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Highlights—April 23, 2011

  • Forbes: IBM Q1 Tops Street Estimates; Hikes Full Year Forecast. By Eric Savitz. Excerpt: For the quarter, Big Blue reported revenue of $24.6 billion, up 8% from a year ago, or 5% adjusted for currency, and ahead of the Street at $24.02 billion. Non-GAAP profits of $2.41 a share were ahead of the Street at $2.30. Adjusted for currency, it was the biggest Q1 revenue increase for the company in 10 years.
  • The Register (United Kingdom): Hardware boom boosts IBM in Q1. Software, services keep the dollars rollin'. By Timothy Prickett Morgan. Excerpts: A bullish hardware upgrade cycle coming out of the Great Recession in the Western economies and continuing booms in several dozen growth markets around the globe helped IBM boost its revenues in the first quarter of 2011 by 7.7 per cent, to $24.6bn. An ever-weakening US dollar didn't hurt Big Blue's books, either, since a large portion of the company's sales are overseas. Real revenue growth was on the order of five per cent, as reckoned in local currencies in the 170 countries where IBM does business.

    Net income grew faster than sales in the first quarter, which is something IBM works hard to engineer each quarter through continuous share buybacks, "workforce rebalancing," automation, and supply chain wringing. Net income was up 10.1 per cent, to $2.86bn, in the quarter, and earnings per share was up 17 per cent, to $2.34. ...

    IBM's Software Group continues to be the profit engine, of course, with sales up 10 per cent, to $5.3bn. Thanks to organic growth with application servers and integration products and the acquisition of Sterling Commerce, Unica, and others, the company's WebSphere branded products had a crazy 51 per cent growth spurt in the first quarter. ...

    If software is the profit engine at Big Blue, services is the revenue engine and even with lower gross margins than even hardware, this people-intensive business nonetheless throws off plenty of cash just from its sheer size.

    Global Services represented $14.6bn in revenues in the first quarter for IBM, up six per cent from the year ago period. Global Technology Services – where IBMers manage your technology, either directly or through outsourcing – accounted for $9.86bn of that, with Global Business Services – where IBMers run your applications on Big Blue's own iron, integrate your systems, or mess around with your business processes – accounting for $4.71bn of that.

    Wall Street was a little freaked out on the call with Loughridge that services signings had plummeted 18 per cent in the quarter, and IBM's CFO did a lot of singing and dancing to try to convince them there was nothing to worry about. IBM had a services backlog of $142bn as the first quarter came to an end, an increase of $8bn as reported but only up $1.5bn on a year-on-year basis if you look at it on a constant-currency basis. ...

    Don't expect Big Blue to make any big bang acquisitions. Even if it wanted to, it needs the cash to keep engineering that EPS growth. Speaking of which, business was so good in the first quarter that IBM upped its expected operating EPS for 2011 by 15 cents to $13.15.

  • Wall Street Journal: Microsoft to Boost Cash Pay for Employees. By Nick Wingfield. Excerpts: Microsoft Corp. plans to sweeten pay for its workers by increasing their compensation and shifting more of it to cash from stock, as the technology stalwart faces fierce competition for talent from Google Inc., Facebook Inc. and other companies. In an email sent Thursday morning to Microsoft employees, Chief Executive Steve Ballmer said Microsoft will increase compensation for specific portions of Microsoft's staff "where the market has moved the most," including junior and mid-level workers in research and development, all mid-level employees and workers in certain geographies. As part of the changes, which will occur this September, Microsoft will provide more up-front cash to all of its employees by shifting a portion of their stock award targets into their base salaries.

    Microsoft also said it will increase funding for its bonus and stock awards so it can better reward top performers. It now aims to deliver 100% or more of those forms of compensation to 80% of the company's eligible employees, rather than only about 50% of employees in prior years.

    "These changes represent the most significant investment in overall compensation we have ever made," Mr. Ballmer said in the email, a copy of which was obtained by The Wall Street Journal.

    The boost in compensation for selected portions of the company show how much pressure Microsoft is under to hold onto talented employees, especially software developers. The pressure is coming from Facebook and other closely held companies that can offer the prospect of potential riches through future public stock offerings, as well as more established publicly held companies like Salesforce.com Inc., VMware Inc. and Google.

    A selected reader comment (possibly written by an IBM executive?) follows:

    I am surprised that they are not moving these jobs offshore. It would be much cheaper. I guess they have become set in their ways and find protecting their employees more important than serving the interests of their shareholders. First sign of a declining business is not doing what it takes to be competitive. This might explain Vista and Windows Mobile, too.
  • USA Today: Tech jobs boom like it's 1999. By Jon Swartz. Excerpts: Tech workers like Mersy are coveted commodities as the high-tech industry undergoes its biggest hiring binge in more than a decade. Not since the dot-com bubble of the early 2000s has competition been so fierce. Would-be employees are being enticed with fat contracts, hefty bonuses and such freebies as iPads, meals, sporting events and shuttle services. These and other perks are in play to hook top talent in engineering, social media, website development, product design and management.

    Many companies are going gangbusters with billboards in the San Francisco Bay Area — such as Groupon's "Do Something Massive" and Skype's "Embrace Your True Calling" — to attract talent. The signs include links to available jobs. ...

    Jobs are so plentiful in Silicon Valley these days, that it's more eye-opening when companies are retrenching rather than expanding. Apple, Google, Facebook and others continue to hire, as they did during the worst of the economic downturn. During its earnings call last week, Google said it added 1,900 jobs in its recently completed fiscal first quarter. "It's a money war for engineers," says Dave MacKeen, CEO of Eliassen Group, one of the largest tech-staffing firms in the Northeast. It works with Fortune 500 companies.

  • Vault: Why Companies Should Put Employees First. Excerpts: Generous salaries; 401(k) matching; health and dental plans, even for part-time employees; hundreds of hours of training and employee development; a world without layoffs, where team members share sacrifice to save colleagues' jobs when times are hard. No, that's not a list of niceties from a bygone age: it's the everyday reality of life working for the Container Store, according to a recent CBS Sunday Morning report on the company.

    The firm, run by Chairman and CEO Kip Tindell, pays sales associates up to $46,000—more than double the average wage for retail workers, according to BLS data. It also offers health care benefits for all employees, and survived the worst of the recession without having to resort to layoffs—although salaries were frozen and 401(k) matches suspended for a couple of years.

    As Tindell put it in the Sunday Morning segment, "you can't go around calling yourself an employee-first culture and then lay people off." ...

    Look again at the list at the top: there are many companies currently in business that could put those things into effect, if they simply made the choice to. And if they did, at a single stroke they'd create a workforce that was more motivated and engaged, better at their jobs, and significantly more likely to remain with the organization for an extended period of time.

    Instead, many major employers choose to pay marginal salaries to workers on the lowest rungs of the career ladder, eschew benefits in the name of cost-saving, and give little thought to training or development. And, as they saying goes, most of the time those companies get what they pay for: workers with little sense of attachment to the company or its goals.

    A reader comment follows:

    Cost cutting's easier than investment. It may be a sad reflection on our times, but cutting costs delivers results fast. You can see the financial payoff immediately. Investing in staff - through training, better conditions, et cetera - has an up front cost and only delivers financial benefits after some time. There is nothing strange about this: there is always a delay between the time an investment is made and the time it delivers. It requires a longer term outlook than some firms are willing to allow for, unfortunately.
  • Wall Street Journal: Big U.S. Firms Shift Hiring Abroad. Work Forces Shrink at Home, Sharpening Debate on Economic Impact of Globalization. By David Wessel. Excerpts: U.S. multinational corporations, the big brand-name companies that employ a fifth of all American workers, have been hiring abroad while cutting back at home, sharpening the debate over globalization's effect on the U.S. economy. The companies cut their work forces in the U.S. by 2.9 million during the 2000s while increasing employment overseas by 2.4 million, new data from the U.S. Commerce Department show. That's a big switch from the 1990s, when they added jobs everywhere: 4.4 million in the U.S. and 2.7 million abroad. ...

