IBM Employee Highlights | September 10, 2011

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Highlights—September 10, 2011

Associated Press, courtesy of Forbes: IBM offers $1B in financing for smaller companies. Excerpt: IBM Corp. said Thursday that it will make $1 billion in financing available to small and medium businesses over the next 18 months to buy its new technologies for analytics and "cloud" computing systems. IBM routinely loans money to customers to buy expensive mainframes and other computer hardware and software. It's not philanthropy. Revenue from its global financing division was $2.3 billion last year. The division is highly profitable, even though its revenue is lower than other business lines.
Associated Press, courtesy of Forbes: Indiana lawyer: IBM bid to depose Daniels 'meritless'. By Ken Kusmer. Excerpts: If Indiana Gov. Mitch Daniels can promote his book and lead a motorcycle tour, he isn't too busy to testify about his decision to cancel a contract with IBM Corp. to automate welfare applications, the technology giant contends in a court filing.
Armonk, N.Y.-based IBM has sued over the dismissal of a $1.37 billion state contract. Judge David Dreyer ruled in April that Daniels need not testify then, but left open the possibility he might be ordered to later. ...

IBM's motion argues Daniels has unique, firsthand information unavailable elsewhere. It contends his testimony is "essential" because he was the "chief player" for the state in designing Indiana's automated welfare application system and the efforts to fix it when it ran into problems. Among them was lost documents, long call center hold times, and bungled face-to-face appointments for welfare clients to meet with case workers. ...

Judge Dreyer's April ruling said IBM had not presented enough evidence to overcome a state law protecting certain state officials from testifying in lawsuits, but the order noted that he could be required to testify under conditions that had not been met at that time. The case is currently scheduled to go to trial in February.
Yahoo! IBM Retiree Information Exchange message board: "What exactly is 'continuous coverage?'" by "djmdata". Full excerpt: I have not been able to find a definitive answer to this (seemingly) simple question. Perhaps someone in this forum can help. The Future Health Benefits documentation states that one must maintain continuous health coverage to remain eligible to use FHA in the future. What is the definition of "continuous"?
If I leave IBM on a Friday and start at a new company on Monday, how do I account for the weekend being "uncovered"? I'm sure there must be a grace period of some duration, but I haven't seen anything in writing yet. thanks
Yahoo! IBM Retiree Information Exchange message board: "Re: What exactly is 'continuous coverage?'" by Kathi Cooper. Full excerpt: Continuous coverage means you do not go greater than 63 days between being insured.
Is there a limit to the period of time I can go without coverage between jobs if I want to reduce the length of a preexisting condition exclusion? Yes. The break in coverage between one period of health coverage and another can be no longer than 63 days (just over 2 months). If you are between jobs and do not have health coverage for 63 days or more, then you may lose the ability to use the coverage you had before the break to offset a preexisting condition exclusion period in a new health plan.

How do I avoid a 63-day significant break in health coverage? There are several ways:
- If a spouse has coverage in a health plan that allows family members to join, you may want to enroll. (See the FAQs on Special Enrollment.)
- If your last coverage was in a group health plan, you may want to sign up for COBRA continuation coverage. While you (and your family members, if they were also part of your prior plan) will have to pay for this temporary coverage, COBRA can prevent or reduce a break in coverage. (Learn more about COBRA.)
- You can buy an individual health insurance policy if you think you would otherwise have a break of 63 days or more.
- Some states have high-risk pools for people who cannot otherwise get health benefits. Your state insurance commissioner's office can tell you if such a pool exists where you live.
States may increase the number of days that constitute a significant break in coverage. For instance, instead of 63 days, a state may allow someone to have a break of 120 days between periods of health coverage. http://www.dol.gov/ebsa/FAQs/faq_consumer_hipaa.html
Yahoo! IBM Retiree Information Exchange message board: "Re: What exactly is 'continuous coverage?'" by "madinpok". Full excerpt: Kathi - The DOL web page describes the HIPAA 63 day window in terms of how it can affect coverage for pre-existing conditions. But I don't see anything there that clearly states that a group plan (like the FHA plan) MUST allow you to join if you have a gap of 63 days or less.
Do you know for sure if HIPAA's 63 day window covers this case? HIPAA only seems to state that if you are allowed to join, they can't discriminate based on health conditions. Without a clear statement that HIPAA applies in this case, I would not want to risk a lapse in coverage of even 1 day.
Yahoo! IBM Retiree Information Exchange message board: "Re: What exactly is 'continuous coverage?'" by Kathi Cooper. Full excerpt: I've had 2 jobs since leaving IBM. Each time, I ask them how long I have of continuous coverage before I lock-in insurance and each time they said 60 or so days. Each time I went back to the FHA for a while and then would exit FHA after a while for my new employer. No big deal.
Did you real the entire page at the DOL site? It is protections via the Health Insurance Portability and Accountability Act of 1996. That's what HIPAA affords us. IF the FHA did not allow us to join, you have to ask why. Again, HIPPA affords us protection against that.
Glassdoor: Top 25 Companies for Career Opportunities. Employees have reported how their companies rate for career opportunities – find out which 25 companies provide the best career opportunities. Editor's note: IBM is not in the top 25. Some of the companies that are include PricewaterhouseCoopers and Deloitte.
Forbes, courtesy of NBC's Today: Companies that make their employees happier. Great benefits and incentives to succeed matter more than money. By Jacquelyn Smith. Excerpts: Fat paychecks, light workloads and endless vacation days don’t necessarily add up to happy employees. In fact, the happiest employees in the U.S. credit their bliss to first-rate employee incentives, ample benefits, career advancement programs and great work-life balance. The companies that have been the most dedicated to cultivating and advancing these things in the past year have seen employee happiness soar.
The jobs site CareerBliss.com just announced the winners of this year’s Leap Awards, which honor the companies that have made the biggest strides to improve employee happiness year-over-year. CareerBliss evaluated more than 250,000 company reviews and ratings it received from employees nationwide to determine the top 50 deserving companies. To qualify for the list, each company had to have at least 50 reviews. (Editor's note: IBM is not in the list. Companies in the list include Infosys, Wipro, Intel, and Accenture.
LinkedIn's "The Greater IBM Connection". Selected posts follow:
- I am enjoying the observations above. It appears that the years of service have a lot to do with the choice. My years were 1967-1983, so, like many of the other observers, I saw the original company led by Sr. start to change. The change is what made me leave. Remember when the "full employment policy" changed to a "practice?" If memory serves me correctly this was under Learson. It was a signal of the change.
  The early 80's were very "political," with about half of the executives with whom I worked getting their promotions on the golf course and then playing internal games that had us losing touch with the real needs of our customers. My observation in DPD HQ was that far too many were fighting over window offices and reading the paper most of the day to pay attention to customers. Since this culture was allowed to grow, I would therefore be hard-pressed to give the nod to any of the presidents who followed Watson Jr.
  
  I wasn't there when Lou Gerstner came in, but I had several family members who were still there. The company was clearly in trouble and Gerstner did play a significant role in righting the ship, but I can't say the ship is nearly as attractive to me or the business community that it once was. Some have said the changes have just been a sign of the times, but I have to point out that the times were set by the likes of the presidents that followed Jr.
  
  I would vote for Tom Watson Sr. as the man responsible for what made IBM such an admired company, with second place going to Jr. for keeping it going in the same direction for as long as he did
- It would be interesting to note the gross salaries IBM's CEO's have earned over the years. with and w/o adjustments for inflation.
  The last straw to 'respect for the individual. came when they said you didn't have to wear a suit unless you were meeting with a customer. That was in 1993. It wasn't too long after that when IBMers where getting laid off I always felt the thinking was it was easier to lay off a street person than a fellow professional in a suit. Prior to that, every year the benefits got better and better and there was always a department meeting where your manager explained all the changes. Since then, benefits have deteriorated at an ever faster pace.
  
