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Lee Conrad, national coordinator for the alliance, said some work is being shifted by IBM to Argentina. Other work is being shifted to other overseas sites or to IBM's Global Delivery Framework centers, known as GDFs. One GDF is at the East Fishkill campus. It's not clear whether any work is being shifted there.
Through my years in management, I've found four tools that have allowed our employees to improve their ability to interact better with customers: We (1) trust our employees, (2) communicate with them, (3) listen to them and (4) explain rather than convince.
If you're a manager, you know how important it is to make sure the client is always pleased with the service or product you're selling. But you're not a miracle worker, and you can't be in front of every single client to assure that every expectation is met. Therefore, take a deep breath and trust your employees. When flight attendants are on the job (i.e., en route), they are for the most part unsupervised and have the freedom to interact with passengers as circumstances dictate. Rather than browbeating them into a strict, regimented passenger-servicing procedure, we give them the flexibility to adjust to customers based on their varying demands, which are not always part of our playbook. This builds trust and over time generates ideas that help improve our service. ...
Bottom line: Give your customer-facing staff the latitude and trust to do their jobs at the highest level. Executives at a lot of companies stifle their employees because they--not those employees--are change averse and afraid of two-way feedback. However, giving your staff ample tools and the opportunity to use them in the service of customers will not only foster an entrepreneurial spirit in the work they do but also keep the customer satisfied. And that is the essence of business.
U.S. companies move jobs, move production, move added value abroad. Judge from the actions." The problem is U.S. companies are left to their own devices because of the lack of government policies or incentives to mitigate the behavior, he said. "I was basically left to decide. Every American CEO gets to decide what's good for the company. Because the U.S. does not provide preferences, priorities, or directions. On the other hand, we are competing with a very effective country [China] that's beating the shit out of us," according to Grove. "And I don't blame them. I blame us." A Chinese phrase that roughly translates as "indigenous innovation" says it all, according to Grove. "That is the byword." U.S. businesses "follow the invisible hand. And the United States follows the black vortex into the abyss, as a result," he continued. U.S. businesses "just follow their own optimum outcome."
So, what's the solution? "Come up with a policy that mitigates or reduces the incentives to move all scaling work to foreign countries," Grove said, referring to the process of scaling up a product from design to manufacturing. "Somebody in the government (needs to take) a step that is dangerous enough to invite targeted criticism. Unless they are willing to do that I don't believe that they are serious about it." And it's certainly not impossible to create and build in the U.S. Brian Krzanich, a senior vice president and general manager for manufacturing and supply chain at Intel, echoes Grove's sentiment. "Each of (Intel's) factories has 1,000 to 2,000 highly trained and highly technical engineers...Getting to the point of taking something from the lab into high-volume manufacturing. There's quite a bit of innovation in that.
Before the recession hit, work was known as a place where an employee could enjoy some stability, he says. "People found solace in going to work," he says. "That was the calm place where you could get away from many of life's struggles. Now it seems to be a little different because of the recession. ...
"The Great Recession severed the last remaining threads connecting us to the reciprocal, employment-for-life contract that hasn't existed for quite some time," she says. "So, I am not surprised that such a high percentage of employees are waking up to the painful reality that making work your primary focus, to the exclusion of everything else, is precarious.
Years later, my dream came true. I got a job with a large bank, and I never again needed to shovel manure. Corporations use something called PowerPoint instead. Thanks to my farm training, I was so good at designing PowerPoint slides that my coworkers called me "The Natural." Jaws dropped when I introduced my signature move: the frozen PowerPoint slide with snow on top. ...
Imagine a parallel universe where employees enjoy going to work. They feel empowered and fulfilled—so much so that they don't care about the size of their paychecks and never want to leave their jobs. That's exactly the sort of nightmare scenario that would destroy the economy. The last thing this world needs is a bunch of dopey-happy workers who can't stop humming and grinning. Our system requires a continuous supply of highly capable people who are so disgruntled with their jobs that they are willing to chew off their own arms to escape their bosses. The economy needs hamster-brained sociopaths in management to drive down the opportunity cost of entrepreneurship. Luckily, we're blessed with an ample supply.
To put it in plainer terms: The primary purpose of management is to kill any hope that staying in your current job will work out for you. That sort of hope is like gravel in the engine of progress. The economy needs workers who are fed up, desperate and willing to quit their jobs for something better. Remember, only quitters can be winners, because you can't do something great until first you quit doing something that isn't.
