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6, 2000 April, 2000

Highlights—September 22, 2012

  • Yahoo! IBM Pension and Retirement Issues message board: "Ellen Schultz on lump sums" by "fhawontcutit". Full excerpt: Pages 49-50 of her book "Retirement Heist":
    Another benefit of lump sums -- from employers' perspective--is that they shift longevity risk to retirees. Employers have been acutely aware that life spans are increasing, which explains why companies with a large percentage of women and white-collar professionals have been eager to provide lump sums.* If the pension is based on a life expectancy of seventy-eight, then an engineer who lives to age ninety will have drawn a pension for roughly twelve years longer than the amount the lump sum will have been based on.

    Footnotes as bottom of page:

    • Employers began using unisex mortality tables in the 1980s, which has been disadvantageous for women taking lump sums rather than annuities.
    • In recent years, some employers have argued that their workers are actually dying younger; this would enable employers to contribute less to their pension plans. Lawmakers bought it: The Pension Protection Act of 2006 allows large companies to use their own mortality assumptions when they figure out how much money to contribute to pension plans. Lower life spans mean lower contributions.
  • Yahoo! IBM Pension and Retirement Issues message board: "You have got to watch these!!!" by Kathi Cooper. Excerpts: Thanks Hermie for directing us to the YouTube presentations on "Re-Imaging Pensions". The snippets were posted on YouTube by the Pension Rights Center (Karen F.).

    I encourage everyone to watch ALL of these snippets on YouTube. It is eye opening and should be mandatory viewing in my opinion.

    To get you started, here is a piece from Coventry & Burling (NOT OUR FRIENDS) discussing hybrid Cash Balance Plans. http://www.youtube.com/watch?v=nlkEYACKEFc&feature=relmfu

    Just watch on the left of your screen to select more snippets posted by the PRC. Thanks Karen!!!! Kathi.

  • Yahoo! IBM Employee Issues message board: "IBM Xcel Energy account: outsourced, offshored and terminated" by Lee Conrad. Full excerpt: Like many new IBM employees that have come into the company from acquisitions, Xcel Energy employees have found that they can be callously replaced by offshore workers.

    Xcel Energy is the sole provider of gas and electricity in the Denver Metro region, Minneapolis, MN, Amarillo, TX and a few other cities. The health of the business is excellent. New buildings are going up in Denver and Minneapolis. Xcel Energy outsourced its IT, application support, infrastructure and database jobs to IBM in 1995. The workers on the IBM Xcel Energy account, like all acquisitions, didn't join IBM voluntarily, but because they are proud of their work gave it a chance.

    Unfortunately this seems to be a one way street for the workers.

    Xcel Energy wants to cut their maintenance costs drastically and IBM agreed. Of course they way they are going to do this is by firing the workers here and offshoring the work to India. It is rumored that 100 out of 145 jobs will be cut from 3 sites. Many of these workers have been with Xcel for 15 to 25 years. The workers are being kept in the dark and are told not to talk with each other about the job losses and offshoring.

    Customers are concerned that the loss of these workers and the offshoring of the jobs will result in a decline of expertise. IBM Xcel Energy account workers know it is just about the money and greed.

    At this moment the workers are not getting any promises from Xcel Energy. IBM is promising to find new positions for these workers but long time IBM employees know these "promises" need to be in writing, not verbal. IBM is also reviewing their severance eligibility.

    IBM Xcel Energy account workers have told the Alliance that it is morally reprehensible to give away good paying, high skill jobs to India. Workers say the termination of US jobs ripples through communities, negatively impacting the economy. These workers have also told us that many of them could lose everything if they are not able to secure employment.

    For those that have been following the Alliance campaign at IBM you know we have seen this before.

    But for how long do we repeat it?

    IBM needs to do the right thing and keep these workers employed.

    We also encourage supporters to contact your congressional representative and tell them what IBM and Xcel are doing.

    Let us do all we can to protect and keep jobs here in the US.

    Stop Offshoring Now!

    More news and information at www.allianceibm.org

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM Xcel Energy account: outsourced, offshored and terminated" by "divaberyl". Excerpt: This breaks my heart because I was involved with the Delivery side of the original PSCo deal as a 1st line manager in 1995 and then with the two merger deals as a 2nd line manager in 2001-2005. The Xcel teams in all locations were the smartest, hardest working and loyal employees -- EVER. From a national security perspective, it made no sense to outsource ANY of the IT jobs but they were primarily application development positions in 1995-2005.

    Are they completely gutting ADM or have they started in on the Delivery teams? Beryl.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM Xcel Energy account: outsourced, offshored and terminated" by Paul Sutera. Full excerpt: Victim mentality? I would say the tens-of-thousands of IBMers who lost jobs in the USA and other 1st world countries are victims. And the ones who didn't get laid off are victims too. I'm sure very few of these people are crippled by self-pity, if that's what you mean by victim mentality.

    If all this offshoring were such a good thing, why is the world economy doing so poorly compared to many prior decades? Costs are not just measured in salary, they are measured in revenues, and IBM is losing to competition. Oracle is eating our lunch precisely because of the bean-counting mentality of IBM management. Exadata - never saw it coming. Now we're playing catchup.

    Oracle bought Sun, it also bought PeopleSoft, it's got itself staked out in so many different niches. Precisely because it didn't run to the cheapest labor. Didn't hurt to have a CEO, Larry Ellison who is a techie instead of an MBA...or a history major. What big account will IBM lose next while it bean-counts its way to disaster.

  • Forbes: Death of Zombie Pensions Will Be Worse Than 2008 Meltdown. By Edward Siedle. Excerpts: Forensic investigations of failed pension investments are far less dramatic but nevertheless similar to the popular television show, CSI Miami. There is a dead body in the room and the question we look to answer is whether it died from natural causes or was there foul-play involved? Did certain parties cause or contribute to the demise of the individual? ...

    It may surprise you to learn that Wall Street has wasted precious little time publicly defending itself after the 2008 market meltdown and taxpayer bailout. Everyone knows the nauseating truth that Wall Street pulled a fast one on the American public and there is no point, i.e., no money to be made by Wall Street, trying to soothe critics, such as the Occupy Wall Street crowd. Instead, Wall Street is busier than ever making even bigger grabs at the few pockets of American wealth still left – pensions, endowments, foundations and high net worth individuals.

    Wall Street no longer has any interest in Main Street—the vampires have drained the blood from America’s middle class and are moving on.

    The “garbage du jour” is high-cost, high-risk, illiquid and opaque alternative investments, such as structured notes, hedge funds, hedge fund of funds, and private equity funds. These investments are designed to lock-in investor monies for, say, a decade, charge exponentially greater fees than traditional investments, provide substantial wiggle-room regarding interim investment performance/portfolio valuation, and delay accountability for years—until it’s too late. ...

    We are in a far more unforgiving financial environment than in decades and pensions are heaping on risk. What’s the likely outcome? The odds are, these desperate gambles will fail and many of America’s few remaining pensions, now on life-support, will finally die.

