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• Job Cut Reports
  • Comment 9/16/11: So, when's the next RA? Appraisals are unfairly dropping on US resources in IGS as jobs continue to move overseas or are replaced by Liquid Portal competitions. What is Liquid Portal, you ask? It's basically IBM's version of topcoder.com - i.e., work done on the cheap by freelancers, most of whom are in India/China. IBMers can check it out here - http://liquidportal.boulder.ibm.com So, the game is to continue to drop the appraisals on the US workforce and continue waves of RAs in favor of short-term freelancer and/or overseas labor. The outlook could not be more dismal in my IGS organization, and people could not be more demoralized. How are things for the rest of you IBMers out there? -Anonymous-
  • Comment 9/17/11: re: So, when's the next RA? They don't need to, the new strategy as you mention is to have lower appraisals, if you get 2 3s you will be let go, with a reduced severance package (13 wk max), saving them money. So expect the carnage to occur e/o Jan. If you got a 3 last year, you are on borrowed time. -qtr_century-
  • Comment 9/18/11: I was part of the great remix several years back, my shift premium and weekend pay was taken away, and now I am being told no OT yet I still work over 40 hrs. I (along with many of my colleagues in ITS) would vote in favor of forming a union. This site seems to only be a forum for complaining with no bite behind the bark. Instead of constantly asking for new paying members, why not first call for a vote. I'd be happy to join if I was confident that an election was going to be held sometime in the near future.-call4election- Alliance reply: We have explained this numerous times over the years. The Alliance can NOT simply ask for a vote. We have to PROVE to the Federal Government that there is sufficient support for a union election. There is a process involved, by law. We do this by having IBMers sign up with the Alliance in any of our 3 membership categories. The subscriber/supporter category is free. The others contribute voluntary dues to help keep this campaign and web site going. So far we are not even close or anywhere near enough support to petition for an election The bite comes from you. You want an election, then sign up and get your co-workers signed up.
  • Comment 9/18/11: re: "So, when's the next RA?" Interesting question, especially since there was so much talk about a 3Q RA planned for end of August. According to my manager (IGS-GTS div.07) we are in such a tight financial condition that they can't afford an RA right now. That seems strange considering how strong the 2Q earnings report was, but it sounds like parts of IGS-NA did not do so well, and are under huge cost pressures. What they are saying is it costs money to RA people. Well of course it does, but I thought corporations had accounting tricks to balance the severance costs against future savings. -CJ-Roc-
  • Comment 9/19/11: RA's will come, and with the super-productive US workforce, management probably figures instead of paying 6 months severance, work people to death over the rest of this year, lower their appraisal, and then pay them 3 months severance. So you got them to work for those 3 months severance instead of sitting around. And you only had to fund their 401K and medical an extra 3 months to get 3 months of extra work. Also most of next year's 3's have already been threatened with a "3", so they're working like demons. I support this union, and will continue to do so. Many in my department were unaware that there is a union. I've tried to enlighten them. I wonder if people are so beaten down, they don't want to improve their lot and join the union. Social Media is currently fueling some interesting nascent movements in the USA. I wonder how it could be used to raise awareness about the existence of this GREAT employees union that would improve their lives and their families' lives. -Anonymous-
  • Comment 9/22/11: A server team member in India reported 3000 contractors cut this month. Cannot be independently verified. -Anon11-
  • Comment 9/22/11: Get off the fence. I joined the Alliance in 1999. The next day I told my fist line that I was an organizer. I have given the same message to the next three first lines I reported to. I have 30 years as of this year and plan on working plenty more. Sure I know my phone calls are tracked, my lap top and notes are tracked. My performance has been rated from 1, 2+ and 2 depending on the manager. If you play by the rules you are no more likely to be ra'd. Piss off your manager or break the rules and you will be gone no matter your union stance. -Biker1mike-

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

• CCH Aspen Publishers: Health Reform Could Eliminate Most Of The Uninsured And Underinsured. Excerpts: Two recent reports suggest that the Patient Protection and Affordable Care Act (ACA) could reduce the majority of uninsured and underinsured. A Commonwealth Fund study found that provisions in the ACA to increase health insurance affordability could reduce the number of underinsured by 70%.

