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6, 2000 April, 2000

Highlights—March 23, 2013

  • CNBC: IBM Ex-CEO's Perks: $1 Million for Office, Cars. By Eamon Javers. Excerpts: Samuel Palmisano retired in December as the chairman of IBM, but that's not stopping the company from paying more than $1 million to set him up with a new office and company cars.

    In an IBM proxy statement dated March 11, the company said it spent $1,033,138 for "personal use of Company autos, retirement items, office payments and administrative support, including space renovation" for the former CEO.

    Office space renovation? Yep.

    Turns out, IBM treats former executives extremely well. Company spokesman Edward Barbini said the funds were spent to "establish an office for a former CEO off of the IBM campus." He would not say where the office is located or why it cost about a million dollars to staff and renovate. "I have nothing further to say on it," Barbini said. ...

    "Does it make any sense at all? Are you kidding me? It's an outrage. Its horrifying," said Nell Minow, a long time CEO compensation expert and board member at the analysis firm GMI Ratings. "If anybody can pay for his own office space, it's the former CEO of IBM." Minow pointed out that shareholders will see very little result from that expenditure. "What is the return on investment for that? It's nothing."

    An IBM spokesman also confirmed another perk for Palmisano: A $20,000 per day consulting gig with the company. Here's how the deal is described in the company's proxy statement:

    "After Mr. Palmisano's retirement, he may be asked, from time to time, to provide services to the Company as an independent contractor. The fee for such services would be $20,000 per day for each day he provides four or more hours of services and $10,000 per day for each day that he provides less than four hours. As of December 31, 2012, no consulting fees have been paid to Mr. Palmisano." ...

    How long will Palmisano, who began work for the company in the early 1970s, continue to have an IBM-financed office? Apparently, as long as he wants it. The proxy statement said, "IBM has agreed to provide furnished office space with administrative support for Mr. Palmisano's use after retirement, until such time that he notifies the Company that he no longer wishes to maintain the office." ...

    All told, the website Footnoted.com has estimated that the value of the former executive's total retirement package could be nearly $271 million.

  • Yahoo! IBM Employee Issues message board: "Re: Employees, here's where your raise and bonus money went!" by "pvsutera". Full excerpt: And it's not like he doesn't have a wing of his home that would be perfectly adequate. You see, he's hailed as some kind of royalty and needs a place to receive visitors bearing tribute. A place where he can further burnish his ego and even future speaking earnings with all the trappings, blessings, and funding of IBM. This was likely in his original contract or in a subsequent contract. IBM doesn't have a choice here, it's in *his* employee contract and IBM must honor it. That's why the workforces of the world ALL need to unionize and write their own contracts.
  • Yahoo! IBM Employee Issues message board: "Re: Employees, here's where your raise and bonus money went!" by "Lefty Mcgee". Full excerpt: It's good to be King!!! (Mel Brooks) Unfortunately, for the average schmo, there's a hundred roads to having no job or health benefits (false 3 PBCs, RAs, off shoring American jobs, etc). Yet, the King continues to reap the awards.
  • ProPublica: Cash, Cars and Contracts: IBM, HP and Oracle in the Crosshairs of Overseas Corruption Investigation. By Stephen Engelberg. Excerpts: In the buttoned-down world of government officials who oversee computer contracts, Poland’s Andrzej Machnacz cut a colorful figure. He enjoyed fine cigars and tooled around Warsaw on a motorcycle. Salesmen beat a path to his office, where the big-screen television was usually tuned to the fashion channel.

    "Andrzej liked to look at pretty girls," one frequent visitor recalled. "There always had to be cigars and good alcohol in his office, mainly well-aged whisky."

    Computer sales executives for local companies and global giants like IBM and Hewlett-Packard had good reason to cultivate Machnacz. As senior technology officer for Poland’s national police and, later, the nation’s Interior Ministry, he set the terms for hundreds of millions of dollars in technology contracts and decided which ones should be awarded without competitive bidding. ...

    Machnacz, prosecutors say, received more than a $1 million in cash and brand-name gifts in exchange for steering government contracts to the three American companies, as well as to a Polish company called Netline. According to prosecutors, the gifts included a BMW motorcycle, a Nissan SUV, a Harmon Kardon home theater, a Sony 50 inch television, 12 HP laptops, several iPads and a refrigerator.

    The bribing of overseas officials is barred under the U.S. Foreign Corrupt Practices Act, and as ProPublica has previously reported, the Justice Department and Securities and Exchange Commission have stepped up enforcement of that statute in recent years. It is unclear whether federal investigators in the U.S. have begun looking at the circumstances of the Polish technology contracts.

    IBM and Hewlett-Packard said in statements that they were cooperating with Polish authorities. Hewlett-Packard noted that "no current HP employees are suspects in this case," while IBM pointed out that "press reports” on the case referred to a "former IBM employee." The company said in its statement that it "believes in the highest ethical standards for its employees and is committed to the principles of business ethics and lawful conduct." ...

    IBM went some lengths to tout its successful collaboration with Machnacz, featuring a Polish project in a glossy 2009 brochure that spotlighted 16 innovative technology efforts around the world. The brochure included a glowing account of how IBM had worked with Machnacz to create a network of handheld computers that gave Poland’s police instant access to a vast array of data. With a few key strokes, cops could learn whether they were dealing with a stolen car or a wanted man, the brochure said.

    The portable computers "practically eliminates errors and incorrect information," the brochure quoted Machnacz as saying. Marcin Figiel, the IBM sales executive in Poland with whom Machnacz worked, proudly asserted that no other country in Europe had deployed such an advanced network. ...

    Hewlett-Packard and IBM have been investigated for bribery in government contracts in other countries. ...

    A year later, the S.E.C. sued IBM in federal court in Washington, D.C., alleging that the company had provided shopping bags full of cash, gifts and travel expenses to officials in South Korea and China to secure computer contracts. The S.E.C. contended that "despite its extensive international operations, IBM lacked sufficient internal controls designed to prevent or detect these violations of the F.C.P.A.," the anti-bribery law. ...

    The S.E.C. and IBM had agreed to settle the case for $10 million, but Richard Leon, the federal judge overseeing the S.E.C.’s action, recently refused to approve that deal. The case is still pending.

  • Yahoo! IBM Employee Issues message board: "Two PBC 3s - Retirement Eligible - 30+ Years with IBM - Second Choicer" by "dotsymccloskey". Full excerpt: I received my second PBC 3. I am retirement eligible with 30 years of service at IBM. My ex-manager gave me the minimized separation papers when he told me I was a 3, and I signed within 30 days.

    Then I get another set of separation papers mailed to my house that say "Retirement Bridge". No mention of TMP/COBRA in these papers. I sign them.

    Called the ESC, they transferred me to Fidelity to ask how to sign up for TMP/COBRA and they actually have no record of my retirement date from IBM. Although I have already set up my pension payments and order my gift from Michael C. Fina.

    I received 2 booklets from IBM. One is all about my pension the other is about is Medical.

    All I am worried about is the subsidized medical from IBM for 12 months under TMP/COBRA. Does IBM have to offer subsidized TMP/COBRA or are they doing this because they are such a great corporation?

    Anyone else in the same situation? Thanks, Dotsy

  • Yahoo! IBM Employee Issues message board: "Re: Two PBC 3s - Retirement Eligible - 30+ Years with IBM - Second Choicer" by "scan356". Full excerpt: The normal procedure is to contact the ESC a few weeks before retirement and have a retirement coordinator assigned to guide you through the process. The coordinator answers all your questions and enters all the options you choose for retirement payments and medical coverage options. My understanding is that the ESC is a service contracted from Fidelity by IBM. Anyone you speak to at ESC is a Fidelity employee.

    The terms and conditions of your separation from IBM are governed by document number USHR119. One year of TMP subsidy for COBRA medical coverage is a standard feature defined in USHR119. You should be eligible for this benefit unless there was some modification to the standard benefit package in your case. Legally IBM is not required to provide TMP subsidies and they may well revoke that benefit in the future.

