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Chronic Unemployment

Neoliberalism as the Cause of Chronic, Structural Unemployment in the USA

News Over 50 and unemployed Recommended Links Chronic stress Computers eat people Underemployment Eroding Western living standards
The neoliberal myth of human capital Perma Temps Adverse Selection Scapegoating and victimization of poor Productivity Myth and "Rising labor costs" hypocrisy Neoliberalism and Christianity The problem of inequality
Neoliberalism as a New Form of Corporatism Corporatism Casino Capitalism If Corporations Are People, They Are Psychopaths Toxic Managers Office Stockholm Syndrome Learned helplessness
Unemployment after graduation Fake Employment Statistics Destructiveness of GDP Mania   Financial Sector Induced Systemic Instability

Economics Pseudo Theories

Notes on Republican Economic Policy
John Kenneth Galbraith Invisible Hand Hypothesis Inflation vs. Deflation Lysenkoism Financial Humor Humor  Etc

Unemployment offices, homeless shelters,  hospitals, prisons and casinos. and are the only real growth industries of Obama Administration. In Jan 2010 35 millions, or one in eight Americans, were on food stamps.

Obama's  biggest — and only major — jobs program is the U.S. military


When I was a kid they told us that automation would "free" us from working long hours. What they didn't tell us what that they weren't going to pay us for all this leisure time we'd get.

Mass unemployment is the primary indication of the collapse of a given form of society -- James Burnham


Introduction


"Unemployment" statistics has been the political advertising media for every Administration in modern times

From comment in
The Rise of Invisible Unemployment
 The Atlantic, Nov 9, 2014

 

Chronic unemployment is an immanent feature of neoliberalism, which requires the army of unemployed to suppress wages in order to increase share of profits for the top 1$ and, especially, the top 0.01%.  Another problem is secular (long-term) stagnation of the economy due to destruction of consumer demand, which comes with the deterioration of the standard of living and high level of unemployment.  As Pope Francis noted:

...Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape.

Human beings are themselves considered consumer goods to be used and then discarded. We have created a “disposable” culture which is now spreading. It is no longer simply about exploitation and oppression, but something new. Exclusion ultimately has to do with what it means to be a part of the society in which we live; those excluded are no longer society’s underside or its fringes or its disenfranchised – they are no longer even a part of it. The excluded are not the “exploited” but the outcast, the “leftovers”.

... ... ...

One cause of this situation is found in our relationship with money, since we calmly accept its dominion over ourselves and our societies. The current financial crisis can make us overlook the fact that it originated in a profound human crisis: the denial of the primacy of the human person! We have created new idols. The worship of the ancient golden calf (cf. Ex 32:1-35) has returned in a new and ruthless guise in the idolatry of money and the dictatorship of an impersonal economy lacking a truly human purpose. The worldwide crisis affecting finance and the economy lays bare their imbalances and, above all, their lack of real concern for human beings; man is reduced to one of his needs alone: consumption.

The institutions of neoliberal capitalism, while promoting an expanded role in the economy for "market forces" (read "financial oligarchy")  simultaneously transform labor relations. The “market” under neoliberalism certainly no longer refers to competition as a form of the production and distribution goods and services. Instead, it means something more along the lines of international financial monopolies protected by collusion between captured vassal state institutions (including neoliberal fifth column domination in the all major branches of government, especially executive and  legislative branches, educational institutions and media) and multinationals, which pay money to sustain this social order. The term “Free markets” under neoliberalism means letting rich people do what they want, not promoting efficient allocation of resources through competition and the price mechanism. The core of the fifth column are local oligarchs and so called "Chicago boys": sons and daughters of local elite who are trained for and indoctrinated for this purpose in Western universities. As aptly noted Neoliberalism – the ideology at the root of all our problems ( The Guardian,  April 15, 2016)

We internalize and reproduce its creeds. The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages – such as education, inheritance and class – that may have helped to secure it. The poor begin to blame themselves for their failures, even when they can do little to change their circumstances.

Never mind structural unemployment: if you don't have a job it's because you are unenterprising. Never mind the impossible costs of housing: if your credit card is maxed out, you're feckless and improvident. Never mind that your children no longer have a school playing field: if they get fat, it's your fault. In a world governed by competition, those who fall behind become defined and self-defined as losers.

Under neoliberalism labor relations assumes the form of full domination of labor by capitalists. Unions are officially suppressed and large part of middle class is brainwashed to hate using set of propaganda stories about unions corruption, welfare quinsy, lack of competitiveness in unionized industries (with Detroit as a prime story), etc.  In this sense crushing by Reagan of the strike of air controllers was one of the first manifestation of this dominance. Workers again are downgraded to the role of debt slaves, who should be glad to get subsistence wages. And, for example, wages in Wal-Mart are really on subsistence level, no question about it (Making Change at Wal-Mart » Fact Sheet – Wages):

Wal-Mart jobs are poverty-level jobs.
Wal-Mart's average sale Associate makes $8.81 per hour, according to IBISWorld, an independent market research group. This translates to annual pay of $15,576, based upon Wal-Mart's full-time status of 34 hours per week1. This is significantly below the 2010 Federal Poverty Level of $22,050 for a family of four. The Wall Street Journal reported that the average Wal-Mart cashier makes just $8.48 an hour, far below the $11.22 national average for all cashiers.

This contrasts with the capital-labor compromise that characterized the state capitalism that existed several post-WWII decades and that was crushed by neoliberalism in 1970th. Neoliberalism also brought change in the relation between financial and non-financial capital: financial capital now again like in 1920th plays a dominant role dictating the rules of the game to manufacturing sector and controlling it via banks.

Under neoliberalism the wealthy and their academic servants, see inequality as a noble outcome. University professors of economics form the most corrupt part of intellectual elite – they are nothing more than employees of the financial oligarchy paid to administer intellectual anesthetic to those among debt slaves, who still have enough time to ask what’s going on. They want to further enrich top 1%, shrink middle class making it less secure, and impoverish poor.  That's an officially state goal. Then in 1992, when asked what Iran-Contra was really all about, Bush I replied that it was done for "...the continuous consolidation of money and power into higher, tighter and righter hands."

The upward redistribution of wealth requires high unemployment to weep prols into unconditional obedience.  In other words neoliberalism and high unemployment are twins.

Under the disguise of "free market" Newspeak  neoliberals promote a type of economy which is often called a plantation economy. In this type of the economy all the resources and power are in the hands of a wealthy planter class who then gives preference for easy jobs and the easy life to their loyal toadies. The wealthy elites like cheap labor: it's much easier to  dictate their conditions of employment when unemployment is high.

Keynesian economics values the middle class and does not value unemployment or cheap labor, so it is incompatible with neoliberal ideology and needs to be suppressed.  Neoliberals created the system which richly reward stooges of neoliberalism for their loyalty to the top 1%  bestowing on them an easier life than they otherwise merit. In a meritocracy where individuals receive public goods and services that allow them to compete on a level playing field, many neoliberal academic toadies would be losers who cannot compete.

One of the most important measures of the health of an economy is the following criteria: how many fulfilling, living-wage jobs are created or destroyed (most other economic factors can be distilled to this.). For example, widely used measure of economic growth, GDP is too influenced by financial masturbation and does not distinguish useful activity from harmful or irrelevant. 

Under neoliberalism the elite revived Roman emperor Septimius Severus advice to his sons before he died at Eboracum (York) on  February 4, 211:

"Avoid infighting, pay well the soldiers, and ignore everybody else" . 

So during the Great Recession Congress simply tuned backs to unemployed. With the implicit message you just need to die out folks ;-).

Military budget at the same time was greatly expanded and several unnecessary wars were launched.  Brainwashed American public eats all those neoliberal policies like real lemmings, demonstrating the level of groupthink and lack of critical thinking that is typical for high demand cults. So the myth about highly conscious "proletariat" that Marxists cherished remains a myth. Moreover quite opposite tendencies to creation of "enlightened lower classes" show their ugly face (Chris Hedges America is a Tinderbox naked capitalism):

ictus92, July 21, 2013 at 5:07 pm

To paraphrase Madeline Albright: “What’s the point of creating a totalitarian police state if you’re not going to use it?”

So where is the American totalitarian state going? If you look at the NDAA and the discussion around repealing the Posse Comitatus Act, the key words include quelling “domestic civil unrest”… So what are the “deep government” types anticipating so hysterically?

Well, the financial crisis keeps grinding away and is about to enter another phase of collapse as “quantitative easing” has run its course. Interest rates are rising, posing “technical insolvency” of the Federal Reserve itself. What this means is that time’s up for the 46 million in the Food Stamp Supplemental Program; 56 million getting Social Security retirement or disability benefits; and at least 20 million more needing full time employment. Obviously there’s some overlap, but the total number of people living on the margins of subsistence pushes 30% of the population.

For these, they face an immediate “Final Solution”… not exactly direct extermination, but death by deprivation, illness etc. Can work camps be far off for these tens of millions and the many millions more living paycheck to paycheck? This population and their sympathizers comprise the tinder for “civil unrest”. Hence the corollary to the famous “Collect it all” (communications) is “control it all” (civil disorder following further economic collapse).

Furthermore, prolonged neglect of key infrastructure will lead inevitably to severe food, water and electric power access shortages — another source of civil unrest potential.

Of course, overseas the totalitarian police state eliminates all expression of opposition that can change policies in the quest for “Permanent War” and “full spectrum” military dominance. This ends in global military confrontation… just as the financial crisis of the 30’s gave rise to another World War… only this time around world war will pitch towards thermonuclear war in short order. That’s how totalitarian regimes collapse into catastrophe, dragging the rest of us to an unpleasant demise.

Unfortunately, I don’t think there’s a damn thing any of us can do to arrest this beserk Levithan…

tongorad, July 20, 2013 at 3:21 pm

This is America, not Denmark. In this country, tens of millions of people choose to watch FoxNews not simply because Americans are credulous idiots or at the behest of some right-wing corporate cabal, but because average Americans respect viciousness.

They are attracted to viciousness for a lot of reasons. In part, it reminds them of their bosses, whom they secretly adore. Americans hate themselves for the way they behave in public, always smiling and nodding their heads with accompanying really?s and uh-huhs to show that they’re listening to the other person, never having the guts to say what they really feel. So they vicariously scream and bully others into submission through right-wing surrogate-brutes. Spending time watching Sean Hannity is enough for your average American white male to feel less cowardly than he really is.

The left won’t accept this awful truth about the American soul, a beast that they believe they can fix “if only the people knew the Truth.”

But what if the Truth is that Americans don’t want to know the Truth? What if Americans consciously choose lies over truth when given the chance–and not even very interesting lies, but rather the blandest, dumbest and meanest lies? What if Americans are not a likeable people? The left’s wires short-circuit when confronted with this terrible possibility; the right, on the other hand, warmly embraces Middle America’s rank soul and exploits it to their full advantage. The Republicans know Americans better than the left. They know that it’s not so much Goering’s famous “bigger lie” that works here, but the dumber and meaner the lie, the more the public wants to hear it repeated.”

“We, The Spiteful” by Mark Ames

http://exiledonline.com/we-the-spiteful/

Dave, July 20, 2013 at 8:18 pm

Please consider that the “right” is far more realistic in their assessment of human nature. The “left” wants things to be according to what they think it should be, mostly because of their left wing educators. The majority of humans are not perfectible.

Even Asians, with their highly socialized societies, have behaved very badly towards those outside their country.

This tendency of self-deception of "blue color America" and resonating of Republican Party ideas within "working poor" and lower middle class, two strata of the US society that typically votes against its own economic interests is analyzed in   What's the matter with Kansas  And to fight neoliberal machine is not easy as media dominance is total, and on a new technological level, which does not require silencing of opponents, just ignoring them, approach the level typical for the USSR or Nazi Germany.  And even if some people question the system, like (at the very beginning) Tea Party did, or later "Occupy Wall Street" movement did, they are mercilessly co-opted or crashed by well paid guard labor. The latter is one of the few  types of employment which prospers under neoliberal empire. See  The Rise of Guard Labor (dollarsandsense.org)

The reality is that many rich countries including the USA now face two problems. One is a shortage of jobs, especially middle class jobs.  The other is stagnant (or falling) wages for those outside top 1%.  This is not a temporary problem. Despite all the propaganda smoke this is an immanent feature of neoliberal regimes that now dominate in the USA and most other countries.  Neoliberalism requires high unemployment as a way to keep workers in check and prevent attempts to slow down redistribution of wealth toward the top.

As George Bush Sr . noted in November 1992 neoliberalism is "the continuous consolidation of money and power into higher, tighter and righter hands". The essence is  the consolidation of money and power to the top 0.1% or even 0.01%.  In a very deep sense our new lords from financial and political oligarchy are not that different from feudal aristocracy, may be only less educated, more prone to avoid military service and much more greedy. 

Unlike Keynesian economy which put middle class in the center of society serving a buffer between rich and poor,  under neoliberalism  middle class is no longer needed as a buffer between aristocracy and proles, as repressive power of the state and regime of total surveillance (National Security State) makes an organized opposition practically impossible. The fate of "Occupy Wall Street" movement is nice illustration here.

On the other hand neoliberalism as an ideology, while discredited by event of 2008 still does not have any viable alternative.  Socialism was discredited by collapse of the USSR (which in reality was a neoliberal counterrevolution by Soviet nomenklatura including part of KGB).  Authoritarian versions of state capitalism does not look too attractive, despite being quite effective as was proven by economic progress of "Asian tigers".

Other important factors are also in play. Technology has stripped away the ability for many to hold a job and the trend continues.  In other words automation eats jobs. Outsourcing eats jobs too. Between those two trends almost no job growth left. This is a structural situation, not transitional caused by recession due to aftermath of 2008 financial bubble bust.  In other words jobs that disappeared will never return. And jobs in construction sector and finance were artificial and unsustainable in any case, crisis or no crisis (as in "what can't last forever eventually stops." )

We are in the midst of slow motion employment collapse. Eurozone unemployment recently reached 12%. The US has probably 20% rate of involuntary unemployment now. The official unemployment "rate" is lower, but that is because both 60-65 years old and 20 to 24 year olds are dropping out of the wage force.

Add to this "peak energy" problem and the situation looks really bleak. That's the funny thing about oil and modern civilization -- almost everybody in large western urban centers is dependent on mass produced technology (much of which was invented before we were born) and cheap oil (and generally cheap energy), Those who live in those urban centers no longer have any direct control or ability to produce own food or transportation energy or heating. those three activities are completely outsourced. See Peak Oil Demand is Already a Huge Problem.

Globalization is yet another problem. I was actually surprised by how many jobs large corporations managed to shred during 2008-2013 without negatively affecting  profitability.  The impression is that it is no low limit.  Usual wisdom is that if you shred too much, this labor shortage will bite you in a couple of years. This is no longer the case in the USA. No visible backlash at all.  Even consumption that should be suffering due to destruction of middle class in this process is no suffering much, because it was already mostly top 1% game and, as such, is recession proof. Here is one interesting comment form Krugman column Globalization and Macroeconomics - NYTimes.com

Floxo Australia

The analysis is flawed. The issue is not goods trade - on its own, this is relatively benign. The real problem is the associated capital drain. Owners of capital will transfer productive capital abroad for better returns. This process creates deep structural problems for all developed economies. Here are some basic predictions:

Recessions are difficult to manage and may become protracted. In a downturn, capital formation dries up but the capital drain continues. This erodes the output gap. A fiscal stimulus now has less headroom for expansion. On top of that, an increase in domestic demand may be met by investment in productive capital abroad; the domestic investment response is missing. This may even cause a fall in labor productivity ( UK productivity puzzle?).

In short, globalization IS the problem.

Unemployment and well being

Recessions generate inequality in both income and well-being: people who lose their jobs bear a disproportionate burden of the recession.  As Kathleen Geier noted the impact of unemployment on well-being it’s even worse than you thought

While reading this odd and meandering New York Times op-ed this morning, I stumbled upon a link to a fascinating study from last year on the impact of unemployment on non-monetary well-being. It was conducted by Stanford sociologist Cristobal Young, who discovered that unemployment has an even more catastrophic effect on personal happiness that we thought.

The study produced three major findings. The first is the devastating impact job loss has on personal well-being. Job loss, says Young, “produces a large drop in subjective well-being”:

Job loss into unemployment, however, is a different matter; this brings on deep distress that is greater in magnitude than the effect of changes in family structure, home-ownership or parental status. The distress of job loss is also hard to ameliorate: family income does not help, unemployment insurance appears to do little and even reemployment does not provide a full recovery [italics mine].

The second finding is that while unemployment insurance (UI) is successful as a macroeconomic stabilizer, it doesn’t make unemployed people any happier. UI, says Young:

is not central to their sense of well-being… [Snip] …[ I]t does little to support their identity, sense of purpose or self-regard.

Third, job loss has a strong, lasting negative impact on well-being that may persist for years:

[J]ob loss has consequences that linger even after people return to work. Finding a job, on average, recovers only about two thirds of the initial harm of losing a job. It is not clear how long it takes for the nonpecuniary effect of unemployment to heal.

Other research suggests that what Young refers to as “the scarring effect” of job loss can last from three to five years, or even longer. He also notes that “the more generalized fear of becoming jobless” may persist.

Young’s discussion of these findings stresses the inequality theme. He points out that “recessions generate inequality in both income and well-being: people who lose their jobs bear a disproportionate burden of the recession.” He suggests job-sharing as a way to reduce the concentrated misery of unemployment. That’s a great idea that unfortunately never seems to go anywhere. Employers today seem more interested in squeezing as much labor out of employees as possible for the lowest cost. They’re looking to shrink their payroll rather than expand it. And unfortunately, there are very few public policies that promote job-sharing, let alone do it effectively.

The sheer human misery created by the economic downturn has been stunning. The economic damage is, in some ways, the least of it. Another study shows that the long-term unemployed experience shame, loss of self-respect, and strained relationships with friends and family. They even suffer significantly higher rates of suicide.

Yesterday, Paul Krugman and others discussed the impact of economic inequality vs. unemployment on income. Krugman argued that inequality has had the greater impact, and I agree. Among other things, inequality is also the root cause of the unemployment problem. Special interests which have disproportionate power in our political system prevented more stimulus and inflicted an austerity agenda, which has had a disastrous effect on employment. Enacting an economic equality agenda will be huge political challenge, but it’s the only way I can see of ultimately resetting the priorities of our government so that it starts working on behalf of ordinary Americans again.

Official measures of unemployment

There are two popular unemployment measured U3 (commonly cited as "official unemployment rate", which dramatically understates real unemployment) and U6, which is close to actual unemployment rate as was measured during the Great Depression. U3 is often as low as half of U6 (that's why it sometimes called 50 cents unemployment rate). As The Big Picture note in the entry Unemployment Reporting

Its been pretty obvious for sometime that the Financial Media are doing a disservice to their readers by only reporting U3, given how dramatically it understates Unemployment. Indeed, consumer sentiment reports are at deep negative levels that only occur when Unemployment is much than what U3 has been saying. It is painfully obvious that U3 does not paint an accurate view of the Employment situation.

Here's the experiment I propose: Let's start reporting both, with appropriate descriptions of each. Report U3, add U6, provide monthly and year over year changes. Let the reader see the full picture, via BLS data.

See Table A-12. Alternative measures of labor underutilization

Factors that make the current unemployment structural

I would like to stress it again: many factors point to the fact that the current level of unemployment is mostly structural. In other words jobs eliminated will not be coming back. Among the most important factors we can mention:

  1. Neoliberal ideology, which prevents strong government action and direct employment by government on infrastructure projects like during New Deal. Related to the dominance of neoliberalism the hypertrophy of financial sector lead to games with "Main street" after which high, self-sustainable (aka structural) unemployment for in now a destiny for millions. Making the whole society sick.
     
  2. Outsourcing (which partially is due to much better communication channels available and computerized navigation)
     
  3. Computerization (which directly "eats jobs" much like during industrial revolution in the UK).
     
  4. High price of energy, which serves as strong depressing factor. If I remember correctly, a decade ago price of oil above $100 was considered an equivalent to permanent recession. This is never mentioned today, but still might be as true today as it was ten years ago: with the high price of oil the economic recovery is simply impossible. The only option, the only trajectory for economy is permanent stagnation.
     
  5. Growth of "lumpen-proletariat". Narcoaddicts, alcoholics, single mothers from poor families with just high school diplomas,  people with "generosity-based" high school (considerable part of Afro-Americans) and university diplomas from "diploma mills" (essentially fake diplomas),  various categories of handicapped, people with criminal records (substantial part of Afro-American male population), etc.  

The first three factors changed the distribution of power between labor and capital in favor of capital; and those guys are not inclined to take prisoners, when there is a chance to fatten their pockets.  None of the first three factors will probably be reversed soon, although neoliberal ideology is after 2008 entered a zombie state.

Also computerization and Internet allowed capital and political forces behind it much better organize politically. So like in in previous human history well organized and wealthy minority dictates its will less-organized poor majority.

I think that financial capital might eventually experience some setbacks. This bacchanalia of greed with those hedge fund  which hack financial system left and right  might come to an abrupt end with the rise of the price of oil. Even now price of oil indirectly pressure "masters of the universe".  And remember famous slogan of 2008 "Jump suckers" ;-). It reflects the society attitude to financial oligarchy and as such entail certain dangers of "blowback" for all those derivatives games.

Not under Obama watch as he is essentially a sock puppet of financial oligarchy. But eventually setback for "big finance" can happen. At the end of the day it is oil that is the real convertible currency and when oil production is diminishing or flat,  financial oligarchy will be pushed back. 

Measures taken by political elite to save financial institutions after 2008 collapse means that unemployment is a part of a general political problem with neoliberalism as a social system. Under neoliberal regime the elite can't care less about long term unemployment. National Security State ensures the security of the neoliberal elite. Elections in the USA are a sham as two party system effectively blocks candidates outside the list approved by the current elite.  The latter might even see sharp division of the society into "have" and "have nots"  as a solution of oil depletion problem (Economist's View):

bakho:

Exactly.

Monetary policy does not operate in a vacuum. Monetary policy operates in an economic system that includes fiscal and regulatory tools. It is a mistake to lock the fiscal and regulatory tools in a shed.

Fiscal policy ALWAYS operates in a recession, at least in the form of automatic stabilizers, (UI, etc.) and sometimes in the form of additional stimulus.

The meagre automatic stabilizers currently in place are enough for a mild recession, but are woefully short of what is needed in a recession like the recent one.

The primary objection to fiscal policy manipulations is that fiscal policy is more easily politicized. This overlooks the fact that monetary policy is not only political, but bankers (who constitute a wealthy special interest) have an agenda that tilts monetary policy to their own self interests.

The primary objection to using fiscal stimulus to address our unemployment crisis is POLITICAL. Wealthy special interests want pay less taxes and short term stimulus would interfere with their political agenda to roll back spending and reduce spending as a percent of GDP.

Wealthy special interests have the upper hand at the moment because enough politicians are dependent on their campaign donations. However, this politicalization of fiscal policy, doing too little to address unemployment, is the prime force behind the Fed keeping interest rates low. If enough fiscal stimulus was enacted to quickly return to full employment and inflation at or slightly above the target, the Fed would not have to consider extraordinary measures.

Anyone unhappy about extraordinary monetary measures should be urging Congress to fix unemployment now. This is not what our elites are doing. They are complaining about extraordinary monetary measures AND about additional stimulus. This suggests that these policy elites care nothing about social problems of long term unemployment, are content to have the US become a divided nation between haves and have nots and are content to oversee the creation of an underclass in order to concentrate wealthy upward.

When one is saying that unemployment became a structural problem that means that it is immune to the business cycle. For example, during the last economic expansion (Jan 2002 -Dec 2007), the median US household income dropped by $2,000. In other words many Americans were worse off at the end of an economic cycle as jobs went outsourced to low wage countries due to wage arbitrage... 

Collapse of Casino Capitalism and unemployment

The collapse of “casino capitalism” model in 2008-2009 was so profound that all sectors of the economy became depressed. As securitization mess exploded in the face of their creators as it became clear to everybody that the king is naked. Debt overhand of financial industry is tremendous and it was just socialized, not removed. Essentially it became the problem of the USA government debt. In many ways problems the USA faces now are more serious then the problems the country faced during Great Depression because economic crisis doubles as the crisis of dominant ideology -- the ideology of neoliberalism.  And the Great Recession, despite Economic Cycle Institute premature desire to bury it, is still with us. Five years in the making as of 2013.

Ideology on which FIRE sector dominance was based is now questioned and that creates additional problems both nationally and internationally, much more internationally. Internationally it means a substantial loss of the USA "soft power", the factor that played tremendous role in the decade of 1990-2000.  When other country laugh at the US financial oligarchy tribulations it is difficult to open new markets selling old neoliberalism doctrine. due to debt overhand the US dollar is replaced by currency swaps in national currency for several major trading partners of China such as Brazil and Russia.   First of all that makes the crisis even deeper and analogies between the USSR and the USA more sinister. As with Stalinists in USSR who destroyed the country economically, there is a powerful block of republican dead enders and democratic supporters of financial oligarchy (blue dogs) who  will continue to promote the current neoliberal course with its deification of "free markets" (free as in "free shooting zone"), oblivious to consequences of neoliberal policies which eat the society and protected by the size of their accounts. There is nothing new here. Oligarchic  democracies can commit suicide. Actually none lasted long. And with such a formidable political wrecking crew in action and gridlock in Congress even over minor reforms that became less probable.

For all practical purposes two party system actually works like one-party system: democrats were also captured by FIRE industries to the extent that they should not be considered an independent party, but as a slightly more moderate wing of the Republican Party. Similarly by all accounts Obama is a moderate Republican with the policies to the right of such Republican Presidents as Dwight Eisenhower and Theodore Roosevelt. In a way, Democratic Party perform the role of spoiler: it exists for the sole purpose of attracting disgruntled left-wing electorate away from more radical parties. Republicans play symmetrical role for right wing crazies. None can or want to became the agent of change. In this sense Obama electoral slogan "change we can believe in" was a nasty, cruel joke of political insiders over political outsiders.  Note how unceremoniously Obama dumped labor after his reelection, while courting it during his reelection campaign.

As private sector is still downsizing, and government can't be the employer of last resort due to dominance of neoliberal ideology, the whole situation looks more and more like Japanese lost decade. The only area where government can expand workforce are defense contractors (military keysianism):

Minsky, however, argued for a “bubble-up” approach, sending money to the poor and unskilled first. The government - or what he liked to call “Big Government” - should become the “employer of last resort,” he said, offering a job to anyone who wanted one at a set minimum wage. It would be paid to workers who would supply child care, clean streets, and provide services that would give taxpayers a visible return on their dollars. In being available to everyone, it would be even more ambitious than the New Deal, sharply reducing the welfare rolls by guaranteeing a job for anyone who was able to work. Such a program would not only help the poor and unskilled, he believed, but would put a floor beneath everyone else’s wages too, preventing salaries of more skilled workers from falling too precipitously, and sending benefits up the socioeconomic ladder.

It is important to understand that the USA is not just coping with the largest financial crisis in history, the USA is also going through a major restructuring of the American economy as well as the world economy due to plato in oil extraction. This transformation, which was postponed by two decades due the collapse of the USSR (which gave the USA companies half billion of new consumers and huge area to dollarize and buy assets for pennies on a dollar), will be very long, very painful and very slow. One additional factor that complicates the picture of "peak oil", is that it is  more properly can be called "end of cheap oil", as at higher prices more oil became economically available. So this is  not a peak but long plato.

As GDP is highly correlated with the energy consumption, the side effect of peak oil will probably be stagnant (close to zero after inflation) growth and with it speed up in permanent decline of the standard of living for middle class 

Also complicating the situation is the status of baby boomers which lost significant part of their savings during last two bubble bursts and now need to retire or will be pushed out of workforce. Pensions are already cuts either directly or indirectly (via inflation). For example, defined benefit pensions almost disappeared outside of government job force. After housing crash middle class no longer has a realistic prospect to fund their retirement and need to work longer: that increases competition for jobs. For middle aged professionals who are unemployed now the odds of finding reasonably paid work are low and they create additional competition for young people entering work force from universities. People over 50 now face especially poor job prospects.

At the same time corporate executives became corporate aristocracy (with differences in pay raising from 10-20 to 100-200 more of average corporate salary; this is the differences close to what used to exist in feudal societies). Most corporations are taking a lazy way out of the crisis with relentless cost-cutting.  This is a self-defeating strategy as cost cuttings eventually returns back via supply chain and bite the corporation which performs it. But so far this did not happened.

In addition productive sectors of economy are now under pressure of rampant financial speculation which serves as a huge tax on productive sectors of economy. Financial system is controlled by small number of large firms that permanently shifted their main activity into gambling and hacking of the financial system. There is some justice that computers which fueled all this crazy gambling on the strength of global reserve currency led to outsourcing of IT professionals to the extent that this part of US economy was destroyed and became a shadow of its former self in just ten years (2000-2010).

Another important sign of stagnation is that new college graduates face extremely bad job market which squeezes out anybody without substantial experience so for them it's Catch 22. Only graduates form Ivy League colleges has real prospect to get a job after graduation. Plus those with good family connections. In a way education is no longer a guarantee for better paying job, the same situation what was typical for the USSR and other countries of Eastern block during Brezhnev's stagnation.

There is also an interesting transformation of the quality of the education that also parallel transformation  experienced by the USSR in post-war period, but in especially acute form, three decades before the collapse. Private education became more like subprime lending.  It's quality became fake, as the term "diploma mills" suggests.  This rat rate to the lowest possible quality (quality instead of quality) was the central tendency in Brezhnev's USSR. 

In the USA in addition to devaluation of education caused by low quality "everything passes, everybody graduates, just pay" modus operandi of diploma mills, graduates from lower middle class families are now overloaded with debt, which creates for them really difficult situation and push many of them into low level service jobs like waiting. In other words excessive debt after college make getting into workforce using acquired specialty even more difficult as there is no space for long job search, relocation is more difficult and so on and so forth. 

There is also huge criminal industry that flourished around people desperate attempts to find well paying jobs. Many educational scams like "we will make you an ultrasound technician in six month; 90% of our graduates found jobs that pay over $60K in the first month after graduation"  or " software tester in four month; 100% of our graduates find jobs" are trying to capitalize of people desperate to find job, any job and getting into crushing debt trying to improve their chances in job market. Those criminals are not prosecuted.  For more information see:

The main source on new jobs is service sector and the lion share of new positions are McJobs

The employment growth comes mainly from the service sector which feeds off of consumer spending. It was hit by outsourcing especially in such areas as IT. Manufacturing no longer create jobs – outsourcing and computers eat them and you no longer need more people to make more stuff. 

Peter Dornan at EconoSpeak has the following comment which perhaps looks deeper at why the elite is so indifferent to mass unemployment and growing poverty in the U.S.

“…The process is more complicated: where one sits in society and the kinds of problems one typically has to solve leads to a way of thinking, and this manner of thinking then informs politics.

For centuries, the finance perspective has played a central role in economic theorizing, and there is ordinarily a body of research to support it. What I am proposing is this: economic orthodoxy is regaining control over policy because it reflects the outlook of those who occupy the upper reaches of government and business….”

http://economistsview.typepad.com/economistsview/2010/05/a-political-economy-moment.html

IMHO to get the economy out of this mess, government should concentrate on direct job creation (like was the case with Roosevelt administration), not on propping zombie banks hoping that they will generate credit necessary for creation o new jobs. Growth of credit will not happen and if it will happen it will not generate new jobs: most of it  is pushed into speculation.  Spectacular rise of S&P500 in first half of 2013 is a pretty good illustration of the process.

Long term high unemployment is a disaster for the country and disaster for the people, despite the fact that it is irrelevant for banksters, too busy playing in the huge casino they created. Failure to address this problem directly by Obama administration (which in economic terms is the second Summers-Bush administration making a joke in the slogan "change we can believe in") make Obama a real serial betrayer of people who elected him, the role he seems enjoy playing. 

Additional factors the complicates the picture

There are several additional factors that makes addressing the problem of chronic, structural unemployment even more difficult:

  1. The economic crisis coincides with deep ideological and political crisis.

    One can't solve the current problems the US are facing without the reform of the political system and institutions. Power of lobbyists need to be curtailed. Senate needs to be reformed.  Republican Party probably should be dissolved or temporary prohibited like Communists after the dissolution of the USSR as it is unable to reform. As there is no political will for political changes the crisis is structural and little people have to suffer.
     

  2. Real economy was damaged by excessive growth of  FIRE sector and associated "fictional" economy.  Real economy can't support the current size of FIRE sector and it needs now to downsized. There is no smooth, painless route back to the easy-money based false prosperity of Reagan-Clinton-Bush era (age of leveraging). A new economy needs to be created for sustainable recovery because the old, FIRE-based was unsustainable. In 2010 housing probably will decline further. Both commercial and residential construction continues to decline. States continue to cut back budgets creating negative feedback loop. Personal bankruptcies are up, more defaults are on the horizon. The U.S. economy needs to be re-structured, both on the "technical" and inter-sectoral level. That amounts to a collective, system-wide Chapter 11 re-organization. Obama administration has totally failed to sell the public on the validity of "stimulus", however named. Suspicion that this administration is a puppet of big banks had grown sharply. Trying to kick the can down the road will yield Republican Congressional majorities in both houses.
  3. The USA is experiencing the process of separation of workforce into two-tiers, with an elite class of highly paid employees at top companies and a subclass of minimal wage and part time laborers who work for less pay, have less job security and receive fewer benefits.
  4. Foreign wars have substantial financial costs and are an important drag on the USA economy. In the book True Cost of the Iraq Conflict, Joseph Stiglitz was estimated he cost at three trillion dollars of which probably only one trillion was offset by looting of Iraq resources. Afghanistan is about  $2 billion a week, and unless all heroin trade is controlled by CIA there is little that can offset those costs. This is the longest ongoing conflict in U.S. history.  And since Joseph Stiglitz book was written things became worse.

    The disability rates are higher. The cost of caring for the disabled are higher. Almost one out of two people coming back from Iraq and Afghanistan are disabled. This is an unfunded liability of—we calculate now to be almost a trillion dollars, over $900 billion. So, one of the big ways of reducing our deficit is a—is cut back some expenditures....

    With Libya and Syria added to the list, the hidden costs of foreign wars will weight on weakened economics more heavily. Annual cost per soldier oversees is approximately $1 Million per year.
  5. Rent that hypertrophied financial sector  extracts from the rest of the society continues to be a serious drag on the economy. This drag adds to substantial drag caused by foreign wars and military bases as well as huge military industrial complex. While parasites are omnipresent in nature, two large parasites instead of one might spells trouble for the host. Moreover the ascendancy of the financial sector and the decline of manufacturing in the U.S. ("Casino Capitalism" ) has implications similar to consequences of an organized crime running the country.  The creation of tangible products whose utility/quality can be more or less objectively measured were phased out in favor of "financial products," whose utility/quality is much easier to conceal behind legal/technical jargon and junk economics. That created a huge new class of white collar criminals. While Blankfein is out claiming that GS is doing God’s work, the reality is quite different: it became a training ground for new type of ruthless criminals, much more dangerous then bank robbers. Killing of Glass-Steagall by Clinton and leverage obtained by financial sector operating without regulatory limit created prerequisites to the financial panic of 2008. Glass-Steagall enshrined two principles that were abandoned:

    The violation of the second principle directly leads to a regulatory capture in which anything goes and a corresponding observed "need" to accommodate indiscretions, as with the Greenspan/Bernanke put. It perhaps should be identified as THE primary cause, since it left Wall Street with the well-founded (LTCM, Latin America debt crisis, etc. ) and since-proved belief that prudence and capital were quite unnecessary, and that reckless, sociopathic deal making is profitable. Four examples :

  6. Capture of the government and the media by financial sector makes the necessary reforms unlikely. “Failed Regulatory Oversight” is a politically correct term for corruption. The latter was probably the second reason of the current high unemployment . See Toxic Sludge is Good For You: Lies, Damn Lies and the Public Relations Industry by John C. Stauber
  7. Effects of coming CRE crash on unemployment and economy in general might be underestimated of official forecasts.  The occupancy rate is the malls and commercial buildings is still declining. Many strip malls in the country are still are empty. Nice office buildings with signs "for rent" are feature of landscape in 2013. Many buildings, even large well designed buildings with datacenter infrastructure are vacant for years and eventually are demolished.  A full scale commercial real-estate crash can also hurt the economy in a way similar to residential home estate crash. Loans that were made in 2005-2007 were refinanced for three years in 2009-2011. And again in 2012-2013. But eventually they will be coming home to roost.  This also affects the construction  sector.  Only $400 billion of loans came due by the end of 2009, but nearly $2 trillion was refinanced by 2012.  

    The collapse in the U.S. commercial real estate market is fought by the government will maximum force but government resources to fight the crisis are diminishing too. in 2011 state financial crises led to cuts in state budget. In addition, in June 2013 municipal bonds came under fire, making financing more costly.  Commercial debt is approximately one third of the size of the total residential debt and it is concentrated in the same places creating double whammy. In Florida commercial loans, broadly defined, are bigger then residential. Unlike residential real estate, problem with commercial real estate are not solved by growth of population and creation of new families.

    Retail and white-collar positions will be directly impacted by CRE crash. As stores and offices close, mall and office building owners suffer from cuts in cash flow and severely limited prospects for new tenants. Insurance companies, hedge funds and regional banks are heavily invested in CRE and are next in line so some financial jobs will be lost too. Extend and pretend might work but the question is if there is enough liquidity to stretch loans.
     

  8. Computers eat people jobs. Automation and the recent advances in robotic and computers make more and more workers redundant.  The latest victims are cashiers in supermarkets. Manufacturing jobs continue to disappear not only due to outsourcing, but also due to new computerized technologies. The reality is that manufacturing employs a mere 11.5 million workers in the U.S.A., or 9% of the workforce and this percentage will never increase substantially.

    My feeling is that even in corporate IT after drastic cuts that were the standard game for large corporations in 2008-2009, additional cuts are possible. But the situation on the ground is somewhat paradoxical as real cuts runs deeper that you would assume from headcount: a lot of current IT personnel belongs to "untouchable" caste -- wives of somebody higher up in this or linked by the supply chain company, sons of somebody important and so on. I can't give you percentage, but probably 10%-20% of "untouchables" would be an educated guess. So removing of at least 10% of the current IT workforce means removal of 12% or more those who do actual work. 

    Another factor is that cuts in IT are one way street as they stimulate replacing of people with technology and there are still tremendous potential for computerization of many areas including first of all IT itself.

    For example all this cloud initiatives are in disguise politically correct way to move things in the direction of higher automation and outsourcing because under the surface there is not much innovation in those "new" technologies.
     

  9. Oil prices despite coming down in September 2011 are back to $85-$90 level.  That level is putting additional stress on manufacturing, transportation and agriculture. Solid US growth of the past decade and earlier was dependent on two factors:

    With the rising oil all bets for re-inflating the economy (aka kicking the can down the road) are off.
     

  10. Indirect job creation strategies via stimulus to businesses seized to produce meaningful job generation. Reaganomics has put the U.S. economy into a high-unemployment equilibrium when the high-rate of labor unemployment is reinforced by the shortage (or absence) of idle, but useful capital stock due to offshoring and  outsourcing as well as chronically low consumer demand due to high level of debt. Only service sector and financial jobs can be generated with minimum capital infrastructure (for financial jobs internet connection and computer are almost all that needed). Automation of production lead to less and less workers.
     
  11. Confidence is really low.  Businesses have no confidence that customers ever return, therefore are not hiring much and scaling down the production. This chicken-egg-chicken-egg cycle has to be broken, but I am really puzzled how that is going to happen without large government role in the economy, which is big no-no for ideological consideration (the USA preaches neoliberalism as a "civil religion" similarly like USSR and other "communist" countries preached Marxism). Without large government projects employees have no confidence in their jobs, therefore are not consuming much.
     
  12. In the face of growing unemployment the current administration proved to be as incompetent as Bush administration in case of Hurricane Katrina. And that means totally incompetent.

Effects on population

Unemployment is a very harsh condition, that traumatize the workers greatly (Sliding into the Great Depression)

At first the unemployed searched eagerly and diligently for alternative sources of work. But if four months or so passed without successful reemployment, the unemployed tended to become discouraged and distraught.

After eight months of continuous unemployment, the typical unemployed worker still searches for a job, but in a desultory fashion and without much hope.

And within a year of becoming unemployed the worker is out of the labor market for all practical purposes: a job must arrive at his or her door, grab him or her by the scruff of the neck, and through him or her back into the nine-to-five routine if he or she is to be employed again.

The USA as a whole is facing the worst labor market prospects since 1929. In terms of duration of elevated unemployment we already rival the early 80s. But in no way we can expect a steep decline in the rate of unemployment in the way that happened in 1983 when unemployment declined at a brisk 2%. And permanent high unemployment creates economic conditions that feel like the USA brought back slavery. The new reserve army of the unemployed drives wages down, while average productivity continues to rise, as a way to generate surpluses to be channeled into executive bonuses. The whole sectors like IT were decimated by outsourcing. Unfortunately given the current overcapacity and ample supply of qualified job seekers in many occupations, I certainly don't expect labor arrangements and employment conditions to become more favorable.

Looks like 7% unemployment is going to become the "new normal". In any case government statistics is very suspect (see Fake Employment Statistics) and actually unemployment is higher. For example, the declining participation in work force means that actual unemployment rate is higher then reported.

Obama-Bush administration saved banks waiting most of taxpayers money and piling up debt in hopes that they restore credit flow in the economy. But this was a fallacy: banks aren’t lending to prospective home buyers, small businesses and real estate developers because bankers recognize the obvious — many of those loans won’t get repaid. Of course, as bankers refuse to lend, the stagnation becomes a self-fulfilling prophecy. But since society is burdened with too much debt, piling on more debt would not be the solution in any case.

There is no smooth, painless route back to the easy-money based false prosperity of Reagan-Clinton-Bush era (age of leveraging). We entered the age of deleveraging. Obama’s “you owe us” message to the banks is the height of naïveté’ and tells us a lot about him. In 2013 our problems are worse than they were in 2007 before the crisis. Peak credit is as dangerous for the economy as peak oil...

Corruption of economic profession

The inability of the economics profession to forecast unemployment in the short, medium, or long run would be downright comical, if not for the human tragedy involved. While the Occam Razor approach suggests incompetence as a culprit, I think it's a manifestation of the corruption of the profession by financial interests (with some "don't rock the boat" variations).  First of all, economists much like elected officials and Wall Street executives have a vested interest in keeping the perception of a robust economy. The employment data announced each month are critical to this perception. That's why government "prints up jobs out of thin air" the same way the Federal Reserve prints money. This is economic propaganda and as such it is not that much different from the over-stated earnings practiced by companies of all striped and colors.