  The number of underinsured adults—those with health insurance, but high medical expenses relative to income—rose by 80% between 2003 and 2010, from 16 million to 29 million, according to the Commonwealth Fund. The study defined underinsured adults as those who reported at least one of the following conditions:

  • family out-of-pocket medical care expenses (not including premiums) that are 10% or more of income;
  • among low-income adults (those with incomes below 200% of the federal poverty level (FPL)), medical expenses that are 5% or more of income;
  • or per-person deductibles that are 5% or more of income.

  Nearly half (44%) of U.S. adults, or 81 million people, were either underinsured or uninsured in 2010, up from 75 million in 2007 and 61 million in 2003. Low-income families were most at risk of being underinsured, according to the Commonwealth Fund. Seventy-seven percent of those with incomes below 133% FPL, and 58% of those with incomes between 133% and 250% FPL were either underinsured or uninsured. If the ACA succeeds in reaching these individuals (those with incomes lower than 250% FPL), the number of underinsured could be reduced by 70% once the law is fully implemented.

• New York Times: Young Adults Make Gains in Health Insurance Coverage. By Kevin Sack. Excerpts: Young adults, long the group most likely to be uninsured, are gaining health coverage faster than expected since the 2010 health law began allowing parents to cover them as dependents on family policies. Three new surveys, including two released on Wednesday, show that adults under 26 made significant and unique gains in insurance coverage in 2010 and the first half of 2011. One of them, by the Centers for Disease Control and Prevention, estimates that in the first quarter of 2011 there were 900,000 fewer uninsured adults in the 19-to-25 age bracket than in 2010.

  This was despite deep hardship imposed by the recession, which has left young adults unemployed at nearly double the rate of older Americans, with incomes sliding far faster than the national average.

  The Obama administration, intent on showcasing the benefits of a law that has been pilloried by Republicans, attributes the improvement to a provision of the Affordable Care Act that permits parents to cover dependents up to their 26th birthdays. Until that measure took effect one year ago this week, children typically had to roll off their parents’ family policies at 18 or 21 or when they left college. ...

  Because entry-level jobs frequently do not have health benefits, and individual policies can be unaffordable on a starting salary, the rate of young adults without coverage is nearly double the national average. A Commonwealth Fund survey found that 45 percent of young adults reported delaying medical care because of cost in 2010, up from 32 percent in 2001.

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

"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.

• ThinkProgress: Multi-Millionaire Rep. Says He Can’t Afford A Tax Hike Because He Only Has $400K A Year After Feeding Family. By Alex Seitz-Wald. Excerpts: Rep. John Fleming (R-LA) appeared on MSNBC with Chris Jansing this morning to attack President Obama’s new deficit reduction plan, which includes some tax increases on the wealthy. Taking up the typical GOP talking point, Fleming said raising taxes on wealthy “job creators” is a terrible idea that kills jobs because many of these people are small business owners who pay taxes through personal income rates.

  Fleming is himself a businesses owner, so Jansing asked, “If you have to pay more in taxes, you would get rid of some of those employees?” Fleming responded by saying that while his businesses made $6.3 million last year, after you “pay 500 employees, you pay rent, you pay equipment, and food,” his profits “a mere fraction of that” — “by the time I feed my family, I have maybe $400,000 left over.” ...

  And how hard does the congressman work to make the equivalent of eight median household incomes? Fleming told the Wall Street Journal that “he spends very little time on day-to-day management, though he weighs in on broad strategy decisions.” “I monitor the reports. I’m certainly in communication with the managers,” he told the paper.

• New York Times: Obama Tax Plan Would Ask More of Millionaires. By Jackie Calmes. Excerpts: President Obama on Monday will call for a new minimum tax rate for individuals making more than $1 million a year to ensure that they pay at least the same percentage of their earnings as middle-income taxpayers, according to administration officials. ...

  The millionaires’ tax is among several changes Mr. Obama will propose in urging Congress to overhaul the federal income tax code next year, both to raise revenues for reducing deficits and to make the tax system simpler and fairer, said the administration officials, who agreed to speak in advance of the president’s announcement on the condition of anonymity. The millionaires’ rate would affect only 0.3 percent of taxpayers, they said. That would be fewer than 450,000; 144 million returns were filed for 2010.

  Mr. Obama’s proposal comes a month after Mr. Buffett began reviving his long-standing objection that he and “my megarich friends” pay a significantly lower percentage of their income in federal taxes — income and payroll taxes — than everyone else, thanks to the tax code’s favoritism toward the rich, and especially toward investors like him. “My friends and I have been coddled long enough by a billionaire-friendly Congress,” he wrote in an opinion article in The New York Times, a complaint he has repeated in talks and media interviews since. “It’s time for our government to get serious about shared sacrifice.” ...