  • Yahoo! IBM Employee Issues message board: "Annual Meeting of Stockholders April 30, 2013 Huntsville Alabama" by "choicer27yrs". Full excerpt: http://www.ibm.com/annualreport/2012/bin/assets/2013_ibm_proxy.pdf. Full excerpt: Annual Meeting of Stockholders on Tuesday, April 30, 2013 at 10 a.m., in the Von Braun Center, Huntsville, Alabama. It is about a 100 mile drive for me. I am thinking about going. Anyone else thinking about it?
  • Triangle Business Journal (RTP, North Carolina): Magazine: IBM mulling massive work-force reduction. Excerpts: IBM on Tuesday dismissed claims by one of its executives that Big Blue is considering a plan that would reduce the company’s full-time head count by 299,000 jobs – to 100,000 – by 2017.

    Tim Ringo, head of IBM’s consulting arm, IBM Human Capital Management, was quoted by Personnel Today as saying that IT giant could dismiss 75 percent of its global work force, then hire them back as contractors on an as-needed basis – a process known as crowd-sourcing.

    "There would be no buildings costs, no pensions and no health care costs, making huge savings,” the magazine quotes Ringo as saying.

    IBM spokesman Doug Shelton called Ringo's comments "ludicrous," saying that there are no plans to reduce IBM's head count by 75 percent and that, to Shelton's knowledge, no such plans are under consideration.

    "The employee was not speaking on behalf of the company," Shelton said. "In fact, his comments run counter to IBM’s history over the last eight years of investing in its people by expanding its work force. Since 2002, we actually have increased our head count by about 80,000 people worldwide."

  • New York Times: Looking for a Lesson in Google’s Perks. By James B. Stewart. Excerpts: Google’s various offices and campuses around the globe reflect the company’s overarching philosophy, which is nothing less than “to create the happiest, most productive workplace in the world,” according to a Google spokesman, Jordan Newman. But do its unorthodox workplaces and lavish perks yield the kind of creativity it prides itself on, and Yahoo obviously hopes to foster?

    Mr. Newman, 27, who joined Google straight from Yale, and Brian Welle, a “people analytics” manager who has a Ph.D. in industrial and organizational psychology from New York University, led me on a brisk and, at times, dizzying excursion through a labyrinth of play areas; cafes, coffee bars and open kitchens; sunny outdoor terraces with chaises; gourmet cafeterias that serve free breakfast, lunch and dinner; Broadway-theme conference rooms with velvet drapes; and conversation areas designed to look like vintage subway cars. ...

    Google lets many of its hundreds of software engineers, the core of its intellectual capital, design their own desks or work stations out of what resemble oversize Tinker Toys. Some have standing desks, a few even have attached treadmills so they can walk while working. Employees express themselves by scribbling on walls. The result looks a little chaotic, like some kind of high-tech refugee camp, but Google says that’s how the engineers like it. ...

    In keeping with a company built on information, this seeming spontaneity is anything but. Everything has been researched and is backed by data. In one of the open kitchen areas, Dr. Welle pointed to an array of free food, snacks, candy and beverages. “The healthy choices are front-loaded,” he said. “We’re not trying to be mom and dad. Coercion doesn’t work. The choices are there. But we care about our employees’ health, and our research shows that if people cognitively engage with food, they make better choices.”

    So the candy (M&Ms, plain and peanut; TCHO brand luxury chocolate bars, chewing gum, Life Savers) is in opaque ceramic jars that sport prominent nutritional labels. Healthier snacks (almonds, peanuts, dried kiwi and dried banana chips) are in transparent glass jars. In coolers, sodas are concealed behind translucent glass. A variety of waters and juices are immediately visible. “Our research shows that people consume 40 percent more water if that’s the first thing they see,” Dr. Welle said. (Note to Mayor Bloomberg: Perhaps New York City should hide supersize sodas rather than ban them.) ...

    Allison Mooney, 32, joined Google two years ago from the advertising giant Omnicom Group, and the difference is “night and day,” she said. “I came here from the New York agency model, where you work constantly, 24/7. You answer every e-mail, nights and weekends. Here, you don’t have to show you’re working, or act like you’re working. The culture here is to shut down on weekends. People have a life.”

    And the perks, she added, are “amazing.” In the course of our brief conversation, she mentioned subsidized massages (with massage rooms on nearly every floor); free once-a-week eyebrow shaping; free yoga and Pilates classes; a course she took called “Unwind: the art and science of stress management”; a course in advanced negotiation taught by a Wharton professor; a health consultation and follow-up with a personal health counselor; an author series and an appearance by the novelist Toni Morrison; and a live interview of Justin Bieber by Jimmy Fallon in the Google office.

  • Yahoo! IBM Pension and Retirement Issues message board: ""
  • Glassdoor IBM reviews. Selected reviews follow:
    • Great company but they are not competitive with pay” Former Software Sales in Phoenix, GA. Pros: Great products. Amazing support. Best teaming/collaboration tools. Cons: Very difficult to advance salary. Extremely high growth targets so 20% or less of sales team will make their sales quota. Seeming disregard for employee compensation and how that relates to overall work experience and retention. IBM thinks they can lose top talent and continue growing because they are IBM. We shall see. Advice to Senior Management: Get rid of the pork and do whatever is necessary to retain your top sellers.
    • Good to Learn, but not to EARN...” Current Hardware Engineer in Rochester, MN. Pros: Good people, hardworking and easy to work with. Usually interesting work, can build a decent resume which you'll need in a few years.

      Cons: More and more IBM employees are figuring outing being an "IBMer" stands for: "I'm Below Market." Most salaries seem to be 15-30% below market, (based on the many mid-career folks jumping ship, and peers at other companies.) The performance pay/bonus system is even worse compared to industry. Actually it couldn't get much worse unless you owed them money once a year because undisclosed "goals" weren't met. It's all about nickle and dime cost cutting, and spending a majority of company's cash flow on stock buybacks to boost earnings per share, benefiting execs and shareholders. (Note also few regular Joe IBMers get any stock or options either, also below market standards).