  • Glassdoor IBM reviews. Selected reviews follow:
    • Rapidly offshoring all IT skills” Current Advisory Software Engineer in Austin, TX. Pros: Great brand name recognized worldwide. Cons: You will not get an IT job at IBM unless you are right out of college or happen to live in India or China. IBM does not hire experienced IT people in the USA. Advice to Senior Management: Everyone knows that you have already moved 80% of the headcount offshore and are hoping for another 10%.
    • Big blue brand equity is good for a short while” Current Employee. Pros: Great opportunities and great experience. 2nd highest brand equity in the world opens doors. Cons: Depends on roles; if you find an industry you like and you can network through the bureaucratic political promotion process you can thrive, great experience but SAP consulting was for me. Advice to Senior Management: Amazing how inefficient we are in working using technology and tools like its 1990 still
    • Highly Disappointed and Amazed at Level of Employee Turnover” Former Employee in New York, NY. Pros: They do offer a fairly good matching program for 401K plan. Cons: IBM is an American icon technology company that repositioned itself-for survival-as a software, services and outsource company. The cost for this "repositioning" has been high in the way of a brain drain of competent mgrs., sales executives, customer service and general culture. It is the most overrated hi-tech company in the industry that happens to have 12,000 finance employees. There is growth, but only through cutting expenses, not by top-line revenues. They manage their business by spreadsheets while they've acquired best of breed enterprise planning software and consolidation tools. Middle level mgmt is horrendous and constantly changing. Compensation is pitiful for revenue producing individuals. Advice to Senior Management: Switched on Marketing campaigns don't make a company; employees, culture and loyalty do.
      • Comment by European colleague: Very well said...employees, culture and loyalty do. What's left of those these days? When I hear about the smarter this-and-that initiative I think...hey, you should look in the mirror and start "smarter" acting inside first...so much hypocrisy!!!
    • 28 years - last 5 tough” Current Employee in Philadelphia, PA. Pros: Great benefits. Best 401k match. Cons: Too many execs with opinions; too many business controls; overpricing engagements - price to deliver, not to win; 2015 plan has cut out people with institutional knowledge in their industry or area, with the ultimate goal of lining upper executive pockets. Advice to Senior Management: Go back to caring about the customer.
    • Process after process...serious lack of common sense” Current Employee in London, London, England (United Kingdom). Pros: People...skills, experience...strength of the brand, breadth of products.


      • complicated processes to do simple things
      • weak managers who hide behind tick in the box spreadsheets
      • staff graded a score of 1 to 4 by subjective management every year, this affects bonus pay out
      • expense policy does not include broadband for home workers
      • expense policy is tedious and far too strict, normal travel to IBM offices needs pre-approval
      • levels and levels of executive management, not clear who does what
      • no budget for any social activity, and very little focus on social's during or after company time
      • poor communication throughout company, overload of email, official announcements often get lost because of this
      • first line managers are text book managers, completed courses, but lack people skills, and are running dysfunctional teams
      • first line managers are performing little motivational support, or HR type support, they are purely focused on transactional activities, and not the interests of their subordinates
      • redundancy programs are run in very tight timescales, and HR seem out of touch with legal guidelines and ensuring people are notified and communicated to properly.
      • employees do not have a dedicated HR person they can turn to if they need support or guidance
      • first line managers are not up to speed with HR guidelines
      • very control driven culture, does not invite feedback, and if feedback is given, company is very very slow to react, and put any changes in place
      • often things have to be extremely bad over a pro-longed period of time, before issues are acknowledged, symptoms of issues are brushed over
      • changes to processes are poorly announced, enablement and roll out is very sub-standard. staff are given short online group sessions, there is no class room based face to face training
      • morale is generally very low, and people do not speak up in case they will be put on personal improvement plans, which is often used as a device to teach you a lesson
      • pay rises are extremely rare, there is no annual inflation adjustment either
      • commission pay out are subjective, rather then automatically paid out

      Advice to Senior Management:

      • read the cons I have listed and start to address this immediately, rather then ignoring issues and focusing on shareholder value
      • reduce the number of senior, executive managers, there are layers and layers of managers, who do very little other then report spreadsheet data back.
      • encourage openness and forums for employees to discuss what processes can be improved, removed, what hinders there performance and ability to do their job
      • there needs to be more team building events throughout the year which bring groups of people who work together, in the same environment to improve relationships
      • managers who provide no support or demotivate staff with abuse of power need to be exposed. managers who are protecting their bad management by applying unnecessary pressure need to be removed.
      • some of the senior execs are really out of touch with what happens in the sales cycle, and there is nothing being done to find out why deals were lost, and to address that

      Comment by Current IBMer (US): Unfortunately this is a very accurate, and thorough, review. It is unfortunately that it has degraded to this point. (And one worries how much further it can go, before the whole thing implodes). The quest for shareholder value is on an unsustainable path. Unfortunately the high level execs will punch out well before they finish running the company into the ground.