    The data also underscore the vulnerability of the U.S. economy, particularly at a time when unemployment is high and wages aren't rising. Jobs at multinationals tend to pay above-average wages and, for decades, sustained the American middle class. ...

    A decade ago, Mr. Slaughter, who consults for several big companies and trade associations, drew attention with his observation that "for every one job that U.S. multinationals created abroad...they created nearly two U.S. jobs in their [U.S.-based] parents." That was true in the 1990s, he says. It is no longer. ...

    The growth of their overseas work forces is a sensitive point for U.S. companies. Many of them don't disclose how many of their workers are abroad. And some who do won't talk about it. "We will decline to comment on future hiring or head-count numbers," says Kimberly Pineda, director of corporate public relations for Oracle Corp. ...

    (Editor's note: Ending a decades long practice, IBM no longer breaks out its employment numbers by country.)

    Microsoft is an exception. It cut its head count globally last year, but over the past five years, the software giant has added more jobs in the U.S. (15,300) than abroad (13,000). About 60% of Microsoft's employees are in the U.S.

  • truthOut: Top "US" Corporations Outsourced More Than 2.4 Million American Jobs Over the Last Decade. By Jaid Zilani. Excerpts: A Washington Post/ABC News poll released this morning finds that 44 percent, a plurality, of Americans think the economy is getting worse, rather than staying the same or getting better. With unemployment hovering around 9.6 percent while economic inequality is at levels not seen since the Depression, many Americans feel as if the economy is leaving them behind.

    The Wall Street Journal reports today that Corporate America certainly isn't doing its part to help bring America out of its economic malaise. The paper surveyed employment data by some of the nation's largest corporations — General Electric, Caterpillar, Microsoft, Wal-Mart, Chevron, Cisco, Intel, Stanley Works, Merck, United Technologies, and Oracle — and found that they cut their workforces by 2.9 million people over the last decade while hiring 2.4 million people overseas. ...

    As you can see from the chart, the economic recession has had little impact on Corporate America's patriotism. In fact, in 2009, representatives of many of the nation's most powerful corporations attended the "2009 Strategic Outsourcing Conference" to talk about how to send American jobs overseas. Conference organizers polled the more than 70 senior executives who attended the conference about the behavior of their companies in response to the recession. The majority said their companies increased outsourcing in response to the downturn, with only 9 percent saying they terminated some outsourcing agreements.

    Another question asked of the executives found that the top reason for companies to outsource was to "reduce operating costs" (46 percent of respondents). Only 12 percent of respondents said their reason for outsourcing was "access to world class capabilities." This means companies are outsourcing to save themselves money, not make better products.

  • Vermont Journalism Trust opinion: Davis: IBM bullies the state of Vermont, again. Excerpts: We have developed a zero tolerance policy for schoolyard bullies but when it comes to the place where laws are made bullying is alive and well. Just ask anyone who has had to deal with IBM lately. ...

    History has taught us that when IBM wants something to happen or not to happen they get their way. They don't like the current health care bill that is on a fast track to the governor's desk so they have put together a coalition of large business owners to turn the bill into something they can live with.

    Their rhetoric is right out of the right-wing playbook. They say they are in favor of health care reform and recognize that it needs to happen. Then they go on to detail all of things wrong with the bill, which is just about every major piece of it.

    The IBM coalition is lobbying (or is it bullying?) the governor and the legislature to make sure the health care bill turns out the way they want it. They may say that are only looking out for what is best for Vermonters, but what they really want is to protect their bottom line at all costs. Just ask the former and current employees who made it clear that IBM management does not speak for them when it comes to health care reform. ...

    IBM could get out of the business of being an insurance company and concentrate on their ability to generate even more than $4.81 billion a year in profit. Instead of being Vermont's biggest bully they could lead the charge to create the largest and most diverse insurance pool the state has ever seen so that our new form of insurance will be financially viable for all Vermonters, not just IBM.

  • Leagle, Inc.: DAVID GERAS, Plaintiff-Appellant, v. INTERNATIONAL BUSINESS MACHINES CORPORATION, Defendant-Appellee. Excerpts: Plaintiff David Geras, a former employee of Defendant IBM, appeals from the district court's Rule 12(b)(6) dismissal of his contract claims against IBM for commission payments and separation pay. The district court concluded that Plaintiff's contract claim for commission payments failed because IBM's employee incentive plan did not constitute an enforceable contract. As for Plaintiff's claim for separation pay, the court concluded that Plaintiff was not entitled to this pay because he had not complied with the requirement to sign a release of claims. This appeal followed.

    Background: In his complaint, Plaintiff alleged he worked for IBM from January 2000 until August 15, 2007, and IBM owed him $156,071.98 for commissions accrued in the month of June 2007 and recorded on IBM's web-based Field Management System. He also alleged IBM failed to pay him $35,831.60 in separation pay when he left his employment.

    IBM then filed a motion to dismiss, to which it attached the Field Management System letter explaining the incentive plan for the relevant employment period. After setting out the plan details, this incentive letter stated:

    Right to Modify or Cancel: The Incentive Plan is described on the Internal Incentive Plan Website . . ., and you should rely on the details provided within the Website for up-to-date information. The Plan does not constitute an express or implied contract or a promise by IBM to make any distributions under it. IBM reserves the right to adjust the Plan terms, including but not limited to any quotas or target incentives, or to cancel the Plan, for any individual or group of individuals, at any time during the Plan period up until any related payments have been earned under its terms. . . . Employees should make no assumptions about the impact potential Plan changes may have on their personal situations unless and until any such changes are formally announced by IBM. ...

    IBM argued the language of this letter made clear that IBM's incentive plan did not create an enforceable contractual promise to pay commissions.

    In his response to IBM's motion to dismiss, Plaintiff agreed the letter provided by IBM was the relevant document controlling his breach-of-contract claim. However, he argued the language of this letter only gave IBM the right to cancel the incentive plan or adjust the overall plan terms, while IBM had no right to simply withhold commissions for one month in the quarterly plan period. Plaintiff attached an affidavit and other evidence to his reply and argued that the district court should convert the motion to dismiss into a motion for summary judgment because the court needed to consider facts outside the pleadings.

  • Comment in Job Cuts section of the Alliance@IBM site concerning the above lawsuit: This is an abomination. IBM messes with language in everything it does, and reading the link below, it shows me that IBM has an incentive plan, but states explicitly it is under no obligation to actually pay anything under it. Excuse me? Someone works under an incentive plan, but does not know if they will ever get it? They hold up their end of the "bargain" but IBM can, at will, decide who they pay and who they stiff?

    I was in development all my years, and under none of these plans, but if I'd read that as a part of my compensation plan, I'd never have taken that job. Considering IBM is offshoring so much of development, support etc, and the majority of US employees are now sales and consulting, jobs that would fall under such incentive pay "systems" it is unconscionable that you guys (and gals) don't stand up and force the issue that if there is a compensation plan, that IBM have to abide by their end of the bargain, and can't weasel out of paying you for earning money for them.

    This one item should be a massive wake-up call for you to GET A CONTRACT! (This was not anger on my part, but incredulity after I read this court ruling) -RAed Jan 09-

    Alliance Reply: When IBM makes the rules, as in 'incentive plans', they can break those rules anytime they want. There is absolutely no legal obligation for them to adhere to those rules; since they are the ones that designed the incentive plan in the first place. You are absolutely correct: Organize and get a contract.

