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Highlights—February 25, 2012

  • The Huffington Post: IBM, AT&T Unfairly Getting Small-Business Contracts: Study. Excerpts: Some of the world's biggest companies are benefiting from a program meant to help America's small businesses, according to a new study. Lockheed Martin, IBM and AT&T all have snatched up federal government contracts meant for small businesses, according to a study from the American Small Business League.

    Indeed, almost three-fourths of the top 100 federal "small" business contractors in fiscal year 2011, were actually large companies, says the report highlighted by the Project on Government Oversight. ...

    "Misrepresenting your firm as a small business is a felony, but the SBA has NEVER prosecuted a single offender," it says on the league's website. An SBA spokesman emailed the following statement from John Shoraka, the agency's Associate Administrator for Government Contracting and Business Development: ...

    Spokesmen for Lockheed Martin, IBM and AT&T did not return emails seeking comment.

  • Yahoo! IBM Pension and Retirement Issues message board: "PPA interest rate" by "sby_willie". Excerpt: For all those who believed IBM that the cash balance pension was cost neutral: With a Future PPA Interest Crediting Rate (if you want to call it that) of 1.1% this year (down from 1.3% last year), why does that NetBenefits calculator still assume a 6% rate (to try to show the rate was on par with the defined benefit plan? NOT even close!)??? It is insulting and offensive that the 6% rate is still being used as a default in the calculator. If IBM is telling Fidelity to use the 6% figure makes it even more appalling.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: PPA interest rate" by "sby_willie". Excerpt: So now that the PPA interest rate can be calculated as 0% then how can that Judge Easteregg (Easterbrock?) who reversed the Cooper vs. IBM lawsuit ruling say that IBM is not discriminating with the cash balance plan due to his twisted "time value of money" theory for the justification of the ruling? The PPA balance can not only be frozen now it might never grow in the future. And don't get me started on the "wearaway" going on...
  • Yahoo! IBM Retiree Information Exchange message board: "Re: 100 Best Companies to Work For" by "Howard". Full excerpt: I retired in 1999, remarried early 2000. For 2000, my total medical bills=$2500 For 2010, my last year before Medicare=$20,000. More than $12,000 was for IBM coverage. That is where IBM failed its retirees.
  • Yahoo! IBM Retiree Information Exchange message board: "Re: 100 Best Companies to Work For" by "hankharty". Full excerpt: Sam figured better out of your pocket than his.
  • Yahoo! IBM Pension and Retirement Issues message board: "IBM Cooper Settlement Insurance Coverage" by "madinpok". Full excerpt: Here is an interesting court decision on a case that I wasn't aware of until now. Apparently, IBM has been trying to collect on an insurance policy to reimburse IBM for the damages in the Cooper v IBM settlement! http://www.courts.state.ny.us/CTAPPS/Decisions/2012/Feb12/20opn12.pdf
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM Cooper Settlement Insurance Coverage" by "madinpok". Full excerpt: The legalese is indeed hard to follow, but after doing some searches, here is what I think is going on.

    Companies often take out insurance policies for their pension and 401k plans to protect them against breaches of fiduciary trust. Typically, this might be to protect them against someone like the company treasurer or a payroll clerk who steals the money that was supposed to go into the pension plan or 401k plan for the benefit of the employees.

    IBM tried to file a claim against their insurance policy to get them to pay for part of the Cooper settlement. IBM tried to claim that by amending the plan such that it contained age discrimination, IBM breached its fiduciary duty and therefore the plaintiff's legal fees, which IBM had to pay as part of the settlement, should be covered by insurance.

    There was some disagreement between IBM and the insurance company over the language in the policy that describes what is covered. The insurance company refused to pay and so it wound up in court. The initial court decision went in IBM's favor since the legal precedent is that when language is unclear in a policy, the decision should go in the insured party's favor.

    But the appeals court disagreed and said that since the Cooper suit had nothing to do with fiduciary duties, and that the role IBM played in changing the plans had nothing to do with fiduciary duties, the claim is not valid.

    The bottom line is that the insurance company does not have to pay IBM.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM Cooper Settlement Insurance Coverage" by Kathi Cooper (of Cooper v. IBM). Full Except: Why I'm shocked, shocked I tell you! Kathi Cooper (with a smirk on her face).
  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM Anonymous in Toronto, ON (Canada): (Current Employee) “IBM = Career Death.” Pros: Decent Benefits Package, Big name on resume. Cons: No career growth. No value as an employee.
    • IBM Senior Managing Consultant in Toronto, ON (Canada): (Current Employee) “Great company but don't look after staff well enough.” Pros: working with smart peers and smart technology. Travel opportunities. Training opportunities. Huge amount of support information. Cons: Salary and bonus is not great. There is a very short-termist view of skills and resources. IBM tend to train or recruit once the work is signed and not build skills for long term. There is little choice over what projects you work on - it depends on what projects are available when you are available. Again, there is not enough succession planning. Advice to Senior Management: More long-term vision and planning in GBS. Look after your people and don't treat them as a commodity.
    • IBM Sales Operations Specialist in Lexington, KY: (Past Employee - 2010) “Depressing.” Pros: Good salaries, flexible schedules, good exposure to experienced professionals. Cons: 16 hour days, jobs going to Asia, training decline, no profit sharing, threat of layoffs. Advice to Senior Management: Go back to ethical principles.
    • IBM Territory Partner Manager: (Current Employee) “Good experience but not for a long time.” Pros: Brilliant brand name. Good to have in your resume. Learn how to face strange personalities. Cons: No promotions. Bad salaries. Old people and mentalities. Advice to Senior Management: Some times brilliant brand is not enough...things gonna change
    • IBM Account Executive: (Current Employee) “One of the worst experiences I've ever had!!!” Pros: 1) Virtual office. 2) The IBM name is recognized so when you are trying to make contact with a prospect you don't have to explain what it is your company does.

      Cons: 1) Too process focused. And the processes take so much time. The people who are conducting the processes are horrible, for the most part. They are outsourced, they don't listen and you end up having to explain, and explain. So frustrating and such a waste of time. 2) Mgmt: The FSL, First Line Leader, they are so incompetent. Their sole reason for being to to micromanage you, give you zero support, hit you with a stick to make sure that they don't get 'the stick' from their manager. FSL's don't give a rat's a__ about you. It's all about them and checking off their list of duties so that they don't get yelled at. Horrible, horrible experience. 3) Zero team work encouraged. IBM and team work don't go together. It's dog eat dog. You're on your own. 4) IBM acquires many companies. They say they retain the employees, however, what they do is give you a list of accounts that no one has ever succeeded in and then if you don't sell in 6 months they really put the pressure on you to get you to leave. They want you to leave on you own vs. terminating you. By leaving on your own accordance it makes IBM look like they aren't shedding employees! Except, who wants to volunteer to leave? Horrible, horrible culture. 5) Work-Life Balance? At IBM? I don't think so. They work you to death. You can't work hard enough to please anyone. 6) Very cheap company. The laptops they provide, have major issues weekly. This causes you to spend time on the help desk, with level 1 support who are not helpful at all. Then they escalate to level 2, they try to help. Finally, you need to have level 2 send a ticket to the local IBM office so that you can come in and get you laptop fixed. By fixed, you send it overnight back to Tennessee, they send out a replacement. This replacement needs to have your hard drive loaded on it. This takes a couple of hours with you at the local IBM office. It's crazy!!!!! It's a terrible, terrible system. 7) They treat experienced sale people like new grads just starting out in sales. Stupid training that involves role play of a sales call, have to have room mates at overnight meetings. Horrible!!!!!!

      Advice to Senior Management: IBM, get over yourself!

