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6, 2000 April, 2000

Highlights—July 7, 2012

  • WRAL Techwire (RTP, NC): IBM reportedly awards raises to India workers. By Rick Smith. Excerpts: IBMers told that there would not be raises awarded the company's Global Technology Services group might be able to get a pay increase - if they move to India.

    Sources have told The India Times that GTS employees in that country will get what the paper describes as "increments."

    "The sources said that the performance assessment exercise had been completed and increments were expected across the organization in India next month," the newspaper said.

    "For the best performers, the increment may be in double digits ," a source told the newspaper.

    The report out of India came just hours after news broke that IBM executives across the company would not receive raises. ...

    By the way, India reportedly is home to the biggest number of IBM employees. While U.S. payrolls have fallen to under 95,000 based on estimates by Alliance@IBM, the union seeking to represent IBM workers, the Indian newspaper estimates that IBM now employs more than 130,000 in that country.

  • I, Cringely: IT class warfare — It’s not just IBM. By Bob Cringely. Excerpts: Back in April I wrote a six-part series of columns on troubles at IBM that was read by more than three million people. Months later I’m still getting ripples of response to those columns, which I followed with a couple updates. There is a very high level of pain in these responses that tells me I should do a better job of explaining the dynamics of the underlying issues not only for IBM but for IT in general in the USA. It comes down to class warfare. ...

    From the large corporation side the issues are cutting costs, raising revenues, increasing productivity, earnings-per-share, and ultimately the price of company stock. Nothing else matters. Old corporate slogans and promises implied in employee handbooks from 1990 have no bearing in the present. It would be nice if companies kept their commitments, but they don’t. Corporate needs change over time. And with rare exceptions for truly criminal behavior we probably just have to accept this and move on.

    From the perspective of IT professionals there’s a betrayal of trust that stems from the attempted commoditization of their function. What once were people now are resources and like any commodity the underlying idea is that a ton of IT here is exactly comparable to a ton of IT there. ...

    There are huge economic forces at work here — far bigger than many people or institutions recognize. Right now, for example, there are hundreds of thousands of experienced IT workers in the USA who are unemployed at the exact moment when big corporate America is screaming for relaxed immigration rules to deal with a critical shortage of IT talent.

    How can this be? Do we have an IT glut or an IT shortage?

    Like any commodity, the answer to this question generally comes down to delivered cost. If you are willing to pay $100 per barrel of oil there’s plenty of the stuff to be purchased. There’s a glut of $100 oil. But if you will only pay $10 per barrel of oil there’s a critical shortage. In fact at $10 America probably has no oil at all.

    In America right now there is a glut of $80,000-and-above IT workers and a shortage of $40,000-and-below IT workers.

    Remember that $80,000-and-above population comes with a surcharge for benefits that may not equally apply to the $40,000-and-below crowd, especially if those are overseas or in this country temporarily. A good portion of that surcharge relates to costs that increase with age, so older workers are more expensive than younger workers.

    It’s illegal to discriminate based on age but not illegal to discriminate based on cost, yet one is a proxy for the other. So this is not just class warfare, it is generational warfare. Yet government and media are too stupid to understand that. ...

    What we see at IBM and most of its competitors is a sales-oriented culture (get the deal — and the commission — at any cost) that sees technical talent as fungible, yet sometimes it isn’t fungible at all. There are many instances where IT resources can’t be replaced ton-for-ton because in the whole world there is less than a ton of what’s needed.

    From the big corporate perspective we discard local resources and replace them with remote or imported resources. This might work if there were no cultural, language, or experience differences, but there are. There are differences based on familiarity with the job at hand. All these are ignored by CEOs who are operating at a level of abstraction bordering on delusion. And nobody below these CEOs sees any margin in telling them the truth. ...

    Against this we have a cadre of IT workers who have been slowly boiled like frogs put into a cold pot. By the time they realize what’s happened these people are cooked. They are not just resentful but in many cases resentful and useless, having been so damaged by their work experience. They just want things to go back the way there were but this will never happen.

  • Yahoo! IBM Employee Issues message board: "Health Reform Subsidy Calculator from the Henry J Kaiser Family Foundation" by Jim Askew. Full excerpt: If you're a second-choicer like me whose Future Health (Hell) Account will last perhaps 2.5 years to cover my wife and me, you may be interested in the subsidy provided by the Affordable Health Care Act (i.e. "ObamaCare") starting in 2014. Given our meager pensions, the subsidy is quite substantial. See http://healthreform.kff.org/SubsidyCalculator.aspx#incomeAgeTables to use the calculator.
  • Yahoo! IBM Employee Issues message board: "Re: Health Reform Subsidy Calculator from the Henry J Kaiser Family Foundation" by "fhawontcutit". Full excerpt: Always, Read it carefully. It says, "Beginning in 2014, tax credits will be available for people under age 65 who purchase coverage on their own in a health insurance Exchange and are not covered through their employer, Medicare or Medicaid."


    One of the questions I have asked for some time on these boards, is whether you can go to the exchange if you have access to an employer retiree medical plan. I have never gotten an answer and I have searched for months trying to get an answer.

    I guess if you have access through the FHA and are not eligible to purchase from the exchange, you could draw your FHA balance down to zero and lose your FHA access?

    THIS IS NOT ADVICE. I don't know the answer...but people on the FHA really need to find an answer.

  • Yahoo! IBM Employee Issues message board: "Re: Health Reform Subsidy Calculator from the Henry J Kaiser Family Foundation" by "madinpok". Full excerpt: I don't know the official answer, either. But it wouldn't surprise me that if you have access to any insurance from any source, you will not be eligible to buy insurance on the exchange. So even if you draw your FHA balance down to zero, you may not be able to buy on the exchange, since you still have access-only coverage at that point.

    It would be nice if they let you buy through the exchange if your only alternative were to pay the full price of access-only coverage. But I'm not optimistic about that being allowed.

  • Yahoo! IBM Employee Issues message board: "Re: Health Reform Subsidy Calculator from the Henry J Kaiser Family Foundation" by "fhawontcutit". Full excerpt: Mad, oops...that's right...you still have access-only coverage if your FHA balance is zero.

    Here is the only thing I have found that indicates FHA retirees can buy from the exchange. It's on Senator Bingaman's website -- Congressional Research document from April, 2010: http://www.bingaman.senate.gov/policy/crs_privhins.pdf

    Individuals will only be eligible to enroll in an exchange plan if they are not enrolled in Medicare, Medicaid, or acceptable employer coverage as a full-time employee.

    Seems to indicate that since a retiree is not a "full-time employee" then retirees can buy from the exchange?

  • Yahoo! IBM Employee Issues message board: "Re: Health Reform Subsidy Calculator from the Henry J Kaiser Family Foundation" by "ncdad1". Full excerpt: This seems too good to be true. My family of four health insurance drops from $18,000/yr to $3,000/yr with the government picking up the remaining $15,000. How can the government afford that? That is better than my IBM insurance.
  • Yahoo! IBM Employee Issues message board: "Re: Health Reform Subsidy Calculator from the Henry J Kaiser Family Foundation" by Kathi Cooper. Full excerpt: How do you know the cost of your IBM insurance? No one knows that. How do you know if it is better than IBM's, if you can't compare the numbers?
  • Yahoo! IBM Employee Issues message board: "Re: Health Reform Subsidy Calculator from the Henry J Kaiser Family Foundation" by "ncdad1". Full excerpt: I know because I write the check for my PPO now of $4000/yr and my Cobra and Retire cost estimate on NetBenefit is $18,000/yr ... if the estimator below is right at $3000/yr I will be free of IBM, FHA, etc. worries. Similarly,if the estimate is right, employees may want IBM to drop medical insurance and same money on the exchange.
  • Yahoo! IBM Employee Issues message board: "Did you know this about COBRA?" by "fhawontcutit". Full excerpt: Footnote on page 76 of Ellen Schultz's "Retirement Heist" book: "This explains why COBRA costs can be so high: Employers can segregate former employees -- regardless of their age--into the retirees' risk pool." How wonderful.
  • Yahoo! IBM Employee Issues message board: "Re: Did you know this about COBRA?" by Jim Askew. Full excerpt: IBMers covered under COBRA are pooled with employees. However, once COBRA ends you're in a higher-cost retiree risk pool. This approach keeps IBM's costs lower since they pay less to cover employees in their own (younger) pool.

    I retired as part of the March RA and am a second choicer. After leaving, I received both "COBRA Fact Sheet" and "Plan Year 2012 Benefit Options" documents from IBM. As part of the RA, IBM pays the first year of COBRA. After the first year I plan to pay an additional six months out of pocket. (COBRA lasts for 18 months, regardless of who pays for it.)

    The "Plan Year 2012 Benefit Options" document shows five different plans (Aetna High Deductible PPO, Aetna Medium Deductible PPO, Aetna Low Deductible PPO with Health Savings Account, IBM EPO-Aetna, and Kaiser Permanente.)

    The COBRA fact sheet lists only the plan I was in before retiring, the High Deductible PPO with HSA. (Apparently you cannot switch your health plan upon retirement...I don't know if that's an IBM rule, an insurance company rule, or a government rule.) So, the only comparison I can make between COBRA cost (i.e. employee risk pool) and retiree cost (i.e. retiree risk pool) is the plan I was in before retiring.

    Here's the numbers: For my wife and I the monthly cost under COBRA is $749.35. The monthly cost under the retiree pal is $1082.59, a 44% increase.

    Dental insurance is similar. "IBM Dental Basic" for my wife and I under COBRA is $42.84 per month. Under the retiree plan, it's $59.24. After doing the math, I determined it was cheaper to pay for our dental care out of pocket rather than buying dental insurance. (This is even with one crown this year.)

  • Yahoo! IBM Employee Issues message board: "Vanity Fair: Where the Money Lives" by "fhawontcutit". Interesting article in Vanity Fair: http://www.vanityfair.com/politics/2012/08/investigating-mitt-romney-offshore-accounts. Excerpt:

    In 1994, Bain bought Dade International, a medical-diagnostics company, then added the medical-diagnostics division of DuPont in 1996 and a German medical-testing company called Behring in 1997. Former Dade president Bob Brightfelt says the operation started well: the Bain managers were "pretty smart guys," he recalls, and they did well cutting out overlap, and exploiting synergies.

    Then brutal cost cutting began. Bain cut R&D spending to an average of 8 percent of sales, a little more than half what its competitors were doing. Cindy Hewitt, Dade's human-resources manager, remembers how the firm closed a Puerto Rico plant in 1998, a year after harvesting $7.1 million in local tax breaks aimed at job creation, and relocated some staff to Miami, then the company's most profitable plant. Based on re­a­ssur­ances she had received from her superiors, she told those uprooting themselves from Puerto Rico that their jobs in Miami were safe for now—but then Bain closed the Miami plant. "Whether you want to call it misled, or lied, or manipulated, I do not believe they provided full information about what discussions were under way," she says. "I would never want to be part of even unintentionally treating people so poorly."

    Bain engaged in startling penny-pinching with the laid-off employees. Their contracts stipulated that if they left early they would have to pay back the costs of relocating to Miami—but in spite of all that Dade had done to them, it refused to release the employees from this clause. "They said they would go after them for that money if they left before Bain was finished with them," Hewitt recalls. Not only that, but the company declined to give workers their severance pay in lump sums to help them fund their return home.

