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Highlights—October 16, 2010

  • Associated Press, courtesy of Forbes: IBM buys PSS Systems for undisclosed amount. Excerpt: IBM has acquired privately-held PSS Systems for an undisclosed amount, the company said Wednesday. PSS, based in Mountain View, Calif., makes software that helps organizations analyze, automate and implement information governance policies. IBM said the capabilities are "critical elements to remaining responsive to legal obligations while reducing data storage costs.
  • The Register: HP cutting 1,300 (more) UK jobs, union claims. By Rik Myslewski. Excerpts: Unite, the UK's largest labor union, says that Hewlett-Packard plans to axe an additional 1,300 British jobs — a move that Unite decries as "butchery". "Despite significant profits HP appears hell-bent on continuing to butcher its highly skilled UK workforce," said Unite national officer Peter Skyte in a Monday statement. According to Unite, when added to HP's nearly 4,000 job cuts over the past two years, plus the 934 cuts announced in July (reportedly reduced to 720), the new round of 1,300 will mean that HP is chopping UK staff by more than 6,000 unfortunate souls.

    HP's UK workforce cuts, Unite claims, "mainly involve" the company moving jobs out of Britain and into locations in other countries. "Lax employment protection in the UK compared to other European countries means that the UK is bearing the brunt of cuts," Skyte added, "as it's quicker and cheaper to sack UK people and export their jobs abroad."

  • truthOut: Chamber of Commerce Champions Outsourcing American Jobs (Video). Rachel Maddow reveals the history of the Chamber of Commerce advocating the business benefits of outsourcing American jobs even as they spend millions of dollars accusing Democratic candidates of doing the same.
  • Bloomberg BusinessWeek: Time to Bring U.S. Corporate Profits Home. American businesses have massive profits overseas. Unless U.S. tax policy is changed, that's where the cash will stay, says columnist Frank Aquila. Excerpts: Imagine if U.S. companies could add well over $1 trillion to their U.S. coffers in an instant without having to sell a subsidiary, issue a single share, or incur a penny of debt. While every company would no doubt use its repatriated cash differently, the windfall could fund a return of capital to shareholders through increased dividends and share buybacks. It might instead be used to repay existing debt, fund capital expenditures, or make strategic acquisitions. It doesn't really matter how companies would eventually deploy the cash. The important thing is that the cash would be used—put to work here in the U.S.

    Given the weak domestic economy, why hasn't this already happened? The answer is clear: U.S. tax policies penalize the repatriation of so-called "foreign source income," essentially the profits earned by foreign subsidiaries of U.S. corporations. The corporate cash pile is not being hoarded or held on the sidelines, as many pundits have suggested. It is being kept offshore by our tax structure. ...

    Recently Microsoft opted to sell billions of dollars in debt to fund its dividend payments, even though it has approximately $37 billion in cash and short-term investments on its books. Since most of the cash is overseas, borrowing makes better economic sense than repatriating it because the cost of borrowing is far lower than paying tax would be. Microsoft is not alone. Cisco Systems, whose Chief Executive Officer John Chambers is a vocal critic of U.S. tax policy, has an estimated $30 billion in cash outside the U.S. Other leading tech companies with significant cash overseas include Dell, Hewlett Packard, International Business Machines, and Intel. Pharmaceutical giants Johnson & Johnson, Merck, and Pfize also have billions in unrepatriated foreign profits.

  • truthOut: Silicon Sweatshops: Foxconn Still Under Fire. By Kathleen E. McLaughlin. Excerpts: Embattled Foxconn, the Taiwanese electronics behemoth that makes everything from iPads to laptops for the world’s top tech companies, is accused of serious labor violations and a culture of mistreatment of its workers in China, in a new study by Chinese academics. The 90-page report, slated for release Tuesday but obtained early by GlobalPost, chronicles a litany of new and serious allegations against the world’s largest electronics manufacturer and calls on China’s top government leadership and trade union to take action to improve working conditions for factory employees. The two-month-long investigation, spearheaded by professors and students at several of China’s top universities, was conducted at 12 Foxconn facilities by 60 academics and two dozen students in China, Taiwan and Hong Kong. It includes interviews and surveys of nearly 1,800 Foxconn employees. ...