    • Good training, not a job for long term” Former Employee in Boston, MA. Pros: Good training ground for new graduates. Especially in consulting, a chance to learn a lot by working with many clients. Cons: You get locked in into one area of specialization and industry; difficult to then work with clients in other industries if you want to. Opaque career level ("band") structure and salary levels associated with them . No manager ever showed what is the salary range for a band; you have to guess or figure out from colleagues what is possible. Very slow and opaque promotion process. Low salaries compared to similar companies; good benefits though. Grueling schedule for consultants, driven by utilization requirements that sometimes were 100%. A lot of things sound good on paper (benefits, mentorship programs) but they are not realized after that.
    • Employees are nothing but small creatures” Former IT Specialist. Pros: The only good thing is the health benefit. Cons: Management has their own favorites...co-workers do not share information even though the company supposedly a proponent of team work. No raise or bonus (except for the upper management). Advice to Senior Management: Value and respect and share with your employees.
    • Never in the history of the world has a company been doing so well yet MORALE and Culture is so BAD”. Current Employee in New York, NY. Pros: Great work from home and ability to move around. Cons: Terrible morale, working employees to death to meet their Roadkill 2015 target. The truth is they will meet it by selling off all the properties they acquired when times were good, however in the process their SW/HW and Services group will crumble due to the lack of people, over worked and under paid. Clients are jumping ship and it can be seen as their revenue remains flat. However profit is booming. That means SQUEEEEEZE. Enjoy IBM while you can, work it, get experience then jump ship and go somewhere that will respect and pay you accordingly. Advice to Senior Management: Wake up. Every quarter you act like a fool and push those people is another quarter you will loose those people. Good luck trying to get revenue without any sales people. Think strategically on long term sales goals and large play to grow business.. Squeezing every dollar will leave you up the creek without a paddle
      • Comment by European colleague: So true and it is strange that this comes up more and more often in different parts of the world, the only exception seems to be Asia where the business is currently moving towards (though they will be the next round a couple of years from now). US and Europe seem to be going down the drain. I wonder how the company wants to build things up and reach real results without having people. Does anyone high up have an idea about what talent, knowledge and experience they are wasting? Do they really think that you can provide expertise by few weeks of training alone? It will cost an awful lot in the long run.
    • Great people, friendly environment” Former Software Developer in Vancouver, BC (Canada). Pros: - you can learn a lot of new technologies and software solutions; - people are very friendly and helpful; - there are bunch of online programming courses available for free. Cons: - you are required to pass a lot of useless online courses ones you get hired which is just waste of time; - some equipment are pretty old and should be thrown away many years ago. Advice to Senior Management: Just be a little bit more sociable. People, sometimes, need to hear from you guys.
    • Proud to be an IBM'er” Current Sales Manager in Raleigh, NC. Pros: Access to resources and technology. World class technical capabilities. Ability to reinvent itself. Ability to chase and define new markets. Respect of others. Cons: Bureaucracy at its finest. Slow to make decision. Processes for the sake of processes. Advice to Senior Management: Stop with the non performance based layoffs. Stop with layoffs period. There is a great lack of trust and commitment to the corporation because of how these are implemented.
    • Development team manager, in charge of software and hardware development” Current Employee in Tel Aviv (Israel). Pros: Good conditions, compensation and benefits. Cons: Too much red tape, no real career development opportunities.
    • IBM is the best place to work if you're a geek” Current Employee in Seattle, WA. Pros: Lots of autonomy. Bring your own device. Amazing culture and opportunities to learn. Supportive management and fair treatment. Competitive pay and decent benefits. Cons: Only 3 weeks of vacation to start. Benefits could be better, they are average. A decent amount of big company bureaucracy. You have to use Lotus Notes. Advice to Senior Management: There are two things that IBM could do to improve in my opinion. 1) provide a more open environment that did not force everyone to use Lotus Notes...it is reviled among many in the organization (except those that have never used another tool for email)...this does not have to mean Outlook (which is worse), just allow people to use whatever POP3/IMAP email client they want to use, and 2) improve the perks just a little bit versus competing high tech companies...some sites don't even have free coffee any more, let alone free soda or food, maybe provide a little better vacation package for US employees (4 weeks instead of 3) and slightly more coverage on health care.
    • Good career company OK Management” Former IT Specialist in Atlanta, GA. Pros: Good benefits, good life balance. If you are in the "right place" great working conditions. Cons: Upper management not in touch with low level employees. If you are in the wrong location—short career with IBM. Advice to Senior Management: Give more attention to the product output (or service) and less on the bottom line - make employees feel safe.
    • IBM As a Company” Current Team Leader in Greater Noida (India). Pros: IBM gives better growth opportunities, brand name and scope of learning to its employees. People looking for stability should go for this company. Cons: IBM is not a pay master and does not offer very good salary packages. HR department is only for management there is no interaction of HR with employees. Advice to Senior Management: IBM should start offering better salary packages. People who are loyal to the company should get good appreciation and company should allow its employees to interact with HR department. There should be regular skips which will help the company to improve.
    • Great Internship for GBS” Former Employee. Pros: - Co-workers were very helpful and intelligent; - A lot of opportunities to learn and contribute more; - Great reputation. Cons: Difficult to move around in the company without having first putting in work. Advice to Senior Management: Lose the Band system and go with titles
    • Not fair to loyal employees” Current Employee. Pros: Flexibility, make you proud, ethical. Cons: Not fair payer to loyal performers, weak H.R. function, low investment in employees, very low salary growth if any. Advice to Senior Management: Retain good talents, invest more to maintain growth.
    • Horizontal mobility but little vertical mobility” Former Employee in Austin, TX. Pros: Lots of variety. Some really sharp people. Exposure across technology industry. Well-recognized and respected name. Cons: Pay is on the low side. Tons of bureaucracy. Too many conference calls, especially in marketing. Too much tracking and scrutiny in sales. Advice to Senior Management: Take care of some of the very talented, young people coming into the company and really develop them. Too many people who have been kicking around there for 20-30 years playing their political cards right and taking up leadership spots that should go to more talented people.
    • Satisfied, but could be better.” Current Employee in Atlanta, GA. Pros: Breadth and depth of technologies used to serve customers and opportunities that exist within, in diverse fields of IT. Cons: Lack of knowledgeable mid level management, often leading to misinformed decisions regarding projects or resources. Advice to Senior Management: Sr. Management -- There is more to employee satisfaction than mere numbers and targets. Outsourcing could be working to meet the bottom line, is leading to loss of best and bright employees who worked for long periods.
    • Terrible company for career advancements” Current Consultant in Washington, DC. Pros: They have a pretty good benefits package. Cons: No real room for career growth. They will pay new hires more than an employee who has worked there for a few years. Senior leadership only cares about making their numbers each quarter. You have to pay out of pocket for happy hours. Advice to Senior Management: Give back to your employees instead of being so greedy.
    • If you're good, they'll notice” Current Software Engineer in Haifa (Israel). Pros: - Lots of opportunities; - Great managers that really listen to us in both professional and personal matters; - Salary is above average; - If you are good, they are taking the time and money to show their appreciation; - Pay raise meeting with manager once a year on specific month. Cons: - Lots of processes are taking a very long time because of the never-ending bureaucracy; - All the security guidelines are very strict, and actually decreases the laptop performance in about 15%.
  • Alliance for Retired Americans: Friday Alert. This week's articles include:
    • Paul Ryan is Booed at AARP Conference
    • Thinking He’s not on Camera, Romney Offends Seniors
    • Pennsylvania Supreme Court Orders Lower Court to Reconsider Voter ID Law
    • Letter from Senators to Other Senators Opposes Social Security Cuts
    • Alliance Events around the Country: Missouri, Florida, Wisconsin
    • Colorado Alliance Holds its Convention
    • Weekend Rally with Rep. Berkley in Nevada
  • New York Times editorial: The Road to Retirement. Excerpts: Even before the Great Recession, Americans were not saving enough, if anything, for retirement, and policy experts were warning of a looming catastrophe. The economic downturn and its consequences — including losses in jobs, income, investments and home equity — have made that bad situation much worse. ...

    The crux of the problem is that as traditional pensions have disappeared from the private sector, replacement plans have proved woefully inadequate. Fewer than half of the nation’s private sector workers have 401(k) plans, and more than a third of households have no retirement coverage during their work lives, according to the Center for Retirement Research at Boston College. ...

    Working longer can help to rebuild savings, and, more important, allow one to delay taking Social Security, which improves the ultimate payout. As a practical matter, however, keeping a job is no sure thing. Workers ages 55 to 64 have been less likely than younger ones to lose their jobs in recent years; their jobless rate has averaged 6.1 percent in the past year, compared with 7.3 percent for workers ages 25 to 54. But when older workers become unemployed, they are much more likely to be out of work for long periods and less likely to find new jobs, while those who do become re-employed usually take a big pay cut. ...

    More saving is clearly needed, along with ways to protect retirement savings from devastating downturns. The question is how. In addition to strengthening and preserving Social Security, the nation needs new forms of retirement coverage, along the lines of the “Automatic Individual Retirement Accounts” that President Obama has proposed in recent budgets, which would require companies that did not offer retirement plans to automatically divert 3 percent of an employee’s pay into an I.R.A., unless the employee opted out. A similar plan was recently proposed by Senator Tom Harkin, Democrat of Iowa.