    In 1999, generous pensions were converted into less generous benefits, wages were cut, and more staff members were laid off. Some employees contacted Norman Stein, then the director of the pension-counseling clinic at the University of Alabama law school, with a view to challenging the conversions. Stein says the employees were "extraordinarily nervous," so fearful, in fact, that they refused to let lawyers even make copies of pension documents. "I have been dealing with pensions issues for over 25 years and I never saw anything like this," recalls Stein. The spooked employees did not go to court. Stein says that, while breaking pension contracts like this was not unheard of, the practice at that time was "questionable," adding that Dade may have saved $10 to $40 million from converting its pensions.

    The beauty—or savagery—of leverage is that it can magnify any and all cash-flow boosts, such as this one. Take $10 to $40 million squeezed from a pension pot, then use that to create new, rosier financial projections to borrow several times that amount, and then pay yourself a big special dividend from the borrowed funds, many times the size of the pension savings. That is just what Bain Capital did: the same month it converted the pensions, it created new financial projections as a basis to borrow an extra $421 million—from which Bain, its co-investor Goldman Sachs, and top Dade management extracted $365 million in dividends. According to Kosman, "Bain and Goldman—after putting down only $85 million … made out like bandits—a $280 million profit." Dade's debt rose to more than $870 million. Romney had left operational management of Bain that year, though his disclosures show that he owned 16.5 percent of the Bain partnership responsible for the Dade investment until at least 2001.

    In 1999, generous pensions were converted into less generous benefits, wages were cut, and more staff members were laid off. Some employees contacted Norman Stein, then the director of the pension-counseling clinic at the University of Alabama law school, with a view to challenging the conversions.

    For a minute there I thought the article was talking about IBM. Didn't Norm Stein appear at some Congressional hearings?

  • Yahoo! IBM Employee Issues message board: "Re: Vanity Fair: Where the Money Lives" by Kathi Cooper. Full excerpt: Me and friends went to a party and dinner with Norm Stein during a DC pension trip. Very smart, very funny. Great person on our side.
  • Vanity Fair: Microsoft’s Downfall: Inside the Executive E-mails and Cannibalistic Culture That Felled a Tech Giant. Excerpts: Analyzing one of American corporate history’s greatest mysteries—the lost decade of Microsoft—two-time George Polk Award winner (and V.F.’s newest contributing editor) Kurt Eichenwald traces the “astonishingly foolish management decisions” at the company that “could serve as a business-school case study on the pitfalls of success.” Relying on dozens of interviews and internal corporate records—including e-mails between executives at the company’s highest ranks—Eichenwald offers an unprecedented view of life inside Microsoft during the reign of its current chief executive, Steve Ballmer, in the August issue. Today, a single Apple product—the iPhone—generates more revenue than all of Microsoft’s wares combined. ...

    Eichenwald’s conversations reveal that a management system known as “stack ranking”—a program that forces every unit to declare a certain percentage of employees as top performers, good performers, average, and poor—effectively crippled Microsoft’s ability to innovate. “Every current and former Microsoft employee I interviewed—every one—cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees,” Eichenwald writes. “If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, 2 people were going to get a great review, 7 were going to get mediocre reviews, and 1 was going to get a terrible review,” says a former software developer. “It leads to employees focusing on competing with each other rather than competing with other companies.”

    When Eichenwald asks Brian Cody, a former Microsoft engineer, whether a review of him was ever based on the quality of his work, Cody says, “It was always much less about how I could become a better engineer and much more about my need to improve my visibility among other managers.” Ed McCahill, who worked at Microsoft as a marketing manager for 16 years, says, “You look at the Windows Phone and you can’t help but wonder, How did Microsoft squander the lead they had with the Windows CE devices? They had a great lead, they were years ahead. And they completely blew it. And they completely blew it because of the bureaucracy.”

  • Yahoo! IBM Pension and Retirement Issues message board: "Insurance Deduction from Pension - Please Help" by "abcsweeps". Full excerpt: Hi everyone, I am writing on behalf of a loved one, who worked at IBM for over 30 years. She locked into the older IBM pension plan (I don't know the exact terms, just going off of what she has told me) and was also working part-time since retirement. Her understanding was the the Future Healthcare available to her and her kids would end after a certain point of time, and THEN it was up to her to secure healthcare, so she did in that November through her current PT now FT job.

    However, what she didn't know was that she also needed to "opt out" of this continued ongoing Future HC, and that if she didn't opt out it would be deducted from her monthly pension deposits.

    Today she learned that the hard way. She was expecting $x amount pension to be deposited as normal and noticed the deposit was over $2000 less than expected. Fidelity has told her she has to wait until November to opt-out for the next year OR she can also try writing an appeal letter and that they are binded by the agreement with IBM.

    I understand the legal aspects of this but am just heartbroken to know that this woman who worked for so much of her life is now trying to figure out how to make it until November. Has this happened to anyone else? Is this common? Is there ANYTHING else she can do to try and get this opt-out moved earlier? She was never contacted by anyone at Fidelity regarding the matter or received notification, unless it was some very fine print. She honestly did not know, so now is paying health insurance in two places and only using one of those policies.

    I don't know where to start or how to help but found this board and hoping someone has some advice. Thanks.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Insurance Deduction from Pension - Please Help" by "fstephens" . Full excerpt: Not sure how anyone with 30 years at IBM doesn't know the basic rules at retirement. BUT, if she has a FT JOB, this is a life changing activity and allows her to OPT OUT at this time.

    The folks at Fidelity call center are really off the street hires and are following a "cheat sheet". She should write to to the IBM PROGRAMS MANAGER (Randy McDonald) and copy NETBENEFITS (using registered mail with written return receipt, not the electronic version) requesting IMMEDIATE OPT OUT.

    If she does not have access to netbenefits.com/ibm she should sign up immediately and review her status.

    The Federal Government has made OPT OUT, ILLEGAL. IF she OPT'ed IN, she should ask to OPT OUT due to life changing activity (a NEW FULL TIME JOB) ! The OPT OUT should be stated as JAN 1, if she got the new job then.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Insurance Deduction from Pension - Please Help" by "madinpok". Full excerpt: Normally, obtaining such coverage would qualify as a life event, which allows you to change your coverage within 30 days of the qualifying event.

    Since it has been longer than 30 days since she began her new coverage under her employer's plan, she is probably out of luck. The rules don't allow changes outside the window. This is one of those things you can't blame IBM for. The federal government sets these rules.

    It is worth filing an appeal. She might get lucky and get a break.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Insurance Deduction from Pension - Please Help" by "madinpok". Full excerpt: My reading of the original post is that she did opt in for FHA coverage at the time she retired. Once you opt in, your choices remain in effect until you change them.

    I don't think there is anything illegal here. Just a misunderstanding by the retiree that she needed to take explicit action to drop her coverage under the FHA. Unfortunately, it is a very costly misunderstanding.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Insurance Deduction from Pension - Please Help" by Mike De Bruyn. Full excerpt: I second the assessment of the Fidelity staff. They really are morons. I've been dealing with a qualified life event and the whole setup they have is idiotic. One of my last exchanges was:
    • I could not get coverage until 08/01 because I did not notify them until 07/1 and changes only take place on the first day of the next month.
    • BUT, in all previous conversations I was flatly refused (both on NetBenefits and on the phone) when I asked to start the change over process on 06/30 (the date the qualifying life event took place.) Talk about an insane system.

    My point is, not only do you get misinformation from them (such as trying to get me to pay $600 for a Prescription Drug Option while I was defaulted as I waited for Kaiser to verify my Medicare ... because I'd have to pay a penalty for a gap in coverage ... completely untrue, according to the SSA), but you get a DIFFERENT story every time you talk with them. Seriously, you need to get it in writing because you can't trust them at all.

    As to the basic problem, I find it odd that it went down exactly that way. In my adventures, the forms I filled out to sign UP for insurance required me to inform them when my PREVIOUS insurance was discontinued. That should certainly raise a big flag that she needed to verify the exact date that the coverage ended. ALSO, with Medicare, I needed to send a letter (an SSA form) to my wife's employer to verify that I was PREVIOUSLY covered and the date that the coverage ENDED. In this case she would have had to send that form to IBM and they would have had to send that form to IBM and they would have responded in some way as to stop the new coverage.

  • The Buffalo News: Retirees wish they'd saved more, and earlier. National poll also finds they mostly are happy. By Patricia Sabatini. Excerpts: For the last five years, Consumer Reports magazine's National Research Center has surveyed retirees and soon-to-be retirees, asking them to look back and share what they did wrong and right in preparing for retirement. What they had to say in the latest annual survey, which included some 22,000 online subscribers, could spur near-retirees to make adjustments before it's too late. ...

    Retirees also shared the best steps they took toward a secure retirement. The top answer was staying in a job that had a traditional defined-benefit pension plan. Though defined-benefit plans, which pay retirees a set amount each month, have been disappearing, some big companies and government workers are still covered by them.

    "The lesson there is if you do have a job with a defined-benefit plan, think twice before you leave," Daugherty said. People considering several offers for a new job may want to lean toward any that have a defined pension, he said.

  • Chicago Sun-Times: War on pensions moves to new target: those already retired. By Terry Savage. Excerpts: When I wrote about the coming “Public Pension Wars” a few years ago, the responses ranged from astounded to angry. The very idea that a state or municipality could change pension contribution requirements — in the middle of an employee’s career — was shocking.

    Now we’re about to see the next level of state and municipal pension warfare: changes in benefits for those already retired.

    Municipal bankruptcy The city of Stockton, Calif., filed for bankruptcy late last week, creating a new challenge to public employee pensions and health care promises. Dozens of other cities and districts have filed for bankruptcy in the past — notably Orange County, Calif., Bridgeport, Conn. and Vallejo, Calif. But not only is Stockton the largest municipal bankruptcy in terms of debt load and population, it appears to be the first one in which the court will be asked to void retiree health care and pension promises. ...

    In Stockton’s Chapter 9 bankruptcy filing (after a 90-day state mandated mediation), the city said it will eliminate its contribution to retiree health care, along with suspending interest payments to bondholders and making cuts in union contracts. It can do that as part of the bankruptcy process. But after the filing, the retirees become general creditors, along with bondholders and others. It appears that Stockton will be the first municipality to ask the court to adjust retirees pension payments.