  The marginal tax rate is the percentage paid on the last dollar a person earns. The current system has six marginal tax rate percentages — 10, 15, 25, 28, 33 and 35 — and each applies to a progressively higher amount of income. In theory, a wealthy filer pays the lower rates on income within each bracket, but the bulk of their income is taxed at the top 35 percent rate. Middle-class taxpayers generally pay marginal rates of 15 percent or 25 percent.

  But investors like Mr. Buffett pay no more than 15 percent on most of their income because that rate applies to capital gains, dividends and “carried interest,” which is the compensation paid to hedge fund partners and investment managers like Mr. Buffett.

  Another reason many wealthy Americans pay a smaller share of their income in federal taxes is that the Social Security payroll tax does not apply to income above $106,800; most people do not reach the cutoff and pay the tax on all their income.

  Counting income and payroll taxes, Mr. Buffett has said he paid an effective tax rate of 17.4 percent for 2010 compared with an average 36 percent rate for many employees of his company, Berkshire Hathaway.

  Under Mr. Obama’s proposal, Mr. Buffett and others with taxable income of more than $1 million would pay a minimum tax rate closer to his employees’ rates. But Mr. Obama will leave the details of how such a rate would be calculated — whether to focus on the overall federal tax burden of middle-income individuals generally, or their marginal rates — to the debate over rewriting the tax code.

• Washington Post: Obama to call for new minimum tax rate for millionaires. By Lori Montgomery. Excerpts: Obama plans to call Monday for a new minimum tax rate on millionaires as part of a comprehensive rewrite of the U.S. tax code to force the wealthiest Americans to pay the same share of income in taxes as middle-class families. In a twist on Obama’s long-standing assertion that the wealthy should do more to tame the soaring national debt, the proposal would target the top 0.3 percent of taxpayers, many of whom currently reap huge benefits from lower rates on capital gains and dividends, which form the bulk of their earnings. ...

  Appearing on CNN’s “State of the Union,” Sen. Lindsey Graham (R-S.C.) echoed Ryan’s characterization of the plan as class warfare, adding that it was “political move” that would do little to reduce the debt. “The tax code should be reformed for one purpose: to generate more revenue to help run the government and create jobs,” Graham said. “When you pick one area of the economy and you say, ‘We’re going to tax those people because most people are not those people,’ that’s class warfare.”

  Democrats, meanwhile, defended the idea and criticized House Speaker John A. Boehner’s (R-Ohio) absolute refusal to consider any tax increases. “I wonder if Boehner knows what it sounds like when he continues to say the position of the Republican party in America is that you can’t impose one more penny in taxes on the wealthiest people. I wonder if he understands how that sounds in Ohio to working families who are struggling paycheck to paycheck.”

• New York Times editorial: A Tax Others Embrace, U.S. Opposes. By David Kocieniewski. Excerpts: President Obama’s proposal for a new tax on millionaires echoes a call in many countries struggling with budget deficits and overwhelming debts to make the wealthy pay more. Britain and France have imposed new taxes on their highest earners — and Italy, Spain, Greece and Japan are considering similar moves, despite some protests.

  Whether the taxes on the rich in Europe raise enough money to close much of their budget shortfalls, they are being promoted as a step toward economic fairness at a time when governments are cutting spending on social programs like pensions, health care and education. Mr. Obama — whose millionaire’s tax would probably raise a modest amount of revenue over the next 10 years by collecting more from several hundred thousand Americans — has also framed his plan as a way to make the system more equitable.

  Specifically, the proposal would counteract decades of tax reductions for most Americans that have given the wealthy the most benefit. But the idea being embraced by much of the world faces strong opposition in the United States from Republicans and other conservatives who say it would harm the economy and cost jobs. ...

  Until the recent financial crisis and worldwide economic downturn, individual tax rates had fallen substantially in most developed countries over several decades. In 1980, the top federal rate on Americans was 70 percent, and most European countries were above 60 percent. Today most European countries have rates below 50 percent. The United States has a top rate of 35 percent, but many wealthy Americans pay considerably less because their earnings are derived from dividends or capital gains, which are taxed at no more than 15 percent.

