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Highlights—July 21 2012

Condolences for Aurora

I live only thirty miles from Aurora so the tragic deaths and injuries suffered at the Batman midnight movie hit close to home. I offer my heart-felt condolences to the victims, their families, and the community of Aurora as a whole. I cannot begin to understand the pain and grief of the victims, and their friends and family. I am thankful for the public servants, our police, firefighters, emergency medical service professionals, and the doctors and nurses who have cared for the victims and their families. I hope and pray for the day when these kinds of tragedies cease to occur.

Denver Post: GivingFirst.org helps you donate to Aurora theater shooting victims without worry.

  • Yahoo! IBM Employee Issues message board: "Alliance@IBM: the employees advocate" by Lee Conrad. Full excerpt: There are times when you as an IBM worker wonder if anyone in corporate headquarters cares about your concerns or is even listening. You talk to co-workers about what is going on inside IBM because the company no longer wishes to inform you of issues critical to your work life.

    If you work from home that connection with co-workers rarely exists and without the Alliance you are left in the dark.

    To IBM workers the message is clear: no one in Armonk is listening or cares about your concerns.

    The concern of corporate executives is to maximize profit for the benefit of corporate officers and large stockholders. Welcome to "Roadkill 2015".

    So who can you turn to? You turn to the Alliance@IBM, the only organization that advocates for IBM workers and exposes what is really going on inside IBM.

    It is the Alliance that notifies IBM employees, the media and government when resource actions are taking place.

    IBM no longer does that.

    It is the Alliance that reports the number of IBM employees in the US, now at 94,000 and declining.

    IBM no longer does that.

    It is the Alliance that reports the jobs being offshored and actively fights for workers job security.

    IBM hides the fact that they are offshoring jobs, makes you train your offshore replacement, then fires you.

    It is the Alliance job cut reports board that gives employees needed information (and some venting) as job cuts happen and new job cut schemes are developed by IBM HR.

    It is the Alliance that talks about the real issues affecting workers inside IBM.

    IBM tells you to keep quiet if you value your job.

    It is the Alliance that takes action and speaks to political leaders about legislation that impacts IBM workers and IT workers.

    IBM tells political leaders to change laws to benefit the corporation not workers.

    The Alliance is here, and has been since 1999, and we will not be quiet.

    If you want an advocate for your concerns then join us and be part of the movement to gain dignity and respect for IBM workers

    Join us to and help spread the word that the Alliance is YOUR voice inside IBM.

    Membership is confidential. IBM will not see your name. Join at our web site today www.allianceibm.org

  • Yahoo! IBM Employee Issues message board: "Re: Alliance@IBM: the employees advocate" by Paul Sutera. Full excerpt: Brilliant as usual! Yes you can retain complete anonymity with the Alliance, no real names are used if you have questions or concerns everyone does their best to answer the myriad questions that IBM will never answer. I kept my own name hidden for a long time, but it's easy enough to figure out from my e-Mail, and I'm still in Blue Pages, for now. I've stood out on Route 9 in 2009 and 2012 with a placard. Within certain guidelines, activities of a union of employees like the Alliance, are protected by law.

    I've spoken to so many nervous, on-edge, worried people. Unlike the 1991-1994 mass-firings there will be no pause in the action this time. Get your head out of your laptop for a minute and take a walk down the hall. You're working so hard, you are incredibly skilled, experienced, talented, ingenious, dedicated and loyal, yet, in the end, your career and future benefits are mere cannon-fodder to our IBM's upper management unless more of us band together and join the Alliance.

    If you are nearly retired, join anyway, you will need the help of the Alliance to protect your pension, your benefits, and the rest of your career. IBM management is not "IBM". We the employees are IBM. We are not a mere resource, we ARE the IBM company!! Paul Sutera

  • Albany Times-Union: Foreigners drive IBM gains in state. Firm, which has millions in state contracts, has brought hires to Albany. By Larry Rulison. Excerpts: IBM Corp. — which has benefited from hundreds of millions of dollars in economic development aid from New York political leaders over the past 10 years — uses computer programmers and analysts from India to work on some of its largest state contracts.

    The foreign workers — who are physically located at state agency offices in Albany but work for an Indian subsidiary of IBM — have been key to the success in IBM being awarded massive amounts of state business, such as a $52 million contract with the state Department of Labor to upgrade its unemployment insurance system.

    Although it is unclear exactly how many foreign workers IBM employs at state agencies, the company's Indian subsidiary, IBM India Private Ltd., has been the most active company in the Capital Region bringing in foreign workers using the federal government's H1-B visa program.

    Since 2010, IBM has secured nearly 350 H1-B visas for foreign workers in Albany — most of whom are computer programmers and analysts making between $60,000 and $70,000 a year, according to data from the U.S. Department of Labor. ...

    IBM spokesman Michael Corrado has repeatedly failed to respond to questions from the Times Union about how many workers IBM India Private Ltd. employs at New York state agencies. IBM has been sensitive to the issue of outsourcing and replacing workers in the U.S. with those from India and elsewhere as it has come under fire from labor groups about the practice. As a company policy, IBM will not reveal how many employees it has in any particular location — even how many workers the Westchester-based company has in New York state.

  • Yahoo! IBM Employee Issues message board: "Re: Foreign IBM employees on NY State contracts" by "bk2006pc". Full excerpt: This is common strategic game most of the US corporations including IBM, Microsoft, Intel, GE and Bain corporations play. First they influence trade associations like IEEE, major medias, and there after buy politicians. They use them to spread rumors that there is a shortage of skill technical workers in USA using all medias and politicians and they keep repeating this mantra 7x24 and on all public events. Eventually even many IBMers accept and believe it as a fact until they get pink sleep and are replaced by new H1-B visa holders.

    Using campaign fund contributions, IBM managed to get huge amount of NY tax payers money to do business in NY as usual which is considered OK by the employed IBMers under new capitalism.

    But I still think that these crony capitalism is still alive because majority common working class voters are careless and think that it will not affect and will hurt to them.

  • The Register (United Kingdom): IBM plans to axe staff in UK, Ireland despite hefty profits. Big Blue bottom line means 'workforce remix' By Brid-Aine Parnell. IBM is planning a round of redundancies in the UK and Ireland despite healthy growth in profits in the second quarter. In company documents seen by The Register, employees in the UK-based Strategic Outsourcing Delivery division were told Big Blue will start an employee consultation period of 30 days on 2 August. El Reg understands workers have been told of the planned changes.

    Staff aside from those in the outsourcing delivery unit may also be facing cuts, including employees from the Software Group in the UK and Ireland.

    IBM is doing well considering the global economic conditions - but bosses appear to desire increased productivity and improved profit margins. In order to achieve these, IBM told its people that redundancies were likely to be a part of the consultation. ...

    The tech giant has continued to make good profits throughout the economic doom and gloom, but its roadmap demands that the company hits at least $20 earnings per share by 2015. IBMers have complained that the target is being achieved by killing raises or laying off staff. ...

    Asked for comment on the looming redundancies, Big Blue representatives told The Reg in an emailed statement:

    "Change is constant in our industry and transformation is a permanent feature of our business model. Consequently, some level of workforce remix is an ongoing part of our business. Given the competitive nature of our business, we do not publicly discuss the details of our staffing plans."

    Selected reader comments follow:

    • Huh? Sorry but this article is a total fail.

      If you listen to the financial reports. IBM's sales are down. With respect to consulting, you don't look at current quarter's revenue, but the size of the backlog. And guess what. Its down 6% when you look at it in terms of US currency.

      Then when you add in flat to down in SWG. Sorry, IBM isn't growing.

      The only way they are making the profits is in making higher cost employees redundant and buying back stock so that the earnings per share looks more attractive. (You're shrinking the float w the buy back.)

      James has it right. Senior execs want to hit their incentive targets at the expense of the longer term outlook for the company.

      What do they care? They will be able to retire on their bonuses alone.

    • Downsizing is easy, it's rebuilding capability after the end of the downturn that is the problem. If you cut too deep and then can't recover the capability when business starts to pick up then your competitors will steal a march on you. Whilst many middle-management do fall for the stupid idea that they can just go out to the market and pick up replacement staff (or even the same staff!) whenever they like, senior management usually are smarter (unless they're Mark Hurd) and will put off cuts if they think they can stomach a quarter of low returns but retain the ability to aggressively chase new business in the upturn. It is worrying that IBM's upper management have so little faith in the overall economic picture that they want more cuts. Seeing as they actually have to pay more to terminate an employee in the UK compared to the US, it may be a sign they are protecting US jobs at the expense of UK employees.
    • They are definitely not protecting US employees. Our US colleagues have been made redundant at a very steady pace for years now. The company had done this by a drip-drip process, keeping the numbers low enough to avoid any Federal reporting requirements. They also stopped issuing employees-by-country numbers because it was obvious they were making large numbers of US staff redundant and moving the jobs out to China and India.

      Europe has known these redundancies were coming as earlier this year they said (and I'm paraphrasing), "We've allocated this cash to make European staff redundant." Guess where the jobs are going? That's right India and China.

    • Despite all the grandiose rhetoric they are subjected to, IBM doesn't give a shit about its employees when it's a matter of profits or executive bonuses. In the management ranks there is such a maniacal focus on hitting internal targets that frankly anything goes, whether that means screwing the careers of loyal employees, jeopardising customers' projects, or compromising suppliers' livelihoods.
    • You've got it spot on. It's an utterly shit company to work for. There are no incentives for performance so it's not worth making any effort at all.

      I know a few folk who left during the last round of redundancies and they all walked into jobs with better pay. I intend to do exactly the same this time. Bring it on.

      Of course, those who went turned out to have been needed so they were replaced with people with less experience and fewer skills, at more competitive salaries. Pay day for recruiters.

      Still, there's probably a good few years worth of assets to strip before the bubble bursts.

    • Surely this part of the ongoing program at IBM to move jobs to low-wage countries; they've been doing this for at least a couple of years now. One day someone will explain to organisations in both the private and public sectors the difference between 'effective' and 'efficient' - and that 'efficiency' is an engineering measurement with no real meaning in a financial context (but then I'm sure most people in finance know that).
  • Austin American-Statesman: Austin still mired in utility billing issues, blames IBM. Email exchanges obtained by Statesman show frustration was mutual. By Marty Toohey. Excerpts: Nine months after it was supposed to be finished and running smoothly, the City of Austin's utility billing system is still experiencing million-dollar problems that city officials blame on an IBM staff that has not finished the project.

    In a four-month string of increasingly frustrated emails to IBM officials, obtained by the American-Statesman through an open records request, city officials paint a picture of missed deadlines, broken promises and general shoddiness on the company's part. ...

    Austin Energy, which handles all city utility billing, says most of the problems with the $55 million system have been fixed or are being worked around — largely thanks to additional city staffers hired on the public dime — and that newer difficulties are of the internal record-keeping variety.

    Utility executives say that between the billing system's problems and the additional staffing, Austin has lost more than $8 million at last count.

    "I understand for a multibillion dollar (company) that may not be a significant loss, but to the citizens of Austin and our small $1 billion (electric utility), these losses are very significant," Alan Claypool, Austin Energy's chief information officer, wrote in a mid-June email to Julie Romero, director of energy and utilities for IBM Global Application Services.

    A month later, Claypool wrote to Bridget van Kralingen, an IBM senior vice president: "We have grave concerns this passive-aggressive culture ... is prevalent in the IBM operations and the City of Austin will continue to suffer financial losses as a result." ...

    It's not clear how Austin's partnership with IBM will end, given the tensions, but both sides said they hope the project will be finished in the near future. "What we don't want is what happened with the state and Cleveland," which also had problems with IBM implementing the same billing system, Claypool said in a Friday interview. "It has not been easy, but we feel IBM will get the job done."

    IBM said in a statement Friday: "As is the case in any large-scale change program, there are shared responsibilities and accountability for outcomes. It is important that Austin Energy carries out its responsibilities under the project plan requirements to ensure the success of this implementation." IBM did not elaborate on those responsibilities. ...

    The tensions were evident in a three-page email exchange between Claypool and IBM's Romero. Claypool notes on June 11 that city officials were concerned with "no timelines, project information, estimates, etc." for finishing the work. "It now appears IBM, again, will not make a due date, thereby continuing the losses" for the city.

    Romero replied that the city had misassigned work and had not verbally agreed to many of the terms and schedules Claypool said IBM employees had: "Regarding your statement that the city has suffered $8 million in losses ... we have no facts of or insights to evaluate your statement, nor would it be appropriate or productive to do so. Many of the implementation challenges we experienced were expected and typical for a system of this nature. ... The city has been conducting its business on the system since October 2011 and has recognized numerous benefits."

    To which Claypool replied as part of a longer email: "We can provide you the very detailed loss statements if IBM is interested in providing a rebate to our citizens."

  • Financial Times: IBM hurt by currency shifts and weak demand. By Richard Waters. Excerpts: IBM’s revenues slid by 3 per cent in its latest quarter as weak economic conditions in the developed world and foreign currency headwinds weighed on its performance.

    But earnings topped forecasts as Big Blue benefited from rising profit margins in its global services unit, and the company raised its full-year earnings forecast. The news was enough to extend a stock price rally that had been felt across the technology sector earlier in the day, adding a further 3 per cent to the company’s share price in after-market trading.

    Mark Loughridge, chief financial officer, sought to shift attention away from the broader economic environment as he stressed the resilience of IBM’s business model in producing steadily rising earnings and cash flow despite the conditions.

  • Yahoo! IBM Employee Issues message board: "Help with news today for UK and Ireland" by Brid-Aine Parnell, Reporter at The Register. Full excerpt: Apologies for coming onto the forum this way, but I am a journalist with The Register and I've heard that IBM has told its UK and Ireland software group today that there will be an employee consultation period starting August 1 with a view to redundancies. Although I've already been told this, I'd like to try to verify it from as many sources as possible so if anyone can confirm this or would like to add anything please get in touch.
  • Yahoo! IBM Employee Issues message board: "2nd qtr earnings out" by "lastdino1". Full excerpt: Well I see the magicians down in Armonk have done a wonderful job in keeping our stock portfolio healthy. Even though revenue was down they managed to sell the overall deal as positive. Good for all of our 401's and retirement stocks. Life is Great.
  • Yahoo! IBM Employee Issues message board: "Re: 2nd qtr earnings out" by "happily_retired_033106". Full excerpt: The value of IBM's stock is up over 4% this morning to just over $196/share - finally recouping recent losses. Still a good investment and one way retirees can supplement their pension checks.
  • Yahoo! IBM Employee Issues message board: "Re: 2nd qtr earnings out" by "mr_quarkwrench". Full excerpt: Wow, I never thought of that. As soon as I get a COLA I'll put it right in the stock market.
  • Yahoo! IBM Employee Issues message board: "Re: 2nd qtr earnings out" by Jim Askew. Full excerpt: Wonderful! Perhaps a still-at-IBM reader can post the message that Ginny undoubtedly sent to her employees about how the executives will be sharing this wealth with the workers in the trenches! I can't wait to hear of their good fortunes!
  • Washington Post, courtesy of a post by Lee Conrad on Yahoo!'s IBM Employee Issues message board: Senate Republican Minority Blocks Bring Jobs Home Act. Full excerpt: Once again the majority voted in favor but because of Senate rules the minority won. "The Senate failed to advance a bill Thursday that would end tax breaks for large companies that relocate jobs overseas and provide tax credits to firms that bring jobs back to the United States.

    Senators voted 56 to 42 to proceed to final consideration of the Bring Jobs Home Act, falling short of the 60 votes necessary in order to proceed. The White House expressed strong support for the measure, which is packed with proposals from Senate Democrats facing reelection and eager to demonstrate efforts to shore up the nation's struggling manufacturing sector.

    The bill would eliminate tax deductions that companies may take when moving workers and equipment overseas, but establish a new 20 percent tax deduction for companies that do the reverse.

