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Highlights—December 17, 2011

  • Yahoo! IBM Retiree Information Exchange message board: "Blue View Vision -- too cheap on eye exams for quality care" by "exitasap". Full excerpt: I'm retired. The new Blue Cross/Blue Shield Blue View Vision plan costs $24.50/mo, vs the prior $39/mo in 2011 (self+2 or more). At first glance, the benefits seemed fairly equivalent. So I called my optometrist of 25 years to let him know, that all his many IBM patients would be affected.

    "I looked into Blue View Vision and it is part of EyeMed. The reimbursement is so low for an eye exam that I cannot afford to see patients under the plan unless I become very aggressive and sell multiple eyeglasses and/or contact lenses and accessories privately to the patient in order to cover costs. For instance, our 30-40 min eye exam's fee is $152. VSP pays about $100 but EyeMed pays only $70 and I cannot charge the patient any more. So most of the docs who accept Eye Med will try to up sell and I don't want to do that."

    With an office staff (assistant, accounting, frame fitters, etc), I can understand the reduced $70 allowance is too low -- and he would not be allowed to charge more to the patient, e.g. another $30 to make equivalent to VSP, even all his patient were willing (for the patient this would be OK, given reduced premium)

    I presume IBM does care for one moment that many employees and retirees will be negatively affected, and either must switch optometrists, or drop coverage (what they want!). Why the change after all these years with VSP, which has provided excellent coverage at reasonable cost, unsubsidized premium. The new plan encouraged a reduction in quality services.

    How about a Choice of VSP or BVV for plan year 2013, after the BVV transitional period runs its course.

  • Yahoo! IBM Retiree Information Exchange message board: "Re: Blue View Vision -- too cheap on eye exams for quality care" by "lastdino1". Full excerpt: Sometimes I am amazed at the thought process of some of the IBM'ers. Why would anyone think that a company like IBM or any other large company is looking out for them. The objective here is to provide some form of coverage at the lowest cost to the company. They continue to negotiate on health care , dental and vision plans aimed at getting the best deal for IBM. This will either thin out the vision providers or make them join the plan. Looks like most will join. I would not expect any change for 2013. The way I see it is these providers have been ripping us off for years so let's squeeze them a bit. Life is Good.
  • Yahoo! IBM Retiree Information Exchange message board: "Re: Blue View Vision -- too cheap on eye exams for quality care" by "exitasap". Actually, the prior post mistakenly left out NOT from one sentence.
    "I presume IBM does NOT care for one moment that many employees and retirees will be negatively affected, and either must switch optometrists, or drop coverage (what they want!)."

    Of course, no one expects IBM to bring back VSP. The company had always said the Dental and Vision plans are not subsidized, and that the premiums are average cost. So why would they bother to change plans, unless the new plan offers more hidden profit (i.e. no subsidy) for executive bonuses. To retain quality care, one must drop in 2013 like they want, so they can live in wealth in Armonk. Top optometrists will not subscribe to BVV.

  • Yahoo! IBM Retiree Information Exchange message board: "Re: Blue View Vision -- too cheap on eye exams for quality care" by "teamb562". Full excerpt: Dino, you should change your handle to blueDino. No matter what board you go to, you always defend the blue pig. Doubt many out here (except the real old ones that don't know how things really are today) would agree with you. Also, what evidence to you have that supports your statement of these providers "ripping us off for years"?
  • Washington Post: EU accepts IBM concessions in antitrust probe of mainframe maintenance, closes case. Excerpt: The European Union’s competition watchdog says it has accepted concessions made by IBM to make it easier for rivals to perform maintenance on its mainframe computers and is closing its investigation of the company. The European Commission last year opened a probe into whether International Business Machines Corp. was illegal restricting other companies from providing profitable maintenance services on its mainframe computers.
  • Glassdoor: Best Places to Work – Employees' Choice Awards. Excerpts: Glassdoor is excited to announce our fourth annual Employees' Choice Awards for Best Places to Work. Our Top 50 winners were selected by the people who know these companies best — their employees! (Editor's note: IBM did not make the list. Some of the I.T. and Consulting companies in the top 50 include SAP America, Intel Corporation, Ernst & Young, Accenture, and PricewaterhouseCoopers.
  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM Anonymous: (Current Employee) “Process oriented.” Pros: Free training opportunities are very good, you can always find something to learn. Cons: Sometimes people forget why they are using a process and just do it to complete it rather than looking at the big picture. You must promote yourself. Advice to Senior Management: Management should try to remember the very good they received by IBM. Apparently, only few managers are able to apply what they have learned.
    • IBM Anonymous: (Past Employee - 2009) “Process heavy, low innovation environment with below average compensation.” Pros: -Employees encouraged to make frequent lateral job changes. -Opportunity to move across businesses without existing expertise. -Global organization; opportunities to gain global perspective. -If you gain your satisfaction mainly from activities outside work easy to find a job where there are low demands on your time. -Performance standards are low.

      Cons: -Unusually heavy process orientation, even for a large organization, leads to very low innovation. -Employees, even senior managers are so beat down by processes that there is little focus on results; mainly process. -Benefits are notably below average; company constantly seeking ways to indirectly reduce compensation by eliminating reimbursements, etc. -Laggard in terms of technology adoption and innovation. - you can quickly fall behind by staying at IBM. -Very high overhead of staff personnel/overhead cost; not likely to be sustainable in the long term.

