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Highlights—December 21, 2013

  • Wall Street Journal: Nice Gig: IBM’s Retiring CFO to Consult at $7,000 a Day. By Maxwell Murphy. Excerpt: International Business Machines Corp.’s Chief Financial Officer, Mark Loughridge, signed a generous three-month consulting contract with the technology firm, according to a regulatory filing.

    He’ll pocket $7,000 a day when he works and $3,500 per day if he works four hours or less.

    Selected reader comments follow:

    • 11:49 am December 15, 2013, Lame Blue Duck wrote : Consulting @IBM for $7K a day? This is as big a rip off as Samuel Palmisano’s retainer and IBM office in downtown Manhattan...just another outsized executive perk at a time when when the company has been doing poorly (look at IBM revenue and results) over the past year! Is the CEO deserving of a bigger bonus this year with the poor performance? Let the shareholders decide.
    • 9:44 am December 17, 2013, Nick wrote: Is this the same company that cancelled 100,000 retiree’s medical benefits because they were going to become too expensive?
    • 3:40 pm December 17, 2013, Unreal wrote: This is the same company that continues to nickel and dime their employees.
    • 7:48 pm December 17, 2013, Jim Savage wrote: Management won’t allow OT for low banded employees (advised to take comp time instead). But, shelling out hundreds of thousands of dollars/millions for these guys is business as usual.

      Something is very wrong in this company.

    • 11:26 am December 18, 2013, Mike Hansen wrote: After taking millions out of IBM in stock and salary, now collecting his pension, he still needs $7K/day to consult? If IBM needed him, why did they allow him to retire? This is exactly the type of money extraction that gives Wall Street firms a terrible name.

      If IBM is as deep in talent as they claim, why do you need to pay this guy crazy money to hang around?

    • 3:25 pm December 18, 2013, Bad Decisions wrote: These types of decisions are why employee morale is at an all time low at IBM along with their sales. They have stripped their employees compensation yet expect them to give 200%. Greed has a way of slapping oneself in the face.
    • 3:51 pm December 18, 2013, Bob Moffat wrote: All I can say is that when I retired, no one offered me a nice “thanks for the 30+ years , read the paper for a few months at 7K a day deal”. Was it something I said?
    • 2:59 pm December 19, 2013, Another great deal for an exec wrote: This is typical of how former high level execs are treated at IBM. This man should be ashamed of himself for taking this offer. Should be covering his travel expenses, if any for his help. Should be out of loyalty to the firm that he help. Lord knows the company needs help, but is this really necessary? I am sure he has more funds than any working person at IBM will ever have.
    • 4:20 pm December 19, 2013, first year associate wrote: Shorting IBM big next year. Who says I can’t punch above my weight.
    • 8:01 pm December 19, 2013, Huh? wrote: Surely that is not the real Bob Moffat’s comments above. We have dozens of staff that retired with 35+ years without even a note from line management. Even more ‘retired’ during an RA and they all honored Business Conduct Guidelines during their careers at IBM.

      If that’s the real Bob Moffat, you owe me compensation for canceled vacation during one of your pet projects and shouldn’t be entitled to your pension for disgracing IBM and setting an example to the power hungry that it’s OK to cheat and share our trusted partners’ secrets as long as you’re powerful and don’t get caught.

    • 8:04 pm December 19, 2013, Huh2 wrote: BTW Bob, it was something you said. You should have served more time and been sued by our partners.
  • Bloomberg: Deutsche Bank Disclosure Lapse in CO2 Case Blamed on IBM Staff. By Karin Matussek. Excerpts: Deutsche Bank AG’s failure to turn over e-mails in a tax probe that led to the arrest last year of five employees may have been caused by errors at International Business Machines Corp., which managed the bank’s data storage.

    The December 2012 arrests were based on prosecutors’ claims that Deutsche Bank withheld e-mails from the last week of April 2010 in the accounts of employees suspected of participating in a tax scheme related to carbon emission certificates.

    A month after the arrests, an IBM employee said in a letter to prosecutors that staff at the computer services company mixed up the dates of its monthly data-storage operations. The confusion may have meant the e-mails from the last week of the month were left out of documents turned over to investigators, according to a copy of the letter obtained by Bloomberg News. ...

    At a July 3 meeting this year with Frankfurt prosecutors, IBM staff told investigators that another “glitch” caused the loss of additional data from a period in 2012. The data sought by prosecutors had been deleted because various archival requests -- including some by Deutsche Bank -- were mingled and one folder was deleted at IBM, according to a copy of a memo written by Frankfurt tax investigators.

  • CNN Money: Fortune 500: Worst-performing stocks of 2013. These 15 companies sat out the huge market rally -- and a few were on the losers list last year. From repeats like J.C. Penney to tech giant IBM, here are 2013's worst-performing stocks. Excerpt: IBM has been feeling the big blues pretty much all year. The stock is the worst performer in the Dow Jones industrial average in 2013. ...

    In October, IBM reported its sixth consecutive quarter of declining revenue, and missed sales forecast by over $1 billion.

    Wall Street isn't too optimistic that IBM will quickly get back on track. Only 28% of analysts have a "buy" rating on the stock, the lowest percentage in at least two decades according to FactSet. And hedge fund titan Stan Druckenmiller recently revealed that he is shorting IBM.

  • The Age (Australia): IBM employee sues computer giant for bonus. By Clay Lucas and Lucy Battersby. Excerpts: An IBM sales executive on a salary of $295,000 is suing the company because it paid her a bonus of $543,000 – half a million dollars less than she believes is owed to her.

    Fiona White is an account manager in IBM's business solutions area who, according to a statement of claim filed in the Federal Court, is suing the company for loss and damage. ...

    Lawyers for Ms White said in her statement of claim that she was paid an annual salary of $295,000, and that she was entitled to earn commissions "depending on her exertions and work levels".

    Having been set a target of $US900,000 ($A1 million) in sales, Ms White said she had achieved recognisable revenue of $US9.1 million.

    This, Ms White calculated, meant she should have been paid a bonus of just over $1 million. But, her statement of claim said, IBM had "failed to pay all commissions due" under the company's incentive plan.

  • The Register: IBM predicts glorious tech future made possible by $IBMmarketing. Poor track record of scrying muddies optimistic pronouncements. By Jack Clark. Excerpts: IBM's latest "five in five" predictions –five things that may happen in the next five years – ignore social and economic realities to alert us to new technology that'll be prevalent (and mostly made by IBM).

    The predictions were published on Tuesday, and are centered around Big Blue's major product push of "cognitive computing" (henceforth abbreviated to $IBMmarketing). This draws upon multiple investments by the company in technologies ranging from its Jeopardy-playing Watson supercomputer, to neuromorphic chips and neural-network research.