    Republicans objected to the bill in part because Senate Majority Leader Harry M. Reid (D-Nev.) blocked GOP amendments to the bill, including a proposal to repeal the 2010 health-care reform act. Senate Republicans this month also attempted to amend a small business tax cut bill with language repealing the health law. Some GOP senators also complained that Democrats bypassed the normal committee process and quickly introduced the bill for election-year political purposes.

    Democrats note that roughly 2.4 million American jobs have been transferred overseas in the last decade as global firms outsource more positions to cheaper markets."

  • Yahoo! IBM Employee Issues message board: "Re: Transition to Retirement...Roadmap or 'Roadkill'" by "willbefree25". Full excerpt: The 1,000 number came from a trusted source. Remember, this is country wide. (Editor's note: The writer is referring to an earlier post of his in which he claims only 1,000 IBM employees chose to sign up for the "transition to retirement" program.)

    The source also admitted that the real IBM workers, not the manager-types, will do more than expected of them on their, ahem, 'days off'. They won't relax, they will continue to be good, loyal, hard-working IBMers until the bitter end.

    So IBM will get from the real IBMers exactly what they planned when they came up with this Roadkill Map to nowhere.

    It remains to be seen what genius diabolical plan IBM has next in store for the real IBM troops, who by the way need a written contract. Hopefully, it will be before the next mind game.

  • Yahoo! IBM Employee Issues message board: "Re: Transition to Retirement...Roadmap or 'Roadkill'" by "orsonbear". Full excerpt: The people who took the transition option are those who planned to retire soon anyway. The plan is a great way to transition to retirement -- work part time so you still have a nice piece of income but still have time off to relax and do what you want. Doesn't matter what you say, these people are on a nice, company-sanctioned, coast to retirement. Life gets better.
  • Yahoo! IBM Employee Issues message board: "Re: Transition to Retirement...Roadmap or 'Roadkill'" by Paul Sutera. Full excerpt: From the people I know who took the plan, most were not running scared though some were - and some may have taken it to get to full retirement eligibility. The 3 guys I know it seemed like a logical choice for them. But I do know another who was worried about missing a retirement bridge. 2009 was a terrible year for some incredible IBMers.

    I worry especially because they were the quiet worker-bee geniuses that got fired in a massive R/A and the number as I recall was closer to 10,000 IBMers who lost their careers, and up to 3000 contractors.

    I like to think most IBMers did the math and were not fooled into thinking this was a good deal money-wise. I hope they did it for the right reasons but for some it was a poor choice, of running scared and opted for the no-man's land of a holding pen rather than be put out to pasture.

  • Yahoo! IBM Employee Issues message board: "Re: Transition to Retirement...Roadmap or 'Roadkill'" by "ncdad1". Full excerpt: Paul, I think financially it is better to stick it out and hope to get laid off since in theory you get severance and unemployment ... for me the reason was logical .... I just wanted to cut back on my hours and start moving toward the door and not make a full stop. Waking up the other day and seeing my pay cut by 30% was scary but it is good preparation to the changes my wife and I need to be as we trade money for time and freedom.
  • Yahoo! IBM Employee Issues message board: "Re: Transition to Retirement...Roadmap or 'Roadkill'"by "ncdad1". Full excerpt: I just hated my work and the environment and it seemed like it is only going to get worse ... as I said, financially, it probably is not a good deal but I am getting to the point that I can see I have fewer years ahead of me than behind and need to spend more time with my family and on my health. So, the trade off of few extra thousand dollars was not worth it .... personally, on a per hour basis, I think I did well.
    • My pay dropped by 30% gross (less net)
    • My hours dropped by 60% (from 60hr/week to 3 days x 8 hrs)
    • My income per hour increased by 75%
  • Yahoo! IBM Employee Issues message board: "Re: Transition to Retirement...Roadmap or 'Roadkill'" by "Steve". Full excerpt: "one day will be doing some dumb IBM thing like changing passwords (I have 20), reacquiring access to some DB I got dropped from, filling out skills assessments, encrypting my hard drive, reloading notes, re-certifying my wireless, etc." Do you have to do all these things EVERY week? Why?
  • Yahoo! IBM Employee Issues message board: "Re: Transition to Retirement...Roadmap or 'Roadkill'" by Paul Sutera. Full excerpt: He's exaggerating and while I don't always agree with ncdad, he's got a definite point. And no Windows 7 for you, here's your Band-Aid version of Windows XP. Unless you are up for Linux. The amount of account administration, expiring passwords, expiring laptops, certifications, skills and other assessments is beyond silly at times. My friends who went on to other companies say, only in IBM did we sit down for a full day and write up our yearly accomplishments.

    Maybe if I took the TTRP, I would just spend a whole day reading those business conduct guidelines, and just read the government section too, you never know if you are going to get a Federal account. You already did a great job being Lenovo's testers for some of the crappiest laptops T-60 being about the worst. Enjoy the transition, just don't look too happy :-).

  • Yahoo! IBM Employee Issues message board: "Re: Transition to Retirement...Roadmap or 'Roadkill'"by "ncdad1". Full excerpt: I told my manager one of my three days will be simple reading and replying to mail and one day will be doing some dumb IBM thing like changing passwords (I have 20), reacquiring access to some DB I got dropped from, filling out skills assessments, encrypting my hard drive, reloading notes, re-certifying my wireless, etc.

    It is amazing how much "overhead" there is in IBM that does not contribute to the bottom line. I use to do those non-value task on the weekends and nights and not I need to cram them all in T-Th.

  • Yahoo! IBM Employee Issues message board: "Re: Transition to Retirement...'Roadkill'" by "willbefree25". Full excerpt: It's hard to describe, fstephens. Now, granted that I was hired in the 1970s, when IBM was not evil and bamboozled me and at least the other 4,999 who were fired with me in 2009 that we were a 'family', but allow me to tell you where I came from.

    For over 3 decades, my job was my priority. I had a work ethic. Of course, I balanced my real life, but my job came first, so if I had to be on the road at midnight, at my own expense, I was. I didn't mind, because my customers appreciated it, and so (I thought) did IBM. One or two of my managers actually did, but they weren't lying scum like my last manager and her lackey team leader.

    I enjoyed my work and until 1999, I thought IBM valued me. Silly me. In 1999, IBM screwed me. But you know all that.

    So, when I started working for the manager and team leader from hell, and had to be available around the clock, seven days a week, I was. Was I appreciated? By my poor customers, yes. But not by IBM or my manager from hell or her lackey team leader. Was I compensated? Guess.

    But again, because of MY work ethic (unlike some who took the Roadkill Map), I still gave 110%. It took a toll on me, on my health, and on my life. But I decided to hold out until I got severance, and even though I was part of the mass Black Thursday firing at IBM, I wasn't ready to go and I didn't like the way my gutless manager fired me - over the phone. And when I told her so, she had her lackey team leader threaten me on her behalf.

    But hey, that's neither here nor there. Life is better after the evil that is IBM, but I hope I've helped you understand why some aren't able to slack off at IBM, whether on full pay or on the Roadkill Map plan.

    Isn't it nice not being at IBM anymore? Don't you feel badly for those who still are and are under the pressure that the evil that is IBM still exerts on them? Don't you hope they wake up and get a WRITTEN contract?

    I do.

  • Yahoo! IBM Employee Issues message board: "Re: Transition to Retirement...Roadkill" by Paul Sutera. Full excerpt: The 1990s will echo through IBM's next massive downturn. We shouldn't be complacent and accept that it's just business as usual to replace people with 3rd world greenhorns who will accept horrible pay. I am affected because the lovely PBC process wants to change 28 years of good appraisals should I ever so much as have a slow stretch of work. If you can think of these chumps sitting around a table hatching more miserable intentions for the US employee (and any 1st world nation employee without unions), you can only think....this is the face of evil. Where everything becomes subverted to the cause of faster growing profits.

    Can you think of any other company that is so greedy that they promise a doubling of EPS in 5 years without a blip in revenues? And this lofty but empty goal will be fulfilled by smashing lives.

    Great for me, that I saved, but I FEEL for the others. There's a guy in my town, lost his job in Jan 2009, smart guy figured out some technical stuff that was giving me fits. Not the most outgoing guy. I see him with his daughter, in town, buying her a taco. No dinners out for him, cut off at the knees, a degree in engineering, top-flight technical guy, thrown out of job just so Sam Palmisano could show rising profits without organic growth of the company. And for what? How's the world economy look after all those record firings/profits? Pretty shaky. Don't get too comfortable, we already saw 401Ks drop to 211Ks. Don't think that the Stable Value (it now has a different name) is guaranteed income for life.

    These people at the top must be fought with our every last breath. Lest they send the economy, our savings, our pensions into a tailspin the likes of which we haven't yet seen. Enjoy your life, do your thing, retire if you want to, but recognize that greed and hubris is an unquenchable evil that you can't turn your back on just because your nest egg looks good. The barbarians are at the gate, human history is full of pillage and plunder.

  • The Register: Is running IT for the Olympics the worst job in the world? The results will be in in August. By Dominic Connor. Excerpt: Until the Atlanta Games, IBM did all the IT for the Olympics, but the Commentator Information System went titsup – annoying a large (even by IBM’s standards) number of the media. IBM doesn’t do the Olympics anymore and its decline from being the world’s largest IT firm started about then. (Though it may be because the firm decided to focus on higher margin services and software revenue – that’s what IBM would say anyway.)
  • CNN: (Lenovo) CEO gives part of his bonus to employees. By CY Xu and Madison Park. Excerpt: In the age of fat payouts and lucrative perks for company executives, the CEO of Lenovo is getting attention for how he used his bonus. Yang Yuanqing distributed $3 million from his bonus among 10,000 junior-level employees, the China-based technology company confirmed Thursday. The employees, such as receptionists, production-line workers and assistants, each received an average bonus of 2,000 yuan, which is $314, in the name of their CEO.
  • Wall Street Journal: How to Avoid Medicare Land Mines. By Ellen E. Schultz. Excerpts: If you are among the growing number of people still working when you turn 65 and become eligible for Medicare, you will face more complicated enrollment decisions than your retired peers.

    Your choices could be affected by whether you have health coverage from a current employer, are covered by a spouse's plan or have retiree health coverage from a former employer. Changes under the Obama health-care overhaul have made Medicare more attractive, which also could influence your choices.

    If you aren't careful, you could face a gap in coverage and pay higher premiums, potentially costing you thousands of dollars.

    The Medicare website provides the details, but it contains so much information that it can be difficult to navigate. Here is the very least you need to know, along with what you should expect if you still are working when you file.

  • Reuters, courtesy of the New York Times: Pension or Buyout? GM Retirees Make the Tough Call. Excerpt: Is it better for existing retirees to convert their pension to an annuity or to take a lump sum payout?

    That is the tricky choice thousands of former General Motors Co employees must make by July 20. It is also a decision that many more workers will make as other companies move expensive pension plans off their balance sheets. Rival Ford Motor Co, for example, will begin offering pension buyouts this summer to 98,000 white-collar retirees and former employees who are vested in its pension, potentially cutting roughly one-third of Ford's U.S. pension liability.

  • Glassdoor IBM reviews. Selected reviews follow:
    • Bring your own monitor, hardware and stationary needed to perform your work” Former STSM in Poughkeepsie, NY. Pros: – Few year ago, I would have said IBM provides great opportunity for education and career development. You can take any class from IBM learning center. No longer. They don't fund education, career development anymore! Cons: No pay raise for last 5 years, they call it MBA (Market Based Adjustment)—no MBAs for last 5 years. Pay raise for PBS rating 1 and 2+ is hardly 2% or so. Deep politics in everything you do. Revenue is flat for so many year (even after dozens of acquisitions every quarter), so only way they can keep the share price afloat is by EXTREMELY tight expense control. That means requests for monitor, extra memory for laptops, new headset (my whole team is remote) etc. are being DENIED. I ended up buying it using my own money. Needless to say, no coffee, food, beverage. Continuous off-shoring in development and services organization. Internal rumors are that the management want to shrink US workforce to 40K employee (currently it is around 80K-90K), so they are being employee unfriendly so that people will leave, and they don't have to do layoffs and pay severance package. Advice to Senior Management: – Be honest about the plans. If you want to shrink US workforce to 40K employee, say so. Nothing wrong in that. But don't give BS to employees about how management care about employee etc. Nobody believe in that.
    • Acquired by IBM” Current Program Manager in San Francisco, CA. Pros: – As a "Tier 1" employee, I was given a sweet retention package. The benefits are pretty good - including discounts on all sorts of services (AT&T phone bill, hotel stays, etc). IBM also practices "workforce flexibility" so I can work from home every single day. Cons: – It's an isolating existence. All of the things you expect about IBM are true - tons of bureaucracy, tons of politics - a "matrixed" organization which means you have more than one boss and roles are not clear. There's also a big difference between those IBMers who are "career" and those who are acquired. Despite the years of experience I brought when I was acquired, I still remain in a pretty junior role - even though I get paid 30% more than my peers based on my many years of experience (I guess getting paid well isn't a con, but it is when my responsibilities are so small compared to what I did prior to the acquisition). Advice to Senior Management: – Realize the "soft" costs of shipping jobs overseas. Yes, Indian and Chinese employees aren't as expensive, but they're also not as responsive and don't reflect the culture of an American company.
    • Not your father's IBM” Current Software Sales in Milwaukee, WI. Pros: The companies solutions are well in front of the industry. They are really trying to make a difference with leading edge solutions for clients. Every other vendor is just warming up old code and serving it up fresh where IBM is inventing new solutions as it has always done. Cons: – It has become a terrible place to work. High quotas (as in UN-realistic high ). Management have slid back into the spreadsheet coverage they once did in the early 90s when the organization nearly went bust. Low pay, low moral and a terrible insight on how bad an IT company can get. Advice to Senior Management: Spreadsheets don't pay bills, sales pay bills. Re-focus, adapt and learn to survive.
    • Different than it used to be, but not for the better...” Current Anonymous Employee. Pros: Lots of things to learn because IBM sells everything. Nice people. International exposure if that's what you want. Cons: Service delivery is a challenge. Too political. Processes around everything. Mid-level management does not have the authority they used to have. Below market compensation. Advice to Senior Management: If you need to get to the 2015 roadmap, you actually should lay people off, rather than having the top performers leave.
    • IBM US” Current Anonymous Employee. Pros: Large global company. Financially stable. Leading edge technology. Continuously evolves to maintain technology leadership. Broad and diverse opportunities geographic specific. Optimization of workload and expense management. Cons: Revenue growth has been slow. Major market growth has diminished with the overall economic climate. IBM continues to shift resource and mission leading to limited opportunities in the US. IBM has chosen a strategy to be no more than competitive with compensation & benefits. Morale in the US continues to diminish due to strategies. Communications is also tightly controlled leading to employee trust issues. HR policies are antiquated, and not consistent with building organizational strength.
    • Great people, very good benefits, flexible hours, growth opportunity, stress.” Current Software Engineer in Research Triangle Park, NC. Pros: The people are great—some of the best people in the industry in terms of work ethic, can-do attitude, helpfulness and competency. The work environment is pretty good—cubes, decent equipment, comfortable, on-site cafeteria with decent food. Vacation: I've worked with IBM for 25 years and get 5 weeks paid vacation, plus sick leave. Cons: The corporate focus is to make money for the shareholders and executives. Employees are simply expendable resources, and are squeezed to do way too much with way too little. If you're not a top performer, your life can be miserable until you quit or are forced out. Advice to Senior Management: I don't think profits would drop that much if IBM were to get folks to work reasonable hours and simply hire on more help to cover. I do not think that running in "crisis" mode all the time gets the best out of your employees in the long run.
    • Cumbersome behemoth, lumbered down with red tape” Former Information Developer. Pros: Good working environment, plenty of educational opportunities. Ability to transfer after two years. Globally recognised. Good social club, good holiday entitlement, good work/life balance.

      Cons: Where do I start? As a writer, I had shoddy equipment, was subject to endless red tape and having to get access to a succession of restricted areas to do my job.