  • Money Observer (United Kingdom): Employees encouraged to leave a final salary pension scheme must think it over carefully. By Colin Richardson. Excerpt: Employees encouraged to transfer out of a final salary pension scheme could end up out of pocket despite a new pension industry code of conduct to protect them. In recent years companies across the UK have closed their final salary schemes to new members as the cost of funding them has rocketed on the back of increasing life expectancy and lower expected long-term investment growth. Many employers have also tried to further reduce their liabilities by tempting the existing members out of these final salary schemes and into alternative personal pension schemes.
  • ZD-Net: Outsourcing exec urges: 'Stop outsourcing your software development'. By By Peter Vaihansky. Excerpts: Do not outsource your software development. Yes, you read that right. I work for a software development outsourcing firm, and I am telling you not to outsource.

    But why not? Everyone's doing it, and everyone can't be mistaken, right? The common perception is that outsourcing saves money based on labor arbitrage. There may be other factors, but mainly companies do it in order to get more software, probably faster, for less money.

    However, the economics of outsourcing are far less straightforward than the labor rates comparison suggests. There really is no such thing as "labor arbitrage" in software development. Unlike copper or wheat, all developers are not created equal, so you are not exactly trading commodities. Furthermore, outsourcing is definitely not without risk, as discussed below. So the concept of arbitrage doesn't apply, and with it goes the whole proposition. ...

    And no, documentation won't completely remedy this: you can't really document everything about a system up front, and any written text is always subject to multiple interpretations. Plus, the market changes so quickly that, by the time your documentation is complete, it's typically obsolete and new requirements are driving a different system. Software development deals with tacit knowledge and emergent understanding. Again, hard enough in-house and even more challenging with an outsourcing supplier (think cultural differences, accents, communication barriers, etc.).

  • CNET: Help wanted: $183K plus. Tool gives lowdown on tech salaries Hoping to land customers, Silicon Valley money-management startup Wealthfront is empowering workers with rich salary data. By Paul Sloan. Excerpts: Anyone who works in tech is going to like this. Wealthfront, an online financial adviser based in Palo Alto, Calif., today rolled out an interactive tool (see below) that let's you see what tech jobs pay among private firms across the country.

    You'll learn, for instance, that software architects make more than managers -- a mean of $183,000 a year plus equity compared with $163,000 plus stock -- and that cash compensation across all tech companies is $112,000. Another curious finding: Despite the huge demand for engineers in Silicon Valley, jobs in the northeast pay more, presumably because companies are competing with Wall Street firms for talent.

New on the Alliance@IBM Site
  • Job Cut Reports
    • Comment 09/14/12: I heard 2nd hand that some RA's may be occurring soon. Per the rumor, at least one of them was in RTP. Not sure of the quality of this information. Anyone else hear anything? -new voting member-
    • Comment 09/15/12: Heard through a very credible source that IBM Dubuque is not going to be there too much longer. Hope you have your resume in tip top shape. -reckless-
    • Comment 09/17/12: Hear the same re: Dubuque. Storage team and TSM recently offshored. Lots of PMs left. -DubuqueRumblings-
    • Comment 09/18/12: To -reckless-: Does this mean the entire site will be shutdown, or just parts of the operation? Do you have a timeframe for this to occur? -Dun-4-
    • Comment 09/19/12: What's the reasoning behind the potential abandonment of Dubuque? Can't staff it with skill? Site costs too much? Honeymoon is over and Iowa is jacking up the tax rate on IBM? -anonymous-
    • Comment 09/20/12: Rumor has it France has announced the same thing the UK did a couple of years ago - where employees that are retirement -eligible, are given 2 options: (1) retire now with your existing pension plan OR (2) stay at IBM and go on the new retirement plan - losing significant retirement $s. Anyone know if this is true? It sounds like a cheap way to cut older, higher-paid employees. -Worried-
    • Comment 09/23/12: I would imagine they would just leave the site all together. They have already moved lots to Columbia, MO. Like VMware support, server builds. They only signed a 5 year lease in Dubuque with an option for 5 more. The option for 5 more has not been signed as of yet and the site has lost money every year. Doubt they stick around to lose more money. -reckless-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Washington Post: Romney health plans would affect seniors’ care, studies find. By Sarah Kliff. Excerpts: It has been a central campaign promise from Mitt Romney: His Medicare overhaul plan would not touch benefits for anyone older than 55.

    That may not, however, be the case with the Republican presidential nominee’s other health-care proposals. A growing body of research suggests that his plans to repeal the Affordable Care Act and cut Medicaid funding would have a direct impact on the health care that seniors receive.

    Repealing the health law would mean higher Medicare premiums, the Kaiser Family Foundation found in a recent analysis. Wellness visits and prescription drugs also would cost more. Although under the current law, reductions in doctor payments could create an access issue. ...

    Health and Human Services estimates that Medicare beneficiaries paid $94 less out-of-pocket for hospital and doctor coverage this year than they would have without the health-care law. That number will rise to $572 in 2021 as the Medicare cuts grow larger. ...

    Repealing the health law also would have an impact on Medicare’s “doughnut hole,” the gap between Medicare’s regular and catastrophic drug coverage, in which seniors are responsible for footing the bill. The average senior who falls into this space spends $604 on prescription drugs.

    The health-care law changes that: It gradually eliminates the doughnut hole over the course of a decade. This saved seniors who fell in the doughnut hole an average of $643, according to Health and Human Services analysis.

  • Wall Street Journal MarketWatch: Health insurers hike rates, ignore government. By Jen Wieczner. Excerpts: To keep prices in check, the health reform law instituted a procedure known as rate review, by which state insurance departments evaluate carriers’ proposed premium hikes of 10% or more to determine whether they are justified. But even when they deem the proposed increases excessive or unreasonable, insurance commissioners can’t always stop companies from putting them into effect.

    While the reviews spared consumers $1 billion in rate hikes, the Department of Health and Human Services announced Tuesday, insurance commissioners and advocates say they would have saved consumers much more if government authorities in all 50 states could prevent insurers from going ahead with unjustified increases.

    “At the end of the day, the companies can tell us to pound sand,” says Dave Jones, the insurance commissioner in California, one of 13 states where the rate reviews are not binding. “It’s very frustrating. Frankly, our hands are tied behind our back.” ...

    When commissioner Jones found Aetna’s small-employer rate hikes unreasonable in April, the health insurance company ignored the ruling, raising those plans’ annual premiums by an average of 8%, and increasing some as much as 21%. “I have no authority to actually enforce a reasonable rate here,” Jones says. “At the end of the day, the health insurers and HMOs have the ability to set the rates wherever they see fit.”

  • AARP: 11 Myths About Health Care Reform. The hype about the law, including its impact on Medicare, is confusing — and scary. Here’s the truth. By Beth Howard. Excerpts: “The amount of misinformation about the Affordable Care Act [ACA] — including outright lies — is astonishing,” says Shana Alex Lavarreda, Ph.D., director of health insurance studies at the UCLA Center for Health Policy Research. “The point of the law is to make the health system better for each person, for less cost to society overall.”