  I have to vote for TJW, Sr. as the greatest CEO. He got IBM through the depression w/o any layoffs and had IBM contribute to the war effort in many ways. (WW II). I started with IBM in June of 69 and left in Feb. 2009 due to a 'resource action'.
- Just to clarify on the salary item above -- you are going to find that the two Watsons took very low salaries (even adjusted for inflation). That is for two reasons. One, they owned a large percentage of the company and their salaries were incidental to their wealth (sort of like Warren Buffet's $100K salary today). Two, the IRS has an unofficial limit on executive salaries (in the range of $100,000 back in those days) and felt anything more was excessive use of stockholder funds. Those restraints were removed in the 1970s or 1980s. So, all the successors took much larger salaries and starting with Gerstner have ratcheted them up to the top tier of corporate executives in the nation.
  By the way, thousands and thousands were laid off before the casual business attire was introduced. Also, the benefits reductions began in the mid-1980s, well before 1993. The peak year was 1984 and after than began the business decline.
- Rich/David, you guys keep adding "to-do's" to my list. :) But excellent points that should be considered in any evaluation, plus the effects a "reward system" had on an individual CEO. The latter is a hard one. How do you ever know what is in the heart of a person - you can just judge their words and match actions against the words.
  Tom Watson Sr. was hammered in the press for his earnings in 1935. From the "The Lengthening Shadow" by Thomas and Marva Belden,
  
  "In 1935 the government began publishing a list of leading salaries in the country, beginning in the fiscal year of 1934. That year Watson's salary was the lowest it had been since 1926, but, much to his mortification, he found that it was first in the country, his thousand dollars a day surpassing even the earnings of Will Rogers. With millions of unemployed in the country Watson became the focus of a national debate about the justice of large incomes. The last of the Robber Barons and a Captain Kidd of industry, he was called."
  
  It also points out that he paid 60% in income tax and is quote as saying, "I am glad to do it...I don't compare my net salary with my gross. I compare it with the six dollars a week I made when I started out in a store in Painted Post, New York."
  
  He was adamant about not taxing corporations though and although supporting Roosevelt, clashed with him on that point but, "he had favored a high income tax on [rich] individuals long before becoming a rich man himself and continued to favor it afterward."
  
  Again a quote, "Start at the lowest-paid people in the country and give them the highest reduction in taxes, because their children eat just as much food."
  
  Kind of sounds like a recent article by Warren Buffett, eh? Cheers, Peter E. Greulich Author, Speaker and Publisher The World's Greatest Salesman, An IBM Caretaker's Perspective: Looking Back
- Tom Watson Jr. in his book "Father Son & Co." laid it out on the line what made IBM so different on page 311 of the book. He describes how when IBM stock was going through the roof, one of his senior officers came to him and said "we have to cut back on our options, we don't want to look like Pigs" Tom Jr. then asked himself "How much more am I worth to IBM than the guy down at the bottom of the pay scale? Twice as much, Sure. Ten times as much? Maybe. Twenty times as much? Probably Not." So if the average employee is making 50K, is the CEO worth $1,000.000? Maybe! Some of these guys today (including Sam) have no problem walking away with 400 times or more than the average employee makes! They also have no problem hiding the percentage of employees who are employed outside the US! GTO
- For several years, Warren Buffet has been complaining about the tax code (including that he has lower effective tax rate than the workers in his office) ... that the special interest lobbying has resulted in an extremely complex 65,000 page tax code (and the lobbying money contributing to claims that congress is the most corrupt institution on earth) ... resulting in as much as 6 percent of GDP being lost ... between resources wasted on dealing with the complexity as well as non-optimal business decisions. and recent item regarding off-shoring Corporations pushing for job-creation tax breaks shield U.S.-vs.-abroad hiring data: http://www.washingtonpost.com/business/economy/corporations-pushing-for-job-creation-tax-breaks-shield-us-vs-abroad-hiring-data/2011/08/12/gIQAZwhqUJ_story.html. From above:
  So secretive are these companies that they hand the figure over to government statisticians on the condition that officials will release only an aggregate number. The latest data show that multinationals cut 2.9 million jobs in the United States and added 2.4 million overseas between 2000 and 2009.
- Hard for me to say... my years are 1972 to 2002. Worked in GTD and all it's follow on name changes... in 79 or 80 transferred to FSD when GTD moved to Vermont. Loved my time at IBM, but after Gerstner came in and sold FSD to Loral, my love began to fade. I know he had to do so to help save the company, but damn. Can't say I had a favorite. Akers inability to see the future of the PC as opposed to mainframes cause a lot of the damage. But that's my opinion. IBM was good to me while I was part of it... Guess I should have mentioned the location was Manassas, Virginia.
- I was lucky enough to work for TJ Watson Jr in FSD and SDD. The biggest ... "You can tame a wild duck but you can never make it wild again" has been on the of core operating principles of my management / leadership philosophy. i am proud to be one of his wild ducks.
- In case anyone in this group doesn't know what I mean by the "ol' man at his desk" we prepared some videos of his Great Depression era talks. We took the famous image of him at his desk and put that on video. This was on my personal budget - so although I think it looks great, it isn't a "big budget" film, eh? No Tom Cruise! Located here. Enjoy. http://www.beneaththedancingelephant.com/videos.html
  For the women in the audience, be sure and read the overview. When I first showed these videos to a good friend at work she almost killed me because we did not alter a single word and Tom Watson Sr. used "men" so much - so I had to add the historical footnote. Good Viewing. Peter E. Greulich Author, Speaker and Publisher The World's Greatest Salesman, An IBM Caretaker's Perspective: Looking Back
Glassdoor IBM reviews. Selected reviews follow:
- IBM Senior Software Engineer in Research Triangle Park, NC: (Past Employee - 2009) “Great place to work until 1992, then it went down hill.” Pros: Good work environment and support facilities. Cons: Management has no guts. They'd rather sign an IT support contract and outsource support than take a risk and develop a real product. Advice to Senior Management: Retire and let someone else lead the company
- IBM Anonymous: (Past Employee - 2011) “Left after more than a decade.” Pros: They have a good benefits package and the large company makes it easy to more to new positions without changing the company. Depending on your position, there is also good opportunities to work with colleagues around the world. A vast majority of the staff employees are great to work with. Cons: Senior management (3rd line and above) in some areas is effectively retired in place. Do they work, yes. Do they know what is happening on the front line, some times. I left due to the lack of opportunity. I had done all I could do at my level and did not see the opportunity to move up in the next few years. That could be sour grapes, but I had asked specifically about my ability to move up and was told I would. So, either it was going to take too long, or they would not be honest with me. The company has an incredible focus on cost control at the expense of almost everything else. Obviously it works for executives with all of those stock options, but rank and file staff (even "1" performers) typically do not get stock. (The $1000 stock grant this year was a joke. It was given at the stock's all time high.) Arguably the hard part was hearing the company tell Wall St. what a great year we had, then managers telling us what a rough year it was when handing out small bonuses for that same "great" year. Advice to Senior Management: Be consistent, ask for feedback and really listen to it without exacting retribution on the employees brave enough to speak up.
- IBM Anonymous: (Past Employee - 2010) “doesn't care about new, proactive or productive staff” Pros: Excellent health care insurance, available at entry level staff. Average to good technical information access. Company's name is still recognized as one of the industry's main players. Very large company structure. Cons: Very low wages. Almost to none career development. Skilled staff leave the company ASAP in disappointment, problematic staff stay while undermining everybody else morale. HR and management don't care about this. And the list continues... Advice to Senior Management: I don't really know if the global management team is aware of the Argentina's regional branch situation. The regional CEO already left and it seems that nobody will miss him, but the problems are still there. If you don't care about the employees that actually DO the work, they'll keep leaving and hiring/keeping lazy staff make thing even worse. Is this really the profitable way? What would Thomas Watson THINK about it?
- IBM Business Unit Executive: (Current Employee) “Great career opportunities but inconsistent incentive compensation with a challenging matrix management structure.” Pros: Market leadership, rich history, financial stability. Broad set of businesses creates many opportunities for movement around company. Majority of employees work from home, which provides flexibility. Cons: Pay and benefits cuts year after year. Sales incentives plans cut to the point of non existence. Total compensation for first and second line management is typically lower than front line employees. Many positions are funded year to year by the various brands, so there is constant organizational churn. Teams are geographically and globally disbursed but travel is not allowed for team nor management meetings to tackle strategies in person nor to build organizational trust. Advice to Senior Management: Fix incentive compensation in order to truly motivate sales force to achieve aggressive 2015 corporate financial objectives. Eliminate internal education burdensome systems that do nothing to drive revenue.
- IBM Staff Software Engineer: (Current Employee) “Good working place, extremely low pay.” Pros: Good working environment. Always can get help from your colleague and senior person. Easily change a job internally easily to access the new technology. Work from home and flexible time. Cons: Poor pay and bonus. Promotion is really slow. Senior management team just care about cutting cost. Benefit is so so. Advice to Senior Management: Not always to acquire the new products, just invent them.
- IBM Pre-Software Engineer in Lenexa, KS: (Past Employee - 2011) “Good company.” Pros: Fun environment. Friendly people. Everyone wants you to do well. Cons: People seem to be there just to gain money...they don't look very happy.
- IBM Senior IT Specialist: (Current Employee) “A comfortable life but beware the PBC.” Pros: Job security, respect for you as a person, strong sense of being a team Cons: Too much middle management with no power (by design of course!). PBC process designed to keep you busy and distracted but offers little benefit other than a stick to 'beat ' you with. So, when you come to fight your corner for whatever reason they have little chance of improving your lot. Crux of the PBC is 'giveback' which largely ensures company recognition for worthless/futile but attention seeking and brown-nosing activities. Obviously that is a generalisation and the motto is (unlike others that just moan) to work to you own career objectives and career plan and not get too bogged down with the PBC machine. Summary, play the 'game' when you have to don't expect to sit back and expect recognition for being the wonderful person as you obviously are ;o) Advice to Senior Management: Provide a way to incentivise employees to earn extra payrises/bonuses. The existing process is unclear and Zzzzz slow.
- IBM Managing Consultant: (Current Employee) “Good to gain experience” Pros: Big name. A lot of large projects to gain experience. Cons: Financial drives everything. Project deadline has the highest priority. Can't take training or vacation if the project is due. Poor performance bonus. Advice to Senior Management: Be generous to recognize employees who work hard and do a good job.
- IBM Systems Administrator in Chicago, IL: (Current Employee) “In recent years I would say it has been fairly good, but could be better.” Pros: Decent pay, good name recognition, great coworkers and team rapor. Work-Life balance is okay. Can work from home. Cons: Long hours without OT, little to no raises, poor to low technical training, the bottom line/number is king. Advice to Senior Management: It is about the people not the dollar. Treat people with respect and decent pay. Happy workers = satisfied customer!
- IBM Managing Consultant in Atlanta, GA: (Current Employee) “Overall pretty good.” Pros: Name recognition. Decent pay. Opportunities for global experience. Awesome knowledge base/network of experts. Cons: Strategy & Transformation consulting is weak relative to IT consulting. Heavy bureaucracy. Sometimes limited ability to control career path. Inconsistent project experiences, with wildly varying degree of competency among project leaders. Advice to Senior Management: Figure out what you how you really want to position your S&T consulting practice in the market
- IBM Staff Software Engineer in Guadalajara, Estado de Jalisco (Mexico): (Current Employee) “IBM a great place to start but not to prosper.” Pros: You work with very bright people and you learn a lot. If you just graduated from college IBM is fantastic since they're used to the learning curve, also there are many areas where you can become and expert.
  Cons: A couple years ago IBM had very competitive salaries but now that Oracle and other companies arrived you can see that the salaries are not good at all. IBM has a 'brilliant' policy to give better salaries to new employees than keeping their current excellent employees with a good salary. Home office is forbidden for employees but you can see management has no issue skipping several days to work some place else, many managers are too busy on their careers that they don't have time for their employees. IBM Mexico has a full control on your salary and your manager has the full decision, in other words only the ones that keep sweet talking the manager will get a 'decent' salary.
  