    Among the new complaints, the report highlights alleged over-reliance on and misuse of interns, students and recent graduates who fill the same jobs as entry-level staffers. The company saves money by hiring workers as interns rather than full employees, using third-party employment agencies and avoiding insurance and other benefits required under Chinese labor law, the study said. Still, thousands of interns — who are supposed to be limited to eight hours’ work per day — are expected to work long hours of overtime. In one example, an intern lost more than 20 pounds in a month on the job from stress. ...

    Foxconn has been under intense scrutiny already this year for a spate of worker suicides this year at its China facilities — 11 at the company’s two Shenzhen plants. The report said there have been 17 suicide attempts at Foxconn facilities so far this year, with three survivors. Additionally, the study found, Foxconn has not implemented promised pay raises following intense media scrutiny after the suicides, and that critical problems for workers continue unabated.

  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM Anonymous in Denver, CO: (Past Employee - 2010) “One of the worst company that I have worked for.” Pros: You get to work from home, and you some what get to managed your own time. Some of the coworkers are nice to work with. Cons: Caviat: this is a huge organization, so I can only speak about the one group that I was working with. You have no control over your working hours: One day you could be working from 6am - 6pm and three days later you could be working from 6pm - 6am. You constantly working over the weekends and holidays. You only get paid if you get paged: They could assign you to work 56hrs as backup on call for the week, but you will only get paid if you get paged. So it is possible that you will not get paid for the whole week, even if you are responsible for responding to any pages within 15 minutes. You will be spending 50% or more of your time doing paper work. You will be responsible for figuring out how to migrate among the huge bureaucracy and get the right permission to get things done. It is your fault if you didn't get the right permission. Their internal documentation and information sharing system (email, ticketing, calendar...) is arcane and hard to use. Some people will assumed you know everything, even if it is not documented anywhere; or nobody has told you. Lots of laid off without any notice. They gave a whole bunch of us the option of either moving to Dubuque, Iowa -- with out moving expenses -- or get laid off. Wages are like third world country. Advice to Senior Management: Not sure if anything would matters, since from what I saw this is IBM normal business practice. They took advantage of the bad economies and treated people like trash. They are slowly replacing IBM US with IBM India personels. Perhaps something constructive like: treat people better, or at least pretend that you cared. Either improve Lotus Notes, or get better tools so people can get their work done more efficiently. Implement work flow like other 20th centuries companies so the technical people don't have to waste their time doing paper work or migrating through the huge bureaucracy to get one simple things done.
    • IBM IT Project Manager in London, England (United Kingdom): (Current Employee) “Good place, good people.” Pros: Good Process, Good People, Good Environment, But not a great place if you want to develop your career and learn new skills Cons: Consultants do not add a lot of value in GBS. Self sellers. AMS and IT services know what they are doing but get paid 40% less than GBS. Advice to Senior Management: equate pay scales. See the value that AMS delivers. The good performers do not stay. PBC is a waste of time as an appraisal method. Too many factors outside of one's control
    • IBM Anonymous: (Current Employee) “Company does not respect the individual anymore - one of its core values. words not practice.” Pros: Has a lot of capability and reach. Cons: Cannot execute in a coordinated fashion on a global basis. Leadership at the top is weak and has allowed itself to be run by the finance department and as a result of weaknesses, there is a great deal of bullying. Advice to Senior Management: Get back to the core values that made the company great. You are losing the mindshare of your people and becoming worse than anyone else. Ballmer was rated low at Microsoft, but people believed in the company. His rating was 51% approval on Glassdoor. What is Palmisano's? 52%.
    • IBM Senior IT Specialist in Melbourne (Australia): (Current Employee) “Lost.” Pros: IBM has a great attitude to people with Disability's and extended illness. Cons: The company is doing extraordinarily well the share price is at record highs and we as employees are seeing less and less in our pay. We have no visibility of how the bonuses are calculated and even if we make 100% of our number we see less than our full year target salary. Advice to Senior Management: Get the salary and bonus structure right and stop managing the organisation by spread sheet
    • IBM Anonymous: (Current Employee) “ibm ok.” Pros: global customers, global strategies, leader in LOBs. Cons: too much travel, restricted travel policies. Advice to Senior Management: think big act at individual level.