Instead, managers should be trained to regularly work with employees to identify ways the manager can help them improve, in a way that doesn't make the employees afraid to acknowledge weaknesses, he says. "It's become so that HR is like the KGB. They keep files on people, and no one feels secure with them around," he says. "This is a problem that can't be solved with more manager training or bigger budgets."
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Since it is typically tied to salary increase, it becomes even more problematic. It is especially a problem when coupled with the absurd notion of bell curves and the fact that salary increases in corporate America are a joke. As reviewer, I have to conform to the bell curve. But managers often have small groups that are not large enough to distribute. So reviews and ratings are bucked up the ladder, where "higher powers" then dictate how many/who are/is rated highest. Now, you have to go back and rethink your evaluation to match the bell curve.
In addition, the pace of change makes annual reviews difficult. Coupled with the fact that so many business goals span multiple groups and disciplines, performance reviews as we know them are dinosaurs.
Finally, the whole concept of job descriptions are the antithesis of the entrepreneurial spirit that we need in this country. Big companies need people that will innovate; not just scientists and engineers. We have traded creativity for compliance.
Also companies that have great employees and make them jump through hoops on the Performance Review and than give the lowest % COLA raise and no merit raise, no bonus all while crying poor OR while constantly promoting the same few senior executives does more harm than good.
At the end of the day, if everyone is going to just get the same % than stop wasting time on the reviews and let people get about doing some real work. I know the overstressed, overworked middle managers and their direct reports would be happier.
What do you think managers would do? Nothing, it seems. Exhibit No. 1: the performance review, a practice that is as destructive and fraudulent as it is ubiquitous. And despite all the evidence — despite the fact that almost every person reviewed and every person reviewing knows it is bogus — corporate bosses do nothing to hasten its demise. They won't even acknowledge they have a problem.
Performance reviews, in which bosses look for weaknesses and pretend to speak objectively for the company, while subordinates grin and bear it, misapply the hierarchical structure that is necessary in any organization. They ensure that the relationship is about power and subordination, making candor all but impossible, and defensiveness the behavior of choice for stressed employees.
Why do managers accept this ritual? Why do they say they want candor in the workplace, but refuse to change the most obvious impediment to such truth telling? And why do they uncritically accept the notion that there is but one truth — the manager's?
Let me offer five reasons, based on my experience talking to, and hearing from, thousands of executives over the years, both as a consultant and as a teacher...
The ramifications of ignoring this, of letting dishonesty (or, at best, silence) run rampant, are staring us all in the face. It seems apparent by now that there were scores of employees who saw General Motors heading to failure, who knew that Toyota was building defective cars, that recognized that BP’s cost-cutting pressures and regulation-skirting practices were a recipe for disaster. Clearly, plenty of bankers were scared to death that they were creating financial monsters that would turn around and eat their institutions, not to mention the global financial system. But too often they said nothing to those higher up who might have been in a position to do something about it. ...
Where’s the proof of this fear and dishonesty, you might ask. Well, the most visible evidence is sitting in front of us, much loathed and yet much ingrained in our institutions. It’s that annual ritual where bosses look for weaknesses and pretend to speak objectively for the company, and where subordinates grin and bear it and count the minutes until they can leave the room. It is the most vivid example that in companies, there is only one way of doing things: the manager’s way. And it is the job of the employee to mirror the manager, and never speak what is on his or her mind.
I am referring to the performance review.
If any managerial practice symbolizes and establishes the pattern for a lack of candor in organizations, to the management by intimidation that pervades our workplaces, it is the continued reliance on this pretentious, destructive, bankrupt practice. The performance review is the control mechanism that allows non-reflective, unthinking, flawed, anxious executives to maintain discipline and order, to claim to be available for candid discussion, and to blame all corporate shortfalls on operatives who didn’t follow the directions from management.
In fact, the pretense of evaluating performance ironically ensures that the company gets less performance than it otherwise could. It ensures that people aren’t going to talk openly about what’s going wrong. It makes it difficult – if not impossible – for the boss and subordinate to have a trusting relationship, even if the boss is a “good” boss. It makes self-protective defensiveness, rather than speaking one’s beliefs – that is, pleasing the boss, rather than getting the company what it needs – the behavior of choice for employees. And it destroys good performance by making it impossible for employees to tell management what they see management doing wrong – if only to give management an opportunity to correct what must be a false impression. ...
