Representatives recently cast a 225-200 vote in favor of Rep. Earl Pomeroy's estate tax proposal, which makes 2009 estate tax law permanent, with a $3.5 million exemption ($7 million for married couples), and a 45% tax rate. If the Senate agrees, the result will still be a loss of $391 billion over 10 years, although that is better than no tax.

    Letting the tax disappear entirely will be even more devastating and will cost upwards of a trillion dollars in lost revenue; revenue that supports vital public systems -- including transportation and energy infrastructure, education and healthcare -- that are the foundation of our broad-based prosperity and economic stability. This is why I believe we must do more and strengthen this levy, which is our county's only tax on inherited wealth and applies to less than 1 percent of American families. The estate tax raises substantial revenue from those with the greatest capacity to pay.

    If abolished or weakened, there are only three ways to make up the resulting shortfall: cut spending, raise taxes on the middle class, or pile it on to the national debt and leave it to our children and grandchildren who will inherit the consequences of the decisions we make now. This why I and thousands of other wealthy individuals have joined a campaign led by United for a Fair Economy to call on Congress to strengthen the estate tax.

    A common, and misguided, criticism of the estate tax is that individuals who work hard and save their money should be entitled to pass on the fruits of that labor to their family. I am not against working hard, saving money, or taking care of your family. However we must acknowledge that the person who accumulates wealth in this country was not able to do that independently. The simple fact of living in America, a country with stable markets and unparalleled opportunity fueled in part by government investment in technology and research (something my family has plenty of firsthand experience of), provide an irreplaceable foundation for success and have created a society which makes it possible for some men, women and their children to live an elegant life.

If you hire good people and treat them well, they will try to do a good job. They will stimulate one another by their vigor and example. They will set a fast pace for themselves. Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will share in its sucess, they will contribute in a major way. The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders. —Thomas J. Watson, Jr., from A Business and Its Beliefs: The Ideas That Helped Build IBM.

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