      I was stuck in a team that regarded promotion as just not feasible - my manager actually laughed at a colleague of mine who asked her how she would go about getting a promotion. Our team passed information down the line only when absolutely necessary; very frustrating.

      Oh, and then there's that atrocious IBM software - Lotus Notes and Symphony - which we had to use. Nobody in their right minds would choose them over the MS alternatives.

      Finally, there's the PBC system, on which salary increases and, indeed, one's job ultimately depend. Managers are forced to choose a certain number of employees as under-performing, regardless of whether they're actually doing their job properly. This selection is on a competitive basis, but employees are not allowed access to information on how the decisions are made.

      Advice to Senior Management: Drop the PBC system, which causes stress and resentment. Drop Lotus Notes and Symphony if you're not going to improve them - they're an industry joke. Have a more transparent system for advancement.

    • Excellent company overall that has lost focus on the value of people” Former Business Development Executive in Toronto, ON (Canada). Pros: Good people to work with who are focussed on their goals, great brand, good opportunities for variety of jobs. Cons: – IBM has forgotten what they used to value most - their people. Since accountants and lawyers now run the business, they have forgotten that people make results happen - so you need to reward them and make them feel valued. IBM has come to the point where they make you feel like you are never good enough. Overall I enjoyed my years at IBM, and left on my own for another opportunity simply because they lost the values they were built on. Loved my years at IBM, but it was sad to see them lose their way. Advice to Senior Management: Go back to the foundation which you were built upon - value people and their contributions.
    • BI Architect” Current Architect in Dallas, TX. Pros: – Very good company with strong ethics. Lot of opportunities for learning new technologies and work with different client. Cons: Needs 100% travel and no local projects. Advice to Senior Management: Improve employee grading system..
    • False advertising during recruiting for IBM GBS” Former Consulting By Degrees Consultant. Pros: – Benefits, brand name, airline miles. Cons: This is a review for the Consulting by Degrees program. It was advertised as a strategy consulting position for new graduates during recruiting, but it turns out the job you will most likely be doing is a PMA (project management assistant) role. This entails typical clerical and secretarial work to the point where you are just a glorified secretary. The training mentioned during recruiting is a lie as it is composed mostly of e-learnings that cover topics such as sexual harassment, how to write an email, and how to use PowerPoint. If you're starting fresh out of college looking for a strategy consulting position, I suggest looking somewhere else in order to save your career. Many current CbDers are now realizing the mistake they made and are looking for work elsewhere or going back to school so as not to waste any more time at this company. Advice to Senior Management: Recruit for what the company needs, not blindly.
    • Way too much internal processes, procedures, business controls, audits, private interests...” Former Technical Support Manager in Sofia (Bulgaria). Pros: + Great team and internal cooperation. Cons: - Management did not keep their promises; - Management betrays trust; - Zero attention of how the staff feels, if there are problems HR dept. can only record it, but not react to it; - Almost no salary increase and promotion in the last 3 years; - No recognition from management side; - HUGE amount of internal processes, procedures, regulations, business controls reviews, audits. In the same time country & above country management expects the numbers to be delivered regardless of the excessive administrative overhead; - HUGE above country structure with a lot of people overlapping their roles and responsibilities; - Interests of the company are not defended - all possible transactions are pushed through "Business Partners", direct business is deeply unwanted and all local management is avoiding it; - And many more ... but those were the most important topics that irritated me. Advice to Senior Management: – Resign ASAP and let this company move forward.
    • It used to be a great technology company. Now it is an average service company” Current Anonymous Employee. Pros: – Reasonable pay and opportunity. The company is a very good corporate citizen Cons: – The company is completely micro-managed by Finance. Every expense, no matter how small requires Senior Executive approval. There is limited opportunity for advancement and little room for creativity or new ideas. I used to be responsible for making good business decisions based on a budget I needed to manage within. This is no longer the case. Senior people have made some very bad decisions which cost the company today and they are not held accountable, but rather moved to new positions. The company used to take pride in respect for the individual. It has lost its care for employees and replaced it with financial metrics. HR in IBM is a joke. Advice to Senior Management: – Get rid of old wood who have been in the same senior position for >10 years...many execs have been in their comfortable jobs for years stifling opportunity. Allow senior people to make sound business decisions, based on an allocated budget.
    • "Big, blue and solid” Current Senior Manager. Pros: – Very stable employer in turbulent times. The incredibly wide scope of activities and industries means that there is so much going on, which can lead to all kinds of opportunities. Looks good on a resume too :-) The matrix management structure and distributed development model means that you can end up working with a great variety of people, and have many different roles. Also, IBM has a long and distinguished history of respecting work-life balance. Cons: – Big, slow and bureaucratic. Also, you have to use Lotus Notes. Advice to Senior Management: – Empower your people more.
    • Going downhill...FAST” Current Anonymous Employee. Pros: – Flexibility of hours. Vacation time at time of hire is above average. Telecommuting. Good 401(k). Cons: – Compensation is sub-par. The annual review process is kind of a joke. Management has almost no clue what their employees are doing, they know the big picture and that's only if you make them a fancy PowerPoint presentation. Advice to Senior Management: – Take a bigger interest in your employees tasks, and where YOU can help THEM.
    • Long-term Software Group employee.” Current Software Engineer. Pros: * Flexible working. * Average pay. * Great opportunities for women, minorities, disabled. * Potential to work on significant projects. * Good work life balance. * The people are often great, you can almost rely on anyone in the organisation to be helpful. Cons: * Morale rock-bottom. * Project management often very poor. Project badly run, technically compromised through lack of planning and arbitrary dates. * No training, except from fellow employees. * Sometimes awful work-life balance. Can depend. * Company PBC process for rating employees is demoralising, and gears up employees to play the game and rather than excelling at their day job. Advice to Senior Management: Take software engineering seriously - it is what software group should be about.
    • Marketing Company - all talk, less stuff” Current Manager in Bangalore (India). Pros: – 1. Good As legacy product based company. 2. Diversified professional global community. Cons: 1. Less maturity in services industry. Self glorifying of achievements should be stopped. 2. Remove people managers role and replace them with project managers as first line managers. PeM are waste of resource and unqualified in India. No hard feelings gs during annual review phase. 3. Big Blue processes should be trimmed for operational efficiency. 4. Lethargic support departments (mobility team, IT service team, travel desk, and HR). 5. Not a good choice for starter, but the best choice for near retiring resources. Advice to Senior Management: – Hope u know Halo effect. Reduce PeM level as mentor only. Bring more transparency in HR depth, and without excuses on tool based evaluations. Lastly, do not have an Indian manager, as in India people are not fit to perform professional or people management skills. Have common policies in all geo locations.
    • New College Grads - Be Prepared for an IBM that is Totally Different than History Remembers” Former Marketing Manager in Austin, TX. Pros: – Great opportunities to learn while being productive and potential to advance. Cons: – Extensive micromanagement drives you nuts. Don't plan on a career at IBM - they don't exist anymore. Advice to Senior Management: – The almighty $$ has taken over the core values that IBM was started with. Don't let your 2015 objectives blind you to the strengths of America.
    • Good place to learn, bad place to earn” Current Application Engineer. Pros: – Well recognized globally which in turn has a lot of benefits for its employees, directly or indirectly. Plethora of opportunities for people who are constantly looking for change. Innumerable domains and technologies - take your pick. Cons: – Has a lot of managers but very few leaders. Poor hikes. Bureaucracy at its best (worst is probably the word). Changing from one role to another takes a billion years for the 'unlucky'. Advice to Senior Management: – Must concentrate on upholding ethics. Practice what you preach and be honest with employees and customers. Must focus on making leaders who can retain employees and their motivation. Must give competitive compensation packages not only for new hires, but for existing employees too.
    • Good experience - but with very low salary” Current Senior Systems Engineer in Bangalore (India). Pros: – Family - Work balanced life. appreciable. Cons: – Very very low salary. Politics. Advice to Senior Management: – At least reasonable hike should be given to critical resources in the project.
    • Depressing work environment” Current Software Developer. Pros: – Awesome coworkers. Intelligent, friendly, and supportive. Very flexible hours. No one keeps track of your hours, or how you are using them. As long as you get your work done you are in good shape. In general people seem to work their 40 hours and go home. Work/life balance is good. Cons: – IBM is very cheap. From the tools you need to do your job to the general work environment IBM cuts corners every where they can. The buildings are depressing. Many of the offices are small and shared. The sharing is especially annoying when there are empty offices all around. The furniture is from the 70s or 80s depending on the office. They recently stopped vacuuming offices because it cost too much. No free soda or snack perks. You can however get all the ice and water you want. IBM is also very much in the business of sending their jobs to India and China. I'm fairly convinced that they feel OK with not worrying about morale or work environment because it is beneficial for them if their employees quit or retire. Advice to Senior Management: – A little attention to morale would go a long way.
    • Big company with a lot of process” Current Software Engineer in Taipei (Taiwan). Pros: – IBM is a very big origination. Most of the IBMers are very nice and professional. Cons: – The original benefit or policy to employers are good but a lot of process and rule make employers very hard to apply. Advice to Senior Management: – Be more open minded and more brave.
    • Great at the onset, painful crawl there onwards.” Current Global Program Manager in New York, NY. Pros: – Good onboarding, great people for the most part. Great research team and resources. Cons: – Not using proper hiring processes for junior team. Not reporting results responsibly. No 360 degree reviews come PBC time. No transparency within senior leadership. Although there is a lot of talk about work-life balance, everyone works 60+ hours a week. It's the norm. Salaries for most positions are below the industry average. Advice to Senior Management: – Embrace and model corporate values. Don't continue to make promises that are never fulfilled.
    • Strong base of consultants, but lack of focus on individual is discouraging/pushing out some of the best staff.” Current Associate Partner in Chicago, IL. Pros: – Large clients; good place to learn fast; strong peer group. Cons: – Slow decisions making; cumbersome internal processes; lots of politics and turf wars; inconsistent compensation policy. Advice to Senior Management: – Promote from within - many experts with 20yr see no career opportunities while mediocre new hires are brought in at higher levels. Help client-facing staff focus on project work rather than give them tons of administrative overhead, supported by really bad tools. Focus on people, growing talent, making life easier vs harder at IBM. The best people are being discouraged and feel "pushed out" This trend will become problematic in coming years and is already visible in financial results.
    • Good experience” Current Senior Software Developer in Toronto, ON (Canada). Pros: - Job security. - Lots of opportunities. - Lots of learning opportunities. Cons: - Lotus notes :). - Excessive processes for pretty much everything (from getting a software license, a hardware upgrade or even replacing/repairing a broken piece of office furniture)
    • Does anyone know this is nowhere????” Former Project Manager in Chicago, IL. Pros: – IBM has smart people, good educational opportunities and at one time, great benefits. It's corporate culture is mythical and its traditions are legendary. There is a pride in its brand recognition. Cons: – You are in grave danger of being "lost" in the size and bureaucracy. They no longer place value on their people. Advice to Senior Management: – stop the wholesale abandonment of your older employees.
    • No focus on employee retention or satisfaction” Current Anonymous Employee. Pros: – Travel reimbursement is easy. Large source of free training material. Convenient corporate card for business expenses.

      Cons: – Corporate leadership has become focused on shareholder satisfaction and profit to a fault. Low pay with virtually no possibility for increases. History has shown that annual raises are nearly extinct. Internal employees are not even compensated when moved into positions of higher responsibility and salary grade. IBM expects employees to take new positions at their existing salary and band regardless of the nature of the job role. It is an amazingly ridiculous practice but seems to be deeply ingrained in management. Over worked and underpaid sums it up.

      IBM's goal is to develop its operations in developing nations where cheap talent is plentiful while reducing its workforce in the United States. It is sad that a company that owes its early success to the New Deal is selling out Americans for corporate greed.

    • Company has issues” Current Anonymous Employee. Pros: – Benefits are comparable to most large companies. Cons: – Salary increases are non existent since the late 1990's despite record profits
    • Long and stable career, a good place for women” Current Anonymous Employee. Pros: – Good place to have a stable career, Versatile, Multi discipline, Opp for women. Cons: – No network; - no growth; average pay; minimum to no perks. Advice to Senior Management: – Too many unwanted baggage in the organization. Needs a shake up.
    • Financial Analyst” Current Anonymous Employee. Pros: – Love the "work from home" option. Cons: – Low salary, too many layoffs, no job security. Advice to Senior Management: – Please stop outsourcing North American jobs to South America and India.
    • IBM is an OK place to work, lots of Kool-Aid” Current Consultant. Pros: – The IBM name has a lot of meaning and is great on a resume. The IBM people you work with are talented and extremely helpful. The people you work with really do make the project worthwhile. Opportunities to do a lot of different projects. Learn to manage yourself. Cons: – Distance from company. It can feel like you are out in left field and management reaches out to you only if there is a timesheet issue. Your experience is based on the random draw of which project you get - at the bottom you have no real choice. Insane utilization requirement. Low pay, no raise, tightwad company. Too much company Kool-Aid. Advice to Senior Management: – Managers should be a 100% full-time job rather than a part-time add-on to consultants. Have reasonable utilization requirements - seriously. Give raises to rank-and-file when stock price is rising and profits are up. Have pay increases earned the previous year kick in earlier in the next year, not July.
    • Great place to start your career” Current Consultant. Pros: – Flexible hours, fair salary, great benefits. Cons: – Not a company for entrepreneurs - difficult for hard workers to have their efforts recognized. Review system in place is painstaking and it is the responsibility of the employee to initiate and complete the long process which yields, at times, minimal results. Advice to Senior Management: – Greater oversight and recognition to those all-stars beyond the review system in place.
    • My experience as apprentices is great but it really depends on the people you work with.” Current Apprentice In Marketing Software in Bois-Colombes (France). Pros: – It's a big recognized company which will offer many opportunities. Not inside the firm because they do not hire, but after for your job search. If you are lucky enough to be in a good department, like marketing department, you will have some benefits such as - the possibility to work at home from time to time, you get a laptop which you can carry everywhere. - having flexible working hours: no one will stare at you or make a not funny joke about the time you arrive / leave at you workplace. As long your job is well done nothing else matter. Like I say before, people you work with are the key. I have an amazing team. They trust me, my work and I have responsibilities, interesting projects, I learn a lot.

      Cons: – Like every big company they have process, too many ... I heard it was one of the worst. It is really boring to follow every steps, to have to fill tools with information, to get approval for every € spend. There is also a lake of creativity, we do every the same kind of event and activity, because of all the process we don"t have enough time to create. And we work a lot with agencies which are here to deliver creativity. The do not hire even if you succeed being the best of your open space...no way. When you arrive you really have to be proactive, work don't come by itself you must look for it, ask for it. My experience is great as I said but many of my fellows are disappointed, they do nothing or uninteresting tasks as excels files, they are really bored. As an apprentice we are really not paid well 1100...

      Advice to Senior Management: – I am really well managed, everything was explained to me when I arrived and after. But It's so not the case of the other trainees or apprentices, they are quite alone, they have someone to manage them who is appointed but they often don"t have time to care about the new one. They really should be aware of where are the needs in order to not waste an apprentice / trainee.