  Promotions aren't always a great idea, I know a couple people who got promoted and their salaries increase was 0, literally 0. When I joined IBM I was proud, happy and I was able to see myself prosper for the following 25 years making the world a better place, nowadays I'm preparing to open my own company or join a more challenging and understanding company. IBM needs to focus more on their employees and cut the bureaucracy and old politics that make them a hard place to work.
  
  Advice to Senior Management: You can't go every year saying that we had a terrible year and that's the reason for a lousy salary and then expect us to say that IBM it's a great place to work and that we had an epic year. You need to realize that having over 200 people in many different projects with a lousy salary and doing a once a year meeting with chips is not going to create a wonderful environment. Seriously consider home office for the best, it can encourage others to go the extra mile.
- IBM Project Manager: (Current Employee) “Good on resume, great people to work with, very little to no career growth.” Pros: I have come across some of the brightest people in this company more than any other firms I worked with. Friendly environment in general. The name IBM still carries some weight in the traditional marketplace. Cons: Very little to no assistance given to career growth even when the employees have a clear road map that management agreed to. Pay is okay but you can very well forget about decent pay hikes or bonuses when you join this company. Definitely not a long term option for any one. Advice to Senior Management: Take care of your greatest asset (i.e., people that work for your company). Looking at bottom line & poor compensation to your employees is great for your balance sheet & Wall Street (maybe), however listen (not just talk) to your own people to see how you can improve. If you don't build a loyal set of employees, in the end you will have nothing.
- IBM Anonymous in Austin, TX: (Current Employee) “It's a big company!” Pros: The work can be stimulating and challenging, but it depends on the organization. The pay is decent (they claim they're competitive). Many areas encourage employees to work from home. Good benefits. Cons: Due to its size, different areas can be run very differently. If you're in a bad area, it can be hard to get out. Many areas micromanage expenses to the point where it's really rather ridiculous. Employees are just another commodity and the easiest way to reduce expenses fast is to let them go. If you get anointed, you stay anointed whether you deserve it or not. If you don't get anointed, it seems like nothing you can ever do will get you anointed. ("If he/she were good, he/she would have been promoted and rewarded before this...") Advice to Senior Management: Develop a spine and do the right thing for the employee and the business, not because the manager above you has issued a decree.
- IBM Anonymous in Boulder, CO: (Current Employee) “Micromanaged to death.” Pros: Good benefits and coworkers are smart and helpful. If you are in a division that is performing well then the opportunities and bonuses are good but if you are in that is under performing they make sure that the little people bear the brunt with layoffs, furloughs, and salary reductions. Cons: Managers are way more concerned about careers and making a name for themselves than listening to employee feedback. Managers refuse to tell upper line management anything that they do not want to hear...will actually remove truthful statements from RCAs if they don't want upper line management to see it. Way too many layers of management and they are completely out of touch. Advice to Senior Management: Stop spending all your time trying to impress upper line management and hiding the truth. Leaders do not hide the truth, they want to know what the problems are so they can fix them.
- IBM Anonymous in Denver, CO: (Current Employee) “It's a job.” Pros: Solid, well-recognized company with decent benefits. Definitely a large variety of positions and experiences available and most employees (US-based) work from home, so there is reasonable flexibility. Cons: Working from home makes it very tricky to have any kind of personal relationship with colleagues. IBM continues to layoff US-based workers without any notice, whatsoever. Morale is just terrible. Amazing to see people who have 30+ years in with the company still work 16+ hour days when they are fearful (daily) that they won't have a job tomorrow. Advice to Senior Management: Do a better job of having--and communicating--a plan for reducing the size of the workforce. Having people on eggshells every single day is terribly unproductive. Concomitantly, compensate the people that you do have left; do make them pick up the work their terminated co-workers used to do without providing improved compensation.
Wall Street Journal: Where The Jobs Are. By Chana R Schoenberger. Excerpts: Today's unemployment data is enough to make even the most dedicated job-seeker wonder: Where are all the good jobs? But good jobs are out there, you just need to know where to look.
According to new figures from job listings site SimplyHired.com, occupational, physical and speech therapists are in particularly high demand but are in especially short supply, making those jobs some of the least competitive. And healthcare companies are at the top of the nation's hiring list, according to the site's monthly jobs outlook report, released Thursday. There are 64 open jobs in occupational therapy for every 100 working in the field, the site's data show. Yet online job listings for these positions get 50 times fewer clicks than the hardest-to-place industry -- the legal field. Meanwhile, unemployed lawyers now find themselves in the country's most cutthroat race for a job, with less than one opening for every 100 working attorneys. ...