    • IBM Advisory Software Engineer in Poughkeepsie, NY: (Current Employee) “IBM Poughkeepsie is an OK place to work.” Pros: IBM is a giant company with many opportunities for leadership. In my experience, first line management is very understanding when dealing with life events both expected and unexpected. As a beginning engineer, you generally share your closed office with one other colleague as opposed to an open layout (i.e. cubicles). Cons: IBM Poughkeepsie is a very old site when compared to many competitors and even other IBM sites, and since there is no other large high tech company in the area, there are very few perks. Since the products we are working on have a very long history, there is a lot of legacy code and design that can be irritating to an engineer. Advice to Senior Management: Lately, IBM has had a single minded focus on driving higher earnings per share. This has been accomplished largely by strong leadership, but there have also been significant cuts. While there was a lot of fat to cut, now some of the cuts feel like they are hitting bone. Budgets for morale, travel, and the development cycle have been cut to a bare minimum and left employees feeling drained and unloved.
    • IBM Anonymous in Markham, ON (Canada): (Current Employee) “Good place to start and learn.” Pros: Brand name. Lots of technology to expose. Work life balance is excellent. Flexible work start. Management try not to micro manage. Cons: Low compensation, no overtime pay, no pager compensation except you can take day off, minimal salary increase, low bonus. Other technology firms pay way better. Advice to Senior Management: Learn to appreciate your employees. Put more effort to keep the talents than drain to other company. Stop ass kissing to senior management.
    • IBM Project Manager in Auckland (New Zealand): (Current Employee) “Worst.” Pros: Limited choice of companies in NZ forces us to work with such employers. Cons: Senior Management is unfair and uses pressurizing and threatening tactics so employees leave without getting appraisal or bonus. Advice to Senior Management: Please be fair to your managers and employees
    • IBM Senior Software Services Specialist in San Jose, CA: (Past Employee - 2011) “It is OK place to work.” Pros: Company legacy products and services, company's name and good reputation and benefits, work from remote, good work life balance provided. Cons: Employee communication are not open. No appreciation of your good work. Salaries are not great, did not get single raise in 5 years. Advice to Senior Management: Appreciate employees good work.
    • IBM Performance Analyst in San Jose, CA: (Current Employee) “Great place to work with easy work/life balance and not much stress.” Pros: big and well known company, lots of different areas and products to work on, research opportunities, flexible work hours, friendly environment. Cons: cost cuts at employees' cost, benefits and salary increases not competitive, no transparency between managers and employees, slowly follows economic trends. Advice to Senior Management: better training of first line managers, refilling of open positions, offering competitive employee benefits, such as hardware and software equipment paid by employer
    • IBM Software Developer in Chennai (India): (Current Employee) “IBM - Good working environment” Pros: Flexible working hours and IBM has a policy to set offices within city limits. Great place to learn new technologies. Wide range of job roles. Cons: IBM is not a paymaster and so salaries are less compared to similar employers. Work in IBM is recognized based on your documentation and not on your deeds/ One has to set his path himself - right or wrong people guide you but not the path. Advice to Senior Management: No trust with employee. The whole company is process driven and there is no care taken to motivate the existing employees. IBM celebrated its 100th year in 2011 and there was no proper celebrations arranged as I know, at least in IBM India. No more employees in IBM India will continue to say I M in IBM.
    • IBM Anonymous in Rochester, MN: (Current Employee) “Working hard may or may not get you ahead...” Pros: You work around very intelligent people. Some of the technology is leading edge from research. People are overall easy to work with. Cons: Can be a very high stress environment with long hours and no weekends off. Depending on where you work, the flexibility may be gone for working remotely. Also, there is constant worries among co-workers that this year could be their year to be let go. It can be a rather uncomfortable place to work. Advice to Senior Management: My advice to management doesn't matter. Generally, the first line managers do the best they can with what they have, to them, keep it up. To the high ranking executives, I would be concerned about the boots on the ground doing the work. IBM can't meet its goals by cutting alone.
    • IBM Anonymous in Kolkata (India): (Current Employee) “Not very satisfactory.” Pros: Work from Home. Flexi Time. Health Insurance for parents. Cons: Career Opportunities. Growth is hindered. Compensation not adequate.
    • IBM Senior Consultant in Washington, DC: (Past Employee - 2011) “Good place to start consulting career.” Pros: Lots of resources, tools available. Cons: Very little consulting skills training, assigned to projects unrelated to practice area or interests.
    • IBM Anonymous: (Current Employee) “Good Place to learn - Not a Place to Earn unless you come in with a huge package.” Pros: Learning Opportunities. Exposure to best quality of work, process and procedures. Ample opportunities to get mentored. IRL, ISL, GBS are the best Business Units to work with. Cons: The Service Industry Business Unit treats employees like slaves. Global Delivery Framework - an IBM Version of Lean has been implemented in an ineffective manner to gain more work with minimum pay rather than efficient use of resources. Advice to Senior Management: Management should consider understanding the financial situation of the Employees and help them grow financially. Promises to be made on paper. Employee is not a machine, they can not do monotonous job - let them keep moving within the organisation for better learning.
    • IBM Team Lead in Boulder, CO: (Current Employee) “soured on big blue.” Pros: good people to work with on core level, management is out of control, need to get back to service, allow manager to have better control of employees work assignments. Cons: very long hours, being on call 24x7, continuous meetings, no rewards for job well done, upper management makes changes without understanding process and procedures of daily work load. Advice to Senior Management: allow employees to actually finish a project before adding more projects, cut back on conference calls, and award for job well done
    • IBM Anonymous in Boston, MA: (Current Employee) “It all Depends” Pros: I have a fantastic manager that promotes independence and growth in the workplace. I've been lucky to work for him and he really is interested in promoting me within the large landscape of IBM. Cons: It's a very large pool. Networking is a must. Lots of Bureaucracy, etc. You can easily get lost so it's important to make yourself visible and to really take into control your own career development.
  • eWeek: Houston, Orlando, Toronto Among Top Cities for IT Workers. By Nathan Eddy. Excerpt: As the economy continues through its recovery and corporate earnings improve, business across North America are reinvesting in IT projects that were put on hold through the recession, according to a survey from IT staffing agency Modis. The industries with the strongest growth, including technology and health care, are adding the most IT jobs today, and the IT positions in demand today are a combination of those directly related to profit drivers (product and service development) and back-office operations (such as networking and database administration), a positive indicator for the economy overall. The distribution of the “Top 12 Cities” across the region also points to the fact that IT job growth is not confined to those areas traditionally considered IT “hubs,” such as Silicon Valley. And with the most skilled IT workers today seeing multiple job offers and commanding higher salaries, 2012 is the year for IT pros to find a new job, the report concluded.
  • AARP: Life Insurance After 50: Still Make Sense? In this episode of The Money Minute, Lynnette discusses whether you really need to keep coverage. By Lynnette Khalfani-Cox. Excerpt: Once you pass 50, your life insurance needs may change. Perhaps the kids are grown and financially secure, or your mortgage is finally paid off. If so, you may be able to reduce or eliminate coverage. On the other hand, a disabled dependent or meager savings might require you to hold on to life insurance indefinitely.
  • Workforce: The Rise and Fall of Employer-Sponsored Pension Plans. By Lisa Beyer. Excerpts: During the Roaring '20s, the United States went through a massive economic boom led by technology as a vehicle to bring conveniences to everyday life—from the emergence of radios that brought entertainment and news to peoples' living rooms to the mass production of automobiles that allowed them to travel more efficiently or take a leisurely Sunday drive. Urbanization took hold and skyscrapers were built to show off the country's strength and prosperity. And although Prohibition was in full effect, that didn't stop many from drinking in the good times. ...

    Thanks to New Deal policies and companies' initiatives in the '30s to ensure that workers' pensions were safe, at least two generations grew up under the assumption that if they had a job with an established company, a retirement plan would help pay future bills. Many of today's workers' parents and grandparents left the workforce with some type of employer-provided income—from the time they retired until their death.

    Employer-sponsored pension plans, combined with Social Security benefits and, more recently, defined contribution plans, have truly turned retirement into the "golden years" for millions of workers. So until the past decade, workers didn't put much thought into saving for retirement, much less worrying about it.

  • American Federation of Government Employees: Congress Gets Better Pension Deal Than Federal Workers in New Bill. Excerpt: a little-known provision in the bill that extends payroll tax relief and unemployment insurance, the head of the American Federation of Government Employees said today. “Thanks to Rep. Dave Camp, R-Mich., members of Congress appear to be on the same footing as federal employees but in fact they’re keeping a luxurious benefit that lets them retire years earlier than federal workers without any reduction in their pension,” AFGE National President John Gage said. “This kind of underhanded shell game gives hypocrisy a bad name.” ...

    Under the back-room deal that was rushed to a vote today, federal employees hired after Dec. 31, 2012 will pay 3.1 percent of their salary toward their pensions – a four-fold increase from the current rate. New members of Congress will pay the same rate as new federal employees, but they will be able to retire at age 50 with 20 years of service without the significant penalty most federal employees receive for retiring early.