    For this year's "five in five", IBM predicts that, by 2019, online classrooms will use $IBMmarketing to provide tailored educational programs for individual students; that $IBMmarketing will allow storekeepers to "beat online" shops by carefully tracking the flow of goods through their business; that doctors will use DNA-specific treatments and DNA testing to provide patient care; a digital guardian that uses $IBMmarketing will follow you round the internet to perform semi-autonomous security checks; and finally cities will start to reach out to your smartphone and/or fondleslab through the magic of $IBMmarketing. ...

    These fuzzy predictions are par for the course for IBM, which has been making them for years. ...

    If we'd believed all of its predictions from 2008 then, by now, we'd have thin-film solar cells layered on the tops of our laptops; we would be offered full DNA profiling from our doctors; we would never interact with people in stores and would instead use "digital shopping assistants"; all of our information would be reliably stored so that "forgetting will become a distant memory"; and we would be using our voice to do many of our tasks online. ...

    So it seems likely that IBM's pronouncements will come true in one way or another, but over a longer time period than Big Blue imagines, and via technologies or competitors it does not yet foresee. As ever, the possibilities posed are tantalizing, but it seems the greatest deployer of $IBMmarketing tech will be Google, rather than Big Blue.

    Selected reader comments follow:

    • "Distant memory" indeed. I am reminded of a piece from not long ago, which congratulated IBM on its successful history of "fighting off" upstart competitors such as (I shit you not) Microsoft. The pundit went on to explain how Big Blue would totally blow Amazon out of the water cloud, any moment now, just you wait...

      I am, of course, being unfair. It must be hard for IBM, a company that once had the whole computing industry in its claws, to be reduced to just another IT company. Barely does it remember, I bet, what it feels to set off in some direction and have the world follow.

    • Re: "Distant memory" indeed. Let's be real—"IBM" doesn't remember that at all. The bean counters and the suits took over the asylum a decade or more ago, understand nothing beyond squeezing every last penny out of the company and its customers, and move on anyway as soon as they've secured their stock options. True corporate memory of the past is close to zero at the upper management level. The only people within the company who DO remember are almost entirely an increasingly sparse band of ageing techies at way too low a level to actually influence which way the company goes. The old IBM is dead and gone; the corpse simply hasn't stopped twitching yet.
    • Watson In the Cloud with Diamonds. Watson has a lot of potential, especially as a cloud based product since current personal products are underpowered for the application. But the only way to meet that potential is to spend resources. Now, Google would do that, and maybe a few others like Apple, but IBM won't, nor would HP. The rumor is that the brain drain is becoming alarming with people fleeing for better pay and more interesting jobs, but that isn't stopping the cost cutters. I don't know how they expect to leverage Watson without spending resource and with only the drone personnel that barely squeaked University attempting to direct flocks of the cheapest available Indian job hoppers.

      Further, the story is that the upper management pulled a demotivational HP by giving pay raises to middle performers and below, leaving high performers with nothing. Maybe the 5 year miracle event would be: still a relevant company.

      Too bad, Watson has a lot of potential but lets face it, the grand entrance was years ago and the lack of investment is showing as the competition poaches the brains and the fruit dies on the vine with only smoke and mirrors to show since.

  • ZD-Net: IBM sued for cooperating with NSA for spy program. Summary: IBM is being sued for not disclosing the risks to its business when cooperating with the NSA for the agency's spy program. By Michael Lee. Excerpts: IBM is being sued by one of its shareholders over its alleged failure to disclose its involvement in the US National Security Agency's (NSA) spy program and subsequent loss of business.

    According to Reuters, the Louisiana Sheriffs' Pension and Relief Fund is suing the technology giant's CEO Virginia Rometty and CFO Mark Loughridge for failing to reveal the risk of tying the company to the NSA.

    In November, the Center for Strategic Studies in Washington noted that IBM, along with Cisco and Microsoft, appeared to be stonewalled by China in response to media reports that US companies were aiding the NSA.

    IBM reported a 22 percent revenue loss from China in October, and a 4 percent drop in its Q3 profits. In September, Microsoft also noted that China is its weakest market.

  • Yahoo! IBM Pension, Retirement Issues, Medical & Extend Health message board: "Hmmmmmm" by Kathi Cooper. Full excerpt: I always thought that the only legal thing keeping IBM from implementing a derisking plan was the problem of running into the anti-discrimination rules. (pot gets small for employees while pot gets bigger for execs = a legal no-no).

    Well, I'm no longer certain the anti-discrimination rules are protecting us. ABC (not our friends) has been working diligently against us. Looks like it is working.

    From: http://www.pionline.com/article/20131213/ONLINE/131219916/irs-issues-testing-relief-for-closed-db-plans#: IRS issues testing relief for closed DB plans, By Hazel Bradford.

    Corporations that sponsor defined benefit plans closed to new employees got some good news Friday from the Internal Revenue Service, which granted relief from non-discrimination testing rules through 2015. (Editor's note: IBM is an example of a corporation whose defined benefit plan is closed to new employees.)

    Defined benefit plan advocates wanted the IRS to allow plans to be considered in compliance if they were at the time of closing. The IRS agreed to the change, but only for 2014 and 2015, and only if benefits were not enhanced for some people but not others. The IRS left the door open for tighter rules in later years by asking for comments on possible new ones.

    Washington lobbyists had hoped to get permanent relief from the rules, which were written to apply to ongoing plans. Closed plans came closer to violating the IRS non-discrimination rules as participants' income grew, and some sponsors were freezing their plans as a precaution, to avoid running afoul of the rules.

    “We applaud the Treasury and IRS for getting this out quickly and addressing in a very effective way our concerns,” said Kent Mason, an attorney at law firm Davis & Harman, who is outside counsel for the American Benefits Council. “We have a number of questions about the approaches they've raised” for the future rules.

  • Glassdoor IBM reviews. Selected reviews follow:
    • Solid employer: Some positives; some negatives.” Anonymous Employee (Former Employee). Wide range of experience in many disciplines. Usually a good team environments. Large company with many advantages in winning business over competitors.

      Cons: Company is so large, much of ones time is spent overcoming internal obstacles. Decisions made at top sometimes are made without considering full implications of implementation in mid-management and lower—a challenge often faced by large companies. Company's top priority seems to be to meet an earnings promise it made to Wall Street—this can impact its investment horizon for certain market spaces, etc.