The second problem is that fiscal policy cannot solve the problem of job creation in all circumstances, especially in deleveraging environment. Position of people like The Fed Can Help, But Fiscal Policy Is The Key To Job Creation ) is a step in right direction. But without something like Jobs Corps to get out of the current situation is very difficult. In 1982 SETH S. KING wrote in NYT (PROPOSAL FOR JOB CORPS RECALLS ROOSEVELT PLAN):

Few of this city's recent celebrations of Franklin Delano Roosevelt's 100th birthday have passed without nostalgic references to the Civilian Conservation Corps, that President's cherished vehicle for getting thousands of jobless, hungry youths off the streets and putting them to work refurbishing the nation's parks and forests.

With today's unemployment rate nearing a postwar high and new thousands of young people again unable to find work, Congress is preparing to wrestle with the Reagan Administration for money to start a new youth job training program and reconstitute the Job Corps, the pale copy of the old C.C.C. that emerged in the Carter days.

But there is little in these plans that is likely to reproduce those Depression era pictures of sturdy, bare-chested young men planting trees, building bridges and saving the nation's battered farmlands.

Nor is today's procedure-encumbered Washington, where a year usually elapses between idea and action, likely to duplicate the astonishing start on the C.C.C., which four months after being conceived had been approved by Congress and had more than 300,000 young men being clothed, housed, fed and paid $30 a month while they breathed all that fresh air.

In this crisis the main lesson was that theologically captured by free market fundamentalism government can destroy economy at a really staggering rate. This is "Back in the USSR" situation. Eight years of Clinton and eight years of Bush administration (see The Economic Consequences of Mr. Bush, by Joseph E. Stiglitz) are as good proof of this as one can ever get. Clinton and Bush regimes (especially Rubin-Greenspan alliance and "vice president from an undisclosed location" activities)  proved to be a real wrecking crew. But that does not mean that government cannot put it weight on easing the unemployment burden. Incentives such a investment tax credit matters. Not tax cuts for the rich, but direct investment credit. direct job creation which is anathema to market fundamentalism would be even better and less costly. Roosevelt administration did it, so why not capitalize on positive experience and develop it further ?

In this crisis the main lesson was that theologically captured by free market fundamentalism government can destroy economy at a really staggering rate.

In any case socializing losses and privatizing gain (crony capitalism) should be downsized. Insurance for gambling by big banks should be cut.

As long as economists believe their report card is the rise in GDP (GDP Mania), we will remain in a failure mode. A country is not defined by GDP but by the quality of life of its citizens. And quality of life cannot be assessed by a simplistic, one-dimensional metric such as GDP. The key dimensions for well-being are: employment, earnings, wealth, health, infrastructure, and living conditions. In that particular order. With employment as the critical factor: the USA looks like an underdeveloped banana republic by the current measure of unemployment and in many respect has became such.

It looks like high persistent unemployment became the defining feature of this recession. Jobs creation prospect in 2014 look pretty grim -- there is no sector other then government that can absorb redundant workforce and automation in manufacturing makes sure that those who are unemployed right now will stay unemployed in the foreseeable future. Most jobs cut are permanent, not temporary, especially in such sectors as IT (structural shift). As Robert Reich noted:

...The basic assumption that jobs will eventually return when the economy recovers is probably wrong. Some jobs will come back, of course. But the reality that no one wants to talk about is a structural change in the economy that's been going on for years but which the Great Recession has dramatically accelerated.

Under the pressure of this awful recession, many companies have found ways to cut their payrolls for good. They’ve discovered that new software and computer technologies have made workers in Asia and Latin America just about as productive as Americans, and that the Internet allows far more work to be efficiently outsourced abroad.

This means many Americans won’t be rehired unless they’re willing to settle for much lower wages and benefits. Today's official unemployment numbers hide the extent to which Americans are already on this path. Among those with jobs, a large and growing number have had to accept lower pay... Or they've lost higher-paying jobs and are now in a new ones that pays less.

The current crisis also means that financial services and real estate (FIRE) economy, this gigantic casino that the US government was trying to build for the last 25 years is now in trouble and shed workers in vast numbers (although working condition in financial industry are still good or very good depending on your position in the food chain). But the profitability of large banks and can achieved only by oversees expansion and derivatives games with foreign assets. The most profitable essentially converted themselves into hedge funds, getting most profits from trading operations, not from the traditional banking activities.

The simplest and the most obvious solution in the current situation is to cut work week and hours of work (4 days six hours a day). That will put enough people to work to make unemployment bearable and it might slightly help entertainment and hospitality industries which now is suffering more that others. From the other point of view if lower standard of living is inescapable, why not to make the transition smoother and more fun by cutting work hours.

Military Keynesianism no longer works

But that's not enough. The USA needs drastically cut military budget. Military Keynesianism no longer works as expected.  As John Maudin in his e-letter proposed (see Thoughts on the Economy- Problems and Solutions):

Mauldin: Unemployment is likely to continue to rise and last longer than ever before. We have to take care of the basic needs of those who want work but can't find it. Unemployment insurance should be extended to those who are still looking for work past the time for benefits to expire, and some program of local volunteer service should be instituted as the price for getting continued benefits after the primary benefits time period runs out. Not only will this help the community, but it will get the person out into the world where he is more likely to meet someone who can give him a job. But the costs of this program should be revenue-neutral. Something else has to be cut.

Mish: Can we deal with 15 million volunteers? Somehow I doubt it.

Mauldin: We have to re-think our military costs (I can't believe I am writing this!). We now spend almost 50% of the world's total military budget. Maybe we need to understand that we can't fight two wars and support hundreds of bases around the world. If we kill the goose, our ability to fight even one medium-sized war will be diminished. The harsh reality is that everything has to be re-evaluated. As an example, do we really need to be in Korea? If so, why can't Korea pay for much of the cost? They are now a rich nation. There are budgetary fiscal limits to being the policeman for the world.

Mish: Bingo. We can easily slash our military budget by 70% and still be the most powerful nation in the world. Moreover, it is time to declare the war in Iraq and Afghanistan over, pack our bags and leave. Gradually, over the next 5-8 years we should bring home all our troops from literally every county they are stationed.

This chart shows the absurdity of our spending.

Chart courtesy of Global Issues - World Military Spending.

By the way that chart does not include the latest increase in the US military budget. Please consider US lawmakers pass 680-billion-dollar defense budget bill

The US House of Representatives passed a 680-billion-dollar defense authorization bill on Thursday that includes funds to train Afghan security forces and more mine-resistant troop carriers.

Lawmakers defied President Barack Obama's veto threat and approved 560 million dollars to continue work on an alternative engine for the F-35 fighter jet built by General Electric and British manufacturer Rolls-Royce.

The compromise legislation would also raise military pay by 3.4 percent -- half a percentage point higher than Pentagon recommendations -- and assign 6.7 billion dollars for mine-resistant armored vehicles known as MRAPs, which is 1.2 billion dollars more than the administration had proposed.

Nearly $700 billion dollars of "defense" spending. The amount needed for actual defense is 20% of that at most, and more likely 5%. Balancing the budget is easy if you start here.

Mauldin: Glass-Steagall, or some form of it, should be brought back. Banks, which are subject to taxpayer bailouts, should not be in the investment banking and derivatives-creating business. Derivatives, especially credit default swaps, should be on an exchange, and too big to fail must go. Banks have enough risk just making loans. Leverage should be dialed down, and hedge funds selling what amounts to naked call options in any form, derivative or otherwise, should be regulated.

Mish: What we need to do is get rid of the Fed, FDIC, and fractional reserve lending. Regulation has failed every step of the way. Regulation created Fannie Mae, Freddie Mac, and the Fed. Regulation by the SEC anointed Moodys, Fitch, and the S&P as debt rating companies. We do not need more regulation, we need less regulation, a sound currency, and no Fed. Regulation is clearly the problem, yet the cries for still more regulation come from nearly every corner save the Austrian economists.

Mauldin: Let me see, is there any group I have not offended yet? But something like I am suggesting is going to have to be done at some point. There is no way we can continue forever on the current path. At some point, we will hit the wall. The fight between the bug and the windshield always ends in favor of the windshield. The bond market is going to have to see a credible effort to get back to a reasonable deficit, or we risk a very difficult economic environment. The longer we wait, the worse it will be.

Mish: "Is there any group I have not offended yet?" Yes. You failed to offend those on public pension plans. Not to fear, I did that myself in Five Major Pension Problems - One Simple Solution.

Unsolvable Problems


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[Jan 20, 2019] Note on students debt peonage

Jan 20, 2019 | www.truthdig.com

RW: Well at this point I think it really depends on what indexes you're looking at. The biggest thing that's kept this economy going in the last few years should make everybody tremble. It's called debt, let me give you just a couple of examples. Ten years ago, at the height of the crash, the total debt carried by students in the United States was in the neighborhood of $700 billion, an enormous sum. What is it today? Over twice that, one-and-a-half trillion dollars. The reason part of our economy hasn't collapsed is that students have taken up an enormous amount of debt that they cannot afford, in order to get degrees which will let them get jobs whose incomes will not allow them to pay back the debts. And forget about getting married, forget about having a family.

We have paid an enormous price in hobbling the generation of people who would have otherwise lifted this economy and made us more productive. It is a disastrous mistake historically, and if you face that, and if you add to it the increased debt of our businesses, and the increased debt of our government, you see an economy that is held up by a monstrous increase in debt, not in underlying productivity, not in more jobs that really produce anything, but in debt.

That should frighten us because it was the debt bubble that burst in 2008 and brought us the crash. It is as if we cannot learn in our system to do other than we've always done and that's taking us into another crash coming now.

LC: Yeah. This is the land of the free, but it seems like most of us are chained down by debt peonage.

[Jan 20, 2019] Degeneration of the US neoliberal elite can be partially attributed to the conversion of neoliberal universities into indoctrination mechanism, rather then institutions for fostering critical thinking

Notable quotes:
"... An excellent piece. I would add only that the so-called elites mentioned by Mr Bacevich are largely the products of the uppermost stratum of colleges and universities, at least in the USA, and that for a generation or more now, those institutions have indoctrinated rather than educated. ..."
"... As their more recent alumni move into government, media and cultural production, the primitiveness of their views and their inability to think -- to say nothing of their fundamental ignorance about our civilization other than that it is bad and evil -- begin to have real effect. ..."
Jan 20, 2019 | www.theamericanconservative.com

Paul Reidinger, January 17, 2019 at 2:03 pm

An excellent piece. I would add only that the so-called elites mentioned by Mr Bacevich are largely the products of the uppermost stratum of colleges and universities, at least in the USA, and that for a generation or more now, those institutions have indoctrinated rather than educated.

As their more recent alumni move into government, media and cultural production, the primitiveness of their views and their inability to think -- to say nothing of their fundamental ignorance about our civilization other than that it is bad and evil -- begin to have real effect. The new dark age is no longer imminent. It is here, and it is them. I see no way to rectify the damage. When minds are ruined young, they remain ruined.

[Jan 17, 2019] Elizabeth Warren is demanding that Wells Fargo be kicked off college campuses, a market the bank has said is among its fastest-growing

Notable quotes:
"... The inquiry follows a Consumer Financial Protection Bureau report said that Wells Fargo charged students the highest fees of 573 banks examined. ..."
"... "When granted the privilege of providing financial services to students through colleges, Wells Fargo used this access to charge struggling college students exorbitant fees," Warren said in a statement. "These high fees, which are an outlier within the industry, demonstrate conclusively that Wells Fargo does not belong on college campuses." ..."
Jan 17, 2019 | www.bloomberg.com

Elizabeth Warren is demanding that Wells Fargo & Co. be kicked off college campuses, a market the bank has said is among its fastest-growing.

The Democratic senator from Massachusetts and likely presidential candidate said Thursday that she requested more information from Wells Fargo Chief Executive Officer Tim Sloan and from 31 colleges where the bank does business. The inquiry follows a Consumer Financial Protection Bureau report said that Wells Fargo charged students the highest fees of 573 banks examined.

"When granted the privilege of providing financial services to students through colleges, Wells Fargo used this access to charge struggling college students exorbitant fees," Warren said in a statement. "These high fees, which are an outlier within the industry, demonstrate conclusively that Wells Fargo does not belong on college campuses."

Warren has been a vocal critic of Wells Fargo -- including repeatedly calling for Sloan's ouster -- since a series of consumer issues at the company erupted more than two years ago with a phony-accounts scandal.

Wells Fargo is "continually working to improve how we serve our customers," a bank spokesman said in an emailed statement Thursday. "Before and since the CFPB's review on this topic, we have been pursuing customer-friendly actions that support students," including waiving service fees on some checking accounts offered to them.

A reputation for overcharging students could further harm Wells Fargo's consumer-banking strategy. The San Francisco-based bank has identified college-age consumers as a growth opportunity, and John Rasmussen, head of personal lending, said last year that Wells Fargo may expand into the refinancing of federal student loans.

[Jan 17, 2019] The financial struggles of unplanned retirement

People who are kicked out of their IT jobs around 55 now has difficulties to find even full-time McJobs... Only part time jobs are available. With the current round of layoff and job freezes, neoliberalism in the USA is entering terminal phase, I think.
Jan 17, 2019 | finance.yahoo.com

A survey by Transamerica Center for Retirement Studies found on average Americans are retiring at age 63, with more than half indicating they retired sooner than they had planned. Among them, most retired for health or employment-related reasons.

... ... ...

On April 3, 2018, Linda LaBarbera received the phone call that changed her life forever. "We are outsourcing your work to India and your services are no longer needed, effective today," the voice on the other end of the phone line said.

... ... ...

"It's not like we are starving or don't have a home or anything like that," she says. "But we did have other plans for before we retired and setting ourselves up a little better while we both still had jobs."

... ... ...

Linda hasn't needed to dip into her 401(k) yet. She plans to start collecting Social Security when she turns 70, which will give her the maximum benefit. To earn money and keep busy, Linda has taken short-term contract editing jobs. She says she will only withdraw money from her savings if something catastrophic happens. Her husband's salary is their main source of income.

"I am used to going out and spending money on other people," she says. "We are very generous with our family and friends who are not as well off as we are. So we take care of a lot of people. We can't do that anymore. I can't go out and be frivolous anymore. I do have to look at what we spend - what I spend."

Vogelbacher says cutting costs is essential when living in retirement, especially for those on a fixed income. He suggests moving to a tax-friendly location if possible. Kiplinger ranks Alaska, Wyoming, South Dakota, Mississippi, and Florida as the top five tax-friendly states for retirees. If their health allows, Vogelbacher recommends getting a part-time job. For those who own a home, he says paying off the mortgage is a smart financial move.

... ... ...

Monica is one of the 44 percent of unmarried persons who rely on Social Security for 90 percent or more of their income. At the beginning of 2019, Monica and more than 62 million Americans received a 2.8 percent cost of living adjustment from Social Security. The increase is the largest since 2012.

With the Social Security hike, Monica's monthly check climbed $33. Unfortunately, the new year also brought her a slight increase in what she pays for Medicare; along with a $500 property tax bill and the usual laundry list of monthly expenses.

"If you don't have much, the (Social Security) raise doesn't represent anything," she says with a dry laugh. "But it's good to get it."

[Jan 14, 2019] Beware of billionaires and bankers bearing gifts: In education, philanthropy means Billionaires buying the policies they want

that's how neoliberalism was installed in the USA
Notable quotes:
"... quelle surprise ..."
Jan 14, 2019 | www.nakedcapitalism.com
Paradox of Privilege

"Winners Take All" is one of several recently published books raising difficult questions about how the world's biggest donors approach their giving. As someone who studies, teaches and believes in philanthropy, I believe these writers have started an important debate that could potentially lead future donors to make make a bigger difference with their giving.

Giridharadas to a degree echoes Ford Foundation President Darren Walker , who has made a stir by denouncing a " paradox of privilege " that "shields (wealthy people) from fully experiencing or acknowledging inequality, even while giving us more power to do something about it."

Like Walker , Giridharadas finds it hard to shake the words of Martin Luther King Jr., who spoke of "the circumstances of economic injustice which make philanthropy necessary."

To avoid changes that might endanger their privileges, mega-donors typically seek what they call win-win solutions. But however impressive the quantifiable results of those efforts may seem, according to this argument, those outcomes will always fall short. Fixes that don't threaten the powers that be leave underlying issues intact.

Avoiding Win-Lose Solutions

In Giridharadas's view, efforts by big funders , such as The Bill and Melinda Gates Foundation and the Walton Family Foundation , to strengthen public K-12 education systems by funding charter schools look past the primary reason why not all students learn at the same pace: inequality .

As long as school systems are funded locally, based on property values, students in wealthy communities will have advantages over those residing in poorer ones. However, creating a more equal system to pay for schools would take tax dollars and advantages away from the rich. The wealthy would lose, and the disadvantaged would win.

So it's possible to see the nearly $500 million billionaires and other rich people have pumped into charter schools and other education reform efforts over the past dozen years as a way to dodge this problem.

Charters have surely made a difference for some kids, such as those in rural Oregon whose schools might otherwise have closed. But since the bid to expand charters doesn't address childhood poverty or challenge the status quo – aside from diluting the power of teacher unions and raising the stakes in school board elections – this approach seems unlikely to help all schoolchildren.

Indeed, years into the quest to fix this problem without overhauling school Paying for Tuition

Bloomberg's big donation raises a similar question.

He aims to make a Johns Hopkins education more accessible for promising low-income students. When so many Hopkins alumni have enjoyed success in a wide range of careers, what can be wrong with that?

Well, paying tuition challenges millions of Americans, not just the thousands who might attend Hopkins . Tuition, fees, room and board at the top-ranked school cost about $65,000 a year.

Only 5 percent of colleges and universities were affordable , according to the Institute for Higher Education Policy, a nonpartisan global research and policy center, for students from families earning $69,000 a year or less.

Like Giridharadas, the institute argues paying for college is "largely a problem of inequity."

Bloomberg's gift will certainly help some people earn a Hopkins degree. But it does nothing about the bigger challenge of making college more affordable for all in a country where student debt has surpassed $1.5 trillion .

One alternative would be to finance advocacy for legislative remedies to address affordability and inequity. For affluent donors, Giridharadas argues, this could prove to be a nonstarter. Like most of what he calls " win-lose solutions ," taking that route would lead to higher taxes for the wealthy.

Subsidies for Gifts from the Rich

Similarly, who could quibble with Bezos spending $2 billion to fund preschools and homeless shelters? Although he has not yet made clear what results he's after, I have no doubt they will make a difference for countless Americans.

No matter how he goes about it, the gesture still raises questions. As Stanford University philanthropy scholar Rob Reich explains in his new book " Just Giving ," the tax break rich Americans get when they make charitable contributions subsidizes their favorite causes.

Or, to phrase it another way, the federal government gives initiatives supported by Bezos and other wealthy donors like him preferential treatment. Does that make sense in a democracy? Reich says that it doesn't.

me title=

The elected representatives in democracies should decide how best to solve problems with tax dollars, not billionaires who are taken with one cause or another, the Stanford professor asserts.

That's why I think it's so important to ask the critical questions that Giridharadas and Reich are raising, and why the students taking my philanthropy classes this semester will be reading "Winners Take All" and "Just Giving."

Editor's note: Johns Hopkins University Press provides funding as a member of The Conversation US, which also has a grant from the Walton Family Foundation. The Gates Foundation is a funder of The Conversation Media Group.


tongorad , January 11, 2019 at 10:35 am

In education, philanthropy means Billionaires buying the policies they want. Re Bill Gates, Eli Broad, DeVos, etc,

Adam Eran , January 11, 2019 at 12:47 pm

None of the common tactics of the "reformers" have scientific backing. So (union-busting) charter schools, merit pay (because teachers are motivated by money), and testing kids until their eyeballs bleed are all bogus, and do not have an impact on educational outcomes.

The plutocrats have even funded a propaganda film called "Waiting for Superman" in which Michelle Rhee applies "tough love" to reform failing Washington D.C. schools, firing lots of teachers because their students' test scores didn't make the cut, etc.

Waiting for Superman touts the Finnish schools as the ones to emulate and they are very good ones, too. Omitted from their account is the fact that Finnish teachers are tenured, unionized, respected and quite well paid.

So what does correlate with educational outcomes? Childhood poverty. In Finland, only 2% of their children are poor. In the U.S. it's 23%.

The problem is systemic, not the teachers, or the types of schools.

L , January 11, 2019 at 10:52 am

In some sense this is nothing new. Back when Pittsburgh was a network of steel mills and mine tailings Carnegie funded meuseums, libraries, arboretums, and strike-breakers who shot workers that complained. He was public about the need to "give back" and made a point of demanding that the places were open on Sundays because he forced his workers to do 12 hour days six days a week.

No doubt he may have felt he was helping, and no doubt the institutions have been and still are a positive benefit, but they also did nothing to attack the root cause of the suffering nor did they make any fundamental change in society. That would upset his apple cart. By the same token the fact that private donors needed to fund public institutions was based upon the simple fact that they had all the money.

It is also notable that some of the more recent endeavors such as Gates' tech-driven charter schools, or Facebook's donation to the same, or for that matter Apple's donation of iPads to LAUSD have a direct commercial component. The intial gift may be free but in the end it is market-making as much of the cash routes back to the company. They may genuinely believe in the solution but the financial connection is also clear.

More interesting though Pierre Omidyar who combined his business and "philanthropy" more directly by putting money into a foundation that then invests in startups he runs which "do social good" or which sell technology to those that do so.

Ultimately Bill Gates and Jeff Bezos may have more to play with than Carnegie ever dreamed of but at the end of the day much of what they are doing is the same, starving necessary institutions of funds, smoothing out the rough edges of their PR (especially when, like Bezos, they are in the crosshairs), and then peddling "solutions" that look good but only reinforce the conditions that make them rich.

JerryDenim , January 11, 2019 at 12:42 pm

" have a direct commercial component. The intial gift may be free but in the end it is market-making as much of the cash routes back to the company."

How true, but you might not even be cynical enough. Back in 2012 (I believe) there was reportage about large banks quitely lobbying Bloomberg to make big cuts to the New York City's funding of local charities and non-profits. Several million dollars were cut as a result of the austerity lobbying by the banks. The same week the food pantry where I volunteered, which lost $40,000 of City funding if memory serves me correctly, received a "generous" gift of a folding table from Citibank. My wife who at the time worked at a large non-profit dedicated to community issues in the South Bronx, had to attend a presentation by a Citibank employee with a name like "How the Nonprofit Community Has Failed the Community". Her attendance was a courtesy demanded in exchange for a several thousand dollar donation from Citibank to her nonprofit. Her non-profit lost much more in funding from the City due to the banks' lobbying efforts, and surprise surprise, what was the main thrust of the Citibank presentation? How micro-finance lending can help historically marginalized communities of course! My wife's organization was engaged in several programs aimed at encouraging and aiding entrepreneurship and financial literacy. Citibank saw local non-profits that were helping the community keep their collective heads above the water as competition. Their programatic work was harmful to the bank's business model of luring people into odious debt by promulgating an environment of despair and desperation.

Beware of billionaires and bankers bearing gifts. Their vast fortunes should be trimmed down to size with taxation/force and distributed democratically according to the needs of the community, not the whims of the market or the misguided opinions of non-expert, know-it-all billionaires who have never lived nor worked in the communities they claim to care about.

Montanamaven , January 11, 2019 at 1:31 pm

Charity makes people supplicants which is a form of servitude. "Thank you kindly, sir, for you gracious gift." That is not a "free" society. We should have a society where no one needs some good folks' trickle downs. A basic guaranteed income might work better than the system we have now especially with an affordable heath care system. It would eliminate food banks and homeless shelters and jobs involving making lists and forms and graphs for the Medical Insurance Business. And it would eliminate a lot of other stupid and bullsh*t jobs. Yes, I've been rereading David Graeber's "Bullsh*t Jobs."

chuck roast , January 11, 2019 at 4:36 pm

Several years ago I collected signatures for Move to Amend, an organizations which advocates for an anti-corporate personhood amendment to the US Constitution. I learned two things:
1. ordinary citizens 'get it' about corporations running the show, and they are enthusiastic about bringing them to heel, and
2. ordinary citizens who work in 501(c)3 non-profits are far less enthusiastic about the possible withering away of their cozy corporate dole.
So, while the giant vampire squids of the world drift lazily along on a fine current of their own making, keep in mind that there are huge schools of pilot fish that depend on their leavings for survival. All of these small fish will surely resist any effort to tenderize this calamari.

drHampartzunk , January 11, 2019 at 4:43 pm

No one said it better than William Jewett Tucker, a contemporary critic of Carnegie:

"I can conceive of no greater mistake, more disastrous in the end to religion if not to society, than of trying to make charity do the work of justice."

David in Santa Cruz , January 11, 2019 at 8:28 pm

This was a terrific post on a very important issue.

Even in my insignificant little burg we have experienced this problem first-hand. A local Charter School was doing a very good job of "keeping out the brown people" and publishing a "walk of shame" of all who made "voluntary" contributions to their coffers, thus "outing" those who didn't (the California constitution forbids schools that spend public money from requiring fees). They even went so far as to hire a Head of School from one of the last Mississippi Segregation Acadamies, just in case their "mission" wasn't clear. Admission was by lottery ("because lotteries are fair!"), unless you happened to be on their massively bloated and self-appointed Board (including influential local officials, quelle surprise !). Those with learning differences or languages other than English were "strongly discouraged" from even applying.

The Charter covered their operating budget with all those "voluntary" contributions, and had sequestered all the cash squeezed out of the local public schools, in order to buy an office building (because kids just love preparing for the world of work by going to school in office buildings!). A local billionaire whose name rhymes with "Netflix" bailed them out with a $10M donation for the building when it appeared that some in authority might look askance at who would be the beneficiaries of this insider real estate deal using skimmed-off public monies.

Scratch a Charter School and 9 times out of 10 there's a real estate deal underlying it ("Because, the children !"). Billionaires should have no more influence than any other individual voter in making public policy.

orange cats , January 13, 2019 at 9:45 am

Grrrrr, Charter Schools are making me angry. The real estate deal(s), you mention are absolutely true. Here's another sweet scheme in Arizonia: "The Arizona Republic has reported that Rep. Eddie Farnsworth stands to make about $30 million from selling three charter schools he built with taxpayer money.
The toothless Arizona State Board for Charter Schools approved the transfer of his for-profit charter school to a new, non-profit company. He might collect up to $30 million -- and maybe even continue running the operation in addition to retaining a $3.8 million share in the new for-profit company.

The Benjamin Franklin charter schools operate in wealthy neighborhoods. The 3,000 students have good scores and the schools have a B rating. But that's not surprising, since most of the parents have high incomes and college educations. If the schools are like most charters in the state, they're more racially segregated than the campuses in the surrounding school districts. The state pays the charter schools $2,000 per student more than it pays traditional school districts like Payson -- which is supposedly to make up for the charter's inability to issue bonds and such.

However, converting the charters to a non-profit company will enable the schools to avoid property taxes and qualify for federal education funds. Taxpayers will essentially end up paying for the same schools twice, since taxpayers have footed the bills for the lease payments to the tune of about $5 million annually. Now, the new owners will use taxpayer money to finance the purchase of buildings already paid for by taxpayers."

drHampartzunk , January 11, 2019 at 9:08 pm

Stevenson school in Mountain View CA, a public school with PACT (parents and children together), has a lottery. Its students are 70% white. Across the street, Theuerkauf, which does not have PACT, is 30% white and no lottery. And a huge difference in the two schools test scores. Smells illegal.

Also, Google took the former building of the former PACT program hosting school, which resulted in this grotesque distortion of the supposed public service the school district provides.

Michael Fiorillo , January 12, 2019 at 9:09 am

As a former NYC public school teacher who fought against the billionaire-funded hostile takeover of public education for two decades, I'm gratified to see the beginnings of a harsher critique of so-called philanthropy, in education and everywhere else.

But the next hurdle is to overcome the tic of always qualifying critique and pushback with talk of the "good intentions" of these Overclass gorgons. Their intention are not "good" in the way most human beings construe that word, and are the same as they've always been: accumulation and establishing the political wherewithal to maintain/facilitiate the same. This hustle does the added trick of getting the public to subsidize it's own impoverishment and loss of political power (as in Overclass ed reformers funding efforts to eliminate local school boards).

When there is near-total congruence between your financial/political interests and the policies driven by your "philanthropy," the credibility of your "good intentions" transacts at an extremely high discount, no matter how much you try to dress it up with vacuous and insipid social justice cliches. For a case in point, just spend five minutes researching the behavior and rhetoric of Teach For America.

Malanthropy (n): the systemic use of non-profit, tax-exempt entities to facilitate the economic and political interests of their wealthy endowers, to the detriment of society at large. See also, Villainthropy.

Mattski , January 12, 2019 at 11:07 am

The critical thing, I have found, is to see "philanthropy" and charitable endeavor as a cornerstone of capitalism, without which the system would–without any doubt–fail. Engels and others documented, contemporary scholars have continued to document, the way that the wives of the first factory owners established almshouses and lying in hospitals where the deserving poor were separated from the undeserving, dunned with religion and political cant, and channelled into various forms of work, including reproductive labor. A very big piece of the neoliberal puzzle involves the rise of the NGO during the Clinton/Blair period, and its integration with works of the like of the IMF and USAID, the increasing sophistication of this enterprise which has at times also included union-busting (see Grenada in the aftermath of the US invasion) and worse. As a State Department function, the Peace Corps integrates the best of charity, grassroots capitalism, and good old Protestant cant.

Spring Texan , January 12, 2019 at 5:54 pm

I've read the Winners Take All book and it's terrific! Even if you understand the general outlines, the author will make you see things differently because of his intimate knowledge of how this ecosystem works. Highly recommended! Also recommend his twitter account, @AnandWrites ‏

He's really good on "pinkerizing" too, and "Thought Leaders" and how they comfort the comfortable.

[Jan 12, 2019] Tucker Carlson Mitt Romney supports the status quo. But for everyone else, it's infuriating Fox News

Highly recommended!
Notable quotes:
"... Adapted from Tucker Carlson's monologue from "Tucker Carlson Tonight" on January 2, 2019. ..."
Jan 02, 2019 | www.foxnews.com
Tucker: America's goal is happiness, but leaders show no obligation to voters

Voters around the world revolt against leaders who won't improve their lives.

Newly-elected Utah senator Mitt Romney kicked off 2019 with an op-ed in the Washington Post that savaged Donald Trump's character and leadership. Romney's attack and Trump's response Wednesday morning on Twitter are the latest salvos in a longstanding personal feud between the two men. It's even possible that Romney is planning to challenge Trump for the Republican nomination in 2020. We'll see.

But for now, Romney's piece is fascinating on its own terms. It's well-worth reading. It's a window into how the people in charge, in both parties, see our country.

Romney's main complaint in the piece is that Donald Trump is a mercurial and divisive leader. That's true, of course. But beneath the personal slights, Romney has a policy critique of Trump. He seems genuinely angry that Trump might pull American troops out of the Syrian civil war. Romney doesn't explain how staying in Syria would benefit America. He doesn't appear to consider that a relevant question. More policing in the Middle East is always better. We know that. Virtually everyone in Washington agrees.

Corporate tax cuts are also popular in Washington, and Romney is strongly on board with those, too. His piece throws a rare compliment to Trump for cutting the corporate rate a year ago.

That's not surprising. Romney spent the bulk of his business career at a firm called Bain Capital. Bain Capital all but invented what is now a familiar business strategy: Take over an existing company for a short period of time, cut costs by firing employees, run up the debt, extract the wealth, and move on, sometimes leaving retirees without their earned pensions. Romney became fantastically rich doing this.

Meanwhile, a remarkable number of the companies are now bankrupt or extinct. This is the private equity model. Our ruling class sees nothing wrong with it. It's how they run the country.

Mitt Romney refers to unwavering support for a finance-based economy and an internationalist foreign policy as the "mainstream Republican" view. And he's right about that. For generations, Republicans have considered it their duty to make the world safe for banking, while simultaneously prosecuting ever more foreign wars. Modern Democrats generally support those goals enthusiastically.

There are signs, however, that most people do not support this, and not just in America. In countries around the world -- France, Brazil, Sweden, the Philippines, Germany, and many others -- voters are suddenly backing candidates and ideas that would have been unimaginable just a decade ago. These are not isolated events. What you're watching is entire populations revolting against leaders who refuse to improve their lives.

Something like this has been in happening in our country for three years. Donald Trump rode a surge of popular discontent all the way to the White House. Does he understand the political revolution that he harnessed? Can he reverse the economic and cultural trends that are destroying America? Those are open questions.

But they're less relevant than we think. At some point, Donald Trump will be gone. The rest of us will be gone, too. The country will remain. What kind of country will be it be then? How do we want our grandchildren to live? These are the only questions that matter.

The answer used to be obvious. The overriding goal for America is more prosperity, meaning cheaper consumer goods. But is that still true? Does anyone still believe that cheaper iPhones, or more Amazon deliveries of plastic garbage from China are going to make us happy? They haven't so far. A lot of Americans are drowning in stuff. And yet drug addiction and suicide are depopulating large parts of the country. Anyone who thinks the health of a nation can be summed up in GDP is an idiot.

The goal for America is both simpler and more elusive than mere prosperity. It's happiness. There are a lot of ingredients in being happy: Dignity. Purpose. Self-control. Independence. Above all, deep relationships with other people. Those are the things that you want for your children. They're what our leaders should want for us, and would want if they cared.

But our leaders don't care. We are ruled by mercenaries who feel no long-term obligation to the people they rule. They're day traders. Substitute teachers. They're just passing through. They have no skin in this game, and it shows. They can't solve our problems. They don't even bother to understand our problems.

One of the biggest lies our leaders tell us that you can separate economics from everything else that matters. Economics is a topic for public debate. Family and faith and culture, meanwhile, those are personal matters. Both parties believe this.

Members of our educated upper-middle-classes are now the backbone of the Democratic Party who usually describe themselves as fiscally responsible and socially moderate. In other words, functionally libertarian. They don't care how you live, as long as the bills are paid and the markets function. Somehow, they don't see a connection between people's personal lives and the health of our economy, or for that matter, the country's ability to pay its bills. As far as they're concerned, these are two totally separate categories.

Social conservatives, meanwhile, come to the debate from the opposite perspective, and yet reach a strikingly similar conclusion. The real problem, you'll hear them say, is that the American family is collapsing. Nothing can be fixed before we fix that. Yet, like the libertarians they claim to oppose, many social conservatives also consider markets sacrosanct. The idea that families are being crushed by market forces seems never to occur to them. They refuse to consider it. Questioning markets feels like apostasy.

Both sides miss the obvious point: Culture and economics are inseparably intertwined. Certain economic systems allow families to thrive. Thriving families make market economies possible. You can't separate the two. It used to be possible to deny this. Not anymore. The evidence is now overwhelming. How do we know? Consider the inner cities.

Thirty years ago, conservatives looked at Detroit or Newark and many other places and were horrified by what they saw. Conventional families had all but disappeared in poor neighborhoods. The majority of children were born out of wedlock. Single mothers were the rule. Crime and drugs and disorder became universal.

What caused this nightmare? Liberals didn't even want to acknowledge the question. They were benefiting from the disaster, in the form of reliable votes. Conservatives, though, had a ready explanation for inner-city dysfunction and it made sense: big government. Decades of badly-designed social programs had driven fathers from the home and created what conservatives called a "culture of poverty" that trapped people in generational decline.

There was truth in this. But it wasn't the whole story. How do we know? Because virtually the same thing has happened decades later to an entirely different population. In many ways, rural America now looks a lot like Detroit.

This is striking because rural Americans wouldn't seem to have much in common with anyone from the inner city. These groups have different cultures, different traditions and political beliefs. Usually they have different skin colors. Rural people are white conservatives, mostly.

Yet, the pathologies of modern rural America are familiar to anyone who visited downtown Baltimore in the 1980s: Stunning out of wedlock birthrates. High male unemployment. A terrifying drug epidemic. Two different worlds. Similar outcomes. How did this happen? You'd think our ruling class would be interested in knowing the answer. But mostly they're not. They don't have to be interested. It's easier to import foreign labor to take the place of native-born Americans who are slipping behind.

But Republicans now represent rural voters. They ought to be interested. Here's a big part of the answer: male wages declined. Manufacturing, a male-dominated industry, all but disappeared over the course of a generation. All that remained in many places were the schools and the hospitals, both traditional employers of women. In many places, women suddenly made more than men.

Now, before you applaud this as a victory for feminism, consider the effects. Study after study has shown that when men make less than women, women generally don't want to marry them. Maybe they should want to marry them, but they don't. Over big populations, this causes a drop in marriage, a spike in out-of-wedlock births, and all the familiar disasters that inevitably follow -- more drug and alcohol abuse, higher incarceration rates, fewer families formed in the next generation.

This isn't speculation. This is not propaganda from the evangelicals. It's social science. We know it's true. Rich people know it best of all. That's why they get married before they have kids. That model works. But increasingly, marriage is a luxury only the affluent in America can afford.

And yet, and here's the bewildering and infuriating part, those very same affluent married people, the ones making virtually all the decisions in our society, are doing pretty much nothing to help the people below them get and stay married. Rich people are happy to fight malaria in Congo. But working to raise men's wages in Dayton or Detroit? That's crazy.

This is negligence on a massive scale. Both parties ignore the crisis in marriage. Our mindless cultural leaders act like it's still 1961, and the biggest problem American families face is that sexism is preventing millions of housewives from becoming investment bankers or Facebook executives.

For our ruling class, more investment banking is always the answer. They teach us it's more virtuous to devote your life to some soulless corporation than it is to raise your own kids.

Sheryl Sandberg of Facebook wrote an entire book about this. Sandberg explained that our first duty is to shareholders, above our own children. No surprise there. Sandberg herself is one of America's biggest shareholders. Propaganda like this has made her rich.

We are ruled by mercenaries who feel no long-term obligation to the people they rule. They're day traders. Substitute teachers. They're just passing through. They have no skin in this game, and it shows.

What's remarkable is how the rest of us responded to it. We didn't question why Sandberg was saying this. We didn't laugh in her face at the pure absurdity of it. Our corporate media celebrated Sandberg as the leader of a liberation movement. Her book became a bestseller: "Lean In." As if putting a corporation first is empowerment. It is not. It is bondage. Republicans should say so.

They should also speak out against the ugliest parts of our financial system. Not all commerce is good. Why is it defensible to loan people money they can't possibly repay? Or charge them interest that impoverishes them? Payday loan outlets in poor neighborhoods collect 400 percent annual interest.

We're OK with that? We shouldn't be. Libertarians tell us that's how markets work -- consenting adults making voluntary decisions about how to live their lives. OK. But it's also disgusting. If you care about America, you ought to oppose the exploitation of Americans, whether it's happening in the inner city or on Wall Street.

And by the way, if you really loved your fellow Americans, as our leaders should, if it would break your heart to see them high all the time. Which they are. A huge number of our kids, especially our boys, are smoking weed constantly. You may not realize that, because new technology has made it odorless. But it's everywhere.

And that's not an accident. Once our leaders understood they could get rich from marijuana, marijuana became ubiquitous. In many places, tax-hungry politicians have legalized or decriminalized it. Former Speaker of the House John Boehner now lobbies for the marijuana industry. His fellow Republicans seem fine with that. "Oh, but it's better for you than alcohol," they tell us.

Maybe. Who cares? Talk about missing the point. Try having dinner with a 19-year-old who's been smoking weed. The life is gone. Passive, flat, trapped in their own heads. Do you want that for your kids? Of course not. Then why are our leaders pushing it on us? You know the reason. Because they don't care about us.

When you care about people, you do your best to treat them fairly. Our leaders don't even try. They hand out jobs and contracts and scholarships and slots at prestigious universities based purely on how we look. There's nothing less fair than that, though our tax code comes close.

Under our current system, an American who works for a salary pays about twice the tax rate as someone who's living off inherited money and doesn't work at all. We tax capital at half of what we tax labor. It's a sweet deal if you work in finance, as many of our rich people do.

In 2010, for example, Mitt Romney made about $22 million dollars in investment income. He paid an effective federal tax rate of 14 percent. For normal upper-middle-class wage earners, the federal tax rate is nearly 40 percent. No wonder Mitt Romney supports the status quo. But for everyone else, it's infuriating.

Our leaders rarely mention any of this. They tell us our multi-tiered tax code is based on the principles of the free market. Please. It's based on laws that the Congress passed, laws that companies lobbied for in order to increase their economic advantage. It worked well for those people. They did increase their economic advantage. But for everyone else, it came at a big cost. Unfairness is profoundly divisive. When you favor one child over another, your kids don't hate you. They hate each other.

That happens in countries, too. It's happening in ours, probably by design. Divided countries are easier to rule. And nothing divides us like the perception that some people are getting special treatment. In our country, some people definitely are getting special treatment. Republicans should oppose that with everything they have.

What kind of country do you want to live in? A fair country. A decent country. A cohesive country. A country whose leaders don't accelerate the forces of change purely for their own profit and amusement. A country you might recognize when you're old.

A country that listens to young people who don't live in Brooklyn. A country where you can make a solid living outside of the big cities. A country where Lewiston, Maine seems almost as important as the west side of Los Angeles. A country where environmentalism means getting outside and picking up the trash. A clean, orderly, stable country that respects itself. And above all, a country where normal people with an average education who grew up in no place special can get married, and have happy kids, and repeat unto the generations. A country that actually cares about families, the building block of everything.

Video

What will it take a get a country like that? Leaders who want it. For now, those leaders will have to be Republicans. There's no option at this point.

But first, Republican leaders will have to acknowledge that market capitalism is not a religion. Market capitalism is a tool, like a staple gun or a toaster. You'd have to be a fool to worship it. Our system was created by human beings for the benefit of human beings. We do not exist to serve markets. Just the opposite. Any economic system that weakens and destroys families is not worth having. A system like that is the enemy of a healthy society.

Internalizing all this will not be easy for Republican leaders. They'll have to unlearn decades of bumper sticker-talking points and corporate propaganda. They'll likely lose donors in the process. They'll be criticized. Libertarians are sure to call any deviation from market fundamentalism a form of socialism.

That's a lie. Socialism is a disaster. It doesn't work. It's what we should be working desperately to avoid. But socialism is exactly what we're going to get, and very soon unless a group of responsible people in our political system reforms the American economy in a way that protects normal people.