  • Forbes: Why Variable Annuities Have No Place in Your 401(k) Plan. By Stuart Robertson. Excerpt: The unpredictable economy of the last five years has sparked many discussions about what, if anything, can be done to ensure guaranteed payouts in retirement plans. Some of the big insurance companies have suggested that putting annuities in 401(k) plans could be the answer and Uncle Sam may be listening too. If so, it’s the wrong answer.
  • Forbes: New Evidence That Retirement Is A Thing Of The Past. By Jacquelyn Smith. Excerpt: Historically, once you’re fully eligible for social security and pension benefits—or just 65 and tired of the job—you exit the workforce and enjoy retirement. But those days may be over, according to a new study conducted by Harris Interactive on behalf of the jobs site CareerBuilder.com. Most (57%) of the 800 surveyed workers age 60 and up said they would look for another gig after retiring from their current jobs. So they would only semi-retire.
  • Quincy (Illinois) Herald-Whig: Fees for 401(k) retirement plan must be listed starting this year. By Doug Wilson. Excerpts: Transparency is coming to 401(k) plans this year, and participants in the retirement plans will find out exactly how much they're paying in fees. "There's going to be some very, very angry people when these costs are no longer hidden," said Kent Adams, a partner at Adams & McReynolds in Quincy.

    Weeks ago, the U.S. Department of Labor issued final rules that require 401(k) plan providers to disclose fees they charge as well as benefits they might receive from mutual funds. Employers also will be under the gun to terminate plan providers who fail to disclose the needed information. The change takes place in July. ...

    According to national retirement experts, there are plans where participants lose 3, 4, even 5 percent of earnings each year to fees.

  • Morningstar: Do Tax Rates Go Up or Down in Retirement? Retired readers share tax-minimization techniques and debate the pros and cons of IRA conversions. By Christine Benz. Excerpts: The decision about whether to opt for Roth tax treatment of your retirement assets--where you pay taxes upfront in exchange for tax-free withdrawals later on--requires you to make a judgment about whether your taxes will be higher in retirement than they were while you were working.

    That's a lot harder than it sounds, as my colleague Adam Zoll explored in this article. Not only does it involve divining what tax rates are apt to be on a macroeconomic level by the time you retire, but you also need to bear your own personal situation in mind. For lower earners who are early in their careers, it's likely that their income tax brackets will be higher in the future than they are today, making Roth contributions and conversions a good bet. For older savers, that might not be the case.

  • Daily Mail (United Kingdom): 'I'll probably just work until I drop': Boomers faced with job market crunch and damaged pensions see retirement plans float away. By Associated Press and Mark Duell. Excerpts: When Paula Symons joined the U.S. workforce in 1972, typewriters in her office clacked nonstop, people answered the telephones and the hot new piece of technology was the fax machine. Ms Symons, fresh out of college, entered this brave new world thinking she'd do pretty much what her parents' generation did. That would entail working for just one or two companies over about 45 years before bidding farewell to co-workers at a retirement party and heading off into her sunset years with a pension.

    Forty years into that run, the 60-year-old communications specialist for a Wisconsin-based insurance company has worked more than a half-dozen jobs. She's been laid off, downsized and seen the pension disappear with only a few thousand dollars accrued when it was frozen. So, five years from the age when people once retired, she laughs when she describes her future plans. ‘I'll probably just work until I drop,’ she says, a sentiment expressed, with varying degrees of humour, by numerous members of her age group.

    Like 78 million other U.S. Baby Boomers, Ms Symons and her husband had the misfortune of approaching retirement age at a time when stock market crashes diminished their 401 (k) nest eggs, companies began eliminating defined benefit pensions in record numbers and previously unimagined technical advances all but eliminated entire job descriptions from travel agent to telephone operator.

    At the same time, companies began moving other jobs overseas, to be filled by people willing to work for far less and still able to connect to the U.S. market in real time.

  • Politico: Feds fret over underfunded corporate pensions. By Josh Boak. Excerpts: Corporate pensions increasingly look like an economic time bomb for the government. Federal officials have assumed responsibility for hundreds of troubled pension plans in recent years. Those takeovers could accelerate as baby boomers start to retire, with taxpayers potentially needing to pay tens of billions of dollars to keep the private plans alive. ...

    For many of the 44 million Americans with pensions, employers have not set aside enough money to provide them a stable income through retirement. Publicly traded companies face a combined pension shortfall of $458 billion, according to a recent report by the bank Credit Suisse. The cost of rescuing these plans has saddled the federal Pension Benefit Guaranty Corp. with a $26 billion deficit, the highest in its 37-year history. The situation will likely worsen as more companies decide they can no longer afford their pension commitments and stick the government with the bill. ...

    Congressional Republicans continue to push measures to rewrite the rules for underfunded state and local government pensions, while Democrats — backed by public employee unions — rally to shield those programs from cuts.

    But Karen Friedman, policy director at the Pension Rights Center, is trying to shift the lobbying on reforming corporate retirement plans into high gear. Her advocacy group is sponsoring a Wednesday conference on Capitol Hill about restructuring pensions with the Urban Institute, a think tank, and the law firm Covington & Burling. “This is the time to address these issues,” she said, “so that we can ensure that we stop a crisis in the future.”

  • Bloomberg BusinessWeek: Obama Urges Congress to Reward Companies That Keep Jobs in U.S. By Margaret Talev. Excerpts: President Barack Obama urged Congress to enact tax proposals that reward technology companies and other businesses that help create jobs in the U.S. rather than overseas. Boeing Co., whose Everett, Washington, jet factory Obama visited yesterday, has “put thousands of folks to work all over the country,” Obama said in his weekly radio and Internet address. “We want to see more of this. We need to make it as easy as we can for our companies to create more jobs in America. And that starts with our tax code.” ...

    “No company should get a tax break for outsourcing jobs,” Obama said. He urged helping “manufacturers who set up shop here at home,” particularly technology companies. “And Congress should send me that kind of tax reform right away.”