Part of it is that to do otherwise would be to admit that they, and the other bosses in the organization, have never truly learned how to lead. They don’t know how to motivate, to work with subordinates, to be a team. They don’t know how to make employees trust and admire them, to inspire employees to do what’s best for the company. They only know how to scare them into doing what the bosses want to do. Face it, it’s easier and less time-consuming and more ego-building to scare people than to work with them and actually engage their different perspectives and learn from them. Reviews allow managers to intimidate rather than manage, to impose their views on people whose experience tells them differently. They allow companies to pretend their executives are making “objective evaluations,” rather than simply giving high marks to employees who have best learned how to put pleasing the boss ahead of getting results for the company. ...
Sidebar: What's Wrong With Performance Reviews? Start With This.
Panera has, for a very long time, played for the long term and stayed consistent. Going into the recession, we said, "This is a time to continue with our strategy." Almost every single one of our competitors said, "We need to pull costs out." As a consumer, if you walk into their restaurants, the lines are longer, the waits are longer. You have a table next to you with dirty dishes. That is the effect of increasing labor productivity. It has to come out of somewhere. We've continued to invest in labor in our cafés and the quality of our people. We've invested in the quality of the food. When everybody pulled back and we did more, the difference between us and our competitors went up. And we've been taking market share. We had near double-digit [same-store sales] for over a year now. The stock has tripled in the recession.
Chief Executive Eric Schmidt disclosed the raise in an email to employees, saying the company wants to lift morale. "We want to make sure that you feel rewarded for your hard work," Mr. Schmidt wrote. "We want to continue to attract the best people to Google."
Meanwhile he's got billions in spare cash he absolute fritters away on frivolous tricks like buying back shares of stock. WE the employees, the real creators of value, are the rightful heirs to these billions that were stolen from us over the years. And now we're told that that new class of superwealthy - all the new VPs and upper-echelon managers - should have their tax-break because otherwise they won't grow jobs. That money for their obscene salaries was stolen from you.
Getting it back through expiring tax-cuts on the wealthy is not socialism. It was our money, our benefits, our raises, our pensions to begin with. A Union is our only chance to force IBM to honor its obligations to employees. Wasting 10 billion on buying back shares may not even raise share price but it doesn't matter to Sam - as long as no union stands in his way, he'll keep stealing our money so he can have more billions to waste on buybacks. And the board is only too happy to enable him in his extreme greed. -Anonymous-
Despite all the attacks on “Obamacare,” the new law props up the employer-based system that insurers and large corporations benefit from so greatly. It also guarantees that private insurers will get billions of dollars in new revenue. And the insurers won’t have to share a penny of that windfall with a government-run public option the president once said was necessary “to keep insurers honest.”
I know what the insurers are thinking because, not long ago, I was on their side. I am sorry to admit it, but over nearly two decades I had a hand in planning the industry’s PR and public-policy strategies to either kill or shape any health-care reform proposal that might hinder profits. I was part of the strategic-communications team that planned and carried out the successful attack on the Clinton plan in the 1990s as well as the one that killed the patients’ bill of rights a few years later. I left my job handling communications for Cigna in 2008 because I didn’t have the stomach to be part of yet another spin campaign to cheat Americans out of the reform they needed.
For months before I left my job, I worked closely with my counterparts at the other big insurers to develop the list of must-haves our well-connected army of lobbyists would take to Capitol Hill when lawmakers began drafting reform legislation. Despite their public statements to the contrary, insurance companies really liked much of what was in both House and Senate versions of the bill—big chunks of which they actually wrote behind the scenes—especially the requirement that all Americans buy insurance if they’re not eligible for an existing public program like Medic-aid or Medicare. ...
It is ironic, of course, that the requirement to purchase insurance has become the centerpiece of Republicans’ condemnation of the new law and their court challenge of its constitutionality. Insurers have no reason to worry, however, because they fare very well when the Republicans are in charge. Their profits soared—as did the number of Americans who are uninsured and underinsured—during the Bush years and Republican control of Congress.
The real reason insurers want the GOP leading Congress again is not to repeal “Obamacare,” but to try to gut some of the provisions of the law that protect consumers from the abuses of the industry, such as refusing to cover kids with preexisting conditions, canceling policyholders’ coverage when they get sick, and setting annual and lifetime limits on how much they’ll pay for medical care. Insurers also hate the provision that requires them to spend at least 80 percent of premium revenues on medical care, as well as the one that calls for eliminating the billions of dollars that the government has been overpaying them for years to participate in private Medicare plans. (Be on the lookout for a death panel–like fearmongering campaign to scare people into thinking, erroneously, that Granny and Pawpaw will lose their government health care if Congress doesn’t restore those “cuts” to Medicare.)