If you want to put America first, you've got to put its families first.

Adapted from Tucker Carlson's monologue from "Tucker Carlson Tonight" on January 2, 2019.

[Jan 12, 2019] Tucker Carlson has sparked the most interesting debate in conservative politics by Jane Coaston

Highly recommended!
Tucker Carlson sounds much more convincing then Trump: See Tucker Leaders show no obligation to American voters and Tucker The American dream is dying
Notable quotes:
"... America's "ruling class," Carlson says, are the "mercenaries" behind the failures of the middle class -- including sinking marriage rates -- and "the ugliest parts of our financial system." He went on: "Any economic system that weakens and destroys families is not worth having. A system like that is the enemy of a healthy society." ..."
"... He concluded with a demand for "a fair country. A decent country. A cohesive country. A country whose leaders don't accelerate the forces of change purely for their own profit and amusement." ..."
"... The monologue and its sweeping anti-elitism drove a wedge between conservative writers. The American Conservative's Rod Dreher wrote of Carlson's monologue, "A man or woman who can talk like that with conviction could become president. Voting for a conservative candidate like that would be the first affirmative vote I've ever cast for president. ..."
"... The Two-Income Trap: Why Middle-Class Parents Are Growing Broke ..."
"... Carlson wanted to be clear: He's just asking questions. "I'm not an economic adviser or a politician. I'm not a think tank fellow. I'm just a talk show host," he said, telling me that all he wants is to ask "the basic questions you would ask about any policy." But he wants to ask those questions about what he calls the "religious faith" of market capitalism, one he believes elites -- "mercenaries who feel no long-term obligation to the people they rule" -- have put ahead of "normal people." ..."
"... "What does [free market capitalism] get us?" he said in our call. "What kind of country do you want to live in? If you put these policies into effect, what will you have in 10 years?" ..."
"... Carlson is hardly the first right-leaning figure to make a pitch for populism, even tangentially, in the third year of Donald Trump, whose populist-lite presidential candidacy and presidency Carlson told me he views as "the smoke alarm ... telling you the building is on fire, and unless you figure out how to put the flames out, it will consume it." ..."
"... Trump borrowed some of that approach for his 2016 campaign but in office has governed as a fairly orthodox economic conservative, thus demonstrating the demand for populism on the right without really providing the supply and creating conditions for further ferment. ..."
"... Ocasio-Cortez wants a 70-80% income tax on the rich. I agree! Start with the Koch Bros. -- and also make it WEALTH tax. ..."
"... "I'm just saying as a matter of fact," he told me, "a country where a shrinking percentage of the population is taking home an ever-expanding proportion of the money is not a recipe for a stable society. It's not." ..."
"... Carlson told me he wanted to be clear: He is not a populist. But he believes some version of populism is necessary to prevent a full-scale political revolt or the onset of socialism. Using Theodore Roosevelt as an example of a president who recognized that labor needs economic power, he told me, "Unless you want something really extreme to happen, you need to take this seriously and figure out how to protect average people from these remarkably powerful forces that have been unleashed." ..."
"... But Carlson's brand of populism, and the populist sentiments sweeping the American right, aren't just focused on the current state of income inequality in America. Carlson tackled a bigger idea: that market capitalism and the "elites" whom he argues are its major drivers aren't working. The free market isn't working for families, or individuals, or kids. In his monologue, Carlson railed against libertarian economics and even payday loans, saying, "If you care about America, you ought to oppose the exploitation of Americans, whether it's happening in the inner city or on Wall Street" -- sounding very much like Sanders or Warren on the left. ..."
"... Capitalism/liberalism destroys the extended family by requiring people to move apart for work and destroying any sense of unchosen obligations one might have towards one's kin. ..."
"... Hillbilly Elegy ..."
"... Carlson told me that beyond changing our tax code, he has no major policies in mind. "I'm not even making the case for an economic system in particular," he told me. "All I'm saying is don't act like the way things are is somehow ordained by God or a function or raw nature." ..."
Jan 10, 2019 | www.vox.com

"All I'm saying is don't act like the way things are is somehow ordained by God."

Last Wednesday, the conservative talk show host Tucker Carlson started a fire on the right after airing a prolonged monologue on his show that was, in essence, an indictment of American capitalism.

America's "ruling class," Carlson says, are the "mercenaries" behind the failures of the middle class -- including sinking marriage rates -- and "the ugliest parts of our financial system." He went on: "Any economic system that weakens and destroys families is not worth having. A system like that is the enemy of a healthy society."

He concluded with a demand for "a fair country. A decent country. A cohesive country. A country whose leaders don't accelerate the forces of change purely for their own profit and amusement."

The monologue was stunning in itself, an incredible moment in which a Fox News host stated that for generations, "Republicans have considered it their duty to make the world safe for banking, while simultaneously prosecuting ever more foreign wars." More broadly, though, Carlson's position and the ensuing controversy reveals an ongoing and nearly unsolvable tension in conservative politics about the meaning of populism, a political ideology that Trump campaigned on but Carlson argues he may not truly understand.

Moreover, in Carlson's words: "At some point, Donald Trump will be gone. The rest of us will be gone too. The country will remain. What kind of country will be it be then?"

The monologue and its sweeping anti-elitism drove a wedge between conservative writers. The American Conservative's Rod Dreher wrote of Carlson's monologue, "A man or woman who can talk like that with conviction could become president. Voting for a conservative candidate like that would be the first affirmative vote I've ever cast for president." Other conservative commentators scoffed. Ben Shapiro wrote in National Review that Carlson's monologue sounded far more like Sens. Bernie Sanders or Elizabeth Warren than, say, Ronald Reagan.

I spoke with Carlson by phone this week to discuss his monologue and its economic -- and cultural -- meaning. He agreed that his monologue was reminiscent of Warren, referencing her 2003 book The Two-Income Trap: Why Middle-Class Parents Are Growing Broke . "There were parts of the book that I disagree with, of course," he told me. "But there are parts of it that are really important and true. And nobody wanted to have that conversation."

Carlson wanted to be clear: He's just asking questions. "I'm not an economic adviser or a politician. I'm not a think tank fellow. I'm just a talk show host," he said, telling me that all he wants is to ask "the basic questions you would ask about any policy." But he wants to ask those questions about what he calls the "religious faith" of market capitalism, one he believes elites -- "mercenaries who feel no long-term obligation to the people they rule" -- have put ahead of "normal people."

But whether or not he likes it, Carlson is an important voice in conservative politics. His show is among the most-watched television programs in America. And his raising questions about market capitalism and the free market matters.

"What does [free market capitalism] get us?" he said in our call. "What kind of country do you want to live in? If you put these policies into effect, what will you have in 10 years?"

Populism on the right is gaining, again

Carlson is hardly the first right-leaning figure to make a pitch for populism, even tangentially, in the third year of Donald Trump, whose populist-lite presidential candidacy and presidency Carlson told me he views as "the smoke alarm ... telling you the building is on fire, and unless you figure out how to put the flames out, it will consume it."

Populism is a rhetorical approach that separates "the people" from elites. In the words of Cas Mudde, a professor at the University of Georgia, it divides the country into "two homogenous and antagonistic groups: the pure people on the one end and the corrupt elite on the other." Populist rhetoric has a long history in American politics, serving as the focal point of numerous presidential campaigns and powering William Jennings Bryan to the Democratic nomination for president in 1896. Trump borrowed some of that approach for his 2016 campaign but in office has governed as a fairly orthodox economic conservative, thus demonstrating the demand for populism on the right without really providing the supply and creating conditions for further ferment.

When right-leaning pundit Ann Coulter spoke with Breitbart Radio about Trump's Tuesday evening Oval Office address to the nation regarding border wall funding, she said she wanted to hear him say something like, "You know, you say a lot of wild things on the campaign trail. I'm speaking to big rallies. But I want to talk to America about a serious problem that is affecting the least among us, the working-class blue-collar workers":

Coulter urged Trump to bring up overdose deaths from heroin in order to speak to the "working class" and to blame the fact that working-class wages have stalled, if not fallen, in the last 20 years on immigration. She encouraged Trump to declare, "This is a national emergency for the people who don't have lobbyists in Washington."

Ocasio-Cortez wants a 70-80% income tax on the rich. I agree! Start with the Koch Bros. -- and also make it WEALTH tax.

-- Ann Coulter (@AnnCoulter) January 4, 2019

These sentiments have even pitted popular Fox News hosts against each other.

Sean Hannity warned his audience that New York Rep. Alexandria Ocasio-Cortez's economic policies would mean that "the rich people won't be buying boats that they like recreationally, they're not going to be taking expensive vacations anymore." But Carlson agreed when I said his monologue was somewhat reminiscent of Ocasio-Cortez's past comments on the economy , and how even a strong economy was still leaving working-class Americans behind.

"I'm just saying as a matter of fact," he told me, "a country where a shrinking percentage of the population is taking home an ever-expanding proportion of the money is not a recipe for a stable society. It's not."

Carlson told me he wanted to be clear: He is not a populist. But he believes some version of populism is necessary to prevent a full-scale political revolt or the onset of socialism. Using Theodore Roosevelt as an example of a president who recognized that labor needs economic power, he told me, "Unless you want something really extreme to happen, you need to take this seriously and figure out how to protect average people from these remarkably powerful forces that have been unleashed."

"I think populism is potentially really disruptive. What I'm saying is that populism is a symptom of something being wrong," he told me. "Again, populism is a smoke alarm; do not ignore it."

But Carlson's brand of populism, and the populist sentiments sweeping the American right, aren't just focused on the current state of income inequality in America. Carlson tackled a bigger idea: that market capitalism and the "elites" whom he argues are its major drivers aren't working. The free market isn't working for families, or individuals, or kids. In his monologue, Carlson railed against libertarian economics and even payday loans, saying, "If you care about America, you ought to oppose the exploitation of Americans, whether it's happening in the inner city or on Wall Street" -- sounding very much like Sanders or Warren on the left.

Carlson's argument that "market capitalism is not a religion" is of course old hat on the left, but it's also been bubbling on the right for years now. When National Review writer Kevin Williamson wrote a 2016 op-ed about how rural whites "failed themselves," he faced a massive backlash in the Trumpier quarters of the right. And these sentiments are becoming increasingly potent at a time when Americans can see both a booming stock market and perhaps their own family members struggling to get by.

Capitalism/liberalism destroys the extended family by requiring people to move apart for work and destroying any sense of unchosen obligations one might have towards one's kin.

-- Jeremy McLallan (@JeremyMcLellan) January 8, 2019

At the Federalist, writer Kirk Jing wrote of Carlson's monologue, and a response to it by National Review columnist David French:

Our society is less French's America, the idea, and more Frantz Fanon's "Wretched of the Earth" (involving a very different French). The lowest are stripped of even social dignity and deemed unworthy of life . In Real America, wages are stagnant, life expectancy is crashing, people are fleeing the workforce, families are crumbling, and trust in the institutions on top are at all-time lows. To French, holding any leaders of those institutions responsible for their errors is "victimhood populism" ... The Right must do better if it seeks to govern a real America that exists outside of its fantasies.

J.D. Vance, author of Hillbilly Elegy , wrote that the [neoliberal] economy's victories -- and praise for those wins from conservatives -- were largely meaningless to white working-class Americans living in Ohio and Kentucky: "Yes, they live in a country with a higher GDP than a generation ago, and they're undoubtedly able to buy cheaper consumer goods, but to paraphrase Reagan: Are they better off than they were 20 years ago? Many would say, unequivocally, 'no.'"

Carlson's populism holds, in his view, bipartisan possibilities. In a follow-up email, I asked him why his monologue was aimed at Republicans when many Democrats had long espoused the same criticisms of free market economics. "Fair question," he responded. "I hope it's not just Republicans. But any response to the country's systemic problems will have to give priority to the concerns of American citizens over the concerns of everyone else, just as you'd protect your own kids before the neighbor's kids."

Who is "they"?

And that's the point where Carlson and a host of others on the right who have begun to challenge the conservative movement's orthodoxy on free markets -- people ranging from occasionally mendacious bomb-throwers like Coulter to writers like Michael Brendan Dougherty -- separate themselves from many of those making those exact same arguments on the left.

When Carlson talks about the "normal people" he wants to save from nefarious elites, he is talking, usually, about a specific group of "normal people" -- white working-class Americans who are the "real" victims of capitalism, or marijuana legalization, or immigration policies.

In this telling, white working-class Americans who once relied on a manufacturing economy that doesn't look the way it did in 1955 are the unwilling pawns of elites. It's not their fault that, in Carlson's view, marriage is inaccessible to them, or that marijuana legalization means more teens are smoking weed ( this probably isn't true ). Someone, or something, did this to them. In Carlson's view, it's the responsibility of politicians: Our economic situation, and the plight of the white working class, is "the product of a series of conscious decisions that the Congress made."

The criticism of Carlson's monologue has largely focused on how he deviates from the free market capitalism that conservatives believe is the solution to poverty, not the creator of poverty. To orthodox conservatives, poverty is the result of poor decision making or a lack of virtue that can't be solved by government programs or an anti-elite political platform -- and they say Carlson's argument that elites are in some way responsible for dwindling marriage rates doesn't make sense .

But in French's response to Carlson, he goes deeper, writing that to embrace Carlson's brand of populism is to support "victimhood populism," one that makes white working-class Americans into the victims of an undefined "they:

Carlson is advancing a form of victim-politics populism that takes a series of tectonic cultural changes -- civil rights, women's rights, a technological revolution as significant as the industrial revolution, the mass-scale loss of religious faith, the sexual revolution, etc. -- and turns the negative or challenging aspects of those changes into an angry tale of what they are doing to you .

And that was my biggest question about Carlson's monologue, and the flurry of responses to it, and support for it: When other groups (say, black Americans) have pointed to systemic inequities within the economic system that have resulted in poverty and family dysfunction, the response from many on the right has been, shall we say, less than enthusiastic .

Really, it comes down to when black people have problems, it's personal responsibility, but when white people have the same problems, the system is messed up. Funny how that works!!

-- Judah Maccabeets (@AdamSerwer) January 9, 2019

Yet white working-class poverty receives, from Carlson and others, far more sympathy. And conservatives are far more likely to identify with a criticism of "elites" when they believe those elites are responsible for the expansion of trans rights or creeping secularism than the wealthy and powerful people who are investing in private prisons or an expansion of the militarization of police . Carlson's network, Fox News, and Carlson himself have frequently blasted leftist critics of market capitalism and efforts to fight inequality .

I asked Carlson about this, as his show is frequently centered on the turmoils caused by " demographic change ." He said that for decades, "conservatives just wrote [black economic struggles] off as a culture of poverty," a line he includes in his monologue .

He added that regarding black poverty, "it's pretty easy when you've got 12 percent of the population going through something to feel like, 'Well, there must be ... there's something wrong with that culture.' Which is actually a tricky thing to say because it's in part true, but what you're missing, what I missed, what I think a lot of people missed, was that the economic system you're living under affects your culture."

Carlson said that growing up in Washington, DC, and spending time in rural Maine, he didn't realize until recently that the same poverty and decay he observed in the Washington of the 1980s was also taking place in rural (and majority-white) Maine. "I was thinking, 'Wait a second ... maybe when the jobs go away the culture changes,'" he told me, "And the reason I didn't think of it before was because I was so blinded by this libertarian economic propaganda that I couldn't get past my own assumptions about economics." (For the record, libertarians have critiqued Carlson's monologue as well.)

Carlson told me that beyond changing our tax code, he has no major policies in mind. "I'm not even making the case for an economic system in particular," he told me. "All I'm saying is don't act like the way things are is somehow ordained by God or a function or raw nature."

And clearly, our market economy isn't driven by God or nature, as the stock market soars and unemployment dips and yet even those on the right are noticing lengthy periods of wage stagnation and dying little towns across the country. But what to do about those dying little towns, and which dying towns we care about and which we don't, and, most importantly, whose fault it is that those towns are dying in the first place -- those are all questions Carlson leaves to the viewer to answer.

[Jan 06, 2019] Neocons in US niversities: Everything Madeleine Albright Doesn t Like is Fascism

Notable quotes:
"... The fact that obviously deranged fanatic hack has students is a testimony to a sewer level of the US "elite-producing" machine and a pathetic sight contemporary US "elite" represents. ..."
"... "political science" is not a science but pseudo-academic field for losers who do not want to study real history or take courses which actually develop intellect and provide fundamental knowledge. ..."
Jan 06, 2019 | www.unz.com

Andrei Martyanov , says: Website January 5, 2019 at 7:02 pm GMT

Early on in her book, Albright says:

My students remarked that the Fascist chiefs we remember best were charismatic

Marked in bold is the most terrifying thing about Albright's book and I am not even going to read her pseudo-intellectual excrement. The fact that obviously deranged fanatic hack has students is a testimony to a sewer level of the US "elite-producing" machine and a pathetic sight contemporary US "elite" represents.

This is apart from the fact that "political science" is not a science but pseudo-academic field for losers who do not want to study real history or take courses which actually develop intellect and provide fundamental knowledge.

[Jan 04, 2019] A whopping 84 percent of all stocks owned by Americans belong to the wealthiest 10 percent of households. And that includes everyone's stakes in pension plans, 401(k)'s and individual retirement accounts, as well as trust funds, mutual funds and college savings programs like 529 plans.

Jan 04, 2019 | economistsview.typepad.com

anne -> anne... , January 01, 2019 at 12:58 PM

https://www.nytimes.com/2018/02/08/business/economy/stocks-economy.html

February 8, 2018

We All Have a Stake in the Stock Market, Right? Guess Again
By PATRICIA COHEN

Take a deep breath and relax.

The riotous market swings that have whipped up frothy peaks of anxiety over the last week -- bringing the major indexes down more than 10 percent from their high -- have virtually no impact on the income or wealth of most families. The reason: They own little or no stock.

A whopping 84 percent of all stocks owned by Americans belong to the wealthiest 10 percent of households. And that includes everyone's stakes in pension plans, 401(k)'s and individual retirement accounts, as well as trust funds, mutual funds and college savings programs like 529 plans.

"For the vast majority of Americans, fluctuations in the stock market have relatively little effect on their wealth, or well-being, for that matter," said Edward N. Wolff, an economist at New York University who recently published new research * on the topic....

* https://www.nber.org/papers/w24085

Tom aka Rusty said in reply to anne... , January 02, 2019 at 12:13 PM
I am skeptical of the 84% if only because 401(k) plans have gotten so large.
Darrell in Phoenix said in reply to Tom aka Rusty... , January 03, 2019 at 01:50 PM
What I could find says 401(k)s have $5.6T, IRAs have $2.5T, and when you add in pensions, the total is $29 trillion. Not sure when those numbers are from.

Hard to know what part of that is stocks vs. bonds.

As of last April, US stock markets had $34 trillion and the rest of the world $44 trillion equiv.

So, if IRA, 401(k) and retirement plans have almost as much wealth as the total of us stocks, and that is 16% of all stocks... does that mean we
1) Americans own a lot more foreign stocks than foreigners own american stocks
or
2) 84% of retirement assets are bonds?

There is, what? $50 trillion is US debt, much of it backed by bonds.

So, $30 trillion retirement assets, $24.5T bonds and $5.5 trillion stocks... such that $5.5T is 16% of $34T?


That doesn't "smell right" to me.

point , January 01, 2019 at 12:37 PM
Meh.

"And it certainly made most Americans poorer. While 2/3 of the corporate tax cut may have gone to U.S. residents, 84 percent of stocks are held by the wealthiest 10 percent of the population. Everyone else will see hardly any benefit."

Wildly unsubstantiated first sentence, though the rest seems likely true. Whether the bulk went to tax cuts for domestic or foreign national or into the furnace, there was indeed some sliver that actually went to the rest of us.

anne -> point... , January 01, 2019 at 01:05 PM
Wildly unsubstantiated...

[ Correct and documented, as always. ]

Plp -> anne... , January 01, 2019 at 01:41 PM
"And it certainly made most Americans poorer"

" everyone else will see hardly any
Benefit "

Well which is it

Poorer or a very little benefit ?


Sloppy righteousness

Plp -> Plp... , January 01, 2019 at 01:55 PM
Here's the PK finesse

"since the tax cut isn't paying for itself

it will eventually have to be paid for some other way "

Nonsense !


" either by raising other taxes
or by cutting spending on programs people value"

This pretends the federal government is a household

Not a self determining
sovereign economy

Plp -> Plp... , January 01, 2019 at 02:01 PM
Sovereign debt in the sovereign's own currency

Has no intrinsic real value

Example


The burden of that debt on society
can become zero
Once the rate of intetest
On the whole stock of debt is cycled
into a zero real rate status

The Fed could start that process at any time

Once it's zero real it can stay zero real forever

EMichael -> Plp... , January 02, 2019 at 04:38 AM
It's about efficiency, not just the printing press.

And even the MMT people realize there are limits.

RC AKA Darryl, Ron said in reply to EMichael... , January 02, 2019 at 06:29 AM
Efficiency of what, I might ask? Efficiency of shipping goods halfway around the world from where people work for less in less safe environments is really the efficiency of theft by capitalists, not the efficiency of production. Taking from the land and sea and dumping waste into the land, sea, and air is the efficiency of theft by capitalists too, not the efficiency of resource use. We are very efficient at making billionaires from externalized costs. We continue to cheaply sell ourselves out because the price is right. Ask Paine what lies hidden in the price?
EMichael -> RC AKA Darryl, Ron... , January 02, 2019 at 06:47 AM
Yeah, I got that business and government can both be inefficient in many ways.

My point is that when you reduce the cost of doing business, or reduce the credit worthiness of a borrower, you will see greater inefficiency.

Digging holes and filling them in is one way to spend money. Building a road or a building is another.

Which would you prefer?

RC AKA Darryl, Ron said in reply to EMichael... , January 02, 2019 at 07:21 AM
I would prefer unhiding externalized costs and allocating domestic labor to pay those costs, not with taxes, but with production of domestic goods and the elimination of pollutants and managed use of limited resources. That's just me and entirely off the subject when it comes to macroeconomics.

In any case, I am also for Paine's KLV full employment macroeconomics. If anything KLV macro is more accessible both politically and intellectually than the kinds of price movements that would be required to place environmentally sustainable caps on carbon emissions or the commercial menhaden catch. A nominal interest rate for interbank lending that was maintained by the Fed to persist at just the rate of inflation except for lower when necessary to recover from a recession is not a terrible thing. The consequence of braking the economy just to avoid hitting some inflation target is reckless driving. As we know the crash victims are always labor.

EMichael -> RC AKA Darryl, Ron... , January 02, 2019 at 07:41 AM
I'd prefer all of that, and a pony.

You need to separate Paine's economics from his politics. He believes a peoples' party can deliver that. It cannot. It will not. As efficiency goes out the door when a small, unregulated group controls everything. Not to say our version of capitalism has anywhere near the government regulation I think it needs to reach your(and my) goals. But it is light years ahead of Paine's dreams.

RC AKA Darryl, Ron said in reply to EMichael... , January 02, 2019 at 07:51 AM
Paine's economics are insightful and useful. Paine's politics are bifurcated. Paine is as much for a progressive liberal democrat as he is for an enlightened communist dictator. Which do you think has a greater chance of actually ever existing in this century?
EMichael -> RC AKA Darryl, Ron... , January 02, 2019 at 08:03 AM
I'm all in on Paine's economics, but I believe his politics make him an opponent to ever coming up with progressive liberal democrats running the country.

All or nothing with him, and that makes it beyond hard to move towards that goal. Many in here like that. I admire them for going through their life without once ever settling for anything but perfect. I never had that opportunity.

A bunch of small steps are necessary, as the Founders insured that. Raging against those facts are immense negatives. And it is why Reps win elections.

Christopher H. said in reply to EMichael... , January 02, 2019 at 09:21 AM
lol the Founders F!@#ed up. They gave us the Senate and electoral college.
RC AKA Darryl, Ron said in reply to EMichael... , January 02, 2019 at 09:33 AM
I am largely in concurrence with you, but I do have some specific caveats.

At least in my part of the country Paine's far left politics are not representative of anything that we come into contact with in public life. Your politics are bit left of us here. I am the far left in these parts. Paine's more populous left side is barely represented by any group in my reality. So, for me, Paine is a unique curiosity reminiscent of my socialist friends from the 60's and early 70's for which I have seen no analog since the introduction of Disco and double-knit leisure suits.

The EV crowd in general is a microcosm of nerdiness rather than a microcosm of well informed constituencies of the US unrepresentative "democracy." There is nothing unsettling about it. This crowd is as normal as the characters of "Big Bang Theory."

Republicans win elections because they get the most votes. The VA voter turnout for 2018 was almost 60%, well above 2014 and 2010 midterms which were just above 40%. Most people think that Trump is the most politically divisive POTUS in history, but I think nothing in my life has done more to unify the Democratic Party given they can curb their enthusiasm about beating Trump in 2020 enough to not rip the party apart over who gets the spoils.

Turnout for POTUS election in VA has been above and sometimes well above 70% for every POTUS election since 1975 except for 2000. Turnout for VA gubernatorial elections has been between 40% and 50% for each election from 1997 up through 2017, but ran much higher before motor voter stopped the purging of voter registration rolls. VA elects state legislators in off years for statewide elections with just over 30% of voters showing up.

https://www.elections.virginia.gov/resultsreports/registration-statistics/registrationturnout-statistics/index.html

Tom aka Rusty said in reply to EMichael... , January 02, 2019 at 12:12 PM
Common sense can still be applied to politics.

Going all flaming leftist is a recipe for losing elections. We need to elect more Democrats.

EMichael -> Tom aka Rusty... , January 02, 2019 at 04:39 PM
Understand. But flaming leftist will help the working class.
RC AKA Darryl, Ron said in reply to EMichael... , January 02, 2019 at 07:44 AM
"...My point is that when you reduce the cost of doing business, or reduce the credit worthiness of a borrower, you will see greater inefficiency.

Digging holes and filling them in is one way to spend money. Building a road or a building is another.

Which would you prefer?"

[While I would prefer bridges to digging holes and filling them, my hesitation in answering this question was with the assumption that lower interest rates generate more wasteful investment, despite that I know it to be true in some contexts. Speculation is the problem more than real projects by far. Diversity among investments can be a very good thing. Failure in this context is just a consequence of innovation by trial and error, one of the more efficient means. Besides, for private investment the risk spread limits useless excursions, while the state needs conscious limits on pork perhaps, but pork is also a useful medium of political exchange. Uncle's discretionary spending is a very small pot of gold.]

EMichael -> RC AKA Darryl, Ron... , January 02, 2019 at 08:05 AM
Lower interest make business plans much easier. In doing so, risks are taken that should not be taken, thus increasing inefficiency.

This is especially true when the planners carry absolutely no financial risk themselves on a project.

Christopher H. said in reply to EMichael... , January 02, 2019 at 09:17 AM
" Many in here like that. I admire them for going through their life without once ever settling for anything but perfect. I never had that opportunity.

A bunch of small steps are necessary, as the Founders insured that. Raging against those facts are immense negatives. And it is why Reps win elections."

The New Deal.

The Great Society.

Social Security. Medicare. Medicaid.

EMichael would have argued against all of them as overreaching.

His excuse for the Democrats was that past Presidents had large majorities in Congress.

He would say the country is too conservative and racist. But they like those programs now.

Christopher H. said in reply to EMichael... , January 02, 2019 at 09:19 AM
During the golden age of social democracy during the post War period, when entrepreneurs failed they had a safety net and could try again.

EMichael has this weird puritanical streak. Just like mulp, another crank on the Interent.

He wants his failed red state family member to wallow in bitterness.

RC AKA Darryl, Ron said in reply to EMichael... , January 02, 2019 at 09:48 AM
"Lower interest make business plans much easier. In doing so, risks are taken that should not be taken, thus increasing inefficiency.

This is especially true when the planners carry absolutely no financial risk themselves on a project."


[I understood what you were going for and do not doubt that you have specific instances for which you are sure that is true. For a few years prior to 2008 then I am sure that was true, but those "animal spirits" were drunk on more than just low interest rates. There was a specific sequence of events that played out over a long period of time bringing the US economy to the precipice of financial system euphoria over the infallibility of markets. Lenders and borrowers and especially middlemen stared down into the abyss and then kept on truckin'. Then we all heard a big splat!

Now is not then. Some future now may be then again if we forget about then, but it takes a lot of stupid to get there, not just low interest rates. Taking a bit more risk, but without the stupid is how we learn from failure to achieve greater success.

RC AKA Darryl, Ron said in reply to RC AKA Darryl, Ron... , January 02, 2019 at 09:52 AM
If either the dot.com splat or the mortgage splat were not clearly visible at least three or four years before the splat then either you need a new prescription for your eye glasses or you need to step out of that fog that you were living in.
Darrell in Phoenix said in reply to RC AKA Darryl, Ron... , January 02, 2019 at 10:27 AM
"success through failure" has become a norm of American business, with the PotUS as the perfect example.

He never got into the casino, steak, wine, water, university, etc. businesses with intent on making money in those businesses. Heck, he barely breaks even on the condo and golf businesses.

He creates the towers and golf resorts to promote the name, and promotes the name to be able to lease it to doomed businesses which he starts with the intent of losing money on the leasing of his name. I suspect the most profitable thing he's ever done was "realty tv" host and having a book ghost-written in his name.

And yes, low interest rates DO create easy money, and much of it does find its way into "success through failure" investments. Why would you loan money to a business that you know was a scam just created to accumulate debt then go bust? Because you can securitize the debt and sell it off to Main Street suckers to eat the loss.

Why else "success through failure". Well, I've worked for a company that dumped a lot of money into a venture it knew was doomed long-term. Why? Because it intended to go IPO, and it needed the (unprofitable) revenue from the doomed venture to pump its price in the IPO.

I think we'd all agree that "success through failure" is terrible and wish it would go away. Problem is, it works.

RC AKA Darryl, Ron said in reply to Darrell in Phoenix... , January 02, 2019 at 12:18 PM
Regarding "Success through failure" I was thinking in terms of the dot.com boom from which sprang the broadband Internet and Amazon. Out there in Phoenix AZ where you and EMichael live things must be really crazy. Back in 70's Phoenix was the yuppy Mecca. What happened?
Darrell in Phoenix said in reply to RC AKA Darryl, Ron... , January 02, 2019 at 01:18 PM
True, not all of the dot.com was bad investment. Just most.

We got a lot of housing built during the housing boom too. Too bad most of it was 2000-3000 sqft McMansions on golf courses, 50 miles from any jobs.

"Out there in Phoenix AZ where you and EMichael live things must be really crazy."

1970 Phoenix metro had 1 million people. Today we're at 4.75 million.

Politics are a mess. Big money is pushing to constantly lower taxes, but now people are pushing back wanting more funding for schools. Surprisingly, we've passed phased in $12 minimum wage and medical marijuana (recreational failed by less than 1%), and now have split representation at the federal level indicating a move toward liberal.

And yet, we'll still very Republican in the state house and go highly conservative on many other issues such as animal rights. A recent "green energy initiative" failed ugly.

So, to sum it up... Pretty Liberal, but Very CONservative, with a HUGE swing vote that goes this-way-and-that in random directions and on different issues...

...but in general want low taxes, are hate big government...

...except on the things like Social Security, Medicare, Medicaid, Defense, education, transportation, police, fire, courts, justice system, boarder security, anti-terrorism, and the rest of stuff government actually spends almost all of its money on...

... but are all for getting rid of all the wasteful government that practically doesn't really exist...

... and we definitely want religious freedom, as long as that religion is Christianity and the freedom is to force their views onto others, and not allow other religions to have a place in society.

Hope that clarifies what happened.

RC AKA Darryl, Ron said in reply to Darrell in Phoenix... , January 03, 2019 at 07:57 AM
"...1970 Phoenix metro had 1 million people. Today we're at 4.75 million...

...Hope that clarifies what happened."

[In spades, Dude. THANKS!]

EMichael -> RC AKA Darryl, Ron... , January 02, 2019 at 04:42 PM
Adequate regulation would have stopped that.

No one notices that the biggest factor in the housing bubble was bush ordering the OCC to take regulation of national banks out of the hands of the states.

The bubble would have been much, much less.

RC AKA Darryl, Ron said in reply to EMichael... , January 03, 2019 at 07:58 AM
Oh, butt for the winged frog...
Darrell in Phoenix said in reply to EMichael... , January 03, 2019 at 08:56 AM
"Adequate regulation would have stopped that."

The population increase? People would have to be somewhere, and unlike coastal California with those stupid oceans, bays and mountains... Phoenix has plenty of open space.

2000-3000 sqft mcmansions 50 miles from jobs? Probably true. Without the housing bubble we would have hit the wall on housing and caused massive rent spike a decade ago instead of a few years ago. With that massive rent increase then instead of now, meaning that a decade ago we would have seen the in-building of small apartments and condos that we are now getting.

Net, we probably would have been better off with more in-building of smaller, multi-family units instead of massive sprawl of McMansions.

RC AKA Darryl, Ron said in reply to Darrell in Phoenix... , January 03, 2019 at 09:41 AM
Don't complain too much. The "massive sprawl of McMansions" is a sure sign of widespread prosperity. Here in eastern Henrico County VA we have the massive sprawl of McCracker boxes instead although not just crackers live in them. McMansions are usually on at least 1/2 acre lots, while McCracker boxes are built so close together that most of the time there was not room left for a driveway and people park on the street except that some of those streets are actually the highways to the neighboring cracker box town. On street parking is just one sign of poverty. There are also drug related shootings just like in the big city.

In eastern Henrico there are only a few small McMansion developments in prime real estate overlooking the flood plain of the James River where there is any such high ground in eastern Henrico near the river. Chesterfield County across the James River has the advantage of very high ground near the James River at River's Bend, a.k.a, Meadowville, where there is plenty room for a golf course and marina as well as loads of McMansions and high-end apartment buildings. High and dry western Henrico County is where they build the McMansions along with all the exclusive high end shopping. The "Sad-eyed Lady of the Lowlands" was probably sad because her basement flooded whenever it rained:<)

Darrell in Phoenix said in reply to RC AKA Darryl, Ron... , January 03, 2019 at 10:50 AM
"Don't complain too much."

I wasn't complaining.

I was adding a tad to the "inefficiencies" discussion caused by disconnecting loan origination from loss risk.

I got my piece of the giant federal government giveaway needed to clean up the mess. In 2011 I bought a 1000 sqft condo for $48K that I now have leased out for a nice cash-flow positive $600+ a month and true after-tax profit of about the same $600 a month (add $100 of the payment that is principal reduction, then subtract 22% income tax on $500 a month ($700 profit - $200 depreciation)).

If you notice the purchase price doesn't match the depreciation, yeah, I've done over $20K in additional capital improvements that increase the base including new roof, new HVAC, replaced all aluminum windows and doors with high-E, gutted and replaced the kitchen and both baths. Summer cooling bill was cut by more than half from ~$300 to ~$125 by the new windows and doors and more efficient HVAC, increasing the monthly rent accordingly.

I've only been spending abut $400 of that $600 profit, letting the rest accumulate for maintenance, repairs, upgrades.

Oh, I also save about $250 a month on the mortgage of my primary by locking in 3% interest rate.

Not big deals in the grand scheme, but the boom->crash->rent squeeze worked out okay for me personally.... for now.

Darrell in Phoenix said in reply to Darrell in Phoenix... , January 03, 2019 at 11:10 AM
As for the cracker houses, we got a lot of those in the 80's and 90's before the big McMansion boom.


Like these 1990s beauties with almost, but not quite enough room in the driveway to park a car without blocking the sidewalk.

https://www.zillow.com/homes/for_sale/globalrelevanceex_sort/33.540639,-112.146931,33.538696,-112.149814_rect/18_zm/

To be perfectly honest, it is exactly those kinds of houses that the Phoenix market needs a lot more of.

Switching from those to McMansions, then hardly any construction at all for 6 or 7 years, is why there is such a crunch on housing, and skyrocketing rents and house prices now.

Even now they aren't building many of those small single family homes.

They are building redevelopment/in-fill condos in downtown/near ASU in Tempe and apartments in the middle-burbs.

anne -> anne... , January 01, 2019 at 01:43 PM
https://www.nytimes.com/2018/11/14/opinion/the-tax-cut-and-the-balance-of-payments-wonkish.html

November 14, 2018

The Tax Cut and the Balance of Payments (Wonkish)
Lots of financial maneuvering, signifying nothing
By Paul Krugman

What tax cuts were supposed to do

A tax cut for corporations looks, on its face, like a big giveaway to stockholders, mainly bypassing ordinary families: of stocks held by Americans, 84 percent are held by the wealthiest 10 percent; * 35 percent of U.S. stocks are held by foreigners. **

The claim by tax cut advocates was, however, that the tax cut would be passed through to workers, because we live in an integrated global capital market. There were multiple reasons not to believe this argument in practice, but it's still worth working through its implications....

* https://www.nytimes.com/2018/02/08/business/economy/stocks-economy.html

** https://www.taxnotes.com/tax-notes/corporate-taxation/slashing-corporate-taxes-foreign-investors-are-surprise-winners/2017/10/23/1x78l

anne -> anne... , January 01, 2019 at 01:52 PM
https://www.nytimes.com/2019/01/01/opinion/the-trump-tax-cut-even-worse-than-youve-heard.html

The key point to realize is that in today's globalized corporate system, a lot of any country's corporate sector, our own very much included, is actually owned by foreigners, either directly because corporations here are foreign subsidiaries, or indirectly because foreigners own American stocks. Indeed, roughly a third of U.S. corporate profits basically flow to foreign nationals – which means that a third of the tax cut flowed abroad, rather than staying at home. This probably outweighs any positive effect on GDP growth. So the tax cut probably made America poorer, not richer.

And it certainly made most Americans poorer. While 2/3 of the corporate tax cut may have gone to U.S. residents, 84 percent of stocks are held by the wealthiest 10 percent of the population. Everyone else will see hardly any benefit....

-- Paul Krugman

Tom aka Rusty said in reply to anne... , January 02, 2019 at 12:10 PM
It will not make them poorer, but will not make many better off, there is a difference.
Tom aka Rusty said in reply to point... , January 02, 2019 at 12:08 PM
As my first tax professor said, "the best first answer to most tax questions is IT DEPENDS."

In the pro formas I have done not everyone in the middle class is getting a tax cut. Some a slight tax increase, most not too much impact at all.

We will know a lot more by April.

anne , January 01, 2019 at 12:50 PM
http://cepr.net/blogs/beat-the-press/steven-rattner-s-charts-in-the-nyt-don-t-show-he-says-they-show

December 31, 2018

Steven Rattner's Charts in the New York Times Don't Show He Says They Show
By Dean Baker

Steven Rattner used his New York Times column * to present a number of charts to show Donald Trump's failures as president. While some, like the drop in enrollments in the health care exchanges, do in fact show failure, others do not really make his case.

For example, he has a chart with a headline "paltry raise for the middle class." What his chart actually shows is that middle class wages, adjusted for inflation, fell sharply in the recession, but have been rising roughly 1.0 percent a year since 2014. They recovered their pre-recession levels in 2017 and now are almost a percentage point above the 2008 level. This is not a great story, but the picture under Trump is certainly better than under Obama. (This wasn't entirely Obama's fault, since he inherited an economy that was failing.)

The chart shows more rapid growth at the bottom of the pay ladder and a modest downturn under Trump for those at the top. By recent standards, this is not a bad picture, even if Trump does not especially deserve credit for it. (He came in with an unemployment rate that was low and falling.)

Rattner also presents as a bad sign projections for fewer Federal Reserve rate hikes. While one basis for projecting fewer rate hikes is that the economy now looks weaker for 2019 than had been thought earlier in the year (but still stronger than had been projected in 2016), another reason is that inflation is lower than expected. Economists have consistently over-estimated the impact that low unemployment would have on the inflation rate. With inflation coming in lower than projected, there is less reason for the Fed to raise rates.

Contrary to what Rattner is implying, this is a good development. It means that the unemployment rate can continue to fall and workers at the middle and the bottom of the pay ladder can continue to see real wage gains.

Rattner also shows us how growth projections for the U.S. and the world have been lowered since June of 2018. It's not clear how much Trump can be held responsible for growth in the EU (try blaming the European Commission's austerity drive) and the rest of the world, but his argument about the U.S. is pretty weak. The 2.4 percent growth projection from December 2018 is actually up 0.1 percentage point from the June projection. More importantly, it is up from a projection of 1.7 percent from January of 2017, the month Trump took office.

Then we have the chart showing the rise in the debt relative to GDP. While Rattner is right that the tax cuts to the rich were a waste of resources, the higher debt to GDP ratio is basically meaningless. (Japan's debt to GDP ratio is almost 250 percent and the current interest rate on its long-term bonds is 0.00 percent.)

If anyone is seriously concerned about the debt that the government is passing on to future generations then it is also necessary to include the rents associated with patent and copyright monopolies. These monopolies are alternative mechanisms to direct funding that the government uses to pay for services (i.e. research and creative work).

To take the most important case, suppose the government were the replace the $70 billion (0.35 percent of GDP) in patent monopoly supported research that the pharmaceutical industry conducts each year with direct funding of $70 billion. All research findings could then be placed in the public domain and new drugs would sell at generic prices.

Rattner and his crew would count the $70 billion in addition spending as an addition to the debt and deficit. However, when the industry is able to charge the public an extra $360 billion ** (1.8 percent of GDP) a year in higher drug prices due to patent monopolies and related protections, Rattner and company choose to ignore the burden. This sort of groundless debt fear mongering deserves only ridicule; it is not serious economic analysis.

Trump has done many awful things as president and threatens to do many more. But this is not a reason to adopt Trumpian tactics, the data provide plenty of grounds to attack his performance without playing games with it.

* https://www.nytimes.com/2018/12/31/opinion/trump-2018-charts.html

** http://cepr.net/images/stories/reports/ip-2018-10.pdf

anne -> anne... , January 01, 2019 at 02:41 PM
https://fred.stlouisfed.org/graph/?g=mv7B

January 15, 2018

Real Median Weekly Earnings, * 1992-2018

* All full time wage and salary workers

(Percent change)


https://fred.stlouisfed.org/graph/?g=mv7D

January 15, 2018

Real Median Weekly Earnings, * 1992-2018

* All full time wage and salary workers

(Indexed to 1992)

anne -> anne... , January 01, 2019 at 02:41 PM
https://fred.stlouisfed.org/graph/?g=mm0s

January 15, 2018

Real Median Weekly Earnings for men and women, * 1992-2018

* All full time wage and salary workers

(Percent change)


https://fred.stlouisfed.org/graph/?g=mm0v

January 15, 2018

Real Median Weekly Earnings for men and women, * 1992-2018

* All full time wage and salary workers

(Indexed to 1992)

anne , January 01, 2019 at 12:50 PM
http://cepr.net/blogs/beat-the-press/e-j-dionne-provides-classic-example-of-liberals-missing-the-boat

December 31, 2018

E.J. Dionne Provides Classic Example of Liberals Missing the Boat
By Dean Baker

I often rail against liberals who wring their hands over the unfortunate folks who have been left behind by globalization and technology. E.J. Dionne gave us a classic example * of such hand-wringing in his piece today on the need to help the left behinds to keep them from becoming flaming reactionaries.