    • Great place to work until the job can be outsourced” Former Program Manager in Beaverton, OR. Pros: – The people the work there for the most part are amazingly intelligent and hardworking individuals. Benefits are very competitive and work site choice is very flexible. Cons: – Many, many layers of bureaucracy. Sometimes difficult to find the right people for you questions.
    • A once great company, tarnished.” Current Anonymous Employee in Somers, NY. Pros: – Smart bunch of communications professionals at the peer level. Work life balance very good. Interesting work. IBM name has cache. Cons: – Communications Leadership is a clique that requires a certain amount of butt-kissing or you are out on yours. Young, beautiful women do better with this communication leadership team than do men or minorities. Layoffs ongoing so there is absolutely no job security...get the IBM name on the resume and leave, leave...leave! Advice to Senior Management: – Get rid of the old communications establishment on the third floor of Armonk (CHQ).
    • Ruthless” Former Senior Consultant. Pros: – Good to work for someone who help you get engagements and cares. Cons: – Will lay you off despite years of productive and sometimes sacrificial work. Advice to Senior Management: – Have a heart.
    • A once great employer that now only cares for earnings per share.” Current IT Architect in Leeds, England (United Kingdom). Pros: – Scope of opportunities - you could end up anywhere doing anything. Brand reputation - IBM is the premier name in IT. Training and education - there will be a course for it in IBM. Cons: – Poor compensation. Salaries have not kept pace with the market. Don't expect a pay rise as your career progresses. Once you're an IBM employee there are lots of career opportunities. But as your responsibilities increase and your value to the company improves, you don't get better compensation. Work/life balance can be poor - you will be expected to travel on a Sunday night and spend the week living in hotels. Advice to Senior Management: – Stop running this business into the ground in a quest to maximise your own bonuses! Relearn about "respect for the individual" and treat your staff right. Understand that your long term staff are what keeps the business afloat and treat them accordingly.
    • Disjointed empire sewn together by the brand” Former Head Marketing in Gurgaon, Haryana (India). Pros: – It's IBM You get to interact with global centers and businesses. Cons: – noisy and unwieldy offices - not like banks which may be as big but work in tight units. Advice to Senior Management: – stay on the mark
    • Work Life Balance” Current Hardware Engineer in Durham, NC. Pros: – Workloads will vary. Modest 4 months in year. Cons: – Has cycles of extreme workload and stress. 8 months in year.
    • Frustrating, limited leadership, frozen in the 80s” Current Associate in Santiago (Chile). Pros: – Flexible hours, balance life and work. Cons: – Compensation below average; fails to empower employees or promote leadership; management decisions are based on short term results; career framework is purely theoretical, no team work.
    • Company making profits but not sharing with employees” Current Marketing Consultant in Armonk, NY. Pros – The work is challenging, the employees are generally highly motivated and skilled, and many opportunities for personal growth. Cons: – The salary increments are abysmal - this year they decided to not raise salaries for executives, and top performers with the highest ratings were given a 1% raise and everyone else did not get raises. Advice to Senior Management: – If your top performers are only given a 1% raise (which is lower than the inflation rate), you are sending a strong message that you do not value these employees. It takes a tremendous amount of effort and energy to be rated as a top performer and to receive a 1% raise is quite an insult.
  • Pension Pulse: Pensions Under Attack in America? By Mark Vorpahl. Excerpts: On Friday, July 6, President Obama signed into law a bill that would renew transportation programs and extend low interest rates on student loans for one year. While this minimal gesture resulted in, no doubt, sighs of relief from those burdened by student debt, tucked away within the bill's pages was a little-noticed proposal to further erode the funding of workers' pensions. The bill was a brilliant sleight of hand where what it appeared to be giving with one hand distracted the public from what it was taking away with the other.

    Aside from the more publicly known parts of this bill, it also reduced the amount that corporations pay into an already grossly underfunded pension system. The way it achieved this is with a complex equation factoring in interest rates, changes in how businesses calculate what they must contribute to retirement premiums, and how these contributions are tax deductible. The end result of this opaque process of number crunching is that, according to the Society of Actuaries, employer pension contributions will be reduced overall from a mandatory $80 billion to $45 billion this year alone. Next year this amount will be slashed by $73 billion. ...

    It is another example of a pattern of how politicians have enabled corporations to minimize their responsibility towards their employees’ pensions to the point where the entire system is in danger and the dream of a comfortable retirement is approaching collapse. ...

    There are numerous examples of how big business and their two parties, the Democrats and Republicans, have colluded to erode their legal responsibility to fund pensions.

    The Pension Protection Act of 2006 enabled pension funds to partner with high-risk speculators, resulting in massive loses to the system in 2008-2010. Corporations have been allowed to declare phony bankruptcies in order to dump their pensions on the PBGC. They are also allowed to divert funds that should go into pension funds towards covering health care costs as well as buying back company stocks and making dividend payouts to stockholders. The list could go on for the ways the political system lets the corporations off the hook at the cost of threatening workers' retirement. The effect of these measures is to starve the pension system in order to fatten corporate profits. ...

    Earlier this week, I covered the topic of why this new pension law is worrisome as it will only accelerate the inexorable trend toward pension poverty. Democrats and Republicans are united when it comes to bipartisan pandering toward their corporate masters. President Obama basically 'pulled a Mitt Romney' and not one major news channel reported on this bill.

  • Pension Pulse: Irresistible Pool of Money Running Dry? Excerpts: While almost all states are required by law to balance their budgets each year, the report said that many have relied on gimmicks and nonrecurring revenues in recent years to mask the continuing imbalance between the revenues they take in and the expenses they face — and that lax accounting systems allow them to do so. ...

    Desperate budget officials often see public pension funds as an almost irresistible pool of money. One common way of “borrowing” pension money is not to make each year’s “annual required contribution,” the amount actuaries calculate must be set aside to cover future payments. Despite its name, there is usually no enforceable law requiring that it be paid. ...

    The report highlights a big part of the reason behind the pathetic state of state pension funds. Desperate public officials often see public pension funds as an almost irresistible pool of money, borrow from these pensions and neglect topping them up. The compounded effect of such actions has led to massive pension shortfalls.

    By the way, before you condemn this as yet another example of public profligacy, let me remind you that things aren't better in the private sector. The WSJ reports that S&P 500 companies posted a record level of underfunding for pensions and other post-employment benefits in 2011. Defined pensions were underfunded by $354.7 billion in 2011, an increase of over $100 billion from the end of 2010.

    During the good years, companies used investment gains from their pension plans to pad their earnings and outright steal from pensions, but now that option has vanished. With interest rates hitting record lows, pensions have become a liability, prompting companies to cut them or offload the risk to insurance companies. ...

    After reading the above, you shouldn't be surprised that pensions are under attack in America. Once again, it is the common worker in the private and public sector that gets royally screwed as companies and states look to trim "soaring" pension costs.

    And if you ask Robert Benmosche, AIG's CEO, there is no retirement crisis. All you have to do is raise the retirement age to 80 and we can fix the problem. Luckily, much wiser and more informed academics are sounding the alarm, pleading for new thinking on the retirement crisis.

  • Alliance for Retired Americans: Friday Alert (PDF). This week's articles include:
    • Biden Reaffirms Administration Commitment to Retirees
    • Let’s not be the Last Generation to Retire Campaign Heats up as Temperatures Rise
    • Sen. Tom Harkin Talks to Alliance Activists about the Rebuild America Act
    • Pennsylvania Alliance Joins Lawsuit against State’s Voter ID Law
    • Coalition Urges Tax Increases, Benefit Cuts under Simpson-Bowles
    • AFL-CIO: Romney is “Mr. 1%”
  • InformationWeek: General Motors Will Slash Outsourcing In IT Overhaul. GM's new CIO Randy Mott plans to bring nearly all IT work in-house as one piece of a sweeping IT overhaul. It's a high-risk strategy that's similar to what Mott drove at Hewlett-Packard. By Chris Murphy. Excerpts: Today, about 90% of GM's IT services, from running data centers to writing applications, are provided by outsourcing companies such as HP/EDS, IBM, Capgemini, and Wipro, and only 10% are done by GM employees. Mott plans to flip those percentages in about three years--to 90% GM staff, 10% outsourcers.

    Insourcing IT on that scale will require GM to go on a hiring binge for software developers, project managers, database experts, business analysts, and other IT pros over the next three years. As part of that effort, it plans to create three new software development centers, all of them in the U.S. IT outsourcers, including GM's one-time captive provider, EDS, face the loss of contracts once valued at up to $3 billion a year.

    This dramatic move away from outsourcing is just one piece of the "IT transformation" Mott is leading, which includes consolidating data centers and applications, centralizing IT planning and execution, and getting a better grip on GM's customer and production data. GM's IT transformation doesn't emphasize budget cuts but instead centers on delivering more value from IT, much faster. In many ways, the foundation Mott is laying is similar to the one Ford started laying four or five years ago as part of its One Ford/One IT initiative.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: GM, Ford hope lump-sum pensions ease obligations" by "real_goose". Full excerpt: The Detroit newspapers have been full of stories about the GM pension choice. Folks that can make a decision are really agonizing.

    One story early on was about financial advisors trying anything to get names of eligible folks. The advisors want to offer to invest the lump sum so they can earn a management cut each year. Almost like sharks circling the chum.

    The Detroit Free Press reports that those who have analyzed the GM lump sum offers versus the annuity conclude that it is not possible to use the lump sum to purchase open market annuities that pay as much as the annuities GM is buying from Prudential.

    There are some folks planning to take a lump sum and purchase an annuity in the future after interest rates have increased. Assuming they don't need the income now and can avoid touching the lump sum, this may pay off. (My personal belief is that interest rates must go up some day, but I have no idea when and by how much.)

  • Pension Rights Center: Should You Take Your Pension as a Lump Sum? Excerpts: General Motors (GM) and Ford are offering to cash out the pensions of some retirees and instead give them a one-time lump sum payment.

    While the idea of suddenly having a large sum of money is tempting, this is a decision that you will have to live with for the rest of your life. Any retiree who accepts the lump sum offer will immediately lose the benefits of a lifetime income and will be responsible for taking care of their own investments and making sure the money lasts through retirement.

    Most experts say that, for most retirees, a guaranteed stream of income for life is a better option than a lump sum. The only situations in which a lump sum should be seriously considered are...

  • Detroit Free-Press: Guest commentary: Why GM retirees should say 'no' to lump-sum payoff option. By Karen Friedman, Executive VP and Policy Director of the Pension Rights Center. Excerpts: By Friday, 42,000 salaried General Motors retirees will have made a critical financial decision that will dictate whether they have a secure or insecure retirement. GM is requiring these loyal old-timers to either exchange their lifetime monthly pension benefits for a onetime lump-sum payment or continue to receive equivalent lifetime monthly payments paid by Prudential instead of GM.

    Understandably, after years of serving the company and being promised a pension for life, many of these retirees feel frightened, betrayed and confused. GM's decision to off-load their pension plan has put this group of retirees in the agonizing position of having to make a decision that will impact them for the rest of their lives, at a time when they are most vulnerable. While anger and distrust might fuel the temptation for retirees to take the lump of cash and run, the reality is that taking the annuity will be the far better and safer option for most retirees.

    Studies show that retirees with ongoing monthly pension payments are more secure than those without them, better able to pay for housing, health care and daily necessities. Also, those with predictable monthly income, unaffected by the whims of Wall Street, can sleep better at night knowing that they have a stable income for life, no matter how long they live, and that their spouse will be protected, too.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Karen Friedman PRC" by "willbefree25". Full excerpt: Thank you Karen, once again, for telling the truth.

    "But it seems clear that if retirees want security, they should stick with the monthly lifetime payments and say "no" to the lump sums."

    Here's hoping that they, like the Second Choicers who knew they were being bamboozled in 1999, say NO to the lump sum. A choice that was given to the Second Choicers, lest anyone forget, only through the efforts of Janet et al.

    Whatever their choice, heaven help them all, and us, when IBM tries out this scam on the retirees.

  • Washington Post: Joyce D. Miller dies; influential women’s union organizer was 84. By Emily Langer. Joyce D. Miller, a fierce proponent of the American labor movement who helped found a national organization of unionized female workers before becoming the first woman elected to the AFL-CIO executive council, died June 30 at Georgetown University Hospital in Washington. She was a District resident. ...

    Ms. Miller spent much of the past half-century organizing women in the workplace and within unions that, in her view, had long neglected the particular needs of female members, such as wage parity, parental leave and child-care services.

    She was a committed feminist but, she insisted, a trade unionist first. “There is no greater road to equality,” she said, “than to be covered by a union contract.”

  • Smirking Chimp: Individuals Have Little Power When Up Against Giant Corporations. By Dave Johnson. Excerpts: In a Sunday op-ed Arthur Laffer provides one of the funniest lines of the week, "Right-to-work laws provide individual workers with greater freedom to negotiate the terms of their employment." I almost spat out my coffee, thinking about what would happen to the worker who goes alone to management, demanding a raise and more vacation time. It's like you or me asking the cable company to show up at 10:30 sharp, and to take those added "fees" off my bill right now!

    Arther Laffer, in an op-ed today titled in the paper (but not online), State's fix: Cut tax rate, enact right-to-work law, gives us the old "make us more business-friendly" argument. Apparently if we become more like China -- China is very "business-friendly" -- and give business owners everything they want, the businesses will move to put-name-of-state-here. (Except, we won't benefit because the environment will suffer, we won't have a say, and a few at the top end up with everything.) ...

    My local newspaper, like most, regularly feeds its readers these right-wing "you should work for less so the rich can be even richer" and "if you tax the rich you won't have jobs" op-eds. They also feed readers a steady diet of "public employees make too much money and shouldn't get pensions." Since the alternative viewpoint is almost never presented, people over time come to accept it. ...

    (*A "right-to-work" law out to be named a "law-that-lowers-your-pay" because it weakens unions, keeps them from collecting dues, and other restrictions. Several southern states have used these laws to break up unions and now Republicans in several other states are passing them. The result of the decline of unions has been a decline of wages and benefits, and the hollowing-out of the middle class.)

  • New York Times: Options for Savers Seeking Better Rates. By Tara Siegel Bernard. Excerpt: If you’re a saver, you’re probably frustrated, even angry. There’s nothing worse than being punished for good behavior, and that’s exactly how it feels if you’re trying to amass a pile of cash before making a big purchase, particularly when banks pay interest rates that don’t come close to keeping pace with inflation.
New on the Alliance@IBM Site
  • Job Cut Reports
    • Comment 07/12/12: A must see video... don't let GM, IBM and others fool you. The mass US job exodus continues while our congressional corporate puppets do nothing to stop it. We need to all wake up now and do something about it!!! http://www.youtube.com/watch_popup?v=Lvl5Gan69Wo -Paul Revere-
    • Comment 07/15/12: Perhaps I shouldn't post this comment. However, I can state that working for an IBM business partner is quite similar to working for IBM. Actually, it is worse.

      I know - I've worked for both IBM and for two IBM partners.

      So, don't believe that they respect their employees; don't believe that they will assign an employee to projects that will use the employee's skills; especially don't believe that they don't require 100% travel. Honestly, depending on the partner firm, don't believe that they will pay your salary as agreed. Especially steer clear of Section 8(a) stars firms, who are small, disadvantaged firms. Do not believe what they say - the person listed as the CEO or owner will stop by the office for an hour or so on Monday, just to check timecards. Also, don't claim actual hours worked, even if you have an hourly contract.