Computer software engineering is another growing field, with 29 job listings for every 100 programmers currently working. Software companies like Apple, Facebook, and Salesforce.com have created a tech-jobs boomlet, explains SimplyHired's chief executive, Gautam Godhwani. Facebook currently has some 2000 employees, with more than 350 open positions, but that's not counting jobs available at companies that make Facebook-related products and software, or social-media jobs that help companies use Facebook.
AccountingWEB: Is it legal to only hire the already-employed? The problems with must-be-employed rules. By Richard D. Alaniz. Excerpts: The job requirements have appeared all around the country. One ad, placed by a Texas electronics company looking for an engineer, stated that the company would not "consider/review anyone NOT currently employed regardless of the reason." In New Jersey, a Craigslist ad for assistant restaurant managers required that applicants "must be currently employed." There are many other examples of these types of ads.
In this economy, many companies fortunate enough to be looking for new employees can find themselves overwhelmed by the number of applicants who respond. Many of the unemployed are so desperate for a job that they are sending out resumes in massive quantities, even if they are under qualified for a particular position.

In their quest to find qualified workers, some employers are explicitly stating that they will only hire those who are already employed and will not consider the unemployed. While the "must be employed to apply" philosophy may make sense, federal regulators are examining these types of policies, and at least one state has made it illegal.

Earlier this year, the U.S. Equal Employment Opportunity Commission held a public meeting to examine how employers are treating unemployed job applicants. At the meeting, advocates of the movement to prohibit unemployment discrimination testified that unemployment discrimination has a "disparate impact" on minority, older, and disabled workers because they currently face higher than average unemployment rates. And, given the surplus of applicants for many jobs, employers are refusing to consider unemployed applicants at an increasing rate.
Huffington Post: How Can We Address Our Retirement Deficits If We Don't Know What to Save or What We've Saved? By Jane White. On a North Carolina company's website it describes its corporate culture as "team-driven" and "result-oriented." It might also add, "We actually care whether you can afford to retire," since annually it sends its 6,000 employees a Total Compensation Report, which tells them whether they are on track and what to do if they aren't. If there are 10 other companies in the country that do this, I'd be amazed.
In an sample communication provided to me, a 33-year-old employee was informed that his frozen pension plan would provide only about $2,000 a year in income and warned that at his current rate of savings in his 401(k) account he is scheduled to run out of money at age 74. The employee is urged to go to Fidelity Investment's website for employer accounts, www.401k.com, and use a tool to learn how much more he/she needs to save to get on target.

Few people realize that if you've got a $50,000 salary at retirement, Social Security will only replace 40 percent of your income, so you need to accumulate 10 times your "final pay," or your salary near retirement, in your 401(k) savings so that you'll be able to replace at least 70 percent of your income. On the other hand, if your salary at retirement is $100,000 or more, you need to aim for almost 13 times your final pay, because Social Security replaces even less, around 29 percent of your salary. According to pension actuary James Turpin, how much you need to save is based on when you start saving: to achieve "10 times final," it's at least 10 percent of your pay if you start at age 25, but it increases the longer you wait, up to at least 48 percent of it if you wait until age 50. ...

We need to at least begin to address the issue of 401(k) inadequacy in the remaining four months of 2011, because this is the first year that boomers turn 65 and haven't been informed that most of them can't retire. If they are told the truth, they can at least attempt to convince their employers to let them stay on the job for a few more years at their current salary. Otherwise, within a few years, they will run out of money and most likely will be forced to find low-paying jobs in retail or the fast food industry -- a fate that ensures that retirement is completely out of the picture.
Urban Institute: How Lifetime Benefits and Contributions Point the Way Toward Reforming Our Senior Entitlement Programs. By C. Eugene Steuerle, Stephanie Rennane. Abstract: The Congress, the President, and various commissions have begun discussing real Social Security, Medicare, and Medicaid reform. This paper suggests that as these discussions move forward, it would be helpful to examine lifetime contributions and benefits for Medicare and Social Security to understand the programs' internal fiscal situations and their broader role in overall budget policy and, most importantly, as a way toward a more unified and coherent approach to entitlement reform for seniors. This approach also provides a useful window on how equitably lifetime benefits and taxes are distributed and on the fiscal stability of the overall system.
Kiplinger: 5 Steps to a Secure Retirement. It’s time to size up your plan. You may be in better shape than you think. By Mary Beth Franklin. Excerpt: If you’re like many Americans whose retirement savings took a major hit during the market meltdown a few years ago, you’re probably wondering if you’ll ever be able to retire. The eye-popping stock market drop in early August and the downgrade of the U.S. credit rating no doubt add to your jitters. Or maybe investment performance isn’t your major worry. A spate of unemployment or depressed home values can make yesterday’s vision of retirement seem like an impossible dream.
Workforce Management: Retirement Plans Morphing as Defined Benefits Fade for New Workers. As of May, 30 percent of Fortune 100 companies offered a defined benefit plan to new salaried employees, down from 37 percent at the end of 2010 and 83 percent as recently as 2002. How are employees reacting to this change in their total compensation? By Patty Kujawa. Excerpts: “Companies today, in general, are in a lot better shape than the stock market is,” Ehrhardt says. “I don’t think we’re going to see the rash of plan freezes as we have in the past because these companies kept their plans for a reason.” But with fewer defined benefit plans among Fortune 100 companies, defined benefit pension advocates such as Karen Friedman, executive vice president and policy director for the Washington, D.C.-based Pension Rights Center, are concerned with how other companies, like Journal Communications, are reacting.
“If companies continue to drop defined benefit plans, it is adding to our retirement crisis,” Friedman says. “Companies know what the competition is doing. If one bar gets lowered, then other companies will feel like they can lower their bar.”
Computerworld: Age bias in IT: The reality behind the rumors Is high tech really that tough on older workers? Or are they simply not pulling their weight in an industry that never stops innovating? By Tam Harbert. Excerpts: Age bias: Some consider it IT's dirty little secret, or even IT's big open secret. Most high-tech employers would likely deny that age discrimination is an issue at their company. But many IT workers over 50 beg to differ, saying they have experienced age bias or know someone who has. The bias can take several forms, they say. Their salaries might stagnate. They might have few or no opportunities for advancement. They might not be included in training and professional development programs. And they could be the first to be laid off and the last to be hired.
Age bias is "something that no [employer] talks about. But it's a reality in tech that if you're 45 years of age and still writing C code or Cobol code and making $150,000 a year, the likelihood is that you won't be employed very long," says Vivek Wadhwa, who currently holds academic positions at several universities, including UC Berkeley, Duke and Harvard. ...

In the category of "computer and mathematical occupations," the overall unemployment rate for people 55 and over jumped from 6% to 8.4% from 2009 to 2010, according to the data. For those 25 to 54 years old in that job category, the unemployment rate fell from 5.1% in 2009 to 4.5% in 2010. Those figures are particularly striking when compared to the overall population, where 55-plus workers had lower unemployment rates (7%) than the 25-to-54-year olds (8.5%) in 2010.
Washington Post: The boring truth about Social Security. By Ezra Klein. Excerpts: There was a long and mostly confused conversation about Social Security during Wednesday night’s GOP debate. But rather than get sidetracked over whether the pension program is a “monstrous lie” (Perry), “a Ponzi scheme” (Perry again), “tyranny” (yep, Perry), “broken” (Cain), or a great system that Americans are being “defrauded out of” (Romney), let’s just go to the numbers.
Over the next 75 years, Social Security’s shortfall is equal to about 0.7 percent of GDP (pdf). If we increase its revenues by that amount -- which could be accomplished by lifting the cap on payroll taxes -- or reduce its benefits by that amount or do some combination of the two, Social Security is back in the black. Here are 30 policy tweaks that could get us there. ...