For some reason, it is difficult for many liberals to grasp the idea that the bad plight of tens of millions of middle class workers did not just happen, but rather was deliberately engineered. Longer and stronger patent and copyright protection did not just happen, it was deliberate policy. Subjecting manufacturing workers to global competition, while largely protecting doctors, dentists, and other highly paid professionals was also a policy decisions. Saving the Wall Street banks from the consequences of their own greed and incompetence was also conscious policy.

I know it's difficult for intellectuals to grasp new ideas, but if we want to talk seriously about rising inequality, then it will be necessary for them to try. (Yeah, I'm advertising my - free - book "Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer" ** again.) Anyhow, let's hope that in 2019 we can actually talk about the policies that were put in place to redistribute income upward and not just pretend that Bill Gates and his ilk getting all the money was a natural process.

* https://www.washingtonpost.com/opinions/there-is-much-to-fear-about-nationalism-but-liberals-need-to-address-it-the-right-way/2018/12/30/2c6e8f24-0ab7-11e9-88e3-989a3e456820_story.html

** https://deanbaker.net/images/stories/documents/Rigged.pdf

Plp -> anne... , January 01, 2019 at 01:27 PM
The way forward is not taking the path that got us here in reverse till its say 1976 again

Because once there where do we go next
Where do we go from there
that doesn't by twist and turn
lead back here in another post 2008
Quagmired earth

Christopher H. said in reply to Plp... , January 01, 2019 at 01:27 PM
The Nordic countries have gone further than 1976 - and it works!

But even they have been backsliding.

They key is rising living standards for everyone. That means eradicating poverty & financial precariousness and rising incomes up the income ladder.

End the Dem's fascination with means testing. Make big programs everyone supports. Republican party needs to be destroyed as Jane Curtin said on CNN.

[Jan 03, 2019] Piketty's World Inequality Review- A Critical Analysis - naked capitalism

Notable quotes:
"... By James K. Galbraith, Lloyd M. Bentsen Jr. Chair in Government and Business Relations, University of Texas at Austin. Originally published at the Institute of New Economic Thinking website ..."
"... World Inequality Report 2018 ..."
"... World Top Incomes Database ..."
"... Capital in the XXI Century ..."
"... Development and Change ..."
"... World Inequality Report ..."
Jan 03, 2019 | www.nakedcapitalism.com

Piketty's World Inequality Review: A Critical Analysis Posted on January 3, 2019 by Yves Smith

Yves here. It's surprising to see Piketty and even more so, one of this co-authors, Gabriel Zucman, make such strong claims for tax data as a way to measure income inequality. The rich and super rich engage in tax avoidance and evasion, to the degree that Zucman has estimated that 6% of the world's wealth is hidden. First, that wealth was hidden to avoid paying taxes on it and/or to hide its criminal origins (such as looting governments). Second, the income on hidden wealth is also by nature hidden.

By James K. Galbraith, Lloyd M. Bentsen Jr. Chair in Government and Business Relations, University of Texas at Austin. Originally published at the Institute of New Economic Thinking website

Thomas Piketty and his colleagues [1] have produced a new exposition of their empirical work, entitled the World Inequality Report 2018 (hereafter: WIR). Their purpose is to showcase the exploration of income and wealth inequalities begun with the World Top Incomes Database (Atkinson and Piketty 2010) and theorized in Piketty's epic Capital in the XXI Century (2014) . In particular the WIR concentrates on the presentation of measures and evidence; the stated goal is to inform a "deliberative process" with "more rigorous and transparent information on income and wealth" than has been available to date. In a review article published on-line and open access in Development and Change on December 24, 2018, I initiate this "deliberative process" by examining the WIR data and the claims made for it.

The ground-breaking, systematic and transparent methodology on which the WIR rests is largely the use of tax records–specifically income tax records–mined to show the income shares of tranches of the income-earning population: top one percent, top ten percent, next forty percent, and bottom fifty percent are the usual divisions. These Piketty and his colleagues argue are more complete, comprehensive, and comparable across countries and through time than the generally-used alternative, which is household or person-based surveys.

The WIR authors write disparagingly of the "Gini index" -- the inequality measure most prevalent in such surveys -- which they find too "technical" and not sufficiently intuitive. But they also object to survey methods: "The main problem with household surveys, however, is that they usually rely entirely on self-reported information about income and wealth. As a consequence, they misrepresent top income and wealth levels, and therefore overall inequality." (p. 29) This sweeping critique carries on for several pages, brushing aside a body of research comprising thousands of papers and millions of survey observations, including the work of the Luxembourg Income Studies, the World Bank, Eurostat, the Economic Commission for Latin America, and the United States Census Bureau among scores of national data-collection agencies. It is a repudiation of what almost every previous researcher has done in this field over fifty years.

But are tax data really better? Where survey and tax measures both exist, and report different results, should one systematically prefer a measure based on taxes? The answer depends in part on the quality of the survey measures. But it also must depend in part on the quality, consistency, length and continuity of the national tax record, and in particular of the income tax. The WIR authors acknowledge that tax data have limits, in particular they cannot cover income and wealth hidden from tax authorities in tax havens. But the question of the quality of tax records goes much further than this.

My new essay examines the question from three points of view: the coverage provided by tax data in the world economy, the consistency of tax data with other sources of information on income inequality, and the peculiarities of tax-based measurement of inequality in the United States. It goes on to make a comparison with measures drawn from other forms of administrative data -- specifically payroll records, used by the University of Texas Inequality Project -- which are generally more consistent with records of inequality measured in household surveys than are the WIR's tax records.

In brief summary, the review shows that by comparison with payroll and survey data, available records from tax files are relatively sparse, and biased toward wealthier countries and those that were once British colonies, which imposed income tax. It shows that tax data are far less consistent with survey and payroll records than are the latter two with each other. And it shows that even within the United States, a country with good tax records by world standards, changes in tax law distort the WIR's measures of changes in the top income shares, while a misunderstanding of the nature of low-income tax filers in the US leads to a dramatic but nonsensical claim that the earnings of the bottom 50 percent of Americans have "collapsed" in recent decades.

Overall, the review casts doubt on claims by the authors of the World Inequality Report to have produced major advances in the study of world economic inequality, and documents that many of the findings touted in the Report as new and unprecedented have in fact been reported in the literature for years, even decades in some cases.

[1] The credited co-authors are Facundo Alvaredo, Lucas Chancel, Thomas Piketty, Emmanuel Saez and Gabriel Zucman.

Figure 1 Top One Percent Shares from the World Inequality Database, showing an unacknowledged data break due to the US Tax Reform Act of 1986. Adjusting the data for the change in the tax definition of income would show that the US top share tracks the UK and Canada very closely. Low numbers for France and Italy are likely due to inferior tax recording of high income persons, not an underlying condition of less inequality.

Mark , January 3, 2019 at 11:27 am

I do not see your and the essay's point about tax evasion impacting actual reported income more harshly than surveys. Even in cases where answers to surveys are required by law, the penalties and effort undertaken by enforcement agencies are going to be several orders of magnitude greater in cases of tax evasion compared to incorrect survey answers. Furthermore income taxes are frequently automated which makes correct or at least some reporting the default case while the default state of surveys is no data at all. Only by taking action is any data generated. While it is theoreticaly possible that surveys are more accurate because the incentive of lower taxes is also stronger, the logic argument given here is not self-evident and actual empirical data is needed for prove.

The critic regarding change in tax reporting over time is quite correct altough I am far from certain that neither survey methods nor questions haven't changed over the last century. A feature not talked about at all is samplesize which always favours actual tax data over surveys given that everyone with an income over a small threshold must pay taxes.

The only empirical evidence provided in the essay is self-referential. If one proxy (survey data) is faulty correlation between it and another proxy (payroll records) does not prove that the first proxy is correct because it remains possible that both proxies have the same deficiencies and are therefore correlated – instead of both being a good approximation of reality.

This is not to say that the essay must be wrong or Piketty et al's assertions must be right, but with only the information provided here a lack of evidence still exists in my opinion.

CanCyn , January 3, 2019 at 12:36 pm

this line towards the end: " nonsensical claim that the earnings of the bottom 50 percent of Americans have "collapsed" in recent decades." is nonsensical itself. Anyone who doesn't believe that low and middle income earners' incomes have collapsed is living in a very opaque bubble, head firmly planted up *ss.

I earned $12.00 per hour in retail with only a high school education in the early 1980s. I'm Canadian but I don't think the two countries are so different in this regard. In 2018 dollars, according to the Bank of Canada inflation calculator that is $26.00 per hour!! Do you know anyone in retail with only a high school education earning $26.00 per hour today? My husband, again, no high school, was making twice that amount in a steel mill in the eighties. Know anyone earning almost $60 per hour in any kind of factory work today? I sure don't. That includes the people who work in that factory now, it is mostly precarious contract work, at much lower wages, the union having been busted long ago

Further, I went back to school in the late 80s and ended with my Masters in Library Science, my first full-time job in the early 90s had me earning the 1990ish equivalent of that $12.00 per hour, things were already going south. It took me quite a few more years to outpace that 1980 retail wage. My husband and I are living proof that wages have collapsed. I don't care how anecdotal that is, I know the truth, just by looking around and talking to people.

It is beyond frustrating to have to argue against this stuff.

CanCyn , January 3, 2019 at 2:57 pm

one correction, that should be "only high school" not "no high school" with regard to my husband's education.

L , January 3, 2019 at 3:03 pm

One question for the author. How do you account for the fact that payroll records, at least as I understand them, generally omit capital gains which is where the upper income generally get most of their real wealth. Stock buybacks and share disbursements are not generally considered "payroll" as I understand it.

The advantage of tax is that it should, at least in theory, show money received by individuals rather than just money sent out in one category.

oaf , January 3, 2019 at 4:51 pm

There's a lot more to inequality than money,,,

[Dec 27, 2018] The Yoda of Silicon Valley by Siobhan Roberts

Highly recommended!
Although he is certainly a giant, Knuth will never be able to complete this monograph - the technology developed too quickly. Three volumes came out in 1963-1968 and then there was a lull. January 10, he will be 81. At this age it is difficult to work in the field of mathematics and system programming. So we will probably never see the complete fourth volume.
This inability to finish the work he devoted a large part of hi life is definitely a tragedy. The key problem here is that now it is simply impossible to cover the whole area of ​​system programming and related algorithms for one person. But the first three volumes played tremendous positive role for sure.
Also he was distracted for several years to create TeX. He needed to create a non-profit and complete this work by attracting the best minds from the outside. But he is by nature a loner, as many great scientists are, and prefer to work this way.
His other mistake is due to the fact that MIX - his emulator was too far from the IBM S/360, which became the standard de-facto in mid-60th. He then realized that this was a blunder and replaced MIX with more modem emulator MIXX, but it was "too little, too late" and it took time and effort. So the first three volumes and fragments of the fourth is all that we have now and probably forever.
Not all volumes fared equally well with time. The third volume suffered most IMHO and as of 2019 is partially obsolete. Also it was written by him in some haste and some parts of it are are far from clearly written ( it was based on earlier lectures of Floyd, so it was oriented of single CPU computers only. Now when multiprocessor machines, huge amount of RAM and SSD hard drives are the norm, the situation is very different from late 60th. It requires different sorting algorithms (the importance of mergesort increased, importance of quicksort decreased). He also got too carried away with sorting random numbers and establishing upper bound and average run time. The real data is almost never random and typically contain sorted fragments. For example, he overestimated the importance of quicksort and thus pushed the discipline in the wrong direction.
Notable quotes:
"... These days, it is 'coding', which is more like 'code-spraying'. Throw code at a problem until it kind of works, then fix the bugs in the post-release, or the next update. ..."
"... AI is a joke. None of the current 'AI' actually is. It is just another new buzz-word to throw around to people that do not understand it at all. ..."
"... One good teacher makes all the difference in life. More than one is a rare blessing. ..."
Dec 17, 2018 | www.nytimes.com

With more than one million copies in print, "The Art of Computer Programming " is the Bible of its field. "Like an actual bible, it is long and comprehensive; no other book is as comprehensive," said Peter Norvig, a director of research at Google. After 652 pages, volume one closes with a blurb on the back cover from Bill Gates: "You should definitely send me a résumé if you can read the whole thing."

The volume opens with an excerpt from " McCall's Cookbook ":

Here is your book, the one your thousands of letters have asked us to publish. It has taken us years to do, checking and rechecking countless recipes to bring you only the best, only the interesting, only the perfect.

Inside are algorithms, the recipes that feed the digital age -- although, as Dr. Knuth likes to point out, algorithms can also be found on Babylonian tablets from 3,800 years ago. He is an esteemed algorithmist; his name is attached to some of the field's most important specimens, such as the Knuth-Morris-Pratt string-searching algorithm. Devised in 1970, it finds all occurrences of a given word or pattern of letters in a text -- for instance, when you hit Command+F to search for a keyword in a document.

... ... ...

During summer vacations, Dr. Knuth made more money than professors earned in a year by writing compilers. A compiler is like a translator, converting a high-level programming language (resembling algebra) to a lower-level one (sometimes arcane binary) and, ideally, improving it in the process. In computer science, "optimization" is truly an art, and this is articulated in another Knuthian proverb: "Premature optimization is the root of all evil."

Eventually Dr. Knuth became a compiler himself, inadvertently founding a new field that he came to call the "analysis of algorithms." A publisher hired him to write a book about compilers, but it evolved into a book collecting everything he knew about how to write for computers -- a book about algorithms.

... ... ...

When Dr. Knuth started out, he intended to write a single work. Soon after, computer science underwent its Big Bang, so he reimagined and recast the project in seven volumes. Now he metes out sub-volumes, called fascicles. The next installation, "Volume 4, Fascicle 5," covering, among other things, "backtracking" and "dancing links," was meant to be published in time for Christmas. It is delayed until next April because he keeps finding more and more irresistible problems that he wants to present.

In order to optimize his chances of getting to the end, Dr. Knuth has long guarded his time. He retired at 55, restricted his public engagements and quit email (officially, at least). Andrei Broder recalled that time management was his professor's defining characteristic even in the early 1980s.

Dr. Knuth typically held student appointments on Friday mornings, until he started spending his nights in the lab of John McCarthy, a founder of artificial intelligence, to get access to the computers when they were free. Horrified by what his beloved book looked like on the page with the advent of digital publishing, Dr. Knuth had gone on a mission to create the TeX computer typesetting system, which remains the gold standard for all forms of scientific communication and publication. Some consider it Dr. Knuth's greatest contribution to the world, and the greatest contribution to typography since Gutenberg.

This decade-long detour took place back in the age when computers were shared among users and ran faster at night while most humans slept. So Dr. Knuth switched day into night, shifted his schedule by 12 hours and mapped his student appointments to Fridays from 8 p.m. to midnight. Dr. Broder recalled, "When I told my girlfriend that we can't do anything Friday night because Friday night at 10 I have to meet with my adviser, she thought, 'This is something that is so stupid it must be true.'"

... ... ...

Lucky, then, Dr. Knuth keeps at it. He figures it will take another 25 years to finish "The Art of Computer Programming," although that time frame has been a constant since about 1980. Might the algorithm-writing algorithms get their own chapter, or maybe a page in the epilogue? "Definitely not," said Dr. Knuth.

"I am worried that algorithms are getting too prominent in the world," he added. "It started out that computer scientists were worried nobody was listening to us. Now I'm worried that too many people are listening."


Scott Kim Burlingame, CA Dec. 18

Thanks Siobhan for your vivid portrait of my friend and mentor. When I came to Stanford as an undergrad in 1973 I asked who in the math dept was interested in puzzles. They pointed me to the computer science dept, where I met Knuth and we hit it off immediately. Not only a great thinker and writer, but as you so well described, always present and warm in person. He was also one of the best teachers I've ever had -- clear, funny, and interested in every student (his elegant policy was each student can only speak twice in class during a period, to give everyone a chance to participate, and he made a point of remembering everyone's names). Some thoughts from Knuth I carry with me: finding the right name for a project is half the work (not literally true, but he labored hard on finding the right names for TeX, Metafont, etc.), always do your best work, half of why the field of computer science exists is because it is a way for mathematically minded people who like to build things can meet each other, and the observation that when the computer science dept began at Stanford one of the standard interview questions was "what instrument do you play" -- there was a deep connection between music and computer science, and indeed the dept had multiple string quartets. But in recent decades that has changed entirely. If you do a book on Knuth (he deserves it), please be in touch.

IMiss America US Dec. 18

I remember when programming was art. I remember when programming was programming. These days, it is 'coding', which is more like 'code-spraying'. Throw code at a problem until it kind of works, then fix the bugs in the post-release, or the next update.

AI is a joke. None of the current 'AI' actually is. It is just another new buzz-word to throw around to people that do not understand it at all. We should be in a golden age of computing. Instead, we are cutting all corners to get something out as fast as possible. The technology exists to do far more. It is the human element that fails us.

Ronald Aaronson Armonk, NY Dec. 18

My particular field of interest has always been compiler writing and have been long awaiting Knuth's volume on that subject. I would just like to point out that among Kunth's many accomplishments is the invention of LR parsers, which are widely used for writing programming language compilers.

Edward Snowden Russia Dec. 18

Yes, \TeX, and its derivative, \LaTeX{} contributed greatly to being able to create elegant documents. It is also available for the web in the form MathJax, and it's about time the New York Times supported MathJax. Many times I want one of my New York Times comments to include math, but there's no way to do so! It comes up equivalent to: $e^{i\pi}+1$.

48 Recommend
henry pick new york Dec. 18

I read it at the time, because what I really wanted to read was volume 7, Compilers. As I understood it at the time, Professor Knuth wrote it in order to make enough money to build an organ. That apparantly happened by 3:Knuth, Searching and Sorting. The most impressive part is the mathemathics in Semi-numerical (2:Knuth). A lot of those problems are research projects over the literature of the last 400 years of mathematics.

Steve Singer Chicago Dec. 18

I own the three volume "Art of Computer Programming", the hardbound boxed set. Luxurious. I don't look at it very often thanks to time constraints, given my workload. But your article motivated me to at least pick it up and carry it from my reserve library to a spot closer to my main desk so I can at least grab Volume 1 and try to read some of it when the mood strikes. I had forgotten just how heavy it is, intellectual content aside. It must weigh more than 25 pounds.

Terry Hayes Los Altos, CA Dec. 18

I too used my copies of The Art of Computer Programming to guide me in several projects in my career, across a variety of topic areas. Now that I'm living in Silicon Valley, I enjoy seeing Knuth at events at the Computer History Museum (where he was a 1998 Fellow Award winner), and at Stanford. Another facet of his teaching is the annual Christmas Lecture, in which he presents something of recent (or not-so-recent) interest. The 2018 lecture is available online - https://www.youtube.com/watch?v=_cR9zDlvP88

Chris Tong Kelseyville, California Dec. 17

One of the most special treats for first year Ph.D. students in the Stanford University Computer Science Department was to take the Computer Problem-Solving class with Don Knuth. It was small and intimate, and we sat around a table for our meetings. Knuth started the semester by giving us an extremely challenging, previously unsolved problem. We then formed teams of 2 or 3. Each week, each team would report progress (or lack thereof), and Knuth, in the most supportive way, would assess our problem-solving approach and make suggestions for how to improve it. To have a master thinker giving one feedback on how to think better was a rare and extraordinary experience, from which I am still benefiting! Knuth ended the semester (after we had all solved the problem) by having us over to his house for food, drink, and tales from his life. . . And for those like me with a musical interest, he let us play the magnificent pipe organ that was at the center of his music room. Thank you Professor Knuth, for giving me one of the most profound educational experiences I've ever had, with such encouragement and humor!

Been there Boulder, Colorado Dec. 17

I learned about Dr. Knuth as a graduate student in the early 70s from one of my professors and made the financial sacrifice (graduate student assistantships were not lucrative) to buy the first and then the second volume of the Art of Computer Programming. Later, at Bell Labs, when I was a bit richer, I bought the third volume. I have those books still and have used them for reference for years. Thank you Dr, Knuth. Art, indeed!

Gianni New York Dec. 18

@Trerra In the good old days, before Computer Science, anyone could take the Programming Aptitude Test. Pass it and companies would train you. Although there were many mathematicians and scientists, some of the best programmers turned out to be music majors. English, Social Sciences, and History majors were represented as well as scientists and mathematicians. It was a wonderful atmosphere to work in . When I started to look for a job as a programmer, I took Prudential Life Insurance's version of the Aptitude Test. After the test, the interviewer was all bent out of shape because my verbal score was higher than my math score; I was a physics major. Luckily they didn't hire me and I got a job with IBM.

M Martínez Miami Dec. 17

In summary, "May the force be with you" means: Did you read Donald Knuth's "The Art of Computer Programming"? Excellent, we loved this article. We will share it with many young developers we know.

mds USA Dec. 17

Dr. Knuth is a great Computer Scientist. Around 25 years ago, I met Dr. Knuth in a small gathering a day before he was awarded a honorary Doctorate in a university. This is my approximate recollection of a conversation. I said-- " Dr. Knuth, you have dedicated your book to a computer (one with which he had spent a lot of time, perhaps a predecessor to PDP-11). Isn't it unusual?". He said-- "Well, I love my wife as much as anyone." He then turned to his wife and said --"Don't you think so?". It would be nice if scientists with the gift of such great minds tried to address some problems of ordinary people, e.g. a model of economy where everyone can get a job and health insurance, say, like Dr. Paul Krugman.

Nadine NYC Dec. 17

I was in a training program for women in computer systems at CUNY graduate center, and they used his obtuse book. It was one of the reasons I dropped out. He used a fantasy language to describe his algorithms in his book that one could not test on computers. I already had work experience as a programmer with algorithms and I know how valuable real languages are. I might as well have read Animal Farm. It might have been different if he was the instructor.

Doug McKenna Boulder Colorado Dec. 17

Don Knuth's work has been a curious thread weaving in and out of my life. I was first introduced to Knuth and his The Art of Computer Programming back in 1973, when I was tasked with understanding a section of the then-only-two-volume Book well enough to give a lecture explaining it to my college algorithms class. But when I first met him in 1981 at Stanford, he was all-in on thinking about typography and this new-fangled system of his called TeX. Skip a quarter century. One day in 2009, I foolishly decided kind of on a whim to rewrite TeX from scratch (in my copious spare time), as a simple C library, so that its typesetting algorithms could be put to use in other software such as electronic eBook's with high-quality math typesetting and interactive pictures. I asked Knuth for advice. He warned me, prepare yourself, it's going to consume five years of your life. I didn't believe him, so I set off and tried anyway. As usual, he was right.

Baddy Khan San Francisco Dec. 17

I have signed copied of "Fundamental Algorithms" in my library, which I treasure. Knuth was a fine teacher, and is truly a brilliant and inspiring individual. He taught during the same period as Vint Cerf, another wonderful teacher with a great sense of humor who is truly a "father of the internet". One good teacher makes all the difference in life. More than one is a rare blessing.

Indisk Fringe Dec. 17

I am a biologist, specifically a geneticist. I became interested in LaTeX typesetting early in my career and have been either called pompous or vilified by people at all levels for wanting to use. One of my PhD advisors famously told me to forget LaTeX because it was a thing of the past. I have now forgotten him completely. I still use LaTeX almost every day in my work even though I don't generally typeset with equations or algorithms. My students always get trained in using proper typesetting. Unfortunately, the publishing industry has all but largely given up on TeX. Very few journals in my field accept TeX manuscripts, and most of them convert to word before feeding text to their publishing software. Whatever people might argue against TeX, the beauty and elegance of a property typeset document is unparalleled. Long live LaTeX

PaulSFO San Francisco Dec. 17

A few years ago Severo Ornstein (who, incidentally, did the hardware design for the first router, in 1969), and his wife Laura, hosted a concert in their home in the hills above Palo Alto. During a break a friend and I were chatting when a man came over and *asked* if he could chat with us (a high honor, indeed). His name was Don. After a few minutes I grew suspicious and asked "What's your last name?" Friendly, modest, brilliant; a nice addition to our little chat.

Tim Black Wilmington, NC Dec. 17

When I was a physics undergraduate (at Trinity in Hartford), I was hired to re-write professor's papers into TeX. Seeing the beauty of TeX, I wrote a program that re-wrote my lab reports (including graphs!) into TeX. My lab instructors were amazed! How did I do it? I never told them. But I just recognized that Knuth was a genius and rode his coat-tails, as I have continued to do for the last 30 years!

Jack512 Alexandria VA Dec. 17

A famous quote from Knuth: "Beware of bugs in the above code; I have only proved it correct, not tried it." Anyone who has ever programmed a computer will feel the truth of this in their bones.

[Dec 23, 2018] Trump proposes cutting food stamps for over 700,000 people just before Christmas by Matthew Rozsa

Dec 20, 2018 | www.salon.com

President Donald Trump is planning on using his executive powers to cut food stamps for more than 700,000 Americans.

The United States Department of Agriculture is proposing that states should only be allowed to waive a current food stamps requirement -- namely, that adults without dependents must work or participate in a job-training program for at least 20 hours each week if they wish to collect food stamps for more than three months in a three-year period -- on the condition that those adults live in areas where unemployment is above 7 percent, according to The Washington Post . Currently the USDA regulations permit states to waive that requirement if an adult lives in an area where the unemployment rate is at least 20 percent greater than the national rate. In effect, this means that roughly 755,000 Americans would potentially lose their waivers that permit them to receive food stamps.

The current unemployment rate is 3.7 percent.

The Trump administration's decision to impose the stricter food stamp requirements through executive action constitutes an end-run around the legislative process. Although Trump is expected to sign an $870 billion farm bill later this week -- and because food stamps goes through the Agriculture Department, it contains food stamp provisions -- the measure does not include House stipulations restricting the waiver program and imposing new requirements on parents with children between the ages of six and 12. The Senate version ultimately removed those provisions, meaning that the version being signed into law does not impose a conservative policy on food stamps, which right-wing members of Congress were hoping for.

"Congress writes laws, and the administration is required to write rules based on the law," Sen. Debbie Stabenow, D-Mich., told The New York Times (Stabenow is the top Democrat on the Senate's agriculture committee). "Administrative changes should not be driven by ideology. I do not support unilateral and unjustified changes that would take food away from families."

Matthew Rozsa is a breaking news writer for Salon. He holds an MA in History from Rutgers University-Newark and is ABD in his PhD program in History at Lehigh University. His work has appeared in Mic, Quartz and MSNBC.

[Dec 17, 2018] Withouth the USSR as a countervailing force the level of inequality in Western societies will always rise to the level on which riots will start and then will fluctuates around this level.

Dec 17, 2018 | discussion.theguardian.com

AmyInNH -> Riever , 23 Aug 2016 10:00

Swing between extremes, however, consistent in US history, economic predatory dependence on free/ultra cheap labor with no legal rights. Current instantiation, offshored and illegal and "temporary" immigrant labor. Note neither party in the US is proposing "immigration reform" is green card upon hire. Ds merely propose green card for time served for those over X number of years donated as captive/cheap.
The entitled to cheap/captive now want it in law, national laws and trade agreements.
All privilege/no responsibilities, including taxes.
Doesn't scale. 1929 says so, 2008 says so.
CivilDiscussion , 23 Aug 2016 10:25
Liberals, the Left, Progressives -- whatever you want to call them suffer from a basic problem. They don't work together and have no common goals. As the article stated they complain but offer no real solutions that they can agree on. Should we emphasize gay pride or should we emphasize good-paying jobs and benefits with good social welfare benefits? Until they can agree at least on priorities they will never reform the current corrupt system -- it is too entrenched. Even if the Capitalist Monstrosity we have now self-destructs as the writer indicates -- nothing good will replace it until the Left get their act together.
AmyInNH -> Juillette , 23 Aug 2016 10:16
"Lesser of two evils" needs to go on the burn pile.
Encumbent congress needs a turn over.
Not showing up to vote is not okay. If people can't think of someone they want to write-in, "none of the above" is a protest vote. Not voting is silence, which equals consent.
Local elections, beat back Koch/ALEC, hiding on ballots as "Libertarian". "Privatize everything" is their mantra, so they can further profitize via inescapeable taxes, while gutting "regulation" - safety and market integrity, with no accountability.
Corporation 101: limited liability. While means we are left holding the bag. As in bailout - $125 billion in 1990, up to $7.7 trillion in 2008.
Dave_P -> Isiodore , 23 Aug 2016 09:59
Anything the Economist presents as the overriding choice is probably best relegated to one factor among many. I respect Milanovic's work, but he's seeing things from where we are now. Remember we've seen populist surges come and go from the witch-burnings and religious panics of the 17th century to 1890s Bryanism and the 1930s far right, and each time they've yielded to a more articulate vision, though the last time it cost sixty million dead - not something we want to see repeated. This time it's hard because dissent still clings to a "post-ideological" delusion that those on top never succumbed to. But change will come as what I'd term "post-rational" alternatives fail to deliver. Let's hope it's sooner rather than later.
willpodmore , 23 Aug 2016 09:53
"Brexit, too, was primarily a working-class revolt." Thank you Martin, at least someone writing in the Guardian has got the point!
We voted against the EU's unelected European Central Bank, its unelected European Commission, its European Court of Justice, its Common Agricultural Policy and its Common Fisheries Policy.
We voted against the EU's treaty-enshrined 'austerity' (= depression) policies, which have impoverished Greece, Spain, Portugal and Italy.
We voted against the EU/US Transatlantic Trade and Investment Partnership, which would privatise all our public services, which threatens all our rights, and which discriminates against the countries of Africa, Asia and Latin America.
We voted against the EU's tariffs against African farmers' cheaper produce.
We opposed the City of London Corporation, the Institute of Directors, the CBI, the IMF, Citigroup, Goldman Sachs, JP Morgan, Citigroup and Morgan Stanley, which all wanted us to stay in the EU.
We voted against the EU's undemocratic trilogue procedure and its pro-austerity Semester programme. We voted to leave this undemocratic, privatisation-enforcing, austerity-enforcing body.
AmyInNH -> ciaofornow , 23 Aug 2016 10:39
Bailout was because that was public savings, pensions, 401ks, etc. the banks were playing with, and lost. Bailout is billing all of us for it. Bad, letting the banks/financial "services" not only survive but continue the exact same practices.
Bailout: $7.2 to $7.7 trillion. Current derivative holdings: $500 trillion.
Not just moral hazard but economic hazard when capitalism basic rule is broken, allow bad businesses to die of their own accord. Subversion currently called "too big to fail", rather than tell the public "we lost all your savings, pensions, ...".
AmyInNH -> Dave_P , 23 Aug 2016 09:40
Relocating poverty from the East into the West isn't improvement.
Creating sweatshops in the East isn't raising their standard of living.
Creating economies so economically unstable that population declines isn't improvement.
Trying to bury that fact with immigration isn't improvement.
Configuring all of the above for record profit for the benefit of a tiny percentage of the population isn't improvement.
Gaming tax law to avoid paying into/for extensive business use of federal services and tax base isn't improvement.
Game over. Time for a reboot.
marxistelf -> Tobyrob , 23 Aug 2016 09:24
I am glad you finally concede a point on neo-liberalism. The moral hazard argument is extremely poor and typical in this era of runaway CEO pay, of a tendency to substitute self-help fables (a la "The monk who sold his Ferrari) and pop psychology ( a la Moral Hazard) for credible economic analysis.
The economic crisis is rooted in the profit motive just as capitalist economic growth is. Lowering of Tarrif barriers, outsourcing, changes in value capture (added value), new financial instruments, were attempts to restore the falling rate of profit. They did for a while, but, as always happens with Capitalism, the seeds of the new crisis were in the solution to the old.
And all the while the state continues growing in an attempt to keep capitalism afloat. Neoliberalism failed ( or should I say "small state" ) and here is the graph to prove it:
http://www.usgovernmentspending.com/include/usgs_chartSp03t.png
Homer32 , 23 Aug 2016 07:32
Interesting, and I believe accurate, analysis of the economic and political forces afoot. However it is ludicrous to state that Donald trump, who is a serial corpratist, out-sourcer, tax avoider and scam artist, actually believes any of those populist principles that you ascribe so firmly to him. The best and safest outcome of our election, in my opinion, would be to have a Clinton administration tempered by the influences from the populist wings of both parties.
Juillette , 23 Aug 2016 06:42
Great article, however the elite globalists are in complete denial in the US. Our only choice is to vote them out of power because the are owned by Wall Street. Both Bernie and Trump supporters should unite to vote establishment out of Washington.
Dave_P -> ShaunNewman , 23 Aug 2016 06:38
The opiate of the masses. As the churches empty, the stadiums fill.
Dave_P -> ciaofornow , 23 Aug 2016 06:36
There were similar observations in the immediate aftermath of 2008, and doubtless before. Many of us thought the crisis would trigger a rethink of the whole direction of the previous three decades, but instead we got austerity and a further lurch to the right, or at best Obama-style stimulus and modest tweaks which were better than the former but still rather missed the point. I still find it flabbergasting and depressing, but on reflection the 1930s should have been a warning of not just the economic hazards but also the political fallout, at least in Europe. The difference was that this time left ideology had all but vacated the field in the 1980s and was in no position to lead a fightback: all we can hope for is better late than never.
idontreadtheguardian -> thisisafact , 23 Aug 2016 05:16
Yes it is, it's an extremely bad thing destroying the fabric of society. Social science has documented that even the better off are more happy, satisfied with life and feel safer in societies (i.e. the Scandinavian) where there is a relatively high degree of economic equality. Yes, economic inequality is a BAD thing in itself.

Oh, give me a break. Social science will document anything it can publish, no matter how spurious. If Scandanavia is so great, why are they such pissheads? There has always been inequality, including in workers' paradises like the Soviet Union and Communist China. Inequality is what got us where we are today, through natural selection. Phenotype is largely dependent on genotype, so why shouldn't we pass on material wealth as well as our genes? Surely it is a parent's right to afford their offspring advantages if they can do so?

SaulGe -> John Black , 23 Aug 2016 03:30
Have you got any numbers? Or references for your allegations. I say the average or median wealth, opportunity, economic circumstance and health measures are substantially better than a generation (lets say 30 years) ago.

Heres this years data. Note the top 25 or so are almost all liberal western type democracies with mixed economies. http://www.numbeo.com/cost-of-living/country_price_rankings?itemId=105

And here is the graph showing growth in wages whilst it slowed for a variety of complex reasons has been overall strong for 25 of the last 30 years http://www.rba.gov.au/publications/bulletin/2015/jun/pdf/bu-0615-2.pdf

Again I don't think our system is perfect. I don't deny that some in our societies struggle and don't benefit, particularly the poorly educated, disabled, mentally ill and drug addicted. I actually agree that we could better target our social redistribution from those that have to those that need help. I disagree that we need higher taxes, protectionism, socialism, more public servants, more legislation. Indeed I disagree with proposition that other systems are better.

shastakath -> TimWorstall , 23 Aug 2016 03:17
George Orwell said, in the 30s, that the price of social justice would include a lowering of living standards for the working- & middle-classes, at least temporarily, so I follow your line of thought. However, the outrageous tilt toward the upper .1% has no "adjustment" fluff to shield it from the harsh despotism it represents. So, do put that in your statistical pipe and smoke it.

[Dec 16, 2018] Palace of Ashes China and the Decline of American Higher Education by Mark S. Ferrara

Notable quotes:
"... I see this in young people all around, 25-35 year old's saddled with $50-100k in debt defining every action and option they have (or don't!). Not everyone gets themselves into this bind, people make poor decisions, but our higher educational institutions readily promote without ample warning and education and the result is what's rumored to be a $1 Trillion student loan debt bubble. This isn't sustainable ..."
"... Educational institutions should not be seen as a profit making enterprise, education should be attainable to all without the fear of untenable costs. ..."
Dec 16, 2018 | www.amazon.com

Andrew S 4.0 out of 5 stars An in-depth discussion on education and how we got to where we are today in the US... September 21, 2018 Format: Hardcover

A very scholarly and educational read, well researched and documented. It is very in-depth, perhaps not for the light hearted but I learned quite a bit about education philosophies world-wide, their origins, how that effects current thoughts and practices, etc. And how the United States higher educational institutions have gotten to where they are today, money printing machines with unsustainable growth and costs being pushed onto those just seeking to potentially better themselves.

I see this in young people all around, 25-35 year old's saddled with $50-100k in debt defining every action and option they have (or don't!). Not everyone gets themselves into this bind, people make poor decisions, but our higher educational institutions readily promote without ample warning and education and the result is what's rumored to be a $1 Trillion student loan debt bubble. This isn't sustainable

My years in oversea schools took place long ago, I can't testify nor draw direction comparisons to the situation we face today. But I can say, that with three young kids approaching college age we remain highly concerned to terrified what the costs and our kids futures.

Educational institutions should not be seen as a profit making enterprise, education should be attainable to all without the fear of untenable costs.

This is a good read, recommended.

[Dec 14, 2018] 10 of the best pieces of IT advice I ever heard

Dec 14, 2018 | www.techrepublic.com
  1. Learn to say "no"

    If you're new to the career, chances are you'll be saying "yes" to everything. However, as you gain experience and put in your time, the word "no" needs to creep into your vocabulary. Otherwise, you'll be exploited.

    Of course, you have to use this word with caution. Should the CTO approach and set a task before you, the "no" response might not be your best choice. But if you find end users-and friends-taking advantage of the word "yes," you'll wind up frustrated and exhausted at the end of the day.

  2. Be done at the end of the day

    I used to have a ritual at the end of every day. I would take off my watch and, at that point, I was done... no more work. That simple routine saved my sanity more often than not. I highly suggest you develop the means to inform yourself that, at some point, you are done for the day. Do not be that person who is willing to work through the evening and into the night... or you'll always be that person.

  3. Don't beat yourself up over mistakes made

    You are going to make mistakes. Sometimes will be simple and can be quickly repaired. Others may lean toward the catastrophic. But when you finally call your IT career done, you will have made plenty of mistakes. Beating yourself up over them will prevent you from moving forward. Instead of berating yourself, learn from the mistakes so you don't repeat them.

  4. Always have something nice to say

    You work with others on a daily basis. Too many times I've watched IT pros become bitter, jaded people who rarely have anything nice or positive to say. Don't be that person. If you focus on the positive, people will be more inclined to enjoy working with you, companies will want to hire you, and the daily grind will be less "grindy."

  5. Measure twice, cut once

    How many times have you issued a command or clicked OK before you were absolutely sure you should? The old woodworking adage fits perfectly here. Considering this simple sentence-before you click OK-can save you from quite a lot of headache. Rushing into a task is never the answer, even during an emergency. Always ask yourself: Is this the right solution?

  6. At every turn, be honest

    I've witnessed engineers lie to avoid the swift arm of justice. In the end, however, you must remember that log files don't lie. Too many times there is a trail that can lead to the truth. When the CTO or your department boss discovers this truth, one that points to you lying, the arm of justice will be that much more forceful. Even though you may feel like your job is in jeopardy, or the truth will cause you added hours of work, always opt for the truth. Always.

  7. Make sure you're passionate about what you're doing

    Ask yourself this question: Am I passionate about technology? If not, get out now; otherwise, that job will beat you down. A passion for technology, on the other hand, will continue to drive you forward. Just know this: The longer you are in the field, the more likely that passion is to falter. To prevent that from happening, learn something new.

  8. Don't stop learning

    Quick-how many operating systems have you gone through over the last decade? No career evolves faster than technology. The second you believe you have something perfected, it changes. If you decide you've learned enough, it's time to give up the keys to your kingdom. Not only will you find yourself behind the curve, all those servers and desktops you manage could quickly wind up vulnerable to every new attack in the wild. Don't fall behind.

  9. When you feel your back against a wall, take a breath and regroup

    This will happen to you. You'll be tasked to upgrade a server farm and one of the upgrades will go south. The sweat will collect, your breathing will reach panic level, and you'll lock up like Windows Me. When this happens... stop, take a breath, and reformulate your plan. Strangely enough, it's that breath taken in the moment of panic that will help you survive the nightmare. If a single, deep breath doesn't help, step outside and take in some fresh air so that you are in a better place to change course.

  10. Don't let clients see you Google a solution

    This should be a no-brainer... but I've watched it happen far too many times. If you're in the middle of something and aren't sure how to fix an issue, don't sit in front of a client and Google the solution. If you have to, step away, tell the client you need to use the restroom and, once in the safety of a stall, use your phone to Google the answer. Clients don't want to know you're learning on their dime.