      I'm not sure whether this is an argument to stay with IBM - if you have the option - or just a reflection of how the job market works today. Regards. -IBM Partner-

    • Comment 07/18/12: Mark Loughridge indicated in Q2 financials there would be additional work force re-balancing that will be more intense than the first half of the year. He indicated the focus would not be on the US, however, we already took a dive for the team with no raises. Thanks Greedy Ginni. -Global-Alliance-Trending-
    • Comment 07/19/12: @Global-Alliance-Trending Don't believe Loughridge when he says the focus won't be on the US. They are cutting costs by getting rid of US employees and shipping jobs to third world countries. They are not going to stop using that model. They have shown earnings increased like this before and after investors really look at the results the stock typically goes down because they know this is not sustainable without really damaging the company. -longtimebeemer-
    • Comment 07/19/12: ICS (Lotus) US division is being told to move headcount out. No exact figures yet, some groups losing as much as 30-40%. Currently targeting subset of people and telling them to make finding a new job outside division their priority. No timeframe set for what will happen when these folks don't find the magical internal job, but RA is next logical step..and it appears it will be large. -Anon-
    • Comment 07/19/12: -Global-Alliance-Trending-: You can thank Mr. Robert X. Cringely and his exposes on IBM why the RAs might be more heavily weighted in India, China, Brazil, Russia, etc. now. The Alliance has also exposed IBM USA headcount numbers and that might also have something to do with things as well. -anonymous-
    • Comment 07/19/12: IBM is officially a mess. Can't turn revenue positive and need stock buybacks and RAs and other stupid cost cutting tactics (no raises, no free coffee, etc.) to fuel earnings per share profits. I don't see IBM sustainable for 2015 at this pace. There is only so much one can cut when the surgeon has no body mass left to operate on. So the patient dies. Remember corporations are living beings according to our Supreme Court. Wall St. just might catch on to all this..and soon. Then what tricks Ginny or Sam you have left in your bag of deception tricks? Maybe consult lil' Louie Napoleon Gerstner for a clue? -anonymous-
    • Comment 07/19/12: The emperor has no cloths, yet the procession goes on and the townspeople have yet to speak out. To use another euphemism, IBM CFO, Mark Loughridge had to use multiple tubes of lipstick to pretty up the 2Q12 earnings announcement pig. I am sure the green eye shade team is up late feeding the 2015 EPS spreadsheet to see how many more to lay to rest to make the number. For those interested in the transcript: international-business-machines-management-discusses-q2-2012-results-earnings -$20in15 Roadmap Roadkill-
    • Comment 07/20/12: I gave my notice today, and it felt great. I look forward to working for a company with a 19% pay increase and an actual team that works together rather than pitted against each other for top PBC rating. Good luck to those left behind. -Anonymous-
    • Comment 07/20/12: Internal calls are stating the SWG did not execute and the numbers are so bad that resource action is the only way that IBM will be able to meet expectations going forward. -270%-
    • Comment 07/21/12: IBM office in Greenville, SC has banned cell phone/smart phone usage. Phones have to be put away. Welcome to North Korea folks! I swear the past 2 years in this office is a case study in how much crap people will take. Unionize. -Anonymous-
    • Comment 07/21/12: According to Mr. Loughridge's comments to analyst, "we will also have workforce rebalancing in the second half, I expect slightly greater than the first half of 2012. Now that workforce rebalancing will be focused on our non-U.S. operations, very little, but really in the U.S. So all in all, we feel optimistic about our hand for the second half in spite of the headwinds that we see." Now, if I understand that correctly, the cuts will be greater in the 2nd half of 2012 than the 1st half and will be definitely focused on the US...with very little happening to non-US. I guess he and the rest of the executives would feel optimistic until there's no US IBMers left to cut. I'm sure there will be plenty of H1B's to backfill though. (if something can't be off-shored) -u2whoer-
    • Comment 07/21/12: Rumored estimates are 2600 RA's in the US in August. Most of them will be from the area(s) not affected in February. SWG should see a brunt of this as they have a major product coming to end. Good luck everyone. -RA's on the way-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • HealthCare.gov: Finding Out If Your Health Insurer Is Providing Value for Your Premiums. By Michael Hash, Interim Director, CCIIO. Excerpt: When hardworking Americans pay for health insurance for their families and themselves, most of what they are paying for should be medical care, not CEO bonuses, slick advertising or administrative costs. That is why one of the pillars of the Affordable Care Act is to help consumers get good value for their health insurance premium dollars. ...

    Want to know whether your health insurance company is required to provide a rebate? Today, on HealthCare.gov, we’re launching a new tool that will allow you to enter your state and health insurance company information and see the average rebate your insurer is required to pay. See the sample screenshots below...

  • New York Times opinion: Five Obamacare Myths. By Bill Keller. Excerpts: On the subject of the Affordable Care Act — Obamacare, to reclaim the name critics have made into a slur — a number of fallacies seem to be congealing into accepted wisdom. Much of this is the result of unrelenting Republican propaganda and right-wing punditry, but it has gone largely unchallenged by gun-shy Democrats. The result is that voters are confronted with slogans and side issues — “It’s a tax!” “No, it’s a penalty!” — rather than a reality-based discussion. Let’s unpack a few of the most persistent myths.
    • ObamaCare is a job killer...
    • ObamaCare is a federal takeover of health insurance...
    • The unfettered marketplace is a better solution...
    • Leave it to the states. They'll fix it.
    • ObamaCare is a loser. Run against it, run from it, but for heaven's sake don't run on it.
  • New York Times opinion: More Myths of Obamacare. By Bill Keller: Excerpts: If only I’d checked with you first, Times readers, I could have expanded my list of fallacies about the Affordable Care Act. Thanks to your comments and emails on my column, I’ve noted a few more enduring myths that seem worthy of debunking. ...
    • Myth #6: Unions that supported Obama don’t have to comply with Obamacare...
    • Myth #7: Obamacare creates a secretive board of bureaucrats with power to cut off grandpa’s dialysis or grandma’s chemotherapy...
    • Myth #8: Obamacare is a distraction from the main issue, which is jobs.

    Selected reader comments follow:

    • Isn't it obvious that decoupling health insurance from employment will free creative entrepreneurs (at least those with "pre-existing conditions" like allergies) to follow their job-creating dreams? Don't we all know someone who has to keep working at a job they don't like because they need to keep their health insurance?
    • That is one of those unintended consequences of the ACA which will be of great value to many when they realize they are no longer tied to an employer or job they loathe and may be able to find reasonably priced insurance on their own - and ditch the job. And some will be able to work part-time, or retire early, if they can get a policy through the exchanges that is affordable for them - which will free up jobs for others.
    • Perhaps the best way of debunking the ACA myths is a thorough and detailed Times analysis on how well Romneycare has been working in Massachusetts. This should include Commonwealth Care - the subsidized program, Commonwealth Choice - the non-subsidized program for those that can afford it, and the Health Connector - the Insurance Exchange. After all, the ACA is essentially all Romneycare.
    • There are many reasons why conservatives continue to pretend the U.S. health care system is the best when the actual best are all located in industrialized economies with socialistic capitalism. But the fundamental principle is anti-government, pro "free" markets. Their theories regarding this principle are demonstrably false and unsupported by economic data, but the sound bytes are more than enough for those who don't know much, if anything, about the economic and comparative realities of health care in this country relative to others. Health care in the U.S. is by far the most expensive on a per capita basis, yet consistently ranks well down the list on every index of results. Long live the myth.
    • Thank you, Mr. Keller, for your fairness and thoroughness. I have found however that no amount of facts, logic, deductive reasoning, common sense, well, you get the picture is sufficient to thwart the 'right wing lying machine' in this country. It only gets louder and more insane. It is well beyond the time for merely calling out untruths about AHCA in a polite way. These fanatics are liars and do not give a damn about more Americans having access to good health care. There is simply no debating them because that implies a respectful, thoughtful, and perhaps even a heated exchange of ideas. That doesn't happen with liars. They lie to cover lies and repeat it again and again knowing some of it is bound to stick with vulnerable voters. That's just the way it is and we have to call it what it is--lying. Thank you.
  • USA Today: Few pay more taxes under health care law. By Kelly Kennedy and Richard Wolf. Excerpts: President Obama's health care law is constitutional as a tax — but only a small percentage of Americans will pay more, a USA TODAY analysis of federal data shows.

    Though the law is projected to raise more than $800 billion in taxes, fees and penalties over a decade, 40% comes from about 3.5 million households with adjusted gross incomes above $200,000. Employers, insurers and health care providers are slated to fork over much of the rest.

    That leaves only a few taxes that will fall partially on middle-income taxpayers...

  • Forbes: Will Small Business Owners Kill Their Companies To Thwart Obamacare? By Carol Tice. Excerpts: We’ve reached the bluster point on healthcare reform. Many small-business owners were holding their breaths and praying the Supreme Court would overturn President Barack Obama‘s landmark healthcare reforms.

    Now that the Court has upheld healthcare reform, entrepreneurs have moved on to spluttering threats about how they plan to gum up the works in 2014, when healthcare-reform provisions compel them to either offer health insurance to workers or pay a penalty. ...

    Smart business owners will be gathering all the facts they can to figure out how to make this change work for them. Smaller businesses — those with fewer than 50 full-time workers — are exempt from the penalty. If that’s you, you could stand out by offering coverage nonetheless, or perhaps leverage that economic advantage to gain some ground against bigger competitors.

    No question there will be winners and losers here — and the smart business owners are expending their energy now figuring out how to come out on the up end, not issuing threats.

    More people with healthcare — which is what happened with Massachusetts’ healthcare law – means fewer sick days for workers. It should mean more healthy customers, too.

    Nobody’s factoring that upside into the equation when they bluster about how healthcare reform will be the death of their business.

  • New York Times editorial: The Rush to Abandon the Poor. Excerpt: The state with the country’s worst health care record just happens to have a governor who has been the loudest voice against national efforts to improve it.

    A quarter of the residents of Texas, 6.3 million people, are uninsured, by far the highest percentage in the country. (That number includes more than a million children.) Texas ranks last in prenatal care and finished last on a new federal assessment of overall health quality that examined factors like disease prevention, deaths from illnesses, and cancer treatment.

    Yet Gov. Rick Perry — strangely puffed up as he was so often in his presidential bid — recently told the Obama administration that he would proudly refuse a huge infusion of Medicaid money that would significantly reduce those shameful statistics and cover 1.7 million more people. The same indifference to suffering that pushed Texas to the bottom is now threatening to keep it there. ...

    Many mainstream Republican governors are taking a different approach. In a letter to the president last week, Gov. Bob McDonnell of Virginia, the chairman of the Republican Governors Association, said states should think carefully before they reject Washington’s money. Though he remained quite critical of health reform and Medicaid, he also noted that refusing the expansion would create “a significant gap in coverage” for low-income people.

    For now, at least, Virginia recognizes an obligation to its weakest citizens. It’s time for Texas, Florida, South Carolina, Wisconsin, Iowa and Louisiana to do the same.

  • The Commonwealth Fund: Medicare Beneficiaries Less Likely to Experience Cost- and Access-Related Problems than Adults with Private Coverage. By Karen Davis, Ph.D., Kristof Stremikis, M.P.P., M.P.H., Michelle M. Doty, Ph.D., and Mark A. Zezza, Ph.D. Synopsis: Medicare beneficiaries age 65 and older are more satisfied with their health insurance, have better access to care, and are less likely to have problems paying medical bills than working-age adults who get insurance through employers or purchase coverage on their own.

    The Issue: The aging of the U.S. population is posing challenges to the Medicare program. Policymakers have proposed a variety of measures to reduce spending, including shifting beneficiaries to a defined contribution plan. Commonwealth Fund researchers argue that when exploring options for sustaining coverage for the 65-and-older population—as well as for expanding coverage for those under age 65—policymakers need to consider the experiences of people covered by Medicare, employer-based health plans, and individual market plans. In this study, the researchers used data from the Commonwealth Fund 2010 Health Insurance Survey to compare individuals’ experiences.

  • The Commonwealth Fund: Oceans Apart: The Higher Health Costs of Women in the U.S. Compared to Other Nations, and How Reform Is Helping (PDF). Abstract: An estimated 18.7 million U.S. women ages 19 to 64 were uninsured in 2010, up from 12.8 million in 2000. An additional 16.7 million women had health insurance but had such high out-of-pocket costs relative to their income that they were effectively underinsured in 2010. This issue brief examines the implications of poor coverage for women in the United States by comparing their experiences to those of women in 10 other industrialized nations, all of which have universal health insurance systems. The analysis finds that women in the United States—both with and without health insurance—are more likely to go without needed health care because of cost and have greater difficulty paying their medical bills than women in the 10 other countries. In 2014, the Affordable Care Act will substantially reduce health care cost exposure for all U.S. women by significantly expanding and improving health insurance coverage.
News and Opinion Concerning the "War on the Middle Class"
Minimize "It is a restatement of laissez-faire-let things take their natural course without government interference. If people manage to become prosperous, good. If they starve, or have no place to live, or no money to pay medical bills, they have only themselves to blame; it is not the responsibility of society. We mustn't make people dependent on government- it is bad for them, the argument goes. Better hunger than dependency, better sickness than dependency."

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

  • ThinkProgress: Walmart Heirs Have As Much Wealth As Bottom 40 Percent Of Americans Combined. By Pat Garofalo. Excerpt: Last year, Sylvia Allegretto, a labor economist at the Center on Wage and Employment Dynamics, found that as of 2007, the Walton family — heirs to the Walmart fortune — had a net worth equal to that of the bottom 30 percent of Americans. And due to the effects of the Great Recession that ratio has gotten substantially worse.

    New Federal Reserve data analyzed by both Allegretto and Josn Bivens at the Economic Policy Institute shows that the Waltons now hold as much wealth as the bottom 40 percent of Americans combined. ...

    At the same time that the Waltons have amassed an ever larger fortune, Congress decided to cut the estate tax, a policy for which the Waltons have been pushing for years. And now that the estate tax cut is in place, conservatives are doing everything they can to ensure it doesn’t go away, allowing the Waltons to amass even larger amounts of wealth.

  • AlterNet: If They're Going to Target Romney for Outsourcing, Democrats Ought to Stop Enabling It. The issue here is not that Democrats offer no alternative to capitalism. But they offer no challenge to it in its most rapacious, exploitative incarnation of recent times. By Gary Younge. Excerpts: Following the stock market crash of 1987 the US House subcommittee on telecommunications and finance needed an expert to explain the underlying impulses that had brought capitalism to the brink. So they asked a criminal. Dennis Levine, once a prominent player in mergers and acquisitions, was coaxed out of prison in New Jersey, where he was serving two years for insider trading, in return for a Big Mac, fries and a chocolate shake.

    After explaining how the market was rigged, he was asked what the government should do about it. "You need to send out a slew of indictments, all at once, and at 3pm on a sunny day, have federal marshals perp walk 300 Wall Street executives out of their offices in handcuffs and out on the street with lots of cameras rolling," he said. "Everyone else would say: 'If that happened to me, my mother would be so ashamed.' "

    But when the most recent global economic crisis struck Uncle Sam took a different route. Rather than punish those who'd brought the system to its knees they rewarded them with billions of dollars in bailout money. For George W Bush this was consistent both with his philosophy and the interests of his base. But Barack Obama stood as a "transformative candidate" and this was a pivotal moment. Popular anger at the finance industry was strong and the banks were weak.

    Just a couple of months into his presidency he called a meeting of banking executives. But instead of representing the interests of those who voted for him and had been hardest hit by the crisis – the poor, union members, black people and Latinos – he sided with those who funded him and precipitated the crisis: "I'm not out there to go after you," he told them. "I'm protecting you."

  • Wall Street Journal: Senate Probe Faults HSBC. Report Says Bank Ignored Money-Laundering Warnings. By Evan Perez and Devlin Barrett. Excerpts: Executives of HSBC Holdings PLC ignored warnings for years that the bank's far-flung operations were being used by money-launderers and potential terrorist financiers, according to a Senate investigation.

    The findings will be aired Tuesday when senior HSBC officials are scheduled to testify before a Senate subcommittee looking into the matter. In a nearly 400-page report, the subcommittee detailed a regulatory culture at the bank where some officials allegedly engaged in risky behavior in pursuit of profits.

    The report said that HSBC did little to clean up operations that should have raised concerns, including its Mexico bank. That bank had a branch in the Cayman Islands with no offices or staff but held 50,000 client accounts and $2.1 billion in 2008, the report said. ...

    HSBC Mexico's top antimoney-laundering official, as he prepared to leave the bank, told an official from HSBC's London compliance office in 2008 that he believed there was "a culture [of] pursuing profits and targets at all costs" and that it "was only a matter of time before the bank faced criminal sanctions," according to the report. ...

    In separate instances, HSBC and officials in its U.S. bank were informed of concerns that one bank official had been named in a list of alleged al Qaeda financial benefactors; that another bank had provided an account to a terrorist organization; and that a third bank was partially owned by terrorist organizations, according to the report. "Another striking feature of these accounts is the fact that a decision by one HSBC affiliate to terminate a relationship with a bank due to terrorist financing concerns did not always lead other HSBC affiliates to follow suit,'' the report said. When a compliance officer declined to approve one of the accounts, her bosses replaced her, it said.