Instead, after two or three months of operation in most states, the plans have enrolled only 8,011 people, according to figures made available for the first time by the Department of Health and Human Services. Although there are notable exceptions, enrollment in most states as of Nov. 1 was well below 10 percent of capacity. New York and Florida, for instance, have each enrolled fewer than 300, and 21 states have fewer than 50.
The slow start-up, which officials believe will accelerate next year, is cause for concern not only for the Democratic administration but also for the new Republican majority in the House of Representatives. Although Republicans opposed the health care law as a whole, they have long embraced high-risk pools as an answer to the plight of the chronically uninsured.
The party’s presidential nominee in 2008, Senator John McCain of Arizona, called for a vast expansion of the pools, and House Republicans in this year’s campaign reiterated the call in their “Pledge to America.” “The pools are our major solution,” said Representative John Shimkus, an Illinois Republican who is in line to become chairman of the health subcommittee of the Energy and Commerce Committee. Mr. Shimkus said Republicans had proposed spending $25 billion on risk pools over 10 years.
Or Japanese. Or Finnish or British or even German. Whatever the case, this much is clear: No American, certainly not one about to occupy a leadership position in our government, could possibly call the American health-care system "the best health care system in the world." Boehner did just that last week. He was having an out-of-country experience.
For statistical refutation, we need only refer to the CIA's World Factbook (no lefty think tank, to be sure) and check the health statistics. The United States is 49th in life expectancy. Our proud nation bests the Libyans in this category but not Japan, France, Spain, Britain or, of course, Italy. You not only live about two years longer in Italy, but you eat better, too.
The same doleful situation applies to infant mortality. This is the saddest of all categories since it relates to infants who don't make it to their first birthday. The CIA tells us that the nations that do the worst in this category are, not surprisingly, mostly in Africa. Then comes much of Asia and parts of South America, but when you start getting up there a bit, Cuba does better than the United States and so do Italy, Hungary, Greece, Canada, Portugal, Britain, Australia and Israel, among others. This should be an embarrassment to us all - but, clearly, it is not. To Boehner, these figures - infants dying before they can get a cupcake with a single candle - don't exist. Rather than improve the situation, he might want to cut the CIA's appropriation. ...
Boehner's Panglossian sentiment is shared by Sen. Mitch McConnell, the Republican leader who has vowed to roll back the Obama health-care program. If McConnell thinks America has the best of all health systems, who can blame him? When in 2003 he underwent heart bypass surgery, it was at the Bethesda Naval Hospital. This is a government facility staffed by government employees - what is sometimes called socialized medicine. His heart did fine, but he left the hospital untreated for Rampant Endemic Hypocrisy, a communicable disease that has swept the GOP and left it vulnerable to irrationality. Michele Bachmann, who peddled the absurdity that President Obama's overseas trip was costing $200 million a day, stands in mortal peril of succumbing to it. ...
The United States spends upward of 17 percent of its gross domestic product on health care. European nations spend about 8 percent - and their citizens are actually healthier. Republicans oppose Obamacare. Fine. But where is their plan? Not the lauded status quo. As we can see, that's a terminal disease.
For Democrats, there's hope in Boehner's chirpy pronouncement. It shows a GOP out of touch with reality, a party of Marie Antoinettes, babbling total nonsense about health care. The same swing voters who used the election to hurt the Democrats might learn that America's health-care system is No. 1 only in health-related bankruptcies. It is best in the world only for the rich and the amply insured. Everyone else can crawl away, unseen by the next speaker of the House of Representatives - a jolly, detached fellow who thinks he lives in another country entirely.
The CDC analyzed data from the National Health Interview Survey for 2006, 2007, 2008, 2009, and the first quarter of 2010. The survey covered 90,000 individuals from 35,000 households. The findings revealed that 3 million more people "went for a year or more with no health insurance" in the first quarter of 2010 than in 2008, and that half of the uninsured were above the poverty level. One in three adults under 65 who made between $44,000 and $65,000 a year, the "middle income range," were uninsured at some point during the year. The findings by the Centers for Disease Control and Prevention "have implications for U.S. healthcare reform efforts. ... Experts from both sides predict gridlock in Congress for the next two years in implementing healthcare reform's provisions".