    • IBM Product Manager Intern in Austin, TX: (Past Employee - 2010) “Great work-life balance. Some bosses have been around for too long and excessively proud.” Pros: Great culture, Flexible timings, No micro-management, Work Life balance is understood well by all Office environment is brilliant Cons: Too Big. Feel insignificant. Contributions go unnoticed Too many hierarchical levels. Some bosses have been around for too long. People with little or no skills are some times recruited. Advice to Senior Management: Cut down on management. There is too much hierarchy and people contribute very little in the top management. People down the value chain end up doing a lot more than most others at the top but get paid the least
    • IBM Senior Software Engineer in Bangalore (India): (Past Employee - 2008) “Great place to work.” Pros: Well defined structure and growth path. Good training facitilities are provided. Well balance between work and life exists. Great place to work. Cons: Too big to be visible. Can't make changes fast. Needs lots of approval. Advice to Senior Management: Vision for the lower employees.
    • IBM Anonymous: (Current Employee) “Still a good place to work.” Pros: Great work environment. Competent coworkers, good sharing of ideas. Strong sense of teamwork. Tremendous work / life flexibility. Fair annual review process. Cons: High workload. Not enough management transparency. Too much focus on expenses. Threat of outsourcing. Advice to Senior Management: Let us do what we do best!
New on the Alliance@IBM Site
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  • To Alliance@IBM supporters: The Alliance is the only organization that advocates and supports IBM employees and ex-employees. In fact, there are few like it in the Information Technology field. It is always difficult to keep an organization like this alive, but as a supporter you know how important it is that we exist. We are calling on you today to help keep us alive another year by joining as a member or associate member. See our online forms below. As our membership has dropped, it is imperative that we gain new members or this organization and web site will cease to exist. Help us keep our organizing and advocacy work alive!
  • General Visitor Comments: Due to a lack of membership growth the comment sections will be closed until we see sufficient growth in full membership, associate membership or donations. Many of you that visit our site have not yet joined, but seem to value its existence. The only comment section that will remain open will be Job Cuts Reports. If you have information that you want the Alliance to know about please send to ibmunionalliance@gmail.com. Information of importance will be put on the front page of this web site. To join go here: Join The Alliance! or here: Join The Alliance!
  • Job Cut Reports
    • Comment 10/08/10: Stock buybacks and the constant dumping of North American employees is certainly a great way to spike up the share price... in the short term. Of course, by the time the rent comes due, Sam and others will be out the door with their guaranteed packages worth many millions of dollars. How can IBM be exhibiting record profits and have giant cash reserves on hand, yet they are unable to keep their employees on the payroll? How can so many people go without a pay increase for years while the balances on the corporate books get so high? IBM is not interested in helping you. -He Who Carries the Pickle-
    • Comment 10/10/10: If IBM is outsourcing USA workers then it is high time to outsource some of the IBM Board of Directors and executives as well to better reflect a global corporation. Replace USA IBM board of directors and IBM executives with more Brazilian, Russian, Indian, and Chinese directors and IBM executives. For you BRIC IBMers when are you realizing IBM is using you. They don't respect you or your leaders; they only want your cheap labor to make their USA executives and board members richer than rich. -sourcethese-
    • Comment 10/13/10: Management came through today, telling select employees they need to have their PBC in by no later than October 22nd. (Dallas) -anonymous-
    • Comment 10/14/10: After being at IBM for almost 17 years, I was let go on March 31, 2010 as part of the RA. My salary nor my work performance was any reason for this, but was told that it's part of the RA. This has really put a bad taste in my mouth after sacrificing all these years for IBM. -Anonymous-
    • Comment 10/14/10: SSO is still dropping headcount, lost 2 in my department in the last six weeks (around 5%). Accounts are being pushed to India, but India is unable to provide qualified entry-level employees, much less skilled ones that can do the job. SSO is still dropping headcount, lost 2 in my department in the last six weeks (around 5%). Accounts are being pushed to India, but India is unable to provide qualified entry-level employees, much less skilled ones that can do the job. -Frank-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Wall Street Journal: Health Overhaul Overlooks Retirees. By Ellen E. Schultz and Jessica Silver-Greenberg. Excerpts: Glenn Franco was excited to hear that the new health-care law requires insurance plans to offer coverage for dependents up to age 26. But when he recently called his health-plan administrator to ask about enrolling his 24-year-old daughter, Michelle, he was told she wouldn't be eligible for the new law taking effect on Sept. 23. The reason? He is retired.