• New York Times editorial: How the Big Money Finds a Way In. By Eduardo Porter. Excerpts: In 2007, the Supreme Court blew aside spending restrictions (weak as they were) by ruling that corporations, unions and other groups could spend unlimited amounts up to Election Day on “issue” ads that mentioned a candidate’s name, as long as they did not explicitly urge a “vote for” or “vote against” a candidate. Soon after that, 501(c) groups (like trade associations, unions and social welfare advocacy groups) became the vehicle of choice; unlike other types of groups, they are allowed to collect unlimited anonymous donations.

  In 2007, the Supreme Court blew aside spending restrictions (weak as they were) by ruling that corporations, unions and other groups could spend unlimited amounts up to Election Day on “issue” ads that mentioned a candidate’s name, as long as they did not explicitly urge a “vote for” or “vote against” a candidate. Soon after that, 501(c) groups (like trade associations, unions and social welfare advocacy groups) became the vehicle of choice; unlike other types of groups, they are allowed to collect unlimited anonymous donations.

  The legal changes of the last decade have contributed to the flood of money in the political process. Corporate campaign donations through 501(c)s and Super PACs hit around $140 million in 2010 from zero in 2006, according to estimates by the Center for Responsive Politics. For interest groups and wealthy individuals, the shifts have meant more direct influence in elections. For American democracy, the effect may well be disastrous.

  As a result, the effective federal tax rate, including payroll taxes, for the wealthiest 0.01 percent of earners fell to 31.5 percent in 2005, from 42.9 percent in 1979, according to data from the Congressional Budget Office. Over the same time, effective rates for taxpayers in the center of the range fell to 14.2 percent, a decrease of just 4 percentage points.

• Huffington Post: Middle-Class Americans Often Fall Down Economic Ladder: Study. Excerpt: The promise of the American dream has given many hope that they themselves could one day rise up the economic ladder. But according to a study released Tuesday, those already in financially-stable circumstances should fear falling down a few rungs too. The study, by the Pew Charitable Trusts, found that nearly a third of Americans who were part of the middle class as teenagers in the 1970s have fallen out of it as adults. Though Pew examined only a certain demographic swath of participants, its findings suggest the relative ease with which people in the U.S. can end up in low-income, low-opportunity lifestyles -- even if they started out with a number of advantages.
• New York Times op-ed: Our Hidden Government Benefits. By Suzanne Mettler. Excerpts: DON’T take at face value the claims that Americans dislike government. Sure, a recent ABC News/Washington Post poll found that 56 percent of Americans said they wanted smaller government and fewer services. Tea Party activists, the most vocal citizens of our time, powerfully amplify those demands. Yet the reality is that the vast majority of Americans have at some point relied on government programs — and valued them — even though they often fail to recognize that government is the source of the assistance.

  A 2008 poll of 1,400 Americans by the Cornell Survey Research Institute found that when people were asked whether they had “ever used a government social program,” 57 percent said they had not. Respondents were then asked whether they had availed themselves of any of 21 different federal policies, including Social Security, unemployment insurance, the home-mortgage-interest deduction and student loans. It turned out that 94 percent of those who had denied using programs had benefited from at least one; the average respondent had used four. ...

  Individuals’ political views partly account for their perceptions. In the Cornell poll, a respondent who self-identified as “extremely liberal” was 20 percentage points more likely to acknowledge using a government program than someone who used the same number of programs but was “extremely conservative.” Also, those who believed that the nation spent too much on welfare were less likely to admit that they had used a “government social program,” perhaps because that term had pejorative connotations. ...

  Until political leaders reveal government benefits for what they are by talking openly about them, we cannot have an honest discussion about spending, taxes or deficits. The stipulation in the new health care reform law that W-2 forms must indicate the value of untaxed employer-provided health care benefits is a step in the right direction. The government should also provide “receipts” that inform people of the size of each benefit they get through the tax code.

• AlterNet: Real Class War Is Working to Keep Those Below You Down. Contrary to popular belief, the United States is not a meritocracy, and amid cries of class warfare, Americans are getting the worst of both worlds. By Joshua Hollan. Excerpts: That conservatives are greeting the deficit reduction package Barack Obama presented on Monday – one that includes a new minimum tax on millionaires – with howls of 'class warfare' is as predictable as the sun rising in the east. It's a poll-tested talking point, after all.