  • LinkedIn's IBM Official Alumni Group: The 25 Best Tech Companies To Work For In 2012, published in Business Insider magazine. Selected comments from LinkedIn members concerning the article follow:
    • None considered IBM out of these 25? strange
    • IBM is no longer a technology but rather a financial company. This has been the case for many years and is what drives corporate decision making
    • Honestly, I did not get your point Sir.. We are into SW business, HW business from earlier years and also, into services. So, why are we saying it is not a technology company. Irrespective of what we designate any company, decisions are mostly on financials. If Accenture can be listed why not IBM, I am really failed to understand.
    • Well perhaps they checked web sites like http://www.ibmemployee.com/. In which case its not difficult to see why IBM did not make the 25. I would have thought the bright college leavers would be looking at Google, Apple Facebook or even Microsoft ahead of IBM, if not a startup where they stand a chance of becoming rich. Makes one wonder what quality IBM management will be like in say 10-20 years time.
    • GTS gets a memo that they will not receive raises this year. Employees of retirement age are promised they won't be laid off if they agree to retire by December 31, 2013 and take a 30% pay cut. Employees are in constant fear of layoff. GBS employees have utilization targets approaching 100% and must compensate for their vacation time. Perhaps these are some of the reasons.
    • Ask any of the thousands of Americans RA'd by IBM over the past few years whether the company belongs in the top 25. (RA means Resource Adjustments - laid off - often due to jobs moving to cheaper labour markets.) In my opinion, if IBM had been included as one of the top 25 companies to work for this ranking would have lost all credibility.
    • I was an IBM'er when IBM was consistently number 1. That is when one of the three founding principles (set out by TJ Watson, Sr, I believe) was 'Respect for the Individual'. Employees were valued as people, not 'resources'. The world has changed a lot in the 33 years since I started, but IBM's change was one of the most profound. You can't continually treat people as just another adjustable/disposable resource and expect any respect or loyalty in return. That is why we aren't in the top 25, or probably even the top 100.
  • Yahoo! IBM Employee Issues message board: "Re: Great News! Big Increases for IBMers!" by Paul Sutera. Full excerpt: Most of the anti-union posts are variations on macroeconomic theory that contain nothing new. From 2001-2008 income for the top 2% rose 355%. For the bottom 98%, 3%. If wealthy people create jobs, all that wealth should be kicking in by now.

    Most anti-union posts have common threads. Investment creates jobs, unions are not appropriate to tech workers etc, etc, etc. The divide and conquer mentality has been at work for years. So much so that techies who (like myself) narrowly escaped 21 years of downsizing think that unions will not reward their merit or are for blue and pink collar workers only. And that giving employees better retirement medical coverage is creating "uncertainty". However destroying millions of middle-class jobs, pensions and benefits is what really created the uncertainty.

    IBM Germany is largely unionized. They were the major players behind porting and supporting Linux on the IBM Mainframe. Unions did not squash their innovation. In fact Linux breathed life into the mainframe and extended the lifespan of the platform.

  • Yahoo! IBM Employee Issues message board: "Re: Great News! Big Increases for IBMers!" by "willbefree25". Excerpts: That's sad, Paul. I lived through it, and know first hand how paralyzed with fear those who were raped and screwed in 1999 were, and how insulated 'most' of those who were grandfathered were. I also know and recognize those who are still here after all these years, attempting to brainwash those who might take a stand and get a written contract, you know like the one the execs have since they don't trust the evil that is IBM, from the evil that is IBM.

    >And that giving employees better retirement medical coverage is creating "uncertainty". That's sad too, Paul. Of course, they'll find out when they are fired and go to sign up for their FHA if they're Second Choicers just how bad the coverage is, and how bleak their future will be if they get sick, and how devastated they will be if they get seriously sick. But hey, it will be too late, and they will shake their heads at their past stupidity.

  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM Senior Consultant in Pune (India): (Past Employee - 2010) “A Good Company with real open management” Pros: Flexible working hours, Work from Home, Good amount of Allowances, Good team of experts on many areas and good number of projects. Managers are accessible and listen. Cons: Less Salary offered and subsequently lesser amount of hike is offered. Advice to Senior Management To maintain and retain employees it is a good idea to be liberal in terms of money.
    • IBM Sales Specialist in New York, NY: (Current Employee) “Losing its way...” Pros: Tons of talented people. Unlimited access to resources. Great resume addition. Cons: Sales driven as opposed to customer centric. Being run by the bean counters, not the visionaries. Bureaucracy personified. No employee empowerment. Advice to Senior Management: Get back to what made the company great...your employees and your customer buying experience. Short sighted stock impacting actions are watering down this once great culture.
    • IBM Staff Software Engineer in Littleton Common, MA: (Current Employee) “Perpetual mediocrity” Pros: Compensation is okay. Work/life flexibility is good: working from home, solid vacation policy, 40 hour work weeks. Good retirement plan & 401k. Cons: Some unskilled employees; poor technical proficiency is not uncommon. Legacy, bread-and-butter products are on life-support, technically; not much movement in these products. Long-term career development system is ineffective in adjusting career path. Many employees are simply frustrated.
    • IBM Anonymous: (Past Employee - 2008) “Decent pay, but frustrating place to work.” Pros: The money is pretty good. The benefits are as well. Having the name IBM on your resume does help as well, although not as much as it used to. Cons: On your first day of work, they give you a serial number. No joke, a serial number. It's in the cards from day one that you're nothing but a number there. You can work at hard as you want, but only those who kiss a$$ the most will advance. I never had one good manager there out of the 6 I had. All were incredibly useless and ignorant of what roles their staff performed. Having them around was like trying to drive a boat with the anchor dropped. Good luck being recognized for hard work, it won't happen unless you have a little brown on your nose from kissing bum. Advice to Senior Management: Use your employees names instead of glorified bar codes. There are some anonymous employee reviews of managers, those should be more closely looked at. Reviewing managers by their staff should be mandatory in every company, so cheers to that, but they should also have some effect on how the managers are graded and bonuses given to them.
    • IBM Anonymous in London, England (United Kingdom): (Current Employee) “Not got the Shareholder, Customer, Employee balance right.” Pros: Plenty of internal opportunity to develop a career and try new things. Opportunity to move abroad if you have the right skills. Cons: Process bound - e.g. three levels of approval required to travel to a meeting. Doesn't value its employees. Employees paying the price for CEO/Chairman's unrealistic commitments to Wall Street. Too many good people leaving which is impacting negatively on the quality of service provided to the customer. Process bound - e.g. it is more important to move revenue between departments than it is to generate new revenue. Remuneration package constantly being eroded. You are encouraged to work from home but dis-incentivised to do so. Did I mention the fact that IBM are process bound? Advice to Senior Management: You can, for a while, increase profits by cutting costs but you cannot grow market share and revenue organically without investing in your employees. Sooner or later the customer gets pissed off with a poor level of service.
    • IBM Advisory IT Architect in Toronto, ON (Canada): (Current Employee) “Great experience with lots of challenging projects and great colleagues.” Pros: -flexible work environment with the ability to work from any office in the city and from home. -Ability to work with leading edge technologies. -opportunities for career growth and learning. Cons: -Very bureaucratic organization with processes for everything including promotion eligibility. -Career growth is what you make it, need to look for good opportunities as managers often can't see outside their immediate area. -compensation is low compared to rest of industry. -Bonus is tiny and yearly salary adjustment is low since the 2009 recession, under 2%. Advice to Senior Management: Recently turnover has been very high, yet the senior management will only allow for the few key people to receive adequate raises. The morale gets low and as people leave project delivery gets jeopardized.
    • IBM Senior Managing Consultant: (Current Employee) “Good company but too big, don't expect good pay raises if you are considering to work for IBM” Pros: Lots of opportunities to grow, very slowly Cons: Company is too big and it's very hard to muscle around to grow. Advice to Senior Management: The pay for traveling is less than what permanent jobs are offering in other companies (no travel)
    • IBM Anonymous: (Past Employee - 2012) “Glad to be moving on to another position in another company.” Pros: Good salary and decent benefits. Enjoyed the people I was working with (excluding some management). Cons: Management has established an environment that is extremely competitive. it was all about the billable utilization numbers. At a senior level or above the expectations are extremely high. They tell you up front they don't expect you can get everything done in 40 hours a week. There is a lot of bureaucratic tasks that have to be done that aren't counted in the normal work week. Good salary if you can take the stress and don't care about work/life balance. Advice to Senior Management: Need to go back to the days where people were treated as individuals. When the economy picks up you will lose many good employees.
    • IBM Anonymous: (Current Employee) “Good company.” Pros: Many options for diverse experiences. Good benefits. Mostly good coworkers who work hard. Flexible work schedules available. Respected company by other employers who are impressed by prior IBM work experience. Cons: Large corporate structure can be frustrating sometimes. Job security is no longer there (where is it still present) Advice to Senior Management: Continue to highlight the long range plans to employees.
  • US News & World Report: A Checklist for Retirement. By David Ning. Excerpts: Imagine that this is the last day of your career. You roll into the office, have a brief chat with HR while you fill out all the necessary paperwork, and station yourself right beside the coffee machine to share the good news with everyone as they walk past the cafeteria.

    You take an extra long lunch with your closest working buddies and have a great time because, for the first time ever, you don't care about walking past the boss's office after running a little late. Then you back up all your personal files and web bookmarks on the company laptop and start making your rounds to personally thank all those at the workplace who have truly helped you over the years.

    However, it will only be possible to have this sort of relaxing last day of work if you have made the necessary preparations for retirement. Here are a few activities soon-to-be retirees should do before they call it quits...

  • Alliance for Retired Americans: Friday Alert. This week's articles include:
    • House Prepares for July 11 Vote to Repeal New Medicare Benefits for Seniors
    • Alliance Members Take to the Streets, Airwaves to Celebrate Supreme Court Ruling
    • “Let’s Not Be the Last Generation to Retire” Campaign Gets Started
    • New Alliance Fact Sheet: Looming Threats to Social Security, Medicare, and Medicaid
    • Ron Paul Says Social Security Unconstitutional, But Collects it Each Month
    • New Report Notes Romney’s Foreign Tax Haven
    • NC Alliance Raises Money to Help Local Seniors
  • Associated Press, courtesy of the New York Times: 4 Key Items to Look For in New 401(k) Disclosures. Excerpts: It's easy to overlook what's important when it comes to saving money. Many people would sooner clip a toothpaste coupon than review their retirement accounts to assess whether they can minimize investment fees. Consider the potential savings from choosing low-cost investments and having the good fortune to participate in a 401(k) plan that charges relatively low administrative fees.

    Let's say you have $20,000 in a retirement account. If you assume you can earn a net return of 6.5 percent a year — 7 percent from investment gains, minus a relatively modest 0.5 percent in fees and charges to run the plan — the account would grow to $70,500 in 20 years. Boost the fees to 1.5 percent, and the account will grow to just $58,400. That's $12,100 less because of a percentage point difference in fees and charges....

    But this summer, 401(k) account holders should keep a close eye on their mailboxes and email. They'll receive new fee disclosures from their employers containing much greater detail about what they're paying to invest in these tax-advantaged plans. ...

    Here are 4 key items investors should look for in the documents...

  • Chicago Tribune: How fees can chew up a chunk of your 401(k). By Gail MarksJarvi. Excerpts: What you don't know can hurt you. In fact, it can hurt you a lot. So when you get a letter about your 401(k) or 403(b) from your benefits office at work this month or next, look at it. It will be different than the usual letters you've been stuffing in a drawer. Inside, you are likely to find a shocking tidbit of information — a revelation that you've been paying bills you probably never imagined paying.

    If you are like most people, you probably assume your 401(k) is free. But no 401(k) is free. You pay, and in some workplaces people pay far too much to get too little. The way you will know is by looking at the letter you are about to receive under new Department of Labor 401(k) fee disclosure rules.

    Just be aware, you are likely to see small numbers that appear inconsequential, but are not. When it comes to invest ...