    • A looonnnnggg grind...” Current Peon in Sydney, NS (Canada). Pros: Some very good people to work with, and the opportunity to work on large client accounts utilising cutting edge technologies Cons: - plenty of deadwood, particularly in lower level management; - remuneration lower than market rates; - excessive levels of process; - staff treated like numbers; - too much sending work to lower cost centre areas overseas; - 'variable pay': 10% of your remuneration package that you will only see if a miracle occurs, bank on about 1-2%; - bring overseas workers to take Australians' jobs due to a supposed skill shortage. Advice to Senior Management: - Work a lot harder on engaging your employees and treating them like humans; - Cut the deadwood in L1 management and get some managers in who care a little about the staff rather than ridiculous KPIs; - Give up on moving work overseas as it doesn't work and decreases client satisfaction.
    • I would leave if I could” Current Technical Specialist in London, England (UK). Pros: Working from home. Working on different customer accounts. Cons: Inefficient, highly process-driven. Focus is on reducing costs above everything else. No pay rises ever. Low morale. No reward and recognition. PBC process forces you to compete against your colleagues instead of collaborating with them. Layers and layers of managers managing each other. Service delivery managers move jobs so often, you can't keep track of them. Share options only for senior managers. Advice to Senior Management: Replace the hated PBC process. Cost of living pay rises every year.
    • Soulless company” Former Technical Support Engineer in Costa Mesa, CA. Pros: Good to have it on your resume. Cons: - no culture; - no real career path; - you are only a number; - managers are very incompetent. Advice to Senior Management: I'm sorry for you. You live in fear.
    • IBM is about as good as it gets” Former Partner in Chicago, IL. Pros: Outstanding people - exceptional integrity. For people who have an opportunity to work for IBM, it remains one of the premier enterprises on the planet. Cons: I don't have any real cons. With all of the acquisitions in the past 10 years, more than half the workforce has been with IBM 5 or less years. The culture is not what it was, but I think this is probably true for most companies. Advice to Senior Management: Continue with the focus on growing profitability. Without profit, nothing else is possible
    • “Project Manager-SAP” Former Project Manager in Noida (India). Pros: 1. Great Processes and learnings/opportunities to lead BIG Teams -100 /150 consultants. 2. Trust and Personal Responsibility values - Work from home 3. Great atmosphere and camaraderie at work. Cons: 1. Too much bureaucracy - Exec Mgmt seem to have forgotten that processes are for servicing customers and employees and not vice versa. Politics starting at senior level is too bad with everyone looking for CYA and not thinking on innovative ideas. 2. Giving phony raises of 2%. Variable pay is a joke...don't expect more than 25% of the amount listed in offer letter. 3. Bad-Bad HR in IBM India...Enjoying all the time ..bunch of buffoons as HRBPs. Advice to Senior Management: 1. Be Transparent and have regular townhalls/communications. Do not just live within your glass doors. 2. Abolish PBC system and setting colleague against each other by forced ranking across each band level. 3. Simplify processes to serve customers and EMPLOYEES .
    • A Once Great company...” Former Service Delivery Manager in Remote, OR . Pros: The IBM Name looks great on a resume. Cons: Continued shift to 'globalization' a/k/a sending jobs to countries with lower wages, this not only results in continued cuts in the US Staff, but when cuts are made the 'survivors' are expected to pick up the slack. Lack of focus on the customer, IBM continues to think that they set the standard and that their clients should fit 'in the box'. This lack of flexibility is causing frustration with clients and employees.
    • Boulder is a disorganized mess...Morgan Stanley Will Eventually Drop Them” Former IT Help Desk Level I in Boulder, CO . Pros: Legal employment in the US. The buildings are reasonably well heated/ventilated and the bathrooms are serviced regularly, so given the hours most workers spend there, it's sanitary. There's enough parking, but finding your way around the campus is otherwise a nightmare.

      Cons: The staff are mostly contract workers, and the recruiting companies fighting for those jobs are awful. At one point it was CCI vs Kelly and CCI broke laws to win the contract. Kelly completely mishandled the situation, and to make matters worse, the quality of workers CCI provided was so bad, it's only a matter of time before IBM loses the Morgan Stanley contract because of IBM's HR failures. $11.35/hr is half what this job should be paying, and few of the workers on the desks are qualified to work it. The call center's main floor has the same feel and smell as a homeless shelter. The general office ambiance is toxic.

      Advice to Senior Management: Resign. You're terrible. I don't care how long you've loitered in your office and done nothing. You would fail at a real company that actually requires work.

    • professionals” Former Systems Engineer in Madison, WI. Pros: lots of opportunity to move up or laterally; autonomy in the positions; smart co-workers; the culture celebrate and rewards success. Cons: expect to travel; customers have huge expectations; very little sense of community in some field offices; hard to keep abreast of the weekly changes from corporate. Advice to Senior Management: Spend more time creating relationships with employees & coworkers.
    • lots of cons. career stall.Pros: Some mates sick leave (and you'll need it if you get stressed, overworked, underutilised). Cons: Virtually no benefits. No formal training; just a 2 hour how to setup your PC ,do your time sheets, and read mail. No R&D. No innovation. Lied to about the size of bonus pool when insourced (told Par was 6%). Low morale. Staff are only kept to drain knowledge to offshore. Entire teams of contractors let go. Overtime not paid at all (lucky to take time of in lieu). IBM assumes you are there for support. Forced to have a mobile (paid for self if contractor) to be contactable for support. Cost saving is the top priority of company. No computer mouse, docking station, or monitors are provided. Managers typically have 40 people under them. Manager may be in a different city (1000 km away). No training. No on-the-job learning. The be all and end of is CIRATS and SHC. Poor Culture. No pay increases. PBC system is about who-you-know and schmooze with. NO interest from management in career development. Survivors left wondering when the axe will fall. Useless office tools (assuming you're not running Linux, in which case it's worse). Management and PMs are mostly useless (some exceptions). What do DPEs do? Clients are overbilled for incompetent work. Advice to Senior Management: Value your staff
    • Not sure how did it survive for 100 years” Current Software Engineer in Bangalore (India). Pros: - Easy approvals for anything if your PM and People Manager is same person; - Extensive options to work from home (helped me a lot for my situation @ home); - Fair leaves on emergency and medical situation (unlike my previous company); - Fair assistance by IT Support; - Well planned IT infrastructure (excluding Snail Lotus Notes).


      • People manager is one point of contact for anything about employees future in the company (he decides everything about you, which is not right)
      • Does not plan on its deliverable (not even on single one, which is utterly unprofessional) everything will happen in hurry, because of which employees have to work late nights. In a situation I have to reach home @ 4 AM, have to wake up from sleep on weekend night and work
      • Senior management or executives are not held responsible for anything that goes wrong, instead employees are made scapegoats
      • If you are a honest and hard worker in IBM then forget about your pay rise (I have no sign of raise since 1.6 years)
      • There are many managers in IBM who think their sub-ordinates like developers are their slaves
      • Every skilled developer is taken for granted and tagged along with his regular project with either other project with hectic work which is called 'Stretch' or with an crappy 'Operations' which means 'Support' to the outside world, it's like a insult to a developer
      • IBM behaves like an corrupt bureaucratic government with its employees, not sure with its clients always a ready answer as NO for anything an employee asks
      • IBM acts like a miser to its employees especially male, unlike other companies it doesn't even offer a quality lunch even when an employee pays for it (free lunch like in other companies is a far topic), IBM's policy towards female employees are too skewed, male employees get to travel in late nights while female get to travel in free cab with an escort

      Advice to Senior Management:

      • You should realize the essence of IBM's existence is its own employees
      • Is there an HR department in IBM, never seen after my recruitment?
      • Remove PeM as an authority to decide employee's performance, bring in HR department
      • Employees are not asking pay rise to become rich, instead because of their hard work and contribution to organization and to make their daily bread (bread gets expensive you know every year)
      • Strictly avoid involvement of too many owners for one single project, get some air into the team, make employees comfortable, give sometime world does not end (2012 is gone)
      • Appreciate employees of their contribution with awards, certificates or at least group emails. Employees deliver more creative and better work when appreciated and feel motivated (mentor is of less use as one's service line is entirely different)
      • When you give rise give it on first month of financial year, not in July
    • Work and no-life balance” Former Managing Consultant in Brisbane (Australia). Pros: Some good consultants with great skills. Cons: Process driven organisation which makes it slow and costly. Do not focus on career development; only focused on shareholder return. Advice to Senior Management: Focus on staff
    • Used to be better” Current IT Specialist in Atlanta, GA . Pros: Work from home or office. Cons: Off shore outsourcing and resource actions are always in the back of your mind. Advice to Senior Management: Get out of the castle and start visiting the trenches where the real work is done.
    • Good but used to be great!” Current Delivery Manager in Boulder, CO. Pros: Mobility and advancement opportunities, work from home. Cons: Below average pay, no bonus, management that only cares about "Blue Dollars" and not about you as a person. Advice to Senior Management: Listen to your team and stop off shoring jobs
    • IBM” Current Senior Learning Performance Consultant in Dallas, TX. Pros: Large company, opportunities world wide, they were interested in what I could bring to the table. Cons: Large Company. Never met anyone outside of client. Promises not kept. Job was not what they made it out to be. Advice to Senior Management: The LPC position I was involved with was simply acting as an order taker. No real consulting, no creativity, no options. Follow the process or get reprimanded!!!
    • Great for shareholders, but not so much for employees” Former Delivery Manager in New York, NY. Pros: Large network. Able to work from home for many positions. Several discount plans & perks available to all employees. 401k matching. Cons: Compensation is "industry" median; you can certainly do better. Tends to pigeon hole people into positions Customer focus over employee growth (sometimes will lock employees into contracts which limits any opportunity for advancement). Advice to Senior Management: Take a look at Google's culture; it drives a culture of innovation and community give back.
    • I like the company's culture, it is ever changing” Current Product Support in Atlanta, GA. Pros: It's a huge global company willing to give chances to all people. Cons: Company has sent many jobs overseas and does not provide many open opportunities to people in the United States.
  • Alliance for Retired Americans: Friday Alert. This week's articles include:
    • Paul Ryan’s Republican Budget Passes the House, Despite Threats Posed to Seniors
    • Wednesday, March 20: A Day of Action Against the Sequester
    • Alliance Supports Nomination of Thomas E. Perez for Labor Secretary
    • Wisconsin Alliance Holds Its State Convention, Elects a New President
    • Florida, Iowa Alliance State Presidents Make the Local TV News – Watch the Video
  • In These Times: Survey Shows Overwhelming Public Support for Social Security. By Roger Bybee. Excerpts: In order to deliver the pound of flesh demanded by Republicans to resolve the sequestration impasse, President Obama is moving to concede to a “chained CPI” (Consumer Price Index) for Social Security that would impose painful new costs on the elderly and other vulnerable groups.