  But it obscures a far more pernicious form of “class warfare” being waged from above – a war of attrition against the upward economic mobility of ordinary working people. We live in a country where most people believe their opportunities are limited only by their innate talents and appetite for hard work, but over the last four decades, while decrying a wholly imaginary class war from below, conservative policies have undermined many of the ladders by which working people once achieved a middle-class lifestyle. Taking pot-shots at another class isn't war, nor is imposing a modest tax increase on those who have been showered with tax cuts for the last decade. Genuine class warfare is those at the very top working to keep everyone else far beneath them. ...

  It's an undeniably true statement: in 1979, those in the top 10th of 1 percent of the American economic ladder took in 1.11 percent of the nation's income, but by 2008, they were grabbing 5 percent. Those extremely wealthy few didn't become five times smarter and aren't working five times harder than they were in the late '70s, and the seismic shift in our economic structures wasn't an accident: the upward redistribution of wealth in this country has been a direct result of policies for which those at the top have lobbied hard – labor policies, trade deals, cuts to the social services that lifted some of those at the bottom out of poverty and a tax structure that shifted a big chunk of the burden from corporations and the wealthiest to ordinary working families. ...

  But, contrary to that popular notion, the United States is not a meritocracy, and Americans are getting the worst of both worlds—not only is a significant portion of the middle class hanging on by the narrowest of threads, not only do fewer working people have secure retirements to look forward to, not only are nearly one in seven Americans uninsured, but working people also enjoy fewer opportunities to pull themselves up by their bootstraps than do the citizens of other advanced countries.

  In reality, the United States’ much-ballyhooed upward mobility is a myth, and it appears to be getting worse with each new generation. Several studies released in recent years suggest that Americans enjoy significantly less upward mobility than do the citizens of a number of other industrialized nations. German workers have 1.5 times the upward movement of Americans, Canada’s economy is nearly 2.5 times as mobile, and Denmark is three times as mobile. Norway, Finland, Sweden, and France (France!) are all more upwardly mobile societies than the United States. Of the countries included in the studies, the United States ranked near the bottom; only in the United Kingdom was it tougher to shake off a low social status one had been born with. ...

  There’s a similar dynamic in terms of health care: people with access to paid sick leave and other health benefits switch jobs less frequently than those who don’t enjoy those bennies, and as a result, they have longer average tenure and higher earnings. In these areas, the United States has felt Jacob Hacker’s “great risk shift.” Hacker described how the U.S. “framework of security has unraveled, leaving Americans newly exposed to the harshest risks of our turbulent economy: losing a good job, losing health care, losing retirement savings, losing a home—in short, losing a stable, financial footing.” All of those hardships offer unique opportunities to fall out of the middle class—opportunities for downward mobility that simply don’t exist for the Canadian or French worker, people who can rely on a more progressive state to help preserve their income levels when disaster strikes.

• New York Times op-ed: Are We Going to Roll Up Our Sleeves or Limp On? By Thomas L. Friedman. Excerpts: The Republicans have come nowhere near rising to our three-part challenge because the G.O.P. is no longer a “conservative” party, offering a conservative formula for American renewal. The G.O.P. has been captured by a radical antitax wing, and the party’s leaders are too afraid to challenge it. What would real conservatives be offering now? They would understand, as President Eisenhower did, that at this crucial hinge in our history we cannot just be about cutting. We also need to be investing in the sources of our greatness: infrastructure, education, immigration and government-funded research. Real conservatives would understand that you cannot just shred the New Deal social safety nets, which are precisely what enable the public to tolerate freewheeling capitalism, with its brutal ups and downs.

  Real conservatives would understand that we cannot maintain our vital defense budget without an appropriate tax base. Real conservatives would understand that we can simplify the tax code, get rid of all the special-interest giveaways and raise revenues at the same time. Real conservatives would never cut taxes and add a new Medicare entitlement in the middle of two wars. And real conservatives would understand that the Tea Party has become the Tea Kettle Party. It is people in real distress about our predicament letting off steam by trying to indiscriminately cut everywhere. But steam without an engine — without a strategic plan for American greatness based on spending cuts, tax reform and investments in tomorrow — will take us nowhere. Countries that don’t invest in the future tend to not do well there. Real conservatives know that.