New on the Alliance@IBM Site
Minimize
  • Job Cut Reports
    • Comment 02/20/12: The offshoring of the GTS Services Excellence organization to Brno, Czech Republic has begun. Entire organization will inevitably be part of the 2015 Roadkill. -Inevitable RA-
    • Comment 02/20/12: Planning to quit IBM after numerous years of service. It is utterly unhealthy to worry about being on the RA list every quarter. PBC doesn't guarantee your job security. Does anyone out there know if I will lose all my pension before the 30 years retirement mark? -Call it quit to stay in sane-
    • Comment 02/20/12: -Call it quit to stay in sane-: No, you will not lose ALL your pension but you might lose ALL your retirement health benefits. How do I know this? I am an Alliance member and educated myself on the sad facts that IBM employees have to deal with (IBM will not educate you on whatever your benefits are or might be). IBMers who have joined the Alliance did not quit but realized they needed to stand up, think twice so to speak, and try to fight this and other injustices IBM has been imposing on employees. If I just read this forum and didn't join and try to do something, what good could come of that? Why not join the Alliance to stay sane? -anonymousbeamer-
    • Comment 02/20/12: After hearing of multiple employee groups getting their pay cut by 15%, and hearing the continued drumbeat that we're going to make the"2015 plan" come hell or high water, I decided it's time to join Alliance. I don't want to wait for my turn to take a 15% cut. I recommend that every other reader do the same. -FedUpInOmaha-
    • Comment 02/20/12: Feb 28th is the day I hear that there will be a mass slaughter of U.S. IBM'ers. New Sheriff in town - same game played. Time to join the Alliance! -anon-
    • Comment 02/20/12: -anon disgusted- Hey, I resemble your story. Exact same thing happened to me. I chose to walk away in lieu of walking their management gang plank. I've never known anyone to take their walk (challenge)and survive it. So, I'll take the minimalized separation package(ISAP) of 13 generous weeks, 1 year medical, retraining assistance and skip to one of several available jobs in my field where my skills, work ethics and morals are valued. Not a problem. Best of luck to you sir. -SlaveNoMoFoMe-
    • Comment 02/21/12: In the Netherlands it is the same story. Decreased PBC ratings and the "Grow or Go" theme is very popular in management teams. There is a culture of ignorance and demotivation of employees started by management. IBM became a kind of Titanic, heading for $20 EPS in 2015 but after that there is an abbys and no way back. And I guess the captain left the ship at that time. -120000 Victims-
    • Comment 02/21/12: -Call it quit to stay in sane- Which plan are you under? If you are under the defined pension plan you just need to be 55 years old with 15 years of service to collect I believe. If you are under the 401k you take it with you. There is no actual retirement age for it but you cannot withdraw until age 59.5 and you must withdraw starting at 70.5. Search Blue pages for the 800 number for pension benefits to find out for certain. Anything else is speculation because IBM has so fragmented its workforce with petty rules everyones situation is usually different. BTW. A contract would guarantee your job security for the length of the contract. Live Better, Work Union. -Exodus2007-
    • Comment 02/21/12: DIV 07, Boulder GDF Storage Services, all overtime has been suspended for salaried DPM's, PM's and all non-exempt employees that took the 15% pay cut are no longer allowed to work overtime, which was promised when each of us took the 15% pay cut. This does not apply to your 1st line mgmr or the team leads. If you are unable to get your job done in eight hours, pass it off to the vendors. Mgmt has a set weekly price with the Vendors, they pay one price regardless if they work 30 hours or 60 hours. Needless to say they are pushing them to work crazy hours, if they don't they get walked out and a their replacement is brought in the very next day. It doesn't matter how dedicated you are, if mgmt or the team leads don't like you as a vendor you don't have a chance to service within Boulder GDF. Last week Mgmt was given a challenge, cut all overtime regardless of how this will impact the business. Needless to say, we have more customers/contracts pulling out of IBM then signing. Mgmt refuses to give a release date to the regulars, but they continue to beat us down and tell us about our horrible job performance. JOB CUTS TO BE ANNOUNCED NEXT WEEK... -FED UP in Boulder!!!-
    • Comment 02/21/12: I think we all come to the point when we have reached the end. I just can't play the game anymore. I do not want to ever do a PBC again - I am done with this discriminatory practice. My question is this, what will be the consequences when I refuse? -AtTheEnd-
    • Comment 02/22/12: Sadly, I can identify with -anon disgusted-. That description of a totally subjective, moving target, measurement of one's performance was alive and well back in early 2000's up to the day I left IBM in 2008... new job offer with a 30K+ raise in one hand and IBM's 3 rating of my performance (first time since I'd been working there) in the other. I do wish there was a Union in place to help the employees. Hopefully people reading this blog will realize that there IS a unified effort against them to keep them demoralized and feeling they can do no better than IBM because IBM rates them as poorly performing human beings. Demoralized people fear change to their situation. Or one day they wake up and realize they're better than this. Well, four years, 15K+ of additional raises and a promotion later, I know that I was right when I realized I was better than all this rubbish IBM puts it's people through. I hope you wake up also. Hopefully the notion of a union has more traction now than it did back then. Hopefully when you wake up and realize how much more you're worth, you can join the critical mass needed to get the IBM Union off the ground. Best wishes to those I left behind. Stay strong, change your situation, Unionize, you are better and worth more than this rubbish. -Happily Out...-
    • Comment 02/22/12: While this is a job-cuts board, I have to laugh at how few IBMers understand their retirement benefits or lack thereof. On the cash-balance pension, some folks got an enhanced annuity provision which means they can start their distribution before age 59 1/2. The extreme passivity of US IBMers when faced with malevolent management is inexplicable. And they don't even know what they will get when they leave the company. Employee Services Center will answer those questions about pensions, annuities, etc. Whether even they understand the FHA is subject to debate! Meanwhile organizing by becoming a member of the Alliance is a wise investment and any online subscriptions you may have probably cost more. -Poughkeepsie Engineer-
    • Comment 02/22/12: Was part of the ECM group at SVL & RA'd (resource action/layoff) in 2010 along with about 1500 other IBM'ers. Job sent to China. Was asked to come back 12 months later in another business unit. Politely turned down the request. Been there done it. I've been mugged (IBM) once, wont let it happen again. -Anonymous-
    • Comment 02/22/12: There are more than a handful of people being unofficially notified in the Westchester area that they will be laid off in late Feb, effective late March - in CHQ groups. -Tom from Westchester-
    • Comment 02/22/12: "all non-exempt employees that took the 15% pay cut are no longer allowed to work overtime, which was promised when each of us took the 15% pay cut" And most of you took IBM at it's word that this was a PAY REMIX! Some promise,eh? But IBM is now well known to break promises. And those that heard Randy Mac when he toured sites to explain why IBM had to do a 15% pay cut to stay "competitive" and comply with FLSA and a band conversion/reduction didn't even challenge Dogbert on it. So you still think it is a pay remix? The Alliance told you it was a PAY CUT when it happened and it still is. And when IBM promises you it will not do another RA will you still believe it? What further actions must IBM do for you to not unionize? -Think2X-
    • Comment 02/23/12: Manufacturing cuts coming soon to Burlington VT plant. Contracts down. We no longer make anything for IBM computers. Just game and cell phone chips. What a waste. -LookingElsewhere-
    • Comment 02/24/12: Due to a high bench on the East Coast in OZ; they are doing RA's DownUnder. As a BP Manager in Perth a bit shocked to hear; we're screaming for resources here in WA - but there are (were) 200+ folks on the bench on the East Coast (as of Dec 2011). They have a massive "Go West" campaign to get folks to relocate to Perth for the big Natural Resource Accounts (e.g. BHPB, Chevron, Rio); as well as a Go Canberra/Go Brissy campaign for Public Sector and Natural Resources in Queensland. So a bit surprised when our team (work on 2 high profile proposals); with FIFO resources from SYD and MEL - gets the word that 4 of our 10 FIFO resources "had the chat" with HR and the BP manager on Wed of this week. They now have until 30/31 Mar to find a new op; or "G'bye Mate". Unfreaking real. Turns out these folks had 3 ratings; and while on the bench - were caught in a state of shock to have the talk and RA pulled on them. One was a 23 year B9 PM, another 4 year B9 PM, two others were B8 Archs. Our proposal team is now suffering; as these folks need to mentally sort out other ops in OZ (relo is a possibility for some to Perth; but some don't want/wish to make the relo). WA has a massive shortage of skills; and we're hurting to staff accounts in Perth. Left hand and right hand just aren't coordinated here in OZ. And what's a bit frightening; our attrition is over 14%; and trending up. Just had a Town Hall with Sarah; and she seems blind to the problem - focusing on "get those Q1 signings closed"; ignoring (of course) questions about the recent RA's. We also had 2 DE's resign in the past week - one to CSC, the other to BHPB. Thinking my own options here... may be time to say "buh bye" after 12 years with Big Blue. Am GBS BP Manager here; Natural Resources group. Any other OZ RA's noted? -GBS-Perth -
    • Comment 02/24/12: Today I celebrate my victory over Goliath. I just heard that my PBC appeal was successful and that my PBC 3 was overturned to a PBC 2. I still think though that I'm headed for an RA as the rumors continue to come fast and hard. I will share that as soon I hear. -Davinia-
    • Comment 02/24/12: RA's across GBS Service Lines in Austin last week for consultants and back office/support. Not sure of numbers but given a HR Partner had SameTime status as essentially unavailable between 22-24 Feb with the noted mtg room location being the same room where RAs took place would suggest quite a few were executed, including me. I sure feel its a blessing in disguise! No loyalty at IBM any more. -Happy Days-
    • Comment 02/25/12: CIO in Pok scheduled to have huge cuts before end of February. managers have been meeting or weeks with hr and each other. roadkill 2015 plans for less than 20% to be US employees, and this out of 3rd lines mouth -good bye pok-
    • Comment 02/25/12: I think I have figured something out. The reason that IBM is not in the "news" anymore when they fire a few hundred or a few thousand people is because US IBMers are not fighting back publicly. After all, good or bad, the Tea Party movement and the Occupy movement both got media attention to their causes. What attention do IBMers get when they are fired by the thousands? Very little. That's because they are not out in the street making their case. This is something IBMers should all "THINK" about. The Alliance can't do this without members and without people to publicly demonstrate on behalf of IBMers USA. Just sayin'... -Read Much?-
    • Comment 02/25/12: PBC 2 still gets GDP/profit sharing; typically 2s have not gotten raises in quite some time. -TireBiter-
    • Comment 02/25/12: WRAL Techwire and the Alliance report these RA's EVERY year. If IBM is not in the 'news" it is because of the A.D.D. nature of the news. FEB. 24, 2011: IBM cuts jobs in services unit. They also made similar reports in 2010 and 2009 and before that. Not in the news? Seriously? -UduntreadMuch-
    • Comment 02/25/12: T. I dealt with the 15% pay cut and the cut in overtime last year, and I dealt with the 2 rating PBC and no raise last year. This year, I couldn't do it. I put out my resume, had a new job offer in 2 weeks with a 30% increase in pay. I had been brainwashed to think that there were no jobs in our industry. That is changing. Cut IBM loose and let it sink without you. -anon-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
Minimize
  • Center for Public Integrity analysis: Taking the initiative in a struggle against excessive rate increases. By Wendell Potter. Excerpts: The biggest applause line Senator Diane Feinstein (D-Calif.) got at a gathering of Democratic Party activists last week came when she endorsed a ballot initiative to give the California Insurance Commissioner power to reject excessive health insurance rate increases.