    Once you get the letter from your benefits office and see the fees you are paying for your 401(k) or 403(b), you can use the expense calculator I used for the above example (sec.gov/investor/tools/mfcc/get-started.htm) to see the impact on the money you will accumulate. You don't need to fill in the line for a "sales charge" unless you happen to have funds that charge you a load. But you should fill in total operating expenses, or what might be called an "expense ratio."

New on the Alliance@IBM Site
  • Job Cut Reports
    • Comment 07/01/12: I work in Poughkeepsie (STG) We were told no cost of living raises, and very limited raises for (1,2+)'s about 2 months ago. All of the money is going to emerging markets. Why is this news now????? Most of us are expecting more of the same musicale chair games until the dust settles in 2015 or beyond. -Anon1234-
    • Comment 07/02/12: Got the message Friday that there's no market based raise (SWG) and even 1's and 2+'s will get a paltry amount if any. The same day my PBC goal outlining how I'm going to perform at 150% over last year was due. Then said manager announced he will be on vacation for next week.. I'm trying to determine whether that makes him a victim of delivering the message of the execs or just another coward. -Critical Mass-
    • Comment 07/02/12: Here is how I try to get the word around: I wear an Alliance tee shirt around town and when I shop, especially at pr around vehemently anti-union businesses. I bet some IBMers have got to have seen me around town wearing the tee shirt. I also wear the tee shirt more during downsizings and announced RAs to further heighten awareness. I have not been challenged negatively for wearing it and even have had a few folks ask me what it is all about. -sby_willie-
    • Comment 07/04/12: If there are no raises regardless of rating, and we are almost certain to be RA'd by 2015....what leverage do they have over us. do whatever you want for the remainder of your time here. There is nothing more they can do. -Geriatric Delivery Center EFK-
    • Comment 07/05/12: I am trying to remain positive in this company, but it is virtually impossible. Everything is a mess. There are roadblocks at every turn. It is impossible to get anything of substance done easily and quickly. I find (and I am not being discriminatory) that when Indian/offshore teams are involved in something I need to accomplish, it is really frustrating and time consuming to drive it to completion. Either I have to escalate the task to a "dispatcher" or the many many many many PMs that have to be involved in these projects have to spoon feed someone in order to get the tasks done properly.

      SOOOOO, who is really saving time or money from this offshoring? I can't answer that. IBM is in a state of emergency...they are bleeding customers because of these inefficiencies...everyone that I speak to about these issues have no answers. We are just waiting for the Big Blue machine to crash. The account I work on is a mess and I would NOT be surprised if they loose it, very soon. Problem after problem...and when these problems arise, guess who they call to the rescue? The US based employees. -BigJoe-

    • Comment 07/06/12: Has anyone seen this blatant piece of disingenuous propaganda that was recently published? http://www.ibm.com/ibm/responsibility/2011/ceos-letter/index.html

      No mention is made of the tens of thousands of loyal employees who have been summarily fired, the pensions for which employees worked their entire lives that have now been stolen, or the elderly widows who had lived for years on a meager IBM pension, and who now receive an invoice for their medical insurance instead of a check. Former Reichsminister Joseph Goebbels must surely be looking up from the Ninth Circle of Hell and smiling, knowing that his legacy of propaganda lives on at IBM, as he eagerly awaits the arrival of those who have perpetrated these grave injustices. -No Fate But What We Make-

    • Comment 07/06/12: 270% of quota and not only did I get my walking papers(30 day exit plan), now they don't want to pay me my earned commission. So much for IBM integrity, and honesty. -Not the ibm i thought I joined- Alliance reply: If IBM doesn't pay you your earned commission, contact your state department of labor.
    • Comment 07/07/12: One thing I don't get... people say if you don't like it, go work somewhere else. I have tried to go back to PwC and have been blocked TWICE by IBM who has threatened PwC that IBM would take away their business from PwC if PwC kept hiring IBM employees, which has caused a "do not hire IBMers" stance at PwC (as recently as 3 months ago). Also, some of us never asked to work for IBM, so the question of "Why do you want to leave IBM?" is kind of moot. -IndiaBusinessMachines-
    • Comment 07/07/12: The fact that every RA folks come here to post that they exceeded quota, or were consistent 1 performers or were the greatest employees since TJ Watson Jr tells me people just do not get it. It does not matter how well you work. You have no contract. It does not matter how much money you make or have made for IBM. You have no contract so you are disposable. Your not management, well some of you may have been, but with no contract you were disposable anyway. This has been the consistent message of the Alliance since 1999. Protect yourselves by joining with others. As long as you do not do this simple thing called safety in numbers you will fall one by one. None of you are so important that you can not be disposed of if Management decides to. -Exodus2007-
    • Comment 07/08/12: To -270% QUOTA- Use the 30 days to collect all the info on your quota attainments, as they may mysteriously disappear later. (monthly letter, etc.) The state department of Labor will want facts, not he said, she said. Your quota tracking statements should show where you were and what you should be paid on. Don't let IBM say that a percentage should be held in arrears, as that is not in the quota contracts. They tried that on me and lost. -NO_KY-
    • Comment 07/08/12: Regarding Executive pay raises. Ginni has picked up on the animosity giving raises just to the bosses causes. No raises for the bosses means happier rank and file. The bosses will probably get larger bonuses that won't be general knowledge. Where there's a will there's a way. -Exodus2007-
    • Comment 07/08/12: Exodus, you're right as usual! No raises for the bosses doesn't mean no bonuses or increased stock options or changing option exercising policies (like lowering the vesting time to exercise the stock buys sooner to compensate for no raise). Folks should check this out often to see: http://finance.yahoo.com/q/it?s=ibm

      Of course the big bosses are immune from RAs. Why can't IBM offshore a VP or Sr. VP to India? Also, no bell curve distribution for PBC ratings either if they are even appraised or under the PBC system to begin with. I wish folks would listen to your wisdom! -anonymous-

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Financial Times: Republicans see way to repeal healthcare ruling. By Stephanie Kirchgaessner. Excerpts: Republican leaders in Congress said they could overturn Barack Obama’s healthcare law with a razor-thin majority if Mitt Romney wins the White House and that it would fall to individual states to preserve a critical patient protection in the law. At the same time, Democrats were seeking to insulate themselves from criticism that “Obamacare” imposed a new tax on the middle class – a charge that has emerged from the Supreme Court decision on the legality of the law – by re branding the legislation as one that punished “free riders” in the insurance system. ...

    Both Mr McConnell and John Boehner, the Republican House Speaker, suggested that it was not the federal government’s job to ensure that patients with pre-existing medical conditions were guaranteed insurance coverage, one of the most popular provisions of the Affordable Care Act. Both said that job should be left to individual states, which could set up “high risk” insurance pools for affected patients.

  • The Fiscal Times: Romney Under Pressure to Reveal His Health Plan. By Merrill Goozner. Excerpts: In the wake of the Supreme Court ruling Obamacare constitutional, Republican leaders immediately repeated their vows to “repeal and replace” the law. But replace it with what?

    Former Massachusetts Gov. Mitt Romney, the presumptive Republican nominee, has so far remained mum on what major alternatives, if any, he might offer before the election. It goes without saying that pointing with pride to the Bay State’s “Romneycare” is not a viable option, since its exchanges, subsidies, mandates and tax penalties served as the model for the federal bill he wants to repeal.

    Many Republican strategists say it would be a huge mistake for Romney to define his replacement strategy before the election. “He’d be distracting attention from the much more pressing goal of repealing the law,” said Michael Cannon, a health care policy analyst at the libertarian Cato Institute. ...

    But some Republican pollsters think otherwise. “You can’t say you’re going to repeal something and not say what you’re going to replace it with,” said John McLaughlin, chief executive officer of McLaughlin & Associates. “It allows your opponent to define what he thinks you’re going to replace it with.” ...

    The Heritage Foundation, which originated the individual mandate but has since abandoned the idea, now places transformation of government programs at the top of its to do list. “Existing health care spending such as Medicaid and the State Children’s Health Insurance Program should be redirected to help low-income individuals and families purchase private health insurance,” a recent paper by health analyst Nina Owcharenko said. “Medicare should be a defined-contribution system in which the government provides a contribution for benefits and seniors are able to apply their contribution to the health plan that suits them best.” ...

    Politically-attuned observers object to radical overhauls that are primarily designed to lower government costs without addressing the problem of the uninsured. They believe Romney should offer small-bore programs that begin to address those problems. “Expand (tax-incentivized) health savings accounts; give tax credits and tax deductions to encourage people to buy health insurance; roll back the cuts in Medicare,” pollster McLaughlin said.

    Democrats and liberal-leaning health care analysts argue that many of these approaches have been tried in the past without success. They say the radical overhauls of Medicare, Medicaid and elimination of the tax preference will lead to higher spending out of pocket by beneficiaries, higher taxes on the middle class and self-rationing by people stuck in inadequate plans.

    But those arguments can only be joined if Romney moves beyond the sound bites of repealing Obamacare to offering something specific as its replacement. “I don’t see how Romney can be a credible candidate unless he has a more specific plan,” said AEI’s Antos. “The big question is when he is going to start talking about it.”

  • New York Times: Consumer Questions on Health Care Act, and the Answers. By Katie Thomas. Excerpts: Q. I’m unemployed and can’t afford health care, what does this ruling do for me? A. Beginning in 2014, the law expands Medicaid to cover people who are under 65 and earn income up to 133 percent of the federal poverty level, or $30,657 for a family of four in 2012. Families who make between 100 and 400 percent of the federal poverty level — or $92,200 for a family of four in 2012 — will be eligible for tax credits for insurance plans that are purchased through state-run exchanges. ...

    Q. My parents are screaming about higher taxes from the Affordable Care Act. Any figures for those who have health insurance through our employers already? What does this mean for us? A. The law imposes tax changes that would affect some people who are covered through their employers, especially those in higher tax brackets. Beginning next year, the law increases the Medicare tax by 0.9 percent on earnings over $200,000 for individual taxpayers and $250,000 for married couples filing jointly. It also imposes a 3.8 percent tax on unearned income for high-income households. ...

    Q. What does the law mean for retirees on Social Security and facing high drug costs? A. The law shrinks the Medicare drug coverage gap known as the “doughnut hole” by requiring pharmaceutical companies to give a 50 percent discount on brand-name drugs. Federal subsidies will gradually fill in the rest of the gap until it is closed by 2020.

  • New York Times: Giving Health Care a Chance to Evolve. By Robert H. Frank. Excerpts: Nearly every economic analysis of the health care industry rests on the observation that individually purchased private insurance is not a viable business model for providing medical services. Such insurance is broadly affordable only if most policy holders are healthy most of the time.

    The fundamental problem is that insurers can often identify specific people — like those with serious pre-existing conditions — who are likely to need expensive care. Any company that issued policies to such people at affordable rates would be driven into bankruptcy, its most profitable customers lured away by competitors offering lower rates made possible by selling only to healthy people.

    Economists call this the adverse-selection problem. Because of it, unregulated private markets for individual insurance cannot accommodate the least healthy — those who most desperately need health insurance. ...

    Employer plans are thus a significant improvement over individual private insurance, but they are still deeply flawed. If you lose your job, you can lose your coverage. This problem has been cast into sharp relief by the persistent high unemployment in the wake of the financial crisis. In no other industrial country do we see communities organizing bake sales to help defray the cost of an uninsured neighbor’s cancer treatments.