• New York Times editorial: Taxes, the Deficit and the Economy. Excerpts: Republicans, predictably, are denouncing President Obama’s proposal to raise taxes on wealthy Americans and corporations to help wrestle down the nation’s budget deficit and pay for his job creation plan. There was the usual silly talk about class warfare against the rich. But the politicians insisted that their real concern was for middle-class Americans and the economy. Rick Perry said the president’s plan “penalizes investment when it is needed most.” Mitt Romney blasted the plan’s “crushing impact on economic growth.” A spokesman for John Boehner, the House speaker, called it a collection of “job-killing small-business tax hikes.”

  Americans need to take a close look at what Mr. Obama is calling for: a broad tax reform that raises $1.5 trillion over a decade but allows for lower rates on businesses and individuals by cutting tax breaks and loopholes for special interests, and that restores some fairness to a system in which millionaires and billionaires pay lower tax rates than middle-class families.

• AlterNet: Elizabeth Warren Puts the Kibosh on GOP's "Class Warfare": Nobody in This Country Got Rich on His Own". Excerpts: I hear all this, you know, “Well, this is class warfare, this is whatever.”—No!

  There is nobody in this country who got rich on his own. Nobody.

  You built a factory out there—good for you! But I want to be clear.

  You moved your goods to market on the roads the rest of us paid for.

  You hired workers the rest of us paid to educate.

  You were safe in your factory because of police forces and fire forces that the rest of us paid for.

  You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.

  Now look, you built a factory and it turned into something terrific, or a great idea—God bless. Keep a big hunk of it.

  But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.

• Washington Post Writer's Group, courtesy of truthOut: When Socialism Saves Capitalism. By E.J. Dionne, Jr. Excerpts: Have you noticed that one of the Obama administration's most successful programs is also its most "socialist" initiative? OK, the bailout of General Motors and Chrysler was not socialist in the classic sense: the government was not looking to hold onto the companies over the long run. Their turnaround was accomplished in significant part by tough, capitalist management steps.

  But, yes, this was socialism -- or, perhaps, "state capitalism" -- because the government temporarily took substantial ownership in the companies when no one in the private sector was willing to put up enough capital to prevent them from going under. Today, the companies are thriving. More than that: the auto industry exemplifies how unions can do their best to protect the interests of their members while also ensuring the prosperity of the companies that employ them. ...

  Franklin Roosevelt described the other way in 1932: "Our Republican leaders tell us economic laws -- sacred, inviolable, unchangeable -- cause panics which no one could prevent. But while they prate of economic laws, men and women are starving. We must lay hold of the fact that economic laws are not made by nature. They are made by human beings."

  Once human beings throw off the chains imposed by the idea that all economic laws are "natural," they discover the capacity to change things and can use the tools of democratic government to do so when all else fails.

• Forbes: Replacing FDR's New Deal With The GOP's Version Of The Great Society. By Lawrence Hunter. Excerpts: It’s not bad enough Wall Street gets bailed out by taxpayers; its mouthpiece at the Wall Street Journal also wants to stiff middle-class workers even more by reducing the pitiful rate of return they can expect from Social Security when they retire. As the WSJ recently boiled down Social Security’s fiscal straits: “the problem is that current seniors get more than they put in. . .”

  How about applying that same standard to Wall Street? How about we pass a law allowing the federal government to raid 15% of Wall Street’s investment capital over and above corporate taxes to help fund the government and then give that exact same, inflation-eroded amount back to it in 35 years without interest? That’s what the WSJ is suggesting to “fix” Social Security. Or better yet, how about the federal government pays the expropriated investment capital back to investment firms with a negative rate of interest—i.e., pays them back less than it raided—because that is exactly what SS already does in many cases and will do even more so in future, especially if the Journal gets its way. ...

  Conservatives like to pretend that Social Security is an extravagant welfare program so even these pitiful rates of return are inexcusably high. Despite the low, even negative rates of return workers realize from their payday contributions to the program, the conservative establishment in Washington considers Social Security benefits excessive as long as they comprise a real rate of return on investment in excess of zero, and even that rate of return is considered unwarranted for any retirees GOP politicians deem “too rich to deserve” them. The position of the Republican establishment in Washington is not to convert Social Security from a financial house of cards into an actuarially sound retirement program that would improve everyone’s retirement income, but instead to scrub its rolls and transform it into a real welfare program by means testing it, reducing benefits and making people work longer.