      Advice to Senior Management: 1) Get more information from sources outside IBM execs before major decisions are made (include subset of lower-level employees, as well as getting more advice from external practitioners). 2) Beware of having company strategy driven by EPS promises to Wall Street; instead focus on targeting markets to own, invest appropriately, and revise Wall Street expectations if necessary, despite short term pain.

    • “Frustrating” Anonymous Employee (Former Employee). Pros: Great opportunities to market different product and technologies (lateral moves). Cons: Marketing is not a career. Most IBM marketers have no experience. It is a placeholder position. They acquire companies and then lay off people. Engineering and sales focused. Older workforce. Status quo lovers. Advice to Senior Management: Strengthen the marketing profession. Great products don't market themselves. No, I would not recommend this company to a friend.
    • MDC is just plain sad” Applications Developer (Current Employee), East Lansing, MI. I have been working at IBM full-time for more than 3 years. Pros: IBM on resume and experience.


      • Salary Salary Salary is a joke; $20K below national averages for people with no experience
      • Ability to transfer within IBM even after transitioning to regular status you have to wait another year
      • No OT anymore to make up for the horrible salary anymore by transitioning us to regular status
      • Inconsistent attendance policy as to who has to adhere to the three days work from Lansing and who can work from home whenever they wish even though they live in Lansing.
      • Being put on projects that are not part of our skill set just to make the center hit its utilization numbers and required to work OT when we are not paid for it to help the center hit utilization targets
      • Very few new benefits for being made a regular employee which the management tried to use to soften the salary situation.

      Advice to Senior Management: Pay us what we are worth not the "low cost wage" that you refer to in the onboarding during the transition that is refereed to as part of MDC. Consistent attitude regarding attendance not single out certain individuals. Give us the yearly bonus that real IBMers are given and treat us like them. No, I would not recommend this company to a friend.

    • Great company story that works its consulting business resources to the bone”. Associate Partner (Former Employee), Tampa, FL. I worked at IBM full-time for more than a year. Pros: Great history, plenty of variety, truly embraces remote workers, decent pay (not for the sacrifice). Cons: Oversells and under-delivers leaving teams too small to get the job done leading to over-worked and stressed teams. No ability to live in apartments while working in other cities. No ability to temporarily relocate. Training and vacation time work against you as your billable time is what matters the most to IBM (not the people). Advice to Senior Management: Focus on your people and less on the bottom line. Good people will continue to leave and revenue will be a challenge with lesser teams. No, I would not recommend this company to a friend.
    • Used to be good, but now spiraling downward” Solution Architect (Former Employee), London, England (UK). I worked at IBM as a contractor for more than a year. Pros: Good people, a lot of good people.

      Cons: Company is too out of balance, becoming unhinged, all focus on Roadmap 2015 has meant everything else is suffering, including its people (sorry, resources). The introduction of the hilariously grotesque GDF system, which plugs into the PBC stack ranking system (both of which are so removed from ensuring and modulating high productivity from a community of above average intelligent people) means everyone is increasingly pitted against each other, which in turn means there is reduced collaboration, increased tension, less team work and an every man (resource) for himself attitude.

      These systems would have been thrown out at the highest level if fear wasn't running the company right at the top. There's a belief that they have to meet certain financial targets, either that or the board members are so greedy and self-serving that they are now devoid of any human empathy so are unable to see that such systems create an environment where everyone from the top of the company down to the lowest levels will develop the same attitudes i.e. one's that are in direct conflict with the natural order of things, and so will sooner or later....no, definitely sooner, stop functioning.

      In the last team I was in I heard of one person that had to be talked out of suicide and others that had had to get treatment for stress e.g. anti-anxiety tablets etc, not to mention those off work with various illnesses and the most talented jumping at the opportunity to take redundancy.

      The company is screaming out for a radical shake-up. Without one, and while fear and greed are the predominant drivers within the company, then it will end up falling on it's face. The banks all fell flat on their face through this attitude (although nothing much has changed with them since so expect them to fall harder very soon, but thats another story) and I have no doubt the same thing will happen to IBM.

      Advice to Senior Management: Resign. Elect a board comprising truly intelligent people, not career fools. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.

    • Positive, overall. Great people, technology, and opportunity.” Anonymous Employee (Former Employee). Pros: Opportunities to learn and move across different teams and technologies. Still a good company to be with over the long term if you can weather the storms. Cons: Far too heavy management and fragmentation of teams doing duplicate work right now. Lots of talent going to waste. Good technology that never sees the light of day. Too much focus on 2015 Roadmap without any apparent thought to how it's being done. It's a disaster. Advice to Senior Management: Develop a more coherent vision of what IBM is trying to be and make sure everyone knows what it is. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Delivery Project Executive for IBM Global Technology Services” Anonymous Employee (Current Employee). I have been working at IBM full-time for more than 10 years. Pros: Great technical knowledge, good corporate trust, always changing, some ability to move around your career within the same company, employees, management is fair. Cons: Poor work-life balance, declining benefits and pay competitiveness, uncertainty about momentum of the company, highly tops down managed, neutral to negative career development opportunity. Yes, I would recommend this company to a friend.
    • Ultimately lacks autonomy, complexity, and a clear connection between effort and reward” Consultant, GBS Consulting By Degrees (Current Employee), New York, NY. I have been working at IBM full-time for more than a year.


      • Good introduction to enterprise technology and B2B interactions
      • Client-facing roles and exposure to a variety of industries and experts
      • Opportunities to learn and work on interesting content (be very proactive and self-promote)
      • Pro due to Con: Learned how to network, self-promote, and find assignments on my own
      • Of course, the "brand name" on the resume.


      • Poor management of talent with myopic emphasis on utilization rate and minimizing bench
      • Not much emphasis on talent development and consultants treated as "Business Machines"
      • Often staffed on non-inspiring, underwhelming roles as "shadow" (cheap) resources
      • Too much oversight, lack of trust, and cannot provide feedback to management
      • High attrition rate erodes community; few stay beyond initial two years.

      Cons in Global Business Services:

      • Bonuses meager to efforts undertaken; no effective incentive to perform at 100%
      • Blind focus on the bottom-line and quarterly performance to meet "EPS roadmap"
      • Cuts to employee benefits and increases in billable hours announced without discussion
      • Office lacks basic amenities, reliance on sub-standard IBM legacy applications and software
      • Slow moving bureaucracy and low employee morale even among veteran IBMers.

      Advice to Senior Management—Consulting by Degrees:

      • A ratio of 300+ consultants per manager simply does not work
      • Revise incentives for managers to eliminate narrow focus on minimizing the bench
      • Institute an anonymous feedback/suggestion mechanism to improve the program
      • Make a real investment in developing consultants as marketed to retain talent Do not take advantage of new consultants; works only once and lose trust forever.

