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Highlights—November 13, 2010

  • Poughkeepsie Journal: IBM workers' group reports layoffs. By Craig Wolf. Excerpt: Job cuts in a segment of IBM Corp. were reported Monday by Alliance@IBM, a workers' group. The group said 299 jobs are covered in a "resource action" report in Integrated Technology Delivery within the Shared Services and Service Management areas. Such layoffs are typically permanent. That number likely covers the United States, as such reports from the alliance are based on a federally required report that IBM gives to employees who are part of the job action.

    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.

  • LinkedIn: The Greater IBM Connection. I actually miss working at IBM. Selected posts follow:
    • Retired after 30 years then worked for a common carrier's services group for the next 14 years made me realize what I don't miss back at IBM. Management's inadvertently pitting department staff against each other so that one of them would get recognition or $$. Teamwork was self motivated.
    • There is a sense of pride in working/having worked for a company that practically invented the computer industry and the vast amount of knowledge available to any IBM'er via W3.
    • My husband and I are both former IBMers. One by choice and one by layoff. I think we both miss IBM a little. I agree with those who said there is a certain pride in working for a great company like IBM. My husband used to say, "There are just so many smart people there." That was my feeling too. Sigh...but nothing remains the same...
    • I miss being marginalized because I was viewed as a threat to my management chain. It's great that I managed to land a job at Google.
    • I miss the people I worked with, not the people I worked for. After Sam started his fiscal plans and bit many of my co-workers in the back door, it was not a great place to be anymore. I was fortunate enough to leave on my own terms and landed in a great place. It's wonderful to be working for a company that appreciates what I know and can do.
    • I did feel pride being part of the larger software team and associated with such a big name. Yes, there were some great folks. In Silicon Valley, however, Big Blue was viewed as the evil empire. I also felt powerless because the company was so big. After working at smaller software companies, where I felt I could impact the organization, this helplessness was painful. And I don't miss the feeling of not fitting in because I wasn't one of the clique who had been there for 20 years. Sorry folks, I DO NOT miss IBM.
    • I am curious to know how long ago most of the posters here left the company. I am still at IBM, in my 27th year. I miss a lot of the same things as you do; because they are no longer a part of the IBM culture I grew up with. IBM used to be a great place to work. Some days it still is. Mostly it's a place to work. On the brighter side, based on what I see on the street and at my competitors, its still probably better than most... damned by faint praise. Its the people I work with on a daily basis that matter. The institution is faceless.
    • I miss the fantastic colleagues and I had fantastic line management as well. I do not miss Sam Palmisano or Bob Weber. The CEO at my new job is so many (good) things that those pieces of work are not. Leaving was my choice and one I'm pleased to have made at this point.
    • I left IBM somewhat involuntarily in February after 33.5 years. I agree that the best thing about IBM is the people and I miss that to some extent. However, I felt that the camaraderie declined over the years with most people having become itinerant workers. I am now the business manager for a small charity which I have found quite a contrast as I am responsible for everything including HR, finance, estates, fund raising, catering, etc. I am having a great time - just being able to make decisions without any bureaucracy is wonderful. On the other hand, the constant struggle to acquire the resources needed to keep going is not something that I ever had to worry about at IBM.
    • IBM Research used to be a great place to work - while it lasted (till approximately 1997). I observed its decline, and finally left in 2000. I miss some colleagues, for sure.
    • I don't miss claim codes, billable utilization, unhappy customers, untrustworthy managers, and working alone. I do miss the great VPN, the ability to reach out and find good people to work with, and the chance to do great things.
  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM Anonymous in Madrid (Spain): (Current Employee) “Not the place for people seeking for a fast career progression.” Pros: Good company for life balance. Relaxed working atmosphere. Good global resources and experts available. Mentoring program, assessment about your performance. Cons: Low salaries and non-existent promotions. Projects mainly related to system integration, little real consulting work. You are usually placed in a long term project with little chances to move to a more interesting opportunity. Not the place for people with professional ambition or willingness to have a fast career progression. Advice to Senior Management: Look at the profile of employees and try to make the most of it, lack of motivation is common because workers have the feeling that they are not progressing in their careers.
    • IBM Anonymous in Sao Paulo, Sao Paulo (Brazil): (Current Employee) “A people based company that doesn't care about them.” Pros: Great place to learn new skills. Cons: 3 jobs, 1 salary. Little work/life balance. Advice to Senior Management: You are loosing everyone that matters to the business, stop focusing only on numbers and take care of your people.
    • IBM Tax Attorney in Armonk, NY: (Current Employee) “I was so excited to work at IBM, too bad it didn't live up to expectations.” Pros: Great resources and smart people Cons: Terrible work environment. Misleading description of work hired to do. Advice to Senior Management: Stop running the IBM tax department like a Big 4 Accounting firm. There is a reason people leave public accounting to work in a corporate environment.
    • IBM Operations Manager in London, England (United Kingdom): (Current Employee) “Pros & Cons” Pros: Flexible working I work with a great team. Cons: Salaries and career progression - very poor. They spend all there money bringing in new people and don't reward the people they already have. Advice to Senior Management: Promote from within and reward your teams.
    • IBM Manager: (Current Employee) “Going rapidly downhill.” Pros: Flexible working conditions - e.g. work from home. Cons: No actual strategy on running a world class business except offshoring (that's cost mitigation, not a strategy!) Disrespect to staff (substandard pay compared to other similar employer, removal of tea and coffee from offices!, no pay rises/awards, no pay rises even when promoted moving up a band!) Maintaining profit targets not through growth of business/technical excellence but by removing employee benefits (see above). Advice to Senior Management: Develop a strategy that will grow our business and reduce costs through technical excellence. Offshoring is fine if that is part of the strategy, but when that is your own strategy to hit your profit targets, then you are driving IBM into the ground.
  • Forbes: Winning Over The Customer At 35,000 Feet. By Louis Saint-Cyr, vice president of in-flight services at Hawaiian Airlines. Excerpts: A company's customer service strategy is without a doubt its most important--but often its most overlooked--strategy. Like letter writing or dressing up for dinner, it has become a dying art. This isn't to say that companies don't invest heavily in customer service through insightful customer relationship management (CRM) technologies or other gadgetry. But I find that the best companies out there tend to be those that give their customer-facing staff the most tools to work with and carte blanche to use them. ...