    The “chained CPI” would establish a new means of measuring inflation, “slowing down annual increases in Social Security and other benefits—including those for veterans, the disabled, and low-income children and their families—as well as income tax brackets,” wrote Nicole Woo of the Center for Economic and Policy Research.

    Obama would be folding on a central issue of income security despite holding a handful of aces, as evidenced by a recent survey that shows overwhelming public support—across the political spectrum—for exempting Social Security from the budget-cutting games of Washington insiders. ...

    This desire for higher benefits is coupled, significantly, with a willingness to pay more for them. NASI found that “Fully 74% of Republicans and 88% of Democrats agree that ‘it is critical to preserve Social Security even if it means increasing Social Security taxes paid by working Americans.’”

    When presented with specific proposals, 69 percent of all respondents favored a gradual one percent increase in the Social Security tax paid by workers and employers (from 6.2 percent to 7.2 percent over twenty years), and 68 percent favored eliminating the cap on taxable income over a ten year period.

    The cap, set at $113,700 for 2013, includes only wage income and exempts income from capital gains and dividends. Revenue from lifting the cap would serve to nearly wipe out projected shortfalls for Social Security, according to economist John Miller:

    Lifting the cap on Social Security taxes would raise a significant amount of revenue: $1.3 trillion dollars over ten years according to the libertarian Cato Institute, and $124 billion a year according to the left-of-center Citizens for Tax Justice. Long term, lifting the payroll tax cap would just about cover the shortfall Social Security will face if economic growth slows to a snail's pace in the decades ahead, as forecast by the Social Security Administration…. According to Stephen Goss, the SSA's chief actuary, lifting the cap while giving commensurate benefit hikes to high-income taxpayers once they retire would cover 93 percent of the SSA's projected shortfall in Social Security revenues over the next 75 years. ...

    The drive to begin the dismantling of Social Security—through measures like raising the retirement age to 70 and substituting the chained-CPI for raising benefits—has been led by Republicans like House Majority Leader John Boehner (although he has been backing off a bit lately) and the corporate coalition Fix the Debt, with Goldman Sachs CEO Lloyd Blankfein playing a leading role as a spokesman and member of its “CEO Council.”

  • Washington Post: Strapped for retirement, more hope to work longer. By Michael A. Fletcher. Excerpts: Nearly half of Americans have little or no confidence that they are financially prepared for retirement, a problem many of them intend to solve by working longer, according to a new survey.

    The Employee Benefit Research Institute (EBRI) survey found that 10 percent of workers plan to retire between ages 66 and 69, and another 26 percent intend to put off retirement at least until age 70 — far more that planned to work that long when EBRI conducted its first retirement confidence survey in 1991.

    Although many Americans are living longer and fewer are in physically demanding jobs, those plans to work longer may be unrealistic. The survey found that 47 percent of retirees left the workforce unexpectedly, largely because of disabilities, other health issues or problems at work.

    At present, the largest group of workers leaves the workforce at age 62. That is when they initially qualify for reduced Social Security retirement benefits, which represents a smaller monthly amount for those who take it before hitting their full retirement age. Just 14 percent of the retirees captured in EBRI’s latest survey retired after age 65, and only one in four of them works for pay in retirement.

    “The risk is that many workers as they get older cannot work for reasons beyond their control, including disability, ill health, and loss of a job and inability to get another,” said Mathew Greenwald of Mathew Greenwald and Associates, a public opinion firm that performed the survey.

  • Pensions & Investments: Boeing to close DB plan to technical workers. By Barry B. Burr. Excerpts: Boeing Co. will close its defined benefit plan to new hires in the technical worker unit of the Society of Professional Engineering Employees in Aerospace, IFPTE Local 2001, after members voted overwhelmingly Monday to accept a contract offer, according to Boeing and union officials.

    Members voted 4,244-654 to accept the contract offer that includes shutting the plan to new technical workers in the unit hired after March 1, 2013. New employees will enroll in only the existing Boeing 401(k) plan but have an enhanced feature of an automatic company annual contribution of 3%, 4%, or 5%, depending on age as well as the existing 75% company match for the first 8% of pay participants contribute.

    Existing SPEEA local members will continue to participate in both the Boeing defined benefit plan and the 401(k). The defined benefit plan had $56.2 billion in assets and $75.9 billion in liabilities, as of Dec. 31, said Charles Bickers, Boeing spokesman. The 401(k) plan had $36.6 billion in assets as of Dec. 31.

  • TechRepublic: Why you should be working in health IT. Excerpts: Health care IT is a field in need of upgrades. Where many of America’s businesses - from retail stores to banks to telecom companies - depend on interoperable network infrastructure and user-friendly interfaces, many doctors’ offices, hospitals, clinics and medical laboratories across the U.S. still rely on legacy software and hardware. Some doctors still store patient files on paper, and write prescriptions by (illegible) hand. ...

    Interfaces need improvements. Improved connectivity and compatibility are back-end problems, but many of these same pieces of management and tracking software also involve outdated front-end interfaces. In order for doctors, nurses and lab technicians to enjoy the benefits of electronic record-keeping, they’ll need user interfaces that are clean, fast and intuitive - as well as teams of knowledgeable support staff to walk their health care experts through the initial stages of adoption. ...

    In other words, familiarity with legacy systems acts as a barrier to progress - which means that health care software’s user interfaces and design conventions need to fast-forward into the user-friendly plug-and-play world of online applications like Gmail and Facebook; a world whose conventions will already be familiar even to non-expert users.

    Thus, if you’re a front-end designer, a UI coder, or even a technician with a talent for learning interfaces quickly, doctors and patients are likely to benefit from your expertise.

  • Forbes: The Greatest Retirement Crisis In American History. By Edward "Ted" Siedle. Excerpts: We are on the precipice of the greatest retirement crisis in the history of the world. In the decades to come, we will witness millions of elderly Americans, the Baby Boomers and others, slipping into poverty. Too frail to work, too poor to retire will become the “new normal” for many elderly Americans.

    That dire prediction, which I wrote two years ago, is already coming true. Our national demographics, coupled with indisputable glaringly insufficient retirement savings and human physiology, suggest that a catastrophic outcome for at least a significant percentage of our elderly population is inevitable. With the average 401(k) balance for 65 year olds estimated at $25,000 by independent experts – $100,000 if you believe the retirement planning industry - the decades many elders will spend in forced or elected “retirement” will be grim. ...

    Corporate America and the financial wizards behind the past three decades of so-called retirement innovations, most notably titans of the pension benefits consulting and mutual fund 401(k) industries, are down-playing just how bad things are already and how much worse they are going to get.

    Americans today are aware that corporate pensions have been virtually eliminated and that the few remaining private, as well as the nation’s public pensions, are in jeopardy. Even if you are among the lucky few that have a pension, you cannot rest assured that it will be there for all the years you’ll need it. Whether you know it or not, someone is busy trying to figure how to screw you out of your pension.