      Advice to Senior Management—Global Business Services:

      • "Think" about what actually drives the top line
      • Embrace a value-driven, long-term mentality
      • Innovate new offerings rather than re-branding old ones, aka "Smarter BS"
      • Do not alienate your employees, especially front-line, client-facing consultants
      • Consider spinning GBS off, not bound by roadmaps, etc.

      No, I would not recommend this company to a friend.

    • Great place to work despite its size” Software Professional (Project Manager) (Current Employee), San Jose, CA. I have been working at IBM full-time for more than 10 years. Pros: This is an innovative, ethical company with a long history that I was proud to work for. They clearly see where their profits lie and move to leverage those performing products in the market. Conversely, unprofitable products are cut. Great benefits with large salary ranges. Working from home was wonderful and perfect for my situation.

      Cons: Dealing with what I call the corporate "hoo haw," the processes for getting some goals accomplished are sometimes monumental. I found that by building my network, I could many times work around these roadblocks and achieve the end goal. Yes, I would recommend this company to a friend. I'm not optimistic about the outlook for this company.

    • A great learning experience, a poor personal promotion path” Senior Managing Consultant (Current Employee), Toronto, ON (Canada). I have been working at IBM full-time for more than 5 years. Pros: Great people, strong process, in many ways a truly SMART workplace. Cons: A generally recognized challenge with promoting people internally, resulting in many leaving the firm to return later at a higher band. Not an entirely healthy situation. Advice to Senior Management: Keep "going organic" in internal growth, lest people leave and not actually come back. Yes, I would recommend this company to a friend. I'm optimistic about the outlook for this company.
    • Company provides personal laptop for all employees which is a plus for working remote” Dispute Analyst (Former Employee), Rochester, NY. I worked at IBM full-time for more than 5 years. Pros: Well established structural. Good place to work if you have technical degrees or Master or PhD. Cons: Not much growth for low pay finance workers since company is outsourcing to India. No, I would not recommend this company to a friend.
  • Glassdoor IBM Canada reviews
  • Washington Post opinion: Is the West retiring early retirement? By Robert J. Samuelson. Excerpts: We may be witnessing the last gasp of early retirement — not just in the United States but in many industrialized countries. Considering the high unemployment since the 2008 financial crisis, you might expect the opposite. Early retirement would flourish. It would strike many unemployed older workers as the path of least resistance. Can’t get a job? Retire instead. Surely this has happened, but it’s being diluted by a determination to work longer. Early retirement is in retreat. ...

    The causes lie in a messy mix of public policy, improved health and changes in lifestyles and economic conditions. For the United States, Burtless cites an increase in Social Security’s eligibility age for full benefits from 65 to 66; a shift among employers from “defined benefit” pensions (which provide payments until a recipient’s death) to “defined contribution” pensions (which provide support only until pension savings are exhausted); and higher education levels among baby boomers. ...

    Similar factors are probably at work abroad: cuts in public programs — or fear of cuts; more economic uncertainty; longer lives and jobs that are less physically demanding. Still, a few advanced countries retain low retirement ages: prominently, France, Italy and Belgium. In 2012, only about 20 percent of their populations aged 60 to 64 had jobs.

  • Alliance for Retired Americans Friday Alert. This week's headlines:
    • Senate Passes Budget Deal
    • The Affordable Care Act is Working for Millions of Americans, Including Seniors
    • Happy Holidays from the Alliance
News and Comments Concerning ExtendHealth (New Medical Plan for Medicare-Eligible IBM Retirees)
  • Yahoo! IBM Pension, Retirement Issues, Medical & Extend Health message board: "HRA Reimbursement Process" by "crack_a_rat". Full excerpt: Per a recent email from Extend Health:

    Dear IBM Retiree or Benefit Recipient,

    Congratulations on making your 2014 plan selection. We know that the process of choosing new coverage on the individual market is very different from what you have been used to with IBM. Further, we know that it took a material time commitment to personalize your health plan and enroll telephonically. Please accept our thanks for your patience in going through the highly regulated Medicare enrollment process. The good news is that your enrollment application is complete. We are now working with your selected carrier(s) to get you your insurance card(s) by year-end for January 1, 2014 effective coverage.

    We Are Always Here For You. You have my personal commitment that we will be here for you for anything you need after enrollment. Our Medicare assistance services don’t end now that your enrollment is complete. Our customer service team remains available should you have issues or concerns related to any of your Medicare plans. At any time during the year, if you have questions about your coverage or need help with your claims, call us using the dedicated phone number for IBM retirees, 1-855-359-7380. You can also send us any questions using the new, dedicated IBM feedback mailbox, IBMsupport@.... Please include your full name and your phone number with your questions so we can respond as quickly as possible.

    What’s Next? If you are eligible for the IBM HRA, we will mail you an HRA Welcome Guide in December. This guide explains how you can receive reimbursement for your eligible medical expenses from your IBM Health Reimbursement Arrangement (HRA). Like enrolling in a new individual Medicare plan, using an HRA to be reimbursed for plan premiums and personal health expenses is also a different approach than what you are used to. Your HRA Guide will explain, in great detail, how this process works. Please also feel free to contact us to help walk you through how to effectively manage and use your new HRA. Lastly, as a new customer, please look to your mailbox or your email inbox for the twice-yearly ExperienceChoice newsletter. This publication provides updates and helpful advice on Medicare benefits and insurance coverage.

    Thank You! Thanks again for your patience in completing the Medicare exchange enrollment process and for the opportunity to serve you and your fellow retirees. We look forward to helping you maximize the value of your new Medicare plan and HRA account at any point in the future.

    Contact Extend Health:
    IBM Dedicated Number: 1-855-359-7380
    (TTY: 711)
    Monday through Friday, 8:00 a.m. until 9:00 p.m. Eastern Time
    IBM Dedicated Feedback Mailbox: IBMsupport@...
    Visit Us Online: www.extendhealth.com/IBM

  • Yahoo! IBM Pension, Retirement Issues, Medical & Extend Health message board: "Kick the Tires" by Gary Pelphrey. Full excerpt: I'll be the first to admit that I know next to nothing about healthcare insurance. I retired in 1988 and thought (think) that my benefits were fixed at that point. I'm embarrassed to admit that I didn't really consider any of the choices in coverage presented to me until a year or so ago.

    My wife and I spent an hour or two each putting our doctors and meds on the ExtendHealth web site.

    I went to the website, put in my zip code(?) and some other stuff, and was presented a screen with 3 columns. One Medigap insurance had 7 alternatives, the drug plan had 17 alternatives, and the 3rd column had 9 alternatives.