See also

  • [Dec 14, 2018] Blatant neoliberal propagamda anout "booming US job market" by Danielle Paquette

    That's way too much hype even for WaPo pressitutes... The reality is that you can apply to 50 jobs and did not get a single responce.
    Dec 12, 2018 | www.latimes.com

    Economists report that workers are starting to act like millennials on Tinder: They're ditching jobs with nary a text. "A number of contacts said that they had been 'ghosted,' a situation in which a worker stops coming to work without notice and then is impossible to contact," the Federal Reserve Bank of Chicago noted in December's Beige Book report, which tracks employment trends. Advertisement > National data on economic "ghosting" is lacking. The term, which normally applies to dating, first surfaced on Dictionary.com in 2016. But companies across the country say silent exits are on the rise. Analysts blame America's increasingly tight labor market. Job openings have surpassed the number of seekers for eight straight months, and the unemployment rate has clung to a 49-year low of 3.7% since September. Janitors, baristas, welders, accountants, engineers -- they're all in demand, said Michael Hicks, a labor economist at Ball State University in Indiana. More people may opt to skip tough conversations and slide right into the next thing. "Why hassle with a boss and a bunch of out-processing," he said, "when literally everyone has been hiring?" Recruiters at global staffing firm Robert Half have noticed a 10% to 20% increase in ghosting over the last year, D.C. district President Josh Howarth said. Applicants blow off interviews. New hires turn into no-shows. Workers leave one evening and never return. "You feel like someone has a high level of interest, only for them to just disappear," Howarth said. Over the summer, woes he heard from clients emerged in his own life. A job candidate for a recruiter role asked for a day to mull over an offer, saying she wanted to discuss the terms with her spouse. Then she halted communication. "In fairness," Howarth said, "there are some folks who might have so many opportunities they're considering, they honestly forget." Keith Station, director of business relations at Heartland Workforce Solutions, which connects job hunters with companies in Omaha, said workers in his area are most likely to skip out on low-paying service positions. "People just fall off the face of the Earth," he said of the area, which has an especially low unemployment rate of 2.8%. Some employers in Nebraska are trying to head off unfilled shifts by offering apprentice programs that guarantee raises and additional training over time. "Then you want to stay and watch your wage grow," Station said. Advertisement > Other recruitment businesses point to solutions from China, where ghosting took off during the last decade's explosive growth. "We generally make two offers for every job because somebody doesn't show up," said Rebecca Henderson, chief executive of Randstad Sourceright, a talent acquisition firm. And if both hires stick around, she said, her multinational clients are happy to deepen the bench. Though ghosting in the United States does not yet require that level of backup planning, consultants urge employers to build meaningful relationships at every stage of the hiring process. Someone who feels invested in an enterprise is less likely to bounce, said Melissa and Johnathan Nightingale, who have written about leadership and dysfunctional management. "Employees leave jobs that suck," they said in an email. "Jobs where they're abused. Jobs where they don't care about the work. And the less engaged they are, the less need they feel to give their bosses any warning." Some employees are simply young and restless, said James Cooper, former manager of the Old Faithful Inn at Yellowstone National Park, where he said people ghosted regularly. A few of his staffers were college students who lived in park dormitories for the summer. "My favorite," he said, "was a kid who left a note on the floor in his dorm room that said, 'Sorry bros, had to ghost.' " Other ghosters describe an inner voice that just says: Nah. Zach Keel, a 26-year-old server in Austin, Texas, made the call last year to flee a combination bar and cinema after realizing he would have to clean the place until sunrise. More work, he calculated, was always around the corner. "I didn't call," Keel said. "I didn't show up. I figured: No point in feeling guilty about something that wasn't that big of an issue. Turnover is so high, anyway."

    [Dec 14, 2018] You apply for a job. You hear nothing. Here's what to do next

    Dec 14, 2018 | finance.yahoo.com

    But the more common situation is that applicants are ghosted by companies. They apply for a job and never hear anything in response, not even a rejection. In the U.S., companies are generally not legally obligated to deliver bad news to job candidates, so many don't.

    They also don't provide feedback, because it could open the company up to a legal risk if it shows that they decided against a candidate for discriminatory reasons protected by law such as race, gender or disability.

    Hiring can be a lengthy process, and rejecting 99 candidates is much more work than accepting one. But a consistently poor hiring process that leaves applicants hanging can cause companies to lose out on the best talent and even damage perception of their brand.

    Here's what companies can do differently to keep applicants in the loop, and how job seekers can know that it's time to cut their losses.


    What companies can do differently

    There are many ways that technology can make the hiring process easier for both HR professionals and applicants.

    Only about half of all companies get back to the candidates they're not planning to interview, Natalia Baryshnikova, director of product management on the enterprise product team at SmartRecruiters, tells CNBC Make It .

    "Technology has defaults, one change is in the default option," Baryshnikova says. She said that SmartRecruiters changed the default on its technology from "reject without a note" to "reject with a note," so that candidates will know they're no longer involved in the process.

    Companies can also use technology as a reminder to prioritize rejections. For the company, rejections are less urgent than hiring. But for a candidate, they are a top priority. "There are companies out there that get back to 100 percent of candidates, but they are not yet common," Baryshnikova says.

    How one company is trying to help

    WayUp was founded to make the process of applying for a job simpler.

    "The No. 1 complaint from candidates we've heard, from college students and recent grads especially, is that their application goes into a black hole," Liz Wessel, co-founder and CEO of WayUp, a platform that connects college students and recent graduates with employers, tells CNBC Make It .

    WayUp attempts to increase transparency in hiring by helping companies source and screen applicants, and by giving applicants feedback based on soft skills. They also let applicants know if they have advanced to the next round of interviewing within 24 hours.

    Wessel says that in addition to creating a better experience for applicants, WayUp's system helps companies address bias during the resume-screening processes. Resumes are assessed for hard skills up front, then each applicant participates in a phone screening before their application is passed to an employer. This ensures that no qualified candidate is passed over because their resume is different from the typical hire at an organization – something that can happen in a company that uses computers instead of people to scan resumes .

    "The companies we work with see twice as many minorities getting to offer letter," Wessel said.

    When you can safely assume that no news is bad news

    First, if you do feel that you're being ghosted by a company after sending in a job application, don't despair. No news could be good news, so don't assume right off the bat that silence means you didn't get the job.

    Hiring takes time, especially if you're applying for roles where multiple people could be hired, which is common in entry-level positions. It's possible that an HR team is working through hundreds or even thousands of resumes, and they might not have gotten to yours yet. It is not unheard of to hear back about next steps months after submitting an initial application.

    If you don't like waiting, you have a few options. Some companies have application tracking in their HR systems, so you can always check to see if the job you've applied for has that and if there's been an update to the status of your application.

    Otherwise, if you haven't heard anything, Wessel said that the only way to be sure that you aren't still in the running for the job is to determine if the position has started. Some companies will publish their calendar timelines for certain jobs and programs, so check that information to see if your resume could still be in review.

    "If that's the case and the deadline has passed," Wessel says, it's safe to say you didn't get the job.

    And finally, if you're still unclear on the status of your application, she says there's no problem with emailing a recruiter and asking outright.

    [Dec 13, 2018] Why inequality matters?

    Notable quotes:
    "... Somewhat foolishly he deepened the cleavage between himself and ordinary people by both his patrician predilections and the love of lecturing ..."
    Dec 13, 2018 | economistsview.typepad.com

    anne , December 07, 2018 at 04:13 PM

    https://glineq.blogspot.com/2018/12/why-inequality-matters.html

    December 5, 2018

    Why inequality matters?

    This is the question that I am often asked and will be asked in two days. So I decided to write my answers down.

    The argument why inequality should not matter is almost always couched in the following way: if everybody is getting better-off, why should we care if somebody is becoming extremely rich? Perhaps he deserves to be rich -- or whatever the case, even if he does not deserve, we need not worry about his wealth. If we do that implies envy and other moral flaws. I have dealt with the misplaced issue of envy here * (in response to points made by Martin Feldstein) and here ** (in response to Harry Frankfurt), and do not want to repeat it. So, let's leave envy out and focus on the reasons why we should be concerned about high inequality.

    The reasons can be formally broken down into three groups: instrumental reasons having to do with economic growth, reasons of fairness, and reasons of politics.

    The relationship between inequality and economic growth is one of the oldest relationships studied by economists. A very strong presumption was that without high profits there will be no growth, and high profits imply substantial inequality. We find this argument already in Ricardo where profit is the engine of economic growth. We find it also in Keynes and Schumpeter, and then in standard models of economic growth. We find it even in the Soviet industrialization debates. To invest you have to have profits (that is, surplus above subsistence); in a privately-owned economy it means that some people have to be wealthy enough to save and invest, and in a state-directed economy, it means that the state should take all the surplus.

    But notice that throughout the argument is not one in favor of inequality as such. If it were, we would not be concerned about the use of the surplus. The argument is about a seemingly paradoxical behavior of the wealthy: they should be sufficiently rich but should not use that money to live well and consume but to invest. This point is quite nicely, and famously, made by Keynes in the opening paragraphs of his "The Economic Consequence of the Peace". For us, it is sufficient to note that this is an argument in favor of inequality provided wealth is not used for private pleasure.

    The empirical work conducted in the past twenty years has failed to uncover a positive relationship between inequality and growth. The data were not sufficiently good, especially regarding inequality where the typical measure used was the Gini coefficient which is too aggregate and inert to capture changes in the distribution; also the relationship itself may vary in function of other variables, or the level of development. This has led economists to a cul-de-sac and discouragement so much so that since the late 1990s and early 2000s such empirical literature has almost ceased to be produced. It is reviewed in more detail in this paper. ***

    More recently, with much better data on income distribution, the argument that inequality and growth are negatively correlated has gained ground. In a joint paper **** Roy van der Weide and I show this using forty years of US micro data. With better data and somewhat more sophisticated thinking about inequality, the argument becomes much more nuanced: inequality may be good for future incomes of the rich (that is, they become even richer) but it may be bad for future incomes of the poor (that is, they fall further behind). In this dynamic framework, growth rate itself is no longer something homogeneous as indeed it is not in the real life. When we say that the American economy is growing at 3% per year, it simply means that the overall income increased at that rate, it tells us nothing about how much better off, or worse off, individuals at different points of income distribution are getting.

    Why would inequality have bad effect on the growth of the lower deciles of the distribution as Roy and I find? Because it leads to low educational (and even health) achievements among the poor who become excluded from meaningful jobs and from meaningful contributions they could make to their own and society's improvement. Excluding a certain group of people from good education, be it because of their insufficient income or gender or race, can never be good for the economy, or at least it can never be preferable to their inclusion.

    High inequality which effectively debars some people from full participation translates into an issue of fairness or justice. It does so because it affects inter-generational mobility. People who are relatively poor (which is what high inequality means) are not able, even if they are not poor in an absolute sense, to provide for their children a fraction of benefits, from education and inheritance to social capital, that the rich provide to their offspring. This implies that inequality tends to persist across generations which in turns means that opportunities are vastly different for those at the top of the pyramid and those on the bottom. We have the two factors joining forces here: on the one hand, the negative effect of exclusion on growth that carries over generations (which is our instrumental reason for not liking high inequality), and on the other, lack of equality of opportunity (which is an issue of justice).

    High inequality has also political effects. The rich have more political power and they use that political power to promote own interests and to entrench their relative position in the society. This means that all the negative effects due to exclusion and lack of equality of opportunity are reinforced and made permanent (at least, until a big social earthquake destroys them). In order to fight off the advent of such an earthquake, the rich must make themselves safe and unassailable from "conquest". This leads to adversarial politics and destroys social cohesion. Ironically, social instability which then results discourages investments of the rich, that is it undermines the very action that was at the beginning adduced as the key reason why high wealth and inequality may be socially desirable.

    We therefore reach the end point where the unfolding of actions that were at the first supposed to produce beneficent outcome destroys by its own logic the original rationale. We have to go back to the beginning and instead of seeing high inequality as promoting investments and growth, we begin to see it, over time, as producing exactly the opposite effects: reducing investments and growth.

    * https://www.gc.cuny.edu/CUNY_GC/media/CUNY-Graduate-Center/PDF/Centers/LIS/Milanovic/papers/2004/challenge_proofs.pdf

    ** http://glineq.blogspot.com/2015/08/all-our-needs-are-social.html

    *** http://documents.worldbank.org/curated/en/888731468331207447/pdf/WPS6963.pdf

    **** https://www.gc.cuny.edu/CUNY_GC/media/LISCenter/Branko%20Milanovic/vdWeide_Milanovic_Inequality_bad_for_the_growth_of_the_poor_not_the_rich_2018.pdf

    -- Branko Milanovic

    Darrell in Phoenix said in reply to anne... , December 07, 2018 at 05:59 PM
    "he argument is about a seemingly paradoxical behavior of the wealthy: they should be sufficiently rich but should not use that money to live well and consume but to invest."

    I disagree on this. I do not care if they use the high income to invest or to live well, as long as it is one or the other.

    The one thing I do not want the rich to do is to become a drain of money out of active circulation. The paradox of thrift. Excess saving by one dooms others into excess debt to keep the economy liquid.

    If you invent a new widget that everyone on earth simply must have, and is willing to give you $1 per to get it, such that you have $7 billion a year income... good for you!

    Now what do you deserve in return?

    1) To consumer $7 billion worth of other peoples' production?

    Or

    2) To trap the rest of humanity in $7 billion a year worth of debt servitude, which will have your income ever increase as interest is added to your income, a debt servitude from which it will be mathematically impossible for them to escape since you hold the money that they must get in order to repay their debts?

    I vote 1.

    Paine -> Darrell in Phoenix... , December 08, 2018 at 05:33 AM
    Yes it's corporate capitalist actions that matter

    The choice of capitalists to buy paper not products

    Wealthy households are obscene But not macro drags. When they buy luxury products and personal services

    When they buy existing stocks of land paintings and the like of course this is as bad as buying paper. But at least that portfolio shifting
    Can CO exist with product purchases. So long as each type of spending remains close to a stable ratio

    Darrell in Phoenix said in reply to Paine... , December 08, 2018 at 07:07 AM
    In my "ideal" tax regimen, steeply progressive income taxes would be avoided by real property spending or capital investment to get deductions.

    This, of course, would lead to over-investment in land, buildings, houses, etc. WHICH is why my regimen also includes a real property tax (in addition to state and local real estate taxes). The income tax would not be "avoided" by real property purchases as much as "delayed".

    To avoid 90% income tax, buy diamonds, paintings, expensive autos... then only pay 5% per year on the real property, spreading the the tax over 20 years. Buy land, buildings, houses, etc., get hit with the 5%, plus the local real estate taxes.

    Paine -> Darrell in Phoenix... , December 08, 2018 at 09:33 AM
    A 100 % ground rent tax Ie a location value confiscatory tax

    Can be off set by credits earned with the costs of "real " land improvements

    Paine -> Paine... , December 08, 2018 at 09:36 AM
    Existing stocks of jewels and paintings should be taxed
    to extract the socially created
    value of the item
    This is an analogue to location taxes

    Yes this can be avoided by.domation to a non.profit museum archive

    kurt -> Darrell in Phoenix... , December 10, 2018 at 03:00 PM
    It really depends on what is consumed. Consumption can lead to malinvestment. For instance, buying 1960s ferraris does very little for the current economy. This is an exceptionally low multiplier activity.
    Soul Super Bad said in reply to anne... , December 07, 2018 at 06:37 PM
    inequality have bad effect on the growth of the lower deciles of the distribution as Roy and I
    "
    ~~BM~

    keep in mind that there are many directions of growth. there is growth that benefits the workers, the rank-and-file. there is growth that benefits the excessively wealthy. but now, finally there's a third type of growth, the kind of growth that destroys the planet, and perhaps a 4th a new channel of growth that would help us to preserve the planet. we need to think about some of these things.

    https://www.zerohedge.com/sites/default/files/inline-images/Screen-Shot-2018-11-29-at-2.41.17-PM.png?itok=WhDnbuoT

    thanks, gals and
    guys
    !

    reason -> anne... , December 08, 2018 at 01:59 AM
    One VERY important item is missing from that list - environmental sustainability - giving people control over much more resources than they need is a waste of something precious.
    Paine -> reason... , December 08, 2018 at 05:35 AM
    Capitalists
    Owning the planets surface
    and its natural resources and products
    Is pathological
    mulp -> reason... , December 10, 2018 at 01:16 AM
    Ted Turner owning millions of acres of land he's restoring to prairie sustained by bison, prairie dogs, wolves, etc is bad?

    I wish he had ten times as much land. Or more so a million bison were roaming the west and supplying lots of bison steaks, hides, etc, as they did for thousands of years before about 1850.

    anne , December 07, 2018 at 04:14 PM
    https://glineq.blogspot.com/2018/12/first-reflections-on-french-evenements.html

    December 5, 2018

    First reflections on the French "événements de décembre"

    Because I am suffering from insomnia (due to the jetlag) I decided to write down, in the middle of the night, my two quick impressions regarding the recent events in France -- events that watched from outside France seemed less dramatic than within.

    I think they raise two important issues: one new, another "old".

    It is indeed an accident that the straw that broke the camel's back was a tax on fuel that affected especially hard rural and periurban areas, and people with relatively modest incomes. It did so (I understand) not as much by the amount of the increase but by reinforcing the feeling among many that after already paying the costs of globalization, neoliberal policies, offshoring, competition with cheaper foreign labor, and deterioration of social services, now, in addition, they are to pay also what is, in their view and perhaps not entirely wrongly, seen as an elitist tax on climate change.

    This raises a more general issue which I discussed in my polemic with Jason Hickel and Kate Raworth. Proponents of degrowth and those who argue that we need to do something dramatic regarding climate change are singularly coy and shy when it comes to pointing out who is going to bear the costs of these changes. As I mentioned in this discussion with Jason and Kate, if they were serious they should go out and tell Western audiences that their real incomes should be cut in half and also explain them how that should be accomplished. Degrowers obviously know that such a plan is a political suicide, so they prefer to keep things vague and to cover up the issues under a "false communitarian" discourse that we are all affected and that somehow the economy will thrive if we all just took full conscience of the problem--without ever telling us what specific taxes they would like to raise or how they plan to reduce people's incomes.

    Now the French revolt brings this issue into the open. Many western middle classes, buffeted already by the winds of globalization, seem unwilling to pay a climate change tax. The degrowers should, I hope, now come up with concrete plans.

    The second issue is "old". It is the issue of the cleavage between the political elites and a significant part of the population. Macron rose on an essentially anti-mainstream platform, his heterogenous party having been created barely before the elections. But his policies have from the beginning been pro-rich, a sort of the latter-say Thatcherism. In addition, they were very elitist, often disdainful of the public opinion. It is somewhat bizarre that such "Jupiterian" presidency, by his own admission, would be lionized by the liberal English-language press when his domestic policies were strongly pro-rich and thus not dissimilar from Trump's. But because Macron's international rhetoric (mostly rhetoric) was anti-Trumpist, he got a pass on his domestic policies.

    Somewhat foolishly he deepened the cleavage between himself and ordinary people by both his patrician predilections and the love of lecturing others which at times veered into the absurd (as when he took several minutes to teach a 12-year old kid about the proper way to address the President). At the time when more than ever Western "couches populaires" wanted to have politicians that at least showed a modicum of empathy, Macron chose the very opposite tack of berating people for their lack of success or failure to find jobs (for which they apparently just needed to cross the road). He thus committed the same error that Hillary Clinton commuted with her "deplorables" comment. It is no surprise that his approval ratings have taken a dive, and, from what I understand, even they do not fully capture the extent of the disdain into which he is held by many.

    It is under such conditions that "les evenements" took place. The danger however is that their further radicalization, and especially violence, undermines their original objectives. One remembers that May 1968, after driving de Gaulle to run for cover to Baden-Baden, just a few months later handed him one of the largest electoral victories -- because of demonstrators' violence and mishandling of that great political opportunity.

    -- Branko Milanovic

    Darrell in Phoenix said in reply to mulp ... , December 10, 2018 at 08:28 AM
    "So, harvesting energy from the sun is unsustainable?"

    No. I'm saying it is not scale-able.

    How are you going to do it? Run diesel fuel powered tractors to dig pit mines to get metals, to be smelted in fossil fuel powered refineries. Burn fossil fuels to heat sand into glass. Use toxic solvents purify the glass and to electroplate toxic metals. Then incinerate the solvents in fossil fuel powered furnaces.

    That may get us to a 40% reduction in carbon, but it isn't getting us to 90% reduction.

    Even then, how are you going to get nitrogen fertilizers for farms? Currently we strip H2 from CH4 (natural gas), then mix with nitrogen in the air, apply electricity, poof, nitrogen fertilizers, and LOTS of CO2. I have yet to see a proposal for large-scale farming that offers a method of obtaining nitrogen fertilizers without CO2 emissions.

    AND, there is still a massive problem of storing the electricity from when the wind is blowing and sun is shining until times when it isn't.

    "So, you are calling for global thermonuclears war to purge 6 billion people from the planet?"

    Nope.

    "You clearly believe the solution is not paying workers to work, but to not pay them so they must die."

    I'm all about paying workers to work. I vehemently disagree with liberals when they breach the idea of "universal basic income"... a great way to end up like the old Soviet Union, where everyone has money, but waits in long lines to get into stores with nothing on the shelves for sale.

    "The population is too high to support hunter-gathers and subsistence farming for 7 billion people plus."

    Correct.

    "You have bought into Reagan's free lunch framing and argue less trash, less processing of 6trash to cut costs, so everyone must earn less so they consume less, ideally becoming dead."

    Not even close.

    This is where Liberals pissed me off right after Trump won and was still talking "border adjustment tax". The cry from the likes of Robert Reich was "oh noooo... prices will go up and hurt the poor." Since when were progressives the "we need low prices" party? I thought we were the ones that wanted higher prices, if those higher prices were caused by higher wages to workers!


    "I call for evveryone paying high living costs to pay more workers to eliminate the waste of landfilling what was just mined from the land."

    Not sure how that makes it magically possible to cut carbon emissions 90% though.

    [Dec 12, 2018] The Neoliberal Agenda and the Student Debt Crisis in U.S. Higher Education (Routledge Studies in Education)

    Notable quotes:
    "... Neoliberalism's presence in higher education is making matters worse for students and the student debt crisis, not better. ..."
    "... Cannan and Shumar (2008) focus their attention on resisting, transforming, and dismantling the neoliberal paradigm in higher education. They ask how can market-based reform serve as the solution to the problem neoliberal practices and policies have engineered? ..."
    "... What got us to where we are (escalating tuition costs, declining state monies, and increasing neoliberal influence in higher education) cannot get us out of the SI.4 trillion problem. And yet this metaphor may, in fact, be more apropos than most of us on the right, left, or center are as yet seeing because we mistakenly assume the market we have is the only or best one possible. ..."
    "... We only have to realize that the emperor has no clothes and reveal this reality. ..."
    "... Indeed, the approach our money-dependent and money-driven legislators and policymakers have employed has been neoliberal in form and function, and it will continue to be so unless we help them to see the light or get out of the way. This book focuses on the $1.4+ trillion student debt crisis in the United States. It doesn't share hard and fast solutions per se. ..."
    "... In 2011-2012, 50% of bachelor's degree recipients from for-profit institutions borrowed more than $40,000 and about 28% of associate degree recipients from for-profit institutions borrowed more than $30,000 (College Board, 2015a). ..."
    Dec 12, 2018 | www.amazon.com

    Despite tthe fact that necoliberalism brings poor economic growth, inadequate availability of jobs and career opportunities, and the concentration of economic and social rewards in the hands of a privileged upper class resistance to it, espcially at universities, remain weak to non-existant.

    The first sign of high levels of dissatisfaction with neoliberalism was the election of Trump (who, of course, betrayed all his elections promises, much like Obma before him). As a result, the legitimation of neoliberalism based on references to the efficient
    and effective functioning of the market (ideological legitimation) is
    exhausted while wealth redistribution practices (material legitimation) are
    not practiced and, in fact, considered unacceptable.

    Despite these problems, resistance to neoliberalism remains weak.
    Strategics and actions of opposition have been shifted from the sphere of
    labor to that of the market creating a situation in which the idea of the
    superiority and desirability of the market is shared by dominant and
    oppositional groups alike. Even emancipatory movements such as women,
    race, ethnicity, and sexual orientation have espoused individualistic,
    competition-centered, and meritocratic views typical of ncolibcral dis-
    courses. Moreover, corporate forces have colonized spaces and discourses
    that have traditionally been employed by oppositional groups and move-
    ments. However, as systemic instability' continues and capital accumulation
    needs to be achieved, change is necessary. Given the weakness of opposi-
    tion, this change is led by corporate forces that will continue to further
    their interests but will also attempt to mitigate socio-economic contra-
    dictions. The unavailability of ideological mechanisms to legitimize
    ncolibcral arrangements will motivate dominant social actors to make
    marginal concessions (material legitimation) to subordinate groups. These
    changes, however, will not alter the corporate co-optation and distortion of
    discourses that historically defined left-leaning opposition. As contradic-
    tions continue, however, their unsustainability will represent a real, albeit
    difficult, possibility for anti-neoliberal aggregation and substantive change.

    Connolly (2016) reported that a poll shows that some graduated student loan borrowers would willingly go to extremes to pay off outstanding student debt. Those extremes include experiencing physical pain and suffering and even a reduced lifespan. For instance, 35% of those polled would take one year off life expectancy and 6.5% would willingly cut off their pinky finger if it meant ridding themselves of the student loan debt they currently held.

    Neoliberalism's presence in higher education is making matters worse for students and the student debt crisis, not better. In their book Structure and Agency in the Neoliberal University, Cannan and Shumar (2008) focus their attention on resisting, transforming, and dismantling the neoliberal paradigm in higher education. They ask how can market-based reform serve as the solution to the problem neoliberal practices and policies have engineered?

    It is like an individual who loses his keys at night and who decides to look only beneath the street light. This may be convenient because there is light, but it might not be where the keys are located. This metaphorical example could relate to the student debt crisis. What got us to where we are (escalating tuition costs, declining state monies, and increasing neoliberal influence in higher education) cannot get us out of the SI.4 trillion problem. And yet this metaphor may, in fact, be more apropos than most of us on the right, left, or center are as yet seeing because we mistakenly assume the market we have is the only or best one possible.

    As Lucille (this volume) strives to expose, the systemic cause of our problem is "hidden in plain sight," right there in the street light for all who look carefully enough to see. We only have to realize that the emperor has no clothes and reveal this reality. If and when a critical mass of us do, systemic change in our monetary exchange relations can and, we hope, will become our funnel toward a sustainable and socially, economically, and ecologically just future where public education and democracy can finally become realities rather than merely ideals.

    Indeed, the approach our money-dependent and money-driven legislators and policymakers have employed has been neoliberal in form and function, and it will continue to be so unless we help them to see the light or get out of the way. This book focuses on the $1.4+ trillion student debt crisis in the United States. It doesn't share hard and fast solutions per se. Rather, it addresses real questions (and their real consequences). Are collegians overestimating the economic value of going to college?

    What are we, they, and our so-called elected leaders failing or refusing to sec and why? This critically minded, soul-searching volume shares territory with, yet pushes beyond, that of Akers and Chingos (2016), Baum (2016), Goldrick-Rab (2016), Graebcr (2011), and Johannscn (2016) in ways that we trust those critically minded authors -- and others concerned with our mess of debts, public and private, and unfulfilled human potential -- will find enlightening and even ground-breaking.

    ... ... ...

    In the meantime, college costs have significantly increased over the past fifty years. The average cost of tuition and fees (excluding room and board) for public four-year institutions for a full year has increased from 52,387 (in 2015 dollars) for the 1975-1976 academic year, to 59,410 for 2015-2016. The tuition for public two-year colleges averaged $1,079 in 1975-1976 (in 2015 dollars) and increased to $3,435 for 2015-2016. At private non-profit four-year institutions, the average 1975-1976 cost of tuition and fees (excluding room and board) was $10,088 (in 2015 dollars), which increased to $32,405 for 2015-2016 (College Board, 2015b).

    The purchasing power of Pell Grants has decreased. In fact, the maximum Pell Grants coverage of public four-year tuition and fees decreased from 83% in 1995-1996 to 61% in 2015-2016. The maximum Pell Grants coverage of private non-profit four-year tuition and fees decreased from 19% in 1995-1996 to 18% in 2015-2016 (College Board, 2015a).

    ... ... ....

    ... In 2013-2014, 61% of bachelor's degree recipients from public and private non-profit four-year institutions graduated with an average debt of $16,300 per graduate. In 2011-2012, 50% of bachelor's degree recipients from for-profit institutions borrowed more than $40,000 and about 28% of associate degree recipients from for-profit institutions borrowed more than $30,000 (College Board, 2015a).

    Rising student debt has become a key issue of higher education finance among many policymakers and researchers. Recently, the government has implemented a series of measures to address student debt. In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (2005) was passed, which barred the discharge of all student loans through bankruptcy for most borrowers (Collinge, 2009). This was the final nail in the bankruptcy coffin, which had begun in 1976 with a five-year ban on student loan debt (SLD) bankruptcy and was extended to seven years in 1990. Then in 1998, it became a permanent ban for all who could not clear a relatively high bar of undue hardship (Best 6c Best, 2014).

    By 2006, Sallie Mae had become the nation's largest private student loan lender, reporting loan holdings of $123 billion. Its fee income collected from defaulted loans grew from $280 million in 2000 to $920 million in 2005 (Collinge, 2009). In 2007, in response to growing student default rates, the College Cost Reduction Act was passed to provide loan forgiveness for student loan borrowers who work full-time in a public service job. The Federal Direct Loan will be forgiven after 120 payments were made. This Act also provided other benefits for students to pay for their postsecondary education, such as lowering interest rates of GSL, increasing the maximum amount of Pell Grant (though, as noted above, not sufficiently to meet rising tuition rates), as well as reducing guarantor collection fees (Collinge, 2009).

    In 2008, the Higher Education Opportunity Act (2008) was passed to increase transparency and accountability. This Act required institutions that are participating in federal financial aid programs to post a college price calculator on their websites in order to provide better college cost information for students and families (U.S. Department of Education |U.S. DoE|, 2015a). Due to the recession of 2008, the American Opportunity Tax Credit of 2009 (AOTC) was passed to expand the Hope Tax Credit program, in which the amount of tax credit increased to 100% for the first $2,000 of qualified educational expenses and was reduced to 25% of the second $2,000 in college expenses. The total credit cap increased from $1,500 to $2,500 per student. As a result, the federal spending on education tax benefits had a large increase since then (Crandall-Hollick, 2014), benefits that, again, are reaped only by those who file income taxes.

    [Dec 11, 2018] John Taylor Gatto s book, The Underground History of American Education, lays out the sad fact of western education ; which has nothing to do with education; but rather, an indoctrination for inclusion in society as a passive participant. Docility is paramount in members of U.S. society so as to maintain the status quo

    Highly recommended!
    Creation of docility is what neoliberal education is about. Too specialized slots, as if people can't learn something new. Look at requirements for the jobs at monster or elsewhere: they are so specific that only people with previous exactly same job expertise can apply. Especially oputragious are requernets posted by requetng firm. There is something really Orvallian in them. That puts people into medieval "slots" from which it is difficult to escape.
    I saw recently the following requirements for a sysadmin job: "Working knowledge of: Perl, JavaScript, PowerShell, BASH Script, XML, NodeJS, Python, Git, Cloud Technologies: ( AWS, Azure, GCP), Microsoft Active Directory, LDAP, SQL Server, Structured Query Language (SQL), HTML, Windows OS, RedHat(Linux), SaltStack, Some experience in Application Quality Testing."
    When I see such job posting i think that this is just a covert for H1B hire: there is no such person on the planet who has "working knowledge" of all those (mostly pretty complex) technologies. It is clearly designed to block potential candidates from applying.
    Neoliberalism looks like a cancer for the society... Unable to provide meaningful employment for people. Or at least look surprisingly close to one. Malignant growth.
    Dec 11, 2018 | www.ianwelsh.net

    [Dec 08, 2018] Americans don't "meekly allow fincancial crimes," No, Americans hugely endorse them. More students keep enrolling in all the biz schools all the time -- much more than any other field of study -- health care being a distant second

    As long as RICO statute is not applied to big banks that current situation will continue.
    And under neoliberalism it will be never be applied. Universities will continue helping big banks to recruit new talent. Like in poor neibophood gang leaders recruit street fighter.
    Notable quotes:
    "... The students not only continue to flock to the amorality skills courses, but also put themselves into mega-debt by student loans to turn themselves not just imaginatively and ethically over to the corporate idolatries, but also to do another double whammy on themselves. ..."
    Dec 08, 2018 | www.alternet.org

    kyushuphil -> Neo Conned 6 years ago ,

    People don't "meekly allow these crimes," Neo. Americans hugely endorse them.

    The students not only continue to flock to the amorality skills courses, but also put themselves into mega-debt by student loans to turn themselves not just imaginatively and ethically over to the corporate idolatries, but also to do another double whammy on themselves. They accept the servitude of massive student loan debt, and ensure by prolonged interest payments on that debt to keep bloating all the most cynically immoral of high finance.

    And then all the other departments of corporate academe have seen how smoothly work the most rank of corporate habits to ensure most mediocrity for most rank careerisms -- and all have only increased departmentalism protocols over recent years. Tenure now means nothing more than max award for most-narrowed specialist minds and for all most-max conformists in all those niched fields.

    Nuthin' "meek" about all this, Neo. The corporate disease, the cubicle culture, the deference to plutocracy, the reduced literacy, the tracking to numbers -- all has been only steroided since Citizens United quite flagrantly legally underlined what most genteel in corporate ed have been doing for years.

    willymack > kyushuphil • 6 years ago

    Well said, and sadly, TRUE.

    zonmoy > kyushuphil • 6 years ago

    and how have students been pushed into those programs and the problems pushed on them by the corporate crooks that own everything including our government.

    [Dec 06, 2018] Understanding Society Sexual harassment in academic contexts

    Dec 06, 2018 | understandingsociety.blogspot.com

    Sexual harassment in academic contexts
    Sexual harassment of women in academic settings is regrettably common and pervasive, and its consequences are grave. At the same time, it is a remarkably difficult problem to solve. The "me-too" movement has shed welcome light on specific individual offenders and has generated more awareness of some aspects of the problem of sexual harassment and misconduct. But we have not yet come to a public awareness of the changes needed to create a genuinely inclusive and non-harassing environment for women across the spectrum of mistreatment that has been documented. The most common institutional response following an incident is to create a program of training and reporting, with a public commitment to investigating complaints and enforcing university or institutional policies rigorously and transparently. These efforts are often well intentioned, but by themselves they are insufficient. They do not address the underlying institutional and cultural features that make sexual harassment so prevalent.

    The problem of sexual harassment in institutional contexts is a difficult one because it derives from multiple features of the organization. The ambient culture of the organization is often an important facilitator of harassing behavior -- often enough a patriarchal culture that is deferential to the status of higher-powered individuals at the expense of lower-powered targets. There is the fact that executive leadership in many institutions continues to be predominantly male, who bring with them a set of gendered assumptions that they often fail to recognize. The hierarchical nature of the power relations of an academic institution is conducive to mistreatment of many kinds, including sexual harassment. Bosses to administrative assistants, research directors to post-docs, thesis advisors to PhD candidates -- these unequal relations of power create a conducive environment for sexual harassment in many varieties. In each case the superior actor has enormous power and influence over the career prospects and work lives of the women over whom they exercise power. And then there are the habits of behavior that individuals bring to the workplace and the learning environment -- sometimes habits of masculine entitlement, sometimes disdainful attitudes towards female scholars or scientists, sometimes an underlying willingness to bully others that finds expression in an academic environment. (A recent issue of the Journal of Social Issues ( link ) devotes substantial research to the topic of toxic leadership in the tech sector and the "masculinity contest culture" that this group of researchers finds to be a root cause of the toxicity this sector displays for women professionals. Research by Jennifer Berdahl, Peter Glick, Natalya Alonso, and more than a dozen other scholars provides in-depth analysis of this common feature of work environments.)

    The scope and urgency of the problem of sexual harassment in academic contexts is documented in excellent and expert detail in a recent study report by the National Academies of Sciences, Engineering, and Medicine ( link ). This report deserves prominent discussion at every university.

    The study documents the frequency of sexual harassment in academic and scientific research contexts, and the data are sobering. Here are the results of two indicative studies at Penn State University System and the University of Texas System:


    The Penn State survey indicates that 43.4% of undergraduates, 58.9% of graduate students, and 72.8% of medical students have experienced gender harassment, while 5.1% of undergraduates, 6.0% of graduate students, and 5.7% of medical students report having experienced unwanted sexual attention and sexual coercion. These are staggering results, both in terms of the absolute number of students who were affected and the negative effects that these experiences had on their ability to fulfill their educational potential. The University of Texas study shows a similar pattern, but also permits us to see meaningful differences across fields of study. Engineering and medicine provide significantly more harmful environments for female students than non-STEM and science disciplines. The authors make a particularly worrisome observation about medicine in this context:

    The interviews conducted by RTI International revealed that unique settings such as medical residencies were described as breeding grounds for abusive behavior by superiors. Respondents expressed that this was largely because at this stage of the medical career, expectation of this behavior was widely accepted. The expectations of abusive, grueling conditions in training settings caused several respondents to view sexual harassment as a part of the continuum of what they were expected to endure. (63-64)
    The report also does an excellent job of defining the scope of sexual harassment. Media discussion of sexual harassment and misconduct focuses primarily on egregious acts of sexual coercion. However, the authors of the NAS study note that experts currently encompass sexual coercion, unwanted sexual attention, and gender harassment under this category of harmful interpersonal behavior. The largest sub-category is gender harassment:
    "a broad range of verbal and nonverbal behaviors not aimed at sexual cooperation but that convey insulting, hostile, and degrading attitudes about" members of one gender ( Fitzgerald, Gelfand, and Drasgow 1995 , 430). (25)
    The "iceberg" diagram (p. 32) captures the range of behaviors encompassed by the concept of sexual harassment. (See Leskinen, Cortina, and Kabat 2011 for extensive discussion of the varieties of sexual harassment and the harms associated with gender harassment.)


    The report emphasizes organizational features as a root cause of a harassment-friendly environment.

    By far, the greatest predictors of the occurrence of sexual harassment are organizational. Individual-level factors (e.g., sexist attitudes, beliefs that rationalize or justify harassment, etc.) that might make someone decide to harass a work colleague, student, or peer are surely important. However, a person that has proclivities for sexual harassment will have those behaviors greatly inhibited when exposed to role models who behave in a professional way as compared with role models who behave in a harassing way, or when in an environment that does not support harassing behaviors and/or has strong consequences for these behaviors. Thus, this section considers some of the organizational and environmental variables that increase the risk of sexual harassment perpetration. (46)
    Some of the organizational factors that they refer to include the extreme gender imbalance that exists in many professional work environments, the perceived absence of organizational sanctions for harassing behavior, work environments where sexist views and sexually harassing behavior are modeled, and power differentials (47-49). The authors make the point that gender harassment is chiefly aimed at indicating disrespect towards the target rather than sexual exploitation. This has an important implication for institutional change. An institution that creates a strong core set of values emphasizing civility and respect is less conducive to gender harassment. They summarize this analysis in the statement of findings as well:
    Organizational climate is, by far, the greatest predictor of the occurrence of sexual harassment, and ameliorating it can prevent people from sexually harassing others. A person more likely to engage in harassing behaviors is significantly less likely to do so in an environment that does not support harassing behaviors and/or has strong, clear, transparent consequences for these behaviors. (50)
    So what can a university or research institution do to reduce and eliminate the likelihood of sexual harassment for women within the institution? Several remedies seem fairly obvious, though difficult.
    As the authors put the point in the final chapter of the report:
    Preventing and effectively addressing sexual harassment of women in colleges and universities is a significant challenge, but we are optimistic that academic institutions can meet that challenge--if they demonstrate the will to do so. This is because the research shows what will work to prevent sexual harassment and why it will work. A systemwide change to the culture and climate in our nation's colleges and universities can stop the pattern of harassing behavior from impacting the next generation of women entering science, engineering, and medicine. (169)

    [Nov 29, 2018] Literature, language, history are essential for a truly cultured human.

    Notable quotes:
    "... They are from the social sciences like Political Science or International Relations which are empty of real content. ..."
    "... They throw in sometimes some "game theory" to give that an aura of "science", but most of it is BS. ..."
    "... Tucker Carlson is the only media individual left that is brave enough to state the truth. So by implication the United States has zero democracy when it comes to our foreign policy. ..."
    Nov 29, 2018 | turcopolier.typepad.com

    Bálint Somkuti , 8 hours ago

    Being on the affected side as a historian please let me add, that the students' majority studies microhistory, family, company, or even family members' personal events that is, which adds very little to our understanding of the world. It is overly and openly supported currently in most universities for a number of reasons.

    This is why obviously ideologically biased works about major correspondences such as Piketty's or Niall Ferguson's, not to mention that young Israeli guy (Yair??) has so much effect. Because basically they are the only ones, or at least the ones with the chance to publish, who take the great effort of choosing the harder way and making the necessary research. There are too few willing to take the harder path.

    Scientification, or should I say natural scientification of social sciences also does not help, because it promotes the 'publish or perish' principle. But social sciences aren't like natural sciences, where X hours in a laboratory or experimenting yields surely X or X/2 publications.

    And on the top of that Marxist thinkers and intelligentsia, cast away from all meaningful positions to universities in the 50's and 60's fearing a communist influence have completely overtaken the higher education in the Western Hemisphere. In the Eastern European countries they managed to keep their positions.

    To sum it up while most of your criticism is valid, international relations e.g. has its merit, but are taught mostly by neoliberals and Marxists, with the known results.

    smoothieX12 -> Pat Lang , 17 hours ago
    They are from the social sciences like Political Science or International Relations which are empty of real content.

    Fully concur. They throw in sometimes some "game theory" to give that an aura of "science", but most of it is BS. If, just in case, I am misconstrued as fighting humanities field--I am not fighting it. Literature, language, history are essential for a truly cultured human. When I speak about "humanities" I personally mean namely Political "Science".

    Eric Newhill -> Pat Lang , 18 hours ago
    Sir, I stand corrected on the humanities into govt assertion. I do tend to get humanities and social sciences jumbled in my numbers/cost/benefit based thinking. I am open to people telling me how to do tasks that they have more experience performing and that I might need to know about. And I have curiosities about people's experiences and perspectives on how the world of men works, but I'm not so concerned about the world of men that I lose my integrity or soul or generally get sucked into their reality over my own. Of course that's just me. Someone like Trump seeks approval and high rank amongst men. So, yes, I guess he is susceptible; though I still think somewhat less than others. This is evident in how he refuses to follow the conventions and expectations of what a president should look and act like. He is a defiant sort. I like that about him. Of course needing to be defiant is still a need and therefore a chink in his armor.
    Pat Lang Mod -> Eric Newhill , 17 hours ago
    He is in thrall to the Israelis, their allies, the neocons, political donors and the popular media. An easy mark for skilled operators.
    Harlan Easley -> Pat Lang , 14 hours ago
    I agree with you and I believe their influence has deepen over the two years. The only pro neocon policy he ran on was regime change in Iran. Terrible idea no doubt. The vote was either potential regime change in Iran or a dangerous escalation with Russia in Syria. I voted for more time. He seemed to have some sense on Syria and Russia at the time. Of course Clinton was promising Apocalypse Now. You've stated the Neocon's have insinuated themselves into both parties. R2P and such. They basically control the foreign policy of both parties due to control by donors, organizational control of DNC, RNC, the moronic narrative, think tanks, media, probably security services, etc.

    Tucker Carlson is the only media individual left that is brave enough to state the truth. So by implication the United States has zero democracy when it comes to our foreign policy. As far as I can tell the United States policy toward Russia continues toward escalation. Two current examples being the absurd Mueller "investigation" into collusion and the Ukraine provocation in the Sea of Azov. Are we heading into the last war?