    Consumer advocates there decided to go the ballot initiative route after the insurance industry’s friends in the legislature blocked a bill last year that would do the same thing. Feinstein became the first Californian to sign a petition. Insurance Commissioner Dave Jones became the second. To get the measure before voters in November, the advocates, led by Santa Monica-based Consumer Watchdog, must collect half a million more signatures.

    In her San Diego speech before the party faithful, Feinstein pointed out that in the first quarter of this year, the five largest health insurers — UnitedHealth, WellPoint, Aetna, CIGNA and Humana — posted profits of $3.6 billion, 16 percent more than the same period a year earlier. One of the ways those companies were able to achieve such Wall Street-pleasing success was by jacking up the rates on policies bought by individuals and small businesses. While most of these policyholders dug deeper into their pockets to avoid joining the 50 million Americans who are uninsured, many others had no choice but to let their coverage lapse.

    As Feinstein noted, thousands of Californians have been forced into the ranks of the uninsured in recent years because of policies being priced beyond the ability of individuals to pay. She said many people in the state had received rate increase notices twice over the past year alone.

  • Associated Press, courtesy of the New York Times: States Attack 'Obamacare' With Birth Control Bills. Excerpt: Republican lawmakers in a handful of states are opening another front in the war against President Obama's health care overhaul, seizing on the hot-button issue of birth control with bills that would allow insurance companies to ignore new federal rules requiring them to cover contraception. Measures introduced recently in Idaho, Missouri and Arizona would go beyond religious nonprofits and expand exemptions to secular insurers or businesses that object to covering contraception, abortion and sterilization.
  • AARP: Health Insurance for 50 to 64 Year Olds. Access drops as costs rise and employer-sponsored plans decline. Health care law promises help. By Gerry Smolka, Megan Multack, Carlos Figueiredo. Excerpts: The Affordable Care Act (ACA) promises to improve access for all older adults, especially for those with lower incomes and pre-existing medical conditions.

    The rising cost of health care has made access to adequate, affordable health care coverage problematic for many in this age group. The share of adults age 50 to 64 who are at risk for high health care spending is rising, while the share with employer-sponsored health coverage is declining.

    Thirty percent of adults in this age group spend at least 10 percent of their disposable income on health care, compared to 18 percent among adults age 19 to 49. For those buying health insurance in the individual market, the likelihood of high total out-of-pocket health spending is much greater — three in four. The uninsured (8.9 million) outnumber those with public coverage (7.3 million) or those with other private coverage (4.2 million), and their number is growing. There are 3.7 million more uninsured older adults since 2000.

  • Healthcare Blue Book. The Healthcare Blue Book is a free consumer guide to help you determine fair prices in your area for healthcare services. If you pay for your own healthcare, have a high deductible or need a service your insurance does not fully cover, we can help. The Blue Book will help you find fair prices for surgery, hospital stays, doctor visits, medical tests and much more.
  • USA Today: Court action could prolong health care fight. By Joan Biskupic. Excerpt: Next month's challenge to the Obama-sponsored health care law could affect the care available to most Americans, alter the balance of power between Washington and the states and remain a flash point through this presidential campaign.

    Yet there is a path the Supreme Court could take when it hears the case that could delay for years any resolution of a main point of contention.

  • Washington Post opinion: The missing contraception question. By Matt Miller. Excerpts: Can we please get one moment of contraceptive clarity Wednesday night in what may be the final big GOP debate of the year? All it will take is a simple line of questioning pressed by moderator John King.

    Here’s what King should say: “The reason we’ve had a fight over the so-called contraception mandate is because we’re the only wealthy nation in which group health coverage can be obtained only from your employer. If individuals were able to buy group coverage outside the employment setting — without risk of being denied coverage or priced out of the market due to preexisting conditions — this entire blowup would never have happened, because the idea of requiring employers to offer specific kinds of coverage would be irrelevant. To avoid this in the future, and to free American business to focus on competing with China and India rather than on administering a corporate welfare state, do you support moving beyond employer-based health coverage? If so, how specifically would you propose we get there?” ...

    There was a time when Republicans knew employer-based health coverage was an outdated relic. In fact, that time was 2008, when John McCain made a transition to individually purchased coverage the centerpiece of his health plan in the campaign.

    In the end, McCain’s plan was fatally flawed for two reasons. First, he didn’t propose insurance market reforms that would enable people with preexisting conditions to be assured coverage as part of a larger pool. And second, McCain didn’t offer the subsidies that millions of poor workers would need to help buy such coverage. But the basic idea of moving past employer-provided care was spot on.

    Mitt Romney knows this but pretends not to in his impressively soulless quest for religious voters. Wouldn’t it have been refreshing if he or another GOP candidate had simply said, “Hey, we could avoid this whole contraception mess if we moved past employer-based health care?” Or if we gave employees of Catholic institutions who want access to contraception publicly funded vouchers they could use to buy policies at the new private insurance exchanges Obama’s health reform sets up?

  • Kaiser Health News: Can Massachusetts Lead The Way On Controlling Health Costs? y Martha Bebinger, WBUR. Excerpt: Employers in Massachusetts routinely complain about health insurance costs rising two, three or even eight times faster than inflation. But not so much lately. As of April 1, base insurance rates approved by the Democratic Gov. Deval Patrick’s administration for small businesses will increase, on average, 1.8 percent. Interestingly, the state’s economy grew at the same rate for the last quarter of 2011.

    So is health care inflation tamed in the state? We put this question and a few others to four economists: MIT’s Jonathan Gruber (one of the architects of the Mass. health law), Harvard University’s David Cutler (who was in the Clinton administration and advised President Obama), Stuart Altman of Brandeis University (who advised Presidents Nixon and Clinton and candidate Barack Obama) and Meredith Rosenthal (at the Harvard School of Public Health). For clarity, we edited their answers.

  • Physicians for a National Health Care Program: 17% of low-wage workers will remain uninsured under ACA. Health-insurance Coverage for Low-wage Workers, 1979-2010 and Beyond. By John Schmitt. Excerpts: In 2010, over 38 percent of low-wage workers lacked health insurance from any source, up from 16 percent in 1979. Coverage problems are particularly severe for Latino workers. Almost 40 percent of all Latino workers (not just low-wage workers) have no health insurance of any form. African American (about 22 percent) and Asian (about 17 percent) workers are also much less likely to have coverage than white workers (about 12 percent). ...

    Conservatives who oppose health care reform often argue that being uninsured is a consequence of the individual's own personal irresponsibility. Those individuals merely need to shape up and go out and get a job, and then they would have health insurance. The conservatives lose their credibility on this point when the actual data show that 38 percent of low-wage workers, who do go out and get a job, lack health insurance from any source.

    Because of such deficiencies in our system reform advocates were able to muster the political support to pass the Affordable Care Act - a half-glass reform. Those who view this as a glass half full celebrate the fact that over half of these uninsured workers will become insured under ACA. The advocates of reform who view this as a glass half empty bemoan the fact that ACA will still leave about 17 percent of low-wage workers without insurance. The diversionary half full, half empty debate is particularly tragic when you consider that a single payer national health program would have brought us a full glass.

  • Fierce Health Payer: Survey: Health insurance industry has worst customer service. By Dina Overland. Excerpts: When it comes to customer service, health insurance companies rank dead last. In a survey rating 206 companies across 18 industries, U.S. consumers gave the health insurance industry the lowest scores, according to the Temkin Group, a customer service consulting company. Insurers received "poor" or "very poor" marks and were one of only three industries to receive an average rating of "poor" as part of the 2012 Temkin Experience Ratings, reported UPI.