    • IBM Senior Consultant in Washington, DC: (Current Employee) “Looking for challenging experiences? Look elsewhere!” Pros: Name recognition. Learn early on how to maneuver through company politics. Cons: IBM doesn't make good use of employee skill sets. Finding opportunities of interest is extremely difficult. Project placement is purely based on need and not where you best fit given your experience and background. Advice to Senior Management: Do some analysis on the experience and education of your employees and do a better job of placing them.
    • IBM Senior Consultant in New York, NY: (Past Employee - 2010) “The perfect place for undergrads or new consultants to get trained and groomed.” Pros: Knowledge-base available, industry expertise, benefits, training, and genuine team project structure. Cons: Minimal to no bonuses, compensation is below industry average if non-experienced consultant, and too many sub par senior leaders. Additionally, as extensive as the knowledge base is, there is no easy or efficient means of accessing it or ever having the time to reuse the things that have already been done firm-wide. Advice to Senior Management: The reason most of the young talent (in one division) left in a year was due to poor partner-level management.
    • IBM Anonymous: (Current Employee) “It is good company to join for shorter period if negotiated well in terms of salary.” Pros: IBM US may be good, regarding IBM India, can't see any good reason to join except the flexible work environments they provide. Cons: No Visibility, No Transparency in promotions, Unjustified salary hikes, No support from senior management, meagre bonus amounts. Advice to Senior Management: Please focus on the lower and middle management employees, Compensation should be matched to Industry standards, promotions should be transparent
    • IBM Pre Sales Engineer in Dallas, TX: (Current Employee) “Very talented group of professionals.” Pros: Work life family flexibility. Competitive pay, great benefits, challenging, fast paced. Lots of technology innovation, and career growth. Cons: Large organization with a lot of complex matrixed management and data models. It's a large company with tons of products. Can be very complex to navigate and stand out. Advice to Senior Management: I love working at IBM, my only advice would be for us to get out of our own way sometimes. I think the processes sometimes stifle the ability to be innovative, creative, and responsive.
    • IBM GBS in Paris (France): (Current Employee) “Hard and frustrating, energy wasted on non-productive internal issues, lack of recognition.” Pros: Vacations days and social benefits. Cons: Unattainable objectives (when clear.) Opacity of evaluation and lack of recognition on all non sales-related activities. Huge waste of energy and time on internal processes hindering work. No ability for the management to recognize financially good performances (individual or groups.) Advice to Senior Management: More informal recognition would go a long way (job dinners, team events, ...) Reward client-related good performances even when not related to new signings. More visibility on career options and requirements for promotion.
    • IBM Anonymous: (Current Employee) “One of my worst job experiences!!” Pros: Virtual offices; IBM is a name that is recognized in all walks of life. Don't have to explain what it is your company does. Cons: 1) Micromanagement to the extreme! 2) Incompetent managers that know nothing about your job, can't answer or help you with any questions or problems. Treat you with such low regard and disrespect. Won't ever, ever support you. 3) All the help desk is in India. Their laptops have major issues, both software and hardware on a daily/weekly basis. Calling into India these people don't listen. You have to repeat yourself many times. They are a mixed bunch of skills: From know nothing and waste of time to some competent. 4) HR is outsourced. Any question you have they refer you back to your manager. Sometimes you don't want to ask your manager these kind/types of questions. No where to turn to. 5) ZERO Team work. It's a dog eat dog environment. ME, ME, ME. No one wants or will help you. Advice to Senior Management: See comments above
    • IBM Anonymous in Omaha, NE: (Current Employee) “Opportunities on cutting edge stuff if you can get them but layoff threats suck.” Pros: Great benefits, opportunities to work on newer technologies if you're in the right position or are able to spend time outside of normal work hours to contribute to some other project. Cons: The biggest con is the constant layoffs to boost stock price. Out of all the people I know that got "surplused", only one got a position elsewhere in the company. What more can I say? Advice to Senior Management: There is too much reliance on bureaucracy when it comes to things like skill evaluations and what not that waste valuable working time.
    • IBM Anonymous in New York, NY: (Current Employee) “It's OK, you will always have a job here.” Pros: - Name recognition, IBM gets you in the door. - Very ethical company. - Great work life balance. - Good "people" management, 1st line managers are very understanding when it comes to problems or issues. - Client-centric company, client relationships are respected and IBM acts very professionally when dealing with its clients.

      Cons: - Company is cheap, feels like we are going out of business despite the surge in stock price. - Below average compensation. - Average benefits package. - Poor bonuses, even in sales. This is NOT the place to get rich. Bonuses in non-client facing jobs are virtually non-existent. - Not challenging, I can do my job in my sleep, and I've raised this to my management, nothing has changed. - Lack of career assistance/planning, you're really left on your own to figure out your path through the machine. Unsurprisingly, this makes vertical moves near impossible unless you're a superstar (which is odd given the mediocrity in first line management).

      Advice to Senior Management: - Treat your employees the same way you treat customers. - Increase compensation to industry average at a minimum, I know swarms of EXCELLENT people who have left for a better package. - Make sure everyone is adding value, there's a lot of middle management that's not needed.

    • IBM Anonymous: (Current Employee) “Unless you remain politically connected to TOP management, you will be "released" through their semi-annual cut backs.” Pros: Their perceived reputation in the Global Market. Cons: Keep your NETWORK and resume up-to-date. You will be blind-sided when you least expect it. Mine came after 3 months of 80 hour conversion weeks. Advice to Senior Management: Focus on QUALITY, not the bottom line. Look at supporting your originating country and those employees who have stuck by you. Measure by quality, not political connections. Management by "mind control" will not last forever.
  • Alliance for Retired Americans Friday Alert (PDF). This week's articles include:
    • Wyden-Ryan Medicare Plan Would Raise Premiums for Seniors
    • Payroll Tax Cut and Doc Fix Update
    • Early Retiree Health Care Program’s Funding to End This Month
    • Fair Pay for Home Care Workers May Be Coming Soon
    • Voter Suppression Continues to Rear its Ugly Head in Wisconsin, Pennsylvania
    • New Hampshire Alliance Chapter Works to Protect Funding for Seniors
  • Washington Post: Marriott CEO J.W. Marriott Jr. to step down. By Michael S. Rosenwald. Excerpts: J.W. Marriott Jr., who built the company his parents started as a District root beer stand into a global lodging giant, is stepping down as chief executive, ending a storied 39-year run that ushered in a new standard of dependable, middle-class hospitality for travelers around the region, the country and then the world. The word “Marriott,” in red letters on buildings from Bethesda to China, came to signify home for weary families making their way to Disney World, for traveling salesmen careening around the Midwest and lately for weary road jockeys keeping pace with globalization. ...

    Throughout the growth of his family’s company and the industry, there was Mr. Marriott, as his devoutly loyal employees call him, espousing his family’s simple maxim that if you take care of your employees, your employees will take care of your customers, and your customers will come back.