    Richard Higginbotham -> Pat Lang , 18 hours ago
    Engineer here, "worked" on myself and not even by very skilled people. Manipulative people are hard to counteract, if you're not manipulative yourself the thought process is not intuitive. If you spend most of your life solving problems, you think its everyone's goal. As I've gotten older I've only solidified my impression that as far as working and living outside of school, the best "education" to have would be history. Preferably far enough back or away to limit any cultural biases. I'm not sure that college classes would fill the gap though.

    Any advice to help the "marks" out there?

    Mark Logan -> Richard Higginbotham , 10 hours ago
    I'll pitch in with a suggestion for those who are for whatever reason not fond of reading: An old history education series called The Western Tradition. Eugene Weber. A shrewd old guy who was interested in motivations which drove our history and culture. Will get your kids solid A's in history if nothing else, if you can get them hooked on it. Insightful narrative as opposed to dry facts helps retention. There are much worse starting points.

    Moreover, the most of books which I believe constitute a canon of sorts are mentioned and points made in them brought to bear. Leviathan, The Prince, Erasmus, how they affected general thought, which makes the viewer want to read them.

    Re-reading TE Lawrence at the moment. What to watch a "pro" work? Scary good, he was.

    TTG -> Pat Lang , 10 hours ago
    To this day, my favorite college course was "The Century of Darwin" taught by Dr. Brown in the history department of RPI in 1973. Dr. Brown was a bespectacled, white haired little man who looked like everyone's idea of a history professor. The course examined the history of scientific discovery, evolving and competing religious and scientific ideas leading up to the general acceptance of Darwin's works. It was a history of everything course, an intellectually exhilarating experience. I still have the textbooks. I heartedly recommend those books.

    "Darwin's Century" by Loren Eiseley came out in 1958 and was reprinted in 2009 with a new forward by Stephan Bertman. "The Death of Adam" by John Green first came out in 1960 and was reprinted in 1981. "Genesis and Geology" by Charles C. Gillespie came out in 1951. My paperback edition was published in 1973 and cost $2.45 new.

    English Outsider -> Pat Lang , an hour ago
    Colonel - Boswell's life of Johnson. A giant of a man seen through the eyes of a clever and observant pygmy. And they both know it.

    That makes it an odd book, that interplay between the two. It's also the ultimate in tourism. One is dumped in the middle of eighteenth century London and very soon it becomes a second home.

    For a long time that's all I got out of the book. Johnson himself emerges only slowly. A true intellectual giant with a flawless acuity of perception, an elephantine memory, and the gift of turning out the perfect exposition, whether a long argument or one of his famous pithy comments, is the starting point only.

    As a person he can easily be read as a slovenly bully, at one time even as an unapologetic hired gun turning out the propaganda of the day. He was subject to long fits of depression alternating with periods of great industry. As he got older the industry fell away and he spent much of his time in the coffee house. It was there, often, that Boswell gathered up the materials - a fragment here, a disquisition there - that allow us to see through to Johnson's outlook.

    It was an outlook, or one could call it a philosophy of life, that could not be more needed at this time of frantic and one sided ideological war.

    It was no tidily worked-up outlook. Intensely patriotic yet ever conscious of the failings of his country. Honorable yet accepting that he lived at a time of great corruption. Loyal yet always yearning after an older dispensation. Robust common sense but fully recognizing the Transcendent. Narrowly prejudiced yet open to other cultures, recognizing their equal validity and worth while remaining rooted in his own.

    It's an outlook that today would be despised by many because, as far as I can tell, he had no ideology, no millenarian solution into which all problems can be jammed. Merely a broad and humane normality and a recognition that, ultimately, each pilgrim must find his own way.

    [Nov 19, 2018] Student loans. Now there's a naked fleecing scam by the moneychangers. High interest, zero risk, no forgiveness. A great racket if you can get it, like Medical Insurance, profiteering guaranteed by Obamacare.

    Notable quotes:
    "... Student loans. Now there's a naked fleecing scam by the moneychangers. High interest, zero risk, no forgiveness. A great racket if you can get it, like Medical Insurance, profiteering guaranteed by Obamacare. ..."
    Nov 19, 2018 | www.nakedcapitalism.com

    Doug Hillman , , November 16, 2018 at 10:58 am

    Wonder the same about bankruptcy. IIRC, think the moneychangers' bankruptcy "reform" under the Bush II regime turned it into a virtual debtors' prison, excluding several kinds of debt from discharge, including student loans.

    Student loans. Now there's a naked fleecing scam by the moneychangers. High interest, zero risk, no forgiveness. A great racket if you can get it, like Medical Insurance, profiteering guaranteed by Obamacare.

    Hudson perceives things that should be but aren't obvious -- about money, power, and freedom. The love of money may be the root of all evil, but it's ultimately a weapon wielded in an insatiable lust for power, absolute, utterly corrupt power, the ownership and enslavement of others. Inequality is not a flaw of rigged-market cannibalism; it's a feature, a feature those at the top of the food chain have no intention of "fixing". The US empire, imo, is the nadir of this evil, a kleptocracy dependent on perpetual mass-murder. The paradox is, they may be more enslaved to their narcotic than anyone.

    "Freedom's just another word for nothin' left to lose." Janis Joplin

    [Nov 07, 2018] Stuxnet 2.0? Iran claims Israel launched new cyber attacks

    Nov 07, 2018 | arstechnica.com

    President Rouhani's phone "bugged," attacks against network infrastructure claimed.

    Sean Gallagher - 11/5/2018, 5:10 PM

    reader comments

    Last week, Iran's chief of civil defense claimed that the Iranian government had fought off Israeli attempts to infect computer systems with what he described as a new version of Stuxnet -- the malware reportedly developed jointly by the US and Israel that targeted Iran's uranium-enrichment program. Gholamreza Jalali, chief of the National Passive Defense Organization (NPDO), told Iran's IRNA news service, "Recently, we discovered a new generation of Stuxnet which consisted of several parts... and was trying to enter our systems."

    On November 5, Iran Telecommunications Minister Mohammad-Javad Azari Jahromi accused Israel of being behind the attack, and he said that the malware was intended to "harm the country's communication infrastructures." Jahromi praised "technical teams" for shutting down the attack, saying that the attackers "returned empty-handed." A report from Iran's Tasnim news agency quoted Deputy Telecommunications Minister Hamid Fattahi as stating that more details of the cyber attacks would be made public soon.

    Jahromi said that Iran would sue Israel over the attack through the International Court of Justice. The Iranian government has also said it would sue the US in the ICJ over the reinstatement of sanctions. Israel has remained silent regarding the accusations .

    The claims come a week after the NPDO's Jalali announced that President Hassan Rouhani's cell phone had been "tapped" and was being replaced with a new, more secure device. This led to a statement by Iranian Supreme Leader Ayatollah Ali Khamenei, exhorting Iran's security apparatus to "confront infiltration through scientific, accurate, and up-to-date action."

    While Iran protests the alleged attacks -- about which the Israeli government has been silent -- Iranian hackers have continued to conduct their own cyber attacks. A recent report from security tools company Carbon Black based on data from the company's incident-response partners found that Iran had been a significant source of attacks in the third quarter of this year, with one incident-response professional noting, "We've seen a lot of destructive actions from Iran and North Korea lately, where they've effectively wiped machines they suspect of being forensically analyzed."


    SymmetricChaos </> , 2018-11-05T17:16:46-05:00 I feel like governments still think of cyber warfare as something that doesn't really count and are willing to be dangerously provocative in their use of it. ihatewinter , 2018-11-05T17:27:06-05:00 Another day in international politics. Beats lobbing bombs at each other. +13 ( +16 / -3 ) fahrenheit_ak </> , 2018-11-05T17:46:44-05:00

    corey_1967 wrote:
    The twin pillars of Iran's foreign policy - America is evil and Wipe Israel off the map - do not appear to be serving the country very well.

    They serve Iran very well, America is an easy target to gather support against, and Israel is more than willing to play the bad guy (for a bunch of reasons including Israels' policy of nuclear hegemony in the region and historical antagonism against Arab states).
    revision0 , 2018-11-05T17:48:22-05:00 Israeli hackers?

    Go on!

    Quote:

    Israeli hackers offered Cambridge Analytica, the data collection firm that worked on U.S. President Donald Trump's election campaign, material on two politicians who are heads of state, the Guardian reported Wednesday, citing witnesses.

    https://www.haaretz.com/israel-news/isr ... -1.5933977

    Quote:

    For $20M, These Israeli Hackers Will Spy On Any Phone On The Planet

    https://www.forbes.com/sites/thomasbrew ... -ulin-ss7/

    Quote:

    While Israelis are not necessarily number one in technical skills -- that award goes to Russian hackers -- Israelis are probably the best at thinking on their feet and adjusting to changing situations on the fly, a trait essential for success in a wide range of areas, including cyber-security, said Forzieri. "In modern attacks, the human factor -- for example, getting someone to click on a link that will install malware -- constitutes as much as 85% of a successful attack," he said.

    http://www.timesofisrael.com/israeli-ha ... ty-expert/

    +5 ( +9 / -4 )
    ihatewinter </> , 2018-11-05T17:52:15-05:00
    dramamoose wrote:
    thorpe wrote:
    The pro-Israel trolls out in front of this comment section...

    You don't have to be pro-Israel to be anti-Iran. Far from it. I think many of Israel's actions in Palestine are reprehensible, but I also know to (rightly) fear an Islamic dictatorship who is actively funding terrorism groups and is likely a few years away from having a working nuclear bomb, should they resume research (which the US actions seem likely to cause).

    The US created the Islamic Republic of Iran by holding a cruel dictator in power rather than risking a slide into communism. We should be engaging diplomatically, rather than trying sanctions which clearly don't work. But I don't think that the original Stuxnet was a bad idea, nor do I think that intense surveillance of what could be a potentially very dangerous country is a bad one either.

    If the Israelis (slash US) did in fact target civilian infrastructure, that's a problem. Unless, of course, they were bugging them for espionage purposes.

    Agree. While Israel is not about to win Humanitarian Nation of the year Award any time soon, I don't see it going to Iran in a close vote tally either.

    [Nov 05, 2018] The Limits of Neoliberalism (Theory, Culture Society) by William Davies

    Notable quotes:
    "... In this book, I provide a somewhat cumbersome definition of neoliberalism and a pithier one, both of which inform the argument running throughout this book. The cumbersome one is as follows: 'the elevation of marked-based principles and techniques of evaluation to the level of state-endorsed norms'. ..."
    Nov 05, 2018 | www.amazon.com

    In this book, I provide a somewhat cumbersome definition of neoliberalism and a pithier one, both of which inform the argument running throughout this book. The cumbersome one is as follows: 'the elevation of marked-based principles and techniques of evaluation to the level of state-endorsed norms'.

    What this intends to capture is that, while neoliberal states have extended and liberated markets in certain areas (for instance, via privatisation and anti-union legislation), the neoliberal era has been marked just as much by the reform of non-market institutions, so as to render them market-like or business-like. Consider how competition is deliberately injected into socialised healthcare systems or universities. Alternatively, how protection of the environment is pursued by calculating a proxy price for natural public goods, in the expectation that businesses will then value them appropriately (Fourcade, 2011). It is economic calculation that spreads into all walks of life under neoliberalism, and not markets as such. This in turn provides the pithier version: neoliberalism is 'the disenchantment of politics by economics'.

    The crisis of neoliberalism has reversed this ordering. 2008 was an implosion of technical capabilities on the part of banks and financial regulators, which was largely unaccompanied by any major political or civic eruption, at least until the consequences were felt in terms of public sector cuts that accelerated after 2010, especially in Southern Europe. The economic crisis was spookily isolated from any accompanying political crisis, at least in the beginning. The eruptions of 2016 therefore represented the long-awaited politicization and publicisation of a crisis that, until then, had been largely dealt with by the same cadre of experts whose errors had caused it in the first place.

    Faced with these largely unexpected events and the threat of more, politicians and media pundits have declared that we now need to listen to those people 'left behind by globalization'. Following the Brexit referendum, in her first speech as Prime Minister, Theresa May made a vow to the less prosperous members of society, 'we will do everything we can to give you more control over your lives. When we take the big calls, we'll think not of the powerful, but you.' This awakening to the demands and voices of marginalized demographics may represent a new recognition that economic policy cannot be wholly geared around the pursuit of 'national competitiveness' in the 'global race', a pursuit that in practice meant seeking to prioritise the interests of financial services and mobile capital. It signals mainstream political acceptance that inequality cannot keep rising forever. But it is still rooted in a somewhat economistic vision of politics, as if those people 'left behind by globalisation' simply want more material wealth and opportunity', plus fewer immigrants competing for jobs. What this doesn't do is engage with the distinctive political and cultural sociology of events such as Brexit and Trump, which are fuelled by a spirit of rage, punishment and self-punishment, and not simply by a desire to get a slightly larger slice of the pie.

    This is where, 1 think, we need to pay close attention to a key dimension of neoliberalism, which 1 focus on at length in this book, namely competition. One of my central arguments here is that neoliberalism is not simply reducible to 'market fundamentalism', even if there are areas (such as financial markets) where markets have manifestly attained greater reach and power since the mid1970s. Instead, the neoliberal state takes the principle of competition and the ethos of competitiveness (which historically have been found in and around markets), and seeks to reorganise society around them. Quite how competition and competitiveness are defined and politically instituted is a matter for historical and theoretical exploration, which is partly what The Limits of Neoliberalism seeks to do. But at the bare minimum, organising social relations in terms of 'competition' means that individuals, organisations, cities, regions and nations are to be tested in terms of their capacity to out-do each other. Not only that, but the tests must be considered fair in some way, if the resulting inequalities are to be recognised as legitimate. When applied to individuals, this ideology is often known as 'meritocracy''.

    The appeal of this as a political template for society is that, according to its advocates, it involves the discovery of brilliant ideas, more efficient business models, naturally talented individuals, new urban visions, successful national strategies, potent entrepreneurs and so on. Even if this is correct (and the work of Thomas Piketty on how wealth begets wealth is enough to cast considerable doubt on it) there is a major defect: it consigns the majority of people, places, businesses and institutions to the status of'losers'. The normative and existential conventions of a neoliberal society stipulate that success and prowess are things that are earned through desire, effort and innate ability, so long as social and economic institutions are designed in such a way as to facilitate this. But the corollary of this is that failure and weakness are also earned: when individuals and communities fail to succeed, this is a reflection of inadequate talent or energy on their part.

    This has been critically noted in how 'dependency' and 'welfare' have become matters of shame since the conservative political ascendency of the 1980s. But this is just one example of how a culture of obligatory competitiveness exerts a damaging moral psychology, not only in how people look down on others, but in how they look down on themselves. A culture which valorises 'winning' and 'competitiveness' above all else provides few sources of security or comfort, even to those doing reasonably well. Everyone could be doing better, and if they're not, they have themselves to blame. The vision of society as a competitive game also suggests that anyone could very quickly be doing worse.

    Under these neoliberal conditions, remorse becomes directed inwards, producing the depressive psychological effect (or what Freud termed 'melancholia') whereby people search inside themselves for the source of their own unhappiness and imperfect lives (Davies, 2015). Viewed from within the cultural logic of neoliberalism, uncompetitive regions, individuals or communities are not just 'left behind by globalisation', but are discovered to be inferior in comparison to their rivals, just like the contestants ejected from a talent show. Rising household indebtedness compounds this process for those living in financial precarity, by forcing individuals to pay for their own past errors, illness or sheer bad luck (Davies, Montgomerie & Wallin, 2015).

    In order to understand political upheavals such as Brexit, we need to perform some sociological interpretation. We need to consider that our socio-economic pathologies do not simply consist in the fact that opportunity and wealth are hoarded by certain industries (such as finance) or locales (such as London) or individuals (such as the children of the wealthy), although all of these things are true. We need also to reflect on the cultural and psychological implications of how this hoarding has been represented and justified over the past four decades, namely that it reflects something about the underlying moral worth of different populations and individuals.

    One psychological effect of this is authoritarian attitudes towards social deviance: Brexit and Trump supporters both have an above-average tendency to support the death penalty, combined with a belief that political authorities are too weak to enforce justice (Kaufman, 2016). However, it is also clear that psychological and physical pain have become far more widespread in neoliberal societies than has been noticed by most people. Statistical studies have shown how societies such as Britain and the United States have become afflicted by often inexplicable rising mortality rates amongst the white working class, connected partly to rising suicide rates, alcohol and drug abuse (Dorling, 2016). The Washington Post identified close geographic correlations between this trend and support for Donald Trump (Guo, 2016). In sum, a moral-economic system aimed at identifying and empowering the most competitive people, institutions and places has become targeted, rationally or otherwise, by the vast number of people, institutions and places that have suffered not only the pain of defeat but the punishment of defeat for far too long.

    NEOLIBERALISM: DEAD OR ALIVE?

    The question inevitably arises, is thus thing called 'neoliberalism' now over? And if not, when might it be and how would we know? In the UK, the prospect of Brexit combined with the political priority of reducing immigration means that the efficient movement of capital (together with that of labour) is being consciously impeded in a way that would have been unthinkable during the 1990s and early 2000s. 1'he re-emergence of national borders as obstacles to the flow of goods, finance, services and above all people, represents at least an interruption in the vision of globalisation that accompanied the heyday of neoliberal policy making between 1989-2008. If events such as Brexit signal the first step towards greater national mercantilism and protectionism, then we may be witnessing far more profound transformations in our model of political economy, the consequences of which could become very ugly.

    Before we reach that point, it is already possible to identify a reorientation of national economic policy making away from some core tenets of neoliberal doctrine. One of the main case studies of this book is antitrust law and policy, which has been a preoccupation for neoliberal intellectuals, reformers and lawyers ever since the 1930s. The rise of the Chicago School view of competition (which effectively granted far greater legal rights to monopolists, while also being tougher on cartels) in the American legal establishment from the 1970s onwards, later repeated in the European Commission, meant that market commitments to neoliberal policy goals is still less than likely. Free trade areas such as NAETA, policies designed to attract and please mobile capital, the search for global hegemony surrounding international markets (as opposed to naked, mercantilist self-interest) may then continue for a few more years. But the collapse of legitimacy or popularity of these agendas will not be reversed.

    Meanwhile, the inability of the Republican Party to defend these policies any longer signals the ultimate divorce between the political and economic wings of neoliberalism: the conservative coalition that came into being as Keynesianism declined post-1968, and which got Ronald Reagan to power, no longer functions in its role of rationalising and de-politicising economic policy making. If neoliberalism is the 'disenchantment of politics by economics', then economics is no longer performing its role in rationalising public life. Politics is being re-enchanted, by images of nationhood, of cultural tradition, of'friends' against enemies, ot race ana religion, une ot me many political miscalculations mat lea to Brexit was to under-estimate how many UK citizens would vote for the first time in their lives, enthralled by the sudden sovereign power that they had been granted in the polling booth, which was entirely unlike the ritual of representative democracy with a first-past-the-post voting system that renders most votes irrelevant. The intoxication of popular power and of demagoguery is being experienced in visceral ways for the first time since 1968, or possibly longer. Wendy Brown argues that neoliberalism is a 'political rationality'' that was born in direct response to Fascism during the 1930s and '40s (Brown, 2015). While it would be an exaggeration to say that the end of neoliberalism represents the re-birth of Fascism, clearly there were a number of existential dimensions of'the political' that the neoliberals were right to fear, and which we should now fear once more.

    While there is plenty of evidence to suggest that 2016 is a historic turning point indeed as I've argued here, possibly the second 'book-mark' in the crisis of neoliberalism we need also to recognise how the seeds of this recent political rupture were sown over time. Indeed, we can learn a lot about policy paradigms from the way they' go into decline, for they always contain, tolerate and even celebrate the very activities that later overwhelm or undermine them. Clearly, the 2008 financial crisis was triggered by activities in the banking sector that were not fundamentally different from those which had been viewed as laudable for the previous 20 years. Equally, as we witness the return of mercantilism, protectionism, nationalism and charismatic populism, we need to remember the extent to which neoliberalism accommodated some of this, up to a point.

    The second major case study in this book, in addition to anti-trust policy, is of strategies for 'national competitiveness'. The executive branch of government has traditionally been viewed as a problem from the perspective of economic liberalism, seeing as powerful politicians will instinctively seek to privilege their own territories vis-a-vis others. This is the threat of mercantilism, which can spin into resolutely anti-liberal policies such as trade tariffs and the subsidisation of indigenous industries and 'national champions'. These forms of mercantilism may now be returning, however, the logic of neoliberalism was never quite as antipathetic to them as orthodox market liberals might have been. Instead, I suggest in Chapter 4, rather than simply seek to thwart or transcend nationalist politics, neoliberalism seizes and reimagines the nation as one competitive actor amongst many, in a global contest for 'competitiveness', as evaluated by business gurus such as Michael Porter and think tanks such as the World Economic Eorum. To be sure, these gurus and think tanks have never been anything but hostile to protectionism; but nevertheless, they have encouraged a form of mild nationalism as the basis for strategic thinking in economic policy. As David Harvey has argued, 'the neoliberal state needs nationalism of a certain sort to survive': it draws on aspects of executive power and nationalist sentiment, in order to steer economic activity towards certain types of competitive strategies, culture and behaviours and away from others (Harvey, 2005: 85).

    There is therefore a deep-lying tension within the politics of neoliberalism between a 'liberal' logic, which seeks to transcend geography, culture and political difference, and a more contingent, 'violent' logic that seeks to draw on the energies of nationhood and combat, in the hope of diverting them towards competitive, entrepreneurial production. These two logics are in conflict with each other, but the story I tell in this book is of how the latter gradually won out over the long history of neoliberal thought and policy making. Where the neoliberal intellectuals of the 1930s had a deep commitment to liberal ideals, which they believed the market could protect, the rise of the post-war Chicago School of economics and the co-option of neoliberal ideas by business lobbies and conservatives, meant that (what 1 term) the 'liberal spirit' was gradually lost. There is thus a continuity at work here, in the way that the crisis of neoliberalism has played out.

    Written in 2012-13, the book suggests that neoliberalism has now entered a 'contingent' state, in which various failures of economic rationality are dealt with through incorporating an ever broader range of cultural and political resources. The rise of behavioural economics, for example, represents an attempt to preserve a form of market rationality in the face of crisis, by incorporating expertise provided by psychologists and neuroscientists. A form of 'neo-communitarianism' emerges, which takes seriously the role of relationships, environmental conditioning and empathy in the construction of independent, responsible subjects. This remains an economistic logic, inasmuch as it prepares people to live efficient, productive, competitive lives. But by bringing culture, community and contingency within the bounds of neoliberal rationality, one might see things like behavioural economics or 'social neuroscience' and so on as early symptoms of a genuinely post-liberal politics. Once governments (and publics) no longer view economics as the best test of optimal policies, then opportunities for post-liberal experimentation expand rapidly, with unpredictable and potentially frightening consequences. It was telling that, when the British Home Secretary, Amber Kudd, suggested in October 2016 that companies be compelled to publicly list their foreign workers, she defended this policy as a 'nudge'.

    The Limits of Neoliberalism is a piece of interpretive sociology. It starts from the recognition that neoliberalism rests on claims to legitimacy, which it is possible to imagine as valid, even for critics of this system. Inspired by Luc Boltanski, the book assumes that political-economic systems typically need to offer certain limited forms of hope, excitement and fairness in order to survive, and cannot operate via domination and exploitation alone. For similar reasons, we might soon find that we miss some of the normative and political dimensions of neoliberalism, for example the internationalism that the IiU was founded to promote and the cosmopolitanism that competitive markets sometimes inculcate. There may be some elements of neoliberalism that critics and activists need to grasp, refashion and defend, rather than to simply denounce: this book's Afterword offers some ideas of what this might mean. But if the book is to be read in a truly post-neoliberal world, 1 hope that in its Interpretive aspirations, it helps to explain what was internally and normalively coherent about the political economy known as 'neoliberalism', but also why the system really had no account of its own preconditions or how to preserve them adequately. The attempt to reduce all of human life to economic calculation runs up against limits. A political rationality that fails to recognise politics as a distinctive sphere of human existence was always going to be dumbfounded, once that sphere took on its own extra-economic life. As Bob Dylan sang to Mr Jones, so one might now say to neoliberal intellectuals or technocrats: 'something is happening here, but you don't know what it is'.

    ... ... ...

    Most analyses of neoliberalism have focused on its commitment to 'free markets, deregulation and trade. I shan't discuss the validity of these portrayals here, although some have undoubtedly exaggerated the similarities between 'classical' nineteenth-century liberalism and twentieth-century neoliberalism. The topic addressed here is a different one the character of neoliberal authority, on what basis does the neoliberal state demand the right to be obeyed, if not on substantive political grounds? To a large extent, it is on the basis of particular economic claims and rationalities, constructed and propagated by economic experts. The state does not necessarily (or at least, not always) cede power to markets, but comes to justify its decisions, policies and rules in terms that are commensurable with the logic of markets. Neoliberalism might therefore be defined as the elevation of market-based principles and techniques of evaluation to the level of state-endorsed norms (Davies, 2013: 37). The authority of the neoliberal state is heavily dependent on the authority of economics (and economists) to dictate legitimate courses of action. Understanding that authority and its present crisis requires us to look at economics, economic policy experts and advisors as critical components of state institutions.

    Since the banking crisis of 2007-09, public denunciations of 'inequality' have increased markedly. These draw on a diverse range of moral, critical, theoretical, methodological and empirical resources. Marxist analyses have highlighted growing inequalities as a symptom of class conflict, which neoliberal policies have greatly exacerbated (Harvey, 2011; Therborn, 2012). Statistical analyses have highlighted correlations between different spheres of inequality', demonstrating how economic inequality influences social and psychological wellbeing (Wilkinson & Pickett, 2009). Data showing extreme concentrations of wealth have led political scientists to examine the US political system, as a tool through which inequality is actively increased (Hacker & Pierson, 2010). Emergent social movements, such as Occupy, draw a political dividing line between the '99%' and the '1%' who exploit them. Political leaders and public intellectuals have adopted the language of'fairness' in their efforts to justify and criticize the various policy interventions which influence the distribution of economic goods (e.g. Hutton, 2010).

    It is important to recognize that these critiques have two quite separate targets, although the distinction is often blurred. Firstly, there is inequality that exists within reasonably delineated and separate spheres of society. This means that there are multiple inequalities, with multiple, potentially incommensurable measures. The inequality that occurs within the market sphere is separate from the inequality that occurs within the cultural sphere, which is separate from the inequality' that occurs within the political sphere, and so on. Each sphere can either unwelcome politically, or impractical (Davies, 2013). Hayek's support for the welfare state, Simons' commitment to the nationalization of key industries, the ordo-liberal enthusiasm for the 'social market' demonstrate that the early neoliberals were offering a justification for what Walzer terms 'monopoly' (separate inequalities in separate spheres) and not 'dominance' (the power of one sphere over all others).

    As the next chapter explores, it was Coasian economics (in tandem with the Chicago School) that altered this profoundly. The objective perspective of the economist implicitly working for a university or state regulator would provide the common standard against which activity could be judged. Of course economics does not replace the price system, indeed economics is very often entangled with the price system (Callon, 1998; Caliskan, 2010), but the a priori equality of competitors becomes presumed, as a matter of economic methodology, which stipulates that all agents are endowed with equal psychological capacities of calculation. It is because this assumption is maintained when evaluating all institutions and actions that it massively broadens the terrain of legitimate competition, and opens up vast, new possibilities for legitimate inequality and legitimate restraint. Walzerian dominance is sanctioned, and not simply monopoly. The Coasian vision of fair competition rests on an entirely unrealistic premise, namely that individuals share a common capacity' to calculate and negotiate, rendering intervention by public authorities typically unnecessary: the social reality of lawyers' fees is alone enough to undermine this fantasy. Yet in one sense, this is a mode of economic critique that is imbued with the 'liberal spirit' described earlier. It seeks to evaluate the efficiency of activities, on the basis of the assumed equal rationality of all, and the neutrality of the empirical observer.

    Like Coase, Schumpeter facilitates a great expansion of the space and time in which the competitive process takes place. Various 'social' and 'cultural' resources become drawn into the domain of competition, with the goal being to define the rules that all others must play by. Monopoly is undoubtedly the goal of competitiveness. But unlike Coase's economics, Schumpeter's makes no methodological assumption regarding the common rationality' of all actors. Instead, it makes a romantic assumption regarding the inventive power of some actors (entrepreneurs), and the restrictive routines of most others. Any objective judgements regarding valid or invalid actions will be rooted in static methodologies or rules. Entrepreneurs have no rules, and respect no restraint. They seek no authority or validation for what they do, but are driven by a pure desire to dominate. In this sense their own immanent authority comes with a 'violent threat', which is endorsed by the neoliberal state as Chapter 4 discusses.

    These theories of competition are not 'ideological' and nor are they secretive. They are not ideological because they do not seek to disguise how reality is actually constituted or to distract people from their objective conditions. They have contributed to the construction and constitution of economic reality, inasmuch as they provide objective and acceptable reports on what is going on, that succeed in coordinating various actors. Moreover, they are sometimes performative, not least because of how they inform and format modes of policy, regulation and governance. Inequality has not arisen by accident or due to the chaos of capitalism or 'globalization'. Theories and methodologies, which validate certain types of dominating and monopolistic activity, have provided the conventions within which large numbers of academics, business people and policy makers have operated. They make a shared world possible in the first place. But nor are any of these theories secret either. They have been published in peer-reviewed journals, spread via policy papers and universities. Without shared, public rationalities and methodologies, neoliberalism would have remained a private conspiracy. Inequality can be denounced by critics of neoliberalism, but it cannot be argued that in an era that privileges not only market competition but competitiveness in general inequality is not publicly acceptable.

    These theories of competition are not 'ideological' and nor are they secretive. They are not ideological because they do not seek to disguise how reality is actually constituted or to distract people from their objective conditions. They have contributed to the construction and constitution of economic reality, inasmuch as they provide objective and acceptable reports on what is going on, that succeed in coordinating various actors. Moreover, they are sometimes performative, not least because of how they inform and format modes of policy, regulation and governance. Inequality has not arisen by accident or due to the chaos of capitalism or 'globalization'. Theories and methodologies, which validate certain types of dominating and monopolistic activity, have provided the conventions within which large numbers of academics, business people and policy makers have operated. They make a shared world possible in the first place. But nor are any of these theories secret either. They have been published in peer-reviewed journals, spread via policy papers and universities. Without shared, public rationalities and methodologies, neoliberalism would have remained a private conspiracy. Inequality can be denounced by critics of neoliberalism, but it cannot be argued that in an era that privileges not only market competition but competitiveness in general inequality is not publicly acceptable.

    The contingent neoliberalism that we currently live with is in a literal sense unjustified. It is propagated without the forms of justification (be they moral or empirical) that either the early neoliberals or the technical practitioners of neoliberal policy had employed, in order to produce a reality that 'holds together', as pragmatist sociologists like to say. The economized social and political reality now only just about 'holds together', because it is constantly propped up, bailed out, nudged, monitored, adjusted, data-mincd, and altered by those responsible for rescuing it. It does not survive as a consensual reality: economic judgements regarding 'what is going on' are no longer 'objective' or 'neutral', to the extent that they once were. The justice of inequality can no longer be explained with reference to a competition or to competitiveness, let alone to a market. Thus, power may be exercised along the very same tramlines that it was during the golden neoliberal years of the 1990s and early millennium, and the same experts, policies and agencies may continue to speak to the same public audiences. But the sudden reappearance of those two unruly uneconomic actors, the Hobbesian sovereign state and the psychological unconscious, suggests that that the project of disenchanting politics by economics has reached its limit. And yet crisis and critique have been strategically deferred or accommodated. What resources are there available for this to change, and to what extent are these distinguishable from neoliberalism's own critical capacities?

    ... ... ...

    Neoliberalism, as this book has sought to demonstrate, is replete with its own internal modes of criticism, judgement, measurement and evaluation, which enable actors to reach agreements about what is going on. These are especially provided by certain traditions of economics and business strategy, which privilege competitive processes, on the basis that those processes are uniquely able to preserve an element of uncertainty in social and economic life. The role of the expert be it in the state, the think tank or university within this programme is to produce quantitative facts about the current state of competitive reality, such that actors, firms or whole nations can be judged, compared and ranked. For Hayek and many of the early neoliberals, markets would do this job instead of expert authorities, with prices the only facts that were entirely necessary. But increasingly, under the influence of the later Chicago School and business strategists, the 'winners' and the 'losers' were to be judged through the evaluations of economics (and associated techniques and measures), rather than of markets as such. Certain forms of authority are therefore necessary for this game' to be playable. Economized law is used to test the validity of certain forms of competitive conduct; audits derived from business strategy are used to test and enthuse the entrepreneurial energies of rival communities. But the neoliberal programme initially operated such that these forms of authority could be exercised in a primarily technical sense, without metaphysical appeals to the common good, individual autonomy or the sovereignty of the state that employed them. As the previous chapter argued, various crises (primarily, but not exclusively, the 2007-09 financial crisis) have exposed neoliberalism's tacit dependence on both executive sovereignty and on certain moral-psychological equipment on the part of individuals. A close reading of neoliberal texts and policies would have exposed this anyway. In which case, the recent 'discovery' that neoliberalism depends on and justifies power inequalities, and not markets as such, may be superficial in nature. Witnessing the exceptional measures that states have taken to rescue the status quo simply confirms the state-centric nature of neolibcralism, as an anti-political mode of politics. As Zizek argued in relation to the Wikileaks' exposures of 2011, 'the real disturbance was at the level of appearances: we can no longer pretend we don't know what everyone knows we know' (Zizek, 2011b). Most dramatically, neoliberalism now appears naked and shorn of any pretence to liberalism, that is, it no longer operates with manifest a priori principles of equivalence, against which all contestants should be judged. Chapter 2 identified the 'liberal spirit' of neoliberalism with a Rawlsian assumption that contestants are formally equal before they enter the economic 'game'. Within the Kantian or 'deontological' tradition of liberalism, this is the critical issue, and it played a part in internal debates within the early neoliberal movement. For those such as the ordoliberals, who feared the rationalizing potential of capitalist monopoly, the task was to build an economy around such an a priori liberal logic. Ensuring some equality of access to the economic game', via the active regulation of large firms and 'equality of opportunity' for individuals, is how neoliberalism's liberalism has most commonly been presented politically. As Chapter 3 discussed, the American tradition of neoliberalism as manifest in Chicago Law and Economics abandoned this sort of normative liberalism, in favour of a Benthamite utilitarianism, in which efficiency claims trumped formal arguments. The philosophical and normative elements of neoliberalism have, in truth, been in decline since the 1950s.

    The 'liberal spirit' of neoliberalism was kept faintly alive by the authority that was bestowed upon methodologies, audits and measures of efficiency analysis. The liberal a priori just about survived in the purported neutrality of economic method (of various forms), to judge all contestants equally, even while the empirical results of these judgements have increasingly benefited alreadydominant competitors. This notion relied on a fundamental epistemological inconsistency of neoliberalism, between the Hayekian argument that there can be no stable or objective scientific perspective on economic activity, and the more positivist argument that economics offers a final and definitive judgement. American neoliberalism broadens the 'arena' in which competition is understood to take place, beyond definable markets, and beyond the sphere of the 'economy', enabling cultural, social and political resources to be legitimately dragged into the economic 'game', and a clustering of various forms of advantage in the same hands. Monopoly, in Walter's terms, becomes translated into dominance.

    The loss of neoliberalisms pretence to liberalism transforms the type of authority that can be claimed by and on behalf of power, be it business, financial or state power. It means the abandonment of the globalizing, universalizing, transcendental branch of neoliberalism, in which certain economic techniques and measures (including, but not only, prices) would provide a common framework through which all human difference could be mediated and represented. Instead, cultural and national difference potentially leading to conflict now animates neoliberalism, but without a commonly recognized principle against which to convert this into competitive inequality. What I have characterized as the 'violent threat' of neoliberalism has come to the fore, whereby authority in economic decision making is increasingly predicated upon the claim that 'we' must beat 'them'. This fracturing of universalism, in favour of political and cultural particularism, may be a symptom of how capitalist crises often play out (Gamble, 2009). One reason why neoliberalism has survived as well as it has since 2007 is that it has always managed to operate within two rhetorical registers simultaneously, satisfying both the demand for liberal universalism and that for political particularism, so when the former falls apart, a neoliberal discourse of competitive nationalism and the authority of executive decision is already present and available.

    One lesson to be taken from neoliberalism, for political movements which seek to challenge it, is that both individual agency and collective institutions need to be criticized and invented simultaneously. Political reform does not have to build on any 'natural' account of human beings, but can also invent new visions of individual agency. The design and transformation of institutions, such as markets, regulators and firms, do not need to take place separately from this project, but in tandem and in dialogue with it. A productive focus of critical economic enquiry would be those institutions which neolibcral thought has tended to be entirely silent on. These are the institutions and mechanisms of capitalism which coerce and coordinate individuals, thereby removing choices from economic situations. The era of applied neoliberal policy making has recently started to appear as one of rampant 'financialisation' (Krippner, 2012). So it is therefore peculiar how little attention is paid within neoliberal discourse to institutions of credit and equity, other than that they should be priced and distributed via markets. Likewise, the rising power of corporations has been sanctioned by theories that actually say very little about firms, management, work or organization, but focus all their attention on the incentives and choices confronting a few 'agents' and 'leaders' at the very top. Despite having permeated our cultural lives with visions of competition, and also permeated political institutions with certain economic rationalities, the dominant discourse of neoliberalism actually contains very little which represents the day-to-day lives and experiences of those who live with it. This represents a major empirical and analytical shortcoming of the economic theories that are at work in governing us, and ultimately a serious vulnerability.

    A further lesson to be taken from neoliberalism, for the purposes of a critique of neoliberalism, is that restrictive economic practices need to be strategically and inventively targeted and replaced. In the 1930s and 1940s, 'restrictive economic practices' would have implied planning, labour organization and socialism. Today our economic freedoms are restricted in very different ways, which strike at the individual in an intimate way, rather than at individuals collectively. In the twenty-first century, the experience of being an employee or a consumer or a debtor is often one of being ensnared, not one of exercising any choice or strategy. Amidst all of the uncertainty of dynamic capitalism, this sense of being trapped into certain relations seems eminently certain. Releasing individuals from these constraints is a constructive project, as much as a critical one: this is what the example of the early neoliberals demonstrates.

    Lawyers willing to rewrite the rules of exchange, employment and finance (as, for instance the ordo-liberals redrafted the rules of the market) could be one of the great forces for social progress, if they were ever to mobilize in a concerted w'ay. A form of collective entrepreneurship, which like individual entrepreneurs saw' economic nonnativity as fluid and changeable, could produce new forms of political economy, with alternative valuation systems.

    The reorganization of state, society, institutions and individuals in terms of competitive dynamics and rules, succeeded to the extent that it did because it offered both a vision of the collective and a vision of individual agency simultaneously. It can appear impermeable to critique or political transformation, if only challenged on one of these terms. For instance, if a different vision of collective organization is proposed, the neoliberal rejoinder is that this must involve abandoning individual 'choice' or freedom. Or if a different vision of the individual is proposed, the neoliberal rejoinder is that this is unrealistic given the competitive global context. Dispensing with competition, as the template for all politics and political metaphysics, is therefore only possible if theory proceeds anew, with a political-economic idea of individual agency and collective organization, at the same time. What this might allow is a different basis from which to speak of human beings as paradoxically the same yet different. The problem of politics is that individuals are both private, isolated actors, with tastes and choices, and part of a collectivity, with rules and authorities. An alternative answer to this riddle needs to be identified, other than simply more competition and more competitiveness, in which isolated actors take no responsibility for the collective, and the collective is immune to the protestations of those isolated actors.

    [Nov 05, 2018] Tax heavens and inequality

    Notable quotes:
    "... creates a parallel society in the countryside that never see these money, but are the pros of having that money there and contributing to the economy outweigh these cons? It would if the money were invested with a view of making a profit from a factory, but I don't think that happens in this case. What do you think? ..."
    "... The result is what we Australians call a two-speed economy or a split economy, where one sub-economy caters for the very rich (real estate agents specialising in luxury properties, lots of luxury hotels and playgrounds, boutique shops and restaurants) and the other sub-economy is hidden away, made up of local people who have to rent their homes because they can't afford to buy their own homes, who have to hold down two or more jobs to survive and who supply the staff for the hotels, shops and restaurants frequented by the rich. Eventually the local people start disappearing to find better-paying jobs and the hotels, restaurants, etc start bringing in foreign labour to replace them. ..."
    Nov 05, 2018 | thenewkremlinstooge.wordpress.com

    blatnoi November 5, 2018 at 3:06 am

    I've lately been wondering about the economics of being a big tax haven like the UK. A place like the Bahamas, I think benefits from it since there are so few citizens and it's easy to bribe them, and it costs a lot less than paying taxes back home. But then you move on to Panama, and the grey area starts. Someone is getting rich there, but the population of Panama is a lot bigger than that of the Bahamas, and that population is not exactly rich. Does it create bigger class divisions and also retards politics in terms of trying to develop their own unique economy not dependent on servicing the rich foreign tax thieves?

    Then you get to London and the UK, with their absolutely enormous population. Most of the people outside of London will never see any of this money, and in London it creates a runaway housing crisis as the best investment for laundered money is thought to be real estate. Obviously there is investment in the local economy other than that, such as buying football clubs and stores, but I don't think that money goes towards funding a pharma start-up or buying stock in a local car company.

    So it exacerbates inequality sure (London real estate is insane and out of reach of most locals), and creates a parallel society in the countryside that never see these money, but are the pros of having that money there and contributing to the economy outweigh these cons? It would if the money were invested with a view of making a profit from a factory, but I don't think that happens in this case. What do you think?

    Mark Chapman November 5, 2018 at 3:20 am
    I think it is an extremely interesting discussion point; one that I would not venture into without doing a bit of research, but right now I have to leave for work. It's definitely something we could chew over for a bit, and I imagine Jen will have something for us on it.
    Jen November 5, 2018 at 2:00 pm
    Blatnoi, if you get hold of the Nicholas Shaxson book I mentioned before, I recall there's a chapter that discusses the effect of being a tax haven has on the Channel Islands economy and Jersey Island in particular. The money that ends up there is in the pockets of a very few people who use it to buy and real estate as if it were shares on the stock market.