    I typed this data into a spreadsheet (getting bounced from EH several times for 'inactivity' - all I was doing was scrolling). A bell started ringing in my head, because I thought I was doing just what any cautious buyer would do, and it obviously didn't fit into EH's plans.

    We called EH on Monday, and spent an hour or so with a young man who seemed nice, but whose accent was so bad that we couldn't differentiate between his saying Plan B and plan F.

    He told us that in addition to the 7 choices we had on the web site, we also had some other choices from AARP, which were not on the web site. When I asked him when they would be posted so we could compare them, he said they wouldn't be posted. That bell rang again.

    We signed off with the notion that I would go to AARP and research these plans. I'm in the process of doing that.

    We've gotten three calls from EH since then, two from a young woman who seemed very knowledgeable and was just calling to followup and give us any more info we needed. Unfortunately, on the second call (which we'd scheduled) we were 5 minutes into a discussion, when she had some sort of coughing/choking fit, so I told her to sign off, take care of herself, and call us back.

    During our brief discussion, I showed her that on this 'detailed' three column display of plans available to me, all of the specifically-drug plans had two columns, one for the co-pay for a one month generic prescription, and another for the copay for the three month generic prescription (in all cases, it was 3 times the one month co-pay). I said that I couldn't find any indication of co-pays for name brand drugs. She said that they were divided into Tiers (I remember that from somewhere else), but we weren't able to complete that investigation before her choking started. Bells going off, again.

    We got another EH call an hour or so later; the caller said he was following up on our contact, but he had no idea who the lady with the coughing was, so he wasn't following that up. He just knew we'd talked to someone on Monday. I tried to ask him about the name brand drugs, but he said he wasn't an adviser, he was just "following up".

    Given the notion that no one from IBM has anything approaching an explanation as to why they can force this cataclysmic change on 110,000 people, claiming it's too expensive for IBM to support, and at the same time hiring a company who works on a commission to "advise" us in order to get any cash benefit from this change, this bell is just ringing more and more.

    I have the definite feeling that whatever motivation or justification exists for IBM's decision, they have chosen to transfer our capital resources in this matter to a company, headed by an individual who has been reducing IBMers retirement benefits (as a consultant) since 1993.

    I cannot overcome the feeling that we're all dealing with a "Buy here, pay here" used car lot sales force, incentivized by a commission structure to sell us policies that maximize their profitability rather than our future healthcare.

    What other explanations can there be for withholding vital drug costs from our decision-making data? Why are some plans available, but not a part of their website?

    There are some on this chat board who are obviously connected with some of the powers in Valhalla (that's next to Armonk, and used to be the site of some headquarters). I would not be surprised to learn that there are some active-duty IBMers monitoring this board, as well.

    Setting aside my inexperience in this healthcare shopping area, and the emotional insecurity I suspect this message is indicating which may be clouding my mind, can someone in authority please correct the deficiencies which created the 2 questions just above, or explain to all of us why we don't really need to have this data?

New on the Alliance@IBM Site

Job Cut Reports

  • Comment 12/13/13: Not only is IBM taking advantage of their retirees and their employees still working, they are trying to skirt the law when it comes to the members of the military - or at least they are in my case. Due to the on-going conflicts around the world, I have been on a military leave of absence from IBM for a couple of years. I am now exercising the reemployment rights afforded to my under USERRA. They are trying to deny me a pay raise due to the fact that I've been gone for several years. IBM is violating USERRA by not treating me as if I was there. So I'm going to hold their feet to the fire. They WILL give me a pay raise that will take effect on the date I return or they will have a military attorney representing my case against them before a judge. -military reservist and employee-

    Alliance reply: Thank you for your service and sacrifice for our country. Are you aware of any other Veterans/IBM employees that are being treated this way at IBM? Please keep us informed on your situation. If you would like to share any other information about this, with Alliance@IBM staff, please contact ibmunionalliance@gmail.com

  • Comment 12/15/13: -military reservist and employee- We all thank you for your service, but take note that while you were gone, most of us didn't get a raise either. Ask your manager where you stand in the range for your band. If you're not below the minimum, or at least in the bottom 20% as a 1 or 2+ performer, you're where you would have been, anyway. -No raise here, either-
  • Comment 12/15/13: To -military reservist and employee-: Thank you for your service. IBM can do what they want in most cases, I hope you'll have a case against them. I was appraised a 2 or 2+ for years and for the last 4 years didn't get a raise because my manager said my salary was penetrated over 100% in my band. I was a band 7 programmer. Then got let go in June and 60 years old. Hummmm. Good luck to you... the rest need some help. -Outta there-
  • Comment 12/16/13: Regarding the post sent anonymously by an IBM manager in regards to dropping appraisals, kudos to that person for being honest and exposing the truth. Why can't IBM be honest and just tell employees that they are no longer needed because their jobs are now being done in India, China, Brazil, Mexico, or wherever? Why add insult to injury by dropping someone's appraisal to a 3 when it is not deserved? Everything nasty is done with purpose by these scheming IBM US executives, so I'm guessing they'd like us to quit to avoid severance packages. I doubt it's merely for their convenience in making HR layoff selection lists easier to generate... -Anonymous-
  • Comment 12/16/13: Single 3, full package in July. I experienced non-trivial identity crisis no longer being an IBMer because I'd really believed the rah rah for decades. But once I was able to finally admit to myself that I'd spent a few decades in denial of how senseless so much of my technical experience was in so many ways that would astound even Dilbert, the relief that washed over me washed away the identity crisis. It was nice to once again see the world in eyes that were no longer perpetually rolling. -3 cheers for the 3 that set me free-
  • Comment 12/17/13: I was an immigrant worker to the USA and a professional hire by IBM. I was paid substantially less than other new hires. The higher paid American born employees were often "RA'd" I was never let go. I did not buy medical benefits from IBM as these were too expensive. In the last years due to my small net income (below a net of 20k) I put zero dollars in the 401k pension. By the time I was told "to look for another job" My net income was below the food stamp support level. IBM asked people to give food to the food banks where people like me could get support. In effect ibm was asking the employees in some case to subsidize the IBM payroll IBM needs a union so it can improve its image and not be despised by its customers and employees. I have heard Even IBM managers say they do not trust IBM. My redeployment outside IBM has been very successful -Immigrant Worker-
  • Comment 12/17/13: STG exec in Tucson last week for a town hall and described his strategy as: instead of doing many things well, I want to do a -few- things very well. Also reiterated personal mantra of: Every IBMer should re-evaluate every year if he or she still has passion for the business. Translation - If you don't leave on your own there will be more layoffs coming to STG in 2014. -Shawn-
  • Comment 12/18/13: Is it just me? Or do any others feel like entering year-end PBC results is an exercise in futility because our fate is sealed already. That anonymous note from an FLM really made me feel totally helpless and hopeless about IBM. I still had some loyalty to them; even after all the carnage of the past few years. Now I feel nothing but disgust and contempt. -Anti_Pep_Rally-
  • Comment 12/18/13: @Shawn - Ginni herself said pretty much the same thing last month when she was in Austin. Straight up told the audience, "if you are not working on cloud, mobile, or the openpower push then you are working on the wrong stuff". Total disconnect between those at the top and those in the trenches, which IMO includes the first 2 or even 3 rungs of management. -centex-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • UCLA Fielding School of Public Health, courtesy of Physicians for a National Health Program: U.S. ranks near bottom among industrialized nations in efficiency of health care spending. Excerpts: A new study by researchers at the UCLA Fielding School of Public Health and McGill University in Montreal reveals that the United States health care system ranks 22nd out of 27 high-income nations when analyzed for its efficiency of turning dollars spent into extending lives.