  • Yahoo! Finance IBM message board: IBM cutting jobs - denying employees benefits. Full excerpt: On April 20, 2011, IBM's Greenville, SC annuity servicing division suddenly told over 120 employees that they would become contract employees effective May 1, 2011. Employees were given the option of accepting 'at will' employment with Manpower with no benefits at a 'rate similar to their current salary' or be terminated with no severance pay. Enraged and shocked employees have begun talking about filing a class action law suit against IBM, convinced that Manpower will immediately terminate them and leave them with no unemployment benefits and no severance packages. IBM's Greenville employees are almost all veteran employees of legacy companies that have serviced the accounts IBM now manages for many years. Will the sudden loss of a great number of highly knowledgable employees have a negative effect on the stock?
  • Computer Sweden courtesy of Computerworld: IBM set to lose megadeal with AstraZeneca. By Marcus Jerrang and Daniel Goldberg. Excerpts: Global pharmaceuticals giant AstraZeneca, headquartered in London, is set to break off its IT outsourcing relationship with IBM, Computer Sweden and sister publication IT24 have learned.

    The US$1.4 billion deal, signed in July 2007, was supposed to be a seven-year arrangement, but now IBM is to leave AstraZeneca in 12-15 months, according to multiple sources familiar with the matter. AstraZeneca is said to have made its plans known on April 8, after several months of negotiations with IBM. ...

    According to sources, AstraZeneca has been dissatisfied with IBM for a long time. Several IBM competitors are now gearing up to compete for the $200 million a year contract and replace IBM at the pharma giant. ...

    The 2007 agreement was seen as a key win for IBM's services unit, given that it came at a time when an increasing number of large pharmaceutical companies where tapping offshore vendors for their IT needs. ...

    IBM and AstraZeneca declined to comment. "We never comment individual client relationships," said a spokesman for IBM in Sweden. "We won't give any comments on this at this time," a spokeswoman for AstraZeneca said.

  • CNN/Money: CEOs earn 343 times more than typical workers. Excerpts: In 2010, chief executives at some of the nation's largest companies earned an average of $11.4 million in total pay -- 343 times more than a typical American worker, according to the AFL-CIO. "Despite the collapse of the financial market at the hands of executives less than 3 years ago, the disparity between CEO and workers' pay has continued to grow to levels that are simply stunning," said Richard Trumka, AFL-CIO president.

    In an effort to shine a light on CEO pay, the AFL-CIO examined chief executive salaries at 299 firms traded on the S&P 500. Their compensation was up 23% in 2010, compared to 2009. AFL-CIO used Bureau of Labor Statistics wage data to define typical worker pay, which was $33,190 for all occupations in 2009, the most recent year for which data is available. ...

    9. Samuel J. Palmisano: $25.2 million. Cash compensation: $11.9 million. Stock and options: $13.3 million. Total compensation 1-yr. change: 19%.

  • Workforce Management: Young Workers Craving Defined Benefit Plans. At a time when defined benefit or pension plans are growing scarcer, they have become a more potent recruiting and retention tool. Clearly, employees still value the security the retirement plans promise, based on the results of a recent Towers Watson & Co. survey. By Patty Kujawa. Excerpts: Ed Willis, assistant vice president of compensation and benefits for Union Pacific Corp., recently ran into a new employee in the company's lobby. She had just graduated from college, and Willis wanted to talk with her about the company's defined benefit retirement plan and what it would offer her over time.

    Her response? "She said she knew exactly what it was," Willis says. "There are so many kids like her who are focused on saving." When Willis travels to some of the colleges where the Omaha, Nebraska-based railroad company recruits, prospective candidates often want to know whether a defined benefit plan is available, even if they don't completely understand the details. "They'll ask questions about it, and they know the difference between a pension plan and a 401(k)," Willis says.

    Union Pacific sees its defined benefit plan as an employee retention tool. The plan's cost is worth the value it provides in retaining well-trained employees, Willis says. "We have made cost trade-offs in other benefit areas that keep our total benefits plan value competitive." ...

    Perhaps most striking is the appeal of traditional pension plans to younger employees. In the Towers Watson study, nearly two-thirds of workers under 40 said defined benefit plans are a key factor in their decision to stay with their companies compared with only a quarter of those with defined contribution plans. ...

    Particularly as companies "move out of this recession and into more of a hiring mode, retirement benefits are becoming a factor for employees," says David Speier, senior retirement consultant in Towers Watson's Arlington, Virginia, office. "I think younger individuals are looking at their parents and seeing the struggles they are going through—having to delay retirement—and are reacting."

  • Indianapolis Star: Work/life balance key for top employers. Open communication also among primary characteristics elevating companies to top of the list. Excerpts: In an era of layoffs and budget cutbacks, the best workplaces aren't necessarily the ones with the best pay and benefits. Instead, Central Indiana's top employers are the ones offering more creative perks -- such as flexible scheduling and extra vacation days -- that help employees achieve better work/life balance.

    "The firm understands that work is not all we have to do. They encourage me to spend time with my family, and I believe they truly want me to be happy," wrote one survey respondent about Hall Render Killian Heath & Lyman, this year's top-ranked midsize company. ...

    Despite those benefits, many employers lose focus on employee satisfaction in challenging economic times -- often adopting the attitude that workers should be grateful simply to be employed, Claffey said.

    When the economy improves, however, such an attitude can prove disastrous.

    "Things pick up, and (the employees) all leave, and it's harder and more expensive to find replacements," Claffey said. "The cost of replacement is huge compared to the cost of retention, so we think having a top workplace is just the right thing to do."

  • San Francisco Chronicle: 9 Things To Know For Retiring In 2011. By Marc Davis. Excerpt: Do you plan to retire this year? Most of us, according to recent surveys, have not calculated if we'll have enough money for the long years of retirement. Prospective retirees who are financially unprepared for the costs of retirement will likely face these potentially unpleasant economic surprises: inflation, tax liabilities, uninsured medical expenses and the all-inclusive miscellaneous expenses - auto and home repairs, rent increases, appliance replacements and so forth.

    And that's just for starters. Here's a list of nine more things you should know if you plan to retire this year.

  • ZD-Net: Best job of 2011: software engineer. By Joe McKendrick. Excerpt: CareerCast.com has just published its list of the best and worst jobs of 2011, and software engineer comes out on top of a list of 200 professions. Way to go, people. According to the placement firm's "Jobs Rated" report, software engineers' jobs cover everything from the design and creation of software for everything from operating systems to cell phone apps to interactive games. The rankings were based on five core criteria: work environment, physical demands, outlook, income and stress.

    Selected reader comments concerning this article follow:

    • I doubt it. It might be hot for L1 and H1B visa holders, but now there are fewer Americans working in IT than in 2007. And this is not counting the offshore centers.
    • RE: Best job of 2011: software engineer @Linux Geek Very true, I'm an analyst for a consulting company and my IT job is to train 50 users for a US project that will be implemented in Manila... that's 50 jobs that Americans won't get SAD.
    • Well .. if it's in a survey .. then it must be true. Caution/disclaimer: Most surveys are self gratifying low cost PR BS spin reports meant to either (a) get the organizations name out there or (b) meant to put a spin on something because a decision is about to be made that impacts the data being reported on.
    • Again, what defines "Best". Seriously. Is it available positions, overall compensation, compensation per hour worked, stress levels, frequency of emergencies caused by others, job satisfaction, task enjoyment levels, etc? One person's concept of "best" is another person's concept of worst. 3200+ hours per year on average dedicated to work, unpaid travel time, and unacknowledged overtime for the average ERP Implementation Consultant (aka Software Engineer). 200+ days of the year in hotels as well. Reasonably good pay in total but a poor percentage of one's billable rate, tons of personal life sacrifice, and more physical contact from airport security than from one's spouse. The problem for the individual is "is it really greener grass elsewhere" or just frustration with what you have talking?
  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM Senior Program Manager: (Current Employee) "I gained some good experience but no longer a company to build a career with." Pros: IBM is a large company that would provide most new hires with technical skill development and experience to prepare them for their next job. Cons: IBM presents the illusion of job security and respect for the individual. Each employee is viewed as an interchangeable "resource" or object by many in management. Do not expect that exemplary performance or strong skills will translate to job security or reward.
    • IBM SDM: (Current Employee) "hated it." Pros: Decent health benefits. Could work from home. Cons: Management - oxymoron - does not exist. No potential for advance or salary increases. Expect you to work 24/7 all the time. Advice to Senior Management: get rid of current management
    • IBM Technical Support Engineer in Portsmouth, South East England, England (United Kingdom): (Current Employee) "Getting worse every year." Pros: Work/life balance good. Plenty of locations to work from and opportunities to work from home. Cons: No salary increase unless you're in the top 5%. Yearly bonus gets worse every year. Working environment driven by accountants. Advice to Senior Management: The staff are the company's biggest asset and you need to go back to that mindset. It's all about the share price these days
    • IBM Sales: (Current Employee) "Miserable!" Pros: Stable, well known name & brand. Cons: Sick company! Everything about working here is hard!! From calling IT support, which is really no support, to having a manager that knows anything about what our job is. Too much paperwork, too much CYA, not enough support to help bring in sales. Mgmt by whipping the employees. Unrealistic expectations. Mgmt doesn't care about you at all. It's all about them. Advice to Senior Management: My advice wouldn't make any difference. "We're IBM, we're big, and we control!"
    • IBM Solutions Architect in New York, NY: (Past Employee - 2010) "Mixed, great company, poor managers." Pros: Great company to work for if opportunities are given the way they are advertised. Cons: Most managers live in remote locations and small cities and towns and have a very poor self image due to which they end up poorly on interpersonal skills with people from big cities. Advice to Senior Management: Recognize worth of your employees otherwise, it does not take too long for a big ship to sink.
    • IBM Principal Consultant: (Past Employee - 2010) "My experience at IBM has been incredibly rewarding intellectually. I would still like to come back and work for IBM." Pros: As a world leader IBM has taught me a lot regarding its business, and I gained knowledge which are not in the books. Thanks to my colleagues who generously shared their knowledge and experience with me and groomed me through out my 14 years of stay at IBM. Cons: Out in the industry IBM is recognised as a technology company, they offer a lot in the field of Management Consulting. Advice to Senior Management: Please market IBM as a Top Management Consulting Firm also besides Technology.
    • IBM Anonymous: (Current Employee) "Good for young people." Pros: - progressive & flexible HR policy; - access to limitless job opportunity, HR policy facilitates job mobility; - relatively stable, one tends to see a higher proportion of long-time employees vs other companies. Cons: - Highly matrixed, decentralized decision making, sometime one feels there's no central authority to make the quick and right decisions; - Not enough knowledgeable workers, some folks just talk; - Can be too virtual, little face-to-face meetings due to globalized work environment; - Promotes work life integration, not balance. Takes a lot of getting used to. Advice to Senior Management: - be more measured on the globalization drive, a virtualized workforce does not build a sense of belonging; - restore authority to regional management, leadership gets diluted at the local management.
    • IBM Managing Consultant in Charlotte, NC: (Current Employee) "It was better many years ago." Pros: Good people to work with. Cons: Little to no training, constant pressure to bill to a client with little ability to make that happen.
    • IBM Senior Lead Advisor in Miami, FL: (Past Employee - 2010) "Very Long Hours, Pay is Not GREAT." Pros: Good if you can work from home, more flexible schedule. Cons: IBM gives you a laptop and as a result you end up taking it home. This in turn makes you check work-related messages and since everyone does the same you can get work related messages from your boss at 11pm. You work very long hours and you don't get paid for it and no time off is given in lieu of pay as a result of these long hours. They GET OUT of YOU EVERY PENNY. Advice to Senior Management: Pay better and don't overwork employees.
    • IBM Client Advocate: (Current Employee) "Not a company to work for if you think you're going to make money." Pros: Great company to start your career. Education is available; exploit it as much as you can. Exposure to customers. Cons: Poor compensation. Forced to make lateral moves. Management has no idea of what's going on. Legacy tools and resources available. Complexity of multilayer management system; your manager has no clue of what you do and compares you to colleagues who have totally different job descriptions. Advice to Senior Management: Lead by example. Enough of the "Thank-You" show us some money.
    • IBM Anonymous: (Current Employee) "Reaching $20 EPS is priority number one, you are not." Pros: Still lots of people with deep technical skill. Flexible working environment. Good salary. Interesting projects to work on. Cons: Everything and everybody is an interchangeable resource. No issues with wasting lots of your time (without compensation) to save 50 cents. Never ending process improvements that lead to more and more meaningless work for absolutely no business benefit. Relentless focus on cutting expenses instead of increasing revenue. Morale is really bad. Salary is good but other compensation (bonuses, stock etc.) has disappeared over the years. Advice to Senior Management: You can't cut costs indefinitely ... need to earn money at some point in time. Stop treating people like numbers at least not as integers. Integrity around company/personal values.
New on the Alliance@IBM Site
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  • IBM Global Union being formed! Full excerpt: A network of IBM unions worldwide, including the Alliance@IBM CWA Local 1701, will meet in Switzerland in May to form the IBM Global Union Alliance.

    For many years IBM unions, including the Alliance, have worked together as a network of information and cooperation. The new Global Union Alliance, under the umbrella of the International Metalworkers Federation (IMF) and Union Network International (UNI) takes that network to another level and will include many more IBM unions. This past year new IBM unions have formed in Bulgaria, Chile and Argentina. In a statement from the IMF and UNI about the new Global Union to IBM unions:

    As IBM has set itself up as a truly global company, trade unions also need to set up a truly global alliance cooperating to the maximum extent for the benefit of their members and IBM employees. This meeting creates an IMF/UNI Global Union Alliance at IBM of trade unions with members working for companies owned by IBM or companies in which IBM has a significant interest.

    The purpose is to express the determination/commitment of trade unions at IBM to work together at global level based on shared values and objectives to strengthen communication and cooperation and to implement action coordinated by IMF/UNI global union.

    The objectives are:

    • To engage IBM in dialog at global level.
    • To pursue agreements with IBM at global level to improve working conditions of IBM employees worldwide.
    • To raise levels of trade union membership at IBM.

    The partners of the Alliance will work together with the aim of protecting and furthering the interests of IBM employees throughout the world.

    The partners will take concrete action to enlarge the network by improving contacts with unions in countries where employees are unionized and make every effort to organize unorganized plants/locations.

    The Alliance@IBM looks forward to the forming of this new organization for IBM employees and their unions.

    As many of you know, we have lost many members due to job cuts at IBM US.

    Please help us build the American section of the new IBM Global Union Alliance. If you are not a dues paying member of the Alliance, please consider joining today at: https://afl.salsalabs.com/o/4004/donate_page/alliance-join