More and more companies in the last year or so have begun signaling their recognition of the added burden shouldered by workers in low- and middle-income jobs by varying the premiums they pay based on salary. Consultants say the trend is likely to continue, as employers devise various ways of spreading increased health care costs among their staff and balancing that side of the ledger against fewer raises and other compensation. ...
Companies have also become increasingly creative in the ways they shift costs. Instead of simply raising premiums or increasing the size of the deductible workers must pay before their coverage kicks in, employers are increasingly asking their workers to pay more of the cost of coverage for their dependents, or to pay more of their share of a hospital stay or an emergency room visit. “Employers do a bit here and do a bit there,” said Gary Claxton, a policy expert at Kaiser. The result is that employees may be paying more, but they may not know how much. Mark Rukavina, the director of the Access Project, an advocacy group, said, “You need multiple spread sheets to figure this out.” ...
More companies are adopting plan designs that require employees to pay more of their own medical bills under specific circumstances so workers are increasingly feeling the pinch. Companies “are taking the usual cost-trend reduction measures, but more of them are doing it,” said Beth Umland, director of health and benefits research at Mercer, the consulting firm. This has clouded exactly how much more workers are paying. “Employers have shifted costs for the past 10 years,” Mr. Miley said. “The confusion allows them to push it further.”
"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.
But guess what? You no longer need to travel to distant and dangerous countries to observe such rapacious inequality. We now have it right here at home — and in the aftermath of Tuesday’s election, it may get worse.
The richest 1 percent of Americans now take home almost 24 percent of income, up from almost 9 percent in 1976. As Timothy Noah of Slate noted in an excellent series on inequality, the United States now arguably has a more unequal distribution of wealth than traditional banana republics like Nicaragua, Venezuela and Guyana.
C.E.O.’s of the largest American companies earned an average of 42 times as much as the average worker in 1980, but 531 times as much in 2001. Perhaps the most astounding statistic is this: From 1980 to 2005, more than four-fifths of the total increase in American incomes went to the richest 1 percent.
That’s the backdrop for one of the first big postelection fights in Washington — how far to extend the Bush tax cuts to the most affluent 2 percent of Americans. Both parties agree on extending tax cuts on the first $250,000 of incomes, even for billionaires. Republicans would also cut taxes above that. The richest 0.1 percent of taxpayers would get a tax cut of $61,000 from President Obama. They would get $370,000 from Republicans, according to the nonpartisan Tax Policy Center. And that provides only a modest economic stimulus, because the rich are less likely to spend their tax savings.
The major vehicle is George W. Bush’s 15 percent levy on long-term capital gains - the lowest since FDR’s first term - and on corporate dividends. The top 1 percent of US households owns nearly 40 percent of all privately held stock, from which the dividends flow. Similarly, the super-rich get more than half their income from capital gains, as documented by tax expert David Cay Johnston in his book “Perfectly Legal.” In the meantime, for the working middle-class, the tax rate on wages is 25 percent. ...
In 2006, Buffett told an interviewer that his tax bill was “far, far less as a fraction of his income than the secretaries or the clerks or anyone else in his office” (and he repeated the statement only recently). His shame in 2006 hits home still: “How can this be fair? How can this be right?”
The tax code sets marginal rates too, and these were gutted by President Reagan in 1981 and again in 1986. He slashed the top rate from 70 to 28 percent, and made the code even less progressive by cutting the number of brackets from 15 to four. The yearning for tax simplification (fewer brackets) trumped the case for progressivity (more brackets). There are six today, with the top four taxed at 25, 28, 33 and 35 percent - a narrow spread, easily offset by provisions like the capital gains rate. The top rate kicks in at about $400,000 of taxable income, a practice Johnston told Truthout he finds “bizarre.” It’s a long way, he argued in a recent email, from $400,000 to $1 million, $5 million, $100 million and hedge-fund billions: “Why don’t we have higher rates for those incomes?” he asked. ...
It’s taken a fortune in lobbying and campaign contributions, but America’s tax system is bearing golden fruit. As even a conservative can see, it’s shifting income to the wealthy.
But both Rep. Eric Cantor, R-Va., who's expected to become the majority leader in the House when the new Congress is sworn in next year, and Senate Minority Leader Mitch McConnell said on Sunday news programs that they'd insist on an extension of the tax cuts for wealthy.