    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.

  • CNET: Intel's Andy Grove on manufacturing in America. Excerpts: Among the scores of fabless chip companies and product design houses in Silicon Valley, Intel is a standout. It's an American high-tech company that not only creates but builds some of the most sophisticated tech products in the world here. That contrasts with others, like Apple and Hewlett-Packard, that consign virtually all product manufacturing and assembly abroad. Last week, I asked Intel co-founder Andy Grove how the chipmaker became one of the last, great high-tech manufacturing giants in the U.S. and why many Silicon Valley icons haven't done the same. Grove was Intel's chairman from May 1997 to May 2005 and served as chief executive from 1987 to 1998. ...

    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.

  • Human Resource Executive Online: Reassessing Work/Life Balance. As a result of the recession, employees are re-evaluating what work really means to them, according to new academic research, and the results aren't pretty. But therein lies an opportunity for HR to step up and make a difference, experts say. By Michael O'Brien. Excerpts: Widespread layoffs and other job changes associated with the latest recession have caused workers to question career-related sacrifices, including time away from family, less leisure time and fewer self-improvement activities, according to new research from Florida State University. Among the more interesting findings, more than one-third (37 percent) of those surveyed say the recession caused them to think work isn't as important as it once was "in the grand scheme of things," and nearly one-quarter (23 percent) say they became more aware of "an over-commitment to work at the expense of family and recreation." ...

    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.