  • 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 4/18/11: GBS operations will likely see layoffs End of 2Q or beginning of 3Q. Don't know much more. -Anon-
    • Comment 4/19/11: From a worker in the UK. 'We were handed a sheet of paper with what the IBM employees receive, which is less than £200 a month, with a rice allowance and a laundry allowance' - An anonymous worker at Orange's Darlington office tells the Northern Echo that about 40 staff have been offered a 'generous' rice allowance to encourage them to relocate to Manila to work for service partner IBM. -anon-
    • Comment 4/19/11: Now that IBM engineered another stellar quarter by offshoring to the cheapest labor after continued cost cuts bet on more USA RAs. Sam and his cronies want to be billionaires and you folks will do that for them by not unionizing. Enjoy you 0% raise. Be wary of losing your job to an RA. -anonymous-
    • Comment 4/19/11: I second the other Anon about GBS layoffs. I work in GBS and all of the R.A. signals are there: managers behind closed doors and completely unavailable, no conference rooms available, extreme pressure to get work to India, etc etc. People are freaking out over mandatory meeting requests for tomorrow. -ANON-
    • Comment 4/20/11: There were a number of jobs cut at the software group 500 Bldg, in RTP on March 31st 2011. At least 50...could be much more. -Anonymous IBMer-
    • Comment 4/23/11: -irRational- All True! IBM doesn't valuate intellectual capital as a profit engine. IBM says their most important asset is their people. I think the only people in IBM they are referring to are those Band D and above now. These are the people that have the most to gain from a high stock price. -anonymous-
    • Comment 4/23/11: It would be nice if IBM would stop treating the rank-and-file employees like interchangeable bags of meat. It would be nice if the company would grow profits by increasing revenue, not by decreasing expenses to the point of no return. It would be nice if IBM would then get back to some form of profit sharing, which has been missing for a few years now. But these things are not going to happen any time soon. I gave up. After nearly 20 years I've decided to take my cash balance plan and my dignity and give somebody else the benefit of my experience. Internally IBM will get more and more stressed as veteran employees lose patience and move on. If the constant focus on expense cuts doesn't let up parts of IBM will start imploding. Development is extremely sensitive to this kind of pressure. I wish we didn't even have to think about needing a union. But here we are. I'd like to thank the Alliance for keeping us informed all of these years. -VotedWithMyFeet-
    • Comment 4/23/11: IBM has lost the Astrazenaca account. That is a fact. 12-15 months the account will have transitioned out. Over 1 billion dollar account. -Bye Bye Birdie-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
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  • Consumer Reports Health: What's this I hear about a plan to privatize Medicare? By Nancy Metcalf. Excerpts: The Republican plan, conceived by Rep. Paul Ryan (R-WI), chairman of the House Budget Committee and passed last week by the House on a party-line vote, would eliminate the government-run Medicare program that's been around since 1965 and replace it with private insurance that would push more costs onto Medicare recipients. It would also increase the Medicare eligibility age by two months a year starting in 2022 so that by 2033 it would be 67 instead of the current 65. ...

    When fully phased in, in 2022, the Ryan plan would give people on Medicare a voucher that they could use to buy private health insurance on a special exchange similar to the exchanges to be set up for working-age adults under the Affordable Care Act. The size of the voucher would vary according to the person's health, age, and income. Plans couldn't turn people down on the basis of pre-existing conditions.

    The problem, according to an analysis by the nonpartisan and authoritative Congressional Budget Office, is that the Ryan plan would be more expensive overall than traditional Medicare, and individuals would have to bear almost all of that extra cost themselves. The nonpartisan, nonprofit Kaiser Family Foundation (no relation to the HMO) estimates that in 2022 the average 65-year-old Medicare recipient would be personally paying $12,500 of the typical plan's total cost of $20,500. Out-of-pocket costs would be even higher in the years beyond, because the Ryan plan is set up so the value of the vouchers won't increase as fast as the price of health care. ...

    So, would the plan help reduce the deficit? Yes. According to the CBO analysis, if the Ryan plan were to be adopted, by 2030 the government would be spending only about 6 percent of our nation's Gross National Product on health programs, including Medicare and Medicaid. If the current system stays in place, government spending on health would total between 8.75 and 9.75 percent of GNP in 2030, the CBO said.

    But overall health spending, both public and private, would be higher—and more of it would come out of your pocket.

  • New York Times op-ed: Patients Are Not Consumers. By Paul Krugman. Here's my question: How did it become normal, or for that matter even acceptable, to refer to medical patients as "consumers"? The relationship between patient and doctor used to be considered something special, almost sacred. Now politicians and supposed reformers talk about the act of receiving care as if it were no different from a commercial transaction, like buying a car — and their only complaint is that it isn't commercial enough.

    What has gone wrong with us? ...

    About that advisory board: We have to do something about health care costs, which means that we have to find a way to start saying no. In particular, given continuing medical innovation, we can't maintain a system in which Medicare essentially pays for anything a doctor recommends. And that's especially true when that blank-check approach is combined with a system that gives doctors and hospitals — who aren't saints — a strong financial incentive to engage in excessive care.

    Before you start yelling about "rationing" and "death panels," bear in mind that we're not talking about limits on what health care you're allowed to buy with your own (or your insurance company's) money. We're talking only about what will be paid for with taxpayers' money. And the last time I looked at it, the Declaration of Independence didn't declare that we had the right to life, liberty, and the all-expenses-paid pursuit of happiness. ...

    Now, what House Republicans propose is that the government simply push the problem of rising health care costs on to seniors; that is, that we replace Medicare with vouchers that can be applied to private insurance, and that we count on seniors and insurance companies to work it out somehow. This, they claim, would be superior to expert review because it would open health care to the wonders of "consumer choice."

    What's wrong with this idea (aside from the grossly inadequate value of the proposed vouchers)? One answer is that it wouldn't work. "Consumer-based" medicine has been a bust everywhere it has been tried. To take the most directly relevant example, Medicare Advantage, which was originally called Medicare + Choice, was supposed to save money; it ended up costing substantially more than traditional Medicare. America has the most "consumer-driven" health care system in the advanced world. It also has by far the highest costs yet provides a quality of care no better than far cheaper systems in other countries. ...

    Medical care, after all, is an area in which crucial decisions — life and death decisions — must be made. Yet making such decisions intelligently requires a vast amount of specialized knowledge. Furthermore, those decisions often must be made under conditions in which the patient is incapacitated, under severe stress, or needs action immediately, with no time for discussion, let alone comparison shopping.

    That's why we have medical ethics. That's why doctors have traditionally both been viewed as something special and been expected to behave according to higher standards than the average professional. There's a reason we have TV series about heroic doctors, while we don't have TV series about heroic middle managers.

    The idea that all this can be reduced to money — that doctors are just "providers" selling services to health care "consumers" — is, well, sickening. And the prevalence of this kind of language is a sign that something has gone very wrong not just with this discussion, but with our society's values.

  • Washington Post: Poll shows Americans oppose entitlement cuts to deal with debt problem. By Jon Cohen and Dan Balz. Excerpts: The survey finds that Americans prefer to keep Medicare just the way it is. Most also oppose cuts in Medicaid and the defense budget. More than half say they are against small, across-the-board tax increases combined with modest reductions in Medicare and Social Security benefits. Only President Obama's call to raise tax rates on the wealthiest Americans enjoys solid support. ...

    In his speech last week, the president renewed his call to raise tax rates on family income over $250,000, and he appears to hold the high ground politically, according to the poll. At this point, 72 percent support raising taxes along those lines, with 54 percent strongly backing this approach. The proposal enjoys the support of majorities of Democrats (91 percent), independents (68 percent) and Republicans (54 percent). Only among people with annual incomes greater than $100,000 does less than a majority "strongly support" such tax increases. ...

    There is broad support for keeping Medicare structured the way it has been since it was instituted in 1965: as a defined-benefit health insurance program. Just 34 percent of Americans say Medicare should be changed along the lines outlined in the Ryan budget proposal, shifting it away from a defined-benefit plan. Under that proposal, recipients would select from a group of insurance plans providing guaranteed coverage, and the government would provide a payment to the insurer, subsidizing the cost. Advocates say this approach is more sophisticated than a pure voucher plan.

  • In These Times: Rep. Ryan's Free-Market 'Death Panels'. By Robert Parry. Excerpts: The consequences of three decades of anti-government Reaganism and free-market extremism are now coming clearly into view, a cruel and brutish America split sharply between a few lucky haves and many desperate have-nots. As Rep. Paul Ryan proudly declared in unveiling the Republican budget plan for fiscal 2012, "This is not a budget; this is a cause."

    It is the "cause" advanced in the modern era by President Ronald Reagan and economist Milton Friedman. It calls for further slashing the tax rate for the richest Americans by another ten percentage points, from 35 percent to 25 percent, while enacting a wide range of domestic spending cuts, including phasing out the Medicare health program for the elderly as it has existed since the 1960s.

    Under Ryan's plan, senior citizens in the future would have to select a private health insurance policy with the government paying "premium support" worth about $8,000 to the company, thus shifting a heavier, even crushing, financial burden onto the elderly.

    And, since Ryan's plan also would repeal President Barack Obama's health reform, which prohibits insurance companies from excluding coverage of "preexisting conditions," senior citizens suffering from chronic illnesses might find themselves unable to get coverage of those ailments and likely consigned to a premature death. ...