    That philosophy still permeates the company — which is now worth nearly $10 billion and employs 129,000 people — after countless nights of putting heads in beds. Arne Sorenson, a trusted Marriott lieutenant for more than a decade, will become chief executive in March, the first non-Marriott to run the company. J.W. Marriott, known as Bill, will become executive chairman.

    Editor's note: As an IBM consultant that had two months-long engagements at Marriott corporate headquarters in Bethesda, I have a great deal of respect for Mr. Marriott and his company. Marriott treats its people well, and with respect. The company reminded me so much of what IBM was like when I started with them in the 70's, but is sadly missing now.

    Mr. Marriott did not hide from his employees. You would routinely see him walking the hallways, by himself (not escorted by a squad of security guards in dark suits.) He routinely ate in the normal company cafeteria (which was excellent!), carrying his own tray (he is nearly 80 years old), and chatting with the employees in line with him.

    Despite his LDS religion (or perhaps because of it!) Mr. Marriott was quite progressive in terms of social issues. I delighted every morning as I walked into the facility to see moms and dads with their infants and toddlers accompanying them to work, to be dropped off at the on-site day care center. At the time of California's Proposition 8, Mr. Marriott wrote forcefully in his Web Blog about his opposition to the Proposition.

    Because of my first-hand knowledge of the company, whenever I travel I try to stay at a Marriott property. And, I've found that his maxim "if you take care of your employees, your employees will take care of your customers, and your customers will come back" to be so true.

    Selected reader comments follow:

    • I've had the privilege of meeting Bill and John Marriott as a guest in their respective garages. The family is a class act, with strong family values and their faith and believe in people passed down from generation to generation. John in particular, did something very special for a young friend of mine with Cystic Fibrosis (he spent about four hours showing his and his dad's cars to us). Bill should be very proud of the family business, but even more so for raising such a humble and nice family. All the best to a wonderful icon.
    • What a CLASS act. I worked for the company for 5 years in the late 80s-early 90's. I still have a framed thank you letter he sent me my first months on the job. In my experience, Mr Marriott has the best work model: treat the employees right, and they will treat the customers right. Too many companies today want the customer treated right and treating the employee right is lip service.
    • I always stay at Marriotts when I travel for work because of how well I am treated. Starts at the top. I hope Marriott does not change.
    • I have a friend, a woman in her early 70's, who worked for the Marriott in California…possibly the Palm Springs area. My friend worked for Marriott about 10 years. She personally knew Mr. Marriott. Her memories of employment and of the character of Mr. Marriott are stellar. He greeted his staff by name, He had personal interest and concern for his staff. He had stock plans for the most basic of worker. He was a mensch.

      In a contemporary sense, I hear similar recollections from people who work for Trader Joes. The workers are treated with respect, The workers have retirement, medical and dental plans.

      My point is that those who work in any capacity for certain employers, when there is a culture of respect and dignity and acknowledgment of the positive role of a worker of any status…well, there is a 110% performance, loyalty and happiness amongst the staff. There is no need for a labor union…and I am a labor union member…and there is a need for a union in the field I worked in. However, I would be the first to acknowledge that being fair, generous, respectful and dignified obviates the need for a contention and conflict. I would be the first to acknowledge that one's political affiliation has nothing to do with the above. And the first to say there are some employers who actually "get it." And the worker returns the generosity with loyalty and care for the customer.

      Mr. Marriott was an employer of this ilk. Trader Joes is a company of this ilk. I do not have a vested interest in either firm. However, it's a really good lesson for this lifetime union member to learn…that decent people do exist and the protections offered by a union are job specific rather than a default position.

      Of course when the opposite culture exists.,..and workers are locked indoors and made to work overtime without additional pay, have very few rights, not time off during the day…well, than a union would help. However, Marriott and Trader Joes are good examples of a culture that I admire.

    • Truly one of the rags to riches stories that is worth looking at, Republicans. THIS is a job creator, and he added jobs as he grew his business, a message you might want to learn from. I've stayed at more Marriotts than I can count, both for business and pleasure, and cannot recall a single bad experience. Amazing what treating your employees like human beings will do for worker morale and for productivity.
    • I want to thank Mr. Marriott. His company was among the first to hire welfare mothers after the 1994 reform and gave people a chance to change their lives.

Retirement Heist:

Throughout the IBM Pension heist, Ellen E. Schultz, a Pulitzer Prize winning investigative reporter with the Wall Street Journal, exposed IBM's and other companies shenanigans that have cost retirees millions and millions of dollars, while enriching corporate executives.

Ms. Schultz has just published a book that every IBMer should read: Retirement Heist: How Companies Plunder and Profit From the Nest Eggs of American Workers. Many IBMers are aware of the "cash balance heist" of 1999. However, IBM has been stealing money from the pension plan dating back to 1991, well before the Gerstner era.

Read more, including an excerpt that focuses on IBM's shenanigans...

An Amazon.com customer review:

A Gleam of Light through the Keyhole of Reality. By Free Speech. This book describes what to some may be all too apparent in American society. The concept of democracy faces a fundamental threat wherever a nation of people are governed by those who can be bought and sold, and matters of law fall at the feet of those who are ever drawn to the rewards offered in the service of elites. This is the nature of capitalism in the modern age. The concepts of the criminal conspiracy and syndicate have achieved new heights in an era in which they can be legitimized with sufficient influence over government, which is, given the example of governments in the U.S. in the era of prohibition in the United States, too old a lesson to believe that it has not already been learned.

The United States struggles to remain at the front of a global wave of development at the same time that it plunges headlong into rampant, corporate, criminal indulgence on a massive scale manipulated by mega-corporations that dwarf the governments of many states in terms of annual incomes and that have little reason to maintain any "national" identity. There are no "corporate citizens" in America, merely corporations that find it convenient to tap the resources of the United States and its population. After all, in a democracy, what is criminal except that which one group proclaims to be wrong in official terms, and others are able to right within the limits of their means? (Even then, contemplate how far one judge went, in the Microsoft anti-trust case, to undermine the decision in the case through a blatant, televised, public proclamation, and the real situation relative to the courts within the United States becomes clear.)