    Kaiser Permanente received the highest marks among the 13 health plans covered in the survey, ranking 67th. However, it only received an "okay" rating and ranked 87th overall, according to the North Colorado Business Report.

    TriCare, Medicare, Aetna, UnitedHealth, Humana, Empire Blue Cross Blue Shield, Blue Shield of California and Cigna all received "poor" ratings. Four plans--Highmark BCBS, Health Net, Medicaid, and Anthem BCBS--received "very poor" ratings and ranked in the bottom seven across all 18 industries, according to a Temkin blog post.

  • Forbes: Single-Payer Health Care Is Coming To America-Are We Ready? By Rick Ungar. Excerpts: Speaking at a recent conference, Mark Bertolini, CEO and Chairman of Aetna Insurance, announced that the end is near for profit driven health insurance companies. “The system doesn’t work, it’s broke today. The end of insurance companies, the way we’ve run the business in the past, is here.” In highlighting the reasons for his bold statement, Bertolini called out the ban on medical underwriting propounded by the Affordable Care Act, which Bertolini believes has made the traditional health insurance business model untenable in the long term, while also giving an ‘honorable mention’ to the MLR requirements. ...

    And yet Bertolini, who leads one of the nation’s largest health insurance companies and is a man known for his honesty and willingness to do the right thing, was not raging against government interference nor suggesting that the Affordable Care Act has destroyed his business as it leads America down the road to healthcare disaster. Indeed, Mark offers a considerable measure of praise for Obamacare saying, “For most of what has already been implemented, it has been a pretty good thing.” ...

    The notion of creating a “Medicare For All” health care system in America has been on the table ever since Medicare first came into being in 1965. And for just as many years, the battle has raged over whether making such a system available to all Americans would be akin to a capitulation to socialism in a nation that prides itself on its free-market principles or, conversely, a humane and moral step forward for our society. Polls have long shown that when the idea of a “Medicare For All” is suggested, or some other variation of a national health insurance system is put to the public, the results tend to be favorable. However, when the wording of such a poll includes the words ‘socialized medicine’ or suggesting an increase in taxes to pay for the same, the results tend to be very different.

  • Bloomberg BusinessWeek: How the Experts Would Fix Health Care. Five innovative health-care leaders assess the challenges in costs, technology, and prevention. Excerpt: People are living longer. Life-threatening diseases have been eliminated. What were once considered medical miracles are now commonplace procedures. Yet there’s a near-universal sense that the U.S. health-care system is a heaving mess, rife with errors and injustices. It’s expensive, too. By 2020 related costs will reach an estimated $4.6 trillion, nearly 20 percent of gross domestic product. So how do we fix health care? That’s the question Bloomberg BusinessWeek Chairman Norman Pearlstine put to our esteemed panel: Dr. Ralph de la Torre, chairman and chief executive officer of Steward Health Care System; Dr. Gregory Curfman, executive editor of the New England Journal of Medicine; Gail Wilensky, economist and senior fellow at Project HOPE; Ronald Williams, former chairman and CEO of Aetna; and Jonathan Bush, CEO, president, and chairman of Athenahealth. Their conversation has been condensed and edited.
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.

  • Financial Times opinion: America needs its own infrastructure bank. By Felix Rohatyn and Rodney Slater. Excerpts: America needs to invest in infrastructure. Despite signs of improvement, our economy is still in crisis. We could create millions of jobs by rebuilding our transport and water systems – ending the congestion that stifles our ports, airports, railroads and highways; increasing productivity; and empowering the US to compete with countries that are investing in infrastructure on a massive scale. Infrastructure financing tools are available, providing Washington wants to use them. They could bolster investment by leveraging hundreds of billions of dollars in private and international capital. ...

    The federal budget should be a tool to encourage national investment, as it was when Thomas Jefferson purchased Louisiana and when Dwight Eisenhower built our super- highways. These great achievements proved public investment can generate vast returns. Investing in our infrastructure would prove it once again.

  • The Smirking Chimp: Class Warfare: Which Side Are You on? By Bob Burnett. Excerpts: Are we in the middle of a Class War? Billionaire Warren Buffett thinks so, "There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning." Most Americans agree; a recent Pew Poll found "Two-thirds of Americans said they think there are 'very strong' or 'strong' class conflicts in society." But there's a notable lack of enthusiasm for making fundamental change. ...

    Perhaps working Americans do not understand how grave the situation is. A recent Mother Jones article graphically illustrated the problem: in the last 30 years the income of the one-percent has quadrupled and everyone else has experienced no growth. The Washington Post noted that in 2008, the average family income for the bottom 90 percent was $31,244 and that was a 1 percent decline from 1970. During the same period, the top .1 percent saw their income increase by 385% to $5.6 million. (The wealth divide is even more extreme; while the top 1 percent earn 21 percent of the nation's income, they now control 36 percent of our wealth.) ...

    Over the last 30 years, the United States has been looted. The rich and powerful, the 1 percent, have taken a disproportionate share of the economic gains that we've all worked for. As a consequence America is teetering on the brink of Plutocracy. To remedy this inequity and restore Democracy, fundamental changes must be made.

  • Huffington Post: The Gas Wars. By Robert Reich. Excerpts: Nothing drives voter sentiment like the price of gas -- now averaging $3.56 a gallon, up 30 cents from the start of the year. It's already hit $4 in some places. The last time gas topped $4 was 2008.

    prices. Last week House Speaker John Boehner told Republicans to take advantage of voters' looming anger over prices at the pump. On Thursday House Republicans passed a bill to expand offshore drilling and force the White House to issue a permit for the Keystone XL pipeline. The tumult prompted the Interior Department to announce on Friday expanded oil exploration in the Arctic.

    If prices at the pump continue to rise, expect more gas wars. In fact, oil prices are rising for three reasons -- none of which has to do with offshore drilling or the XL pipeline.

    The first, on the supply side, is Iran's decision to cut in oil exports to Britain and France in retaliation for sanctions put in place by the EU and United States. Iran's threat to do this has been pushing up crude oil prices for weeks.

    The second, on the demand side, is rising hopes for a global economic recovery -- which would mean increased oil consumption. The American economy is showing faint signs of a recovery. Europe's debt crisis appears to be easing. Greece's pending bailout deal is calming financial nerves on both sides of the Atlantic, and the Bank of England and European Central Bank are keeping rates low. At the same time, China has decided to boost its money supply to spur growth there.

    Neither of these would have much effect were it not for the third reason -- overwhelming bets of hedge funds and other money managers that oil prices will rise on the basis of the first two reasons. Speculators have pushed crude oil to $105.28 per barrel, up 35 percent since September. Brent crude, Europe's benchmark, is now $120.37 a barrel -- also worrisome because many East Coast refineries use imported oil.

  • Wall Street Journal: Obama Proposes Tax Revamp. Top Corporate Rate Would Dip to 28%; Overall Tax Revenue to Rise on Fewer Deductions. By Damian Paletta and John D. McKinnon. Excerpts: The plan would require U.S. companies operating overseas to pay—for the first time—a minimum tax rate on their foreign earnings. ...

    One theme of the proposal is offering new tax benefits for U.S. manufacturers while raising taxes on U.S. companies with large operations in other countries. ...

    U.S. businesses paid $181 billion in corporate income taxes in fiscal year 2011, representing 7.9% of all federal revenue and 1.2% of U.S. gross domestic product—a near-historic low percentage of GDP. The administration believes corporate income taxes will snap back in 2014 to $430 billion, roughly 13.4% of all federal revenue and 2.5% of GDP, because of the recovering economy and expiring tax breaks. Company owners pay billions of dollars more every year in "individual" income taxes, because of how a growing number of firms are structured. ...

    For example, many partnerships—including law firms but also, increasingly, other types of businesses—have enjoyed nontaxable status for years. Due to changes in the 1980s and 1990s, those entities have proliferated, and now far outnumber taxable corporations. Instead of being subject to the corporate tax, their owners pay tax on the businesses' earnings through their individual returns. These firms are politically powerful, and a big change in their tax status could be divisive.