    The study, which appears online Dec. 12 in the "First Look" section of the American Journal of Public Health, illuminates stark differences in countries' efficiency of spending on health care, and the U. S.'s inferior ranking reflects a high price paid and a low return on investment.

    For example, every additional hundred dollars spent on health care by the United States translated into a gain of less than half a month of life expectancy. In Germany, every additional hundred dollars spent translated into more than four months of increased life expectancy

    The researchers also discovered significant gender disparities within countries.

    "Out of the 27 high-income nations we studied, the United States ranks 25th when it comes to reducing women's deaths," said Dr. Jody Heymann, senior author of the study and dean of the UCLA Fielding School of Public Health. "The country's efficiency of investments in reducing men's deaths is only slightly better, ranking 18th." ...

    Comment: By Don McCanne, M.D. To no surprise to those who have been paying attention to the U.S. health care system, we rank very low amongst OECD nations - 22nd out of 27 studied - on the efficiency of health care spending when measured by improvements in life expectancy. Spending on women was even less efficient than spending on men. As we have long known, we spend more while getting less.

    There are likely many factors that contribute to these differences, but there is no doubt that we have a very dysfunctional, fragmented, wasteful, inequitable health care financing system that certainly is an exemplar of inefficiency. Why should we not expect poor outcomes for our high level of spending?

    Once we have in place a single payer national health program it will be much easier to identify the deficiencies specifically related to health care delivery, and then we can correct them. Ladies first, please.

  • New York Times editorial: An Epidemic of Attention Deficit Disorder. Excerpts: The hard-sell campaign by drug companies to drive up diagnoses of attention deficit hyperactivity disorder, or A.D.H.D., and sales of drugs to treat it is disturbing. The campaign focused initially on children but is now turning toward adults, who provide a potentially larger market.

    There is no doubt that a small percentage of children, perhaps 5 percent, have the disorder and that medication can alleviate the symptoms, such as inability to concentrate, that can impede success in school or in life. Some studies have shown that medications helped elementary schoolchildren who had been carefully evaluated for A.D.H.D. improve their concentration and their scores on reading and math tests.

    Recent data from the Centers for Disease Control and Prevention showed that 15 percent of high-school-age children had been diagnosed with the disorder and that the number of children taking medication for it had soared to 3.5 million, up from 600,000 in 1990. Many of these children, it appears, had been diagnosed by unskilled doctors based on dubious symptoms.

    A two-decade campaign by pharmaceutical companies promoting the pills to doctors, educators and parents was described by Alan Schwarz in The Times on Sunday. The tactics were brazen, often misleading and sometimes deceitful. Shire, an Irish company that makes Adderall and other A.D.H.D. medications, recently subsidized 50,000 copies of a comic book in which superheroes tell children that “Medicines may make it easier to pay attention and control your behavior!” Advertising on television and in popular magazines has sought to persuade mothers that Adderall cannot only unleash a child’s innate intelligence but make the child more amenable to chores like taking out the garbage. ...

    So many medical professionals benefit from overprescribing that it is difficult to find a neutral source of information. Prominent doctors get paid by drug companies to deliver upbeat messages to their colleagues at forums where they typically exaggerate the effectiveness of the drugs and downplay their side effects. Organizations that advocate on behalf of patients often do so with money supplied by drug companies, including the makers of A.D.H.D. stimulants. Medical researchers paid by drug companies have published studies on the benefits of the drugs, and medical journals in a position to question their findings profit greatly from advertising of A.D.H.D. drugs.

  • The Smirking Chimp: The Other Side Of Health Care Scare Stories. By Dave Johnson. Full excerpt: You have probably heard the right’s (well-funded) messaging that people have “lost” their health insurance because of Obamacare. The thing is, people who had plans cancelled can go to the exchanges and get better insurance and almost always for a lot less money.

    Compare that to the following, which you are not hearing about but which is also happening:

    • 71 million Americans on private insurance have gained coverage for at least one free preventive health care service such as a mammogram, birth control, or an immunization in 2011 and 2012. In the first eleven months of 2013 alone, an additional 25 million people with traditional Medicare have received at least one preventive service at no out of pocket cost.
    • Up to 129 million Americans with pre-existing conditions – including up to 17 million children –will no longer have to worry about being denied health coverage or charged higher premiums because of their health status.
    • Approximately 60 million Americans have gained expanded mental health and substance use disorder benefits and/or federal parity protections.
    • 41 million uninsured Americans will have new health insurance options through Medicaid or private health plans in the Marketplace. Nearly 6 in 10 of these individuals could pay less than $100 per month for coverage.
    • Consumers have saved $5 billion over the past two years due to a new requirement that insurance companies have to spend at least 80% of premium dollars on care for patients (at least 85% for large group insurers). If they don’t, they must send consumers a rebate. In 2013, 8.5 million enrollees will receive rebates averaging $100 per family.
    • Insurance companies must submit premium increases of 10% or more for review by experts. In 2012, 6.8 million Americans saved an estimated $1.2 billion on health insurance premiums after their insurers cut back on planned increases as a result of this process.
    • Since the health care law was enacted, more than 7 million seniors and people with disabilities have saved an average of $1,200 per person on prescription drugs as the health care law closes Medicare’s “donut hole.”
    • Over three million young adults have gained health insurance because they can now stay on their parents’ health plans until age 26.
    • Individuals no longer have to worry about having their health benefits cut off after they reach a lifetime limit on benefits. Starting in January, 105 million Americans will no longer have to worry about annual limits, either.
    • Using funds available through the Affordable Care Act, health centers are expanding access to care by building new sites and renovating existing sites. Health centers served approximately 21 million patients in 2012.
  • HealthAffairs Blog: Health Care Reform: Views From The Hospital Executive Suite. By Andrew Steinmetz, Ralph Muller, Steven Altschuler, and Ezekiel Emanuel. Excerpts: Pessimism pervades the national dialogue surrounding healthcare reform. Despite fixes to the federal exchange website and marked improvements in enrollment, politicians and pundits continue to assail the Affordable Care Act (ACA), offering grim predictions about the future of healthcare after its implementation. The law, they claim, is an unworkable train-wreck. It will produce a healthcare system with significantly higher costs, lower quality, and bureaucratic confusion.