    Americans also know the great 401k experiment of the past 30 years has been a disaster. It is now apparent that 401ks will not provide the retirement security promised to workers. As a former mutual fund legal counsel, when I recall some of the outrageous sales materials the industry came up with to peddle funds to workers, particularly in the 1980s, it’s almost laughable—if the results weren’t so tragic.

    There was the “Dial Your Own Return” cardboard wheel of fortune that showed investors which mutual funds they should select for any given level of return. Looking for 12%? Load up on our government plus or option income funds! It was that easy to get the level of income needed in retirement, investors were told.

    The signs of the coming retirement crisis are all around you. Who’s bagging your groceries: a young high school kid or an older “retiree” who had to go back to work to supplement his income or qualify for health insurance?

    Related article: IBM Leader in Gutting 401(k)s.

  • GlassDoor: Highest Rated CEOs. Excerpt: Do you approve of the way your CEO is leading the company? See which CEOs have the highest approval ratings. The Glassdoor list is based entirely on employee feedback shared during the past year. (Editor's note: IBM's CEO is not on the list. Many of IBM's competitors' CEOs are, though.)
New on the Alliance@IBM Site
  • Job Cut Reports
    • Comment 03/18/13: My 2 cents on Roadkill 2015...I think IBM plans to divest SO/Div 07. We make crappy margins and have too much cost pressure with other LCC's. IBM is pumping up the price, getting ready to sell it off. That would be a boon to their 2015 EPS targets because I don't think they are close enough yet at the pace they are going. Warren Buffett might make a killing on that as well :-). No facts on this, but I think it is highly likely...Outsourcing is a commodity...we make better margins in SW, HW, Consulting, Maintenance, etc..... -Ex-IBMer and glad I left!-
    • Comment 03/18/13: As you all know the 401k match program this year is being changed to a deferred program. Next year will it be a reduction from 6% match to say 3% with the following year being removed all together ? 3 yrs is uh oh - 2015 - could be another lever to the EPS target. Food for thought. You say it would never happen - I bet you never thought they would take away the each paycheck match. -Could it happen-
    • Comment 03/19/13: I am surprised no one noticed this other 401k change - they are in the process of taking the Interest Income (formerly known as Stable Value fund) from the 401k, kind of "merging" it into total bond fund. Benefits just keep being chipped away, the boiling frog syndrome. http://en.wikipedia.org/wiki/Boiling_frog -gone-
    • Comment 03/20/13: I see Mr. John Akers mentioned here. The last CEO to use respect for the individual and the full employment policy as his standards of management. We all hoped replacing his replacement (Gerstner) with another CEO from within IBM (Palmisano) would bring back those principles IBM was founded on. That certainly did not happen. And it isn't happening under the current CEO. There will never be a return to these values that made IBMers the envy of workers around the world. The only thing you will ever get from IBM is what you fight for. Do not fight alone. You will lose. Join the Alliance and fight together. Live Better. Work Union. -Exodus2007-
    • Comment 03/20/13: Contractor Furloughs are in full swing again. I guess 214 bucks a share is not enough for these thieves. Now I have been blackballed and cannot get a job in my field. After 20 years I am going to have start over. Closer to retirement than the robots they hire. Anyone who thinks they are safe is deadly wrong. No wonder the new contracts come in with SLA fines for not meeting client goals and requirements. I know of one contract who is micromanaging time to 5 minute intervals, under staff the whole unit and then blames staff for misses and furloughs them. If you are being tapped by another company, RUN LIKE HELL. If you are a contractor, expect to loose at least 200 hours in salary this year. -3rd time layoff from Blue-
    • Comment 03/21/13: IBM's largest competitor has been hiring. Here is a quote from Oracle's earnings review - "Co-president Mark Hurd said Oracle added over 4,000 people to the Oracle sales force in the last 18 months and significantly expanded customer coverage, adding, ..." Better watch out IBM, Oracle is ready to compete. -Anon-
    • Comment 03/21/13: If you think you're "safe" with a PBC 2+ from a planned RA I want you to THINK TWICE. After working for IBM for almost 25 years and worked through injury, illness, and pain, one would think IBM would stick behind me. Well, they didn't when I developed serious health issues in the year I was RAed. IBM only cares about greed for the upper ranks. The regular John or Jane Beamer employee is a replaceable widget. Unless we all try to do something to change this attitude by IBM middle and upper management IBM will continue to prune us off. This is not only a USA sentiment: Fellow IBMers in India, China, Brazil, IBM will soon treat you much the same way they treated me. Join the Alliance. It is never too late. We meed a Global Alliance! NOW -sby_willie-
    • Comment 03/22/13: -gone-: IBM just wants more of your retirement money to play with. Stable Value fund is less volatile than Bond funds. So IBM can make money or save money by not paying any investment fees that might be with Stable Value Fund. -anonymous-
    • Comment 03/23/13: Anybody else notice that WWERS has been out all week? My guess is that it won't be back online until after the new quarter starts. The best way to control expenses is to turn off the server. In the old days, they would send an email telling you to defer expenses, but in the new IBM, they just "fixed that glitch." Oh yeah, it is also against the law to defer expenses to a different reporting period. Welcome to the new age of lawlessness. -any-mouse-
    • Comment 03/23/13: IBM proxy statement - 143 pages. IBM executive compensation statement - 80 pages. What is wrong with this picture? -Anon-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • The Salt Lake Tribune: Denied by your insurer? Health law provides a new way to fight back. Consumers can appeal insurance denials and have claims independently reviewed by physicians. By Kirsten Stewart. Excerpts: Jacy Morgan-Barnum heeded recommendations for avoiding Sudden Infant Death Syndrome (SIDS) and put her baby boy, Bradley, to sleep on his back.

    As a result, like a growing number of infants, he developed a flattened head, or plagiocephaly. The fix prescribed by Bradley’s doctor — a specially-tailored helmet to coax his soft skull back into symmetry — worked, but wasn’t covered by the family’s health insurance plan.

    So Morgan-Barnum, taking advantage of a little known benefit of the Affordable Care Act, is fighting back.

    New rules in the health law allow consumers to seek a second opinion on care denied or delayed by their insurance plan. If appeals to their insurer fail, they can request an independent review of their coverage denial.

    The reviews are meant to ensure coverage decisions are based on medical need, not just financial considerations, said Deborah Reidy Kelch, a researcher at the California HealthCare Foundation. "People want some confidence that medical professionals have looked at their case and given it a fair, unbiased review."

    Only a fraction of the thousands of Utah consumers who file complaints with the state Department of Insurance seek reviews. But those who do have good odds of prevailing.

    Regulators commissioned 10 reviews in 2011 and 40 in 2012, finding in favor of the patient in 40 percent and 32 percent of the cases in those years.

  • National Committee to Preserve Social Security and Medicare: "Bitter Pill" - A Time Magazine Article Every Senior in Medicare Should Read. Excerpts: Time Magazine’s cover story this week is an incredible read and one we highly recommend. Steven Brill’s “Bitter Pill: Why Medical Bills are Killing Us” provides a remarkably in depth look at our American health care system including Medicare. Using many personal case studies, Brill breaks down and describes the economic devastation being reaped by our for profit medical industrial complex.

    As we’ve said here repeatedly, America doesn’t face a Medicare crisis -- we face a national health care crisis. Rather than targeting Medicare for cuts we should be using it as the model to improve out health care system nationwide. As Brill reports:

    “Unless you are protected by Medicare, the health care market is not a market at all. It’s a crapshoot. They are powerless buyers in a seller’s market where the only sure thing is the profit of the sellers.”

    Consider Time’s example of Susan S. She was 64, one year away from qualifying for Medicare, when she went to the hospital with chest pains. Her bill for 3 hours of tests and a false alarm was $21,000. If she had Medicare she would have paid less than $500. Compare her costs:

    Without Medicare With Medicare
    Troponin Blood Test $199.50 $13.94
    Complete Blood Count $157.61 $11.02
    Stress Test $7997.54 $550.00

    Time’s survey of this same hospital found that in 2010 its total charges were 11 times its actual costs. And that’s not unusual in our current private profit and even non-profit health care system.