And that’s...it. That’s what’s needed to fix Social Security. All this talk about it being a “monstrous lie” or “a Ponzi scheme” or “broken” is meant to create a crisis to clear the way for radical changes in Social Security. But if folks want to make radical changes to Social Security, they should just make the argument for their proposed fixes. And good luck to them. But in reality, what’s going to happen is that sometime in the next decade or so, Republicans and Democrats are going to compromise on a package that adjusts Social Security by about 0.7 percent of GDP over the next 75 years.
Washington Post: 30 options for reforming Social Security -- and how much they'll save. By Ezra Klein. Excerpt: As I've said, my preference is to make Social Security more, rather than less, generous. There are a lot of areas in which the federal government should be spending a lot less -- but I don't think Social Security is one of them. Still, Social Security reform is likely to be a big issue in the fall, and so it's worth getting a sense of the wide range of potential changes available. This chart comes from the Congressional Budget Office's report on 'Policy Options in Social Security,' and it shows both what people think they are, and how much they'll save.

New on the Alliance@IBM Site

IBM: It is time to call it "India Business Machines". Full excerpt: As everyone knows, IBM has continued its advance against American workers- it is not well loved abroad either, witness the strikes in Chile. Before anyone complains about how bad IBM is, I need to point something out. IBM is not the ethereal "they", IBM is us, the employees. The only reason IBM is able to do what it does, continue laying off Americans and contribution to our shared economic disaster, is if we the employees, allow it.. we are after all.. IBM.
There is not a week that goes by that one of us does not read about the "resource action" that is taking place. Each time it happens we all worry it will be us next time, but.. we don't join the union, we do nothing, we get what we deserve. Working for IBM and allowing and participating in its activities makes us all complicit. Without our help, the company could not do what it does today. Are we any different than the good little Germans, who did not speak up, who worried about their own jobs and well being as the Holocaust occurred around them?

I recently worked on a project, the result of which was to offshore the workforce of the client company to IBM Global Resources in India. The new word for India resources is "GR".. they are euphemistically called "Global Resources". My work, my labor, took the jobs of American workers, and put it in the hands of people in India- I DID THAT...not IBM.

Do not let anyone tell you about the Great Global Economy and how these newly enriched countries are going to give back all the money we lose from the destruction of American Labor in trade. India just gave their largest (10B$) military contract to, well, not us!

The country that profits the most from US financial aid and a free license to undercut American Workers.. did not give us their business.. Remember.. government spending turns into paychecks for workers- that money goes into bank accounts and funds something called M1- M1 is multiplied and becomes the money supply.. We pay taxes, the government spends money and that money circulates and helps drives the economy. We are leaking M1- the money leaves us.. goes to workers in India and drives their economy- we don't get the trade in return, it is flatly a lie.

The time is now.. before its to late.. to take the risks.. to come out.. to do the hard thing.. Write to your congressman, grow a spine, stop the tax benefits to IBM and others who offshore and eliminate American Jobs.. Band together, join a union, do something! If you don't.. then be quiet, be a good little IBMer and each week.. as the layoff happens.. be glad its not you.. but.. eventually. it will be. -Anonymous-
Job Cut Reports
- Comment 9/05/11: GDF wave 2011.2 in progress in Canada (2011.2 is for the legacy systems). Everybody back in the office 5 days a week starting October 24th (except people living over 50 miles away), even if you're the only member of your team at that location (as in Canada Global Delivery Centers are virtual and located in multiple cities like Toronto, Montreal, etc.) -Canonymous-
- Comment 9/06/11: Happy Labor Day to all Alliance members. Not so much happy for all the lurkers doing nothing. Didn't you have American History in school? Didn't you learn about the robber barons and the rise of the labor movement? Look around now. I think Mark Twain said "History doesn't repeat itself but it rhymes". I can hear it rhyming now. Do you? I wore my Alliance shirt today - not that anybody cared (sigh). -Neal Watkins-
- Comment 9/06/11: Anyone else had a review letter recently? 11 year veteran tech (Band 9) near top of salary curve. Technologist in a WW overlay STG group of sales people. Been 1's and solid 2 until this "mid year review" which I was not invited to. FLM said it was stock wording and he could only change the middle paragraph. Anyone else seen one? -Anonymous-
- Comment 9/08/11: Read a report today regarding capacity planning. IBM India August 2011 : 95,600. IBM India Dec. 2012 : 125,500. Expected growth rate is 20% per year through 2015. -Anonymous-
- Comment 9/08/11: -Dave G- I hear ya. I have been waiting for over 10 years, as an Alliance member and still the same lousy sentiment from the average Joe and Jane IBMer. I hate to say it, most IBMers have no B*lls. They are naive and they play scared. It's sad. And you know something?, Sam and Randy and the rest of the Armonk posse like their inaction. It makes their jobs so easy that it is more than money in their banks. -anonymous-

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform

Century Foundation: How the Affordable Care Act Pays for Itself. By Maggie Mahar. Introduction: The Patient Protection and Affordable Care Act signed into law by President Barack Obama in the spring of 2010 will extend health insurance to millions of uncovered Americans while launching reforms aimed at making our highly inefficient medical system less wasteful. The legislation (which often is referred to as the Affordable Care Act, or ACA), would also reduce federal budget deficits through a combination of tax increases and spending reductions. The Congressional Budget Office (CBO) has concluded that the ACA will more than pay for itself, provide coverage for 32 million uninsured Americans, and trim federal budget deficits by some $210 billion over the ten years ending in 2021.
In addition, Medicare’s Trustees report that the legislation “substantially improved the financial outlook for the Medicare program” without shifting costs to seniors, reducing medical benefits, or making across-the-board cuts to physicians’ pay.2 The ACA also strengthens Medicare benefits: copayments and deductibles for preventive care disappear, and more than a million seniors who, in the past, have fallen into the Medicare Part D coverage gap (or “donut hole”) will pay less for prescription drugs. At the same time, the law hikes Medicare and Medicaid reimbursements to physicians and nurse practitioners who provide primary and preventive care, while raising fees for general surgeons who work in under-served areas. Fees for doctors who offer primary care to Medicaid patients will be raised to Medicare levels. Finally, if patients enjoy better outcomes at a lower cost, doctors, hospitals, and others that collaborate in accountable care organizations (ACOs) to improve care will share in the savings.

The assessments coming from CBO and Medicare’s Trustees may seem hard to believe. How can Washington guarantee insurance for an additional 32 million people, improve Medicare’s coverage, and simultaneously save money without rationing care, charging seniors more, or slashing physicians’ fees?

Although the news media has provided overviews of the law’s provisions, most Americans remain confused. They are not convinced that reform can make the American health care system more cost efficient, while simultaneously improving both coverage and the quality of care. The truth lays in the details. As Medicare’s Trustees observed in their 2011 Annual Report, the ACA “contains roughly 165 provisions affecting the Medicare program by reducing costs, increasing revenues, improving certain benefits, combating fraud and abuse, and initiating a major program of research and development for alternative provider payment mechanisms, health care delivery systems, and other changes intended to improve the quality of health care and/or reduce its costs to Medicare.”

Little wonder that no one can sum up the effect of those 165 changes in a page or two. The goal of this report is to synthesize the relevant numbers and offer in-depth analysis of exactly how the ACA will both strengthen health insurance protections and save money.
New York Times: Doctor Fees Major Factor in Health Costs, Study Says. By Robert Pear. Excerpts: Doctors are paid higher fees in the United States than in several other countries, and this is a major factor in the nation’s higher overall cost of health care, says a new study by two Columbia University professors, one of whom is now a top health official in the Obama administration.
“American primary care and orthopedic physicians are paid more for each service than are their counterparts in Australia, Canada, France, Germany and the United Kingdom,” said the study, by Sherry A. Glied, an assistant secretary of health and human services, and Miriam J. Laugesen, an assistant professor of health policy at Columbia.