    The public has seemed equally pessimistic. Fifty-four percent of Americans, according to a recent poll, believe the ACA will have a negative impact on the healthcare system, compared to only 24 percent who anticipate a positive impact. Nearly three-quarters expect the quality of healthcare to decline or stay the same, while only 11 percent expect it to improve. More than half expect costs to rise while only 9 percent expect them to fall.

    Such pessimism, however, is hardly a credible predictor of the success or failure of the ACA. Politicians, pundits, and the public are largely removed from the inner workings of the healthcare system, so it is difficult for them to form an accurate, 360-degree view of reform. Moreover, most Americans (70 percent) readily admit they know little about the ACA or its potential impact.

    A more meaningful source for an appraisal of healthcare reform, and for predictions about how it will fair, would be individuals who are especially informed—people who have spent their entire careers on the front lines of the healthcare system deciding how budgets are managed and how care is delivered—people like the leaders of America’s hospitals and health systems. Healthcare reform is catalyzing major changes for these executives and their institutions. Wouldn’t it be helpful to know if they share the public’s apprehension and pessimism? ...

    The differences in attitudes were stark. Unlike politicians, pundits, and the public, the leaders of America’s leading hospitals and health systems are optimistic about reform (Figure 1). Fully 65 percent indicated that by 2020, they believe the healthcare system as a whole will be somewhat or significantly better than it is today. And when they were asked about their own institutions, the optimism was even more dramatic. Fully 93 percent predicted that the quality of care provided by their own health system would improve. This is probably related to efforts to diminish hospital acquired conditions, medication errors, and unnecessary re-admissions, as encouraged by financial penalties in the ACA.

  • New York Times: Drug Maker’s Donations to Co-Pay Charity Face Scrutiny. By Andrew Pollack. Excerpts: As drug prices have soared in recent years and insurers have increased co-payments, a new type of charity has blossomed to fill a vital niche — helping patients pay the steep out-of-pocket costs for their medicines.

    But the largest of these co-payment assistance charities, the Chronic Disease Fund, is now in turmoil after questions have arisen about its relationship with a pharmaceutical company that is itself under investigation for its marketing practices.

    The practice is casting light on what has long been an open secret: The bulk of the contributions to these charities come from the pharmaceutical companies. The foundations not only help hundreds of thousands of patients a year, they also raise drug company sales and profits.

    After all, if a patient cannot afford out-of-pocket costs of $5,000 for a $100,000-a-year drug, the drug company gets nothing. But if the manufacturer or the charity pays the $5,000, the patient gets the drug and the company receives $95,000 from the patient’s insurance company or Medicare. ...

    The charities are supposed to solicit donations from the public, not just drug companies. Still, 81 percent of the contributions to the Chronic Disease Fund in 2011 came from two pharmaceutical companies, according to its financial report for the year. The companies were not identified.

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.

  • Daily Kos: Pope Francis Responds to Rush Limbaugh's "Marxist" Charges. Excerpts: In an interview with Italian newspaper La Stampa, Pope Francis responded on Saturday to Rush Limbaugh's recent accusation that he is a "pure Marxist."

    Asked how it felt to be called a Marxist, Time Magazine's Person of the Year answered:

    "The Marxist ideology is wrong. But I have met many Marxists in my life who are good people, so I don’t feel offended."

    Pope Francis went on to reiterate his criticism of trickle down economics, saying it never benefits the poor, instead resulting in the rich simply keeping more for themselves:

    "The only specific quote I used was the one regarding the “trickle-down theories” which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and social inclusiveness in the world. The promise was that when the glass was full, it would overflow, benefitting the poor. But what happens instead, is that when the glass is full, it magically gets bigger nothing ever comes out for the poor. This was the only reference to a specific theory. I was not, I repeat, speaking from a technical point of view but according to the Church’s social doctrine. This does not mean being a Marxist."
  • New York Times opinion: We Are Not All in This Together. By Shamus Khan. Excerpts: Rising income inequality troubles Americans. Some of us worry that the fate of the many has become divorced from the fortunes of the few. Others are concerned that the government will attack inequality by taking their hard-earned money and giving it to the less virtuous.

    What both sides seem to agree on is that from the late 1940s until the early 1970s things were different. Those coming home from the war entered college in record numbers, which fueled a generation of economic growth. As each year passed, a majority of Americans were economically better off. Incipient political movements that confronted racial oppression and gender discrimination flourished. ...

    In the postwar period the rich found themselves in a quandary. Their wages and their membership were static. They needed to resuscitate themselves. This required allies who shared a basic concern. The rich thought, not incorrectly, that high tax rates were handicapping their capacity to advance. And they found common ground with suburbanites who didn’t see social spending as something that enhanced their lives and neighborhoods, but as something that transferred their tax dollars to a different kind of American — urban, of a notably darker hue — who had only recently gained political legitimacy. Through a tax revolt these groups went to work dismantling social programs.

    They were terribly successful and they helped turn America on its head. Since the late 1970s, it has been average Americans who have experienced comparative wage stagnation and who are more likely than their parents to stay in the same economic position. For the rich, the story is the exact opposite.

    Let’s say you’re fortunate enough to be in the top 1 percent of American families; at a minimum you make almost $400,000 a year. Things aren’t just good; they seem to keep getting better. While the median American worker received about a 5 percent wage increase since 1979, your raise was above 150 percent. From your perch, even when you look at people right below you in the top 5 percent, you find that the rate of your wage growth is much greater than theirs. ...

    The second lesson is harder. We are not in this together. We need to get back to what made America great, when the many and not the few were winning. To do so we must stop conflating moral arguments with economic ones. Instead of operating under the fiction that we will all benefit from a proposed change in economic direction, let’s be honest. If a few of us are better off, then many are not. If many are better off, then the few will be constrained. Which world would you rather live in? To me the answer is obvious.