    Many large employers are telling retirees the same thing. They include Alcatel-Lucent and Verizon Communications Inc., as well as state and federal government plans and those for military families and unions. Thanks to a little-noticed clause in a 1996 law, retiree-only health plans are exempt from the Patient Protection and Affordable Care Act that went into effect last month. That means the rule requiring health plans to extend dependent coverage to age 26, regardless of financial dependency, student status, employment or marital status, doesn't apply to millions of retirees' health benefits.

  • New York Times editorial: Whose Advantage? Excerpts: Some of the private health plans that participate in Medicare will be dropping out next year, but don’t blame health care reform. Most are unwilling to meet the sensible requirements of a 2008 law that they do more to earn the federal subsidies that have fueled their rapid growth.

    Medicare Advantage plans enroll one-quarter of the 46 million Medicare beneficiaries. Medicare subsidizes these plans — paying them more on average than what the same services would cost in traditional Medicare. As a result, beneficiaries pay less or get extra benefits, such as dental coverage or even health club memberships. The extra cost is paid by taxpayers and through higher premiums for enrollees in traditional Medicare.

    Health care reform will phase out these unjustified subsidies starting in 2012 and use the savings, $132 billion over the next decade, to help finance coverage of the uninsured. Enrollments are projected to fall as some plans drop out and others raise their charges or reduce benefits. There will still be plenty of private plans available, and any older Americans who can’t find one to their liking will still have access to traditional Medicare. ...

    Over time, the best Medicare Advantage plans will survive and the least efficient will close. That is what should happen. These subsidies are inequitable and far too costly for the American taxpayer.

  • The Register: Microsoft says US staff must chip in for healthcare. By Kelly Fiveash. Excerpt: Microsoft told its US staff on Friday that from 2013 they would have to pay contributions toward their healthcare costs. The company’s compensations and benefits veep J. Ritchie told MS employees at a 'Town Hall' meeting in Redmond that Microsoft was “not immune” to the “rising costs” of US healthcare. "We needed to evolve our US-based healthcare programs. We want to be able to over the long term reduce the rate of increase we’re experiencing in our health plans," he said, according to The Seattle Times.
News and Opinion Concerning the "War on the Middle Class"
Minimize "It is a restatement of laissez-faire-let things take their natural course without government interference. If people manage to become prosperous, good. If they starve, or have no place to live, or no money to pay medical bills, they have only themselves to blame; it is not the responsibility of society. We mustn't make people dependent on government- it is bad for them, the argument goes. Better hunger than dependency, better sickness than dependency."

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

  • New York Times op-ed: Hey, Small Spender. By Paul Krugman. Excerpts: Here’s the narrative you hear everywhere: President Obama has presided over a huge expansion of government, but unemployment has remained high. And this proves that government spending can’t create jobs. Here’s what you need to know: The whole story is a myth. There never was a big expansion of government spending. In fact, that has been the key problem with economic policy in the Obama years: we never had the kind of fiscal expansion that might have created the millions of jobs we need.