Where pensions and retirement funds can be translated, under the law, into large masses of cash that corporations can perceive as being, at least from their perspectives, disturbingly, both within but, somehow, beyond their grasp, in a nation controlled by a for-profit legal system in which ERISA laws do not permit the awarding of punitive damages to the aggrieved, the cash in untapped retirement funds will inevitably roll downhill into the pockets of those individuals who have established themselves as corporate powers and "fiduciaries", and in particular, into the pockets of those too incompetent to turn a profit in the current global market and disposed instead to raid their employees' retirements to prop up their credibility as parties worthy of the massive pay offered to America's dark CEO "princes" compared to their global counterparts. The nature of the evolution of a society under such dark "princes" wielding the influence of mega-corporations is irrevocably defined.

New on the Alliance@IBM Site
  • Job Cut Reports
    • Comment 12/12/11: Here's an employee number we'll never get, no matter how hard we try - How many US employees are being let go with a cheaper US replacement hired for them? IBM had a huge work-from-home program for a couple years, and then got rid of many of those people (as well as people working at smaller sites) and hired new people for those jobs at lowered bands, pay, and benefits rates in the new delivery centers. Let's not forget to take that into account when we're counting up the number of US jobs dumped, even though there is no way to get actual numbers on it. This is part of a systematic lowering of pay for US employees. -Anon-
    • Comment 12/12/11: I used to work for IBM for 11 years then got the early retirement package so often described here. After a rough restart, I now work for Curam, until recently, when I learned that IBM bought them. Does anyone have any advice on what to do next? -NowCuram-
    • Comment 12/14/11: IBM must be on the ragged edge trying to make their 4Q numbers. First they told contractors to take off 5 days (40 hours) without pay before Thanksgiving. (That's the same amount of furlough required in 3Q) Then they realized that was not enough, so they then said contractors needed to take two more days (16 hours) without pay before Christmas. Yesterday the word went out to take yet another day (8 hours) before next Friday. Off course, those are not the same numbers across the board. Some contractors have been on 30-day furlough, and just had another 30 days added to that. -Anon-
    • Comment 12/14/11: @NowCuram, now is a good time to organize your fellow workers and join the Alliance. After IBM absorbs this company, it will fleece all financial benefits and eventually strip the labor to the bone as it has done in the past and will continue to do in the future. -Sound-Advice-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Phawker: The Man Who Wasn't There: Q&A w/ Wendall Potter, Healthcare Executive Turned Whistleblower. By Jonathan Valania. Excerpt: This is the second installment of a massive, 30,000 word, three-part Q&A with Philadelphian Wendell Potter*, former mild-mannered Cigna health insurance executive turned whistle-blowing superman standing up for truth, justice and the American way. (You can read Part 1 here.) You may have seen Mr. Potter testifying before Congress or talking about the ills of the health insurance industrial complex on CNN or MSNBC or PBS, or in the pages of The New York Times, Wall Street Journal or Time magazine, to name but a few. Last year he published Deadly Spin, an authoritative takedown of a sick and dangerous healthcare system and the incredibly powerful and phenomenally profitable industry that games it for billions. He debunks the dark arts of modern corporate P.R. that uses subterfuge, misdirection and good old fashioned distortion of the truth to manipulate public opinion and absolve its paymasters of all culpability for the dirty deeds that make those obscene profits possible. In the end, Deadly Spin is an impassioned call for substantive reform, basic mercy and common decency.

    In the first installment we discussed the crisis of conscience that turned him from loyal, not to mention highly paid, company man to crusading reformer, watchdog and all-around thorn in the industry’s side. Having long thought he was on the side of the angels he increasingly came to realize that he was in fact playing for the other team, that the point of for-profit healthcare insurance is not paying for customers’ medical costs but avoiding doing so whenever possible. That for-profit health insurance corporations have a legal obligation to prioritize the enhancement of shareholder value over saving the lives of its customers. That he had blood on his hands. That he was an apologist for a system that denies medical care to more than 50 million Americans, and as a result more than 48,000 people die prematurely every year. Potter was tasked with writing an official-sounding report that minimized the problem and shifted all the blame on the uninsured. He helped craft reform-killing talking points for the healthcare lobby’s Congressional stooges to repeat into the cameras of Fox News and CNN. He was part of the effort to smear Michael Moore and discredit Sicko, his 2007 critique of the iniquities of the healthcare industrial complex, even though deep down he knew Moore was dead-on. The final straw was having to serve as company spokesperson through the resulting media firestorm when Cigna denied 17-year-old Nataline Sarkisyan a liver transplant and she died less than a week later. It is the campaign against Michael Moore and Sicko that we focus on in this installment. It begins with a cabal of health insurance operatives hiring a mole to sneak into the premier of Sicko at Cannes and take notes so that neutralizing talking points can be crafted. These talking points — which mostly rely on the usual lizard brain illuminators, namely fear (”Universal coverage is creeping Socialism!”) and loathing (”Taxpayers will have to pay out of pocket for illegal immigrants to get Cadillac health care!”) — are then passed along to various industry-owned Congressmen who dutifully parrot them in the echo chamber of 24-7 cable news and talk radio. It ends with Wendell Potter apologizing to Michael Moore live on national television.

  • Time Magazine: Why I Protest: Dr. Arthur Chen of Oakland, Calif. By Jason Motlagh. Excerpt: A family physician, Dr. Arthur Chen, 60, was an unusual addition to the counterculture of the Occupy Oakland movement. But the Connecticut-born Oakland resident who works in the city's Chinatown had a cause — health care reform — and the protests gave him a forum. He spoke to TIME's Jason Motlagh:

    TIME: What was the event that precipitated your activism? And what made it personal?

    Arthur Chen: I'm part of that 99%, proud to say, so it's very relevant. And then in addition to that ... I've been seeing patients that are low-income impacted, many of them unemployed, and then struggling for survival. They're immigrants, and so I've seen the negative impacts in their lives from day to day. And I've seen uninsured patients who have to struggle with the recommendations that I make because of whether or not they can afford it. So it's been real to me on a personal level, and looking at the population as a whole, looking at the patients that I see, and just knowing intellectually that there's flaws in our current system. We're taking capitalism and its negative sides head on, which I think is essential to a democracy. And hopefully preserve the positive side of capitalism, because I'm not totally against capitalism; I just think at this point it's probably out of control.