  • Bloomberg BusinessWeek: The Gatsby Curve: How Inequality Became a Household Word. By Brendan Greeley. Excerpts: On Dec. 4, President Obama gave a speech about income inequality in Washington. A family in the richest 1 percent, he said, has more than 288 times the wealth of the median family. The likelihood that a child can escape her parents’ circumstances is lower in America than in “most of our wealthy allies—countries like Canada or Germany or France.” Although the president didn’t pull out any graphs, Obama borrowed two ideas for his speech that make inequality easier to understand: the 1 percent and the Gatsby Curve. In part, the president—and the pope in Evangelii Gaudium, an Apostolic Exhortation released on Nov. 24—are able to talk about income inequality because two groups of economists spent the better part of a decade coming up with easily digestible ways to describe it.

    ...Other economists, relying on household surveys taken by the U.S. Department of Labor, also found growing inequality. But the Frenchmen used IRS data that goes back much further than Labor’s numbers. By 2007, the two were able to show that the income share of the top 1 percent had reached a level not seen since 1928, the Jazz Age of F. Scott Fitzgerald’s Jay Gatsby. ...

    By the late 1980s, the Michigan study had detailed information on two generations of Americans showing that social mobility was much less prevalent than previously estimated. The poor were staying poor, and the rich were staying rich.

    In the late 1990s, Miles Corak at the University of Ottawa applied that approach to Canada. He also began the complicated econometric work necessary to compare social mobility among countries. Corak made it possible to see whether the American Dream measured up to the Danish Dream. (It doesn’t.) In 2004, again inspired by a theoretical paper by Solon, Corak produced the first version of a graph that compared developed economies according to income inequality and social mobility. The graph shows that countries with the highest income inequality, such as the U.K. and the U.S., are also the most likely to pass economic status from one generation to another.

  • Washington Post opinion: Family values hypocrisy. By E.J. Dionne Jr. Excerpts: Politicians talk about family values but do almost nothing to help families. They talk about parental responsibility but do almost nothing to help parents. They talk about self-sufficiency but do precious little to make self-sufficiency a reality for those who must struggle hardest to achieve it.

    How often can we hear that government should be more responsive to the problems Americans face now? But the vogue for simply assuming that government cannot — or should not — do much of anything about those problems leads to paralysis. This, in turn, further increases disaffection from government.

    For all these reasons, it was exciting last week to see Sen. Kirsten Gillibrand of New York and Rep. Rosa DeLauro of Connecticut introduce the FAMILY Act, the acronym standing for their Family and Medical Insurance Leave Act. The bill would provide partial income for up to 12 weeks of leave for new parents and for other family demands, such as care for a sick family member, including a domestic partner.

    How far behind the rest of the world is our country on this quintessential family values matter? The Post’s Amy Joyce cited a Harvard University study in 2004 noting that of 168 countries it examined, 163 had some form of paid maternity leave. We weren’t one of the 163. Joyce observed that “the U.S. is on par with places like Papua New Guinea and Swaziland when it comes to paid family leave.” ...

    Our current discussion of what constitutes “freedom” is shaped far too much by a deeply flawed right-wing notion that every action by government is a threat to personal liberty and that the one and only priority of those who care about keeping people free is for government to do less than it does.

    This perspective ignores the many ways over the course of our history in which government has expanded the autonomy of our citizens. Consider how much less freedom so many of us would have without civil rights or voting rights laws, without government student loans, without labor laws, without public schools and without Medicare, Medicaid and Social Security. (And we don’t take seriously enough the implications of a most basic fact of our national story: that it took big government in Washington to outlaw slavery.) ...

    At a time when the political news is dominated by a debate between do-little conservatism and do-nothing conservatism — which is to say, between a right-tilting Republican establishment and the radical tea party — Gillibrand’s package includes building blocks for a broader counter-vision inspired by the idea of an Empowering Government.

    Yes, we need to protect what the philosophers call “negative liberty.” There are, indeed, many things that government should never be able to do to us. But we need to think more about “positive liberty,” the ability to realize certain goals in our lives. Democratic government can create the framework in which we have more power to reach those ends.

  • The Economist: The politics of low pay. Raising the floor. America’s minimum-wage debate has rolled round again. Excerpts: He likes the work; but at $9.60 an hour, stacking the shelves at a Walmart in east Los Angeles does not pay Anthony Goytia enough to cover the bills for his family of five, he says. He supplements his fortnightly pay of $560-600 with the odd catering job, by subjecting himself to clinical trials of a treatment for his psoriasis, and with federal and state assistance. He was recently approved for food stamps; that should make Christmas a little jollier. ...

    Between 1979 and 2007 the incomes of the top 1% of American earners rose by 275%, according to the Congressional Budget Office. Those of the bottom 20% rose by 18%. Had the federal minimum wage kept up with productivity gains since 1968 it would have reached $21.72 last year, estimates the Centre for Economic and Policy Research (CEPR), a leftish think-tank. Campaigners gripe that the government should not have to top up the pay of workers like Mr Goytia (who agrees); this “hidden subsidy” amounts to $7 billion in the fast-food industry alone, according to one study.

  • Huffington Post: The Meaning of a Decent Society. By Robert Reich. Excerpts: It's the season to show concern for the less fortunate among us. We should also be concerned about the widening gap between the most fortunate and everyone else.

    Although it's still possible to win the lottery (your chance of winning $636 million in the recent Mega Millions sweepstakes was one in 259 million), the biggest lottery of all is what family we're born into. Our life chances are now determined to an unprecedented degree by the wealth of our parents.

    That's not always been the case. The faith that anyone could move from rags to riches -- with enough guts and gumption, hard work and nose to the grindstone -- was once at the core of the American Dream.

    And equal opportunity was the heart of the American creed. Although imperfectly achieved, that ideal eventually propelled us to overcome legalized segregation by race, and to guarantee civil rights. It fueled efforts to improve all our schools and widen access to higher education. It pushed the nation to help the unemployed, raise the minimum wage, and provide pathways to good jobs. Much of this was financed by taxes on the most fortunate.

    But for more than three decades we've been going backwards. It's far more difficult today for a child from a poor family to become a middle-class or wealthy adult. Or even for a middle-class child to become wealthy.

    The major reason is widening inequality. The longer the ladder, the harder the climb. America is now more unequal that it's been for eighty or more years, with the most unequal distribution of income and wealth of all developed nations. Equal opportunity has become a pipe dream. ...

    Last month Pope Francis wondered aloud whether "trickle-down theories, which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness," Rush Limbaugh accused the pope of being a Marxist for merely raising the issue.

    But the question of how to bring about greater justice and inclusiveness is as American as apple pie. It has animated our efforts for more than a century -- during the Progressive Era, the New Deal, the Great Society, and beyond -- to make capitalism work for the betterment of all rather merely than the enrichment of a few.

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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