    The decline in the number of workers covered by employer plans began long before the recent crisis. According to census data, 65 percent of workers had employer-backed plans in 2000, but only 55 percent were covered by 2010. This decline has been driven in part by rapid increases in health care costs. ...

    Modeled after proposals advanced by the Heritage Foundation, the American Enterprise Institute and other conservative research organizations in the 1990s, the main provisions of the president’s health care law were intended to eliminate the most salient problems associated with the current system.

    One provision establishes insurance exchanges, where participating companies must offer coverage to all customers, irrespective of pre-existing conditions. Another imposes a financial penalty on those who fail to obtain coverage — the individual mandate. And a third prescribes subsidies to make insurance more affordable for low-income families. (The Massachusetts plan engineered by Mitt Romney as governor in 2006 took an almost identical approach.) ...

    It isn’t that people should buy health insurance because it would be good for them. Rather, failure to do so would cause significant harm to others. Society will always step in to provide care — though in much more costly and often delayed and ineffective forms — to the uninsured who fall ill. To claim the right not to buy health insurance is thus to assert a right to impose enormous costs on others. Many legal scholars insist that the Constitution guarantees no such right. ...

    No one can be sure how the law will play out. But its critics would be unwise to assume that it would have been easy to draft superior legislation had the law been overturned. Any new attempt would have taken the employer-based system as a starting point. ...

    The new law will hardly be the final word on these issues. Though it takes tentative first steps on cost control, government budgets will be decimated unless we do much more to reduce inflation in medical services. And in Medicare, many tough decisions remain to be made about end-of-life interventions, and whether Medicare should become an optional form of coverage for those who aren’t elderly. The point worth celebrating is that last week’s ruling will at last enable our distinctly dysfunctional health care system to evolve into something better.

  • Los Angeles Times: New law could shift employee health benefits to private market. The Affordable Care Act could entice companies to give employees a fixed amount to buy their own insurance. By Chad Terhune. Excerpts: The Supreme Court's endorsement of the federal healthcare law this week could spur more employers across the nation to relinquish their long-standing role as chief healthcare buyer for their workers.

    This shift has already begun among some big employers shedding their role in providing retiree health benefits, and experts say the court's decision this week could eventually lead companies to pursue a similar approach with current workers. ...

    One of the more popular ideas being discussed is to give workers a lump sum, or defined contribution, and then let them use that money to buy their own individual health plan.

    The approach resembles existing 401(k) retirement plans in which employers put a fixed amount of tax-deferred dollars into employees' retirement accounts and leave it to the workers to manage the money. In the case of health benefits, employers gain more control over their spending and avoid the hassle of picking plans for their workforce.

  • The New Yorker: Something Wicked This Way Comes. By Atul Gawande. Excerpts: A few days ago, while awaiting the Supreme Court’s ruling on President Obama’s health-care law, I called a few doctor friends around the country. I asked them if they could tell me about current patients whose health had been affected by a lack of insurance.

    “This falls under the ‘too numerous to count’ section,” a New Jersey internist said. A vascular surgeon in Indianapolis told me about a man in his fifties who’d had a large abdominal aortic aneurysm. Doctors knew for months that it was in danger of rupturing, but since he wasn’t insured, his local private hospital wouldn’t fix it. Finally, it indeed began to rupture. Rupture is an often fatal development, but the man—in pain, with the blood flow to his legs gone— made it to an emergency room. Then the hospital put him in an ambulance to Indiana University, arguing that the patient’s condition was “too complex.” My friend got him through, but he’s very lucky to be alive.

    Another friend, an oncologist in Marietta, Ohio, told me about three women in their forties and fifties whom he was treating for advanced cervical cancer. A Pap smear would have caught their cancers far sooner. But since they didn’t have insurance, their cancers were recognized only when they caused profuse bleeding. Now the women required radiation and chemotherapy if they were to have a chance of surviving.

    A colleague who practices family medicine in Las Vegas told me about his clinic’s cleaning lady, who came to him in desperation about her uninsured husband. He had a painful rectal fistula—a chronically draining infection. Surgery could cure the condition, but hospitals required him to pay for the procedure in advance, and, as unskilled laborers, the couple didn’t have the money. He’d lived in misery for nine months so far. The couple had nowhere to turn. Neither did the doctor.

    The litany of misery was as terrible as it was routine. An internist in my Ohio home town put me on the phone with an uninsured fifty-five-year-old tanning-salon owner who’d had a heart attack. She was now unable to pay the bills for the cardiac stent that saved her and for the medications that she needs in order to prevent a second heart attack. Outside Philadelphia, there was a home-care nurse who’d lost her job when she developed partial paralysis as a result of a rare autoimmune complication from the flu shot that her employers required her to get. Then she lost the insurance that paid for the medications that had been reversing the condition. ...

    Two decades ago, the economist Albert O. Hirschman published a historical study of the opposition to basic social advances; “the rhetoric of intransigence,” as he put it. He examined the structure of arguments—in the eighteenth century, against expansions of basic rights, such as freedom of speech, thought, and religion; in the nineteenth century, against widening the range of citizens who could vote and participate in government; and, in the twentieth century, against government-assured minimal levels of education, economic well-being, and security. In each instance, the reforms aimed to address deep, pressing, and complex societal problems—wicked problems, as we might call them. The reforms pursued straightforward goals but required inherently complicated, difficult-to-explain means of implementation. And, in each instance, Hirschman observed, reactionary argument took three basic forms: perversity, futility, and jeopardy.

    The perversity thesis is that the change will not just fail but make the problem worse. The futility thesis is that the change can’t make a meaningful difference, and therefore won’t be worth the effort. We hear both of these lines of argument against the health-care-reform law. By providing coverage for everyone, it will drive up the system’s costs and make health care unaffordable for even more people. And, some say, people can get care in emergency rooms and through charity, so the law won’t do any real good. In fact, a slew of evidence indicates otherwise—from the many countries that have both universal coverage (whether through government or private insurers) and lower per-capita costs; from the major improvements in health that uninsured Americans experience when they qualify for Medicare or Medicaid. The reality is unavoidable for anyone who notices what it’s like to be a person who develops illness without insurance. ...

    For all that, the Court’s ruling keeps alive the prospect that our society will expand its circle of moral concern to include the millions who now lack insurance. Beneath the intricacies of the Affordable Care Act lies a simple truth. We are all born frail and mortal—and, in the course of our lives, we all need health care. Americans are on our way to recognizing this. If we actually do—now, that would be wicked.

  • Washington Post: It's the party, not the candidate. By Jonathan Bernstein. Excerpts: The reason that Romney can’t speak sensibly on health care reform has little to do with the admittedly uncomfortable fact that his plan in Massachusetts was the prototype for the Affordable Care Act. No, he’s proven perfectly capable of bashing Obamacare. Is it true that he “can’t” attack the individual mandate as a tax without admitting that Romneycare raised taxes? Nope. On the one hand, nothing would stop him from doing exactly that; on the other, Barack Obama’s campaign could attack him by calling it a tax whether Romney “admits” to it or not.

    No, Romney’s problem is that there’s simply no possible health care reform plan that he can support that would both appeal to those who have doubts about the Democratic plan and, at the same time, prevent Republicans from revolting against him. All there is are the same slogans — not plans, but slogans — that Republicans have been reciting over the last three years: purchasing insurance over state lines, malpractice reform. And not only does everyone who pays close attention know that it doesn’t add up to a real reform plan, but it doesn’t seem to even fulfill the job of sounding good. ...

    For Republicans running for nominations or in lopsided Republican districts, none of this is as much of a problem; the constituents they care about are mostly happy with just plain repeal, and are certainly happy with crude Obama-bashing. But the incentives are all different for a presidential candidate who has to worry about swing voters. That, and not Romneycare, is what's causing the trouble.

  • Huffington Post: For America's Families: ACA Just What the Doctor Ordered. By Irwin Redlener, M.D. Excerpts: The things that affect the well-being and financial security of families, the true impact of this enormous accomplishment are far more basic -- and life-changing -- than the wonky details of legislative implementation.

    For families this is all about finally getting health insurance coverage for a child with a chronic illness or congenital problem who had been denied coverage for years, saddling already strapped families with medical bills that could never be paid.

    It's about never again having to worry that whatever coverage they may have had will reach some arbitrary limit, putting sky high medical bills on the horizon for years to come.

    It's about a new health center coming to their community where simply finding a clinic or doctor's office has been a major challenge.

    It's about programs to encourage and provide incentives for doctors to practice in communities that have been experiencing serious shortages of medical professionals. ...

    In the meantime, let's recognize Obama's health care legislation for the landmark accomplishment that it is. After decades of started and stalled attempts to create a more equitable system of care -- under Democratic and Republican administrations -- the impossible was achieved. ACA is a giant step forward.

    And if you don't agree with that, try asking a family who doesn't have health insurance and can't afford medical care for a sick child what it feels like to be stuck with crushing bills and the heartache of not being able to provide the best for those who are most precious to you. ...

    Underneath the nearly 200 pages of legal rhetoric issued by the Roberts court, and the incessant bantering by politicians and talking heads, lies a simple understanding: America's health care system was failing millions of families and was long overdue for a makeover. The ACA is just what the doctor ordered.

  • Washington Post opinion: Curbing the cost of health care. By Fareed Zakaria. Excerpts: Many liberals believe that the Affordable Care Act — Obamacare — is unpopular only because most Americans don’t understand it. There is some truth to this: Studies show that the core provisions of the bill are more popular than the bill itself. But there’s also a reason, rooted in reality, why many Americans worry about Obamacare — its cost.

    Most Americans have health care. What they worry about is the cost of insuring 20 million to 30 million more people. Unless the meteoric rise of health-care costs is slowed, a big expansion of coverage might well remain unpopular, no matter how it is explained. ...

    A new study conducted by the pharmaceutical company Novartis and McKinsey and Co. shows a stunning difference among countries with regard to health-care efficiency.

    For example: Smoking rates are higher in France than in the United States, so the French population has higher rates of lung disease. Yet the French system is able to treat the disease far more effectively than happens in the United States, with levels of severity and fatality three times lower than those in this country. And yet France spends eight times less on treatments per person than the U.S. system. Or consider Britain, which handles diabetes far more effectively than the United States, while spending less than half of what we spend per person. The study concludes that the British system is five times more productive in managing diabetes than is the United States. ...

    To understand the issue better, I spoke with Daniel Vasella, the chairman (and former chief executive) of Novartis and a physician by training. He is also frankly pro-market and pro-American, both of which have made him a target for some criticism in Europe.

    Vasella emphasized that there is no single model that works best, but he explained that France and Britain are better at tackling diabetes and lung disease because they take a systemic approach that gives all health-care providers incentive to focus on early detection and cost-effective treatment and that makes wellness the goal. “In America,” he said, “no one has incentives to make quality and cost-effective outcomes the goal. There are so many stakeholders and they each want to protect themselves. Someone needs to ask, ‘What are the critical elements to increase quality?’ That’s what we’re going to pay for, nothing else.”

  • Associated Press, courtesy of Xfinity Comcast: Mass. health law may bode well for federal law. By Steve LeBlanc. Excerpts: Massachusetts has the nation's highest rate of residents with health insurance. Visits to emergency rooms are beginning to ease. More residents are getting cancer screenings and more women are making prenatal doctors' visits.