    Ask yourself: What major new federal programs have started up since Mr. Obama took office? Health care reform, for the most part, hasn’t kicked in yet, so that can’t be it. So are there giant infrastructure projects under way? No. Are there huge new benefits for low-income workers or the poor? No. Where’s all that spending we keep hearing about? It never happened.

    To be fair, spending on safety-net programs, mainly unemployment insurance and Medicaid, has risen — because, in case you haven’t noticed, there has been a surge in the number of Americans without jobs and badly in need of help. And there were also substantial outlays to rescue troubled financial institutions, although it appears that the government will get most of its money back. But when people denounce big government, they usually have in mind the creation of big bureaucracies and major new programs. And that just hasn’t taken place.

    Consider, in particular, one fact that might surprise you: The total number of government workers in America has been falling, not rising, under Mr. Obama. A small increase in federal employment was swamped by sharp declines at the state and local level — most notably, by layoffs of schoolteachers. Total government payrolls have fallen by more than 350,000 since January 2009. ...

    The answer to the second question — why there’s a widespread perception that government spending has surged, when it hasn’t — is that there has been a disinformation campaign from the right, based on the usual combination of fact-free assertions and cooked numbers. And this campaign has been effective in part because the Obama administration hasn’t offered an effective reply. ...

    And a side consequence of this awkward positioning is that officials can’t easily offer the obvious rebuttal to claims that big spending failed to fix the economy — namely, that thanks to the inadequate scale of the Recovery Act, big spending never happened in the first place. But if they won’t say it, I will: if job-creating government spending has failed to bring down unemployment in the Obama era, it’s not because it doesn’t work; it’s because it wasn’t tried.

  • Yahoo! IBM Employee Issues message board: "Re: If the tax rate changes" by "albanyblue2000". Full excerpt: Old School, Bean wasn't suggesting that the financial world in the US should collapse. She was providing the insight that says: "you can hide the problem of economic stagnation by moving it from the US economy, -and into the Fed, but it won't go away."

    The basic problem is that US business has abandoned this country, sucking cash out of employees, vendors, customers and the tax man, -and spending it in overseas investments. It has gotten away with it through favorable legislation over the 1992-2008 period, and by incenting Americans to borrow, in order to maintain an unrealistic standard of living.

    Their motivation at that time was that economic activity, for good or bad, increases shareholder value.

    The result was that 78% of US GDP was (and is) supported by the consumer. That consumer also supports the GDP's of China, Japan, India, Malaysia, Singapore, Indonesia, Brazil, Vietnam, Taiwan, and a few ex-SSR's.

    That worked until the merry-go-round slowed.

    The large corporations panicked, and sucked up as much cash as they could, exacerbating the problem. They stopped investing in new plants, programs and products. Banks foreclosed without mercy and without proper procedures. US citizens started to lose their homes and found themselves without jobs, -or with reduced working hours and benefits.

    Then, the big problem hit. Scared shitless, the American family stopped spending foolishly and started saving!!! The result has been a contraction of economic activity. The businessmen, having extracted as much as they can from employees, vendors and customers, want to extract more from the public sector, so their battle cry is for lower taxes and less government.

    The Fed has been providing a temporary patch, by literally throwing free money at business, and asking it to start investing. It hasn't worked. Why not?

    My conclusion is that Wall Street and the corporate executives have decided to shove a cork up the ass of the economy, and they've threatened to keep it there until the government gives them what they want.

    And, what's that?

    Much lowered taxes for the rich and the reduction of such programs as Social Security, Medicare, Medicaid and infrastructure building.

    Your suggestion that we're heading into 1933 again is probably correct. It was preceded by just the activities that I outlined above. --Mike.