The study, being published Thursday in the journal Health Affairs, found that the incomes of primary care doctors and orthopedic surgeons were substantially higher in the United States than in other countries. Moreover, it said, the difference results mainly from higher fees, not from higher costs of the doctors’ medical practice, a larger number or volume of services or higher medical school tuition. ...

Ms. Laugesen and Ms. Glied said that among primary care doctors, those in the United States had the highest annual pretax earnings after expenses — an average of $186,582 in 2008 — while those in Australia and France had the lowest earnings, $92,844 and $95,585.

“Among orthopedic surgeons, those who had the highest annual pretax incomes, net of expenses, were in the United States,” with an average of $442,450, the study said. In Britain, which ranked second, the comparable figure was $324,138. Annual pretax earnings of orthopedic surgeons in the other countries were less than $210,000.
Washington Post: How health costs wiped out a full decade of income increases. By Ezra Klein. Excerpts: All evidence points to American voters not really caring about rising health-care costs. But here's one pretty compelling reason they should: The escalating cost of health care has wiped out nearly all income gains made by the average American family in the past decade. A new study in the journal Health Affairs games out how steep health cost growths have decimated a full decade of increased earnings. It focuses on a middle-income family of four with employer-sponsored health insurance.
Overall, that middle-income family saw its income go up by $23,000, from $76,000 in 1999 to $99,000 in 2009 — not too bad. But rising health-care costs, in the form of increased insurance premiums and co-pays, ate up nearly all of that. Factor in that spending, and the average family only had $95 per month more in available income than it did a decade ago.

News and Opinion Concerning the "War on the Middle Class"

"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.

AlterNet: 4 Ways Government Policy Favors the Rich and Keeps the Rest of Us Poor. While most Americans struggle in the face of the recession, the rich are enjoying the benefits of policies that redistribute wealth upward--and crying class war if we complain. By Jake Blumgart. Excerpts: The rich really are different from you and me. There’s the obvious, of course: They have a whole hell of a lot more money. But just as important, they are able to preserve their wealth from the forces that decimate the earning power of your average American. While government programs for working or jobless Americans are under constant attack, the state frequently intervenes on behalf of the rich, or at least lets them keep their earnings, tax free (leaving the rest of us to pick up the tab).
Republicans in Congress, and to a lesser extent the Obama administration, seem to believe that austerity is the best way to deal with our recessionary woes (despite all economic evidence to the contrary). Instead of unraveling the safety net, voters should consider all the ways the government aids and abets the one class of people who clearly don’t need help.
1. Protectionism for high-income professionals, free trade for everyone else...
2. Rich and own a big house? Here’s some money! ...
3. A sales tax for bread but not for bonds (or stocks or futures) ...
4. Tired of payroll taxes? The wealthy aren’t because they don’t have to pay...
Mother Jones: My Jobs Plan: A Trillion Dollars For Infrastructure. By Kevin Drum. Excerpts: few weeks ago I rode an American train for just about the first time in my life. It was the 9:07 Metro North from Grand Central Terminal to New Haven, Connecticut, and I'm sort of embarrassed to say that I was slightly shocked by the experience. It's not that I had any problem getting to New Haven: The train left on time and arrived on time. But the two-hour ride itself was terrible: bouncy and loud and swaying and uncomfortable for practically the entire way. If you're not a car-happy Southern Californian like me, maybe this doesn't surprise you. But it did surprise me—at least a little—and there's a reason for this: Although I've never taken a train anywhere in the United States, I've been on plenty of trains in Europe. Not bullet trains, just ordinary intercity trains. And so I always figured this was what all first-world trains were like: fast and quiet and suspended on a railbed that's smooth as glass.
Go ahead and laugh. I deserve it. But although this is a minor annoyance in the great scheme of things, it's symptomatic of our deteriorating public infrastructure in the United States. A gas pipeline in San Bruno, California, exploded last year, killing eight people, and on Wednesday the chair of the National Transportation Safety Board announced the results of its investigation: The explosion was a story of "flawed pipe, flawed inspection, and flawed emergency response." It was, she said, "not a question of if the pipe would fail, but when." And this wasn't just a story about San Bruno or just about Pacific Gas and Electric: The rest of our national gas pipeline network is under similar strain. ...

All of this is common knowledge. What's also common knowledge is that manufactured outrage over the deficit aside, the federal government can currently borrow money for free. Actually, it's even better than that: It can borrow money at negative interest rates. If we want to upgrade our national infrastructure, there's no better time to do it than right now. As Dartmouth professor Matthew Slaughter puts it, "There is a crucial connection between potholes and unemployment." Repairing our infrastructure will put people to work during a long and seemingly unending economic slump; it will provide us with the capital stock we need to compete on the world stage in the future; and it will cost us less now than it ever will again. It's a no-brainer.
New York Times op-ed: The Fatal Distraction. By Paul Krugman. Excerpts: Friday brought two numbers that should have everyone in Washington saying, “My God, what have we done?” One of these numbers was zero — the number of jobs created in August. The other was two — the interest rate on 10-year U.S. bonds, almost as low as this rate has ever gone. Taken together, these numbers almost scream that the inside-the-Beltway crowd has been worrying about the wrong things, and inflicting grievous harm as a result.
Ever since the acute phase of the financial crisis ended, policy discussion in Washington has been dominated not by unemployment, but by the alleged dangers posed by budget deficits. Pundits and media organizations insisted that the biggest risk facing America was the threat that investors would pull the plug on U.S. debt. For example, in May 2009 The Wall Street Journal declared that the “bond vigilantes” were “returning with a vengeance,” telling readers that the Obama administration’s “epic spending spree” would send interest rates soaring.

The interest rate when that editorial was published was 3.7 percent. As of Friday, as I’ve already mentioned, it was only 2 percent.

I don’t mean to dismiss concerns about the long-run U.S. budget picture. If you look at fiscal prospects over, say, the next 20 years, they are indeed deeply worrying, largely because of rising health-care costs. But the experience of the past two years has overwhelmingly confirmed what some of us tried to argue from the beginning: The deficits we’re running right now — deficits we should be running, because deficit spending helps support a depressed economy — are no threat at all.

And by obsessing over a nonexistent threat, Washington has been making the real problem — mass unemployment, which is eating away at the foundations of our nation — much worse.

Although you’d never know it listening to the ranters, the past year has actually been a pretty good test of the theory that slashing government spending actually creates jobs. The deficit obsession has blocked a much-needed second round of federal stimulus, and with stimulus spending, such as it was, fading out, we’re experiencing de facto fiscal austerity. State and local governments, in particular, faced with the loss of federal aid, have been sharply cutting many programs and have been laying off a lot of workers, mostly schoolteachers.

And somehow the private sector hasn’t responded to these layoffs by rejoicing at the sight of a shrinking government and embarking on a hiring spree.
Other Words: The Rich are Raking it in, so Where are the Jobs? It's a grim joke to speak of Labor Day as a celebration of labor. By Donald Kaul. Excerpts: Ah, Labor Day, the holiday when we honor Organized Labor. You know, unions and stuff like that. Yes, there'll be picnics and speeches detailing the enormous contribution unions make to our nation's prosperity. Political candidates will extol the virtues of the American worker and… Wait minute. I think I've picked up the wrong script here. This is an old one — so 20th-century.
Once upon a time, Americans celebrated the labor movement on Labor Day. But that was a long while ago, B.R. (Before Reagan). Most Americans have long since ceased viewing life through the prism of the working class. Americans are consumers first and foremost. We like to buy things. Unions, with their insistence on livable wages, pension plans, and health insurance, are an impediment to that desire. They drive up prices. ...

Unemployment is chronic and entrenched, having hovered around 9 percent for more than two years. Foreclosures continue apace and workers who do find jobs are getting them at significantly lower wages than their previous jobs paid. Many are losing their health insurance, and the public schools they send their kids to are being starved for funds by destitute cities and states.