    The result is what we Australians call a two-speed economy or a split economy, where one sub-economy caters for the very rich (real estate agents specialising in luxury properties, lots of luxury hotels and playgrounds, boutique shops and restaurants) and the other sub-economy is hidden away, made up of local people who have to rent their homes because they can't afford to buy their own homes, who have to hold down two or more jobs to survive and who supply the staff for the hotels, shops and restaurants frequented by the rich. Eventually the local people start disappearing to find better-paying jobs and the hotels, restaurants, etc start bringing in foreign labour to replace them.

    I certainly agree with you that a two-speed economy creates and exacerbates class divisions, and moreover destroys not only local economies in the areas where it operates but also local societies and cultures.

    Aha I Googled "Shaxson", "economy" and "Jersey" and out of what Google threw at me, I found this account by Bram Wanrooij of his time living in Jersey with his family for six years:

    An excerpt from Wanrooij's post:

    ".. I have never been so aware of wealth discrepancies as I have in Jersey. And that says a lot, as I have lived in places like Kenya and Sudan when I was younger. Disparity is on full display, in combination with a shameless promotion of greed and privilege. Range Rovers wizz past you, their 4×4 engines sputtering out clouds of pollution, utterly useless on a small island with a decent infrastructure and no real elevation to speak of. You even see flashy sports cars; quite amusing when you consider the speed limit is 40 at most. What are these people trying to prove?

    The island caters to the very wealthy, especially reflected in everyday expenses and housing and travel costs. Getting off the island becomes ever more impossible as your family grows, with flights to England ridiculously expensive and ferries charging a small fortune for carrying you across the channel. In this way, Jersey has quickly become a financial and geographical prison for middle and low earners.

    In the six years I've lived here, my family has had to move six times and every time we had to rent a house which was slightly beyond our budget, even though both my wife and I are hard workers with honest professions. I have seen qualified, talented people leave because of this, a phenomenon which makes no sense, neither on a social, nor an economic level "

    Comparisons between the Jersey-style financial two-speed economy and economies afflicted with so-called Dutch disease (typically economies like Saudi Arabia and others dependent on oil, gas and mineral exploitation) have been made. Characteristics of such economies are outlined in detail at this link:
    https://www.economicshelp.org/blog/11977/oil/dutch-disease/

    Fern November 5, 2018 at 5:25 pm
    I've lived on the outskirts of London for many years and what I've seen is the city becoming increasingly hollowed out. You can walk around street after street at night and everywhere is in darkness – the lights are out because no-one is home, not that evening, not ever. London is permanently under construction; huge numbers of new buildings have gone up in recent years – all of them beyond the purchasing power of most Londoners – and huge numbers of those new buildings have been purchased off plan by overseas investors with no intention or interest in living in them.

    When the money moves in existing communities disintegrate, local councils seek to dump those in social housing on other, less fashionable boroughs (thus exacerbating housing problems in those areas) or even outside London so housing can be razed and the land sold to developers, those renting in the private sector are priced out, local businesses close down – their market has gone plus insane rent and rates increases etc etc. London used to have a bit of a 'village' feel to it – distinct areas with settled communities, traditional butcher-baker-candlestick maker high streets, a sense of community. All gone or going.

    Moscow Exile November 5, 2018 at 3:51 am
    'Billionaires Row': inside Hampstead palaces left empty for decades
    On The Bishops Avenue houses worth tens of millions of pounds lay derelict in a spectacular example of waste and profligacy

    The multimillion-pound wrecks are evidence of a property culture in which the world's richest people see British property as investments. One Hyde Park, a block of apartments in Knightsbridge, is another example where more than half the flats are registered with the council as empty or second homes.

    Rinat Akhmetov pays record £136.4m for apartment at One Hyde Park
    Ukraine's richest man spends record amount for a UK home after buying two Knightsbridge flats totalling 25,000 sq ft

    He just loves the weather there!

    Northern Star November 5, 2018 at 2:35 pm
    Hmmm ..
    https://en.wikipedia.org/wiki/Rinat_Akhmetov#Political_activity
    Jen November 5, 2018 at 3:46 pm
    Buying properties in hot-spot areas and leaving them empty – because you plan to trade and sell them if and when the prices rocket up to levels you want – would be typical behaviour of people who treat property portfolios like share portfolios. You want to be ready to sell when the price is right so you don't move tenants into them. Getting rid of tenants can be a hassle if you want to sell quickly.

    Also buying property and deliberately leaving it to rot is a way of using it as a tax shelter to minimise land and other taxes, lower your income or claim a tax rebate on losses you make because you're forking out more in land taxes, council rates and other rates than you are making on the property, depending on the taxation jurisdiction prevailing in the area or country where you have bought the property.

    Evgeny November 5, 2018 at 3:59 am
    Thanks for a great article, Mark!

    Apparently, the U.S. authorities believe that by squeezing the corrupt Russian money out of the Great Britain, they would force those corrupt rich Russians to return their money home and remake the Russia as a modern Western nation with the rule of law and checks and balances.

    At least, that's what I have heard at anti-Putin forums. So -- and especially so in view of your article -- that ought to be taken with a grain of salt.

    But if that's indeed the idea -- I'm skeptical that it would work. Definitely, it sounds alright, and if it were implemented, say, 30 years ago -- it might have sort of worked, by preventing the corrupt Russians to move their assets abroad. Now, I think, they would just move their fortunes into some other friendly jurisdiction outside of the reach of Uncle Sam and Russia's authorities.

    If getting at dirty money was that easy, I doubt that China would ever need to resort to such a complex operation as the "Fox Hunt".

    Moscow Exile November 5, 2018 at 4:25 am
    Well it seems that Rusal has said "Kiss my arse goodbye!" to the bounteous, tax-free-zoned West.

    Sanctions-hit Rusal decides to move from Jersey to Russia
    November 05, 9:24 updated at: November 05, 10:24 UTC+3

    That's Jersey the British Channel Island and not "New Jersey", the former British colony.

    Mark Chapman November 5, 2018 at 3:36 pm
    Another kick in the sack for Britain, caused by Washington but for which Washington will suffer no penalty. That Special Relationship certainly is something, isn't it?
    Mark Chapman November 5, 2018 at 3:32 pm
    I think you're probably right – although I never thought of such a devious motive as forcing Putin's enemies (in some cases) back to Russia, where they would presumably start financing the opposition and making trouble, I agree it likely would not work according to plan. Very likely all it would accomplish is the withdrawal of their money from London, to be hidden somewhere else.

    [Nov 05, 2018] How neoliberals destroyed University education and then a large part of the US middle class and the US postwar social order by Edward Qualtrough

    Notable quotes:
    "... Every academic critique of neoliberalism is an unacknowledged memoir. We academics occupy a crucial node in the neoliberal system. Our institutions are foundational to neoliberalism's claim to be a meritocracy, insofar as we are tasked with discerning and certifying the merit that leads to the most powerful and desirable jobs. Yet at the same time, colleges and universities have suffered the fate of all public goods under the neoliberal order. We must therefore "do more with less," cutting costs while meeting ever-greater demands. The academic workforce faces increasing precarity and shrinking wages even as it is called on to teach and assess more students than ever before in human history -- and to demonstrate that we are doing so better than ever, via newly devised regimes of outcome-based assessment. In short, we academics live out the contradictions of neoliberalism every day. ..."
    "... Whereas classical liberalism insisted that capitalism had to be allowed free rein within its sphere, under neoliberalism capitalism no longer has a set sphere. We are always "on the clock," always accruing (or squandering) various forms of financial and social capital. ..."
    Aug 24, 2016 | www.amazon.com

    From: Amazon.com Neoliberalism's Demons On the Political Theology of Late Capital (9781503607125) Adam Kotsko Books

    Every academic critique of neoliberalism is an unacknowledged memoir. We academics occupy a crucial node in the neoliberal system. Our institutions are foundational to neoliberalism's claim to be a meritocracy, insofar as we are tasked with discerning and certifying the merit that leads to the most powerful and desirable jobs. Yet at the same time, colleges and universities have suffered the fate of all public goods under the neoliberal order. We must therefore "do more with less," cutting costs while meeting ever-greater demands. The academic workforce faces increasing precarity and shrinking wages even as it is called on to teach and assess more students than ever before in human history -- and to demonstrate that we are doing so better than ever, via newly devised regimes of outcome-based assessment. In short, we academics live out the contradictions of neoliberalism every day.

    ... ... ...

    On a more personal level it reflects my upbringing in the suburbs of Flint, Michigan, a city that has been utterly devastated by the transition to neoliberalism. As I lived through the slow-motion disaster of the gradual withdrawal of the auto industry, I often heard Henry Ford s dictum that a company could make more money if the workers were paid enough to be customers as well, a principle that the major US automakers were inexplicably abandoning. Hence I find it [Fordism -- NNB] to be an elegant way of capturing the postwar model's promise of creating broadly shared prosperity by retooling capitalism to produce a consumer society characterized by a growing middle class -- and of emphasizing the fact that that promise was ultimately broken.

    By the mid-1970s, the postwar Fordist order had begun to breakdown to varying degrees in the major Western countries. While many powerful groups advocated a response to the crisis that would strengthen the welfare state, the agenda that wound up carrying the day was neoliberalism, which was most forcefully implemented in the United Kingdom by Margaret Thatcher and in the United States by Ronald Reagan. And although this transformation was begun by the conservative part)', in both countries the left-of-centcr or (in American usage) "liberal"party wound up embracing neoliberal tenets under Tony Blair and Bill Clinton, ostensibly for the purpose of directing them toward progressive ends.

    With the context of current debates within the US Democratic Party, this means that Clinton acolytes are correct to claim that "neoliberalism" just is liberalism but only to the extent that, in the contemporary United States, the term liberalism is little more than a word for whatever the policy agenda of the Democratic Party happens to be at any given time. Though politicians of all stripes at times used libertarian rhetoric to sell their policies, the most clear-eyed advocates of neoliberalism realized that there could be no simple question of a "return" to the laissez-faire model.

    Rather than simply getting the state "out of the way," they both deployed and transformed state power, including the institutions of the welfare state, to reshape society in accordance with market models. In some cases creating markets where none had previously existed, as in the privatization of education and other public services. In others it took the form of a more general spread of a competitive market ethos into ever more areas of life -- so that we are encouraged to think of our reputation as a "brand," for instance, or our social contacts as fodder for "networking." Whereas classical liberalism insisted that capitalism had to be allowed free rein within its sphere, under neoliberalism capitalism no longer has a set sphere. We are always "on the clock," always accruing (or squandering) various forms of financial and social capital.

    [Nov 03, 2018] Is Red Hat IBM's 'Hail Mary' pass

    Notable quotes:
    "... if those employees become unhappy, they can effectively go anywhere they want. ..."
    "... IBM's partner/reseller ecosystem is nowhere near what it was since it owned the PC and Server businesses that Lenovo now owns. And IBM's Softlayer/BlueMix cloud is largely tied to its legacy software business, which, again, is slowing. ..."
    "... I came to IBM from their SoftLayer acquisition. Their ability to stomp all over the things SoftLayer was almost doing right were astounding. I stood and listened to Ginni say things like, "We purchased SoftLayer because we need to learn from you," and, "We want you to teach us how to do Cloud the right way, since we spent all these years doing things the wrong way," and, "If you find yourself in a meeting with one of our old teams, you guys are gonna be the ones in charge. You are the ones who know how this is supposed to work - our culture has failed at it." Promises which were nothing more than hollow words. ..."
    "... Next, it's a little worrisome that the author, now over the whole IBM thing is recommending firing "older people," you know, the ones who helped the company retain its performance in years' past. The smartest article I've read about IBM worried about its cheap style of "acquiring" non-best-of-breed companies and firing oodles of its qualified R&D guys. THAT author was right. ..."
    "... Four years in GTS ... joined via being outsourced to IBM by my previous employer. Left GTS after 4 years. ..."
    "... The IBM way of life was throughout the Oughts and the Teens an utter and complete failure from the perspective of getting work done right and using people to their appropriate and full potential. ..."
    "... As a GTS employee, professional technical training was deemed unnecessary, hence I had no access to any unless I paid for it myself and used my personal time ... the only training available was cheesy presentations or other web based garbage from the intranet, or casual / OJT style meetings with other staff who were NOT professional or expert trainers. ..."
    "... As a GTS employee, I had NO access to the expert and professional tools that IBM fricking made and sold to the same damn customers I was supposed to be supporting. Did we have expert and professional workflow / document management / ITIL aligned incident and problem management tools? NO, we had fricking Lotus Notes and email. Instead of upgrading to the newest and best software solutions for data center / IT management & support, we degraded everything down the simplest and least complex single function tools that no "best practices" organization on Earth would ever consider using. ..."
    "... And the people management paradigm ... employees ranked annually not against a static or shared goal or metric, but in relation to each other, and there was ALWAYS a "top 10 percent" and a "bottom ten percent" required by upper management ... a system that was sociopathic in it's nature because it encourages employees to NOT work together ... by screwing over one's coworkers, perhaps by not giving necessary information, timely support, assistance as needed or requested, one could potentially hurt their performance and make oneself look relatively better. That's a self-defeating system and it was encouraged by the way IBM ran things. ..."
    Nov 03, 2018 | www.zdnet.com
    Brain drain is a real risk

    IBM has not had a particularly great track record when it comes to integrating the cultures of other companies into its own, and brain drain with a company like Red Hat is a real risk because if those employees become unhappy, they can effectively go anywhere they want. They have the skills to command very high salaries at any of the top companies in the industry.

    The other issue is that IBM hasn't figured out how to capture revenue from SMBs -- and that has always been elusive for them. Unless a deal is worth at least $1 million, and realistically $10 million, sales guys at IBM don't tend to get motivated.

    Also: Red Hat changes its open-source licensing rules

    The 5,000-seat and below market segment has traditionally been partner territory, and when it comes to reseller partners for its cloud, IBM is way, way behind AWS, Microsoft, Google, or even (gasp) Oracle, which is now offering serious margins to partners that land workloads on the Oracle cloud.

    IBM's partner/reseller ecosystem is nowhere near what it was since it owned the PC and Server businesses that Lenovo now owns. And IBM's Softlayer/BlueMix cloud is largely tied to its legacy software business, which, again, is slowing.

    ... ... ...

    But I think that it is very unlikely the IBM Cloud, even when juiced on Red Hat steroids, will become anything more ambitious than a boutique business for hybrid workloads when compared with AWS or Azure. Realistically, it has to be the kind of cloud platform that interoperates well with the others or nobody will want it.


    geek49203_z , Wednesday, April 26, 2017 10:27 AM

    Ex-IBM contractor here...

    1. IBM used to value long-term employees. Now they "value" short-term contractors -- but they still pull them out of production for lots of training that, quite frankly, isn't exactly needed for what they are doing. Personally, I think that IBM would do well to return to valuing employees instead of looking at them as expendable commodities, but either way, they need to get past the legacies of when they had long-term employees all watching a single main frame.

    2. As IBM moved to an army of contractors, they killed off the informal (but important!) web of tribal knowledge. You know, a friend of a friend who new the answer to some issue, or knew something about this customer? What has happened is that the transaction costs (as economists call it) have escalated until IBM can scarcely order IBM hardware for its own projects, or have SDM's work together.

    M Wagner geek49203_z , Wednesday, April 26, 2017 10:35 AM
    geek49203_z Number 2 is a problem everywhere. As long-time employees (mostly baby-boomers) retire, their replacements are usually straight out of college with various non-technical degrees. They come in with little history and few older-employees to which they can turn for "the tricks of the trade".
    Shmeg , Wednesday, April 26, 2017 10:41 AM
    I came to IBM from their SoftLayer acquisition. Their ability to stomp all over the things SoftLayer was almost doing right were astounding. I stood and listened to Ginni say things like, "We purchased SoftLayer because we need to learn from you," and, "We want you to teach us how to do Cloud the right way, since we spent all these years doing things the wrong way," and, "If you find yourself in a meeting with one of our old teams, you guys are gonna be the ones in charge. You are the ones who know how this is supposed to work - our culture has failed at it." Promises which were nothing more than hollow words.
    geek49203_z , Wednesday, April 26, 2017 10:27 AM
    Ex-IBM contractor here...

    1. IBM used to value long-term employees. Now they "value" short-term contractors -- but they still pull them out of production for lots of training that, quite frankly, isn't exactly needed for what they are doing. Personally, I think that IBM would do well to return to valuing employees instead of looking at them as expendable commodities, but either way, they need to get past the legacies of when they had long-term employees all watching a single main frame.

    2. As IBM moved to an army of contractors, they killed off the informal (but important!) web of tribal knowledge. You know, a friend of a friend who new the answer to some issue, or knew something about this customer? What has happened is that the transaction costs (as economists call it) have escalated until IBM can scarcely order IBM hardware for its own projects, or have SDM's work together.

    M Wagner geek49203_z , Wednesday, April 26, 2017 10:35 AM
    geek49203_z Number 2 is a problem everywhere. As long-time employees (mostly baby-boomers) retire, their replacements are usually straight out of college with various non-technical degrees. They come in with little history and few older-employees to which they can turn for "the tricks of the trade".
    Shmeg , Wednesday, April 26, 2017 10:41 AM
    I came to IBM from their SoftLayer acquisition. Their ability to stomp all over the things SoftLayer was almost doing right were astounding. I stood and listened to Ginni say things like, "We purchased SoftLayer because we need to learn from you," and, "We want you to teach us how to do Cloud the right way, since we spent all these years doing things the wrong way," and, "If you find yourself in a meeting with one of our old teams, you guys are gonna be the ones in charge. You are the ones who know how this is supposed to work - our culture has failed at it." Promises which were nothing more than hollow words.
    cavman , Wednesday, April 26, 2017 3:58 PM
    In the 1970's 80's and 90's I was working in tech support for a company called ROLM. We were doing communications , voice and data and did many systems for Fortune 500 companies along with 911 systems and the secure system at the White House. My job was to fly all over North America to solve problems with customers and integration of our equipment into their business model. I also did BETA trials and documented systems so others would understand what it took to make it run fine under all conditions.

    In 84 IBM bought a percentage of the company and the next year they bought out the company. When someone said to me "IBM just bought you out , you must thing you died and went to heaven." My response was "Think of them as being like the Federal Government but making a profit". They were so heavily structured and hide bound that it was a constant battle working with them. Their response to any comments was "We are IBM"

    I was working on an equipment project in Colorado Springs and IBM took control. I was immediately advised that I could only talk to the people in my assigned group and if I had a question outside of my group I had to put it in writing and give it to my manager and if he thought it was relevant it would be forwarded up the ladder of management until it reached a level of a manager that had control of both groups and at that time if he thought it was relevant it would be sent to that group who would send the answer back up the ladder.

    I'm a Vietnam Veteran and I used my military training to get things done just like I did out in the field. I went looking for the person I could get an answer from.

    At first others were nervous about doing that but within a month I had connections all over the facility and started introducing people at the cafeteria. Things moved quickly as people started working together as a unit. I finished my part of the work which was figuring all the spares technicians would need plus the costs for packaging and service contract estimates. I submitted it to all the people that needed it. I was then hauled into a meeting room by the IBM management and advised that I was a disruptive influence and would be removed. Just then the final contracts that vendors had to sign showed up and it used all my info. The IBM people were livid that they were not involved.

    By the way a couple months later the IBM THINK magazine came out with a new story about a radical concept they had tried. A cover would not fit on a component and under the old system both the component and the cover would be thrown out and they would start from scratch doing it over. They decided to have the two groups sit together and figure out why it would not fit and correct it on the spot.

    Another great example of IBM people is we had a sales contract to install a multi node voice mail system at WANG computers but we lost it because the IBM people insisted on bundling in AS0400 systems into the sale to WANG computer. Instead we lost a multi million dollar contract.

    Eventually Siemens bought 50% of the company and eventually full control. Now all we heard was "That is how we do it in Germany" Our response was "How did that WW II thing work out".

    Stockholder , Wednesday, April 26, 2017 7:20 PM
    The author may have more loyalty to Microsoft than he confides, is the first thing noticeable about this article. The second thing is that in terms of getting rid of those aged IBM workers, I think he may have completely missed the mark, in fairness, that may be the product of his IBM experience, The sheer hubris of tech-talking from the middle of the story and missing the global misstep that is today's IBM is noticeable. As a stockholder, the first question is, "Where is the investigation to the breach of fiduciary duty by a board that owes its loyalty to stockholders who are scratching their heads at the 'positive' spin the likes of Ginni Rometty is putting on 20 quarters of dead losses?" Got that, 20 quarters of losses.

    Next, it's a little worrisome that the author, now over the whole IBM thing is recommending firing "older people," you know, the ones who helped the company retain its performance in years' past. The smartest article I've read about IBM worried about its cheap style of "acquiring" non-best-of-breed companies and firing oodles of its qualified R&D guys. THAT author was right.

    IBM's been run into the ground by Ginni, I'll use her first name, since apparently my money is now used to prop up this sham of a leader, who from her uncomfortable public announcement with Tim Cook of Apple, which HAS gone up, by the way, has embraced every political trend, not cause but trend from hiring more women to marginalizing all those old-time white males...You know the ones who produced for the company based on merit, sweat, expertise, all those non-feeling based skills that ultimately are what a shareholder is interested in and replaced them with young, and apparently "social" experts who are pasting some phony "modernity" on a company that under Ginni's leadership has become more of a pet cause than a company.

    Finally, regarding ageism and the author's advocacy for the same, IBM's been there, done that as they lost an age discrimination lawsuit decades ago. IBM gave up on doing what it had the ability to do as an enormous business and instead under Rometty's leadership has tried to compete with the scrappy startups where any halfwit knows IBM cannot compete.

    The company has rendered itself ridiculous under Rometty, a board that collects paychecks and breaches any notion of fiduciary duty to shareholders, an attempt at partnering with a "mod" company like Apple that simply bolstered Apple and left IBM languishing and a rejection of what has a track record of working, excellence, rewarding effort of employees and the steady plod of performance. Dump the board and dump Rometty.

    jperlow Stockholder , Wednesday, April 26, 2017 8:36 PM
    Stockholder Your comments regarding any inclination towards age discrimination are duly noted, so I added a qualifier in the piece.
    Gravyboat McGee , Wednesday, April 26, 2017 9:00 PM
    Four years in GTS ... joined via being outsourced to IBM by my previous employer. Left GTS after 4 years.

    The IBM way of life was throughout the Oughts and the Teens an utter and complete failure from the perspective of getting work done right and using people to their appropriate and full potential. I went from a multi-disciplinary team of engineers working across technologies to support corporate needs in the IT environment to being siloed into a single-function organization.

    My first year of on-boarding with IBM was spent deconstructing application integration and cross-organizational structures of support and interwork that I had spent 6 years building and maintaining. Handing off different chunks of work (again, before the outsourcing, an Enterprise solution supported by one multi-disciplinary team) to different IBM GTS work silos that had no physical spacial relationship and no interworking history or habits. What we're talking about here is the notion of "left hand not knowing what the right hand is doing" ...

    THAT was the IBM way of doing things, and nothing I've read about them over the past decade or so tells me it has changed.

    As a GTS employee, professional technical training was deemed unnecessary, hence I had no access to any unless I paid for it myself and used my personal time ... the only training available was cheesy presentations or other web based garbage from the intranet, or casual / OJT style meetings with other staff who were NOT professional or expert trainers.

    As a GTS employee, I had NO access to the expert and professional tools that IBM fricking made and sold to the same damn customers I was supposed to be supporting. Did we have expert and professional workflow / document management / ITIL aligned incident and problem management tools? NO, we had fricking Lotus Notes and email. Instead of upgrading to the newest and best software solutions for data center / IT management & support, we degraded everything down the simplest and least complex single function tools that no "best practices" organization on Earth would ever consider using.

    And the people management paradigm ... employees ranked annually not against a static or shared goal or metric, but in relation to each other, and there was ALWAYS a "top 10 percent" and a "bottom ten percent" required by upper management ... a system that was sociopathic in it's nature because it encourages employees to NOT work together ... by screwing over one's coworkers, perhaps by not giving necessary information, timely support, assistance as needed or requested, one could potentially hurt their performance and make oneself look relatively better. That's a self-defeating system and it was encouraged by the way IBM ran things.

    The "not invented here" ideology was embedded deeply in the souls of all senior IBMers I ever met or worked with ... if you come on board with any outside knowledge or experience, you must not dare to say "this way works better" because you'd be shut down before you could blink. The phrase "best practices" to them means "the way we've always done it".

    IBM gave up on innovation long ago. Since the 90's the vast majority of their software has been bought, not built. Buy a small company, strip out the innovation, slap an IBM label on it, sell it as the next coming of Jesus even though they refuse to expend any R&D to push the product to the next level ... damn near everything IBM sold was gentrified, never cutting edge.

    And don't get me started on sales practices ... tell the customer how product XYZ is a guaranteed moonshot, they'll be living on lunar real estate in no time at all, and after all the contracts are signed hand the customer a box of nuts & bolts and a letter telling them where they can look up instructions on how to build their own moon rocket. Or for XX dollars more a year, hire a Professional Services IBMer to build it for them.

    I have no sympathy for IBM. They need a clean sweep throughout upper management, especially any of the old True Blue hard-core IBMers.

    billa201 , Thursday, April 27, 2017 11:24 AM
    You obviously have been gone from IBM as they do not treat their employees well anymore and get rid of good talent not keep it a sad state.
    ClearCreek , Tuesday, May 9, 2017 7:04 PM
    We tried our best to be SMB partners with IBM & Arrow in the early 2000s ... but could never get any traction. I personally needed a mentor, but never found one. I still have/wear some of their swag, and I write this right now on a re-purposed IBM 1U server that is 10 years old, but ... I can't see any way our small company can make $ with them.

    Watson is impressive, but you can't build a company on just Watson. This author has some great ideas, yet the phrase that keeps coming to me is internal politics. That corrosive reality has & will kill companies, and it will kill IBM unless it is dealt with.

    Turn-arounds are possible (look at MS), but they are hard and dangerous. Hope IBM can figure it out...

    [Nov 03, 2018] The evaluation system in which there was ALWAYS a "top 10 percent" and a "bottom ten percent" is sociopathic in it's nature

    Notable quotes:
    "... Four years in GTS ... joined via being outsourced to IBM by my previous employer. Left GTS after 4 years. ..."
    "... The IBM way of life was throughout the Oughts and the Teens an utter and complete failure from the perspective of getting work done right and using people to their appropriate and full potential. ..."
    "... As a GTS employee, professional technical training was deemed unnecessary, hence I had no access to any unless I paid for it myself and used my personal time ... the only training available was cheesy presentations or other web based garbage from the intranet, or casual / OJT style meetings with other staff who were NOT professional or expert trainers. ..."
    "... As a GTS employee, I had NO access to the expert and professional tools that IBM fricking made and sold to the same damn customers I was supposed to be supporting. Did we have expert and professional workflow / document management / ITIL aligned incident and problem management tools? NO, we had fricking Lotus Notes and email. Instead of upgrading to the newest and best software solutions for data center / IT management & support, we degraded everything down the simplest and least complex single function tools that no "best practices" organization on Earth would ever consider using. ..."
    "... And the people management paradigm ... employees ranked annually not against a static or shared goal or metric, but in relation to each other, and there was ALWAYS a "top 10 percent" and a "bottom ten percent" required by upper management ... a system that was sociopathic in it's nature because it encourages employees to NOT work together ... by screwing over one's coworkers, perhaps by not giving necessary information, timely support, assistance as needed or requested, one could potentially hurt their performance and make oneself look relatively better. That's a self-defeating system and it was encouraged by the way IBM ran things. ..."
    Nov 03, 2018 | www.zdnet.com

    Gravyboat McGee , Wednesday, April 26, 2017 9:00 PM

    Four years in GTS ... joined via being outsourced to IBM by my previous employer. Left GTS after 4 years.

    The IBM way of life was throughout the Oughts and the Teens an utter and complete failure from the perspective of getting work done right and using people to their appropriate and full potential. I went from a multi-disciplinary team of engineers working across technologies to support corporate needs in the IT environment to being siloed into a single-function organization.

    My first year of on-boarding with IBM was spent deconstructing application integration and cross-organizational structures of support and interwork that I had spent 6 years building and maintaining. Handing off different chunks of work (again, before the outsourcing, an Enterprise solution supported by one multi-disciplinary team) to different IBM GTS work silos that had no physical special relationship and no interworking history or habits. What we're talking about here is the notion of "left hand not knowing what the right hand is doing" ...

    THAT was the IBM way of doing things, and nothing I've read about them over the past decade or so tells me it has changed.

    As a GTS employee, professional technical training was deemed unnecessary, hence I had no access to any unless I paid for it myself and used my personal time ... the only training available was cheesy presentations or other web based garbage from the intranet, or casual / OJT style meetings with other staff who were NOT professional or expert trainers.

    As a GTS employee, I had NO access to the expert and professional tools that IBM fricking made and sold to the same damn customers I was supposed to be supporting. Did we have expert and professional workflow / document management / ITIL aligned incident and problem management tools? NO, we had fricking Lotus Notes and email. Instead of upgrading to the newest and best software solutions for data center / IT management & support, we degraded everything down the simplest and least complex single function tools that no "best practices" organization on Earth would ever consider using.

    And the people management paradigm ... employees ranked annually not against a static or shared goal or metric, but in relation to each other, and there was ALWAYS a "top 10 percent" and a "bottom ten percent" required by upper management ... a system that was sociopathic in it's nature because it encourages employees to NOT work together ... by screwing over one's coworkers, perhaps by not giving necessary information, timely support, assistance as needed or requested, one could potentially hurt their performance and make oneself look relatively better. That's a self-defeating system and it was encouraged by the way IBM ran things.

    The "not invented here" ideology was embedded deeply in the souls of all senior IBMers I ever met or worked with ... if you come on board with any outside knowledge or experience, you must not dare to say "this way works better" because you'd be shut down before you could blink. The phrase "best practices" to them means "the way we've always done it".

    IBM gave up on innovation long ago. Since the 90's the vast majority of their software has been bought, not built. Buy a small company, strip out the innovation, slap an IBM label on it, sell it as the next coming of Jesus even though they refuse to expend any R&D to push the product to the next level ... damn near everything IBM sold was gentrified, never cutting edge.

    And don't get me started on sales practices ... tell the customer how product XYZ is a guaranteed moonshot, they'll be living on lunar real estate in no time at all, and after all the contracts are signed hand the customer a box of nuts & bolts and a letter telling them where they can look up instructions on how to build their own moon rocket. Or for XX dollars more a year, hire a Professional Services IBMer to build it for them.

    I have no sympathy for IBM. They need a clean sweep throughout upper management, especially any of the old True Blue hard-core IBMers.

    [Oct 31, 2018] Over 50% Of College Students Afraid To Disagree With Peers, Professors

    Social pressure to conform is natural in any organization. And universities are not exception. Various people positioned differently on confiormism-independent_thinking spectrum, so we should not generalize that social pressure makes any students a conformist, who is afraid to voice his/her opinion. Some small percentage of student can withstand significant social pressure. But the fact that around 50% can't withstand significant social pressure sounds right.
    Oct 31, 2018 | www.zerohedge.com
    As more and more college professors express their social and political views in classrooms, students across the country are feeling increasingly afraid to disagree according to a survey of 800 full-time undergraduate college students, reported by the Wall Street Journal ' s James Freeman.

    When students were asked if they've had "any professors or course instructors that have used class time to express their own social or political beliefs that are completely unrelated to the subject of the course," 52% of respondents said that this occurs "often," while 47% responded, "not often."

    A majority -- 53% -- also reported that they often "felt intimidated" in sharing their ideas, opinions or beliefs in class because they were different from those of the professors. - WSJ

    What's more, 54% of students say they are intimidated expressing themselves when their views conflict with those of their classmates.

    The survey, conducted by McLaughlin & Associates on behalf of Yale's William F. Buckley, Jr. Program (which counts Freeman among its directors), was undertaken between October 8th and 18th, and included students at both public and private four-year universities across the country.

    This is a problem, suggests Freeman - as unbiased teachers who formerly filled universities have been replaced by activists who "unfortunately appear to be just as political and overbearing as one would expect," and that " perhaps the actual parents who write checks can someday find some way to encourage more responsible behavior. "

    Read the rest below via the Wall Street Journal :

    ***

    As for the students, there's at least a mixed message in the latest survey results. On the downside, the fact that so many students are afraid of disagreeing with their peers does not suggest a healthy intellectual atmosphere even outside the classroom. There's more disappointing news in the answers to other survey questions. For example, 59% of respondents agreed with this statement:

    My college or university should forbid people from speaking on campus who have a history of engaging in hate speech.

    This column does not favor hatred, nor the subjective definition of "hate speech" by college administrators seeking to regulate it. In perhaps the most disturbing finding in the poll results, 33% of U.S. college students participating in the survey agreed with this statement:

    If someone is using hate speech or making racially charged comments, physical violence can be justified to prevent this person from espousing their hateful views.

    An optimist desperately searching for a silver lining would perhaps note that 60% of respondents did not agree that physical violence is justified to silence people speaking what someone has defined as "hate speech" or "racially charged" comments. But the fact that a third of college students at least theoretically endorse violence as a response to offensive speech underlines the threat to free expression on American campuses.

    Perhaps more encouraging are the responses to this question:

    Generally speaking, do you think the First Amendment, which deals with freedom of speech, is an outdated amendment that can no longer be applied in today's society and should be changed or an important amendment that still needs to be followed and respected in today's society?

    A full 79% of respondents opted for respecting the First Amendment, while 17% backed a rewrite.

    On a more specific question, free speech isn't winning by the same landslide. When asked if they would favor or oppose their schools having speech codes to regulate speech for students and faculty, 54% of U.S. college kids opposed such codes while 38% were in favor.

    The free exchange of ideas is in danger on American campuses. And given the unprofessional behavior of American faculty suggested by this survey, education reformers should perhaps focus on encouraging free-speech advocates within the student body while adopting a campus slogan from an earlier era: Don't trust anyone over 30.


    keep the bastards honest , 26 minutes ago link

    this tyranny applies not only to politics and weirdo social world view, it runs thru everything. Group think is powerful and those not following get excluded, defunded of resources and ridicule and other punishment.

    ... ... ...

    PGR88 , 39 minutes ago link

    The education-industrial complex is a massive spending and debt-fed bubble, that has created a massive political organizing force and teflon monoculture. They are parasites feeding off government and the debt of students

    ... ... ...

    keep the bastards honest , 55 minutes ago link

    It's always been like this, at school as a 5 year old ....my little kid was sent to the headmaster for objecting to making a key ring thing in craft as not one kid had a key. He spoke a well reasoned argument and of course is at the Supreme Court now. But gained no respect or nurturing from that school. I also copped it, made career decision to be a scientist because of the stupidity of an english teacher not knowing same issues prevailed there. Was thrown out of english honours course so did the exam on my own knowledge and got first class honours in the state.

    At University we all know you feed back what they want if you want to pass. Some want intelligence and best true understanding others want their crippled stuff. This also applies if you are a science, physiology researcher. Cutting edge work if not mainstream does not get published, you have to be part of a recognised institution to be published so no independent researcher,

    There are set ideas and marketing there of eg antioxidants fallacies, need for estrogen, and until recently How stupid was Lamarck because he espoused the passing down of response to environment to subsequent generations...Darwin thought this too but idea was suppressed. Then epigenetics got the new hot thing for grants. Fck them all.

    My child and I discussed a version with the principal when he was doing the bacceaulureate, as from 5 onwards teachers rejected correct answers and wanted their answers. The excellent advice was to view it all like a driving exam, learn the road rules and give them back.

    students always know the tyranny of the teacher and evaluator. At 6 my kid was sat with the slow learners and forced to give 30answers a day ' correct' . Ie lies and untruths.

    Infinity as answer to how many corners has a cylinder was not only mad bad but ridiculed.

    Charlie_Martel , 2 hours ago link

    Because its an indoctrination not an education.

    Duc888 , 2 hours ago link

    It's impossible to actually debate someone who has NO FACTS on either side of the argument....

    it winds up like this....

    "not even WRONG"

    The phrase " not even wrong " describes an argument or explanation that purports to be scientific but is based on invalid reasoning or speculative premises that can neither be proven correct nor falsified .

    Hence, it refers to statements that cannot be discussed in a rigorous, scientific sense . [1] For a meaningful discussion on whether a certain statement is true or false, the statement must satisfy the criterion called "falsifiability" -- the inherent possibility for the statement to be tested and found false. In this sense, the phrase "not even wrong" is synonymous to "nonfalsifiable". [1]

    The phrase is generally attributed to theoretical physicist Wolfgang Pauli , who was known for his colorful objections to incorrect or careless thinking. [2] [3] Rudolf Peierls documents an instance in which "a friend showed Pauli the paper of a young physicist which he suspected was not of great value but on which he wanted Pauli's views. Pauli remarked sadly, 'It is not even wrong' ." [4] This is also often quoted as "That is not only not right; it is not even wrong", or in Pauli's native German , " Das ist nicht nur nicht richtig; es ist nicht einmal falsch!". Peierls remarks that quite a few apocryphal stories of this kind have been circulated and mentions that he listed only the ones personally vouched for by him. He also quotes another example when Pauli replied to Lev Landau , "What you said was so confused that one could not tell whether it was nonsense or not. " [4]

    https://en.wikipedia.org/wiki/Not_even_wrong

    JimmyJones , 2 hours ago link

    Chemical engineering, engineering structural (optional), basic electrical engineering and C++ programing and he can make any machine to automatically preform any chemical process out of his garage. You could probably watch a butt ton of YouTube and a library card and also learn those skills.

    LetThemEatRand , 2 hours ago link

    The homogenized culture of colleges today is very similar to what I imagine it was like in the 1950's, but with a different set of "values" obviously. The 1950's led to the 1960's, and a complete rejection by many young people of establishment mono-culture. Maybe the young people eventually will figure out that what they see as SJW counter-culture is actually new establishment culture, and they will rebel against it in a few years. Probably not, though.

    TeethVillage88s , 2 hours ago link

    Thanks. I'm older than others probably think. But I generalizae or estimate more than others my age due to the life I chose or led.

    culture of colleges today is very similar to what I imagine it was like in the 1950's,

    TeethVillage88s , 2 hours ago link

    Thanks. I'm older than others probably think. But I generalizae or estimate more than others my age due to the life I chose or led.

    culture of colleges today is very similar to what I imagine it was like in the 1950's,

    dcmbuffy , 2 hours ago link

    and going into debt for their prison term. bunch of punk bullies!!!

    DuckDog , 2 hours ago link

    When I was in the army and got sentence to 2 years less a day in Military prison in Edmonton, I paid $1.70 a day, which the military were so kind to ring up a tab for me, when I got released from prison they handed me my bill and made me work it off before I got my dishonorable discharge

    Sort of like college today

    [Oct 30, 2018] I have worked at IBM 17 years and have worried about being layed off for about 11 of them. Moral is in the toilet. Bonuses for the rank and file are in the under 1% range while the CEO gets millions

    Notable quotes:
    "... Adjusting for inflation, I make $6K less than I did my first day. My group is a handful of people as at least 1/2 have quit or retired. To support our customers, we used to have several people, now we have one or two and if someone is sick or on vacation, our support structure is to hope nothing breaks. ..."
    Oct 30, 2018 | features.propublica.org

    Buzz , Friday, March 23, 2018 12:00 PM

    I've worked there 17 years and have worried about being layed off for about 11 of them. Moral is in the toilet. Bonuses for the rank and file are in the under 1% range while the CEO gets millions. Pay raises have been non existent or well under inflation for years.

    Adjusting for inflation, I make $6K less than I did my first day. My group is a handful of people as at least 1/2 have quit or retired. To support our customers, we used to have several people, now we have one or two and if someone is sick or on vacation, our support structure is to hope nothing breaks.

    We can't keep millennials because of pay, benefits and the expectation of being available 24/7 because we're shorthanded. As the unemployment rate drops, more leave to find a different job, leaving the old people as they are less willing to start over with pay, vacation, moving, selling a house, pulling kids from school, etc.

    The younger people are generally less likely to be willing to work as needed on off hours or to pull work from a busier colleague.

    I honestly have no idea what the plan is when the people who know what they are doing start to retire, we are way top heavy with 30-40 year guys who are on their way out, very few of the 10-20 year guys due to hiring freezes and we can't keep new people past 2-3 years. It's like our support business model is designed to fail.

    [Oct 30, 2018] Sam Palmisano now infamous Roadmap 2015 ran the company into the ground through its maniacal focus on increasing EPS at any and all costs. Literally.

    Oct 30, 2018 | features.propublica.org

    GoingGone , Friday, April 13, 2018 6:06 PM

    As a 25yr+ vet of IBM, I can confirm that this article is spot-on true. IBM used to be a proud and transparent company that clearly demonstrated that it valued its employees as much as it did its stock performance or dividend rate or EPS, simply because it is good for business. Those principles helped make and keep IBM atop the business world as the most trusted international brand and business icon of success for so many years. In 2000, all that changed when Sam Palmisano became the CEO. Palmisano's now infamous "Roadmap 2015" ran the company into the ground through its maniacal focus on increasing EPS at any and all costs. Literally.

    Like, its employees, employee compensation, benefits, skills, and education opportunities. Like, its products, product innovation, quality, and customer service.

    All of which resulted in the devastation of its technical capability and competitiveness, employee engagement, and customer loyalty. Executives seemed happy enough as their compensation grew nicely with greater financial efficiencies, and Palisano got a sweet $270M+ exit package in 2012 for a job well done.

    The new CEO, Ginni Rometty has since undergone a lot of scrutiny for her lack of business results, but she was screwed from day one. Of course, that doesn't leave her off the hook for the business practices outlined in the article, but what do you expect: she was hand picked by Palmisano and approved by the same board that thought Palmisano was golden.

    People (and companies) who have nothing to hide, hide nothing. People (and companies) who are proud of their actions, share it proudly. IBM believes it is being clever and outsmarting employment discrimination laws and saving the company money while retooling its workforce. That may end up being so (but probably won't), but it's irrelevant. Through its practices, IBM has lost the trust of its employees, customers, and ironically, stockholders (just ask Warren Buffett), who are the very(/only) audience IBM was trying to impress. It's just a huge shame.