    Not only does Medicare manage these outrages costs better than the private market, Medicare’s administrative costs are two-thirds of 1% or less than $3.80 per claim. Private Insurers administrative costs run much higher. Brill reports Aetna’s for example, run 29% or $30 for each claim. ...

    The health care industrial complex spends more than three times what the military industrial complex spends for Washington lobbying. Is it any wonder why so many in Congress have chosen to ignore the true system wide health care problem in favor of targeting Medicare for benefit cuts, arbitrary caps, cost-shifting, means-testing and privatization.

    They know what the core problem is — lopsided pricing and outsize profits in a market that doesn’t work.

    In spite of this, Congress appears ready to protect that broken health care market that is wrecking our economy in favor of targeting the program that works for cuts -- all in the name of deficit reduction. Cutting benefits to seniors in Medicare not only ignores the real challenges we face as a nation but it also threatens the health security of millions of Americans.

  • Wall Street Journal, courtesy of Physicians for a National Health Program: A disaster in the making - defined contribution for employer plans. To Save, Workers Take On Health-Cost Risk. By Anna Wilde Mathews. Excerpts: Last fall, two big employers embarked on a radical new approach to employee health benefits, offering workers a sum of money and allowing them to choose their health plans on an online marketplace. Now, the first results are in: Many workers were willing to choose lower-priced plans that required them to pay more out of their pockets for health care.

    The new online marketplace, operated by consulting firm Aon Hewitt, a unit of Aon PLC, was used by more than 100,000 employees of Sears Holdings Corp. and Darden Restaurants Inc. (Olive Garden and Red Lobster), as well as Aon itself, to pick plans for 2013. The employers gave workers a set contribution to use toward health benefits, and they could opt to pay more each month to get richer plans, or choose cheaper ones that might have bigger out-of-pocket fees, such as higher deductibles. ...

    Comment: By Don McCanne, M.D. Be prepared. Very shortly you will be hearing from the supporters of consumer-directed health plans (CDHPs) of the phenomenal success of these plans wherein you put consumers in charge of the money to be used for their health plan purchases. In the first year of this program, there has been a massive shift from more traditional preferred provider organizations (PPOs) to these CDHPs. But you have to understand why this is really terrible news.

    Under the traditional employer-sponsored defined benefit health plans, the employers purchase plans for their employees, with the employees paying a percentage of the premium. If the employer offers options, the employee will often select the plan that requires a lower contribution - typically a PPO, but with enough benefits to provide some health security.

    Under this newer model of employer-sponsored defined contribution health plans, the employers give a fixed amount of money to each employee to be used to select plans from these private insurance exchanges. Since the employees become responsible for 100 percent of the premium costs above the employer defined contribution, the employees have a much greater incentive to choose plans with the premiums that are closest to the amount of the employer defined contribution - typically a cheaper CDHP.

    The experience in the first year alone, with this Aon-operated exchange, 23 percent of employees dropped PPOs, and 4 percent dropped HMOs, resulting in increased enrollment in CDHPs from 12 percent in 2012 to an astonishing 39 percent in 2013!

    While the CDHP advocates spread the word that giving consumers control of their health insurance dollars will lower health care spending by allowing employees to "buy only the insurance that they need," they will remain silent on what really happened. They shifted risk from the employers and their insurers onto the backs of the employees. ...

    Keep in mind that a minority of workers or their family members actually will face major medical events. Should that occur, these individuals, who have quite modest incomes, will be responsible for huge medical bills - bills because of the very high deductibles, high coinsurance, and all costs of out-of-network care in these plans that tend to have more limited networks.

    This is a setup for personal bankruptcy. Should these CDHP-enrolled employees lose their bets and end up with major injuries or major medical disorders, a very large percentage of them will face this prospect . This is exactly the opposite of what their health care coverage should be providing. The system should ensure that financial barriers to care are removed so that patients can access the care that they need without having to face severe financial hardship.

    So when the CDHP advocates tout the success of empowered health care insurance shoppers, they will be able to claim that it works really well for most workers and their families (only not for those who end up needing health care). We need to keep exposing this con job.

  • Boston Globe: Author: Health care prices are “fiction, fantasy” By Chelsea Conaboy. Excerpts: On health care quality, Goldhill pointed out that doctors themselves will advise family members to always accompany a loved one in the hospital, that patients can’t trust that they will be safe even in institutions dedicated to their well-being.

    “Could you imagine FedEx saying to you, we’ll get your package there, but it probably would be best if you stayed with it all the way” to the destination, he said.

    And he ridiculed the idea that finding the best solutions to skyrocketing health care costs requires getting all “stakeholders” on board.

    “I beg you as journalists, every time you hear that, to substitute the idea of inviting a bunch of turkeys to plan your Thanksgiving meal,” he told the AHCJ lunch crowd. “You get absolutely no economic innovation, cost-saving, or disruption by talking to stakeholders. Economic disruption -- true cost-savings -- hurts stakeholders. There’s no way around it.”

    Perhaps the most compelling part of his presentation was about his father, who died in 2007 after being hospitalized for pneumonia and acquiring other infections during his hospital stay. “The bill for killing my dad” came to $636,687.75. A couple of excerpts from his presentation:

    I asked myself, if I put dad at the most expensive hotel in New York and filled it with hospital equipment, made a doctor spend an hour a day with him – which is about 50 minutes more than he got in the hospital – gave him round the clock nursing, and I also gave him some room service -- and some of you probably are wondering why there’s no television charge. In hotels, they don’t charge separately for television. That’s just in hospitals. The most I could get to was $155,000 and, you know, that’s basically treating dad as if he was king of Saudi Arabia. ...

    The important thing is, when looking at prices in health care, remember you are looking at nothing. Fiction. Fantasy. Administered numbers. And the fact that we make decisions and that hospitals themselves often allocate resources on these prices is one of the ways the system is massively broken.

  • ABC News: CVS Pharmacy Wants Workers’ Health Information, or They’ll Pay a Fine. By Steve Osunsami. Excerpts: A new policy by CVS Pharmacy requires every one of its nearly 200,000 employees who use its health plan to submit their weight, body fat, glucose levels and other vitals or pay a monthly fine.

    Employees who agree to this testing will see no change in their health insurance rates, but those who refuse will have to pay an extra $50 per month — or $600 per year — for the company’s health insurance program. All employees have until May 1, 2014, to make an appointment with a doctor and record their vitals.

    “The approach they’re taking is based on the assumption that somehow these people need a whip, they need to be penalized in order to make themselves healthy,” Patient Privacy Rights founder Dr. Deborah Peel said.

    Critics are calling the policy coercion, and worrying that CVS or any other company might start firing sick workers.

    “It’s technology-enhanced discrimination on steroids,” Peel said. ...

    Brad Seff, a former Broward County, Fla., employee, learned the hard way that it is legal, according to one court. Seff sued the county in April 2011 after it charged him an extra $40 per month for health insurance after he refused health screenings.

    In the suit, Seff said the wellness program violated the Americans With Disabilities Act because the county was making medical inquires of its employees. Seff lost his suit. “I’m so disgusted. I moved. I left the state,” Seff told ABC News by phone.

  • truthOut, courtesy of Physicians for a National Health Program: Access to Health Care, Basic Necessities a Matter of Life or Debt. By Margaret Flowers and Kevin Zeese. Excerpts: The U.S. has used a market-based health system for so long that most people probably feel that it is normal, but in truth, the U.S. health system is an aberration. Most industrialized nations have publicly-funded universal health care systems paid for through taxes that cover virtually 100 percent of necessary care. Their systems have been in existence for many decades, and while no system is perfect, other countries spend half what the United States does per person on health care, cover everyone and have better health outcomes.