    Still, one of the biggest challenges for the state lies ahead: reining in spiraling costs.

    Six years after Gov. Mitt Romney signed the nation's most ambitious health care law — one that would lay the groundwork for his presidential opponent's national version — supporters say the Massachusetts law holds promise for the long-term success of Barack Obama's plan.

    Like the federal law it inspired, the Massachusetts law has multiple goals, among them expanding the number of insured residents, reducing emergency room visits, penalizing those who can afford coverage but opt to remain uninsured, and requiring employers to offer coverage or pay a fine.

    Supporters of the Massachusetts experiment are quick to point out its successes.

    An additional 400,000 individuals have gained insurance since 2006, meaning about 98 percent of residents have coverage.

    A recent study by the Blue Cross Blue Shield of Massachusetts Foundation found that between 2006 and 2010, the use of emergency rooms for non-emergency reasons fell nearly 4 percent. That was a key goal of the law, since using emergency rooms for routine care is far more expensive than visiting a doctor. ...

    The charge that the law has been a "budget-buster" in Massachusetts has also been challenged. A recent study by the business-backed Massachusetts Taxpayers Foundation found that during the five full fiscal years since it was implemented, the law has cost the state an additional $91 million a year after federal reimbursements — well within initial projections.

  • AlterNet: How Well Does Conservative Misinformation About Obamacare Work? New Chart Illustrates: Pretty Well. Excerpts: Mother Jones’ Kevin Drum created a new chart yesterday that illustrates how well Americans understand Obamacare amidst conservatives’ relentless manipulation of the facts. Apparently, their misinformation works pretty well.

    Drum looked at the results of an Affordable Care Act quiz (you should take it!) put out by a health foundation several months ago and found that the questions that were most frequently answered incorrectly were the ones that asked about issues conservatives have worked tirelessly to distort. ...

    The questions on the right were most often answered incorrectly because, as Drum wrote, conservatives are always “rabble rousing” about death panels, illegal immigrants, Medicare cuts, a “government takeover” (public option) and supposed small business mandates.

    However, they don’t say much about pre-existing conditions, small business tax credits, Medicaid expansion and low-income subsidies — I guess they haven’t found a way to twist these popular features yet.

    Drum also shared his thoughts on why the small business mandate question was the one most often answered incorrectly:

    The Rush/Fox/Drudge axis has been screaming about the government takeover of healthcare for three years now, and it's sunk in … That's why, faced with a question most of them really have no idea about, their immediate reaction is to believe that, in fact, government is once again planting its jackboot directly on the necks of America's small businesses. It's a small issue, but it's also a bellwether that the broader conservative misinformation campaign has burrowed very deeply into the American psyche.
  • Huffington Post: Rachel Maddow: Mitt Romney's Campaign Is A 'Totally, Incoherent Mess' On Health Care (VIDEO). Excerpts: Maddow discussed the precarious position Romney's campaign found itself in when it sent out contradicting messages following the Supreme Court's ruling that upheld the individual mandate within President Obama's signature Affordable Care Act as a tax.

    To make matters clearer, Maddow played a clip from the 2008 Republican primary in which Romney touted his Massachusetts health reform achievement. "I like mandates, the mandates work," Romney said during the 2008 primary. "If you can afford to buy [health] insurance, then buy it."

    Speaking of the 2008 clip, Maddow said, "Mitt Romney taking credit for doing as a governor, exactly what Barack Obama did as president, which Mitt Romney now says is the main reason you should vote against Barack Obama for a second term as president."

    Maddow wondered why voters who do not want to re-elect Obama because he implemented health reform would then vote to replace him with a politician "that did exactly the same thing, he just did it first." Maddow described Romney's campaign as a "totally, incoherent mess," as it tries to criticize Obama's health reform while simultaneously attempting to tout Romney's own health care achievements. She added that running on his own signature achievement "is the worst possible thing for [Romney] to run on, and he's decided to run on it."

  • Economic Policy Institute: Public insurance helps blunt effects of declining employer-sponsored coverage. By Elise Gould. Excerpt: The share of Americans under age 65 with employer-sponsored health insurance (ESI) declined every year from 2000-10, a total of 10.6 percentage points. This erosion of ESI, especially among children, would have been much worse if not for public insurance (i.e., Medicaid and CHIP particularly for this group). While children experienced greater losses in ESI than adults, their insured rate actually rose. This rise in insurance was made possible by a 13.7 percentage-point increase in the share of children with public coverage, which was large enough to fully offset their ESI losses. The share of adults with public coverage increased 5.0 percentage points over this period, not nearly enough to offset their ESI loss of 10.1 percentage points.
  • New York Times opinion: For Us, There Is Only The Trying. By Ross Douthat. Excerpts: Jonathan Chait concludes a post on the Republican Party’s obvious desire to avoid formulating a serious alternative to Obamacare by expressing bafflement at the various conservative pundits who have been urging the G.O.P. to advance one:
    … [since] the actual [Republican] plan is first to get rid of Obamacare, then pretend to work on a replacement before eventually discovering that it’s expensive and unpopular … the only interesting question here on any level is why so many conservatives feel bound to pretend that the Republicans really are going to formulate some other plan to care for the poor and sick.

    Josh Barro made a similar point in a back-and-forth with Reihan Salam:

    The alternative to PPACA is nothing. Mitch McConnell’s comments last weekend were instructive — Republicans in Congress have no meaningful plan to replace Obamacare and think that 30 million uninsured Americans is “not the issue.”

    Conservative health wonks will object to my characterization. They will say they have many plans to use markets to drive down costs so that affordability is less of an issue. They may even advance plans that spend money to subsidize some sort of coverage for some expanded group of Americans. But Republicans have not taken them up on those plans when they have had the chance.

  • New York Times editorial: Mr. Romney Changes His Mind, Again. Excerpts: Massachusetts residents who file a state tax return have to provide proof that they have health insurance. If they can afford insurance but don’t have it, they must “pay a penalty through their tax returns,” according to the state Department of Revenue’s Web site.

    This is all thanks to former Gov. Mitt Romney, who set up the system — the best of its kind in the country — and is now trying to pretend he doesn’t remember how it works. On Monday, his campaign said Mr. Romney believed the identical requirement in President Obama’s health care law was a penalty, paid through the tax system. Two days later, Mr. Romney rushed to the cameras to contradict the campaign and insist the mandate was a tax.

    Why the switch? As he has on so many issues, Mr. Romney caved to Republican conservatives who want him to campaign on the falsehood that the mandate is a vast tax increase on the middle class. The Supreme Court’s decision that the law is constitutional was disastrous to their cause, so they distorted its basic reasoning. Chief Justice John Roberts Jr. wrote that the mandate is legal under the Congressional taxing power, which Republicans took a step further, saying the mandate must now be a tax. And not just a tax, but a huge, oppressive tax, one of the largest in history.

    It is, of course, no such thing. How many “oppressive taxes” are entirely optional? Anyone who does the smart thing and gets health insurance won’t have to pay it. It is, as Mr. Romney himself described it in 2006, a fee to promote “personal responsibility” and prevent healthy people from freeloading. (Among those who won’t be able to comply with the law are poor people living in states where Republican governors refuse to expand their Medicaid programs using federal dollars — though most of those people don’t make enough to have to pay the penalty.) ...

    Against all evidence, Mr. Romney and his party believe the private system will simply fix itself if government gets out of the way. At least, that’s what he says he believes now.

  • Los Angeles Times op-ed: The court saved my lifeline. For one woman battling breast cancer, the Supreme Court decision to uphold the Affordable Care Act was a true matter of life and death. By Spike Dolomite Ward. Excerpts: Not to be overly dramatic, but for me the Supreme Court decision on the Affordable Care Act was a matter of life and death. Because the law was largely upheld, I will be able to continue receiving treatment for breast cancer.

    I was one of the early beneficiaries of the law. When I was diagnosed with an aggressive form of breast cancer late last year, I had no health insurance, which meant my options were extremely limited. No insurer would pick up someone in my circumstances. But luckily, the Pre-existing Condition Insurance Plan had already kicked in, and it made it possible for me to purchase insurance under a government program.

    I was uninsured not because I'm a lazy, freeloading deadbeat but because my husband and I are self-employed. We had been purchasing health insurance on the individual market along with 6% of the rest of the population. But after exhausting all of our resources trying to keep up with premiums of $1,500 a month, we had no choice but to cancel it.

    can tell you that "Obamacare" — at least the part I've participated in — works. A week ago, I had a double mastectomy after five months of chemotherapy. I have been receiving outstanding care in West Hills — no death panels, no rationing, no waiting, no government officials telling my doctors what to do, no denials of tests or treatments, none of the stuff that the plan's critics said would happen.

    Six months ago, when I first wrote about my situation in this newspaper, I got hate mail from people who said I deserved to die. But there was also a lot of curiosity and a lot of encouragement and support. Much of the curiosity was from abroad. Canadians, French, Italian, British and Swiss cannot understand why healthcare reform is so politicized here; why most people don't know anything about the Affordable Care Act; how we can be so cruel to one another; and why we criticize their healthcare systems.

  • New York Times: Delicate Pivot as Republicans Blast Rivals on Medicare Cuts. By Jackie Calmes. Excerpts: For much of the past year, Republicans assailed President Obama for resisting the Medicare spending reductions they say are needed to both preserve health benefits for older Americans and avert a Greek-style debt crisis. Representative Paul D. Ryan, the House Republicans’ point man on the budget, has called the president “gutless.”

    Yet since the Supreme Court upheld the Democrats’ 2010 health care law, Republicans, led by Mitt Romney, have reversed tactics and attacked the president and Democrats in Congress by saying that Medicare will be cut too much as part of that law. Republicans plan to hold another vote to repeal the law in the House next week, though any such measure would die in the Democratic-controlled Senate.

    “Obamacare cuts Medicare — cuts Medicare — by approximately $500 billion,” Mr. Romney has told audiences that is a reprise of Republicans’ mantra of the 2010 midterm elections, which gave them big gains at both the state and federal levels and a majority in the House. Yet the message conflicts not only with their past complaint that Democrats opposed reining in Medicare spending, but also with the fact that House Republicans have voted twice since 2010 for the same 10-year, $500 billion savings in supporting Mr. Ryan’s annual budgets.

    The result is a messaging mess, even by the standards of each party’s usual election-year attacks that the other is being insufficiently supportive of older people’s benefits.

"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.

  • Washington Post: Outsourcing: What’s the true impact? Counting jobs is only part of the answer. By Steven Pearlstein. Excerpts: The battle has been going on since at least the 1880s, when the first New England textile mills began moving production to the Carolinas. Whatever name it goes by — “runaway plants,” “outsourcing,” “global sourcing,” “offshoring”— workers and the public tend to hate it, executives view it as inevitable and economists defend it as part of the painful process by which market economies prosper. Now, President Obama and his election-year rival, Mitt Romney, have joined the debate. Their focus is Romney’s tenure as head of Bain Capital, which owned controlling stakes in firms that either moved their own work overseas or specialized in helping other companies do so. ...