  • Financial Times: Wealthy backers boost Republicans. By Richard McGregor. Excerpts: Sheldon Adelson, the Las Vegas casino magnate whose family has spent $11m backing Newt Gingrich for the Republican presidential nomination, says he may give “another $10m or $100m” to the candidate, a boast which underlines how the rules of campaign finances are being rewritten for the 2012 election. The weight of Mr Adelson’s comments, made in an interview to Forbes, was reinforced by the latest release of campaign funding data, which show wealthy donors still overwhelming traditional funding sources. ...

    The Republican super-Pacs for the four main candidates, Messrs, Romney, Gingrich, Santorum and Ron Paul, the libertarian Texas congressman, together raised $22.1m.

    By contrast, Priorities USA, the super-Pac backing Mr Obama, raised just $59,000 in January, something the White House had in mind when it recently announced that administration officials would no longer shun the body and attend its fund raisers.

    Mr Adelson, whose net worth is about $25bn, is the biggest single donor for this election to conservative super-Pacs, along with Harold Simmons, a Texas businessman. ...

    If, as expected, Mr Gingrich is forced out of the race, Mr Adelson suggested he would support other Republicans to stop Mr Obama’s “socialist-style” policies.

  • Huffington Post: The GOP's Big Investors. By Robert Reich. Excerpts: Have you heard of William Dore, Foster Friess, Sheldon Adelson, Harold Simmons, Peter Thiel, or Bruce Kovner? If not, let me introduce them to you. They're running for the Republican nomination for president.

    I know, I know. You think Rick Santorum, Newt Gingrich, Ron Paul, and Mitt Romney are running. They are -- but only because the people listed in the first paragraph have given them huge sums of money to do so. In a sense, Santorum, Gingrich, Paul, and Romney are the fronts. Dore et al. are the real investors.

    According to January's Federal Election Commission report, William Dore and Foster Friess supplied more than three-fourths of the $2.1 million raked in by Rick Santorum's super PAC in January. Dore, president of the Dore Energy Corporation in Lake Charles, Louisiana, gave $1 million; Freis, a fund manager based in Jackson Hole, Wyoming, gave $669,000 (he had given the Santorum super PAC $331,000 last year, bringing Freis's total to $1 million).

    Sheldon Adelson and his wife Miriam provided $10 million of the $11 million that went into Gingrich's super PAC in January. Adelson is chairman of the Las Vegas Sands Corporation. Texas billionaire Harold Simmons donated $500,000. ...

    Mitt Romney's super PAC raised $6.6 million last month -- almost all from just forty donors. Bruce Kovner, co-founder of the New York-based hedge fund Caxton Associates, gave $500,000, as did two others. David Tepper of Appaloosa Management gave $375,000. J.W. Marriott and Richard Marriott gave a total of $500,000. Julian Robertson, co-founder of hedge fund Tiger Management, gave $250,0000. Hewlett-Packard CEO Meg Whitman gave $100,000.

    Bottom line: Whoever emerges as the GOP standard-bearer will be deeply indebted to a handful of people, each of whom will expect a good return on their investment.

  • New York Times opinion: Is Romney Reading Krugman? By Andrew Rosenthal. Excerpts: At a campaign stop in Michigan on Tuesday, Mitt Romney made news by telling the truth about the economy. He said: “If you just cut, if all you’re thinking about doing is cutting spending, as you cut spending you’ll slow down the economy. So you have to, at the same time, create pro-growth tax policies.”

    The idea that spending reductions slow, rather than spur the economy is what Paul Krugman, The Times editorial board, and many liberal economists have been advancing since the downturn. (Simply put: You can’t cut your way to growth.) It’s also in keeping with the Obama administration’s arguments. As Jack Lew, the White House chief of staff said recently on Meet the Press, “I think that there’s pretty broad agreement that the time for austerity is not today…Right now we have a recovery that’s taking root and if we were to put in an austerity measures right now, it would take the economy in the wrong way.”

    Actually, there is no “broad agreement:” The Republican political establishment considers such ideas heresy. Andy Roth of the Club for Growth, called Mr. Romney’s admission “hogwash.” And within hours of the gaffe, campaign spokesman Ryan Williams stepped in to assure voters that Mr. Romney “believes that budget cuts—especially in the context of President Obama’s unprecedented spending explosion—are a step in the right direction.”

  • Investment News: GOP or Dem president best for stocks? It's not even close Investors have fared far better under Democratic administrations; cause-and-effect or coincidence? Excerpts: While Republicans promote themselves as the friendliest party for Wall Street, stock investors do better when Democrats occupy the White House. From a dollars-and-cents standpoint, it's not even close.

    The BGOV Barometer shows that, over the five decades since John F. Kennedy was inaugurated, $1,000 invested in a hypothetical fund that tracks the Standard & Poor's 500 Index (SPX) only when Democrats are in the White House would have been worth $10,920 at the close of trading yesterday.

    That's more than nine times the dollar return an investor would have realized from following a similar strategy during Republican administrations. A $1,000 stake invested in a fund that followed the S&P 500 under Republican presidents, starting with Richard Nixon, would have grown to $2,087 on the day George W. Bush left office.

  • Huffington Post: Obama Tax Plan Would Raise Taxes On Private Equity And Hedge Fund Chiefs. By D.M. Levine. Excerpts: Part of the tax proposal announced by the Obama administration on Wednesday would shut down a controversial loophole that allows hedge fund managers and private equity executives to pay taxes at a lower rate than many working people. ...

    Hedge funds managers and private equity executives pay a different tax on their profits--which often comprise the bulk of their income --than most wage earners pay on their regular income. Hedge fund and private equity gains are taxed as “carried interest" at 15 percent. The Obama administration proposal would tax these profits at regular income rates of up to 35 percent.

    “Currently, many hedge fund managers, private equity partners, and other managers in partnerships are able to pay a 15 percent capital gains rate on their labor income,” a relevant section of the proposal reads. “This tax loophole is inappropriate and allows these financial managers to pay a lower tax rate on their income than other workers.”

  • Huffington Post: Oil Slicks: Who Benefits From Gambling on Gas Prices? By Richard Eskow. Excerpts: Anybody who doesn't believe that energy speculators can change election results might want to ask Gray Davis, the former Governor of California who was removed in a recall drive partly prompted by voter frustration over California's ongoing energy crisis. Only afterwards did we learn that the crisis was caused by speculators who backed his opponents' deregulatory agenda -- and benefited from it.

    Coincidence? We report, you decide.

    And anyone who doesn't believe that gas prices affect election results might want to ask former President Jimmy Carter. If the 1980 election hadn't turned out the way it did we might be living in a very different world.

    Today gas prices continue to rise, despite the fact that demand for oil is lower than it's been in the last fifteen years. Are speculators affecting our fate again? That's the subject of heated technical debate, although I find the evidence very compelling. But here's something to consider: The prime suspects for oil speculation -- Goldman Sachs, the Koch Brothers, etc. -- are the people who are fighting tooth and nail to make sure government never has the power to investigate their actions.

  • Washington Post: Report: Debt will swell under top GOP hopefuls’ tax plans. By Lori Montgomery. Excerpts: The national debt would balloon under tax policies championed by three of the four major Republican candidates for president, according to an independent analysis of tax and spending proposals so far offered by the campaigns. The lone exception is Texas Rep. Ron Paul, who would pair a big reduction in tax rates with even bigger cuts in government services, slicing about $2 trillion from future borrowing.

    According to the report released Thursday by U.S. Budget Watch, a project of the bipartisan Committee for a Responsible Federal Budget, former Pennsylvania senator Rick Santorum and former House speaker Newt Gingrich would do the most damage to the nation’s finances, offering tax and spending policies likely to require trillions of dollars in fresh borrowing.

    Both men have proposed to sharply cut taxes but have not identified spending cuts sufficient to make up for the lost cash, the report said. By 2021, the debt would rise by about $4.5 trillion under Santorum’s policies and by about $7 trillion under Gingrich’s plan, pushing the portion of the debt held by outside investors to well over 100 percent of the overall economy, the study said. ...

    The report does not include an analysis of President Obama’s latest spending blueprint, which seeks to reduce borrowing by $3 trillion by 2021. Budget Watch plans to analyze Obama’s request in future reports.

  • Washington Post: SEC May Ticket Speeding Traders. High-Frequency Firms Face Fees on Canceled Transactions. By Scott Patterson and Andrew Ackerman. Excerpts: The Securities and Exchange Commission is looking to curb high-frequency traders' huge influence on stock trading and is considering charging fees for the myriad buy and sell orders that are later canceled, among other options. SEC Chairman Mary Schapiro said a large portion of equities trading has little to do with "the fundamentals of the company that's being traded." She said it had more to do with "the minuscule aberrational price move" that computer-assisted traders with direct connections to the exchange can "jump on" in fractions of a second. ...