  • Wall Street Journal: The Perfect Stimulus: Bad Management. If no one had a hamster-brained sociopath for a boss, who would start new businesses? By Dave Barry. Excerpts: One of my earliest childhood jobs involved shoveling manure at my uncle's dairy farm in upstate New York. Things were going well until my uncle explained that no matter how well I performed, I would never be promoted to farmer. Or even cow. I had hit the manure ceiling. I consider that experience my first economic stimulus package—the unwelcome realization that my current job was a dead end. While my classmates were building snowmen with carrot noses (mostly the girls) and carrot genitalia (mostly the boys), I started to do some serious career planning about how to get out of the fecal relocation profession and into the warm embrace of a loving corporation. I studied hard, and I earned money for college by mowing lawns, shoveling snow, shoveling even more manure, and (my personal favorite) shoveling frozen manure covered with snow. I saved my meager funds, and with the help of my parents, who both took extra jobs, plus a few scholarships, I clawed my way into college.

    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.

  • Wall Street Journal: Human-Resources Executives Say Reviews Are Off the Mark. By Joe Light. Excerpts: The performance review systems at companies have gotten so bad that companies might be better served by doing away with them altogether, suggests Samuel Culbert, management professor at University of California- Los Angeles and author of "Get Rid of the Performance Review!" "It causes fear and intimidation and prevents people from engaging one another authentically," he says.

    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."

    Selected reader comments concerning this article follow:

    • In the typical review, there are two parties -- the manager and the employee. The poor performance review automatically assumes that the employee is the problem and not the manager. I've seen so many cases of the reverse being true that it brings the entire process into question. As one respondent said, numerical scales only make it seem as though the process is objective. This it totally bogus.
    • Good topic! I have been on both sides of the process in a Fortune 500 company. Too often, the review is perceived by the reviewee as a necessary HR step in the process of complying with regs in the case someone needs to be fired. It is seldom tied to proactive programs to help employees improve.

      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.

    • It's all a game. Our reviews were done by our "immediate" supervisors. They would rate us on different categories and then submit them to their bosses. These bosses would then sit down and reshuffle the "grades" based on others impressions. They may have had NO contact with the individual they were evaluating. However, it did impact those of us that got reviewed. It is a bogus system, and like others have said, rewards the teachers pets and penalizes the others. Very glad that I am no longer under this ridiculous system. BTW, these managers did NOT care, they just wanted to get it over with so they could move on.
    • The joke is when HR tells you, that there is no bell curve and that you should grade each person as open and honestly as you see it, and than they come back and tell you to adjust your ratings, because there are too many A's, or B's. Or, that you can't be honest with the employee about weaknesses.

      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.

  • Harvard Business Review: Why Corporate Leaders Won't Abolish Performance Reviews. By Samuel Culbert. Excerpts: Let me pose a not-so-hypothetical question. Assume there was a corporate practice that damaged the relationship between bosses and their subordinates, kept employees from speaking honestly about themselves and company practices, helped bad managers be bad managers and hindered good managers from being good managers, and ultimately hurt the bottom line. Further assume that there wasn't a shred of evidence that anything good came out of this practice.

    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...

  • Ivey Business Journal: Why Corporate Leaders Block the Candor They Say They Want. By Samuel A. Culbert. Excerpts: How often do we hear our corporate leaders hold that up as a principle they cherish? It’s what keeps us honest and informed, those at the top say. It reflects our willingness to listen and learn, a testament to our belief that our employees are our most valuable assets, the driving force for company growth. It is the natural extension of an open-door policy, where employees offer their opinions and bosses listen. Ah, if only it were so. ...

    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.

    1. They purport to be objective. but if that was true, why do studies show that when employees change bosses, their evaluations also change dramatically?
    2. The metrics used are arbitrary and too often the same for everybody – regardless of the job or the style and approach of the person being evaluated.
    3. Reviews are often marked on a curve. But that forces bosses to find weaknesses that don't exist, because they can't give everybody good grades, even if they wanted to. And the curve means that employees are pitted against one another, undermining the notion of teamwork.
    4. Only one thing counts: the boss's subjective opinion. That means the review depends largely on the personal chemistry between the boss and subordinate.
    5. Reviews are justified on two bogus grounds: pay and liability. But pay is determined by market forces, not performance. And companies don't need performance reviews to fire employees.
    6. They're bad management, relying on finding weaknesses rather than playing to strengths.
    7. They allow managers to get away with bad behavior, because they can hide behind their "objective" performance reviews rather than face their own shortcomings.
    8. They keep employees from growing as employees, since they are afraid to reveal their own deficiencies.
    9. They force employees to tell managers what they want to hear, rather than what they really think will improve company results.
    10. They mean that problems are discussed after they happen – rather than before they appear.