    But myths about the ACA abound. Some of the most persistent:

    • MYTH 1: The new law cuts Medicare drastically, so I won't be able to get quality health care. ...
    • MYTH 2: I've heard that Medicare Advantage plans will be cut or taken away. ...
    • MYTH 3: I'll have to wait longer to see my doctor — or I won't be able to see my doctor at all. ...
    • MYTH 4: If I have Medicare, I will need to get more or different insurance. ...
    • MYTH 5: The new law "raids Medicare of $716 billion." ...
    • MYTH 6: The law is going to bankrupt America. ...
    • MYTH 7: The new law will drive up premiums astronomically. ...
    • MYTH 8: If I can't afford to buy health insurance, I'll be taxed — or worse. ...
    • MYTH 9: I'm a small-business owner and I'll pay big fines if I don't provide health insurance to my employees. ...
    • MYTH 10: The ACA basically turns our health care system into universal health care. So now some government bureaucrat will decide how and when I get treated. ...
    • MYTH 11: If my state doesn't set up an insurance exchange, I can't get health coverage.
  • Orlando Sentinel: As hospitals take over doctors' practices, fees rise. By Marni Jameson. Excerpts: Hospitals throughout Florida are taking over doctors' practices at a rapid — and some say worrisome — rate. The trend, happening across the country, allows hospitals to charge more and doctors to worry less about their financial futures. Meanwhile, patients and others who foot the bill for health care lose, say some health-policy analysts. ...

    Today 40 percent of primary-care physicians nationwide are hospital employees, more than double the number employed by hospitals in 2000, according to Southwind, a Nashville, Tenn.-based consulting group that analyzes health-care trends. In 2000, only one in 20 specialists was a hospital employee; today nearly one in four is. Buying physician practices is a boon to hospitals because it helps them secure more patients and profits. Once employed, physicians admit their patients to the hospital they work for and also funnel patients there for tests and procedures. ...

    "Doctors watch hospitals get higher payment rates, and they want in on that," said Dr. Robert Berenson, an analyst at the Urban Institute's Health Policy Center, a Washington think tank. "They find it attractive to work on high salary with productivity incentives, and get out from under the headaches of managing a practice." ...

    "It doesn't matter what political party you belong to," said Dawn Lipthrott, a Winter Park family therapist and patient advocate. "If we're going to talk seriously about health-care reform, lowering health-care costs and Medicare viability, this is what we should be talking about. "Unbeknownst to everybody, these consolidations are doubling the cost of health care." ...

    When hospitals employ doctors, they can layer in a "facility fee," which adds cost to a patient's visit without adding value, experts say. It's a practice few consumers are aware of. "Patients don't even know, quite honestly, and they aren't going to notice," said Cynthia Peterson, vice president of the Broward County Medical Association. ...

    In its March report to Congress, Medcap, a government agency that analyzes Medicare policy, found that the cost for a basic doctor visit nearly doubled once a practice was purchased. Last year, a 15-minute visit to a doctor in private practice cost $69, including the $14 patient co-pay, the report said. That same visit to a hospital-employed physician cost $124. The patient portion rose to $25. At that rate, Medicare spending for doctors visits alone would increase by $2 billion a year, the Medcap report said.

  • Center for Public Integrity: Hospitals grab at least $1 billion in extra fees for emergency room visits. By Joe Eaton. Excerpt: Judging by their bills, it would appear that elderly patients treated in the emergency room at Baylor Medical Center in Irving, Texas, are among the sickest in the country — far sicker than patients at most other hospitals.

    In 2008, the hospital billed Medicare for the two most expensive levels of care for eight of every 10 patients it treated and released from its emergency room — almost twice the national average, according to a Center for Public Integrity analysis. Among those claims, 64 percent of the total were for the most expensive level of care.

    But the charges may have more to do with billing practices than sicker patients. A Baylor representative conceded hospital billing for emergency room care “did not align with industry trends,” but said that the hospital since 2009 has reined in its charges.

    The Texas hospital’s billing pattern is far from unique. Between 2001 and 2008, hospitals across the country dramatically increased their Medicare billing for emergency room care, adding more than $1 billion to the cost of the program to taxpayers, a Center investigation has found. The fees are based on a system of billing codes — so-called evaluation and management codes — that makes higher payments for treatments that require more time and resources.

    Use of the top two most expensive codes for emergency room care nationwide nearly doubled, from 25 percent to 45 percent of all claims, during the time period examined. In many cases, these claims were not for treating patients with life-threatening injuries. Instead, the claims the Center analyzed included only patients who were sent home from the emergency room without being admitted to the hospital. Often, they were treated for seemingly minor injuries and complaints.

    While taxpayers footed most of the bill, the charges also hit elderly patients in the pocketbook, increasing the amount of their 20-percent co-payments for emergency room care.

  • USA Today: Medicare recipients save $4.5 billion on prescriptions. By Kelly Kennedy. Excerpts: Medicare beneficiaries have saved a total of about $4.5 billion on prescription medications because of the 2010 health care law since January 2011, the Department of Health and Human Services plans to announce today. ...

    Drugmakers participating in Medicare agreed to give the government a 50% discount on premium drugs and 14% on generic drugs as part of the law, and the government passed those savings on to seniors. In 2012, the coverage gap - or "doughnut hole" - is $2,930. The law eliminates that gap by 2020. So far, no research has shown that the drugmakers have passed costs from those discounts on to other consumers, as some opponents of the law had feared.

    Compared to last year, more patients have saved more money this year, Blum said. Through August 2012, beneficiaries have saved an average of $641.

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.

  • Talking Points Memo (TPM): Tax Cuts For The Rich Do Not Spur Economic Growth: Study. By Sahil Kapur. Excerpts: There is no clear correlation between tax cuts for high earners and economic growth, according to a new study by Congress’ nonpartisan policy analyst.

    “There is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth,” concluded a report by the Congressional Research Service released Friday. “Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth.” ...

    The study delves into the last 65 years of U.S. tax policy pertaining to high earning Americans — including top marginal rates on income and capital gains taxes — and how it impacts their decision-making. The conclusion: cutting effective taxes on the rich doesn’t boost economic growth, but it does correlate with rising income inequality.

  • Wall Street Journal: Romney's Tax Plan Fails to Gain a Foothold. Conservatives Worry GOP Nominee is Losing Messaging Battle to Obama on an Issue They Say Should Favor Republicans. By John D. Mckinnon. Excerpts: Mitt Romney, who has proposed new cuts to individual and corporate taxes, has lost his recent lead over President Barack Obama on the question of which presidential candidate would best handle taxation, a reversal that turns up in several polls and presents a worrisome trend for the GOP nominee.

    Republicans who favor tax cuts as a way to boost the economy, and who believe the issue should be a political winner for the GOP, are wondering why Mr. Romney hasn't gained traction with his tax-cut plan. Some say he simply isn't promoting it well or arguing forcefully that it would bring economic benefits. ...

    Some conservatives suggest the Romney campaign hasn't done enough to convince voters that his plan would boost economic growth. "I think there's an educational effort that needs to be made with the public," said Douglas Holtz-Eakin, a former economic adviser to GOP Sen. John McCain's 2008 campaign. "I don't think sufficient effort has been made on that front" by the Romney campaign.