    After World War II, the United States moved toward a system of health insurance primarily accessed through employment. Then, under President Reagan in the 1980s, there was an intentional effort to create investor-owned health-care services, turn health insurance into a profit-making sector and privatize the delivery of health care in for-profit hospitals. Creating a for-profit health care system is a thirty-year experiment with clear outcomes: uncontrolled costs, growing health disparities, falling life expectancy and other indicators of poor health status, including high numbers of preventable deaths. If such an experiment were to have been conducted by a research team, ethics would have demanded that the experiment be stopped a long time ago.

    The basic flaws of the U.S. system are obvious. When health insurance is tied to employment, the healthiest segment of the population (i.e. essentially those who are working) is covered. Those who cannot work, perhaps because of a serious accident or illness, lose their coverage or struggle to afford it on the individual market where the prices are higher and the coverage is skimpier. When the bottom line is profit, not health, health insurers compete to attract those who are healthy in the first place and then find ways to restrict and deny payment for care through provider networks, authorization processes and out-of-pocket costs.

  • Kaiser Health News: Health Reform Quiz. Excerpt: The health reform law promises to deliver big changes in the U.S. health care system. But, as with other sweeping pieces of legislation, it can be hard to get the real facts about what it does. And it is all too easy for misinformation about the law to spread.

    Take our short, 10-question quiz to test your knowledge of the law, and then share your results with friends on Twitter or Facebook.

  • The Commonwealth Fund: New Report: Insurers on Average Spent Less Than 1 Percent of Premium Dollars on Health Care Quality Improvement Activities in 2011. By Mary Mahon. Excerpt: Health insurance companies reported spending an average of less than 1 percent of the premiums they collected from policyholders in 2011 on activities directly supporting improvement of health care quality, according to a new Commonwealth Fund study. The report, which looks at differences in medical loss ratios, consumer rebates, and quality improvement expenses based on insurance companies’ corporate structure and ownership, finds that insurers spent a combined $2.3 billion on direct quality improvement activities―an average of $29 per subscriber. The Affordable Care Act’s medical loss ratio rule requires insurers to spend at least 80 or 85 percent of premiums on medical claims and quality improvement activities, or else pay rebates to consumers. For purposes of calculating medical loss ratios, quality improvement expenses are those for activities that are likely to improve health outcomes, prevent hospital readmissions, improve patient safety and reduce medical errors, and increase wellness and health promotion.
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.

  • Washington Post opinion: Paul Ryan is no Ronald Reagan. By Matt Miller. Excerpts: Ronald Reagan ran the federal government at 22 percent of gross domestic product when the country’s population was much younger and health care consumed about 11 percent of GDP. ...

    Now Paul Ryan says we can run the federal government at 19 percent of GDP as the massive baby-boom generation retires and when health costs (largely for seniors) have already soared to 18 percent of GDP.

    Sorry, but Ryan is either deeply confused or doing his best to snooker us.

    In the sandstorm of commentary on what’s wrong with the Wisconsin Republican’s budget, its easy to lose sight of the few central facts that should make people of all political stripes scratch their heads. The most important is that Ryan wants to shrink government precisely when we have an unavoidably costly demographic tsunami bearing down on us and when per capita health costs have spiraled. (These costs must be challenged, but the medical industrial complex’s current level of loot has to be the starting point for the debate.)

    In 1989, when President Reagan left office, there were 34 million people on Medicare and 39 million on Social Security. In 2025, according to these programs’ trustees, there will be 73 million on Medicare and 78 million on Social Security.

    This is not happening because we’re stringing up the “hammock of dependency” that Ryan often invokes. It’s happening because our famously big postwar birth cohort is getting older.

    Ryan obviously knows these facts. This means he’s disingenuously trying to use the aging of America to force a severe cutback in the non-elderly, non-defense portion of government, which is already headed toward historic lows as a share of GDP. ...

    An unbalanced budget is math. It means that spending is greater than revenue. We could balance the budget at 19 percent of GDP, or at 15 percent, or at 25 percent. It’s refreshing that after years of make-believe, Ryan has finally decided to take a stab at becoming a fiscal conservative (though even his plan’s magic asterisks have magic asterisks — quite a feat). But the level of spending and taxes at which we fiscal conservatives seek to balance the budget depends on what we want government in an aging America to do.

    At 19 percent, Ryan’s vision is an America with 50 million uninsured ... forever. Of infrastructure and R&D investment that trails other advanced nations ... in perpetuity. Of a nation that assigns its least effective teachers to poor children . . . permanently. (Amazingly, Senate Democrats have fallen prey to Ryan’s gravitational pull, with the budget they put out Wednesday coming in at 21.7 percent of GDP in the years ahead, a tad below Reagan-era spending.)

  • New York Times op-ed: After the Flimflam. By Paul Krugman. Excerpts; Way back in 2010, when everybody in Washington seemed determined to anoint Representative Paul Ryan as the ultimate Serious, Honest Conservative, I pronounced him a flimflam man. Even then, his proposals were obviously fraudulent: huge cuts in aid to the poor, but even bigger tax cuts for the rich, with all the assertions of fiscal responsibility resting on claims that he would raise trillions of dollars by closing tax loopholes (which he refused to specify) and cutting discretionary spending (in ways he refused to specify).

    Since then, his budgets have gotten even flimflammier. For example, at this point, Mr. Ryan is claiming that he can slash the top tax rate from 39.6 percent to 25 percent, yet somehow raise 19.1 percent of G.D.P. in revenues — a number we haven’t come close to seeing since the dot-com bubble burst a dozen years ago.

    The good news is that Mr. Ryan’s thoroughly unconvincing policy-wonk act seems, finally, to have worn out its welcome. In 2011, his budget was initially treated with worshipful respect, which faded only slightly as critics pointed out the document’s many absurdities. This time around, quite a few pundits and reporters have greeted his release with the derision it deserves.

  • New York Times Dealbook: Windfalls for Wall Street Executives Taking Jobs in Government. By Susanne Craig. Excerpts: People usually say they go into government to perform public service. If they came from Wall Street, however, their former employers often provide another service.

    Banks, including JPMorgan Chase, Goldman Sachs and Morgan Stanley, all have provisions that allow acceleration of payments owed to senior executives if they take government jobs, a new study finds.

    Such a benefit was highlighted recently during the confirmation hearing for Jacob J. Lew as Treasury secretary. His previous employer, Citigroup, had guaranteed him preferential financial treatment if he were to leave to take a job in the government. When Mr. Lew left Citigroup he held stock that he could not immediately cash worth as much as $500,000, according to a government filing.

    “These companies seem to be giving a special deal to executives who become government officials,” says the study, to be released Thursday by the Project on Government Oversight. “In exchange, the companies may end up with friends in high places who understand their business, sympathize with it, and can craft policies in its favor.” ...

    The debate has heated up recently as top officials from the Securities and Exchange Commission leave for new jobs, possibly on Wall Street, while the White House has nominated Mary Jo White, a lawyer who has represented Wall Street firms, to run the S.E.C.

  • The Smirking Chimp: Why Is The FDIC Helping Banksters Avoid Trial? By Thom Hartmann. Excerpts: The Federal Deposit Insurance Corp is supposed to insure deposits and regulate banks, but the agency has helped the banksters avoid trial for their crimes since the 2008 financial meltdown. The LA Times reports that the very agency responsible for investigating and prosecuting bank procedures that crashed our economy has been quietly settling charges out of court – and out of the view of the American public.

    Since 2007, the agency has settled numerous charges of bankster wrongdoing, but agreed to a “no press release” clause in the settlement agreements, so the big banks have avoided public scrutiny. A spokesman for the FDIC said they only announce the settlements “when damage payments are large and media interest [is] intense.” However, the FDIC didn’t announce a $54 million settlement with Deutsche Bank for causing the collapse of of The Independent National Mortgage Corporation, known as IndyMac. ...

    It’s time to hold the banksters accountable. If too-big-to-fail means too-big-to-jail, then break up the banks and charge the banksters for their crimes.