  • Visual tour: A brief history of computer displays. From blinking lights and punch cards to LCDs and 3D flat panels, we trace the 70-year history of the tech that users rely on to see what a computer is doing. By Benj Edwards.
  • Bloomberg BusinessWeek: How Panera Bread Kept Rising Through the Recession. Executive Chairman Ronald Shaich tells Businessweek.com the chain prospered by adding staff and boosting food quality while competitors cut back. Excerpts: Since the end of 2007, about the time the U.S. recession began, Panera Bread (PNRA) has boosted revenue 24 percent and added 191 café-bakeries to its 1,421-unit chain—all while increasing its workforce by 20 percent with the hiring of 4,661 extra workers. The U.S. restaurant industry, meanwhile, saw same-store sales drop 2 percent last year, including a 4.7 percent decline at casual restaurants, according to a Restaurant Research analysis of chains with more than $1 billion in sales. Since the start of 2008, the Standard & Poor's Midcap Restaurants index is up 4 percent, while shares of Panera, which is based in Richmond Heights, Mo. near St. Louis, are up 161 percent, trading less than a dollar below their Oct. 22 record of 94.40. ,,,

    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.

  • Newsweek: America the Ignorant. Silly Things We Believe About Witches, Obama, and More.
  • Wall Street Journal: Google to Give Staff 10% Raise. Excerpts: By Amir Efrati and Scott Morrison. Excerpts: Moving to plug the defection of staff to competitors, Google Inc. is giving a 10% raise to all of its 23,000 employees, according to people familiar with the matter. The raise, which will be given to executives and staff across the globe, is effective in January. ...

    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."