  • Yahoo! IBM Employee Issues message board: "Re: If the tax rate changes." By Kathi Cooper. Full excerpt: BINGO!!! Excellent summary. I couldn't agree more regarding your conclusion. Might I add... The republican party is being tagged lately as 'the party of no'. You suggest that corporate America is doing the same. I can see now that corporate America is not going to do anything (hire, invest, expand) until after the elections. By keeping the economy sour, they win at the polls, blaming Obama for everything, and taking power again. And power is better than being king.
  • New York Times: Offering Donors Secrecy, and Going on Attack. By Jim Rutenberg, Don Van Natta Jr. and Mike McIntire. Excerpts: The American Future Fund, a conservative organization based in Iowa, has been one of the more active players in this fall’s campaigns, spending millions of dollars on ads attacking Democrats across the country. It has not hesitated to take credit for its attacks, issuing press releases with headlines like “AFF Launches TV Ads in 13 States Targeting Liberal Politicians.Like many of the other groups with anodyne names engaged in the battle to control Congress, it does not have to identify its donors, keeping them — and their possible motivations — shrouded from the public. ...

    The American Future Fund, organized under a tax code provision that lets donors remain anonymous, is one of dozens of groups awash in money from hidden sources and spending it at an unprecedented rate, largely on behalf of Republicans. The breadth and impact of these privately financed groups have made them, and the mystery of their backers, a campaign issue in their own right. Through interviews with top Republican contributors and strategists, as well as a review of public records, some contours of this financing effort — including how donors are lured with the promise of anonymity — are starting to come into view. ...

    Stoking the flow of dollars has been the guarantee of secrecy afforded by certain nonprofit groups. Mel Sembler, a shopping mall magnate in St. Petersburg, Fla., who is close to the Republican strategist Karl Rove, said wealthy donors had written six- and seven-figure checks to Crossroads GPS, a Rove-backed group that is the most active of the nonprofits started this year. Republicans close to the group said that last week, the group received a check for several million dollars from a single donor, whom they declined to identify. ...

    The U.S. Chamber of Commerce, which does not identify its corporate members, spent $10 million over the last week on advertisements, mostly against Democrats, records show. The chamber will most likely meet its fund-raising goal of $75 million, more than double what it spent on the 2008 campaign, Republican operatives say.

  • truthOut: Brother, Can You Spare a Dime? I Only Earn Six Figures. By Paul Krugman. Excerpts: I live in a very sheltered world, yet I know young people just out of college who can’t find employment; men in their late 50s who have lost their jobs and think they will never find another; and families barely scraping by, terrified by what might happen if anyone were to get sick. These days, there are terrible stories everywhere you look.

    Yet some Americans who have secure jobs and rather high incomes are feeling very sorry for themselves because it’s possible that they might have to pay somewhat higher taxes next year if the temporary reductions made during President George W. Bush’s tenure in office are allowed to expire for the wealthy.

    Take, for example, an unnamed person mentioned in a recent online post by economist J. Bradford DeLong. This person supposedly makes $450,000 a year, has a family of five and after paying bills, loans, taxes and everything else (including private school tuition for three children and the costs of a $1 million house), is left with only a few hundred dollars a month of discretionary income. Mr. DeLong says this person strongly feels that he should not have to pay more taxes — “It is unfair: he is not ‘rich.’”

    As Mr. DeLong puts it, “Is it pathetic that somebody with nine times the median household income thinks of himself as just another average Joe, just another ‘working American’? Yes.”

    By using the Tax Policy Center’s online tax calculator, I have determined that the aforementioned sorry-for-himself person might indeed end up paying higher taxes next year — there is some uncertainty linked to our lack of knowledge about the details of his family situation — but probably not more than 2 percent of his income. So, Mr. DeLong points out, this person is angry — and not at financiers, but at “Barack Obama, who dares to suggest that the U.S. government’s funding gap should be closed partly by taxing him.”

  • truthOut: Don't Cut Social Security, DOUBLE It. By Steven Hill. Excerpts: But the New America Foundation just released a study that I authored that proposes a different approach: doubling the current Social Security payout and making it a true national retirement system. Creating a more robust system of "Social Security Plus" not only would be good for American retirees, but also would be good for the greater macro economy. Here's the dilemma that the US faces. Since WW II, retirement has been conceived as a "three-legged stool," with the three legs being Social Security, pensions and personal savings centered around homeownership. But, today, most private sector employers have quit providing pensions, and state and local government's public pensions are drastically underfunded. ...