    Even today, people just shy of Medicare's 65-year-old threshold find themselves either shunned by insurance companies or paying exorbitant amounts. Yet Ryan envisions thrusting Americans over 65 into that same predicament, only worse because they are more likely to have health problems and are less likely to be under a company plan. ...

    "For older people the prospect of getting and paying for private health insurance is daunting," Guilloton wrote "For instance, in Connecticut a PPO with a $5,000 deductible would cost a 60-64 year old and spouse between $1,400 and $1,900 a month. And that cost presumes that they either are part of a company group plan or have no pre-existing conditions. ...

    Yet, even as Ryan touts his goal of cutting government spending by more than $6.2 trillion over the next decade, compared to Obama's budget, Ryan's plan would still not result in a balanced federal budget for nearly three decades, let alone pay off the accumulated national debt. That's because Ryan would accompany his steep spending cuts with lower tax rates for the wealthiest Americans. And those lower tax rates – based on an ideological devotion to Reagan's "trickle-down economics" and Friedman's "free-market" extremism – have been a principal cause of the debt problem.

  • Talking Points Memo (TPM): Will Anyone Even Insure Seniors if Paul Ryan's Medicare Plan Passes? By Benjy Sarlin. Excerpts: At first glance, Paul Ryan's plan to send millions of seniors into the free market with dwindling vouchers in hand might seem a boon to the private insurance industry. But would companies even want to participate?

    Unlike the Affordable Care Act, which mandated that millions of young and healthy Americans purchase insurance with government subsidies, the Paul Ryan plan would instead bring the oldest, sickest, and least profitable demographic to the table. And with the CBO projecting that the average senior would be on the hook for over two-thirds of their health care costs within just 10 years of the plan's adoption -- a proportion that is projected to worsen in the long run --- the government subsidies backing them up may not bring in enough profitable customers to make things worthwhile. ...

    Insurers have successfully demanded funding hikes to other programs even as their clients faced far less dire circumstances than projected under Ryan's plan, raising the question of whether Ryan's savings would ever come to pass. Take Medicare+Choice, a private exchange for seniors created in 1997 by the GOP Congress. Under the program, the government paid the equivalent it would use to fund Medicare coverage to reimburse private HMOs instead under the theory that the free market would operate more efficiently and produce better results. Instead, insurers found they were unable to sustain a profit and began pulling out en masse. In 2000, more than 900,000 patients were dropped as HMOs deserted the program, citing inadequate federal backing and a lack of a prescription drug benefit.

    "Year after year, the reimbursement rates were cut for these plans, making it increasingly unattractive for private providers to offer plans," one Republican congressman recalled in 2009, adding that for seniors who lost coverage "the consequences were painful and the vocal anger was justified."

    That congressman was none other than Paul Ryan. And he put his money where his mouth was in 2003 by voting for President Bush's Medicare law, which replaced Medicare+Choice with the more costly Medicare Advantage and added a pricey prescription drug benefit. The more generous system brought insurance companies back to the table, but ended up spending 14% more per patient than regular Medicare in the process.

    "In theory the idea of a more competitive market would have a lot to recommend it," MIT economist Jonathan Gruber told TPM, "But in fact it just simply hasn't worked. We have the example, we've lived it, it's Medicare Advantage, and it hasn't worked"

  • Albany Times-Union: A tale of two nations. America's widening income gap shows the very rich prospering, others struggling. By Alex Wynnyczuk. Excerpts: The growth in income inequality in America over the past 30 years has been well-documented. Reversing a trend toward less inequality from the end of World War II to the 1970s, income differences today are as large or even larger than in 1928, when they reached their previous peak. The disparity is even greater than it was during the Gilded Age of the robber barons. ...

    Saez also found that a considerably larger share of the top income receivers comes from salaries and bonuses, rather than from dividends, rents and capital gains that the very rich also depended upon in the past. In addition, the tax system has become less progressive. Who are the people in the top 1 percent, with incomes of more than $368,000?

    Certainly not the small businessmen so routinely touted by our politicians when they discuss tax changes. They are probably CEOs of large corporations, investment bankers, Wall Street traders, hedge fund managers, university presidents, Hollywood stars and famous athletes. ...

    It may be debated to what degree the changing income distribution is just or morally justified, and to what degree it may lead to social stress. What is clear is that it affects the current and future performance of the economy. The increased income inequality helped cause the recent financial crises. Excess borrowing by people whose real incomes were declining but who wanted to maintain their living standard most probably would not have happened if incomes were growing in a more uniform manner.

    Also, the growing income disparities are prolonging the recession, since aggregate consumer spending is being held back by insufficient incomes of a large segment of the population. Finally, future economic growth is not being helped by the shrinking of the middle class. Historically, income distribution has been more uneven in less developed countries than in rich countries. That implies that as economies grow, new income is spreading more evenly than before.

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: The Pirates of Capitol Hill. By Charles M. Blow. Excerpts: Corporations are roaring. Wall Street is rolling in cash. C.E.O. bonuses are going gangbusters. It's a really good time to be rich!

    If you're poor, not so much. The pall of the recession is suffocating. The unemployment rate is still unbearably high. The Census Bureau reported in September that the poverty rate for 2009 was 14.3 percent, higher than it has been since 1994, and the number of uninsured reached a record high. And the Department of Agriculture has reported record "prevalence of food insecurity."

    So in a civil society, which of these groups should be expected to sacrifice a bit for the benefit of the other and the overall health and prosperity of the nation at a time of great uncertainty? The poor, of course. At least that seems to be the Republican answer.

    Under the guise of deficit reduction, the Republicans are proposing to not only make the Bush tax cuts for the wealthy permanent, but to reduce their taxes even more — cutting the top individual rate from 35 percent to 25 percent to "promote growth and job creation." And they plan to pay for this by taking a buzz saw to programs that benefit the poor, elderly and otherwise vulnerable.

    But the spurious argument that cutting taxes for the wealthy will somehow stimulate economic growth is not borne out by the data. A look at the year-over-year change in G.D.P. and changes in the historical top marginal tax rates show no such correlation. This isn't about balancing budgets or fiscal discipline or prosperity-for-posterity stewardship. This is open piracy for plutocrats. This is about reshaping the government and economy to benefit the wealthy and powerful at the expense of the poor and powerless.

    And it's not that the rich haven't already gotten their tax cuts. According to an analysis released Thursday by the Economic Policy Institute, the average tax rate for the top 1 percent of households dropped by about 20 percent from 1979 to 2007, while the average tax rate for all Americans dropped by just 8 percent over that time. However, in just the period from 1992 to 2007, the tax rate on the top 400 households in America — those with an average annual income of nearly $350 million — fell by more than a third. In fact, the tax rate for these supermillionaires is now less than the tax rate for average Americans.

  • AlterNet: Our Phony Budget Battles Are All Smoke and Mirrors. Both parties in Washington have supported and sustained massive ongoing deficits propping up a crippled, state-dependent capitalism. By Richard D. Wolff. Excerpts: In fact, both sides never actually engaged the deficit and the debt. They limited themselves to purely cosmetic, symbol-laden cuts (Republicans) and refusals to cut (Democrats). Aiming at the 2012 election, both parties used the deficit and budget debates purely to impress their voters. Basic numbers tell the true story. The current (Fiscal Year 2011) budget spends about $3.5 trillion while receiving $2.0 trillion in tax revenues. The difference of $1.5 trillion (the equivalent of $1,500 billion) is this year's deficit. The US Treasury must borrow that from whoever will lend to the US government. After much hot air, Republicans and Democrats reached a "historic compromise," namely a spending cut of $38 billion. That will reduce this year's deficit from $1,500 billion to $1,462 billion, an economically insignificant sum. The sound and fury of Washington's debates signified nothing was to be done about the actual deficit. ...