  • Washington Post opinion: Expose the fat cats. Excerpts: Americans who are worried about the corrosive power of big money in politics ought to watch what is about to happen in the Senate. On Monday, a cloture vote is scheduled on legislation that would require the disclosure of donors anonymously pumping tens of millions of dollars into this year’s presidential and congressional campaigns. Not a single Republican in the chamber has expressed support for the bill, known as the Disclose Act, meaning it will probably die for this session. It should be interesting to hear how the Republican senators justify this monumental concealment of campaign cash.

    Before the Watergate scandals — for those who may not recall — money ran wild in American politics. One man, W. Clement Stone, gave more than $2 million to President Richard M. Nixon’s 1972 reelection campaign. The Watergate break-in was financed with secret campaign contributions. Fat cats plunked down cash for ambassadorships, and corporations for special treatment. The scandal led to landmark campaign finance reforms, enacted in 1974. For many years since, Republicans and Democrats broadly supported the idea of full disclosure.

    That consensus has broken down and thrown the country back to the unruly days before Watergate. We seem to have created the political equivalent of secret Swiss bank accounts. The Supreme Court’s 2010 Citizens United decision opened the door to unlimited donations by corporations, wealthy individuals and labor unions. The sheer size of the donations flowing into groups sponsoring political advertising is alarming enough. But the secrecy is also corrosive for democracy. Who is writing checks for $10 million or $1 million at a single throw, and what do they want? We don’t know, and this shadowy bazaar undermines our political system. ...

    Credibility is a precious thing. In their lust for contributions, in cozying up to the moneybags of this era, candidates and political operatives in both parties seem to be forgetting that they put their own credibility at risk. There is a very good chance that when some government decision or vote comes along next year, responsible politicians will find themselves haunted by the secret money of the 2012 campaign.

    Is it really worth it? Do these donors deserve to remain hidden? Why can’t they handle a little sunshine? We’d like to see a few courageous Republicans rise in the Senate on Monday and declare: Enough is enough.

  • Financial Times: Ex-Citi banker faces trial over CDO sale. By Kara Scannell. Excerpts: US regulators will on Monday face their first courtroom test in a case involving an individual banker accused of misleading buyers of a mortgage-related product at the start of the financial crisis. The case comes amid intense pressure on the US authorities to hold individuals accountable for the crisis.

    The SEC alleges that he was negligent by failing to tell buyers that Citigroup had selected some of the assets and placed a $500m bet against them. The SEC is seeking disgorgement of profits and penalties from Mr Stoker. Unless a settlement is reached, jury selection is to begin Monday. ...

    The SEC has been criticised for charging Mr Stoker and others with negligence rather than intentional misconduct. The SEC need only prove by a preponderance of evidence that Mr Stoker had reason to know important facts were withheld from the documents, but went ahead with the disclosures anyway.

  • The Rock River Times: Sensata employees in Freeport reach out to Mitt Romney for help in saving their jobs. Excerpt: Employees at Freeport’s Sensata Technologies plant are reaching out to former Massachusetts Gov. Mitt Romney, the presumptive Republican nominee for president, in attempts to save their jobs.

    The Massachusetts-based Sensata Technologies has announced it plans to close the Freeport plant and outsource more than 150 jobs to China.

    Sensata is owned by Bain Capital, a private equity investment firm co-founded by Romney in 1984. Romney served as CEO of the company from 1984 until 2002, according to SEC filings. ...

    Dear Gov. Romney,

    We work at Sensata Technologies in Freeport, Illinois — a company owned by Bain Capital, which you started, ran, and still profit from.

    Our jobs are about to be outsourced to China. More than 150 of us will lose our jobs — and some of us have worked here for over 40 years. The worst indignity is that many of us are being asked to train the Chinese workers who are taking our jobs.

    It’s not right that our good American jobs are being sent to China. It’s not right that you stand to get even richer off of our loss and pain.

  • Romney’s Bain Yielded Private Gains, Socialized Losses. By Anthony Luzzatto Gardner. Excerpts: Mitt Romney touts his business acumen and job-creation record as a key qualification for being the next U.S. president.

    What’s clear from a review of the public record during his management of the private-equity firm Bain Capital from 1985 to 1999 is that Romney was fabulously successful in generating high returns for its investors. He did so, in large part, through heavy use of tax-deductible debt, usually to finance outsized dividends for the firm’s partners and investors. When some of the investments went bad, workers and creditors felt most of the pain. Romney privatized the gains and socialized the losses.

    What’s less clear is how his skills are relevant to the job of overseeing the U.S. economy, strengthening competitiveness and looking out for the welfare of the general public, especially the middle class.

    Thanks to leverage, 10 of roughly 67 major deals by Bain Capital during Romney’s watch produced about 70 percent of the firm’s profits. Four of those 10 deals, as well as others, later wound up in bankruptcy. It’s worth examining some of them to understand Romney’s investment style at Bain Capital.

  • Smirking Chimp: It's Not the Tax Returns - It's the Arrogance. By Marty Kaplan. Excerpts: "What is Mitt Romney hiding?" isn't the most damaging thing that can be said about his refusal to release his tax returns. Here's what is: Romney thinks the rules don't apply to him.

    Americans don't resent wealth. They resent a rigged system. Ordinary people have to play by the rules, but the lesson of the financial meltdown is that plutocrats don't.

    One of the rules of running for president is that you have to release your tax returns. It's not a law, but that doesn't mean it's not a rule. There's no law that a presidential candidate has to debate, either, but that's the way we do it in America.

    Romney reeks of entitlement. He thinks it's up to him to decide whether his financial life should be transparent. It doesn't even occur to him that he owes this to voters -- that it's an obligation, not an option.

  • National Journal: Romney: The Man without A Past. By Michael Hirsh. Excerpts: What is it about the private equity world that Romney doesn't appear eager to bring up? As I explain in an article in the current issue of National Journal, "Mystery Man," Romney was basically what used to be known as a "barbarian at the gate." The term "private equity" sounds respectable, but it is a euphemism for the old leveraged buyout deals we remember from the 1980s, the era of corporate raiders like T. Boone Pickens and Henry Kravis. After junk-bond king Michael Milken, who funded a lot of those takeovers, went to jail, the industry decided to rename itself in order to remove the taint.

    This is Mitt Romney's true world. As the founder of Bain Capital, Romney became a brilliant LBO buccaneer who specialized in buying up firms by taking on a lot of debt, using the target firm as collateral, and then trying to make the firm profitable -- often by breaking it up or slashing jobs -- to the point where Bain and its investors could load up the firm with even more debt, which Bain would then use to pay itself off. That would ensure a profit for Bain investors whether or not the companies themselves succeeded in the long run. Often, burdened by all that debt, these bought-out companies did not succeed, costing thousands of jobs as they were downsized, sold off and shuttered. Other times they did phenomenally well, as in the case of Sports Authority and Domino's Pizza.

    But job creation is irrelevant to Bain's business model, which is all about paying back investors. Nor does the long-term fate of the companies that private-equity firms buy up matter crucially to Bain's bottom line (though of course success is better). The only real risk for Bain is that these companies fail to make enough initial profit in order to permit Bain to pile on more debt and extract a payout, so that it can make back its investment quickly.

    Though he started off dabbling in less profitable "venture capital," Romney quickly saw the high-return, low-risk potential of LBOs in the mid-1980s and ultimately was involved in about 100 such deals, which made him a true Wall Street tycoon. He then maximized his take further by socking away his gains in offshore shelters from Bermuda to the Caymans and using capital gains tax breaks and loopholes to reduce the rate of his 2010 tax return (the only one he's released) to 13.9 percent, a far lower rate than the one paid by middle-class Americans. Many of Wall Street's big dealmakers do the same with their profits, employing whole teams of international tax accountants.

    But none of these dealmakers has ever run for president. This is perhaps the main reason for Romney's reticence: It's not just that being honest about Bain's real business pulls back the veil from the ugly heart of financial capitalism. It's also that this may be the hardest year since 1932 for a Wall Street big-shot to make a bid for the White House: The former Masters of the Universe remain unpopular because of the historic recession they did so much to create. So it's hardly a surprise that Romney won't dwell on practices that his onetime GOP primary opponent, Texas Gov. Rick Perry, labeled "vulture" capitalism. ...

    This is the same Romney who declared during the hard-knocking primaries that the $350,000 he earned in speaking fees wasn't a lot of money, who said that his wife drives a "couple of Cadillacs," who grinningly bet Rick Perry $10,000 on a whim, and who boasted that even wealthy Ted Kennedy had to "take a mortgage out" to beat him. And those are moments when Romney was trying to be one of the guys. What has become clear is that he is part of a world of super-elites who live in a universe apart from most Americans. Romney may well make a very good president. But we should know who we're getting.

  • Forbes: 35 Questions Mitt Romney Must Answer About Bain Capital Before The Issue Can Go Away. By TJ Walker. Excerpts: Mitt Romney conducted numerous TV and other media interviews yesterday in order to minimize the damage his campaign has received regarding discrepancies surrounding his tenure at Bain.

    During times of crisis it is often a smart strategy to give virtually unlimited access to the media in order to push out your message aggressively and satisfy reporter curiosity so that the issue can be pushed off the front burner. John McCain famously did this well earlier in his career when dealing with his own Keating Five controversies.

    Unfortunately for the Romney Campaign, the slew of TV interviews did little to satisfy the media. In times of crisis, a strong candidate will come up with answers that satisfy the basic questions surrounding the controversy and will make people want to move on to another subject. Romney, however, could not seem to come up with basic messages that resolved the controversies. Many of his answers seemed evasive or overly legalistic. The biggest problem for Romney is that all of his interviews have only increased the questions that political observers, voters and the media have regarding the subject of Bain Capital.

    Specifically, Romney is going to have to answer the following 35 questions before this issue subsides.

    1. Are you contending that an individual can simultaneously be the CEO, president, managing director of a company, and its sole stockholder and somehow be “disassociated” from the company or accurately classified as someone not having “any” formal involvement with a company?

  • New York Times opinion: The ‘Merit-Based Society’. By Thomas B. Edsall. Excerpts: Over the past two decades, newly minted corporate titans have used political power to minimize taxation on their principal sources of income, winning preferential rates on capital gains and dividends — and have nearly eliminated taxation on the intergenerational transfer of wealth, brilliantly exploiting the term “death tax.”

    One industry in particular — the financial sector — has used its power to gain an enormous advantage at public expense persuading the government to dismantle much of the federal regulatory structure. The Financial Crisis Inquiry Commission, a 10-member bipartisan panel appointed in 2009 by congressional leaders of both parties, reported in January 2011 that “from 1997 to 2008, the financial sector expended $2.7 billion in reported federal lobbying expenses; individuals and political action committees in the sector made more that $1 billion in campaign contributions” to achieve what the commission described as “deregulation redux.”

    The greatest danger is that high inequality creates a society in which wealthy ‘crony capitalists’ dominate corporate and government policies and use their wealth to subvert market competition and to corrupt democracy in order to maintain their position atop the income hierarchy.

    Campaign contributions are among the most important weapons deployed by new corporate elites. The finance industry, for example, has given more money, $19 million, to the Romney campaign than any other sector, quadrupling its nearest competitor, real estate, which contributed 4.8 million. ...

    Not only would Romney’s tax, regulatory and spending proposals reinforce the leverage over public policy now exercised by the affluent, but he would leave untouched the post-Citizens United campaign finance regime that gives corporations, unions and billionaires unlimited opportunities to shape election outcomes.

    Nor would Romney reform the Washington lobbying community that now amounts to a fourth branch of government, staffed by former Senators, Congressmen and executive branch officials, who work for clients equipped to pay fees of $200,000 or more a year.

    The overwhelming majority of the $3.3 billion spent annually on lobbying goes to preserve and expand the market-distorting corporate “rents” granted by Congress and the executive branch, ranging from agribusiness subsidies to an array of special breaks that allow companies like G.E. to pay little or no federal tax. ...

    The super PACs enabled by Citizens United and related lower-court decisions are overwhelmingly tilted in Romney’s favor and supportive of the Republican Party in general: Conservative super PACs have so far spent $125 million, while liberal groups have spent less than a third of that, $35.2 million. ...

    As reasonable as Romney’s endorsement of a “merit-based opportunity society” may appear on the surface, what he is really calling for is a society that rewards hard-hearted, relentless competitors and disregards the losers. It is precisely this aspect of his campaign that has made him vulnerable to Democratic attacks. ...

    Romney, however, is the willing prisoner of a radically evolving Republican Party, a party perhaps best described by Thomas Mann and Norman Ornstein in their recent book, “It’s Even Worse Than It Looks: How the American Constitutional System Collided With the New Politics of Extremism”:

    One of the two major parties, the Republican Party, has become an insurgent outlier —ideologically extreme; contemptuous of the inherited social and economic policy regime; scornful of compromise; unpersuaded by conventional understanding of facts, evidence, and science; and dismissive of the legitimacy of its political opposition. When one party moves this far from the center of American politics, it is extremely difficult to enact policies responsive to the country’s most pressing challenges.
  • New York Times editorial: After three days of Mitt Romney complaining about attacks on his record at Bain Capital, it’s clear that President Obama has nothing to apologize for. If Mr. Romney doesn’t want to provide real answers to the questions about his career, he had better develop a thicker skin.

    Mr. Romney’s descriptions of when he left Bain have been erratic and self-serving. In 2002, when he needed to show he was still a Massachusetts resident, he denied he had quit in 1999, saying he had taken a leave of absence to run the Olympics committee. A series of documents filed with the Securities and Exchange Committee show that Bain certainly didn’t describe him as absent after 1999.

    A former Bain managing director, Edward Conard, said on MSNBC Sunday that Mr. Romney remained C.E.O. “legally” so he could negotiate his generous exit deal.

    But now that Bain has been accused of helping other companies outsource jobs overseas, laying off steel company employees and wiping out their pensions, Mr. Romney says he had no management role after 1999. A Kansas City steel plant that Bain bought in 1993 under Mr. Romney’s control, for example, went bankrupt in 2001, costing 750 workers their jobs and pensions. After the Obama campaign made an ad featuring several of the angry workers, the Romney campaign said he couldn’t be blamed because he left Bain in 1999.

    On Thursday, a Boston Globe article demonstrated Mr. Romney’s continuing ties to Bain through 2002, and Mr. Obama said it raised questions for his opponent. “I think most Americans figure if you are the chairman, C.E.O. and president of a company,” he said, “you are responsible for what that company does.”

  • New York Times op-ed: Policy and the Personal. By Paul Krugman. Excerpts: A lot of people inside the Beltway are tut-tutting about the recent campaign focus on Mitt Romney’s personal history — his record of profiting even as workers suffered, his mysterious was-he-or-wasn’t-he role at Bain Capital after 1999, his equally mysterious refusal to release any tax returns from before 2010. Some of the tut-tutters are upset at any suggestion that this election is about the rich versus the rest. Others decry the personalization: why can’t we just discuss policy?

    And neither group is living in the real world.

    First of all, this election really is — in substantive, policy terms — about the rich versus the rest.

    The story so far: Former President George W. Bush pushed through big tax cuts heavily tilted toward the highest incomes. As a result, taxes on the very rich are currently the lowest they’ve been in 80 years. President Obama proposes letting those high-end Bush tax cuts expire; Mr. Romney, on the other hand, proposes big further tax cuts for the wealthy.

    The impact at the top would be large. According to estimates by the nonpartisan Tax Policy Center, the Romney plan would reduce the annual taxes paid by the average member of the top 1 percent by $237,000 compared with the Obama plan; for the top 0.1 percent that number rises to $1.2 million. No wonder Mr. Romney’s fund-raisers in the Hamptons attracted so many eager donors that there were luxury-car traffic jams.