  • Physicians for a National Health Program: Students Occupy for Health Justice. By Danielle Alexander. Excerpts: I met a patient last week who stopped taking her antidepressant medications because she had been denied long-term health insurance and thought it would improve her chances of eligibility. Unfortunately this obviously wasn’t in the best interest of her health.

    I had another patient who presented to the emergency department with metastatic lung cancer. He had not been to the doctor in over 30 years because he couldn’t afford it. If he had sought treatment earlier he may have been cured.

    Everywhere I look private health insurance companies are making our patients sicker. ...

    I support the occupy movement because I feel that powerful and profiting insurance companies get in the way of my practice of medicine. Treatment should be the same high quality for everyone; instead, we have to consider what someone can afford.

    It too often becomes treatment for the “haves” and neglect for the “have nots.” But the thing is, these days you may not know which group you fall into. Insurance plans are so spotty, with major gaps in coverage, that you don’t even realize it until you need medical attention, and you find your plan does not cover it.

    I see it every day in the clinic – treatment is designed around what the insurance will pay (or not) instead of what is best for the patient first and foremost. It’s no fault of the medical team; we want to give the patients the best care, but the insurance industry has our hands tied. ...

    The United States is the only industrialized country that does not provide health care to all its citizens regardless of employment status or economic class. Our profit-driven health care industry raises costs and inequality.

    But our political system has been corrupted by corporate money and power, and the 1% have rejected evidence-based health policy that save lives and money, namely expanded and improved Medicare for all. We support Occupy Wall Street because economic and social inequality makes our patients sick.

  • Physicians for a National Health Program: An Open Letter to Secretary Sebelius and President Obama regarding the Institute of Medicine’s recommendations on the Essential Benefits under the 2010 Health Reform Law. Excerpts: We protest the Institute of Medicine’s (IOM) recommendation that cost rather than medical need be the basis for defining the “essential benefits” that insurance policies must cover when the federal health reform law takes effect in 2014. If adopted by the Department of Health and Human Services, this recommendation will sacrifice many lives and cause much suffering. We call on Secretary Sebelius and President Obama to reject them.

    The IOM proposal would base the required coverage on the benefits typical of plans currently offered by small businesses – enshrining these skimpy plans as the new standard. These bare-bones policies come with a long list of uncovered services and saddle enrollees with unaffordable co-payments and deductibles.

    Already, millions of underinsured Americans forgo essential care: adults with heart attacks delay seeking emergency care; children forgo needed primary and specialty care; patients fail to fill prescriptions for lifesaving medications; and serious illness often leads to financial catastrophe.

    The inadequate coverage the IOM recommends would shift costs from corporate and government payers onto families already burdened by illness. Yet this strategy will not lower costs. Delaying care often creates even higher costs. Steadily rising co-payments and deductibles over the past two decades have failed to stem skyrocketing medical inflation. And nations that assure comprehensive coverage – with out-of-pocket costs a fraction of those in the United States – have experienced both slower cost growth and greater health gains than our country. ...

    The IOM committee was riddled with conflicts of interest, many members having amassed personal wealth through their involvement with health insurers and other for-profit health care firms. Its recommendations were lauded by insurance industry leaders who have sought to undermine real health reform at every turn. As the Lancet noted on its Dec. 5, 2009, cover: “Corporate influence renders the U.S. government incapable of making policy on the basis of evidence and the public interest.” Sadly, the committee’s damaging recommendations suggest that this corporate bug has also infected the IOM.

  • Physicians for a National Health Program: More than 2,400 doctors, nurses and health advocates denounce Institute of Medicine’s health coverage recommendations. IOM panel ‘riddled with conflicts of interest’ in violation of agency’s own guidelines, signers of protest letter charge. Excerpt: The IOM committee’s members include Sam Ho, executive vice president of UnitedHealthcare; Leonard D. Schaeffer, director of the biotechnology company Amgen and former chairman and CEO of WellPoint (Schaeffer’s family foundation donated $2 million to the IOM in 2010); as well as executives from 3M Health Information Systems, a medical supplier, Milliman Inc., an actuarial consulting firm with close ties to the insurance industry, and The Blackstone Group, a private equity firm with major health care interests. The IOM’s full list of panel’s members, with a partial listing of their affiliations, is accessible here.
  • Wall Street Journal: Ryan Revises Medicare Plan. By Louise Radnofsky and Jonathan Weisman. Excerpt: Republican Rep. Paul Ryan unveiled a new Medicare proposal Thursday that would give future seniors the choice of purchasing private insurance coverage or staying in the traditional federal plan. The concept, which is backed by Democratic Sen. Ron Wyden of Oregon, steps back from the House budget chairman's previous plan to end the traditional fee-for-service Medicare program for future retirees and replace it with subsidies starting at $8,000 that seniors would use to purchase private health plans.

    That subsidy wasn't guaranteed to keep pace with the rate of health-care inflation, leaving beneficiaries potentially to face higher out-of-pocket costs.

News and Opinion Concerning the "War on the Middle Class"
Minimize "It is a restatement of laissez-faire-let things take their natural course without government interference. If people manage to become prosperous, good. If they starve, or have no place to live, or no money to pay medical bills, they have only themselves to blame; it is not the responsibility of society. We mustn't make people dependent on government- it is bad for them, the argument goes. Better hunger than dependency, better sickness than dependency."

"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.

  • AlterNet: Moyers: Why 'We The People' Must Triumph Over Corporate Power. Bill Moyers reminds us that repairing American democracy begins with reasserting that corporations do not have the same constitutional rights as citizens. By Bill Moyers. Excerpts: Rarely have so few imposed such damage on so many. When five conservative members of the Supreme Court handed for-profit corporations the right to secretly flood political campaigns with tidal waves of cash on the eve of an election, they moved America closer to outright plutocracy, where political power derived from wealth is devoted to the protection of wealth. It is now official: Just as they have adorned our athletic stadiums and multiple places of public assembly with their logos, corporations can officially put their brand on the government of the United States as well as the executive, legislative, and judicial branches of the fifty states.