  • Yahoo! IBM Employee Issues message board: "Re: Google to Give Staff 10% Raise" by "freemoffat". Full excerpt: "Google is stuffing a $1,000 bonus into the holiday stocking of each employee this year as well as a minimum 10% raise for 2011, Business Insider reports." Oh, and Google is paying the taxes on the $1,000 so that workers will be able to keep the whole thing. In comparison, IBM cuts Sat/Sun pay, cans the employee "Thanks" program, continues to off-shore US jobs.
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 11/07/10: "I just saw the following report and am disgusted that IBM is considered in the top 10 of working mother-friendly employers. This is far from the truth. What a joke!" I would agree with you. The working moms that I know all hate their jobs at IBM and are worried about getting laid off. Frankly, the way the mom is holding her baby in that pic as she fiddles with her cell phone makes me think that I would not want to be on this list. That poor kid looks like he/she could fall any moment. It reminds me of the pic of Britney Spears holding her kid while she fumbles with her Starbuck Vente Latte. What a joke is right. -Shocked dad-
    • Comment 11/07/10: -RAed in 10- I hear ya! Let's see if the new Republican controlled House passes a bill cutting H1B visas. That will be the only way to preserve more jobs in the USA. Sammy can't outsource all of the USA IBMers just yet. -anonymous-
    • Comment 11/08/10: My manager called to say that there is a Resource Action taking place today in ITD. I work in a dept of project managers. I was not selected, but he said that some people in our dept are. The cuts are across ITD. He would not give any numbers or percentages. -anonymous-
    • Comment 11/08/10: I was just called, I've been cut. Between GR and GDF, I figured it would happen eventually. -John-
    • Comment 11/08/10: I was told this morning by my manager that I got cut. Worked for IBM 7 years with numerous OT, hardwork. -7-year IBMer- Alliance Reply: We are sorry for your job loss. We've seen so many good IBMers fired, just like you. Are you an Alliance member? If not, did you ever think being fired, couldn't happen to you? This is why we continue to repeat ourselves, ad nauseam: Organize organize organize! IBMers need to join Alliance@IBM and then get to work gathering your co-workers to join. Organize openly, publicly. Show IBM Executives that there ARE many IBMers that want a contract and a voice in the workplace. Grow the membership, grow the numbers until we have a majority. It is the only answer, other than quitting or letting them fire you. If unions go away because no one believes in a contract for employees; then there will be no way for employees to ever truly have a voice in their workplace. Who here thinks that will be good?
    • Comment 11/09/10: Was cut today in IBM Canada. Part of GDF, manager didn't say much. Indicated HR took PBC into consideration. 2 years ago I disputed my PBC result....was told just to accept it, wouldn't matter...guess it came back. Anyway with GDF knew it was a matter of time. 12 years with the company...but it has changed for the worse...not a good or productive workplace any longer. -ibm canada-
    • Comment 11/09/10: Hi I am an IBM contractor, and I am sorry for all of you guys, but you should get organized and pass a law saying outsourcing should be illegal, should be treated the same way as hiring illegals -forzan-
    • Comment 11/10/10: "Found out this AM in PBC discussion with mgr that HR is present at the final department wide rollup. Why? -Anon- Alliance Reply: Can you say 'RA List'? " The Alliance reply is right. IBM has had several age discrimination lawsuits in the past with these RAs and as far as I know settled out of court. The problem was the distribution of RAed employees was skewed to the older employee population. You better believe that HR will be scrubbing the numbers to make it a normal "bell shaped curve" distribution. Sick, I know. But IBM has become a sick company. Each time IBM has an RA those are people they are putting on the unemployment line. The US economy is already in an economic crisis. Don't let IBM fuel the fire with this abuse and misuse of power. Sammy is doing it just to make the quarterly bottom line look better for Wall Street. A union would help put a stop to this insanity. -on the Titanic-
    • Comment 11/10/10: Was notified 09/11/2010 that I was RA'ed. Was not given a opportunity to find another job within IBM. Mgr said it was I was not contributing as much since GDF came into effect and our roles have been expanded to take on more work without the training needed. I was doing fine in the previous role where my skills was utilized in the area I was trained and had experience. GDF is really a bad idea that will be the down fall of my unit. -Anonymous-
    • Comment 11/11/10: To those about to be RAed or thinking that being RAed is not that bad: Open enrollment for medical COBRA after your severance is over is over $1000 a month for a family of four or more. But IBM can't afford to pay in any more since they need money for executive bonuses and stock buybacks. IBM is sick. It can make you very unhealthy too. If you have a union contract it would be less per month. -beamerhealth-
    • Comment 11/11/10: Outsourcing can probably not be made illegal, but it can be made more expensive. Severance packages in Europe are larger for long-term employees. I've even heard as much as 2 years pay for some countries. Both EU rules and UNIONS work to protect worker rights. You can bet that Sam and his cronies would layoff very few of us if it cost them 2 years pay. He's looking for the quick turnaround... and you can't get short-term cost savings from laying off a European. That said, more contractors are now being hired in Europe because THEY still can be laid off with relative impunity. So much that Sam does is to tweak short-term profits... after all he and his cronies reap millions off the misery of thousands of the 1st world IBMers without Union or government protection.