    What about everyone else? Again according to the policy center, Mr. Romney’s tax cuts would increase the annual deficit by almost $500 billion. He claims that he would make this up by closing loopholes, in a way that wouldn’t shift the tax burden toward the middle class — but he has refused to give any specifics, and there’s no reason to believe him. Realistically, those big tax cuts for the rich would be offset, sooner or later, with higher taxes and/or lower benefits for the middle class and the poor.

    So as I said, this election is, in substantive terms, about the rich versus the rest, and it would be doing voters a disservice to pretend otherwise. ...

    So how can the Obama campaign cut through this political and media fog? By talking about Mr. Romney’s personal history, and the way that history resonates with the realities of his pro-rich, anti-middle-class policy proposals.

    Thus the entirely true charge that Mr. Romney wants to slash historically low tax rates on the rich even further dovetails perfectly with his own record of extraordinary tax avoidance — so extraordinary that he’s evidently afraid to let voters see his tax returns from before 2010. The equally true charge that he’s pushing policies that would benefit the rich at the expense of ordinary working Americans meshes with Bain’s record of earning big profits even when workers suffered — a record so stark that Mr. Romney is attempting to distance himself from part of it by insisting that he had nothing to do with Bain’s operations after 1999, even though the company continued to list him as C.E.O. and sole owner until 2002. And so on.

  • Huffington Post: Putting an End to Secret Campaign Contributions. By Senator Al Franken (D-MN). Excerpts: Reformers (like me) have argued that we should limit how much influence any one person can gain by limiting how much money any one person can spend. The idea being that unlimited money in politics is inherently corrupting.

    Opponents of such reform have disagreed vehemently. The idea being that money is speech -- and since free speech should be unlimited, so should money.

    But until lately, there has always been bipartisan agreement that campaign spending -- limited or not -- should at least be transparent. Even as they've fought against spending limits designed to clean up our elections, many conservatives have solemnly assured the American people that they understood sunlight to be the best disinfectant. (In Minnesota, for example, we've had a long and bipartisan tradition of transparency in our campaign finance system.)

    Then, in Citizens United, the Supreme Court overturned a century of precedent to find that the right to have a say over elections wasn't, in fact, reserved for citizens after all -- corporations could enjoy it, too. And in FreeSpeechNow.org v. FEC, the Court found that even the weak limits we'd established to prevent the powerful from completely dominating our elections were unconstitutional. ...

    In the 2010 election, these "independent expenditures" by outside groups -- organizations established under obscure provisions of the tax code with names using words like "Future," "Prosperity," and/or "Freedom" in various permutations -- totaled more than $280 million, more than double what they spent in 2008 and more than five times what they spent in 2006. Outside groups spent more than the actual Democratic and Republican party committees.

    And already in 2012, we've seen a single individual write multi-million-dollar checks in support of his favorite presidential candidate. We've seen corporations spend tens of millions of dollars on attack ads. We could see $1 billion in outside spending before Election Day.

    Worse, there is little sunlight to be found in the post-Citizens United political system. Corporations that want to hide their spending can create shell corporations to contribute unlimited money to a group -- so that when you look at the outside group's fundraising records (which are published only occasionally), you'll see the shell corporation but not the original source of the money.

    And that guy who wrote all those seven-figure checks to support his favorite presidential candidate? We only know about that because he announced it himself (adding that some of his future spending would remain secret).

    And because none of this spending is transparent, none of these spenders (or the candidates who profit from their spending) can be held accountable. We simply don't know who is wielding all this financial power in this year's elections. We just know it isn't us, the people. That's a system in need of disinfecting.

  • New York Times opinion: For Political Closure, We Need Disclosure. By Warren Rudman (former Republican Senator, New Hampshire) and Chuck Hagel (former Republican Senator, Nebraska). Excerpts: Since the beginning of the current election cycle, extremely wealthy individuals, corporations and trade unions — all of them determined to influence who is in the White House next year — have spent more than $160 million (excluding party expenditures). That’s an incredible amount of money.

    To put it in perspective, at this point in 2008, about $36 million had been spent on independent expenditures (independent meaning independent of a candidate’s campaign). In all of 2008, in fact, only $156 million was spent this way. In other words, we’ve already surpassed 2008, and it’s July.

    In the near term, there’s nothing we can do to reverse this dramatic increase in independent expenditures.

    Yet what really alarms us about this situation is that we can’t find out who is behind these blatant attempts to control the outcome of our elections. We are inundated with extraordinarily negative advertising on television every evening and have no way to know who is paying for it and what their agenda might be. In fact, it’s conceivable that we have created such a glaring loophole in our election process that foreign interests could directly influence the outcome of our elections. And we might not even know it had happened until after the election, if at all.

    This is because unions, corporations, “super PACs” and other organizations are able to make unlimited independent expenditures on our elections without readily and openly disclosing where the money they are spending is coming from. As a result, we are unable to get the information we need to decide who should represent us and take on our country’s challenges. ...

    We believe that every senator should embrace the Disclose Act of 2012. This legislation treats trade unions and corporations equally and gives neither party an advantage. It is good for Republicans and it is good for Democrats. Most important, it is good for the American people. What’s more, every senator considering re-election faces the possibility of being blindsided by a well-funded, anonymous campaign challenging his or her record, integrity or both. The act under consideration would prevent this from happening to anyone running for Congress.

    Without the transparency offered by the Disclose Act of 2012, we fear long-term consequences that will hurt our democracy profoundly. We’re already seeing too many of our former colleagues leaving public office because the partisanship has become stifling and toxic. If campaigning for office continues to be so heavily affected by anonymous out-of-district influences running negative advertising, we fear even more incumbents will decline to run and many of our most capable potential leaders will shy away from elective office.

    No thinking person can deny that the current situation is unacceptable and intolerable. We urge all senators to engage in a bipartisan effort to enact this critically needed legislation. The Disclose Act of 2012 is a prudent and important first step in restoring some sanity to our democratic process.

  • New York Times editorial: The Power of Anonymity. Excerpts: Two years ago, Congress came within a single Republican vote in the Senate of following the Supreme Court’s advice to require broad disclosure of campaign finance donors. The justices wanted voters to be able to decide for themselves “whether elected officials are ‘in the pocket’ of so-called moneyed interests.”

    The court advised such disclosure in its otherwise disastrous Citizens United decision in 2010, which loosed a new wave of unlimited spending on political campaigns. The decision’s anticorruption prescription has grown even more compelling as hundreds of millions of dollars in disguise have flooded the 2012 campaigns — a great deal of it washed through organizations that are set up for the particular purpose of hiding the names of the writers of enormous checks. ...

    Still, the vote was a chance for the public to see who stands for and against such basic transparency in political spending. The answer: not one Republican showed the courage to break ranks and speak up for disclosure.

    Republicans have been the main beneficiaries of corporate and independent spending sprees. The party’s lock-step opposition to letting voters see who writes the big checks is an embarrassment to Congress.

    Opponents are crying that disclosure violates donors’ privacy and favors unions. This is election-year nonsense to give cover to the aggressively partisan groups that pose as “social welfare” organizations but tip the campaign scales heavily with stealth financing.

    The Senate measure would require corporations, unions and any other organization paying for election-cycle messages to disclose expenditures of $10,000 or more within 24 hours and identify donors writing checks of $10,000 or more. It would further require reporting of third-party money transfers, a shadow device to hide contributors.

  • National Journal: Senate GOP Blocks DISCLOSE Act, Again. By John Aloysius Farrell. Excerpts: On a party line vote, 53-45, Senate Republicans blocked a second Democratic attempt to end the GOP filibuster on the DISCLOSE Act on Tuesday. (Editor's note: 53 senators voted in favor of the Act, but because of Senate rules a 60-vote supermajority is required to allow legislation to move forward.)

    Earlier Monday, Senate Majority Leader Harry Reid said that if Congress doesn't do something to curb the torrents of money being spent on political campaigns by secret donors, said today, then "17 angry old white men will wake up" on the morning after Election Day, "and realize they've just bought the country."

    With that rip-snorting salvo at the wealthy donors who have been giving seven-figure contributions to shadowy political groups and Super PACs, the Senate Democrats opened debate on Monday on the Democracy Is Strengthened by Casting Light On Spending in Elections (DISCLOSE) Act - a measure that would require that political organizations disclose all donors who give them more than $10,000.

    The current system permits "legalized political money laundering" that is "a perfect recipe for corruption," said Democratic Sen. Sheldon Whitehouse, the bill's lead sponsor. "Hang on to your wallets. Here come the special interests. And you won't even know who they are."

  • The New Yorker: Why Won't Romney Release More Tax Returns? By John Cassidy. Excerpts: I’m following Mitt Romney’s example and vacationing in New England this week, but the Sunday-morning talk shows make it to out to Cape Cod, and I couldn’t quite go cold turkey. In addition to rehashing of Friday’s Bain Capital story, the network gabfests actually generated some news on another front: three well known Republican pundits—Bill Kristol, George Will, and Matthew Dowd—all criticized Mitt Romney for not releasing more of his tax returns.

    “He should release the tax returns tomorrow: it’s crazy,” Kristol, the editor of the Weekly Standard, said on “Fox News Sunday.” “You gotta release six, eight, ten years of back tax returns. Take the hit for a day or two.” Speaking on ABC’s “This Week,” Will, the veteran columnist, agreed, saying, “If something going to come out, get it out in a hurry.” And Dowd, who was the chief strategist for the Bush-Cheney campaign in 2004, said Romney’s refusal to release returns for the years prior to 2010 was a sign of his “arrogance.” ...

    It’s only fair to assume that Mitt is doing what he always does: acting on the basis of a careful cost-benefit analysis. Will’s comments on this were spot on: “The cost of not releasing the returns are clear,” he said. “Therefore, [Romney] must have calculated that there are higher costs in releasing them.” But what information could the earlier tax returns contain that would be so damaging if it were brought out into the open? Obviously, we are entering the realm of speculation, but Romney has invited it. Here are four possibilities...

  • Washington Post: A challenge to conservatives. By E.J. Dionne, Jr. Excerpts: Occupy Wall Street, whatever its future, will always merit praise for placing inequality at the center of our politics. The biggest sign of the Occupiers’ success: Conservatives once stubbornly insisted that inequality wasn’t a problem because the United States was the land of opportunity and upward mobility. Now they are facing the fact that we are by no means the most socially mobile country in the world.

    Reports from the Organization for Economic Cooperation and Development and others show that social mobility is greater elsewhere, notably in Denmark, Australia, Norway, Finland, Canada, Sweden and Germany.

    What do these countries have in common? Not to put too fine a point on it, all have national policies that are, in right-wing parlance, more “socialist” or (to be precise) social democratic than ours. They guarantee their citizens health insurance. They have stronger union movements and more generous welfare states. They tend to keep higher education more affordable. In most cases, especially Germany’s, they have robust apprenticeship and job training programs. They levy higher taxes.

    The lesson from this list is not that cutting back government, gutting unions and reducing taxes on the rich will re-create an America of opportunity. On the contrary, we need more active and thoughtful government policies to become again the nation we claim to be. ...

    Actually, liberals are not for “soaking the rich,” unless you consider the Clinton-era tax rates some kind of socialist bath. And as the experience of the more social democratic countries shows, a modest amount of “economic redistribution” — to offset the radical redistribution toward the very rich of recent decades — can begin the process of restoring the kind of mobility we once bragged about.

    My challenge to conservatives worried about inequality is to follow the logic of their concern to what may be some uncomfortable conclusions, especially in an election year.

  • Mother Jones: Mitt Romney's Bain Capital Timeline. By Tim Murphy. Excerpt: Since his first run for office in 1994, Mitt Romney has been dogged by charges that the private equity firm he founded profited from outsourcing and shuttered companies. But over the last two weeks, new documents emerged to call into question the GOP presidential candidate's narrative about his time at the company. At issue are two primary questions: Was Mitt Romney responsible for decisions made by Bain Capital between 1999 and 2002? And did the company's behavior in those years—building huge profits by squeezing companies dry—reflect Romney's broader mission at Bain? The answer to the first question depends on your definition of the term "managing director"; the answer to the second question is a subject of fierce debate.

    Here, as best as we can figure, is Romney's timeline at Bain...

  • Washington Post: Mitt Romney attracts big donations from financial industry, including Goldman Sachs and Bain. Posted by T.W. Farna. Excerpts: Mitt Romney’s history in the financial industry is clearly an asset for his campaign when it comes to fundraising.

    A new disclosure filing released Sunday night shows that the Republican presidential candidate’s biggest sources of cash in recent months have been top financial firms. Employees of Goldman Sachs Group alone have given $902,000 to Romney Victory, which is a joint fundraising vehicle for Romney and the Republican Party. ...

    Employees of Elliott Asset Management, the hedge fund company run by Romney supporter Paul Singer, gave $818,000. People who listed themselves as self-employed investors gave more than $2 million over the three-month period from April through June.

    The report shows that Romney Victory brought in a total of $140 million during the past three months. ...

    The Romney Victory fund is set up to send money to Romney’s campaign, the Republican National Committee and a handful of state parties around the country. Many financial industry professionals in effect can’t contribute to state parties because their firms would then be banned from managing lucrative financial deals with the states under SEC rules. That means their donations will go to the National Republican Senatorial Committee and the National Republican Congressional Committee instead.

  • Huffington Post: Time For a Maximum Wage. By Carl Gibson. Excerpts: During a February 1934 radio address, when unemployment and economic inequality were both rampant, Louisiana US Senator Huey Long said,
    We do not propose to say that there shall be no rich men. We do not ask to divide the wealth. We only propose that, when one man gets more than he and his children and his children's children can spend or use in their lifetimes, then we shall say that such person has his share.

    There is no state in the union where someone working a minimum-wage job for 40 hours a week, or $15,080 a year, can afford a two-bedroom apartment at fair market value.

    At the opposite end of the financial spectrum, Mitt Romney made $15,080 every 6 hours in 2010, a year in which he grossed more than $21 million in income. It would take a minimum wage worker 1,436 years and 10 months to make what Mitt Romney made in 2010.

    If that hasn't sunk in yet, I'll say it differently. To make as much as Mitt Romney made in one year, a minimum wage worker working 40 hours a week for $7.25 an hour would have to start work during the Liang Dynasty and work all the way to the present day. Assuming an average life expectancy of 65 years, since minimum wage workers can't get the same nutrition and health care that everyone else can, that's 22 entire lifetimes of nonstop minimum wage work, from infancy to death, just to make what one man made in one year.

    Guys as rich as Mitt Romney make money for having money. He doesn't simply work for a living, but rather acquires wealth from investments already made with previously accumulated wealth. While a minimum wage worker pays a third of his or her income in sales, property, payroll and excise taxes, Mitt Romney pays just a 13.9% tax rate on more than half of his income, because it comes from capital gains, instead of good old-fashioned hard work.

  • The Nation: How Mitt Romney's Father Would Have Left Bain Capital. By Lee Fang. When one Romney considered leaving his successful business for public service, he made sure to relinquish pay, set up a new management team and officially step down as CEO. He left no gray area in terms of his corporate responsibilities overlapping other duties, as he told the press, because doing so would violate his principles. That was former Michigan Governor George Romney.

    Archived news articles from the early sixties reveal a businessman and politician with a very different approach from that of his son Mitt, who now finds himself in an avoidable scandal over when he actually left his company, Bain Capital.

    Mitt’s departure from Bain Capital was far less transparent. When Mitt Romney joined the Olympics organizing committee on February 11, 1999, did he take an official leave of absence with “no involvement in the management or investment activities” at Bain Capital, the private equity and investment firm he founded, or was he a “part-timer with Bain, providing input on investment and key personnel decisions,” as Boston media and a raft of documents filed with the Securities and Exchange Commission seem to suggest? ...

    The Obama campaign is quick to point out that Romney has taken credit for job gains by Bain companies from 1999 to 2002, yet has claimed that the outsourcing of jobs and the bankrupting of a steel mill company during those years can not be attributed to him given his supposed lack of involvement with the firm.