Ronald Reagan told us he could cut taxes, jack up defense spending and balance the budget — all at the same time. How’d he do? As his biographer Garry Wills tells us, the Gipper “nearly tripled the deficit in his eight years, and never made a realistic proposal for cutting it.” ...
The deficit hawks want to radically cut budgets and shrink the government, which they assure us will not only get the economy moving again but will eventually bring budgets into balance as neatly as some ideal middle-class family balances its checkbook.
This will somehow be achieved, we’re told, without raising taxes. And Senator Jim DeMint of South Carolina, a darling of the Tea Party, said on “Meet the Press” on Sunday that he was not in favor of cuts in benefits to senior citizens, meaning Social Security and Medicare, or any reductions in veterans’ benefits.
You can’t have a coherent conversation about deficit reduction if tax increases are off the table and the country is still at war. This is fantasyland economics, the equivalent of believing that John Boehner can fly.
People traveling in the real world understand that the federal budget deficits are sky high because of the Bush-era tax cuts, the costs of the wars in Iraq and Afghanistan, and the spending that was needed to keep the Great Recession from spiraling into another Great Depression.
Even if deficit reduction right now were a good idea — which it is not, given the sorry state of the economy and the vast legions of the unemployed — the deficit zealots have no viable plan for getting their misguided mission accomplished. What’s needed now is the same thing that has been needed for the past two years and more, a bold plan to put millions of Americans back to work and paying taxes, and a careful, thoughtful, strategic but unequivocal withdrawal of U.S. troops from Afghanistan and Iraq.
What we find is that the wealth is going not just to the top 10 percent of Americans, but really to the tiny slice at the very top, the top one tenth of one percent, even the top one hundredth of one percent. The Congressional Budget Office, using these income tax statistics, calculated that in 2005, the top 100th of one percent, the richest 11,000 households -- had an after-tax income that averaged $24 million a year. That was up from a $4 million average for this group back in 1979. That’s a remarkable change. In contrast, the middle fifth, the middle 20 percent of Americans, saw their incomes over this 1979-2005 period go from $41,000 a year to $50,000 a year.
By the laws of economics, if not physics, those bonuses should fall to earth this year, because the bankers have performed poorly. Trading is down, profits are flat (despite being given trillions of dollars in almost-interest-free money through the back door of the Federal Reserve), firms are handing out pink slips to lower-level employees, and the blatant greed of bank honchos have ruined the public reputations of their financial outfits.
Who cares, shriek the big-shots, we make our own laws -- it's bonus time, baby, so grab all you can! Sure enough, the CEOs of Goldman Sachs, Citigroup, JPMorgan Chase and others have set aside billions of dollars to flood their executive suites with bonus cash at the end of this year -- money that rightfully should go to shareholders.
Their claim is: "We deserve it, for we took low pay during the crash of 2008-2009." For example, Lloyd Blankfein, Goldman Sachs' boss, was paid a mere $9 million last year, so now he wants that "sacrifice" made up to him.
Lest you worry that poor Lloyd's family had to resort to food stamps to make ends meet with that tough $9 million year, note that he had a bit of a cushion, having pocketed a record Wall Street payday of $68 million in 2007 -- even as his the financial condition of his bank was crumbling.
One banker-pay analyst says he had assumed that bonuses would go down this year. But, he said, "I underestimated the industry's resiliency." By "resiliency," I assume he was referring to the industry's incurable greed. ...
The only thing "soft" in today's economy are the heads of economists who keep blaming consumers, rather than fingering the big bankers and corporate CEOs who continue to knock down America's wages, the middle class ... and America itself.
"It is reprehensible to ask working people, including many who do physically-demanding labor, to work until they are 69 years of age. It also is totally impractical. As they compete for jobs with 25-year-olds, many older workers will go unemployed and have virtually no income. Frankly, there will not be too much demand within the construction industry for 69-year-old bricklayers.
"Despite all of the right-wing rhetoric, Social Security is not going bankrupt. According to the Congressional Budget Office, Social Security can pay every nickel owed to every eligible American for the next 29 years and after that about 80 percent of benefits.
"If we are serious about making Social Security strong and solvent for the next 75 years, President Obama has the right solution. On October 14, 2010, he restated a long-held position that the cap on income subject to Social Security payroll taxes, now at $106,800, should be raised. As the president has long stated, it is absurd that billionaires pay the same amount into the system as someone who earns $106,800.