    Worries about high-speed trading have been mounting inside the SEC and the Commodity Futures Trading Commission for years, but Ms. Schapiro's remarks indicate a heightened sense of concern and suggest the agency could take aggressive action to rein in the practice. High-frequency trading firms move in and out of stocks rapidly using powerful computers. ...

    The SEC also is weighing imposing fees on order cancellations, which constitute "a vast majority of orders" submitted by high-frequency firms, Ms. Schapiro said. An estimated 95% to 98% of orders submitted by high-speed traders are canceled as the firms rapidly react to shifts in prices across the stock market, according to Tabb Group, which tracks trends in electronic trading. The possible fee, previously mentioned in a joint advisory committee of the SEC and CFTC, would likely be a tiny fraction of a cent per canceled order, experts say.

  • New York Times: What Cameras Inside Foxconn Found. By David Pogue. Excerpts: I wrote about the Apple/China/Foxconn controversy in this space a couple of weeks ago, but there have been some developments, some progress and some new revelations.

    The story so far: Last month, The New York Times published a front-page article highlighting working conditions at a factory in China owned by Foxconn Technology, where Apple’s products are built. The problems included fatal accidents and employees injured while using a toxic chemical that can cause nerve damage. (Although Apple is the poster child for Foxconn, just about all of our electronics are made in the same Chinese factories, as the Times article noted. Foxconn also builds products for Sony, Panasonic, Samsung, Sharp, Asus, Hewlett-Packard, Dell, Intel, I.B.M., Lenovo, Microsoft, Motorola, Netgear, Nintendo, Nokia and Vizio. The Xbox, the PlayStation and the Amazon Kindle are made here.) The article set off a firestorm of protest, petitions and demonstrations. ...

    Anyway, for me, two new sources of light were trained on the Foxconn situation: a TV broadcast and an e-mail. ABC’s “Nightline” was invited to visit Apple’s production lines at Foxconn. Its correspondent, Bill Weir, was allowed to interview any worker, on camera or off, in the factory or outside. On Tuesday night, ABC broadcast its report. You can watch it online.

  • The Fiscal Times: Lower the Deficit? Not with These GOP Candidates. By Michelle Hirsch. Excerpts: The Republican presidential candidates spent much of last night trying to outdo each other on plugging the gush of red ink spewing from Washington. But three out of four contenders would send deficits soaring over the next decade, a new report out today from a Washington, D.C., budget watchdog group reveals. The only candidate whose plan would reduce the national debt is Texas Congressman Ron Paul, according to the analysis by the Committee for a Responsible Budget, a think tank comprised of former members of Congress and cabinet members, as well as economists. ...

    The conclusion? Most of these candidates are guilty of making overzealous promises to cut taxes without detailing specific or sufficient ways to pay for them. “None of the numbers are ever going to be perfect and none of the best scorers in the whole city [of Washington] can ever get all this perfect,” said Maya MacGuineas, CRFB’s president, who says her organization’s analysis is still a work in progress. “But it’s clear that you can say tax cuts don’t pay for themselves.”

    Gingrich, the study finds, is the worst offender when it comes to inflating deficits. When taken together, his commitments to slash education spending and social welfare programs would not be enough to counteract the effects of his plans to cut taxes for the wealthy and introduce private Social Security retirement accounts. Under his policies, the national debt would rise by about $7 trillion over two terms in office, mostly as a result of his plans to cut the top corporate income tax rate from 35 percent to 12.5 percent, eliminate estate and capital gains taxes, and replace the current tax code with an optional 15 percent flat tax.

  • The Smirking Chimp: Another Obama Sellout: Mortgage Settlement a Sad Joke. By Ted Rall. Excerpts: As penance for their sins--securitizing fraudulent mortgages, using forged deeds to foreclose on millions of Americans and oh, yeah, borking the entire world economy--Ally Financial, Bank of America, Citibank, JPMorgan Chase and Wells Fargo have agreed to fork over $5 billion in cash. Under the terms of the new agreement they're supposed to reduce the principal of loans to homeowners who are "underwater" on their mortgages--i.e. they owe more than their house is worth--by $17 billion.

    Some homeowners will qualify for $3 billion in interest refinancing, something the banks have resisted since the ongoing depression began in late 2008.

    What about those who got kicked out of their homes illegally? They split a pool of $1.5 billion. Sounds impressive. It's not. Mark Zuckerberg is worth $45 billion.

    "That probably nets out to less than $2,000 a person," notes The Times. "There's no doubt that the banks are happy with this deal. You would be, too, if your bill for lying to courts and end-running the law came to less than $2,000 per loan file." ...

    Tens of millions of homeowners have seen the value of their homes plummet since the housing crash. (The average home price fell from $270,000 in 2006 to $165,000 in 2011.) Those who are underwater tended not to have had much equity in their homes in the first place, having put down low downpayments. Why single them out for special assistance? Shouldn't people who owned their homes free and clear and those who had significant equity at the beginning of crisis get as much help as those who lost less in the first place? What about renters? Why should people who were well-off enough to afford to buy a home get a payoff ahead of poor renters?

    The biggest fairness issue of all, of course, is one of simple justice. If you steal someone's house, you should go to jail. If your crimes are company policy, that company should be nationalized or forced out of business. Your victim should get his or her house back, plus interest and penalties. You shouldn't pay less than a speeding ticket for stealing a house.

  • The Smirking Chimp: Politicians Increasingly Dancing With Billionaires Who Brung 'Em. By Dave Johnson. Excerpts: Our politicians are doing and saying increasingly incomprehensible things. The separation from regular people is unbelievable. But in politics you "dance with the one that brung ya," and these things become comprehensible and believable when you look at who is bringing them to the dance.

    The Supreme Court, in its conservative-movement-created wisdom, has ruled that billionaires and corporations -- even subsidiaries of foreign corporations -- can spend unlimited amounts in our elections. This has led to the super Pacs, where just a few billionaires and companies now dominate the elections and the things the candidates say and the policies they promote. And it is most of that money is used to run negative ads that run down candidates and destroy the public's faith in government and democracy.

    This new election-funding system has our candidates trolling for billionaire and corporate dollars instead of coming up with policies and positions that serve the people. Did you think Republicans were talking about billionaires as "job creators" because it would get them votes? No, it is because vain, wealthy, greedy billionaires like to be described that way, and those politicians are trying to get them to loosen their wallets. Even if they lose the election they are looking for rewards -- lucrative jobs -- later. ...

    The top 1% also own 50.9% of all stocks, bonds, and mutual fund assets. The top 10% own 90.3%.

  • National Journal: One-Fourth of All Super PAC Donations Last Month Came From Just Five People. By Dashiell Bennett, The Atlantic Wire. Excerpts: We know how the super PACs have come to dominate the presidential campaign, but a closer look at financial-disclosure numbers shows how just a tiny handful of billionaires are dominating those super PACs. An analysis of January's campaign-disclosure filings reveals that 25 percent of all the money raised for the presidential race that month came from just five donors. That select group gave $19 million to various super PACs, often in support of more than one Republican candidate. Those numbers come from both The Washington Post and USA Today, though neither gives a complete list of those five top donors of 2012.

    However, a look at the biggest overall donors reveals who have been the biggest supporters of this whole campaign and the outsized level of support they've provided — and some indication of how they hope the race will play out. The limit on individual contributions that can go directly to a candidate is $2,500, but when giving to a super PAC the sky is the limit. And a handful of wealthy individuals have already crossed the $1 million threshold in giving.

    By far the most generous contributor is Harold Simmons of Texas, though he has not played favorites during this election cycle. He gave more than $1 million to Rick Perry's super PAC last year (before he dropped out of the race), threw $500,000 to Newt Gingrich in December, quickly pivoted with a $100,000 check to the pro-Mitt Romney Restore Our Future PAC, then went back to Gingrich with another $500,000 check. Perhaps he got confused by the names of the competing PACs — Restore Our Future (Romney) versus Winning the Future (Gingrich). Or as some have pointed out, anyone giving money to Gingrich at this point is really supporting Romney, since Newt's refusal to quit actually undermines Rick Santorum's chances.

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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