    The spiraling controversy leaves much to ponder. Why didn’t Romney simply appoint an interim Bain CEO or officially demote himself during his leave of absence in Salt Lake City? If he cut off all involvement with Bain to run the Winter games, as Romney said on Friday in an interview with CNN, why did Romney spend the following years signing documents as the chief executive, while collecting over $100,000 in salary from his old firm?

  • Washington Post opinion: Romney’s problem of his own making. By Eugene Robinson. Excerpts: Mitt Romney has every right to cloak his personal and professional finances in secrecy — and voters have every right to assume he has something embarrassing to hide. If this seems unfair, Romney has only himself to blame. ...

    On the Sunday morning talk shows, even Republicans urged Romney to release more tax returns while wondering what secrets he’s trying to keep. And the campaign’s latest attempt to explain how and when Romney left Bain Capital — he’s supposed to have “retired retroactively” at some unspecified date — became an instant punch line. ...

    The only reason anyone cares when Romney left Bain Capital, the private equity firm he founded and ran, is because Romney made a totally unreasonable claim: When Democrats pointed to outsourcing and job cuts at companies Bain owned or controlled, Romney denied any responsibility since these unfortunate developments took place after he left to run the Winter Olympics in 1999.

    This was an absurd position to take. Romney has boasted of his prowess at creating jobs by pointing to successful companies in which Bain invested, such as Staples, the office-supply chain that went on to expand and hire tens of thousands of employees. But much of this growth took place after 1999. Romney was trying to take credit for post-departure successes but not for failures.

    On such shaky ground, Romney planted his flag. He then tried to insist on another ridiculous proposition, which is that he left Bain suddenly and completely in 1999. This cannot possibly be true. Romney was Bain Capital — chairman, chief executive and sole stockholder. There is no way he could have disentangled himself from the firm so abruptly. ...

    If you look at Romney’s signature on those documents and listen to what he’s been saying on the campaign trail, you have to conclude that either he lied to the SEC or he’s lying to voters now. Romney’s defenders have had to fall back to the position that the SEC doesn’t really expect companies to file accurate information. So, all you corporate compliance officers, take the day off!

  • National Review: Romney on Tax Returns: ‘I’m Simply Not Enthusiastic about Giving Them Hundreds or Thousands of More Pages to Pick Through, Distort, and Lie About’. By Robert Costa. Excerpt: My tax returns that have already been released number into the hundreds of pages. And we will be releasing tax returns for the most current year as soon as those are prepared. They will also number in the hundreds of pages. In the political environment that exists today, the opposition research of the Obama campaign is looking for anything they can use to distract from the failure of the president to reignite our economy. And I’m simply not enthusiastic about giving them hundreds or thousands of more pages to pick through, distort, and lie about.
  • National Review editorial: Release the Returns. Excerpt: We doubt that there is anything truly surprising in Romney’s additional personal tax returns (he’s already released 2010 and will release more from 2011). We already know that he has made vast amounts of money, that he gives generously to his church and to charities, that he has set up trusts for his family, that he maintains bank accounts and investments overseas, and that he takes advantages of such benefits as are available to him under our ridiculously complex tax code. If there is scandal to be had of that, it can be had from the information that already is available. But there is no scandal in that: Romney is a wealthy man — and he has complicated personal finances, something that is typical of wealthy men. In fact, Romney’s personal finances are a very good case study in what’s wrong with the American tax system and regulatory climate.

    The Romney campaign says he has released as many returns as candidate John Kerry did in 2004, and cites Teresa Heinz Kerry’s refusal to release any of her tax returns. Neither is an apt comparison. John Kerry actually released returns from 1999 through 2003, and also released tax returns during his Senate runs. As for Teresa Heinz, Romney isn’t the wealthy spouse of a candidate, but the candidate himself. In 2008, John McCain released two years of returns, but he had been filling out financial disclosure forms for decades as a senator. Romney protests that he is not legally obliged to release any tax returns. Of course not. He is no longer in the realm of the private sector, though, where he can comply with the letter of the law with the Securities and Exchange Commission and leave it at that. Perceptions matter.

  • Financial Times: Rivals clash on US corporate tax reform. By Alan Beattie. Excerpts: In the fierce political debate over offshoring, taxes and American jobs, one conclusion commands broad consensus: the current US corporate tax regime looks like the work of a malign foreign agent trying to weaken America from within.

    The tax code rewards American companies for holding profits abroad, while high marginal rates – albeit shot through with loopholes – discourage foreign companies from investing in the US. ...

    Opinion polls suggest most Americans seem to think businesses investing overseas are traitors rather than ambassadors, and it is not hard to see why. Ted Alden of the Council on Foreign Relations think-tank noted recently that in the 1990s, US-based multinational companies created 4.4m jobs in the US and 2.7m jobs in overseas affiliates.

    But in the 2000s, he wrote: “Those same companies went on adding another 2.6m jobs abroad, but eliminated 2.9m jobs in the United States. The world’s gain became our loss.” Mr Alden adds that Mr Obama’s proposal would probably make this even worse by giving multinationals an incentive to reorganise themselves to escape the new burden. ...

    Prof Desai says: “It’s easy to believe that the world is a zero-sum game, but the evidence doesn’t support that.” Other countries – notably the UK, Canada and Japan – have recently moved towards a territorial tax system without seeing a disastrous loss of revenue from offshorers, he says.

    But he adds that the US needs complementary reforms, such as restricting the abuse of “transfer pricing” rules which allow multinationals to report profits in tax havens rather than where they were actually generated.

  • New York Times editorial: Not All Investors Are Equal. Excerpts: In the Facebook fiasco in May, brokerage firms that sold Facebook’s initial shares apparently warned large investors about doubts from analysts regarding the company’s prospects. Many ordinary investors who were not warned sustained considerable losses. The Securities and Exchange Commission is investigating the disclosures.

    But what if it turns out that the selective release of views of analysts is more the rule on Wall Street than the exception?

    Gretchen Morgenson reported in The Times this week that a handful of top hedge funds appear to be taking an early peek at views from research analysts, allowing them to trade on the information while other investors are still in the dark. The tips come from surveys that the hedge funds send to research analysts, either monthly or quarterly, asking about possible earnings surprises or the competitive position, management or innovations of companies. ...

    Still, what if big investors systematically receive early word of important company developments?

    The answer, in brief, is that there are already more than enough reasons that individuals shun the stock market. Serial booms and busts of the last 15 years have cast justifiable doubt on the conventional wisdom of buy-and-hold investing. Serial scandals — insider trading, Ponzi schemes, the flash crash of 2010 — have also eroded trust. At the same time, the S.E.C. and other investor protection agencies must fight for every penny from Congressional Republicans who are hostile to the very notion of regulation. Politicians of both parties, in thrall to financial-industry campaign contributors, have supported legislation to erode investor safeguards.

    The result will be a less robust market, a less robust economy and a less wealthy society, as individuals are unable to mass the sums needed for retirement. But until the stock markets are restored to health — with rules and protections that are clearly understood and enforced — individual investors have reason to be wary.

  • Washington Post: With or without tax return release, pressure on Romney ramps up from both sides. By Felicia Sonmez and Philip Rucker. Excerpt: The political pressure on Mitt Romney to release more of his personal income tax returns is causing some divisions inside the GOP presidential candidate’s camp, according to a Republican strategist close to the campaign.

    Late Tuesday, after the interview with Romney, the editors of the National Review wrote an editorial arguing that the only question for Romney is “whether he releases more returns now, or later — after playing more defense on the issue and sustaining more hits.”

    The editorial adds to a growing chorus of Romney allies urging him to make the additional information public. In response to a reporter’s question at the State Capitol in Austin, Texas Gov. Rick Perry (R) also urged his former White House rival to be “as transparent as you can be,” although he appeared to stop short of calling on Romney to disclose more information.

  • Politico: Ron Paul to Mitt Romney: Release tax returns. By M.J. Lee. Excerpt: Texas Rep. Ron Paul said Tuesday that Mitt Romney should release more of his tax returns, adding to the pressure on the GOP nominee to share personal financial information with the public. “Politically, I think that would help him,” the Republican congressman and former presidential candidate said in an interview with POLITICO. “In the scheme of things politically, you know, it looks like releasing tax returns is what the people want.”
  • New York Times editorial: Permanent Tax Holiday. Excerpts: A common election-season complaint is that candidates spend too much time attacking each other and too little discussing issues. That was not the case this week on the question of how to tax American multinational corporations on their foreign earnings.

    President Obama raised the issue at a town-hall meeting in Ohio, discussing his proposals for tax credits for manufacturers in the United States to encourage the creation of new jobs. He said this was greatly preferable to Mitt Romney’s support for a so-called territorial tax system, in which the overseas profits of American corporations would escape United States taxation altogether.

    It’s not surprising that large multinational corporations strongly support a territorial tax system, which, they say, would make them more competitive with foreign rivals. What they don’t say, and what Mr. Obama stressed, is that eliminating federal taxes on foreign profits would create a powerful incentive for companies to shift even more jobs and investment overseas — the opposite of what the economy needs.

    Mr. Romney’s response essentially consisted of a non sequitur. His campaign accused Mr. Obama of “crony capitalism” that uses government resources to reward campaign donors. Republicans pointed out that members of the President’s Council on Jobs and Competitiveness had supported a territorial tax system, which is true, but they failed to note that the council members who endorsed the idea are corporate executives whose multinational firms would benefit from the lower taxes.

  • The Fiscal Times: Bank Scandals: Why Bankers Cheat and Break Rules. By Yuval Rosenberg. Excerpts: Money, of course, is a powerful motivator for bankers’ bad behavior – nearly a third of those surveyed said they felt pressure because of their bonus or pay plans to break the law or act unethically. Financial incentives may go a long way toward explaining the London Whale's bungled bet on credit derivatives or why Barclays traders asked others at the bank to report artificially high or low interest rate numbers. But can it really explain the lapses at HSBC?

    n anti-money laundering director who was leaving the bank's Mexican affiliate noted a culture of "pursuing profits and targets at all costs." And the report says that, "in anticipation of revenues of $75,000 to $100,000 per year," U.S. bank personnel "disregarded troubling evidence of possible links to terrorist financing" and opened accounts for two Bangladeshi banks. In other cases, information was stripped from 25,000 of transactions worth more than $19 billion involving Iran – but the motivation may have been to avoid triggering any additional reviews of the transactions that could have caused delays or problems.

    Yet a memo from a banker at HSBC Middle East noted the business benefits of keeping the transactions flowing: “It is anticipated that Iran will become a source of increasing income for the group going forward and if we are to achieve this goal we must adopt a positive stance when encountering difficulties," the executive wrote, suggesting "that by working together we can overcome them using means which are perfectly legitimate and in accordance with rules laid down by the relevant regulatory bodies.”

    But perhaps the pursuit of money and the constant quest for growth don't entirely explain all the scandals. As University of Chicago business school professor Luigi Zingales, the co-creater of an index measuring financial trust, writes at Bloomberg View, there may be a broader problem underlying the unscrupulous banking behavior: “We are dealing with a drop in ethical standards throughout the business world, and our graduate schools are partly to blame.”

    His piece, titled “Do Business Schools Incubate Criminals?,” argues that universities encourage amorality by the way they teach ethics to MBA students: “The way to teach these ethics is not to set up a separate class in which a typically low-ranking professor preaches to students who would rather be somewhere else. This approach, common at business schools, serves only to perpetuate the idea that ethics are only for those students who aren’t smart enough to avoid getting caught.”

  • The Fiscal Times: Tax Reform: Companies Balk at Closing Loopholes. By Merrill Goozner. Excerpts: House Ways and Means Committee chairman Dave Camp, R-Mich., chose a curious set of messengers to explain how the U.S.’s highest-in-the-world corporate tax rate is retarding investment and job creation in the manufacturing sector.

    First up at a hearing Thursday was Diane Dossin, chief tax office for Ford Motor Co. Ford is the only domestic manufacturer that didn’t require a bailout by the federal government. Last year it posted a robust $8.7 billion profit on $136.3 billion in sales as the automotive industry continued its remarkable rebound from a near-death experience in early 2009.

    “A low rate is the single most important thing” the federal government could do to improve the business climate, she told the committee. But when pressed by Rep. Charles Rangel, D-N.Y., to name which corporate tax breaks her company would eliminate in order to lower the overall rate without reducing revenue to the federal government, she demurred. In her prepared testimony, she lauded the research and development tax credit, accelerated depreciation and the special tax break for domestic manufacturing Congress passed in 2004. ...

    Ford’s most recent Securities and Exchange Commission filing reveals the extent to which one company can benefit from the current code. The company paid no income taxes last year at either the federal or state level despite nearly $9 billion in earnings. In fact, it enhanced its balance sheet by an additional $11.5 billion from previous losses that gave the company an effective tax rate of negative 141 percent. ...

    The taxman’s take doesn’t improve if one looks back three years, all of them profitable for Ford. The company paid a grand total of $592 million in federal and state taxes on $18.4 billion in pre-tax earnings, which is an effective rate of 3.2 percent. That is well below the 39.2 percent tax rate highlighted by Camp in his opening statement (a 35 percent federal rate plus a blended state rate of 4.2 percent). ...

    Corning Inc. from upstate New York was the final big company to testify. Vice president Susan Ford echoed her colleagues’ claim that “a substantial reduction in the statutory tax rate is critical . . . A significant rate cut accompanied by a review of existing, often inefficient, tax benefits is in order.”

    She also remained silent when the panel was pressed by Rangel to name which inefficient tax breaks to eliminate. Corning paid an effective tax rate of 12.7 percent last year after earning $3.2 billion on $7.9 billion in sales. Its tax rate in 2010 was 7.5 percent on $3.8 billion in profits. And in 2009, the company paid no taxes at all on $1.9 billion in earnings and even carried forward $74 million in unused tax credits.

  • Washington Post opinion: The Postal Service is struggling, but not because of the mail. By Fredric Rolando, President of the National Association of Letter Carriers. Excerpts: Would it startle you to learn that the U.S. Postal Service netted an impressive profit in the first quarter of this fiscal year? Probably so, given all that has been said about an agency supposedly bleeding billions of dollars as Americans abandon paper mail for the ease of the Internet.

    Yet it’s true: Revenue from selling stamps and other products exceeded the costs of delivering mail by $200 million, the Postal Service’s chief financial officer reported in February. Much has been written about the Postal Service, an institution embedded in our Constitution and actually older than the country. It touches the lives of all Americans, and for six straight years it was named the public’s most trusted federal agency, according to the Ponemon Institute. Yet conventional wisdom about the Postal Service is strikingly misleading. I’d like to provide some context that’s rarely heard. ...

    There is indeed red ink, but the reasons are unrelated to the mail. In 2006 Congress required that, within the next decade, the Postal Service pre-fund future retiree health benefits for the next 75 years — a burden no other agency or company faces. That accounts for 85 percent of all of the agency’s red ink since — and more than 90 percent of the $6.46 billion shortfall from the first half of fiscal 2012. Before pre-funding began in 2007, the Postal Service had annual profits in the low billions. It’s this unaffordable payment that the Postal Service is “simply not capable of making” next month, a spokesman said this week. ...

    Pre-funding isn’t just bankrupting the Postal Service; it’s also forcing the agency into a panic mode that absorbs energy and resources in a desperate effort to find about $5.5 billion every September for this unique burden. Inexplicably, instead of focusing on how to best meet today’s challenges so Americans can continue to enjoy the world’s best delivery service, Congress has made its top postal priority the funding of benefits for retired workers nearly a century out.

    If lawmakers address their part of the problem, the Postal Service could do what it has done for 200 years: develop a forward-looking business plan that adapts to society’s evolving needs, just as it did when the telephone, telegraph and fax machine came along. Each time the agency emerged stronger. Dismantling the network and degrading service isn’t a business plan.

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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