    The bigger problem is that Social Security's payout is so meager, which is problematic since it has been thrust into this new role as a de facto national retirement plan. Currently, it replaces only about 33 to 40 percent of a worker's average wage from the year prior to retirement (compared to Germany, where it replaces 70 percent). That is simply not enough money to live on when it is your primary - perhaps your only - source of retirement income.

    Doubling Social Security's individual payout would cost about $650 billion annually for the 51 million Americans who receive benefits. Here are some ways to pay for it.

    First, lift Social Security's payroll cap that favors the wealthy. Currently, Social Security only taxes wages up to $106,800 a year, and any income earned above that is not taxed. The net result is that poor, middle-class and even moderately upper middle-class Americans are taxed 12.4 percent (split between employee and employer) on 100 percent of their income, but the wealthy pay a much lower percentage. Millionaire bankers effectively pay a paltry 1.2 percent. Making all income levels pay the same percentage - that's how Medicare works - is popular with Americans and would raise about $377 billion.

    Second, with all Americans receiving Social Security Plus, employer-based pensions would be redundant, so businesses no longer would need the substantial federal deductions they currently receive for providing employees' retirement plans. These deductions total a whopping $126 billion annually. ...

    An expansion of Social Security - one of the most successful and popular social programs in American history, currently celebrating its 75th year - would be good for the macro economy as well because it would act as an "automatic stabilizer" during economic downturns, keeping money in retirees' pockets and stimulating consumer demand. Benefits would be portable when changing from one job to another.

    It also would help American businesses trying to compete with foreign companies that don't provide pensions to their employees, since those countries already have generous national retirement plans. And it would be broadly fair, since even those higher income Americans who are losing their tax deductions would see part of it returned to them in the form of a greater Social Security payout.

  • alterNet: Why Germany Has It So Good -- and Why America Is Going Down the Drain. Germans have six weeks of federally mandated vacation, free university tuition, and nursing care. Why the US pales in comparison. By Terrence McNally. Excerpts: While the bad news of the Euro crisis makes headlines in the US, we hear next to nothing about a quiet revolution in Europe. The European Union, 27 member nations with a half billion people, has become the largest, wealthiest trading bloc in the world, producing nearly a third of the world's economy -- nearly as large as the US and China combined. Europe has more Fortune 500 companies than either the US, China or Japan. ...

    While the bad news of the Euro crisis makes headlines in the US, we hear next to nothing about a quiet revolution in Europe. The European Union, 27 member nations with a half billion people, has become the largest, wealthiest trading bloc in the world, producing nearly a third of the world's economy -- nearly as large as the US and China combined. Europe has more Fortune 500 companies than either the US, China or Japan. ...

    In his new book, Were You Born on the Wrong Continent?, Thomas Geoghegan makes a strong case that European social democracies -- particularly Germany -- have some lessons and models that might make life a lot more livable. Germans have six weeks of federally mandated vacation, free university tuition, and nursing care. But you've heard the arguments for years about how those wussy Europeans can't compete in a global economy. You've heard that so many times, you might believe it. But like so many things, the media repeats endlessly, it's just not true.

    According to Geoghegan, "Since 2003, it's not China but Germany, that colossus of European socialism, that has either led the world in export sales or at least been tied for first. Even as we in the United States fall more deeply into the clutches of our foreign creditors -- China foremost among them -- Germany has somehow managed to create a high-wage, unionized economy without shipping all its jobs abroad or creating a massive trade deficit, or any trade deficit at all. And even as the Germans outsell the United States, they manage to take six weeks of vacation every year. They're beating us with one hand tied behind their back." ...

    Americans don't know how things actually work in European countries. For many people the fact that Germany is neck and neck with China as the number one exporting country -- give or take the rise and fall of currency - must be mind blowing. Even progressives in America don't look overseas for models that work. I find it almost pathological that our exceptionalism infects even those who assume they don't believe in it. ...