    The decision in Citizens United v. Federal Election Commission giving “artificial entities” the same rights of “free speech” as living, breathing human beings will likely prove as infamous as the Dred Scott ruling of 1857 that opened the unsettled territories of the United States to slavery whether future inhabitants wanted it or not. It took a civil war and another hundred years of enforced segregation and deprivation before the effects of that ruling were finally exorcised from our laws. God spare us civil strife over the pernicious consequences of Citizens United, but unless citizens stand their ground, America will divide even more swiftly into winners and losers with little pity for the latter. Citizens United is but the latest battle in the class war waged for thirty years from the top down by the corporate and political right. Instead of creating a fair and level playing field for all, government would become the agent of the powerful and privileged. Public institutions, laws, and regulations, as well as the ideas, norms, and beliefs that aimed to protect the common good and helped create America’s iconic middle class, would become increasingly vulnerable. The Nobel Laureate economist Robert Solow succinctly summed up the results: “The redistribution of wealth in favor of the wealthy and of power in favor of the powerful.” In the wake of Citizens United, popular resistance is all that can prevent the richest economic interests in the country from buying the democratic process lock, stock, and barrel.

    America has a long record of conflict with corporations. Wealth acquired under capitalism is in and of itself no enemy to democracy, but wealth armed with political power — power to choke off opportunities for others to rise, power to subvert public purposes and deny public needs — is a proven danger to the “general welfare” proclaimed in the Preamble to the Constitution as one of the justifications for America’s existence. ...

    To find out why, read on, and as you read, keep in mind the words of Theodore Roosevelt, a Republican, who a century ago stood up to the mighty combines of wealth and power that were buying up our government and called on Americans of all persuasions to join him in opposing the “naked robbery” of the public’s trust:

    It is not a partisan issue; it is more than a political issue; it is a great moral issue. If we condone political theft, if we do not resent the kinds of wrong and injustice that injuriously affect the whole nation, not merely our democratic form of government but our civilization itself cannot endure.
  • The Guardian: Revealed: huge increase in executive pay for America's top bosses. Exclusive survey shows America's CEOs enjoyed pay hikes of up to 40% last year – with one chief executive earning $145m. By Dominic Rushe. Excerpts: Chief executive pay has roared back after two years of stagnation and decline. America's top bosses enjoyed pay hikes of between 27 and 40% last year, according to the largest survey of US CEO pay. The dramatic bounceback comes as the latest government figures show wages for the majority of Americans are failing to keep up with inflation.

    America's highest paid executive took home more than $145.2m, and as stock prices recovered across the board, the median value of bosses' profits on stock options rose 70% in 2010, from $950,400 to $1.3m. The news comes against the backdrop of an Occupy Wall Street movement that has focused Washington's attention on the pay packages of America's highest paid. ...

    GMI released a preliminary report on 2010 CEO pay earlier this year, before all the data was available. Paul Hodgson, a senior research associate at GMI, said that report had shown a significant bounce but he had expected a wider sample to dampen the effect. "Wages for everybody else have either been in decline or stagnated in this period, and that's for those who are in work," said Hodgson. "I had a feeling that we would see some significant increases this year. But 30-40% was something of a surprise." Bosses won in every area, with dramatic increases in pensions, payoffs and perks – as well as salary. ...

  • Financial Times: Private equity trapped in ‘zombie funds’. By Daniel Schäfer. Excerpts: About half of all institutional private equity investors have a stake in a “zombie fund” where unsuccessful managers with no hope of getting a bonus are holding on to the investments as long as possible to live off the management fee, a global survey shows. ...

    The situation is most prevalent in North America, where 57 per cent of the investors said they had capital locked in an underperforming fund, according to the Global Private Equity Barometer, due to be published on Monday by Coller Capital. ...

    Private equity funds are typically structured with a 1.5 to 2 per cent management fee and “carried interest” that pays managers a 20 per cent share of the profits. There is usually an 8 per cent profit threshold that managers have to achieve before they get paid a performance bonus. ...

    If a fund is lossmaking and managers have no realistic chance of achieving the hurdle rate, they stand to gain from holding on to investments as long as possible as the management fee is based on the size of the portfolio. This is bad for investors whose returns are diluted by the longer holding periods as they have to pay management fees over a longer period of time, Mr Coller said.

    Selected reader comments follow:

    • Private equity is just regulatory arbitrage taken to its logical end. Debt acts as a tax shield, carried interest taxed at capital gains of 15%. At least in America if the government ended the tax code's preference for capital gains and debt then the vast majority of PE would fail, with only those who can generate actual organizational optimization -without- the heavy debt load up surviving.
    • It is so satisfying to see one group of asset stripping speculators being trapped and eaten alive by another group of enablers of asset stripping speculation.

      Given that the average PE target company is turned into a sad shadow of a leveraged shell company with all cash stripped out, demoralised employees who have probably been tricked out of their pensions (if not laid off) along with at least five years of underinvestment in capital or research disguised as "improved management" and "cost focus" the companies are pretty much un-saleable unless it is to dumb money floating in a sea of liquidity.

      Well the dumb money ran out in 2008 after paying for traders bonuses over the previous decade or so. So now all the greedy investors have to look forward to is paying more management fees for a few years while everyone pretends things are fine, until the debts have to be rolled over or the companies trashed by the PE merchants finally collapse.

    • People talk about the Wall Street Crash as the exemplar of all economic crashes and crises. When you however hear of it, you do not hear that in almost every area of the financial and banking world, those people entrusted with the wealth of the nation, have not only failed to deliver what they promised but also have by failing to do what they have been trained to do, lost much if not most of what they have been given to invest or be custodian of.
  • Financial Times: Frustration mounts over Madoff backlog. By David Gelles and Kara Scannell. Excerpts: Mr Madoff’s scheme unravelled at the height of the financial crisis. Its perpetrator was the former chairman of the Nasdaq, his clients included major banks, and his operations were supposedly regulated by US agencies. Mr Madoff was sentenced to 150 years in prison and other top lieutenants have been charged.