  The conservative establishment can call Social Security whatever it wants to now but for decades, don’t forget, they participated with every other politician in Washington telling workers they were investing in their own retirement every payday. It is, therefore, not surprising that American workers perceive Social Security as a public retirement plan they pay into each and every payday. It is, in their eyes, forced saving in a government retirement plan, which precludes them from using their money to save and invest in a private retirement plan. That’s not welfare, and to get there from here Republicans will have to pull the biggest bait-and-switch scam in political history.

• truthOut: The Truth About "Class War" in America. By Richard D. Wolff. Excerpts: Republicans and conservatives have done us a service by describing federal policies in terms of "class war." But by applying the term only to Obama's latest proposals to raise taxes on the rich, they have it all backward and upside down. The last 50 years have indeed seen continuous class warfare in and over federal economic policies.

  But it was a war waged chiefly by business and conservatives. They won, as we show below, and the mass of middle-income and poor Americans lost. Obama's modest proposal for tax increases on the rich does not begin a class war. On the contrary, it is a small, modest effort to reduce the other side's class war victories.

  Big business and conservatives have worked to undo the regulations and taxes imposed on them in the wake of the Great Depression of the 1930s. Then, an upsurge in labor union organization (the Congress of Industrial Organizations sweep across basic US industries) and in membership in both the socialist and communist parties gave Franklin Delano Roosevelt the support and the pressure to tax business and the rich. He took their money to pay for the massive federal hiring program (11 million federal jobs filled between 1934 and 1941) and to start the Social Security Administration etc. He regulated their business activities to try to prevent devastating capitalist depressions from recurring in the nation's future.

  Since the end of the Great Depression - and especially since the 1970s - the class warfare waged by business and its allies (most conservatives in both parties) was successful. For example, at the end of World War II, for every dollar Washington raised in taxes on individuals, it raised $1.50 in taxes on business profits. In contrast, today, for every dollar Washington gets in taxes on individuals, it gets 25 cents in taxes on business. Business and its allies successfully shifted most of its federal tax burden onto individuals.

  Over the same period, the tax rates on the richest Americans fell from 91 percent in the 1950s and 1960s, and 70 percent in the 1970s to the current low rate of 35 percent. The richest Americans won that spectacular tax cut. Middle- and lower-income Americans won no such cuts, while paying a higher proportion of their income for Social Security that the rich were required to do.

• New York Times op-ed: The Social Contract. By Paul Krugman. Excerpts: This week President Obama said the obvious: that wealthy Americans, many of whom pay remarkably little in taxes, should bear part of the cost of reducing the long-run budget deficit. And Republicans like Representative Paul Ryan responded with shrieks of “class warfare.”

  It was, of course, nothing of the sort. On the contrary, it’s people like Mr. Ryan, who want to exempt the very rich from bearing any of the burden of making our finances sustainable, who are waging class war.

  As background, it helps to know what has been happening to incomes over the past three decades. Detailed estimates from the Congressional Budget Office — which only go up to 2005, but the basic picture surely hasn’t changed — show that between 1979 and 2005 the inflation-adjusted income of families in the middle of the income distribution rose 21 percent. That’s growth, but it’s slow, especially compared with the 100 percent rise in median income over a generation after World War II.

  Meanwhile, over the same period, the income of the very rich, the top 100th of 1 percent of the income distribution, rose by 480 percent. No, that isn’t a misprint. In 2005 dollars, the average annual income of that group rose from $4.2 million to $24.3 million.

  So do the wealthy look to you like the victims of class warfare? ...

  And one consequence of the shift of taxation away from wealth and toward work is the creation of many situations in which — just as Warren Buffett and Mr. Obama say — people with multimillion-dollar incomes, who typically derive much of that income from capital gains and other sources that face low taxes, end up paying a lower overall tax rate than middle-class workers. And we’re not talking about a few exceptional cases.

  According to new estimates by the nonpartisan Tax Policy Center, one-fourth of those with incomes of more than $1 million a year pay income and payroll tax of 12.6 percent of their income or less, putting their tax burden below that of many in the middle class. ...

  Republicans claim to be deeply worried by budget deficits. Indeed, Mr. Ryan has called the deficit an “existential threat” to America. Yet they are insisting that the wealthy — who presumably have as much of a stake as everyone else in the nation’s future — should not be called upon to play any role in warding off that existential threat. Well, that amounts to a demand that a small number of very lucky people be exempted from the social contract that applies to everyone else. And that, in case you’re wondering, is what real class warfare looks like.