"With the richest people in this country getting richer and the middle class in decline, it is absurd that billionaires pay the same amount into the Social Security system as someone who earns $106,800."
My misgivings increased as we got a better feel for the views of the commission’s co-chairmen. It soon became clear that Erskine Bowles, the Democratic co-chairman, had a very Republican-sounding small-government agenda. Meanwhile, Alan Simpson, the Republican co-chairman, revealed the kind of honest broker he is by sending an abusive e-mail to the executive director of the National Older Women’s League in which he described Social Security as being “like a milk cow with 310 million tits.” ...
Start with the declaration of “Our Guiding Principles and Values.” Among them is, “Cap revenue at or below 21% of G.D.P.” This is a guiding principle? And why is a commission charged with finding every possible route to a balanced budget setting an upper (but not lower) limit on revenue?
Matters become clearer once you reach the section on tax reform. The goals of reform, as Mr. Bowles and Mr. Simpson see them, are presented in the form of seven bullet points. “Lower Rates” is the first point; “Reduce the Deficit” is the seventh.
So how, exactly, did a deficit-cutting commission become a commission whose first priority is cutting tax rates, with deficit reduction literally at the bottom of the list?
Actually, though, what the co-chairmen are proposing is a mixture of tax cuts and tax increases — tax cuts for the wealthy, tax increases for the middle class. They suggest eliminating tax breaks that, whatever you think of them, matter a lot to middle-class Americans — the deductibility of health benefits and mortgage interest — and using much of the revenue gained thereby, not to reduce the deficit, but to allow sharp reductions in both the top marginal tax rate and in the corporate tax rate.
It will take time to crunch the numbers here, but this proposal clearly represents a major transfer of income upward, from the middle class to a small minority of wealthy Americans. And what does any of this have to do with deficit reduction? ...
It’s no mystery what has happened on the deficit commission: as so often happens in modern Washington, a process meant to deal with real problems has been hijacked on behalf of an ideological agenda. Under the guise of facing our fiscal problems, Mr. Bowles and Mr. Simpson are trying to smuggle in the same old, same old — tax cuts for the rich and erosion of the social safety net. Can anything be salvaged from this wreck? I doubt it. The deficit commission should be told to fold its tents and go away.
Demand Creates Jobs. A job is created when demand for goods or services is greater than the existing ability to provide them. When there is a demand, people will see the need and fill it. Either someone will start filling the demand alone, or form a new business to fill it or an existing provider of the good or service will add employees as needed. (Actually a job can be created by a business, a government, a non-profit organization or just a person doing the job, depending on the nature of the good or service that is required.) ...
Businesses Want To Kill Jobs, Not Create Them. Many people wrongly think that businesses create jobs. They see that a job is usually at a business, so they think that therefore the business "created" the job. This thinking leads to wrongheaded ideas like the current one that giving tax cuts to businesses will create jobs, because the businesses will have more money. But an efficiently-run business will already have the right number of employees. When a business sees that more people are coming in the door (demand) than there are employees to serve them, they hire people to serve the customers. When a business sees that not enough people are coming in the door and employees are sitting around reading the newspaper, they lay people off. Businesses want customers, not tax cuts.
Businesses have more incentives to eliminate jobs than to create them. Businesses in our economy exist to create profits, not jobs. This means the incentive is for a business to create as few jobs as possible at the lowest possible cost. They also constantly strive to reduce the number of people they employ by bringing in machines, outsourcing or finding other ways to reduce the payroll. This is called "cutting costs" which leads to higher profits. The same incentive also pushes the business to pay as little as possible when they do hire. (It also pushes businesses to cut worker safety protections, cut product quality, cut customer service, "externalize" costs by polluting, etc.) ...
Corrupted Obviously businesses in our system must be kept from having any ability whatsoever to influence government decision-making in any way, or the system breaks down. When businesses are able to influence government, they will influence government in ways that provide themselves - and only themselves - with more profits, meaning lower costs, meaning fewer jobs at worse pay and not protecting workers, the environment or other businesses. And, they will fight to keep their ability to influence government, using the resulting wealth gains to increase their power over the government which increases their wealth which increases their power over the government which increases their wealth which increases their power over the government which increases their wealth which increases their power over the government which increases their wealth which increases their power over the government ... Unfortunately this is the system as it is today.
he Americans I’m talking about are not just those shadowy anonymous corporate campaign contributors who flooded this campaign. No less triumphant were those individuals at the apex of the economic pyramid — the superrich who have gotten spectacularly richer over the last four decades while their fellow citizens either treaded water or lost ground. The top 1 percent of American earners took in 23.5 percent of the nation’s pretax income in 2007 — up from less than 9 percent in 1976. During the boom years of 2002 to 2007, that top 1 percent’s pretax income increased an extraordinary 10 percent every year. But the boom proved an exclusive affair: in that same period, the median income for non-elderly American households went down and the poverty rate rose.