    Yet in the intervening three years, few on Wall Street have been held personally accountable for the financial crisis, and no new meaningful legislation has been passed, points often made by the burgeoning Occupy Wall Street movement. ...

    Yet like Ms Ambrosino, Mr Simon has little confidence in Wall Street in the wake of Madoff. “There was all this talk about how law enforcement dropped the ball, and three years later it’s still business as usual,” says Mr Simon. “The more powerful you are on Wall Street, the less likely you’re going to be scrutinised. That’s the way Madoff was able to get away with it for so long.”

  • Financial Times commentary: Can America regain most dynamic labour market mantle? By Edward Luce. Excerpts: America used to be exceptional. Postwar, it maintained lower unemployment than the Europeans and a higher rate of jobs turnover, enabling it to get away with more meagre benefits; “a fair day’s work for a fair day’s pay” was within the grasp of most. That gave America a booming middle class that until recently was the most important engine of global demand.

    No longer. Today, somewhat remarkably, US joblessness is higher than in much of Europe. And the US consumer is mired in high personal debt. As the jobs crisis deepens, so too does US political polarisation. Allegations of “class warfare” are a staple of Washington debate. In contrast to the 1960s, dominated by protests for peace and civil rights, today’s battles are economic. Yet there are few signs that either policymakers or economists are closer to finding answers. ...

    In short, the middle-skilled jobs that once formed the ballast of the world’s wealthiest middle class are disappearing. They are being supplanted by relatively low-skilled (and low-paid) jobs that cannot be replaced either by new technology or by offshoring – such as home nursing and landscape gardening. Jobs are also being created for the highly skilled, notably in science, engineering and management.

    For the remainder of the workforce, including college graduates, it is both increasingly hard to find a secure job and tougher for those who do find jobs to be paid in line with inflation. Most people know that median US income has declined sharply since the late 1990s. Fewer are aware that real incomes also fell sharply in the same period for those with degrees. Only those with postgraduate qualifications, particularly PhDs, saw net gains (for some spectacular). ...

    “I know companies that employ senior engineers whose only job is to find ways to reduce the headcount,” says Carl Camden, chief executive of Kelly Services, a booming staffing agency based in Michigan. “The name of the game everywhere is to reduce permanent headcount and we are still only at the early stages of this trend.”

  • Financial Times: Pay gap a $740bn threat to US recovery. By Robin Harding. Excerpts: Jonathan Smucker felt so strongly that something was wrong at the heart of the American system that he left the small business he runs in Rhode Island and set off for New York City to take part in the Occupy Wall Street protest.

    “Like a lot of Americans, I’m pretty ticked off. It’s not that there are rich people, it’s that the people with a lot of money over the past few decades have rigged the system so that there’s not a fair chance for anyone any more,” he said at the protests last week.

    “We are the 99%”, the slogan of Occupy Wall Street, is a reference to the rising wealth of the top 1 per cent of US income distribution. But an equally valid slogan might be: “We get 58%”.

    That figure is the share of US national income that goes to workers as wages rather than to investors as profits and interest. It has fallen to its lowest level since records began after the second world war and is part of the reason why incomes at the top – which tend to be earned from capital – have risen so much. If wages were at their postwar average share of 63 per cent, workers would earn an extra $740bn this year, about $5,000 per worker, according to FT calculations. ...

    The decline in the labour share, along with a shift of labour income towards higher earners, may be an important part of why the US economic recovery is so sluggish. Workers on lower wages consume much of their income, while higher wage earners and those with capital income are more likely to save. That will not affect total demand if savers lend to those who want to consume or invest in buildings and start-ups – but investment has been slow to recover in the wake of the recession. ...

    The strange behaviour of profits after this recession needs further explanation and Mr Smithers has an innovative idea. “It seems to me that what we’ve seen has been a marked change in corporate behaviour,” he says. “They have not responded by cutting prices and competing like fury, they’ve responded by cutting staff.”

    He suggests that the change is linked to the rise of bonus culture and share options for business executives. The average chief executive of an S&P500 company is only in the job for five or six years and their pay is often closely linked to the share price of their corporation or to its returns on equity.

    That creates strong incentives to keep profits high in the short term, and Mr Smithers suggests that those incentives have changed how management responds to a recession. Instead of hoarding labour and cutting prices to grab market share, companies are sacking workers, holding prices and choosing to buy back their own equity rather than make new investments.

    Selected reader comments follow:

    • It's a function of political patronage, tax incentives for special interests, offshoring of production and profits, and domestic losses and tax shifting to individuals from corporations. The system is rigged. If you have the funds, you can buy access and legislation in America. And the US Supreme Court has rubbered stamped its legality.
    • Also a function of the scale of the bonuses. If an executive only needs a few 'good" years to amass enough wealth to live independently they will sacrifice long run viability for short term bonuses. Bad for the company but rational (if immoral) from the exec's perspective. This was at the heart of the dotcom craze. None of my friends in that sector had any interest in creating a sustainable business but rather hype, cash out and leave the rubble for someone else to deal with.
    • America and I suspect many of her Capitalists cohorts world wide, ALL, live for the short term, driven by the markets demands. The Street here in America is a joke because they "create nothing". They use the money of others to enrich themselves at the expense of others and have literally turned Wall Street into the new Las Vegas of New York. Then when they blow up the world financial systems, they get bailed out with the tax dollars of the very people they just ripped off. Capitalism will implode in this country and around the world, n matter how clever they believe that they are...their self-centered greed and avarice will bring our financial house of cards down. Globalization will make this whole process extremely painful for many, but perhaps that is the only rational thing that will bring equilibrium to an out of whack system of predatory Capitalism.
  • Huffington Post: An Offer to the President. By Robert Reich. Excerpts: Mr. President, we heard what you said last week in Kansas -- about the dangers to our economy and democracy of the increasing concentration of income and wealth at the top. We agree. And many of us are prepared to work our hearts out to get you reelected -- as long as you commit to doing what needs to be done in your second term:
    • Raise the tax rate on the rich to what it was before 1981. The top 1 percent has an almost unprecedented share of the nation's wealth and income yet the lowest tax rate in 30 years. Meanwhile, America faces colossal budget deficits that have already meant devastating cuts in education, infrastructure, and the safety nets we depend on. The rich must pay their fair share. ...
    • Raise capital gains taxes to the same level. It's absurd that the 400 richest Americans -- whose wealth exceeds the wealth of the bottom 150 million Americans put together -- should pay an average 17 percent tax on their incomes, the rate day laborers and child-care workers pay. That's because so much of the income of the super-rich is considered capital gains, now taxed at only 15 percent. Close this loophole.
    • Tax financial transactions. A tiny tax on every financial deal would yield billions of dollars more. It would also slow speculators and reduce the wild gyrations of financial markets.
    • Use the bulk of this money to create good schools, give our kids access to a college education, and build a world-class infrastructure, so all our children have a chance to get ahead.
    • Resurrect the Glass-Steagall Act, that used to separate commercial from investment banking. It was put in place after the Great Crash of 1929 to prevent financiers from gambling with peoples' bank deposits. But it was repealed in 1999 -- and its repeal contributed to the Crash of 2008. Wall Street lobbyists have made sure the new Dodd-Frank law has enough loopholes to allow financiers to continue to gamble with other peoples' money. The only way to stop this is to bring Glass-Steagall back.
    • Cap the size of Wall Street's biggest banks and break up the biggest. They were too big to fail before the bailout. They're even bigger now. And because of their huge size they get preferential treatment from the Fed, giving them an even greater competitive advantage over smaller banks. Cap their size and break them up before we have to bail them out again.
    • Require the big banks that got bailed out to modify the mortgages of millions of Americans now under water, who owe more than their homes are worth. It's not their fault the banks created a housing bubble that burst, causing home values to plummet.
  • Financial Times: Death by strangling: the demise of state spending. By Jeffrey Sachs. Excerpts: The American economy reached a watershed 30 years ago when Ronald Reagan came into office. While Europe decided to boost its tax-to-gross domestic product ratio in the 1970s and 1980s to fund an expanded range of education, training, labour market and family support programmes, the US did not. Reagan insisted that less, not more, government was the key to prosperity and growth, and put emphasis on lowering tax rates on top incomes. Federal revenues in the fiscal year 2011 amounted to 15 per cent of GDP, less than the 19 per cent of GDP of 1980.

    Outlays on public services and investments other than healthcare and pensions have been badly squeezed. Non-security discretionary programmes, including education, energy, environment, roads, training, science and much more, have been hit hard. In the late 1970s, 5-6 per cent of national income was directed to these areas. Reagan slashed that to 2-3 per cent. Spending has remained at that lower level since, apart from a short-lived blip caused by the Obama stimulus.

    America is unilaterally ceding its global leadership in education, science and infrastructure. Much of today’s young workforce lacks the education and skills to sustain middle-class living standards, and unemployment rates are high and stuck as a result. Yet in 2008, as a candidate, Barack Obama said he too would aim for the same tax-GDP ratio as during the Reagan years! Mr Obama’s promise of continued low taxation may have helped him to electoral victory, but it also planted the seeds of his policy failures.

    Mr Obama speaks of investing in education, infrastructure and technology to restore competitiveness and jobs, but lacks the financial room to manoeuvre. The result is an utterly dispiriting contradiction between his soaring rhetoric about the role of government and the grinding cuts he has agreed with Congress. His entire economic programme rests on a fiscal fallacy.

    According to July’s debt agreement between Congress and the White House, non-security discretionary programmes will be further squeezed to below 2 per cent of GDP by the end of the decade. In short, other than war and a few transfer programmes, government programmes are being asphyxiated. Republicans claim that low taxes and small government have spared it from the European disease. That is utterly false. The US is vastly outperformed by northern Europe’s high-tax-and-spend states.

    These countries tax heavily but also spend efficiently. They buy superb public health, quality childcare, proficient public education, quality infrastructure, and remarkable social equality. The results are lower unemployment rates, smaller budget deficits, much lower poverty and smaller trade deficits than in the US. These countries also enjoy higher social mobility, life expectancy and life satisfaction than the US.

    Nor have they suffered slower growth in per capita incomes. From 1980 to 2009, US per capita income grew by an average of 1.7 per cent. Northern Europe averaged about the same. In the US, most gains accrued to the top of the income distribution. Median male earnings in the US have not risen since 1973.

  • CBS News' 60 Minutes: Prosecuting Wall Street. Excerpt: Two whistleblowers offer a rare window into the root causes of the subprime mortgage meltdown. Eileen Foster, a former senior executive at Countrywide Financial, and Richard Bowen, a former vice president at Citigroup, tell Steve Kroft the companies ignored their repeated warnings about defective, even fraudulent mortgages. The result, experts say, was a cascading wave of mortgage defaults for which virtually no high-ranking Wall Street executives have been prosecuted.
  • Washington Post Letter to the Editor: George Will’s ‘dead weight’ defense. By Ed Rader. Full excerpt: George F. Will’s Dec. 14 op-ed column, “A capital crime,” castigated Newt Gingrich for suggesting that Mitt Romney return all the money he earned “by bankrupting companies and laying off employees over his years at Bain Capital” (quoting Mr. Gingrich).

    Mr. Will defended Mr. Romney, pointing out that companies like Bain are essential for wealth creation, which “often involves taking over badly run companies, shedding dead weight and thereby liberating remaining elements that add value.” All well and good, I suppose, if it weren’t for the fact that Republicans proudly (and tediously) portray themselves as “job creators.” Wealth creators, perhaps, but job creators, not so much.

    After all, the “dead weight” that Mr. Will referred to are real people who once held jobs now lost in the name of “creative destruction.” And while many people would cheer the creation of wealth, perhaps even at the expense of all that “dead weight,” should we not ask ourselves if it’s such a good thing for society to find so much of the resultant wealth concentrated in the hands of the top 1 percent (people such as Mr. Gingrich and Mr. Romney) rather than blindly accept the results as a given?

    Maybe the unfettered capitalism so admired by Mr. Will and the “job creators” in the GOP ought to be tempered with a little judgment and common sense.

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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