    Romney’s retort takes various forms: that the offshore outsourcing didn’t happen on his watch; that it wasn’t Bain-owned companies that did it, just their customers; that outsourcing some jobs was the only way to preserve and create other jobs. The critique, says Romney, is just another example of Obama’s ­anti-business bias.

    The debate over outsourcing has been morphing, and today there are growing numbers of people who think that what started as a sensible, globalized extension of sending some work outside a firm to specialized companies may in fact be creating long-term structural unemployment in the United States, hollowing out entire industries. ...

    Initially, a lot of outsourcing was to other American firms; later it involved moving production to foreign countries. Many companies rushed to spin off all but their most essential “core” activities.

    Today, some of the world’s largest companies and biggest employers are the product of this outsourcing trend: Sodexo in food service; IBM in information technology; Wackenhut, now known as G4S, in security services; UPS and FedEx in logistics; Foxconn and Lenovo in computer manufacturing. Instead of the Rouge plant, the new model of industrial organization has become Nike, which outsources the making of all of its shoes, clothing and sporting equipment so it can concentrate on design and marketing, and Apple, which outsources all of its hardware manufacturing. ...

    Back when the business world was dominated by family-owned firms, the owners’ personal ties to workers and neighbors made them reluctant to shift work elsewhere, even if meant giving up a bit of profit. That same sensibility persisted even after entrepreneurial owners began to sell their companies to public shareholders and hire a cadre of professional managers, beginning in the 1920s.

    All that began to change, however, in the 1980s, with a wave of corporate takeovers, many of them unwanted and uninvited. Corporate executives came to fear that if they did not run their businesses with the aim of maximizing short-term profits and share prices, their companies would become takeover targets and they would be out of a job. Overnight, outsourcing became a manhood test for corporate executives. ...

    While private-equity managers like to boast that they are free to manage the companies they buy without worrying about changes in quarterly profits, the reality is that their “long term” time horizon is limited. Generally, they allow two or three years for recouping their original cash investment and seven years for selling the whole company again at a handsome profit. The standard strategy has been to load up company executives with so much stock and stock options that they don’t hesitate to make difficult decisions such as shedding divisions, closing plants or outsourcing work overseas.

    Even its competitors agree that Bain was among the most successful at this game, never more so than during the 1990s when Romney was at the helm. ...

    One theory is that in the early days of offshoring, moving production work overseas did indeed have that salutary effect of creating more than enough offsetting jobs back home in engineering, design, marketing and final assembly.

    But in the past few years, a number of respected tech executives, among them former Intel chairman Andy Grove and IBM’s former chief scientist Ralph Gomory, have warned that a tipping point of sorts has been reached. It turns out that designing and developing products requires rather intimate familiarity and close collaboration with the manufacturing process. That was not a problem when there was still some production left in the United States. But now that many categories of high tech have moved virtually all production offshore, companies are finding that they also need to move more and more of engineering and design work overseas as well.

    Arie Lewin, director of the Center of International Business Education and Research at Duke University, says we’ve seen a variation of this same dynamic before, with the consumer electronics business in the 1950s and ’60s.

    At first, U.S. companies found it cheaper to begin shipping some of the production of radios and televisions to Japan. But in time, Japanese suppliers reverse-engineered the products and figured out how to design and produce their own brands. They then took over the global industry. As a result, an outsourcing strategy that might have been benign or even beneficial in terms of U.S. employment eventually turned negative.

  • Financial Times: US election: Fully funded. Courts have made it easier to make big donations and keep them secret, transforming the electoral landscape. By Richard McGregor. Excerpts: A series of US court decisions in recent years has lifted most caps on political donations, unleashing a tsunami of money which has poured into the 2012 presidential and congressional elections. For critics, the courts have wound back US politics to the era of Richard Nixon, when campaign finance was largely unregulated; Mr Nixon even used his campaign arm, the ‘Committee to Re-Elect the President’, as a slush fund to pay the legal costs of the Watergate burglars.

    The battle over campaign finance is as much about self-interest as it is ideology. Having persuaded the courts that political donations are a form of free speech, the Republicans are determined to protect their cash edge. ...

    However, operating in parallel with the super-Pacs, and often under the same roof, are a growing number of campaign organisations that have been established under the tax code as non-profit “social welfare” bodies.

    For political operatives, the tax exempt non-profits have one big attraction: they can take as much money as they want, without having to disclose their donors. In short, the new rules have made it easier both to give a lot of money to politicians and political causes, and, in part, to keep donations secret. As a result, the 2012 presidential campaign will cost about double that of 2008.

    Mr Obama more than matches Mr Romney in formal campaign funds. Steve Schmidt, John McCain’s 2008 campaign manager, reckons the candidates and their parties’ committees will raise about $1bn each for 2012, compared with a collective $1.3bn four years ago. Otherwise, the big winners have been the Republicans, whose outside campaign groups have been banking one-off cheques as large as $10m from wealthy donors, a trend with profound implications if it offers a permanent financial advantage.

    The most extravagant contributors, such as Sheldon Adelson, the Las Vegas casino magnate who has so far given more than $30m to Republican candidates and says he is willing to spend up to $100m to get rid of Mr Obama, have got the most headlines.

    Mr Adelson is far from alone. Dozens of wealthy Americans have donated hundreds of thousands and in some cases millions of dollars, mostly to Republicans, in a way they never could have done legally before. Pro-conservative groups operating separately from the campaigns will have an estimated $1bn to spend on the presidential and congressional races, compared with less than $100m in 2008. ...

    The law says the non-profits must operate “exclusively” for social welfare reasons, but over time, in a remarkable feat of legal finesse, this standard has been gradually lowered, to be their “primary” purpose.

    “To go from ‘exclusive’ to ‘primary’ requires a dictionary which is not available in Great Britain or America,” says Fred Wertheimer, of Democracy21, a Washington group advocating campaign finance reform. “Everyone in the world knows that the only purpose of these bodies is to win elections.” ...

    On the morning after the Supreme Court’s healthcare decision, Crossroads GPS, the non-profit co-founded by long-time Republican adviser Karl Rove, was already airing an advertisement in North Dakota attacking the Democratic Senate candidate for her support for “Obamacare”. Although patently political, featuring a scowling Mr Obama and various perceived sins of the candidate, the advertisement would not necessarily be classified as political speech under current law, as it did not advocate a specific vote. ...

    Tim Phillips, who heads two non-profits under the AFP banner, says he has about $100m to spend on the 2012 elections. AFP has run hard-hitting campaigns against Mr Obama’s stimulus and the administration’s energy and climate-change policies but stays within its non-profit charter either by not mentioning Mr Obama by name or by not advocating votes for particular candidates. “It may seem like a distinction without a difference but I think it is a distinction,” he says.

  • Washington Post: Mitt Romney’s Bain problem. By E.J. Dionne Jr. Excerpts: As Democrats, mostly from Washington and New York, debated the efficacy of attacks on Romney’s role in Bain, an entirely different conversation was being driven in the swing states, courtesy of ads broadcast by the Obama campaign and especially by Priorities USA Action, the pro-Obama super PAC. The ads portray highly sympathetic workers who lost their jobs and companies that collapsed even as Bain’s principals made substantial profits.

    An NBC News/Wall Street Journal poll last week provided surprisingly dramatic evidence of how much these commercials are wounding Romney.

    In the country as a whole, 23 percent said they viewed Romney more positively because of his experience “managing a firm that specializes in buying, restructuring and selling companies,” while 28 percent said this made them view Romney more negatively. But in this year’s 12 battleground states, many of which have gotten a heavy run of the anti-Bain ads, only 18 percent viewed Romney’s business experience positively; 33 percent viewed it negatively. Obama led Romney by three points nationally but by eight in the battlegrounds.

    This is disturbing news for Romney, who hoped his business experience would be an unalloyed asset. The numbers also underscore voter resistance to the core conservative claim that job creation is primarily about rewarding wealthy investors and companies through further tax cuts and less regulation. Americans are not anti-business, but they are skeptical that everything that is good for corporations is also good for their employees, and for job creation itself.

  • Vanity Fair: Where the Money Lives. For all Mitt Romney’s touting of his business record, when it comes to his own money the Republican nominee is remarkably shy about disclosing numbers and investments. Nicholas Shaxson delves into the murky world of offshore finance, revealing loopholes that allow the very wealthy to skirt tax laws, and investigating just how much of Romney’s fortune (with $30 million in Bain Capital funds in the Cayman Islands alone?) looks pretty strange for a presidential candidate. By Nicholas Shaxson. Excerpts: Bain Capital is the heart of Romney’s fortune: it was the financial engine that created it. The mantra of his campaign is that he was a businessman who created tens of thousands of jobs, and Bain certainly did bring useful operational skills to many companies it bought. But his critics point to several cases where Bain bought companies, loaded them with debt, and paid itself extravagant fees, thereby bankrupting the companies and destroying tens of thousands of jobs.

    Come August, Romney, with an estimated net worth as high as $250 million (he won’t reveal the exact amount), will be one of the richest people ever to be nominated for president. Given his reticence to discuss his wealth, it’s only natural to wonder how he got it, how he invests it, and if he pays all his taxes on it. ...

    Ironically, it was Mitt’s father, George Romney, who released 12 years of tax returns, in November 1967, just ahead of his presidential campaign, thereby setting a precedent that nearly every presidential candidate since has either willingly or unwillingly been subject to. George, then the governor of Michigan, explained why he was releasing so many years’ worth, saying, “One year could be a fluke, perhaps done for show.”

    But his son declined to release any returns through one unsuccessful race for the U.S. Senate, in 1994, one successful run for Massachusetts governor, in 2002, and an aborted bid for the Republican Party presidential nomination, in 2008. Just before the Iowa caucus last December, Mitt told MSNBC, “I don’t intend to release the tax returns. I don’t,” but finally, on January 24, 2012—after intense goading by fellow Republican candidates Newt Gingrich and Rick Perry—he released his 2010 tax return and an estimate for 2011.

    These, plus the mandatory financial disclosures filed with the Office of Government Ethics and released last August, raise many questions. A full 55 pages in his 2010 return are devoted to reporting his transactions with foreign entities. “What Romney does not get,” says Jack Blum, a veteran Washington lawyer and offshore expert, “is that this stuff is weird.”

    The media soon noticed Romney’s familiarity with foreign tax havens. A $3 million Swiss bank account appeared in the 2010 returns, then winked out of existence in 2011 after the trustee closed it, as if to remind us of George Romney’s warning that one or two tax returns can provide a misleading picture. Ed Kleinbard, a professor of tax law at the University of Southern California, says the Swiss account “has political but not tax-policy resonance,” since it—like many other Romney investments—constituted a bet against the U.S. dollar, an odd thing for a presidential candidate to do. The Obama campaign provided a helpful world map pointing to the tax havens Bermuda, Luxembourg, and the Cayman Islands, where Romney and his family have assets, each with the tagline “Value: not disclosed in tax returns.” ...

    Mysteries also arise when one looks at Romney’s individual retirement account at Bain Capital. When Romney was there, from 1984 to 1999, taxpayers were allowed to put just $2,000 per year into an I.R.A., and $30,000 annually into a different kind of plan he may have used. Given these annual contribution ceilings, how can his I.R.A. possibly contain up to $102 million, as his financial disclosures now suggest?