  • The New Yorker: Mitt’s Forty-Seven-Per-Cent Problem Posted. By Amy Davidson. Excerpts: “My job is not to worry about those people,” Mitt Romney said. “I’ll never convince them they should take personal responsibility and care for their lives.” He was talking about forty-seven per cent of the American population. Romney’s views were conveyed in a private fundraiser that was held at the home of Marc Leder, in Boca Raton, according to Mother Jones, which obtained and authenticated a video of the event (parts had been on YouTube for a while, but their provenance was uncertain). Romney confirmed that the video was real—and stood by much of what he said, though he thought that he could have done so more “elegantly.” “By the way, whoever has released the snippets would, I would certainly appreciate if they’d release the whole tape so we could see all of it,” Romney said. We can all agree on that: there was more this morning, in which he dismissed a two-state solution in Israel and, pretty much entirely, the Palestinians. So far, though, the least of the problems with what Romney said is that he seems to be utterly delusional. ...
    There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what.

    That forty-seven per cent does a lot of work, especially since the root idea—that that number of Americans don’t pay federal income taxes—is deployed so often as a distortion. The majority of them pay other federal taxes, like payroll taxes, which are highly regressive, or pay state taxes, or are retirees—many of whom will be voting for Romney. The perfect concentricity of the income-tax-paying and the Republican-voting circles does not bear scrutiny. But the pliability of that number also says a great deal about Romney’s world view—the transitive property of wealth—and will make it hard for him to say (though he tried) that he was only talking about his lack of concern for votes, not for lives. That forty-seven per cent of Americans, by virtue of their tax treatment, “believe that they are victims”; think they are entitled “to you name it”; and are not even persuadable on the question of voting for anyone with the tax policies Romney offers: they are thinking not about growth or their country but their little check. What they are entitled to, in Romney’s view, is only contempt.

    And how can they stop being poor? Simply and only by taking “personal responsibility.” And this connects with something else Romney related in the video: the story of his own wealth.

    I have inherited nothing. There is a perception, “Oh, we were born with a silver spoon, he never had to earn anything and so forth.” Frankly, I was born with a silver spoon, which is the greatest gift you can have: which is to get born in America.

    Romney was the son of a governor and an auto executive who gave him a wealth of connections, a private education, college tuition, a stock portfolio that he lived on while in graduate school, help buying a first house. That he recognizes the value of none of these things is both dismaying and discouraging for anyone who thinks that he will be able to do much to actually encourage opportunity in America. He is clear enough about one difference money can make in life, when he tells those present, “Frankly, what I need you to do is to raise millions of dollars,” and talks about how many foreign customers his campaign consultants have had. But Romney did, in the video, talk about a disadvantage that he feels he has labored under: had his father “been born of Mexican parents, I’d have a better shot of winning this.”

  • New York Times op-ed: Thurston Howell Romney. By David Brooks. Excerpts: Romney, who criticizes President Obama for dividing the nation, divided the nation into two groups: the makers and the moochers. Forty-seven percent of the country, he said, are people “who are dependent upon government, who believe they are victims, who believe the government has a responsibility to take care of them, who believe they are entitled to health care, to food, to housing, to you name it.”

    This comment suggests a few things. First, it suggests that he really doesn’t know much about the country he inhabits. Who are these freeloaders? Is it the Iraq war veteran who goes to the V.A.? Is it the student getting a loan to go to college? Is it the retiree on Social Security or Medicare?

    It suggests that Romney doesn’t know much about the culture of America. Yes, the entitlement state has expanded, but America remains one of the hardest-working nations on earth. Americans work longer hours than just about anyone else. Americans believe in work more than almost any other people. Ninety-two percent say that hard work is the key to success, according to a 2009 Pew Research Survey. ...

    The people who receive the disproportionate share of government spending are not big-government lovers. They are Republicans. They are senior citizens. They are white men with high school degrees. As Bill Galston of the Brookings Institution has noted, the people who have benefited from the entitlements explosion are middle-class workers, more so than the dependent poor.

    Romney’s comments also reveal that he has lost any sense of the social compact. In 1987, during Ronald Reagan’s second term, 62 percent of Republicans believed that the government has a responsibility to help those who can’t help themselves. Now, according to the Pew Research Center, only 40 percent of Republicans believe that. ...

    The final thing the comment suggests is that Romney knows nothing about ambition and motivation. The formula he sketches is this: People who are forced to make it on their own have drive. People who receive benefits have dependency.

    But, of course, no middle-class parent acts as if this is true. Middle-class parents don’t deprive their children of benefits so they can learn to struggle on their own. They shower benefits on their children to give them more opportunities — so they can play travel sports, go on foreign trips and develop more skills.

  • Financial Times: How to cut the US deficit by fixing tax. By Laura Tyson. Excerpts: When the US economy is operating near capacity, total tax revenues – federal, state and local – are much smaller as a share of GDP than in other developed countries. And there is scant evidence that taxes as a share of GDP and economic growth are negatively correlated. Indeed, there is a small positive correlation between income per capita and tax revenue as a share of GDP. ...

    But tax reform should not come at the expense of progressivity. Income inequality is greater in the US than in the other developed countries of the OECD. The US tax system is considerably less progressive than it was a few decades ago and it does less to counteract pre-tax income inequality than other OECD systems.

    Widening inequality is reflected in opportunity gaps between children born into different income groups and a decline in intergenerational mobility: an American child’s future income is more dependent on his or her parents’ income than in most other OECD nations. Mr Obama’s plan counters these trends. The Romney-Ryan plan exacerbates them. ...

    Proponents of greater progressivity often call for an increase in corporate taxes but this would lead to slower growth and fewer jobs. The US has the highest statutory corporate tax rate in the developed world. Even after tax expenditures are included, its effective marginal corporate tax rate is one of the highest in the world. Business decisions about where to locate investments are responsive to differences in taxes and have become more sensitive over time. Of all taxes, corporate income taxes do the most harm to economic growth. ...

    A more efficient and progressive way to pay for a lower corporate tax rate would be to increase taxes on dividends and capital gains. This would shift more of the burden towards capital owners and away from labour, which bears the burden in the form of fewer jobs and lower wages. Mr Obama proposes to raise rates on capital gains and dividends for the top 2 per cent of taxpayers. Most capital gains and dividends go to this group. Mr Romney would leave these rates unchanged for this group.

  • New York Times opinion: Taxes Over The Life Cycle. By Paul Krugman. Excerpts: Mark Thoma has the best data post so far on the execrable Romney speech, linking to the Hamilton Project work on taxes. This work makes a crucial point: even aside from the fact that there are other taxes besides the income tax, even aside from the larger point that lower-income working Americans are hardly grifters, the fact is that the vast majority of Americans do pay income taxes at some point in their life...

    Thanks to the child tax credit and Earned Income Tax Credit, a fair number of working families with young children pay no income tax; thanks to the exemption on Social Security, many older Americans pay no income tax. But in middle age, close to 80 percent of the population pays income taxes, and even more, of course, pay federal taxes of some kind.

    So the notion that almost half of our citizens are grifters isn’t just vile; it’s also based on a complete misunderstanding of tax realities.