  • National Committee to Preserve Social Security and Medicare: Corporate Lobbyists Launch Generational Warfare Campaign to Avoid Talking about the Real Problem...$1 Trillion in Tax Loopholes. Excerpts: If you listen to any of the hundreds of lobbyists and PR flaks who are part of a billion dollar corporate campaign to cut Social Security and Medicare benefits, our fiscal problems have nothing to do with economic collapse, Wall Street excess, or a trillion dollars in wasteful corporate tax loopholes. America’s real problem is grandma and grandpa. According to our nation’s wealthiest CEO’s and Wall Street millionaires, led by “Fix the Debt”, the Business Roundtable and countless other Pete Peterson backed organizations, the solution to our economic woes is to convince America’s young people that Social Security won’t be around for them. Then, make them believe that the “greedy geezers” (aka their parents/grandparents), who are trying to get-by on an average $14,000 annual Social Security benefit, really don’t care about the program’s future - just their own survival. It’s classic case of dodge and deflect -- divide and conquer politics. Economist, Dean Baker explains:

    Peter Peterson, the Wall Street investment banker, has been most visible in this effort, committing over $1 billion of his fortune for this purpose. Recently he enlisted a group of CEOs in his organization, Fix the Debt, which quite explicitly hopes to divert concerns over income inequality into concerns over generational inequality. It argues that programs like Social Security and Medicare, whose direct beneficiaries are disproportionately elderly, are taking resources from the young.

    It is easy to show the absurdity of this position. The amount of money that the young stand to lose from the upward redistribution of income is an order of magnitude larger than whatever hit to their after-tax income they might face due to the continuing drop in the ratio of workers to retirees. Also, older people generally have families. This means that when we cut the Social Security or Medicare benefits of middle and lower income beneficiaries we are often creating a gap that will be filled from the income of their children.” ...

    The real problem is this “game plan” will be devastating for America’s young people. The wealthy corporate “generals” of this generational warfare strategy claim to be “saving” the social safety net for future generations. In truth, it’s America’s young people who will face the biggest benefit cuts if they buy into this campaign. The fact is, the Recession Generation will need Social Security and Medicare just as much, if not more than the parents and grandparents these wealthy CEO’s are trying to demonize. ...

    Social Security and Medicare aren’t the problems. However, rising income inequality and Washington’s economic policies which have shifted income away from middle-class families (including the young and old alike) to America’s millionaires and corporations are the problems. That’s why groups like Fix the Debt, the Business Roundtable, the Peterson Foundation and the rest of Washington’s massive corporate lobby have made such a huge investment in slick messaging campaigns to convince America’s young people to focus on their grandparents’ $14,000 Social Security benefit rather than the trillion dollars in tax breaks and loopholes enjoyed by our nation’s wealthiest.

  • Huffington Post: Selling the Store: Why Democrats Shouldn't Put Social Security and Medicare on the Table. By Robert Reich. Excerpts: Prominent Democrats -- including the President and House Minority Leader Nancy Pelosi -- are openly suggesting that Medicare be means-tested and Social Security payments be reduced by applying a lower adjustment for inflation.

    This is even before they've started budget negotiations with Republicans -- who still refuse to raise taxes on the rich, close tax loopholes the rich depend on (such as hedge-fund and private-equity managers' "carried interest"), increase capital gains taxes on the wealthy, cap their tax deductions, or tax financial transactions.

    It's not the first time Democrats have led with a compromise, but these particular pre-concessions are especially unwise.

    For over thirty years Republicans have pitted the middle class against the poor, preying on the frustrations and racial biases of average working people who can't get ahead no matter how hard they try. In the Republican narrative, government takes from the hard-working middle and gives to the undeserving and dependent needy.

    In reality, average working people have been stymied because almost all the economic gains of the last three decades have gone to the very top. The middle has lost bargaining power as unions have shriveled. American politics has been flooded with campaign contributions from corporations and the wealthy, which have used their clout to reduce marginal tax rates, widen loopholes, loosen regulations, gain subsidies, and obtain government bailouts when their bets turn sour.

    Now five years after the worst downturn since the Great Depression and the biggest bailout in history, the stock market has recouped its losses and corporate profits constitute the largest share of the economy since 1929. Yet the real median wage continues to fall -- wages now claim the lowest share of the economy on record -- and inequality is still widening. All the economic gains since the trough of the recession have gone to the wealthiest 1 percent of Americans; the bottom 90 percent continue to lose ground.

    What looks like the start of a more buoyant recovery is a sham because the vast majority of Americans have neither the pay nor access to credit that allows them to buy enough to boost the economy. Housing prices and starts are being fueled by investors with easy money rather than would-be home buyers with mortgages. The Fed's low interest rates have pushed other investors into stocks by default, creating an artificial bull market.

  • In These Times: Call It What It Is: A Class War. The GOP’s budget is a naked assault on the poor. By David Sirota. Excerpts: When it comes to the Republican Party’s budget proposal that passed the U.S. House this week, I agree with those who find it strange that anyone sees the initiative as a serious attempt to “grow the economy,” as Rep. Paul Ryan (R-Wis.) claims. I also agree that the now-standard barrage of reports that accompany such an initiative render most non-political junkies confused, bored or both.

    However, all of that doesn’t mean the proposal Ryan spearheaded is unimportant, nor does it mean that there are no worthwhile analyses to explain that significance. On the contrary, the proposal is quite important because it endorses an economic war waged by the upper class against everyone else. Two simple studies make this war painfully obvious. ...

    As that watchdog group shows, the allegedly “pro-growth” GOP proposes no big cuts to corporate welfare or other subsidies that enrich the already rich. Instead, the party proposes that 66 percent of the cuts come from “programs that serve people of limited means.” Yes, that's right—the “pro-growth” GOP is proposing to primarily cut the programs that reduce economic inequality and, thus, spur economic growth.

    Where do much of the savings generated from those cuts go? That gets us to a report by Citizens for Tax Justice. The nonpartisan group discovered that after a decade of trickle-down tax cuts delivered more economic inequality and historically weak macroeconomic growth, the GOP is now proposing a budget whose centerpiece is a proposal to give those with an “income exceeding $1 million (an) average net tax decrease of over $200,000.” ...

    Supercharged as it is, that phrase—class war—is appropriate and accurate. As the data prove, the GOP and its financiers are so committed to a class war that the party is willing to put forward a budget proposal that quite clearly preferences fighting that war over doing what’s actually necessary (read: addressing inequality) to fix the economy.

  • Rolling Stone: How the GOP Became the Party of the Rich. The inside story of how the Republicans abandoned the poor and the middle class to pursue their relentless agenda of tax cuts for the wealthiest one percent. By Tim Dickinson. Excerpts: The nation is still recovering from a crushing recession that sent unemployment hovering above nine percent for two straight years. The president, mindful of soaring deficits, is pushing bold action to shore up the nation's balance sheet. Cloaking himself in the language of class warfare, he calls on a hostile Congress to end wasteful tax breaks for the rich. "We're going to close the unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share," he thunders to a crowd in Georgia. Such tax loopholes, he adds, "sometimes made it possible for millionaires to pay nothing, while a bus driver was paying 10 percent of his salary – and that's crazy."

    Preacherlike, the president draws the crowd into a call-and-response. "Do you think the millionaire ought to pay more in taxes than the bus driver," he demands, "or less?"

    The crowd, sounding every bit like the protesters from Occupy Wall Street, roars back: "MORE!"

    The year was 1985. The president was Ronald Wilson Reagan.

    Today's Republican Party may revere Reagan as the patron saint of low taxation. But the party of Reagan – which understood that higher taxes on the rich are sometimes required to cure ruinous deficits – is dead and gone. Instead, the modern GOP has undergone a radical transformation, reorganizing itself around a grotesque proposition: that the wealthy should grow wealthier still, whatever the consequences for the rest of us.

    Modern-day Republicans have become, quite simply, the Party of the One Percent – the Party of the Rich.

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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