    The Romneys won’t say, but Mark Maremont, writing in The Wall Street Journal, uncovered a likely explanation. When Bain Capital bought companies, it would create two classes of shares, named A and L. The A shares were risky common shares, to which they would assign a very low value. The L shares were preferred shares, paying a high dividend but with the payoff frozen, and most of the value was assigned to them. Bain employees would then put the exciting A shares in their I.R.A. accounts, where they grew tax-free. With all the risk of the deal, the A shares stood to gain a lot or collapse. But if the deal succeeded, the springing value could be stunning: Bain employees saw their A shares from one particularly fruitful deal grow 583-fold, 16 times faster than the underlying stock.

  • Washington Post opinion: A court of, by and for the 1%. By Katrina vanden Heuvel. Excerpts: Americans for Prosperity, the shadowy conservative group, announced that it would run $8.2 million worth of attack ads to slam health-care reform in nearly a dozen key swing states. No doubt many more of the GOP’s secretive sugar daddies will soon follow suit.

    It’s a reminder that Roberts and his conservative colleagues have not shied away from empowering malignant, moneyed interests who undermine our democracy. Thursday’s decision notwithstanding, this is still a court of, by and for the 1 percent.

    In fact, last Monday the Supreme Court doubled down on its calamitous Citizens United decision, which unleashed a flood of anonymous, outside, 1 percent spending into our political process.

    As Dahlia Lithwick wrote for Slate, rejecting Montana’s attempt to curb the corrupt influence of money in politics in American Tradition Partnership v. Bullock showed that “the court’s conservatives don’t care how much you hate Citizens United.”

    It’s a shame, because we really do hate Citizens United — a lot.

    Nearly 70 percent of voters think super PACs should be outlawed, and more than half “strongly” do. We can hardly believe that the billionaire brothers David and Charles Koch will spend more this year than John McCain’s entire presidential campaign raised in 2008. We can’t stand the constant flood of negative ads on every channel or the ominous anonymity of the interests behind them.

    The Roberts Court sees all this and refuses to acknowledge that it “give[s] rise to corruption or the appearance of corruption.” ...

    Ultimately, nothing short of a constitutional amendment can stem the flood of corporate cash and settle once and for all that corporations are not people and money is not speech. Several have already been introduced in Congress. But the big story since the devastating Citizens United ruling has been the citizens’ movement it inspired. As Texas’s legendary populist Jim Hightower has written, “Ironically, Citizens United . . . literally united America’s citizenry in broad, deep, and vehement opposition to the absurd notion that a corporation is entitled to inclusion as one of us in ‘We the People.’ ”

  • Jim Hightower: A crass betrayal of America's middle class. Full excerpt: To know which way the economic winds are blowing, just check such newspaper headlines as these: "Underemployed and Underpaid," "Shrinking Consumers," "Economy Leaving Lost Generation."

    This devastating economic hurricane is not the natural product of market forces, as the financial elite want us to believe. Rather it's a direct hit from the ethos of plutocratic greed that now prevails among a cabal of our country's corporate and governmental decision makers. They keep putting the short-term, selfish interests of the few over the future well-being of America's many -­ national interest be damned.

    Another recent headline offers a galling example of this shortsighted avarice in action: "China Takes Tech Tips from Silicon Valley." The story behind the headline is that Chinese officials have launched a crash program to zoom their country into the lead of the world's "knowledge economy," by surpassing our country as the entrepreneurial innovator and owner of the high-tech future. And, guess who's helping them make this Great Leap Forward over the USA? Our own venture capitalists, corporate executives, and university officials, that's who.

    You might recall that only a dozen years ago, America's middle-class workers were told not to worry about the offshoring of their good-paying manufacturing jobs, because their future lay in the new knowledge-based economy. As we now see, that was a lie, for Silicon Valley itself is presently hightailing it to China.

    China. Chasing quick profits for themselves, U.S. firms are transferring our technical knowledge, competitive edge, and middle class future nearly 7,000 miles away from us. Why is this crass betrayal of America's workaday families not even being talked about in this year's elections? To help raise hell, go to: www.AmericanManufacturing.org.

  • The Smirking Chimp: A Wall Street Gambling Tax: The Remedy to Inequality. By Dean Baker. Excerpts: As the presidential election builds up steam, the Washington elites in both parties are actively scheming to find ways to cut Social Security and Medicare benefits for retired workers. The media have widely reported on efforts to slip through a version of the deficit reduction plan developed by Morgan Stanley director Erskine Bowles and former Senator Alan Simpson. Since the vast majority of voters across the political spectrum reject cuts to these programs, the Washington insiders hope to spring this one on us after the election, when the public will have no say.

    That is the sort of anti-democratic behavior we expect from elites who naturally want to protect their own interests. Of course, the rest of us are more concerned about the well-being of the country as a whole rather than preserving the wealth of the richest 1 percent.

    For the 99 percent there are much better ways of dealing with whatever deficit problems may arise down the road. Most obviously, insofar as we need more revenue we can look to tax the sort of financial speculation through which the Wall Street gang makes its fortunes. A very small tax on trades of stocks, options, credit default swaps and other derivative instruments could raise a vast amount of money.

    The Joint Tax Committee of Congress estimated that a tax of just 0.03 percent on each trade, as proposed by Senator Tom Harkin and Representative Peter DeFazio, would raise more than $350 billion over the first nine years that it is in place. This is real money. It is an order of magnitude larger than the measures that have been suggested to go after the wealthy, such as President Obama's bank tax or most versions of the Buffet Rule.

    A somewhat higher rate, such as the 0.5 percent rate charged in the United Kingdom, could raise considerably more revenue. The U.K. raises the equivalent (relative to the size of its economy) of $30-$40 billion a year just by taxing stock trades. Estimates for the U.S. suggest that a broadly based tax that is scaled appropriately for the asset traded could raise more than $1.5 trillion in the United States over the course of a decade. ...

    In short, taxing Wall Street speculation is a great way to raise whatever money might be needed to meet deficit targets. However, because the folks in Washington are so dependent on Wall Street money, it is more likely that they will be looking to target the benefits of people struggling to get by on their $1,100 a month Social Security checks.

  • AlterNet: Low Capital Gains Tax Rate Rewards the Rich with No Discernible Benefit to the Larger Economy. Excerpts: The Center of Budget and Policy Priorities has posted 10 charts and associated text on the impact of the capital gains tax. These provide an excellent guide for anyone encountering work colleagues or radio hosts who offer stomach-churning arguments in favor of lower capital gains rates.

    As you can see from this first one to the right, the beneficiaries aren't exactly hoi polloi. Nearly half the extra income from low rates go not to the top one percent but to the top one-tenth of one percent. That is hoi oligoi in anyone's book, except for the propagandists who try to convince people there was no such thing as class war until society's whiners and lazybones launched it. The top one percent of taxpayers receives 71 percent of all capital gains, according to the Tax Policy Center. ...

    As this chart shows, households with incomes between $50,000 and $75,000 who receive most of their income from their paychecks (as middle-class people generally do) paid 14.9 percent of their income in federal income and payroll taxes in 2011, according to [the Tax Policy Center]. Millionaires who received more than two-thirds of their income from capital gains and qualified dividends faced a 12.0 percent rate.

    That isn't good enough for some people, like the face-palmers at the Cato Institute, who think the proper capital gains tax rate should be zero. ...

    The CBPP site includes seven more charts focusing on the truth and myths of capital gains. The whole post is a nicely condensed collection whose arguments you can pull out during barbecue today when your right-wing uncle gets started jabbering about the damn socialistic scheme to alter the tax code. The way the current arrangement works, as in so much else, is socialism for the rich.

  • New York Times opinion: Off And Out With Mitt Romney. By Paul Krugman. Excerpts: It appears that the Obama campaign has decided to ignore the queasiness of Democrats with Wall Street ties, and go after Mitt Romney’s record at Bain. And rightly so! ...

    Now, the truth is even under the best of circumstances, the case for electing a businessman as president would be very weak. A country is not a company – does any company sell more than 80 percent of what it makes to its own workers, the way America does? — and competitive success in business bears no particular relationship to the principles of macroeconomic policy. So even if Romney were a true captain of industry, a latter-day Andrew Carnegie, this wouldn’t be a strong qualification.

    In any case, however, Romney wasn’t that kind of businessman. He didn’t build businesses, he bought and sold them – sometimes restructuring them in ways that added jobs, often in ways that preserved profits but destroyed jobs, and fairly often in ways that extracted money for Bain but killed the business in the process.

    And recently the Washington Post added a further piece of information: Bain invested in companies that specialized in helping other companies get rid of employees, either in the United States or overall, by outsourcing work to outside suppliers and offshoring work to other countries.

    The Romney camp went ballistic, accusing the Post of confusing outsourcing and offshoring, but this is a pretty pathetic defense. For one thing, there weren’t any actual errors in the article. For another, it’s simply not true, as the Romney people would have you believe, that domestic outsourcing is entirely innocuous. On the contrary, it’s often a way to replace well-paid employees who receive decent health and retirement benefits with low-wage, low-benefit employees at subcontracting firms. That is, it’s still about redistribution from middle-class Americans to a small minority at the top. ...

    Or put it a different way: Romney wasn’t so much a captain of industry as a captain of deindustrialization, making big profits for his firm (and himself) by helping to dismantle the implicit social contract that used to make America a middle-class society.

  • AlterNet: "Zero Accountability": Glenn Greenwald on Obama's Refusal to Prosecute Wall Street Crimes. By Amy Goodman. Excerpt: Four years after the 2008 economic crisis, not a single top Wall Street executive has gone to jail. "These executives knew that they could take these huge risks and even break laws and pay no real price, and that’s what happened," says Glenn Greenwald, author of "With Liberty and Justice For Some: How the Law is Used to Destroy Equality and Protect the Powerful," and a blogger for Salon. "It’s not just a travesty of justice that we haven’t punished them for past transgressions. The real danger is that we’re continuing to send the signal to the world’s most powerful financial actors that they don’t have any fear of criminal accountability when they commit these obvious crimes."
  • In These Times: Plant Workers Fight Bain On Job Outsourcing. By William Lineberry. Excerpts: A manufacturing and developing plant in Freeport, Ill., which is owned by Bain Capital, the private equity firm Republican presidential nominee Mitt Romney co-founded and was CEO of until 1999, is planning on outsourcing 150 full-time positions to China.

    Many workers at the Sensata Technologies plant—along with community organizers, religious leaders and labor leaders from around the state—have began speaking out, urging the company to reconsider.

    “This area is hurting already,” George Benson, president of the Freeport chapter of the NAACP, said. “The unemployment rate is already above the state average. This is just a move by some rich folks to make more money, to become richer. They are sending these experienced workers’ jobs overseas just for money. They just keep lining their pockets. This just isn’t in Freeport, this is all over. We have to stand against it. It’s a big fight. But it’s an important fight worth being in.”

    The employees—who manufacture sensors that are sold to auto manufactures—were told in early 2011 that the plant would be closing in December 2012. They are currently training their Chinese replacements, who have been flown in by Bain to the Illinois plant. “This just adds insult to injury,” said Cheryl Randecker, a Sensata employee. “They’re going to be here three months and they’re not going to leave knowing everything they need to know.”

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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