    McNally: You point out that as globalization grew, the US chose to compete on the basis of cheap labor by outsourcing. We kept the marketing and executives here and moved the manufacturing elsewhere. We've been playing that game for 20-30 years now. Germany chose to play the opposite game. Geoghegan: 30 years later the Germans are making money off of China, and China is making big time money off of us. One thing I really try to get across in the book: Many Americans think that we've got a trade deficit because we can't compete with China. We've got a trade deficit because we can't compete with Germany in selling things to China. Until people wake up and look at the kinds of things that the Germans are doing to keep their manufacturing base, we're going to continue to run deficits which leave us in the clutches of foreign creditors and compromise our autonomy as a country. ...

    McNally: Let me finish with a quote of yours that really struck me: Without an industrial base a democracy dies. Geoghegan: My own favorite ending line would be: Countries like Germany do both capitalism and socialism better than we do.

  • Jim Hightower: The Rich Versus the Rest of Us. Excerpts: Apparently, you and I owe an apology to the extravagantly-rich in our society. They're reported to be in a deep pout and a political funk because We the People have hurt their feelings.

    This stems from the public's simmering anger over the fact that the Wall Street barons who crashed our economy are back to paying themselves multimillion-dollar bonuses, while the corporate CEOs who keep downsizing and offshoring our middle class opportunities are grabbing bigger paychecks than ever for themselves. The wealthy swells are upset by our anger and feel picked on by us riff-raff – they don't like being blamed for our economic distress, even though they are to blame, and they certainly don't like the rising populist fervor for more economic fairness in our country. So they're mad at us for being mad at them, claiming that they are victims of our "wealth envy."

    I'm sure you feel as badly as I do about this, so you'll be glad to know that those living in luxury seem to have found a way to soothe their bad mood: they've gone shopping! Yes, while workaday Americans are scrambling just to cover the rent and buy groceries, the well-heeled are reported to be splurging again, indulging their consumer whims with such pricey pretties as exotic automobiles.

    One analyst of trends in the luxury car market concedes that sales of Bentleys, Lamborghinis, Maseratis, and other ultra-priced autos had been down the past couple of years. He explained that, "It didn't feel right buying a $300,000 Rolls-Royce when people were being foreclosed out of their homes." But this year, the elites are saying, "To hell with what the public thinks, I'm gonna get me a new Ferrari 458 Italia, the people be damned!"

    How nice for them. But I don't think their conspicuous consumption is going to make anyone feel better about their greed – nor will it quell the public's rising populist fervor.

  • Huffington Post: How to Earn $900,000 an Hour While Unemployment Soars. By Les Leopold. Excerpts: Let's be honest. Wouldn't you like to rake in a cool $900,000 for one hour's work? No? Still have hippie ideals, perhaps? You could work for just 10 minutes and walk off with $150,000. Push yourself to work one entire day and we're talking $7.2 million. Hang in there for a month, and you'll pull in more than the richest athletes make in 10 years -- $256.5 million. And in one year? Well, you'll be earning what the top ten hedge fund honchos each averaged in 2009 -- $1.87 billion. Wouldn't you like to know their secrets? Here are a few:

    Step 1: Check your conscience at the door. You must be able to live with the knowledge that while you were making $900,000 an hour, more than 29 million other Americans had no job at all or were forced into part-time work. Also you'll have to live with the uncomfortable fact that your sector -- high finance -- crashed the economy, leaving eight million Americans jobless in a matter of months. ...

    Step 2: Remember: None of this is your fault! Yes, a few tiresome critics will keep pointing the finger at you, saying that the financial sector crashed the economy. Ignore them and put the blame where it belongs - somewhere else. When in doubt, seek guidance from the pros on Wall Street. ...

    Step 3: Proclaim that you are the solution: It's not enough to dodge the blame. You've got to convince academics and journalists to anoint you as the savior. You see, it's you and your fellow high finance moguls who will save us from ever having to endure a crisis like this again. Fortunately for you, they've already bought the story. For example, in More Money than God, Sebastian Mallaby writes...

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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