      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-

    • Comment 11/11/10: @titanic - that just goes to show that performance, for the most part, means absolutely nothing when it comes to RAs....so if the company needs a yellow male in their 20s from dept XYZ to layoff, and you're the only one, sorry Charlie.....sure does suck. -Follower-
    • Comment 11/12/10: Dear -ibm canada- and other Canadian RA's don't feel bad as I was cut (consultant not renewed) in IBM Canada ITD Nov 8th. I too knew with GDF it was a matter of time and yes this place has changed for the worse... Funny thing is my group has been so cut that now they are hitting high rate consultants such as myself who billed more then IBM willing to pay. Thankfully I saw the writing on the wall as FTE's were walked out the door over the last year and had a gig lined up... It was only a matter of time before consultants got it too when there was no longer any FTE's left... -Buh-bye-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
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  • Newsweek: Repeal and Replace? Not so fast. An insurance-company defector explains why the most controversial provision of the health-care law will survive. By Michael Reynolds. Excerpts: Conservatives who voted for congressional candidates because they pledged to repeal and replace the health-care-reform law are in for a rude awakening. Once those newly elected members of Congress have a little talk with the insurance industry’s lobbyists and executives, they will back off from that pledge. They will go through the motions, of course. They’ll hold hearings and take to the floor of both Houses to rail against the new law, and they’ll probably even introduce a bill to repeal it with much fanfare—but it will all be for show. That’s because health insurers, one of Republican candidates’ biggest and most reliable benefactors—the industry contributed three times as much money to Republicans as to Democrats since January—can’t survive without it.

    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.)

  • New York Times: High-Risk Insurance Pools Are Attracting Few. By Kevin Sack. Excerpts: After the health care law passed, concerns emerged immediately that a $5 billion appropriation would not be nearly enough to cover the hordes expected to enroll in a network of new insurance pools for people with pre-existing conditions. The government’s health care actuary projected that hundreds of thousands of otherwise uninsurable people would rush to gain coverage this year, and that the money would be exhausted by 2012.

    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.

  • Washington Post op-ed: Boehner's health delusion. By Richard Cohen. Excerpts: With a John Boehner speakership fast approaching, I dutifully read up on the man. I learned he is a Midwestern fellow, born (like us all) into the virtuous lower middle class, one of 12 siblings and a man whose early career, in an unironic homage to "The Graduate," was in plastics. What I did not know - what was missing entirely from my reading - is that he might be French.

    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.

  • Kaiser Health News: CDC Report: 50 Million Americans Uninsured. Excerpts: "According to a new report by the Centers for Disease Control and Prevention, 49.9 million people ages 18 to 64," or about 26.2 percent of the adult population, "had no medical coverage for at least part of the past 12 months. … Moreover, when children 17 and under are factored in, the number of Americans uninsured for at least part of a year span numbered 59.1 million." Most people over age 64 have "universal coverage, thanks to Medicare," but older adults who skip doctor's visits because they lack insurance "are sicker when they reach 65," which "further taxes Medicare." The silver lining: "Public programs such as Medicaid and State Children's Health Insurance Program have reduced the number of children without medical insurance from ten million two years ago to 8.7 million"

    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".

  • New York Times: Some Companies Shift Health Costs to Better-Paid. By Reed Abelson. Excerpts: With health care costs climbing even higher during this enrollment season, more employers are adopting a tiered system to pass on the bulk of those costs to their employees by assigning bigger contributions to workers in top salary brackets and offering some relief to workers who make less money. For years, employees have seen what they pay toward health care go up as companies ask them to contribute more to premiums and deductibles. But now, as people enroll in health plans for the coming year, the sticker shock is more jolting than ever because so many companies are passing on to their workers most, if not all, of the higher costs. ...

    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.”

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: Our Banana Republic. By Nicholas D. Kristof. Excerpts: In my reporting, I regularly travel to banana republics notorious for their inequality. In some of these plutocracies, the richest 1 percent of the population gobbles up 20 percent of the national pie.

    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.

  • truthout: Tax System Favors Wealth Over Work. By Gerald E. Scorse. Excerpts: Tea Partiers rage against taxes and say they’re too high. Wrong, says billionaire Warren Buffett: on the rich, they’re too low. The tax code holds the answer to this standoff, and the code backs Buffett. Taxes may be the bane of the Tea Party, but they’re a relative boon for the wealthy. Let’s look at some of the ways America’s tax system keeps Warren Buffett’s fortune in Warren Buffet’s hands.

    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.