Republicans in Congress say the answer to all of these problems is to cut government to the bone and beyond. Old people, poor people, and young people all have to share the burden of debt reduction. No government function is so sacrosanct as to be spared the knife. Except…

Except when it comes to taxing the well-to-do and filthy rich. GOP lawmakers argue that millionaires are the economy's job creators, and if they're not making money, they won't create any jobs.

A reasonable argument, except for the fact that they're making money already. And where are those jobs? CEO pay at large companies soared 27 percent last year. Profits are up too. Bankers, hedge fund managers, and stock brokers are raking it in. Things are so good for the richest of the rich that sales of mansions costing $20 million or more are up in the Los Angeles area. The stock market performed well in the first half of the year too. Where are the jobs? Why aren't these sultans of finance and industry hiring people, lending money, and doing something for the economy?
The Big Picture: WP: Special Report on “Breakaway Wealth”. By Barry Ritholtz. Excerpts: There is a huge Washington Post special report on Breakaway Wealth in the US. More than most other industrialized nations, the US has seen the top 0.1% compensated in vastly disproportionate numbers versus the rest of the populace.
There are at least several reasons to be concerned about this, beyond basic fairness: 1) Nations that have extremes wealth disparities tend towards social unrest. Usually, its banana republics and dictatorships, but it could happen in a corporate-owned quasi democracy as well. 2) CEOs and other company insiders have been engaging in a massive grab of shareholders wealth for decades. Its gotten appreciably worse in the 2000s. 3) Management is now trying to hide their compensation from the business owners — the firm’s shareholders.

Making matters even more outrageous, these CEOs are trying to pass legislation that would legally allow them to not to disclose executive compensation at public companies:

“Here’s one financial figure some big U.S. companies would rather keep secret: how much more their chief executive makes than the typical worker. Now a group backed by 81 major companies — including McDonald’s, Lowe’s, General Dynamics, American Airlines, IBM and General Mills — is lobbying against new rules that would force disclosure of that comparison.
Washington Post: Romney unveils sweeping plan for jobs, economy. By Philip Rucker and Karen Tumulty. Excerpts: he far-reaching economic plan that Republican presidential candidate Mitt Romney put forward on Tuesday relies heavily on the premise that reviving the economy depends on getting the government out of the way of corporations. Romney’s prescription for the country’s ailing economy includes overhauling federal tax, regulatory, trade and energy policies. His is a collection of business-friendly ideas that fit neatly within the mainstream of the Republican Party, with a few innovative proposals sprinkled throughout, namely tougher stances on China and labor unions.
“The right answer for America is not to grow government or to believe that government can create jobs. It is instead to create the conditions that allow the private sector and entrepreneurs to create jobs and to grow our economy. Growth is the answer, not government,” Romney said as he released the plan, called “Believe in America.”

That may be a questionable concept at a time when businesses are seeing record profits but have not put them into the kind of hiring and investment that could start a national economic recovery. At the same time, though, polls show that voters are losing faith in the Obama administration and its embrace of government as a solution to many of the country’s problems.
Wall Street Journal: Debt Hobbles Older Americans. By E.S. Browning. Excerpts: More Americans are reaching their 60s with so much debt they can't afford to retire. Most people used to pay off their debts before retiring. But as wages have barely kept up with rising prices over the past 35 years Americans have pushed debt higher, living beyond their means. Now, people are postponing retirement, cutting living standards or both.
All kinds of debt held by this age group have risen, but the big problem is mortgages. Thirty-nine percent of households with heads aged 60 through 64 had primary mortgages in 2010 and 20% had secondary mortgages, including home-equity lines, according to research group Strategic Business Insights' MacroMonitor. That was up from just 22% and 12%, respectively, in 1994.
Business Insider: 15 Mind-Blowing Facts About Wealth And Inequality In America. Excerpts: (See the article for charts for each of these facts.)
- The gap between the top 1% and everyone else hasn't been this bad since the Roaring Twenties
- Half of America has 2.5% of the wealth
- Half of America has only 0.5% of America's stocks and bonds
- Look at the wealth gap grow!
- The last two decades were great...if you were a CEO or owner.
- Real average earnings have not increased in 50 years
- And savings rates are sinking
- Despite the myth of social mobility, poor Americans have a SLIM CHANCE of rising to the upper middle class
- Republican tax cuts have significantly increased the wealth gap
- Meanwhile, income tax is getting lower and lower for the rich
- America spreads its wealth FAR LESS than other developed countries
- America's income spread is nearly twice the OECD average
- The income gap is NOT growing in other countries, like France
- Inequality is worst around Wall Street and Oil Land
- If you aren't in the top 1%, then you're getting a bum deal. Normalized to 1979, the top 1% have seen their share of America's income more than double. The bottom 90% have seen their portion shrink.
Forbes: 9 Recommendations for President Obama to Create Jobs. By Adam Hartung. Excerpts: Public companies aren’t going broke, by and large. Most have record high cash balances. Only they keep using the money to buy back their own stock! Every month sees a wave of new stock buy back commitments, as 24×7 Wall Street reported “August’s New Massive Stock Buybacks… Over $30 Billion!” Business leaders find it less risky to buy their own stock (supporting their own bonuses, by the way) than invest in any sort of growth program – something that might create jobs. ...
We’ve done a great job of cutting taxes, but we’ve simultaneously gutted our investment in R&D, innovation and doing anything new! If you wonder where the jobs went it wasn’t oversees, it was into equipment for higher productivity, higher corporate cash levels, more stock buybacks, increased bank reserves and dramatically higher executive compensation as profits rose!

We don’t need more tax cuts – because nobody is investing in any new projects! We don’t need more unemployment insurance, because that – at best – delays the day of reconning without a solution.

Here's what we need to do today (Editor's note: 3 of the 9 are shown here):
- Implement a tax on corporate stock buybacks. At least as great as the tax on corporate dividends. Buybacks simply drain the economy of investment funds, with no benefit. At least dividends give returns back to shareholders – who might invest in a new company! And if buybacks are taxed, executives might start investing in projects again! ...
- Cut payroll taxes on the self-employed and small business. Today self-employed pay 2x the payroll taxes, so it’s a big dis-incentive to entrepreneurship. Give start-ups a break by lowering employment taxes on small employers – say less than 50 employees. ...
- Re-activate the SBA (Small Business Administration) it by giving it $100B (maybe $200B) to guarantee bank loans of start-up businesses. Bank lending has ground to a halt as banks eliminate risk – so let’s get them back into their primary business again. In WWII the government guaranteed every loan for the construction of the Liberty Ships – and behold business built 2,751 of the things in 4 years!
New York Times op-ed: The Whole Truth and Nothing But. By Thomas L. Friedman. Excerpts: Kishore Mahbubani, a retired Singaporean diplomat, published a provocative essay in The Financial Times on Monday that began like this: “Dictators are falling. Democracies are failing. A curious coincidence? Or is it, perhaps, a sign that something fundamental has changed in the grain of human history. I believe so. How do dictators survive? They tell lies. Muammar Gaddafi was one of the biggest liars of all time. He claimed that his people loved him. He also controlled the flow of information to his people to prevent any alternative narrative taking hold. Then the simple cellphone enabled people to connect. The truth spread widely to drown out all the lies that the colonel broadcast over the airwaves.
“So why are democracies failing at the same time? The simple answer: democracies have also been telling lies.” ...

Of course, there is a big difference between America and Libya. We can vote out our liars, unlike certain Arab — and Asian — countries. Still, Mahbubani’s comparison warrants some reflection this week, which coincides with the 10th anniversary of 9/11 and the president’s jobs speech. It is a great week for truth-telling.

Can you remember the last time you felt a national leader looked us in the eye and told us there is no easy solution to our major problems, that we’ve gotten into this mess by being self-indulgent or ideologically fixated over two decades and that now we need to spend the next five years rolling up our sleeves, possibly accepting a lower living standard and making up for our excesses?