It’s the very top earners, not your garden variety, entrepreneurial multimillionaires, who will be by far the biggest beneficiaries if there’s an extension of the expiring Bush-era tax cuts for income over $200,000 a year (for individuals) and $250,000 (for couples). The resurgent G.O.P. has vowed to fight to the end to award this bonanza, but that may hardly be necessary given the timid opposition of President Obama and the lame-duck Democratic Congress.
On last Sunday’s “60 Minutes,” Obama was already wobbling toward another “compromise” in which he does most of the compromising. It’s a measure of how far he’s off his game now that a leader who once had the audacity to speak at length on the red-hot subject of race doesn’t even make the most forceful case for his own long-held position on an issue where most Americans still agree with him. (Only 40 percent of those in the Nov. 2 exit poll approved of an extension of all Bush tax cuts.) The president’s argument against extending the cuts for the wealthiest has now been reduced to the dry accounting of what the cost would add to the federal deficit. As he put it to CBS’s Steve Kroft, “the question is — can we afford to borrow $700 billion?”
That’s a good question, all right, but it’s not the question. The bigger issue is whether the country can afford the systemic damage being done by the ever-growing income inequality between the wealthiest Americans and everyone else, whether poor, middle class or even rich. That burden is inflicted not just on the debt but on the very idea of America — our Horatio Alger faith in social mobility over plutocracy, our belief that our brand of can-do capitalism brings about innovation and growth, and our fundamental sense of fairness. Incredibly, the top 1 percent of Americans now have tax rates a third lower than the same top percentile had in 1970.
“How can hedge-fund managers who are pulling down billions sometimes pay a lower tax rate than do their secretaries?” ask the political scientists Jacob S. Hacker (of Yale) and Paul Pierson (University of California, Berkeley) in their deservedly lauded new book, “Winner-Take-All Politics.” If you want to cry real tears about the American dream — as opposed to the self-canonizing tears of John Boehner — read this book and weep. The authors’ answer to that question and others amounts to a devastating indictment of both parties.
Their ample empirical evidence, some of which I’m citing here, proves that America’s ever-widening income inequality was not an inevitable by-product of the modern megacorporation, or of globalization, or of the advent of the new tech-driven economy, or of a growing education gap. (Yes, the very rich often have fancy degrees, but so do those in many income levels below them.) Inequality is instead the result of specific policies, including tax policies, championed by Washington Democrats and Republicans alike as they conducted a bidding war for high-rolling donors in election after election.
The book deflates much of the conventional wisdom. Hacker and Pierson date the dawn of the collusion between the political system and the superrich not to the Reagan revolution, but to the preceding Carter presidency and its Democratic Congress. They also write that contrary to the popular perception, America’s superhigh earners are not mostly “superstars and celebrities in the arts, entertainment and sports” or the stars of law, medicine and real estate. They are instead corporate executives and managers — increasingly (and less surprisingly) financial company executives and managers, including those who escaped with outrageous fortunes as their companies imploded during the housing bubble. ...
Those in the higher reaches aren’t investing in creating new jobs even now, when the full Bush tax cuts remain in effect, so why would extending them change that equation? American companies seem intent on sitting on trillions in cash until the economy reboots. Meanwhile, the nonpartisan Congressional Budget Office ranks the extension of any Bush tax cuts, let alone those to the wealthiest Americans, as the least effective of 11 possible policy options for increasing employment. ...
As “Winner-Take-All Politics” documents, America has been busy “building a bridge to the 19th century” — that is, to a new Gilded Age. To dislodge the country from this stagnant rut will require all kinds of effort from Americans in and out of politics. That includes some patriotic selflessness from those at the very top who still might emulate Warren Buffett and the few others in the Forbes 400 who dare say publicly that it’s not in America’s best interests to stack the tax and regulatory decks in their favor.
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