  • McClatchy Newspapers, courtesy of truthout: GOP: No Compromise on Tax Cut for Wealthiest Taxpayers. By Renee Schoof. Excerpts: Republican leaders in both the House and the Senate said Sunday there would be no compromise with Democrats on whether to extend Bush-era tax cuts for the nation's wealthiest taxpayers. President Barack Obama has said he wants to extend the tax cuts for taxpayers with a combined annual income of less than $250,000, but that the cuts should be eliminated for people making more than that. He's suggested there might be room for compromise in discussions with Republicans on other tax issues.

    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.

  • New York Times op-ed: The Impossible Dream. By Bob Herbert. Excerpts: One of the most frustrating tendencies of mainstream leaders in the United States is their willingness, year after debilitating year, to embrace policies that have no hope of succeeding. ...

    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.

  • Washington Post: How to truly honor Veterans Day? Give them more jobs.
  • alterNet: How the Wealthy Organized to Rip Everyone Else off -- And What You Can Do to Stop It. The policies that benefit a tiny fraction of Americans resulted from a long-concerted effort by the wealthy to thwart laws that might give the rest of Americans a chance. By Maria Armoudian. Excerpts: LIKE THIS ARTICLE ? Join our mailing list: Sign up to stay up to date on the latest headlines via email. For years, wealth has been increasingly concentrated at the very top of the income pyramid with the super-rich owning a larger and larger share of wealth, benefits and power. But while much attention has been focused on fixing a flawed economy, other experts suggest the problem would be better addressed by examining the politics and policies behind the phenomenon. Those policies that continue to benefit a tiny fraction of Americans resulted from a long-concerted effort by the very wealthy who organized campaigns to thwart those laws that might give the rest of Americans a chance. The history and policies are detailed in a book by professors Jacob Hacker and Paul Pierson titled Winner Take All Politics: How Washington Made the Rich Richer and Turned its Back on the Middle Class. ...

    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.

  • truthout: Soft Landing for Bankers, Hard Times for Everyone Else. By Jim Hightower. Excerpts: I've seen some truly amazing feats of magic, but here's one that beats them all. Right before your eyes, this thing rises into the air on its own, with no wires or mechanical devices giving it lift. And it hovers there effortlessly. But it's not magic, for magic is an illusion, and this gravity-defying phenomenon of perpetual levitation happens to be real. What is this "it" that keeps floating up, up, up? The annual bonuses paid to Wall Street's top bankers.

    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.

  • BuzzFlash: Senator Bernie Sanders Denounces Proposed Cuts on Social Security and Medicare. Full excerpt: "The Simpson-Bowles deficit reduction plan is extremely disappointing and something that should be vigorously opposed by the American people. The huge increase in the national debt in recent years was caused by two unpaid wars, tax breaks for the wealthy, a Medicare prescription drug bill written by the pharmaceutical industry, and the Wall Street bailout. Unlike Social Security, none of these proposals were paid for. Not only has Social Security not contributed a dime to the deficit, it has a $2.6 trillion surplus.

    "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."

  • New York Times op-ed: The Hijacked Commission. By Paul Krugman. Excerpts: Count me among those who always believed that President Obama made a big mistake when he created the National Commission on Fiscal Responsibility and Reform — a supposedly bipartisan panel charged with coming up with solutions to the nation’s long-run fiscal problems. It seemed obvious, as soon as the commission’s membership was announced, that “bipartisanship” would mean what it so often does in Washington: a compromise between the center-right and the hard-right.

    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.

  • truthout: Businesses Do Not Create Jobs. By Dave Johnson. Excerpts: Businesses do not create jobs. In fact, the way our economy is structured the incentive is for businesses to get rid of as many jobs as they can.

    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.

  • New York Times op-ed: Who Will Stand Up to the Superrich? By Frank Rich. Excerpts: The wealthy Americans we should worry about instead are the ones who implicitly won the election — those who take far more from America than they give back. They were not on the ballot, and most of them are not household names. Unlike Whitman and the other defeated self-financing candidates, they are all but certain to cash in on the Nov. 2 results. There’s no one in Washington in either party with the fortitude to try to stop them from grabbing anything that’s not nailed down.

    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.

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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