    The problems with these liberals' logic are many. First, if the government taxed corporations and the wealthiest individuals more, it could maintain high spending without having to incur huge deficits. One recent calculation showed that if corporations and individuals earning over $1,000,000 per year paid the same rate of taxes today as they paid in 1961, the US Treasury would collect an addition $716 billion per year. That would cut the 2011 deficit by half and likewise its interest costs. Second, consider who lends to the US government. Major creditors include the People's Republic of China, Japan, large corporations and wealthy individuals in the US and abroad. The greater our deficits, the more of everyone's taxes go to pay interest to those creditors. Third, consider the basic injustice of deficits: (1) Washington taxes corporations and the rich far less than it used to in, say, the 1960s, (2) Washington therefore runs a deficit and (3) the US Treasury then borrows from corporations and the rich the money that the government allowed them not to pay in taxes.

  • AlterNet: The Execs at GE Are Laughing at What a Bunch of Suckers We Are for Filing Our Taxes -- Let's Make Them PAY. The joke's on us, folks. GE and tons of other corporations will have a tax bill for 2010 of ZERO. By Michael Moore. Excerpts: Do you wonder (like I do) what the tax accountants and executives are doing over at GE this weekend? Frantically rushing to fill out their IRS returns like the rest of us? Hardly. They're taking the weekend off to throw themselves a big party and have a hearty laugh at all of us. It must really crack them up to see us like suckers scurrying around to make sure we report everything to Uncle Sam -- and even send him a check, if necessary. ...

    In the latest budget deal, our politicians could have tackled the deficit by stopping the flow of these ill-gotten billions to corporations. Instead they cut billions from "wasteful" programs that do "wasteful" things, like create new jobs, drive economic growth, and help the needy and our nation's children. It's Democracy in reverse and it sickens me. ...

    We're doing this because we don't buy into the Big Lie: that greedy teachers caused the crash on Wall Street! That the selfish firefighters sent millions of jobs overseas! That pregnant woman, infants, and children are sending us into deficit!

    No, it was the big corporations that did this. It was the CEOs and the top 1% of the country. THEY brought on the mortgage crisis. THEY made off with trillions of dollars from our economy. THEY are systematically destroying the middle class. And THEY have bought and sold the very people elected to represent us!

  • Washington Post editorial: As in 1984, we need the courage to raise taxes. By Walter Mondale. Many have described my 1984 presidential campaign promise to raise taxes as exemplifying the folly of proposing tax hikes during an election. Although the rebounding economy and improving job picture that year probably had more to do with President Ronald Reagan's reelection than my pledge did, there are certainly political lessons for anyone considering tax increases today. In particular, avoid generalities, and clearly link taxes to addressing concrete national needs.

    Taxes reveal who we are as a people and what we value. Polls consistently show that majorities of Americans are willing to pay taxes and even have them increased when the revenues are devoted to their priorities, such as education, health care and deficit reduction. The public's support is greatest for raising taxes on the affluent, but it extends to hikes tied to popular programs such as Social Security and Medicare. ...

    I told the truth in 1984. "The American people will have to pay Mr. Reagan's bills," I said in my acceptance speech at the Democratic National Convention in San Francisco. "The budget will be squeezed. Taxes will go up... It must be done. Mr. Reagan will raise taxes, and so will I. He won't tell you. I just did."

    I lost the election, but I won the debate. Reagan ended up increasing taxes in 1984, 1985, 1986 and 1987 to mend the budget and tax systems. ...

    It makes sense to seize today's bipartisan support for cutting tax exemptions as a way to increase revenue. I also believe that we must eliminate Bush's tax cuts for the rich. Where is the decency in cutting taxes for those making tens of millions while middle America struggles? This is a fight over fairness that Americans can understand.

    Republicans are not risk-free in the tax debate. GOP politicians promise to reduce the deficit, but the indisputable record of Bush shows that his first priority was cutting taxes for the super-rich, even when that brought higher deficits. This record has bred distrust among the conservative base, including tea party sympathizers. One of Reagan's domestic policy advisers, Bruce Bartlett, wrote a book in 2006 titled "Impostor," decrying Bush's phoniness on deficits and spending. Talking about shrinking deficits while cutting taxes for the the wealthiest does not attract conservative populists or swing voters.

  • TruthDig: The False Debate on the Debt. By Robert Scheer. Excerpts: In the ever-so-smug company of the rich and powerful, it is a given that there is never to be any expression of remorse or other acknowledgment of the pain they have inflicted on the lesser mortals they so cavalierly plunder. It's convenient for them that the media and the politicians, which they happen to own, rarely connect the dots between the scams that made the rich so rich and the alarming rise in the federal debt that is crushing this nation.

    The result of this purchased public myopia is that we are left with an absurd debate over how deeply to cut teachers' pensions and seniors' medical benefits while preserving tax breaks for the superrich and their large corporations. At a time when 10 million American families will have lost their homes by year's end, when $5.6 trillion in home equity has been wiped out, when most Americans face steep unemployment rates and stagnant wages, a Democratic president is likely to compromise with Republican ideologues who insist that further cuts in taxes for the rich is the way to bring back jobs.

    Let's deal right off with that canard. There is currently no shortage of corporate profits or excessive executive compensation to explain away the failure of the private sector to create jobs. On the contrary, as The New York Times reports, "In the fourth quarter, profits at American businesses were up an astounding 29.2 percent, the fastest growth in more than 60 years. Collectively, American corporations logged profits at an annual rate of $1.678 trillion." And to add insult to injury, the top executives, who seem unable or unwilling to create jobs or adequately reward their workers, have increased their own compensation by a whopping 12 percent over the previous year, setting the median pay at $9.6 million per year for those in control of the leading 200 companies. The Times adds that "C.E.O. pay is also on the rise again at companies like Capital One and Goldman Sachs, which survived the economic storm with the help of all of those taxpayer-financed bailouts."

    Lost in this faux debate is the reality that our debt now looms so large because the government had to bail out many of those same corporations, quite a few of which, like General Electric and AIG, pay no taxes and have no problem paying truly obscene amounts to their top executives. GE CEO Jeffrey Immelt, whom President Barack Obama named chairman of the Council on Jobs and Competitiveness, is making as much as he did before the recession hit, a recession that his GE Capital division did much to cause with its reckless loans. AIG, saved with a government infusion of $170 billion, has just lavishly rewarded its top executives but has provided no relief for the homeowners ripped off by its phony credit default swaps.

    Continued tax breaks for the 1 percent of the population that controls 40 percent of the nation's wealth will do nothing to restore the confidence of the other 99 percent of consumers who are suffering so. This at least Obama seems to understand, but count on him to betray his own better instincts by once again following the advice of his treasury secretary and the Wall Street crowd that contributed so lavishly to his first presidential campaign and whose support he seeks once again.

  • New York Times op-ed: Let's Not Be Civil. By Paul Krugman. Excerpts: Now, Republicans claim that last year's midterms gave them a mandate for the vision embodied in their budget. But last year the G.O.P. ran against what it called the "massive Medicare cuts" contained in the health reform law. How, then, can the election have provided a mandate for a plan that not only would preserve all of those cuts, but would go on, over time, to dismantle Medicare completely?

    For what it's worth, polls suggest that the public's priorities are nothing like those embodied in the Republican budget. Large majorities support higher, not lower, taxes on the wealthy. Large majorities — including a majority of Republicans — also oppose major changes to Medicare. Of course, the poll that matters is the one on Election Day. But that's all the more reason to make the 2012 election a clear choice between visions.

    Which brings me to those calls for a bipartisan solution. Sorry to be cynical, but right now "bipartisan" is usually code for assembling some conservative Democrats and ultraconservative Republicans — all of them with close ties to the wealthy, and many who are wealthy themselves — and having them proclaim that low taxes on high incomes and drastic cuts in social insurance are the only possible solution.

    This would be a corrupt, undemocratic way to make decisions about the shape of our society even if those involved really were wise men with a deep grasp of the issues. It's much worse when many of those at the table are the sort of people who solicit and believe the kind of policy analyses that the Heritage Foundation supplies.