  • Financial Times: Take on Wall St titans if you want reform. By John Kay. Excerpts: When the global worldwide banking system went into meltdown in 2007-8, the short-term response – the appropriate one – was to use public money to prevent a sequence of collapses of financial institutions. But the right long-term response is not to try to stop future bank failures, but to construct a global financial and economic system that is robust to individual bank failures. That is a fundamentally different objective.

    It has proved difficult to find executives and management systems able to control the risk exposures of large financial conglomerates: even the halo above Jamie Dimon looks tarnished. To believe that the control these managers failed to establish will be achieved by the supervisory efforts of junior officials in public agencies is a delusion. Even if regulators had the technical competence, they do not have the political backing. Hotlines from bank boardrooms to ministerial offices are answered as promptly as ever.

  • The Economist: Living off handouts: it's not just the poor. By Buttonwood. Excerpt: The latest gaffe by Mitt Romney (not so much Romneygate, as Romney-gated community) brings up a related issue, of how modern states have tended to extend benefits to the better-off, partly because of lobbying and partly as a way of buying the support of the wealthy for the welfare state. All this is well illustrated in Suzanne Mettler's book "The Submerged State", which shows how these hidden subsidies can distort voters' view of the way that government policy works; a 2008 poll found that 57% of Americans denied ever using a government programme. But when shown a list of 21 actual programmes, including student loans and home-mortgage interest deduction, 94% of the deniers turned out to have benefited after all.
  • New York Times editorial: Mitt Romney, Class Warrior. Excerpts: It turns out that Mitt Romney was right. There is class warfare being waged in the 2012 campaign. It is Mr. Romney who is waging it, not President Obama, and he’s stood the whole idea on its head.

    When you think of class warfare, you probably think of inciting anger, resentment and jealousy among the have-nots against the haves. That’s what Mr. Romney has accused Mr. Obama of doing, but those charges have always been false. The truth is that Mr. Romney has been trying to incite the anger of a small slice of the richest Americans who need no government assistance but get it anyway, against the working poor, older Americans, the disabled workers and veterans, and even a significant chunk of middle-class Americans. ...

    To Mr. Romney, that 47 percent consists of people who do not make enough money to be required to pay federal income tax. They are freeloaders, he said, “who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it.” It is not his job, he said, as a candidate nor apparently as president if he is elected, “to worry about those people.”

    By his definition, those undeserving freeloaders include workers in low-paying, menial jobs (sometimes more than one job) who don’t even earn $9,750 a year, the amount at which they would start to owe federal income tax. Also included are older Americans whose Social Security pensions are too low to be taxed, disabled veterans and people who were maimed on the job.

    This group also includes some middle-income Americans who make, say, $50,000 a year but are not required to pay taxes after they take advantage of child credits, marriage penalty relief and other tax breaks, many of which are part of the Bush-era tax cuts that Mr. Romney backs with a blind ideological fervor.

    But, of course, Mr. Romney was not talking about the Americans who make so much money that they are able to avoid paying any tax at all or who, like him, are able to shelter their incomes in overseas banks or tax loopholes that permit them to pretend that ordinary income comes from investment and thus pay lower taxes. Mr. Romney has been paying, by his own account, about 13 percent to 15 percent of his enormous income in federal income taxes. Just compare that with your own tax return. ...

    The right wing has long been whining about people who don’t pay taxes and who, therefore, don’t deserve a say in government. They have it backward. The shame is not that those people don’t pay income taxes. The shame is how many poor people there are when the top 1 percent can amass uncountable fortunes fed by tax breaks and can donate tens of millions of dollars to political candidates to keep it that way.

  • IEEE Spectrum: NYSE Pays a Paltry $5 million Fine for Giving Private Customers a Trading Head Start. By Robert N. Charette. Excerpts: On Friday, the U.S. Securities and Exchange Commission (SEC) announced that it had administratively fined the New York Stock Exchange (NYSE) $5 million (pdf) for allowing its private customers access to stock market information ahead of when it was available to the general public. This occurred from June 2008 to about mid-May 2010. The fine amounts to about a morning’s worth of revenue for the exchange. ...

    However, during the period in question, the NYSE allowed customers of its proprietary feeds to receive information from milliseconds to sometimes several seconds ahead of the general public. An article in the LA Times quoted a trader as saying that allowing this to happen was akin to letting those NYSE customer to see “who won a horse race and being able to bet before everyone else.” ...

    Why did this happen? The SEC said that the NYSE’s internal system’s architecture (pdf) was designed in such a way that allowed its proprietary customers a faster path to the real-time market data than the public. ...

    A former SEC litigator is quoted in the Wall Street Journal saying that although the fine wasn’t large, it was “meant to send a message” to all the exchanges that they need to be fair and non-discriminatory in their business practices.

    If that was the intent, it’s likely to have the same effect as telling a teenager to clean up his or her room.

  • New York Times: Rising Tower Emerges as a Billionaires’ Haven. By Alexei Barrionuevo. Excerpts: One57, a 1,004-foot tower under construction in Midtown Manhattan, will soon hold the title of New York’s tallest building with residences. But without fanfare from its ultraprivate future residents, it is cementing a new title: the global billionaires’ club.

    The buyers of the nine full-floor apartments near the top that have sold so far — among them two duplexes under contract for more than $90 million each — are all billionaires, Gary Barnett, the president of the Extell Development Company, the building’s developer, said this week. The other seven apartments ranged in price from $45 million to $50 million. ...

    Since late last year, the “trophy” end of New York’s real estate market has been recording eye-popping sales that seem to have little basis in reality. The signed contract for the nearly-11,000-square-foot duplex on the 89th and 90th floors of One57 that sold for about $95 million topped the record sale in March of a penthouse at 15 Central Park West to a Russian billionaire’s daughter for $88 million. In June, Steve Wynn, the Las Vegas casino magnate, paid $70 million for a duplex penthouse apartment above the Ritz-Carlton.

  • Washington Post: Not everyone who needs help is a moocher. By Michelle Singletary. Excerpts: Well-off individuals frequently talk about the less fortunate with unbelievable disdain and without the self-realization that they, too, are often just a job loss away from needing help.

    Lose your job and you often lose your health insurance. Get sick without health insurance and you’re likely to understand what it is like to be impoverished.

    Romney was talking about nearly half of Americans who work and worry about earning enough to support their families, pay rent or the mortgage, save what they can to send their children to college or invest for their retirement. He was not just talking about the poor but also about middle-income Americans. He was talking about seniors who rely on Social Security. He was talking about the disabled who can’t work and need help. And, yes, he was talking about some folks who could do more for themselves but haven’t for a number of reasons. ...

    Big Mama, my grandmother, worked hard and made a decent living as a nursing assistant that allowed her to buy and pay off her home before she retired. She paid all her bills on time. However, she didn’t make enough money to afford health insurance for the five grandchildren she raised, including three with major medical issues. She received medical assistance from the state that covered the bills for my juvenile rheumatoid arthritis, a sister with asthma and a brother who had epilepsy.

    My grandmother never saw herself as a victim. She did not have an entitlement mentality. She was one of the most financially responsible people I’ve ever known. Mr. Romney, Big Mama was not a moocher.