For me, this is the most important thing to say both on the anniversary of 9/11 and on the eve of President Obama’s jobs speech. After all, they are intertwined. Why has this been a lost decade? An answer can be found in one simple comparison: How Dwight Eisenhower and his successors used the cold war and how George W. Bush used 9/11. America had to face down the Russians in the cold war. America had to respond to 9/11 and the threat of Al Qaeda. But the critical difference between the two was this: Beginning with Eisenhower and continuing to some degree with every cold war president, we used the cold war and the Russian threat as a reason and motivator to do big, hard things together at home — to do nation-building in America. We used it to build the interstate highway system, put a man on the moon, push out the boundaries of science, teach new languages, maintain fiscal discipline and, when needed, raise taxes. We won the cold war with collective action.

George W. Bush did the opposite. He used 9/11 as an excuse to lower taxes, to start two wars that — for the first time in our history — were not paid for by tax increases, and to create a costly new entitlement in Medicare prescription drugs. Imagine where we’d be today if on the morning of 9/12 Bush had announced (as some of us advocated) a “Patriot Tax” of $1 per gallon of gas to pay for education, infrastructure and government research, to help finance our wars and to slash our dependence on Middle East oil. Gasoline in the U.S. on Sept. 11, 2001, averaged $1.66 a gallon.

But rather than use 9/11 to summon us to nation-building at home, Bush used it as an excuse to party — to double down on a radical tax-cutting agenda for the rich that not only did not spur rising living standards for most Americans but has now left us with a huge ball and chain around our ankle. And later, rather than asking each of us to contribute something to the war, he outsourced it to one-half of one-percent of the American people. Everyone else — y’all have fun.
Common Dreams: Nurses to Obama: Heal America, Tax Wall Street! By Mary Bottari. Excerpts: As President Obama gets ready for his big jobs speech Thursday, America’s nurses have a message for him. "Heal America, Tax Wall Street!" the signs read as nurses rallied in front of 61 Congressional offices this week. The nurses are proposing a bold alternative to the “cut, cut, cut” rhetoric emanating from Washington, D.C.
Their proposal? “It’s time for the Wall Street financiers who created this crisis and continue to hold much of the nation’s wealth to start contributing to rebuild this country and for the American people to regain their future,” explained Rosanne DeMoro the Executive Director of National Nurses Union (NNU) in a press release. The nurses are joining groups across the nation and around the world who are calling for a financial transaction fee on high-volume, high-speed Wall Street trades, to tamp down dangerous speculation and to raise revenue for heath care, jobs and other critical needs.
Washington Monthly: Economists: Obama’s plan would work (if it passes). By Steve Benen. Excerpts: A tentative thumbs-up. That was the assessment Thursday night from economists who offered mainly positive reviews of President Barack Obama’s $450 billion plan to stimulate job creation. Some predicted it would put hundreds of thousands of people back to work next year, mainly because a Social Security tax cut for workers would be deepened and extended to small businesses. […] Mark Zandi, chief economist at Moody’s Analytics, estimated that the president’s plan would boost economic growth by 2 percentage points, add 2 million jobs and reduce unemployment by a full percentage point next year compared with existing law. ...
There are reasonable questions as to whether congressional Republicans even want to improve the economy at all, but if lawmakers have any interest in creating jobs and boosting growth, the American Jobs Act would work. It’s not everything I could have asked for, but it’s an ambitious solution to a pressing problem that would a big difference.
Investment News: Krugman on economy: 'This is a very bad scene'. State cutbacks and end of stimulus could add up to disaster, Nobel laureate says; pegs odds of worldwide recession at 50-50. Excerpts: Krugman, who last month said the risk of a global decline may be “a bit higher” than one-in-three, urged advanced economies to reverse fiscal belt-tightening and central banks to adopt a more expansionary monetary policy. ...
Krugman also said President Barack Obama has “close to zero chance” of getting his $447 billion jobs plan passed by the Republican-held Congress, which means unemployment will stay persistently high. “Realistically, the chance of getting any of it is very close to zero,” Krugman said before Obama unveiled his plan. “That's a bad thing. We're going to be seeing unemployment at something like its current levels, perhaps even higher, right through next year and beyond.”
New York Times op-ed: Setting Their Hair on Fire. By Paul Krugman. Excerpts: First things first: I was favorably surprised by the new Obama jobs plan, which is significantly bolder and better than I expected. It’s not nearly as bold as the plan I’d want in an ideal world. But if it actually became law, it would probably make a significant dent in unemployment.
Of course, it isn’t likely to become law, thanks to G.O.P. opposition. Nor is anything else likely to happen that will do much to help the 14 million Americans out of work. And that is both a tragedy and an outrage. ...

As Mr. Evans pointed out, the Fed, both as a matter of law and as a matter of social responsibility, should try to keep both inflation and unemployment low — and while inflation seems likely to stay near or below the Fed’s target of around 2 percent, unemployment remains extremely high.

So how should the Fed be reacting? Mr. Evans: “Imagine that inflation was running at 5 percent against our inflation objective of 2 percent. Is there a doubt that any central banker worth their salt would be reacting strongly to fight this high inflation rate? No, there isn’t any doubt. They would be acting as if their hair was on fire. We should be similarly energized about improving conditions in the labor market.”

But the Fed’s hair is manifestly not on fire, nor do most politicians seem to see any urgency about the situation. These days, the best — or at any rate the alleged wise men and women who are supposed to be looking after the nation’s welfare — lack all conviction, while the worst, as represented by much of the G.O.P., are filled with a passionate intensity. So the unemployed are being abandoned.

O.K., about the Obama plan: It calls for about $200 billion in new spending — much of it on things we need in any case, like school repair, transportation networks, and avoiding teacher layoffs — and $240 billion in tax cuts. That may sound like a lot, but it actually isn’t. The lingering effects of the housing bust and the overhang of household debt from the bubble years are creating a roughly $1 trillion per year hole in the U.S. economy, and this plan — which wouldn’t deliver all its benefits in the first year — would fill only part of that hole. And it’s unclear, in particular, how effective the tax cuts would be at boosting spending. ...

So, at this point, leading Republicans are basically against anything that might help the unemployed. Yes, Mr. Romney has issued a glossy, well-produced “jobs plan,” but it might best be described as 59 bullet points with nothing there — and certainly nothing to justify his assertion, bordering on megalomania, that he would create no fewer than 11 million jobs in four years. The good news in all this is that by going bigger and bolder than expected, Mr. Obama may finally have set the stage for a political debate about job creation. For, in the end, nothing will be done until the American people demand action.
New York Times editorial: The Enlightened Rich Want to Be Taxed. Excerpts: Some of the world’s wealthiest people are calling for higher taxes on the rich. They seem to recognize that the burden of the economic downturn cannot be borne entirely by the poor and middle class.
After the American billionaire investor Warren Buffett urged Congress last month to raise taxes on millionaires, the call echoed across Europe. Sixteen of France’s wealthiest individuals urged the government to raise their taxes. The Italian Formula One magnate Luca di Montezemolo publicly backed Mr. Buffett’s idea “for reasons of fairness and solidarity.” About 50 of Germany’s richest people have been campaigning for a higher top tax rate since 2009. ...

But altruism does not fully explain why members of the global elite are suddenly keen to prevent the deep budget reductions that will occur if governments don’t raise more money. They are also moved by what some might call enlightened self-interest. Their walls may be high, but the wealthy live in the same world as the poor and the middle class, who have been walloped by unemployment and cuts to social welfare programs. When Mercedes-Benzes burned in Berlin and riots broke out on London’s streets, the rich were watching on TV.

These nations risk more than social unrest. Austerity is already undermining economic growth on both sides of the Atlantic. Slashing funds for education, infrastructure and other vital needs will undercut future competitiveness and endanger industrialized nations’ economic performance for generations. ...

Mr. Buffett lives on the other end of the income spectrum, where 1 percent of American taxpayers — about 750,000 families — pocket more than 20 percent of the nation’s income. It is not surprising that the enlightened rich would think paying higher taxes was a wise investment. The Republicans in Congress need to be persuaded of that truth.

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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