    So let's not be civil. Instead, let's have a frank discussion of our differences. In particular, if Democrats believe that Republicans are talking cruel nonsense, they should say so — and take their case to the voters.

  • Huffington Post: Cost Of Tax Cuts For America's Rich Exceeds Value Of Budget Cuts. By William Alden. Excerpt: Today, as Americans submit their tax returns, the wealthiest earners will each reap hundreds of thousands of dollars in tax savings. As part of a law passed late last year, the Bush-era tax cuts for the richest Americans were extended for two years. The estimated cost to the government of that portion of the tax deal, $42 billion this fiscal year, exceeds the stated $38 billion value of the savings from the federal budget cuts lawmakers approved last week.
  • The New Yorker: Deepest Cuts. By George Packer. Excerpts: The Republicans now hold just one house of Congress, yet they have controlled the terms of the debate, because they understand that budget battles are about far more than numbers, and they've made the ideology behind their various bargaining positions startlingly clear: government should be reduced to gasping for air. What's more, they're willing to deploy legislative terrorism—threatening to shut down the government and to allow the United States to default on its debt—to get their way. In politics, the side with a fixed notion of ends and an unscrupulous approach to means always has the advantage.

    A decade and a half after Clinton and Gingrich, Republicans are once again trying to privatize Medicare, gut Medicaid (by turning it into block grants), cut education spending and regulations that protect the environment, and give yet another round of tax cuts to the rich. They continue to insist—despite years of evidence to the contrary—that market forces will lower health-care costs and that tax cuts will create economic growth and lift all incomes. "Ideology makes it unnecessary for people to confront individual issues on their individual merits," the late Daniel Bell wrote. "One simply turns to the ideological vending machine, and out comes the prepared formulae." Ideology knows the answer before the question has been asked. ...

    The impetus for Obama's return to politics was the budget plan of Representative Paul Ryan, the doe-eyed Wisconsin Republican who chairs the House Budget Committee. The Ryan plan, which claims to cut the deficit by $4.4 trillion over the next decade (and was passed by the House last Friday, along party lines), contains every Republican dogma about political economy, and Obama, in his speech, pointedly called them out, while Ryan sat seething in the audience: "There's nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires. And I don't think there's anything courageous about asking for sacrifice from those who can least afford it and don't have any clout on Capitol Hill." Obama then offered a counter-plan, vague on details, that would combine spending cuts and tax increases in roughly equal measure, imposing cost controls on health care but preserving entitlement programs, while claiming to arrive at roughly the same savings as Ryan, but guided by vastly different principles. ...

    All this suggests, not for the first time, that the President might be a better tactician than his critics. But outmaneuvering his political opponents is not the same thing as achieving a country that, as he said last week, "values fairness." The most persistent and corrosive feature of American life over the past three decades is income inequality: it rose steeply during Clinton's first term, and, despite his budget victory, it continued to go up in his second. Obama often discussed inequality during the 2008 campaign, and his health-care plan represented the most serious effort in a generation to reverse it. But last week he mentioned it only in passing. As he knows, the reform stage of his Presidency lasted less than two years. We have now entered the period of rearguard defense.

  • truthOut: The New Corporate World Order. By Robert Scheer. Excerpts: The debate over Republicans' insistence on continued tax breaks for the super-rich and the corporations they run should come to a screeching halt with the report in Tuesday's Wall Street Journal headlined "Big U.S. Firms Shift Hiring Abroad." Those tax breaks over the past decade, leaving some corporations such as General Electric to pay no taxes at all, were supposed to lead to job creation, but just the opposite has occurred. As the Journal put it, the multinational companies "cut their work forces in the U.S. by 2.9 million during the 2000s while increasing employment overseas by 2.4 million, new data from the U.S. Commerce Department show."

    General Electric, which was bailed out by taxpayers and which stored so much of its profit abroad that it paid no taxes for the past two years, was forced to tighten up, but while cutting its foreign workforce by 1,000 it cut a far more severe 28,000 in the United States. Jeffrey Immelt, the CEO of GE, recently appointed by President Barack Obama as his chief outside economic adviser, admits that this does not involve poorly paid work that Americans don't want, but instead prime jobs: "We've globalized around markets, not cheap labor. The era of globalization around cheap labor is over. Today we go to China, we go to India, because that's where the customers are." ...

    Of course it will be argued that multinational corporations have the right to arrange their business as they see fit in order to maximize profit. But if that is the case, do beleaguered American taxpayers have to foot the bill? When those corporations run into trouble overseas because of financial hustles or hostile locals and need the diplomatic and military might of the U.S. government to protect their interests abroad, it is again the U.S. taxpayer who must pay to maintain this new world order. It is an order, as we see with three current wars and a military budget that rivals Cold War highs, that is contributing mightily to the U.S. government debt. More than half of all discretionary spending, the dollars that the Republicans in Congress now want to take out of needed domestic programs, is accounted for by defense spending. That defense spending to support a massive network of military bases and deployed weapons and troops is key to establishing an order in which the interests of American corporations are attended to. If the companies don't feel that way, let them operate under the flag of Liberia or the Cayman Islands.

    Big government, the devil that Republicans love to inveigh against, is big precisely because it is so active in so many costly ways in serving the interests of our biggest corporations. Corporate lobbyists attest with their every breath that big government and big business are bedmates in a bountiful venture that impoverishes the rest of us. It is time to admit that we are, in practice if not surface appearance, close to the Chinese communist model of state-sponsored capitalism that sacrifices the interests of ordinary workers, be they in the public or private sector, for the exorbitant profits of the super-rich. It is the corporations that need big government to protect their interests, and one would hope they would be willing to pay for the services that their government so faithfully renders to make them obscenely wealthy as it studiously ignores the well-being of the rest of us.

  • Smirking Chimp: Representative Ryan Puts the Republicans on the Record. By Dean Baker. Excerpts: For years people have accused the Republican Party of being the servants of the rich and powerful at the expense of the broader public. In the past, they would deny this charge and claim that they just had a different view of how the economy works.

    Republican House Budget Committee Chairman Paul Ryan sought to eliminate any confusion on this point. He proposed, and last week the Republican House approved, a budget bill that will transfer tens of trillions (yes, that is "trillions" with a "T") of dollars from ordinary working people to the insurance industry, the pharmaceutical industry and generic rich people from any industry. This money will come in the form of higher payments by seniors in their old age for health insurance and another round of tax breaks for the country's richest people. ...

    The main reason that retiree health care costs will increase is that the private sector is less efficient at delivering care than the existing Medicare program. The Congressional Budget Office (CBO) projects that, under the Ryan plan, the increase in the cost of buying Medicare equivalent policies would be more than $30 trillion over Medicare's planning horizon.

    This additional waste comes to almost $100,000 for every man, woman, and child in the country. It is approximately equal to six times the size of the projected Social Security shortfall. This waste is a direct transfer from retirees to the insurance industry and the health care industry. ...

    The tax breaks would be real money for the people who get them. For example, Representative Ryan's tax breaks could give Lloyd Blankfein, the CEO of Goldman Sachs, another $3 million a year based on his $20 million annual paycheck. That's the equivalent of more than 2,600 monthly Social Security checks.

  • Wall Street Journal: Gingrich Steps Away From Ryan Budget. By Jonathan Weisman. Excerpt: Former House Speaker Newt Gingrich is distancing himself from the House-passed budget plan that would end fee-for-service Medicare in favor of private insurance plans for seniors partially subsidized by the federal government. In a post on his Facebook page Wednesday, Mr. Gingrich – a likely presidential candidate – instead embraced a voluntary plan that would give seniors the option to choose private plans without explicitly abolishing Medicare as we know it. That is in line with a Medicare proposal by former Democratic Congressional Budget Office director Alice Rivlin and former Republican Sen. Pete Domenici, once embraced, then rejected by House Budget Committee Chairman Paul Ryan.
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