  • Huffington Post: Mitt Romney's '47 Percent' Includes Real-Life Millionaires. By Mark Gongloff. Excerpts: In that crowd of wealthy donors at Marc Leder's Boca Raton sex palace that listened to Mitt Romney blast Americans who don't pay income taxes, there were probably a few people who didn't pay income taxes. ...

    The vast majority of what Romney calls the "47 percent," the percentage of Americans who don't pay federal income taxes --which is really 46 percent, but who's counting -- are working poor, retirees and the disabled, including disabled veterans, along with students and some people suffering long-term unemployment after the Great Recession. As Bonnie Kavoussi and others have pointed out, many in this group still pay federal payroll taxes, likely at a higher rate than Romney's own tax rate. ...

    According to the non-partisan Tax Policy Center, some 3,000 of the 76 million taxpayers that were expected to pay no federal income taxes in 2011 were members of Romney's cohort, making nearly $2.2 million per year, which puts them in the top 0.1 percent income bracket.

    Another 24,000 taxpayers expected to pay no income taxes last year were in the top 1 percent income bracket, according to the TPC, making between $532,613 and $2.2 million per year.

    How the heck does this happen? For one thing, as Kevin Roose at New York magazine points out, these wealthy earners benefit to an unusual degree -- as Mitt Romney himself does -- from tax breaks on investment.

    Capital gains on investments are taxed at 15 percent, much lower than the top income-tax rate. "Carried interest" income, which Romney and other private-equity executives enjoy, is taxed at the capital-gains rate. And many wealthy taxpayers take advantage of a feature that lets them recognize past investment losses to lower or eliminate their tax bills.

  • Washington Post: Does Romney dislike America? By E.J. Dionne Jr. Excerpts: What kind of nation are we if nearly half of us are lazy, self-indulgent moochers who will never be persuaded to mend our ways? “I’ll never convince them they should take personal responsibility and care for their lives,” Romney said, thus writing off a huge share of our citizenry.

    From his perch high atop the class structure, Romney offered an analysis of political motivations that even Marxists would regard as excessively materialistic. He speaks as if hardworking parents who seek government help to provide health care for their kids are irresponsible, that students who get government aid to attend community colleges are not trying to “care for their lives.” Has he never spoken with busboys and waitresses, hospital workers and janitors who make too little to pay income taxes but work their hearts out to “take personal responsibility”? ...

    And Romney said not a word about all the redistribution upward in a tax code that favors investment over labor income. That’s why Romney pays federal taxes at a much lower rate than do many in middle class — and why, given his stress on the importance of paying income taxes, he might usefully release a few more of his own tax returns. ...

    But here’s the most important point Romney got wrong: Among the wealthy nations, it’s difficult to find one where people work harder than the United States. In a 2005 New Yorker article (written before the downturn), James Surowiecki noted that, compared with Europeans, “more people work in America, and since they work so many more hours, Americans create more wealth.” Yes, the riches enjoyed by the folks at that Boca Raton fundraiser were made possible in significant part by the strenuous efforts of proud, self-sufficient people, including many in the 47 percent.

  • Washington Post: Romney’s theory of the “taker class,” and why it matters. Excerpts: In other words, Romney is arguing that about 47 percent of the country is a “taker class” that pays little or nothing into the federal government but wants to tax the productive classes for free health care, food, housing, etc.

    Romney is not alone in this concern. “We’re dismayed at the injustice that nearly half of all Americans don’t even pay any income tax,” Texas Gov. Rick Perry said when he began his presidential campaign. “We’re coming close to a tipping point in America where we might have a net majority of takers versus makers in society,” Rep. Paul Ryan said at the Heritage Foundation. “People who pay nothing can easily forget the idea that there is no such thing as a free lunch,” warned Rep. Michelle Bachmann.

    For what it’s worth, this division of “makers” and “takers” isn’t true. Among the Americans who paid no federal income taxes in 2011, 61 percent paid payroll taxes — which means they have jobs and, when you account for both sides of the payroll tax, they paid 15.3 percent of their income in taxes, which is higher than the 13.9 percent that Romney paid. Another 22 percent were elderly.

    So 83 percent of those not paying federal income taxes are either working and paying payroll taxes or they’re elderly and Romney is promising to protect their benefits because they’ve earned them. The remainder, by and large, aren’t paying federal income or payroll taxes because they’re unemployed. But that’s a small fraction of the country. ...

    Part of the reason so many Americans don’t pay federal income taxes is that Republicans have passed a series of very large tax cuts that wiped out the income-tax liability for many Americans. That’s why, when you look at graphs of the percent of Americans who don’t pay income taxes, you see huge jumps after Ronald Reagan’s 1986 tax reform and George W. Bush’s 2001 and 2003 tax cuts. So whenever you hear that half of Americans don’t pay federal income taxes, remember: Ronald Reagan and George W. Bush helped build that. (You also see a jump after the financial crisis begins in 2008, but we can expect that to be mostly temporary.)

  • Investment News: Pawlenty now feeding at Wall Street 'trough' he once bashed. Former Presidential candidate taking over as CEO of financial services lobbying group. Excerpts: Tim Pawlenty, the former Republican governor of Minnesota who criticized Wall Street while running for president last year, is joining the Financial Services Roundtable as president and chief executive officer. ...

    In a Bloomberg Television interview last year before he ended his presidential run and joined Romney’s campaign, Pawlenty said his “truth message to Wall Street is going to be, ‘Get your snout out of the trough’.” He was viewed as a potential Romney running mate before the former Massachusetts governor selected Representative Paul Ryan of Wisconsin. ...

    Pawlenty, who campaigned as a “Sam’s Club Republican” concerned with issues affecting the middle class, will represent the interests of the large financial firms across a broad range of business, from insurance giants such as State Farm Insurance Cos. and money managers including BlackRock Inc. to payment networks like Visa Inc.

  • Washington Post editorial: Romney’s class warfare. By Eugene Robinson. Excerpts: Now, at least, there can be no doubt about who is waging class warfare in this presidential campaign. Mitt Romney would pit the winners against the “victims,” the smug-and-rich against the down-on-their-luck, the wealthy tax avoiders against those too poor to owe income tax. He sees nearly half of all Americans as chumps who sit around waiting for a handout.

    When Romney disclosed those views at a $50,000-a-plate fundraiser in Boca Raton, Fla., this year, he and his audience had no idea they were being surreptitiously recorded. Romney obviously believed he was among friends who shared his worldview, which I would translate as: “We must stop coddling the servants.” ...

    To all the single parents holding down two minimum-wage jobs to make ends meet, all the seniors who saw their savings dwindle and had to go back to work part time, all the breadwinners who lost their jobs when private-equity firms swooped down to slash and burn — to all struggling Americans, it must come as a surprise to learn how irresponsible they’ve been. And it must be devastating to learn that, try as he might, Mitt Romney will never be able to show these unfortunates the error of their ways. ...

    In an elegant dining room where the self-satisfaction was thick enough to cut with a knife, Romney made clear that he sees this election as “us” vs. “them” — wealthy Republicans vs. the unwashed hordes, makers vs. takers. Romney believes half of America is lazy, dependent and, frankly, not too bright.

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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