    HiJinks , Sunday, March 25, 2018 3:07 AM
    I agree with many who state the report is well done. However, this crap started in the early 1990s. In the late 1980s, IBM offered decent packages to retirement eligible employees. For those close to retirement age, it was a great deal - 2 weeks pay for every year of service (capped at 26 years) plus being kept on to perform their old job for 6 months (while collecting retirement, until the government stepped in an put a halt to it). Nobody eligible was forced to take the package (at least not to general knowledge). The last decent package was in 1991 - similar, but not able to come back for 6 months. However, in 1991, those offered the package were basically told take it or else. Anyone with 30 years of service or 15 years and 55 was eligible and anyone within 5 years of eligibility could "bridge" the difference. They also had to sign a form stating they would not sue IBM in order to get up to a years pay - not taxable per IRS documents back then (but IBM took out the taxes anyway and the IRS refused to return - an employee group had hired lawyers to get the taxes back, a failed attempt which only enriched the lawyers). After that, things went downhill and accelerated when Gerstner took over. After 1991, there were still a some workers who could get 30 years or more, but that was more the exception. I suspect the way the company has been run the past 25 years or so has the Watsons spinning in their graves. Gone are the 3 core beliefs - "Respect for the individual", "Service to the customer" and "Excellence must be a way of life".
    ArnieTracey , Saturday, March 24, 2018 7:15 PM
    IBM's policy reminds me of the "If a citizen = 30 y.o., then mass execute such, else if they run then hunt and kill them one by one" social policy in the Michael York movie "Logan's Run."

    From Wiki, in case you don't know: "It depicts a utopian future society on the surface, revealed as a dystopia where the population and the consumption of resources are maintained in equilibrium by killing everyone who reaches the age of 30. The story follows the actions of Logan 5, a "Sandman" who has terminated others who have attempted to escape death, and is now faced with termination himself."

    Jr Jr , Saturday, March 24, 2018 4:37 PM
    Corporate loyalty has been gone for 25 years. This isnt surprising. But this age discrimination is blatantly illegal.

    [Oct 30, 2018] This might just be the deal that kills IBM because there's no way that they don't do a writedown of 90% of the value of this acquisition within 5 years.

    Oct 30, 2018 | arstechnica.com

    afidel, 2018-10-29T13:17:22-04:00

    tipoo wrote:
    Kilroy420 wrote:
    Perhaps someone can explain this... Red Hat's revenue and assets barely total about $5B. Even factoring in market share and capitalization, how the hey did IBM come up with $34B cash being a justifiable purchase price??

    Honestly, why would Red Hat have said no?

    You don't trade at your earnings, you trade at your share price, which for Red Hat and many other tech companies can be quite high on Price/Earnings. They were trading at 52 P/E. Investors factor in a bunch of things involving future growth, and particularly for any companies in the cloud can quite highly overvalue things.

    A 25 year old company trading at a P/E of 52 was already overpriced, buying at more than 2x that is insane. This might just be the deal that kills IBM because there's no way that they don't do a writedown of 90% of the value of this acquisition within 5 years.

    [Oct 30, 2018] The insttuinaliuzed stupidity of IBM brass is connected with the desire to get bonuses

    Oct 30, 2018 | arstechnica.com

    3 hours ago afidel wrote: show nested quotes Kilroy420 wrote: Perhaps someone can explain this... Red Hat's revenue and assets barely total about $5B. Even factoring in market share and capitalization, how the hey did IBM come up with $34B cash being a justifiable purchase price??

    Honestly, why would Red Hat have said no?

    You don't trade at your earnings, you trade at your share price, which for Red Hat and many other tech companies can be quite high on Price/Earnings. They were trading at 52 P/E. Investors factor in a bunch of things involving future growth, and particularly for any companies in the cloud can quite highly overvalue things.
    A 25 year old company trading at a P/E of 52 was already overpriced, buying at more than 2x that is insane. This might just be the deal that kills IBM because there's no way that they don't do a writedown of 90% of the value of this acquisition within 5 years.

    OK. I did 10 years at IBM Boulder..

    The problem isn't the purchase price or the probable write-down later.

    The problem is going to be with the executives above it. One thing I noticed at IBM is that the executives needed to put their own stamp on operations to justify their bonuses. We were on a 2 year cycle of execs coming in and saying "Whoa.. things are too centralized, we need to decentralize", then the next exec coming in and saying "things are too decentralized, we need to centralize".

    No IBM exec will get a bonus if they are over RedHat and exercise no authority over it. "We left it alone" generates nothing for the PBC. If they are in the middle of a re-org, then the specific metrics used to calculate their bonus can get waived. (Well, we took an unexpected hit this year on sales because we are re-orging to better optimize our resources). With that P/E, no IBM exec is going to get a bonus based on metrics. IBM execs do *not* care about what is good for IBM's business. They are all about gaming the bonuses. Customers aren't even on the list of things they care about.

    I am reminded of a coworker who quit in frustration back in the early 2000's due to just plain bad management. At the time, IBM was working on Project Monterey. This was supposed to be a Unix system across multiple architectures. My coworker sent his resignation out to all hands basically saying "This is stupid. we should just be porting Linux". He even broke down the relative costs. Billions for Project Monterey vs thousands for a Linux port. Six months later, we get an email from on-high announcing this great new idea that upper management had come up with. It would be far cheaper to just support Linux than write a new OS.. you'd think that would be a great thing, but the reality is that all it did was create the AIX 5L family, which was AIX 5 with an additional CD called Linux ToolBox, which was loaded with a few Linux programs ported to a specific version of AIX, but never kept current. IBM can make even great decisions into bad decisions.

    In May 2007, IBM announced the transition to LEAN. Sounds great, but this LEAN was not on the manufacturing side of the equation. It was in e-Business under Global Services. The new procedures were basically call center operations. Now, prior to this, IBM would have specific engineers for specific accounts. So, Major Bank would have that AIX admin, that Sun admin, that windows admin, etc. They knew who to call and those engineers would have docs and institutional knowledge of that account. During the LEAN announcement, Bob Moffat described the process. Accounts would now call an 800 number and the person calling would open a ticket. This would apply to *any* work request as all the engineers would be pooled and whoever had time would get the ticket. So, reset a password - ticket. So, load a tape - ticket. Install 20 servers - ticket.

    Now, the kicker to this was that the change was announced at 8AM and went live at noon. IBM gave their customers who represented over $12 Billion in contracts 4 *hours* notice that they were going to strip their support teams and treat them like a call center. (I will leave it as an exercise to the reader to determine if they would accept that kind of support after spending hundreds of millions on a support contract).

    (The pilot program for the LEAN process had its call center outsourced overseas, if that helps you try to figure out why IBM wanted to get rid of dedicated engineers and move to a call-center operation).

    [Oct 30, 2018] Arbitrators overwhelmingly favor employers

    Oct 30, 2018 | features.propublica.org

    When it comes to employment claims, studies have found that arbitrators overwhelmingly favor employers. Research by Cornell University law and labor relations specialist Alexander Colvin found that workers win only 19 percent of the time when their cases are arbitrated. By contrast, they win 36 percent of the time when they go to federal court, and 57 percent in state courts. Average payouts when an employee wins follow a similar pattern.

    Given those odds, and having signed away their rights to go to court, some laid-off IBM workers have chosen the one independent forum companies can't deny them: the U.S. Equal Employment Opportunity Commission. That's where Moos, the Long Beach systems security specialist, and several of her colleagues, turned for help when they were laid off. In their complaints to the agency, they said they'd suffered age discrimination because of the company's effort to "drastically change the IBM employee age mix to be seen as a startup."

    In its formal reply to the EEOC, IBM said that age couldn't have been a factor in their dismissals. Among the reasons it cited: The managers who decided on the layoffs were in their 40s and therefore older too.

    [Oct 30, 2018] I see the Performance Improvement Plan (PIP) problem as its nearly impossible to take the fact that we know PIP is a scam to court. IBM will say its an issue with you, your performance nose dived and your manager tried to fix that. You have to not only fight those simple statements, but prove that PIP is actually systematic worker abuse.

    Notable quotes:
    "... It is in fact a modern corporate horror story; it's also life at a modern corporation, period. ..."
    Oct 30, 2018 | features.propublica.org

    Cindy Gallop , Thursday, March 22, 2018 10:24 AM

    This makes for absolutely horrifying, chills-down-your-spine reading. A modern corporate horror story - worthy of a 'Black Mirror' episode. Phenomenal reporting by Ariana Tobin and Peter Gosselin. Thank you for exposing this. I hope this puts an end to this at IBM and makes every other company and industry doing this in covert and illegal ways think twice about continuing.
    Daisy S Cindy Gallop , in reply to" aria-label="in reply to">
    Agree..a well written expose'. I've been a victim of IBM's "PIP" (Performance Improvement Plan) strategy, not because of my real performance mind you, but rather, I wasn't billing hours between projects and it was hurting my unit's bottom line. The way IBM instructs management to structure the PIP, it's almost impossible to dig your way out, and it's intentional. If you have a PIP on your record, nobody in IBM wants to touch you, so in effect you're already gone.
    Paul Brinker Daisy S , in reply to" aria-label="in reply to">
    I see the PIP problem as its nearly impossible to take the fact that we know PIP is a scam to court. IBM will say its an issue with you, your performance nose dived and your manager tried to fix that. You have to not only fight those simple statements, but prove that PIP is actually systematic worker abuse.
    dragonflap Cindy Gallop , in reply to" aria-label="in reply to">
    Cindy, they've been doing this for at least 15-20 years, or even longer according to some of the previous comments. It is in fact a modern corporate horror story; it's also life at a modern corporation, period.
    Maria Stone dragonflap , in reply to" aria-label="in reply to">
    This started happening in the 1990's when they added 5 years to your age and years of service and ASKED you to retire.
    Matt_Z , Thursday, March 22, 2018 6:01 PM
    After over 35 years working there, 19 of them as a manager sending out more of those notification letters than I care to remember, I can vouch for the accuracy of this investigative work. It's an incredibly toxic and hostile environment and has been for the last 5 or so years. One of the items I was appraised on annually was how many US jobs I moved offshore. It was a relief when I received my notification letter after a two minute phone call telling me it was on the way. Sleeping at night and looking myself in the mirror aren't as hard as they were when I worked there.
    IBM will never regain any semblance of their former glory (or profit) until they begin to treat employees well again.
    With all the offshoring and resource actions with no backfill over the last 10 years, so much is broken. Customers suffer almost as much as the employees.
    I don't know how in the world they ended up on that LinkedIn list. Based on my fairly recent experience there are a half dozen happy employees in the US, and most of them are C level.
    Jennifer , Thursday, March 22, 2018 9:42 AM
    Well done. It squares well with my 18 years at IBM, watching resource action after resource action and hearing what my (unusually honest) manager told me. Things got progressively worse from 2012 onward. I never realized how stressful it was to live under the shadow of impending layoffs until I finally found the courage to leave in 2015. Best decision I've made.

    IBM answers to its shareholders, period. Employees are an afterthought - simply a means to an end. It's shameful. (That's not to say that individual people managers feel that way. I'm speaking about IBM executives.)

    Herb Jennifer , in reply to" aria-label="in reply to">
    Well, they almost answer to their shareholders, but that's after the IBM executives take their share. Ginni's compensation is tied to stock price (apparently not earnings) and buy backs maintain the stock price.
    Ribit , Thursday, March 22, 2018 8:17 AM
    If the criteria for layoff is being allegedly overpaid and allegedly a poor performer, then it follows that Grinnin' Jenny should have been let go long ago.
    Mr. Hand Ribit , in reply to" aria-label="in reply to">
    Yes! After the 4th of those 22 consecutive quarters of declining revenues. And she's no spring chicken either. ;-)
    DDRLSGC Ribit ,
    Especially these CEOs who have ran their companies into the ground for the last 38 years.
    owswitch , Thursday, March 22, 2018 8:58 AM
    Just another fine example of how people become disposable.
    And, when it comes to cost containment and profit maximization, there is no place for ethics in American business.
    Businesses can lie just as well as politicians.

    Millennials are smart to avoid this kind of problem by remaining loyal only to themselves. Companies certainly define anyone as replaceable - even their over-paid CEO's.

    DDRLSGC owswitch

    The millennials saw what happen to their parents and grandparents getting screwed over after a life time of work and loyalty. You can't blame them for not caring about so called traditional American work ethics and then they are attacked for not having them when the business leaders threw away all those value decades ago.

    Some of these IBM people have themselves to blame for cutting their own economic throats for fighting against unions, putting in politicians who are pro-business and thinking that their education and high paying white collar STEM jobs will give them economic immunity.

    If America was more of a free market and free enterprise instead of being more of a close market of oligarchies and monopolies, and strong government regulations, companies would think twice about treating their workforce badly because they know their workforce would leave for other companies or start up their own companies without too much of a hassle.

    HiJinks DDRLSGC

    Under the old IBM you could not get a union as workers were treated with dignity and respect - see the 3 core beliefs. Back then a union would not have accomplished anything.

    DDRLSGC HiJinks
    Doesn't matter if it was the old IBM or new IBM, you wonder how many still actually voted against their economic interests in the political elections that in the long run undermine labor rights in this country.
    HiJinks DDRLSGC
    So one shouldn't vote? Neither party cares about the average voter except at election time. Both sell out to Big Business - after all, that's where the big campaign donations come from. If you believe only one party favors Big Business, then you have been watching to much "fake news". Even the unions know they have been sold out by both and are wising up. How many of those jobs were shipped overseas the past 25 years.
    DDRLSGC HiJinks ,
    No, they should have been more active in voting for politicians who would look after the workers' rights in this country for the last 38 years plus ensuring that Congressional people and the president would not be packing the court system with pro-business judges. Sorry, but it is the Big Business that have been favoring the Republican Party for a long, long time and the jobs have been shipped out for the last 38 years.

    [Oct 30, 2018] The women who run large US companies are as shallow and ruthless as the sociopathic men.

    Oct 30, 2018 | features.propublica.org

    Bob Gort , Saturday, March 31, 2018 9:49 PM

    Age discrimination has been standard operating procedure in IT for at least 30 years. And there are no significant consequences, if any consequences at all, for doing it in a blatant fashion. The companies just need to make sure the quota of H1B visas is increased when they are doing this on an IBM scale!
    900DeadWomen Bob Gort , in reply to" aria-label="in reply to">
    Age discrimination and a myriad other forms of discrimination have been standard operating procedure in the US. Period. Full stop. No need to equivocate.
    Anon , Friday, March 30, 2018 12:49 PM
    Wait for a few years and we can see the same happening to "millenials".

    And the women who run these companies are as shallow and ruthless as the sociopathic men.

    [Oct 30, 2018] Soon after I started, the company fired hundreds of 50-something employees and put we "kids" in their jobs. Seeing that employee loyalty was a one way street at that place, I left after a couple of years. Best career move I ever made.

    Oct 30, 2018 | features.propublica.org

    Al Romig , Wednesday, April 18, 2018 5:20 AM

    As a new engineering graduate, I joined a similar-sized multinational US-based company in the early '70s. Their recruiting pitch was, "Come to work here, kid. Do your job, keep your nose clean, and you will enjoy great, secure work until you retire on easy street".

    Soon after I started, the company fired hundreds of 50-something employees and put we "kids" in their jobs. Seeing that employee loyalty was a one way street at that place, I left after a couple of years. Best career move I ever made.

    GoingGone , Friday, April 13, 2018 6:06 PM
    As a 25yr+ vet of IBM, I can confirm that this article is spot-on true. IBM used to be a proud and transparent company that clearly demonstrated that it valued its employees as much as it did its stock performance or dividend rate or EPS, simply because it is good for business. Those principles helped make and keep IBM atop the business world as the most trusted international brand and business icon of success for so many years. In 2000, all that changed when Sam Palmisano became the CEO. Palmisano's now infamous "Roadmap 2015" ran the company into the ground through its maniacal focus on increasing EPS at any and all costs. Literally. Like, its employees, employee compensation, benefits, skills, and education opportunities. Like, its products, product innovation, quality, and customer service. All of which resulted in the devastation of its technical capability and competitiveness, employee engagement, and customer loyalty. Executives seemed happy enough as their compensation grew nicely with greater financial efficiencies, and Palisano got a sweet $270M+ exit package in 2012 for a job well done. The new CEO, Ginni Rometty has since undergone a lot of scrutiny for her lack of business results, but she was screwed from day one. Of course, that doesn't leave her off the hook for the business practices outlined in the article, but what do you expect: she was hand picked by Palmisano and approved by the same board that thought Palmisano was golden.
    Paul V Sutera , Tuesday, April 3, 2018 7:33 PM
    In 1994, I saved my job at IBM for the first time, and survived. But I was 36 years old. I sat down at the desk of a man in his 50s, and found a few odds and ends left for me in the desk. Almost 20 years later, it was my turn to go. My health and well-being is much better now. Less money but better health. The sins committed by management will always be: "I was just following orders".

    [Oct 30, 2018] Verizon is making similar moves, only sending them to third-party outsourcers instead of laying off.

    Oct 30, 2018 | arstechnica.com

    atomic.banjo , Smack-Fu Master, in training et Subscriptor 5 hours ago New Poster

    Legatum_of_Kain wrote:
    It is not a good thing towards employees that are getting fired before retirenment.

    https://features.propublica.org/ibm/ibm ... n-workers/

    Verizon is making similar moves, only sending them to third-party outsourcers instead of laying off.

    [Oct 30, 2018] IBM age discrimination

    Notable quotes:
    "... Correction, March 24, 2018: Eileen Maroney lives in Aiken, South Carolina. The name of her city was incorrect in the original version of this story. ..."
    Oct 30, 2018 | features.propublica.org

    Consider, for example, a planning presentation that former IBM executives said was drafted by heads of a business unit carved out of IBM's once-giant software group and charged with pursuing the "C," or cloud, portion of the company's CAMS strategy.

    The presentation laid out plans for substantially altering the unit's workforce. It was shown to company leaders including Diane Gherson, the senior vice president for human resources, and James Kavanaugh, recently elevated to chief financial officer. Its language was couched in the argot of "resources," IBM's term for employees, and "EP's," its shorthand for early professionals or recent college graduates.

    Among the goals: "Shift headcount mix towards greater % of Early Professional hires." Among the means: "[D]rive a more aggressive performance management approach to enable us to hire and replace where needed, and fund an influx of EPs to correct seniority mix." Among the expected results: "[A] significant reduction in our workforce of 2,500 resources."

    A slide from a similar presentation prepared last spring for the same leaders called for "re-profiling current talent" to "create room for new talent." Presentations for 2015 and 2016 for the 50,000-employee software group also included plans for "aggressive performance management" and emphasized the need to "maintain steady attrition to offset hiring."

    IBM declined to answer questions about whether either presentation was turned into company policy. The description of the planned moves matches what hundreds of older ex-employees told ProPublica they believe happened to them: They were ousted because of their age. The company used their exits to hire replacements, many of them young; to ship their work overseas; or to cut its overall headcount.

    Ed Alpern, now 65, of Austin, started his 39-year run with IBM as a Selectric typewriter repairman. He ended as a project manager in October of 2016 when, he said, his manager told him he could either leave with severance and other parting benefits or be given a bad job review -- something he said he'd never previously received -- and risk being fired without them.

    Albert Poggi, now 70, was a three-decade IBM veteran and ran the company's Palisades, New York, technical center where clients can test new products. When notified in November of 2016 he was losing his job to layoff, he asked his bosses why, given what he said was a history of high job ratings. "They told me," he said, "they needed to fill it with someone newer."

    The presentations from the software group, as well as the stories of ex-employees like Alpern and Poggi, square with internal documents from two other major IBM business units. The documents for all three cover some or all of the years from 2013 through the beginning of 2018 and deal with job assessments, hiring, firing and layoffs.

    The documents detail practices that appear at odds with how IBM says it treats its employees. In many instances, the practices in effect, if not intent, tilt against the company's older U.S. workers.

    For example, IBM spokespeople and lawyers have said the company never considers a worker's age in making decisions about layoffs or firings.

    But one 2014 document reviewed by ProPublica includes dates of birth. An ex-IBM employee familiar with the process said executives from one business unit used it to decide about layoffs or other job changes for nearly a thousand workers, almost two-thirds of them over 50.

    Documents from subsequent years show that young workers are protected from cuts for at least a limited period of time. A 2016 slide presentation prepared by the company's global technology services unit, titled "U.S. Resource Action Process" and used to guide managers in layoff procedures, includes bullets for categories considered "ineligible" for layoff. Among them: "early professional hires," meaning recent college graduates.

    In responding to age-discrimination complaints that ex-employees file with the EEOC, lawyers for IBM say that front-line managers make all decisions about who gets laid off, and that their decisions are based strictly on skills and job performance, not age.

    But ProPublica reviewed spreadsheets that indicate front-line managers hardly acted alone in making layoff calls. Former IBM managers said the spreadsheets were prepared for upper-level executives and kept continuously updated. They list hundreds of employees together with codes like "lift and shift," indicating that their jobs were to be lifted from them and shifted overseas, and details such as whether IBM's clients had approved the change.

    An examination of several of the spreadsheets suggests that, whatever the criteria for assembling them, the resulting list of those marked for layoff was skewed toward older workers. A 2016 spreadsheet listed more than 400 full-time U.S. employees under the heading "REBAL," which refers to "rebalancing," the process that can lead to laying off workers and either replacing them or shifting the jobs overseas. Using the job search site LinkedIn, ProPublica was able to locate about 100 of these employees and then obtain their ages through public records. Ninety percent of those found were 40 or older. Seventy percent were over 50.

    IBM frequently cites its history of encouraging diversity in its responses to EEOC complaints about age discrimination. "IBM has been a leader in taking positive actions to ensure its business opportunities are made available to individuals without regard to age, race, color, gender, sexual orientation and other categories," a lawyer for the company wrote in a May 2017 letter. "This policy of non-discrimination is reflected in all IBM business activities."

    But ProPublica found at least one company business unit using a point system that disadvantaged older workers. The system awarded points for attributes valued by the company. The more points a person garnered, according to the former employee, the more protected she or he was from layoff or other negative job change; the fewer points, the more vulnerable.

    The arrangement appears on its face to favor younger newcomers over older veterans. Employees were awarded points for being relatively new at a job level or in a particular role. Those who worked for IBM for fewer years got more points than those who'd been there a long time.

    The ex-employee familiar with the process said a 2014 spreadsheet from that business unit, labeled "IBM Confidential," was assembled to assess the job prospects of more than 600 high-level employees, two-thirds of them from the U.S. It included employees' years of service with IBM, which the former employee said was used internally as a proxy for age. Also listed was an assessment by their bosses of their career trajectories as measured by the highest job level they were likely to attain if they remained at the company, as well as their point scores.

    The tilt against older workers is evident when employees' years of service are compared with their point scores. Those with no points and therefore most vulnerable to layoff had worked at IBM an average of more than 30 years; those with a high number of points averaged half that.

    Perhaps even more striking is the comparison between employees' service years and point scores on the one hand and their superiors' assessments of their career trajectories on the other.

    Along with many American employers, IBM has argued it needs to shed older workers because they're no longer at the top of their games or lack "contemporary" skills.

    But among those sized up in the confidential spreadsheet, fully 80 percent of older employees -- those with the most years of service but no points and therefore most vulnerable to layoff -- were rated by superiors as good enough to stay at their current job levels or be promoted. By contrast, only a small percentage of younger employees with a high number of points were similarly rated.

    "No major company would use tools to conduct a layoff where a disproportionate share of those let go were African Americans or women," said Cathy Ventrell-Monsees, senior attorney adviser with the EEOC and former director of age litigation for the senior lobbying giant AARP. "There's no difference if the tools result in a disproportionate share being older workers."

    In addition to the point system that disadvantaged older workers in layoffs, other documents suggest that IBM has made increasingly aggressive use of its job-rating machinery to pave the way for straight-out firings, or what the company calls "management-initiated separations." Internal documents suggest that older workers were especially targets.

    Like in many companies, IBM employees sit down with their managers at the start of each year and set goals for themselves. IBM graded on a scale of 1 to 4, with 1 being top-ranked.

    Those rated as 3 or 4 were given formal short-term goals known as personal improvement plans, or PIPs. Historically many managers were lenient, especially toward those with 3s whose ratings had dropped because of forces beyond their control, such as a weakness in the overall economy, ex-employees said.

    But within the past couple of years, IBM appears to have decided the time for leniency was over. For example, a software group planning document for 2015 said that, over and above layoffs, the unit should seek to fire about 3,000 of the unit's 50,000-plus workers.

    To make such deep cuts, the document said, executives should strike an "aggressive performance management posture." They needed to double the share of employees given low 3 and 4 ratings to at least 6.6 percent of the division's workforce. And because layoffs cost the company more than outright dismissals or resignations, the document said, executives should make sure that more than 80 percent of those with low ratings get fired or forced to quit.

    Finally, the 2015 document said the division should work "to attract the best and brightest early professionals" to replace up to two-thirds of those sent packing. A more recent planning document -- the presentation to top executives Gherson and Kavanaugh for a business unit carved out of the software group -- recommended using similar techniques to free up money by cutting current employees to fund an "influx" of young workers.

    In a recent interview, Poggi said he was resigned to being laid off. "Everybody at IBM has a bullet with their name on it," he said. Alpern wasn't nearly as accepting of being threatened with a poor job rating and then fired.

    Alpern had a particular reason for wanting to stay on at IBM, at least until the end of last year. His younger son, Justin, then a high school senior, had been named a National Merit semifinalist. Alpern wanted him to be able to apply for one of the company's Watson scholarships. But IBM had recently narrowed eligibility so only the children of current employees could apply, not also retirees as it was until 2014.

    Alpern had to make it through December for his son to be eligible.

    But in August, he said, his manager ordered him to retire. He sought to buy time by appealing to superiors. But he said the manager's response was to threaten him with a bad job review that, he was told, would land him on a PIP, where his work would be scrutinized weekly. If he failed to hit his targets -- and his managers would be the judges of that -- he'd be fired and lose his benefits.

    Alpern couldn't risk it; he retired on Oct. 31. His son, now a freshman on the dean's list at Texas A&M University, didn't get to apply.

    "I can think of only a couple regrets or disappointments over my 39 years at IBM,"" he said, "and that's one of them."

    'Congratulations on Your Retirement!'

    Like any company in the U.S., IBM faces few legal constraints to reducing the size of its workforce. And with its no-disclosure strategy, it eliminated one of the last regular sources of information about its employment practices and the changing size of its American workforce.

    But there remained the question of whether recent cutbacks were big enough to trigger state and federal requirements for disclosure of layoffs. And internal documents, such as a slide in a 2016 presentation titled "Transforming to Next Generation Digital Talent," suggest executives worried that "winning the talent war" for new young workers required IBM to improve the "attractiveness of (its) culture and work environment," a tall order in the face of layoffs and firings.

    So the company apparently has sought to put a softer face on its cutbacks by recasting many as voluntary rather than the result of decisions by the firm. One way it has done this is by converting many layoffs to retirements.

    Some ex-employees told ProPublica that, faced with a layoff notice, they were just as happy to retire. Others said they felt forced to accept a retirement package and leave. Several actively objected to the company treating their ouster as a retirement. The company nevertheless processed their exits as such.

    Project manager Ed Alpern's departure was treated in company paperwork as a voluntary retirement. He didn't see it that way, because the alternative he said he was offered was being fired outright.

    Lorilynn King, a 55-year-old IT specialist who worked from her home in Loveland, Colorado, had been with IBM almost as long as Alpern by May 2016 when her manager called to tell her the company was conducting a layoff and her name was on the list.

    King said the manager told her to report to a meeting in Building 1 on IBM's Boulder campus the following day. There, she said, she found herself in a group of other older employees being told by an IBM human resources representative that they'd all be retiring. "I have NO intention of retiring," she remembers responding. "I'm being laid off."

    ProPublica has collected documents from 15 ex-IBM employees who got layoff notices followed by a retirement package and has talked with many others who said they received similar paperwork. Critics say the sequence doesn't square well with the law.

    "This country has banned mandatory retirement," said Seiner, the University of South Carolina law professor and former EEOC appellate lawyer. "The law says taking a retirement package has to be voluntary. If you tell somebody 'Retire or we'll lay you off or fire you,' that's not voluntary."

    Until recently, the company's retirement paperwork included a letter from Rometty, the CEO, that read, in part, "I wanted to take this opportunity to wish you well on your retirement While you may be retiring to embark on the next phase of your personal journey, you will always remain a valued and appreciated member of the IBM family." Ex-employees said IBM stopped sending the letter last year.

    IBM has also embraced another practice that leads workers, especially older ones, to quit on what appears to be a voluntary basis. It substantially reversed its pioneering support for telecommuting, telling people who've been working from home for years to begin reporting to certain, often distant, offices. Their other choice: Resign.

    David Harlan had worked as an IBM marketing strategist from his home in Moscow, Idaho, for 15 years when a manager told him last year of orders to reduce the performance ratings of everybody at his pay grade. Then in February last year, when he was 50, came an internal video from IBM's new senior vice president, Michelle Peluso, which announced plans to improve the work of marketing employees by ordering them to work "shoulder to shoulder." Those who wanted to stay on would need to "co-locate" to offices in one of six cities.

    Early last year, Harlan received an email congratulating him on "the opportunity to join your team in Raleigh, North Carolina." He had 30 days to decide on the 2,600-mile move. He resigned in June.

    David Harlan worked for IBM for 15 years from his home in Moscow, Idaho, where he also runs a drama company. Early last year, IBM offered him a choice: Move 2,600 miles to Raleigh-Durham to begin working at an office, or resign. He left in June. (Rajah Bose for ProPublica)

    After the Peluso video was leaked to the press, an IBM spokeswoman told the Wall Street Journal that the " vast majority " of people ordered to change locations and begin reporting to offices did so. IBM Vice President Ed Barbini said in an initial email exchange with ProPublica in July that the new policy affected only about 2,000 U.S. employees and that "most" of those had agreed to move.

    But employees across a wide range of company operations, from the systems and technology group to analytics, told ProPublica they've also been ordered to co-locate in recent years. Many IBMers with long service said that they quit rather than sell their homes, pull children from school and desert aging parents. IBM declined to say how many older employees were swept up in the co-location initiative.

    "They basically knew older employees weren't going to do it," said Eileen Maroney, a 63-year-old IBM product manager from Aiken, South Carolina, who, like Harlan, was ordered to move to Raleigh or resign. "Older people aren't going to move. It just doesn't make any sense." Like Harlan, Maroney left IBM last June.

    Having people quit rather than being laid off may help IBM avoid disclosing how much it is shrinking its U.S. workforce and where the reductions are occurring.

    Under the federal WARN Act , adopted in the wake of huge job cuts and factory shutdowns during the 1980s, companies laying off 50 or more employees who constitute at least one-third of an employer's workforce at a site have to give advance notice of layoffs to the workers, public agencies and local elected officials.

    Similar laws in some states where IBM has a substantial presence are even stricter. California, for example, requires advanced notice for layoffs of 50 or more employees, no matter what the share of the workforce. New York requires notice for 25 employees who make up a third.

    Because the laws were drafted to deal with abrupt job cuts at individual plants, they can miss reductions that occur over long periods among a workforce like IBM's that was, at least until recently, widely dispersed because of the company's work-from-home policy.

    IBM's training sessions to prepare managers for layoffs suggest the company was aware of WARN thresholds, especially in states with strict notification laws such as California. A 2016 document entitled "Employee Separation Processing" and labeled "IBM Confidential" cautions managers about the "unique steps that must be taken when processing separations for California employees."

    A ProPublica review of five years of WARN disclosures for a dozen states where the company had large facilities that shed workers found no disclosures in nine. In the other three, the company alerted authorities of just under 1,000 job cuts -- 380 in California, 369 in New York and 200 in Minnesota. IBM's reported figures are well below the actual number of jobs the company eliminated in these states, where in recent years it has shuttered, sold off or leveled plants that once employed vast numbers.

    By contrast, other employers in the same 12 states reported layoffs last year alone totaling 215,000 people. They ranged from giant Walmart to Ostrom's Mushroom Farms in Washington state.

    Whether IBM operated within the rules of the WARN act, which are notoriously fungible, could not be determined because the company declined to provide ProPublica with details on its layoffs.

    A Second Act, But Poorer

    W ith 35 years at IBM under his belt, Ed Miyoshi had plenty of experience being pushed to take buyouts, or early retirement packages, and refusing them. But he hadn't expected to be pushed last fall.

    Miyoshi, of Hopewell Junction, New York, had some years earlier launched a pilot program to improve IBM's technical troubleshooting. With the blessing of an IBM vice president, he was busily interviewing applicants in India and Brazil to staff teams to roll the program out to clients worldwide.

    The interviews may have been why IBM mistakenly assumed Miyoshi was a manager, and so emailed him to eliminate the one U.S.-based employee still left in his group.

    "That was me," Miyoshi realized.

    In his sign-off email to colleagues shortly before Christmas 2016, Miyoshi, then 57, wrote: "I am too young and too poor to stop working yet, so while this is good-bye to my IBM career, I fully expect to cross paths with some of you very near in the future."

    He did, and perhaps sooner than his colleagues had expected; he started as a subcontractor to IBM about two weeks later, on Jan. 3.

    Miyoshi is an example of older workers who've lost their regular IBM jobs and been brought back as contractors. Some of them -- not Miyoshi -- became contract workers after IBM told them their skills were out of date and no longer needed.

    Employment law experts said that hiring ex-employees as contractors can be legally dicey. It raises the possibility that the layoff of the employee was not for the stated reason but perhaps because they were targeted for their age, race or gender.

    IBM appears to recognize the problem. Ex-employees say the company has repeatedly told managers -- most recently earlier this year -- not to contract with former employees or sign on with third-party contracting firms staffed by ex-IBMers. But ProPublica turned up dozens of instances where the company did just that.

    Only two weeks after IBM laid him off in December 2016, Ed Miyoshi of Hopewell Junction, New York, started work as a subcontractor to the company. But he took a $20,000-a-year pay cut. "I'm not a millionaire, so that's a lot of money to me," he says. (Demetrius Freeman for ProPublica)

    Responding to a question in a confidential questionnaire from ProPublica, one 35-year company veteran from New York said he knew exactly what happened to the job he left behind when he was laid off. "I'M STILL DOING IT. I got a new gig eight days after departure, working for a third-party company under contract to IBM doing the exact same thing."

    In many cases, of course, ex-employees are happy to have another job, even if it is connected with the company that laid them off.

    Henry, the Columbus-based sales and technical specialist who'd been with IBM's "resiliency services" unit, discovered that he'd lost his regular IBM job because the company had purchased an Indian firm that provided the same services. But after a year out of work, he wasn't going to turn down the offer of a temporary position as a subcontractor for IBM, relocating data centers. It got money flowing back into his household and got him back where he liked to be, on the road traveling for business.

    The compensation most ex-IBM employees make as contractors isn't comparable. While Henry said he collected the same dollar amount, it didn't include health insurance, which cost him $1,325 a month. Miyoshi said his paycheck is 20 percent less than what he made as an IBM regular.

    "I took an over $20,000 hit by becoming a contractor. I'm not a millionaire, so that's a lot of money to me," Miyoshi said.

    And lower pay isn't the only problem ex-IBM employees-now-subcontractors face. This year, Miyoshi's payable hours have been cut by an extra 10 "furlough days." Internal documents show that IBM repeatedly furloughs subcontractors without pay, often for two, three or more weeks a quarter. In some instances, the furloughs occur with little advance notice and at financially difficult moments. In one document, for example, it appears IBM managers, trying to cope with a cost overrun spotted in mid-November, planned to dump dozens of subcontractors through the end of the year, the middle of the holiday season.

    Former IBM employees now on contract said the company controls costs by notifying contractors in the midst of projects they have to take pay cuts or lose the work. Miyoshi said that he originally started working for his third-party contracting firm for 10 percent less than at IBM, but ended up with an additional 10 percent cut in the middle of 2017, when IBM notified the contractor it was slashing what it would pay.

    For many ex-employees, there are few ways out. Henry, for example, sought to improve his chances of landing a new full-time job by seeking assistance to finish a college degree through a federal program designed to retrain workers hurt by offshoring of jobs.

    But when he contacted the Ohio state agency that administers the Trade Adjustment Assistance, or TAA, program, which provides assistance to workers who lose their jobs for trade-related reasons, he was told IBM hadn't submitted necessary paperwork. State officials said Henry could apply if he could find other IBM employees who were laid off with him, information that the company doesn't provide.

    TAA is overseen by the Labor Department but is operated by states under individual agreements with Washington, so the rules can vary from state to state. But generally employers, unions, state agencies and groups of employers can petition for training help and cash assistance. Labor Department data compiled by the advocacy group Global Trade Watch shows that employers apply in about 40 percent of cases. Some groups of IBM workers have obtained retraining funds when they or their state have applied, but records dating back to the early 1990s show IBM itself has applied for and won taxpayer assistance only once, in 2008, for three Chicago-area workers whose jobs were being moved to India.

    Teasing New Jobs

    A s IBM eliminated thousands of jobs in 2016, David Carroll, a 52-year-old Austin software engineer, thought he was safe.

    His job was in mobile development, the "M" in the company's CAMS strategy. And if that didn't protect him, he figured he was only four months shy of qualifying for a program that gives employees who leave within a year of their three-decade mark access to retiree medical coverage and other benefits.

    But the layoff notice Carroll received March 2 gave him three months -- not four -- to come up with another job. Having been a manager, he said he knew the gantlet he'd have to run to land a new position inside IBM.

    Still, he went at it hard, applying for more than 50 IBM jobs, including one for a job he'd successfully done only a few years earlier. For his effort, he got one offer -- the week after he'd been forced to depart. He got severance pay but lost access to what would have been more generous benefits.

    Edward Kishkill, then 60, of Hillsdale, New Jersey, had made a similar calculation.

    A senior systems engineer, Kishkill recognized the danger of layoffs, but assumed he was immune because he was working in systems security, the "S" in CAMS and another hot area at the company.

    The precaution did him no more good than it had Carroll. Kishkill received a layoff notice the same day, along with 17 of the 22 people on his systems security team, including Diane Moos. The notice said that Kishkill could look for other jobs internally. But if he hadn't landed anything by the end of May, he was out.

    With a daughter who was a senior in high school headed to Boston University, he scrambled to apply, but came up dry. His last day was May 31, 2016.

    For many, the fruitless search for jobs within IBM is the last straw, a final break with the values the company still says it embraces. Combined with the company's increasingly frequent request that departing employees train their overseas replacements, it has left many people bitter. Scores of ex-employees interviewed by ProPublica said that managers with job openings told them they weren't allowed to hire from layoff lists without getting prior, high-level clearance, something that's almost never given.

    ProPublica reviewed documents that show that a substantial share of recent IBM layoffs have involved what the company calls "lift and shift," lifting the work of specific U.S. employees and shifting it to specific workers in countries such as India and Brazil. For example, a document summarizing U.S. employment in part of the company's global technology services division for 2015 lists nearly a thousand people as layoff candidates, with the jobs of almost half coded for lift and shift.

    Ex-employees interviewed by ProPublica said the lift-and-shift process required their extensive involvement. For example, shortly after being notified she'd be laid off, Kishkill's colleague, Moos, was told to help prepare a "knowledge transfer" document and begin a round of conference calls and email exchanges with two Indian IBM employees who'd be taking over her work. Moos said the interactions consumed much of her last three months at IBM.

    Next Chapters

    W hile IBM has managed to keep the scale and nature of its recent U.S. employment cuts largely under the public's radar, the company drew some unwanted attention during the 2016 presidential campaign, when then-candidate Donald Trump lambasted it for eliminating 500 jobs in Minnesota, where the company has had a presence for a half century, and shifting the work abroad.

    The company also has caught flak -- in places like Buffalo, New York ; Dubuque, Iowa ; Columbia, Missouri , and Baton Rouge, Louisiana -- for promising jobs in return for state and local incentives, then failing to deliver. In all, according to public officials in those and other places, IBM promised to bring on 3,400 workers in exchange for as much as $250 million in taxpayer financing but has hired only about half as many.

    After Trump's victory, Rometty, in a move at least partly aimed at courting the president-elect, pledged to hire 25,000 new U.S. employees by 2020. Spokesmen said the hiring would increase IBM's U.S. employment total, although, given its continuing job cuts, the addition is unlikely to approach the promised hiring total.

    When The New York Times ran a story last fall saying IBM now has more employees in India than the U.S., Barbini, the corporate spokesman, rushed to declare, "The U.S. has always been and remains IBM's center of gravity." But his stream of accompanying tweets and graphics focused as much on the company's record for racking up patents as hiring people.

    IBM has long been aware of the damage its job cuts can do to people. In a series of internal training documents to prepare managers for layoffs in recent years, the company has included this warning: "Loss of a job often triggers a grief reaction similar to what occurs after a death."

    Most, though not all, of the ex-IBM employees with whom ProPublica spoke have weathered the loss and re-invented themselves.

    Marjorie Madfis, the digital marketing strategist, couldn't land another tech job after her 2013 layoff, so she headed in a different direction. She started a nonprofit called Yes She Can Inc. that provides job skills development for young autistic women, including her 21-year-old daughter.

    After almost two years of looking and desperate for useful work, Brian Paulson, the widely traveled IBM senior manager, applied for and landed a position as a part-time rural letter carrier in Plano, Texas. He now works as a contract project manager for a Las Vegas gaming and lottery firm.

    Ed Alpern, who started at IBM as a Selectric typewriter repairman, watched his son go on to become a National Merit Scholar at Texas A&M University, but not a Watson scholarship recipient.

    Lori King, the IT specialist and 33-year IBM veteran who's now 56, got in a parting shot. She added an addendum to the retirement papers the firm gave her that read in part: "It was never my plan to retire earlier than at least age 60 and I am not committing to retire. I have been informed that I am impacted by a resource action effective on 2016-08-22, which is my last day at IBM, but I am NOT retiring."

    King has aced more than a year of government-funded coding boot camps and university computer courses, but has yet to land a new job.

    David Harlan still lives in Moscow, Idaho, after refusing IBM's "invitation" to move to North Carolina, and is artistic director of the Moscow Art Theatre (Too).

    Ed Miyoshi is still a technical troubleshooter working as a subcontractor for IBM.

    Ed Kishkill, the senior systems engineer, works part time at a local tech startup, but pays his bills as an associate at a suburban New Jersey Staples store.

    This year, Paul Henry was back on the road, working as an IBM subcontractor in Detroit, about 200 miles from where he lived in Columbus. On Jan. 8, he put in a 14-hour day and said he planned to call home before turning in. He died in his sleep.

    Correction, March 24, 2018: Eileen Maroney lives in Aiken, South Carolina. The name of her city was incorrect in the original version of this story.

    Do you have information about age discrimination at IBM?

    Let us know.

    Peter Gosselin joined ProPublica as a contributing reporter in January 2017 to cover aging. He has covered the U.S. and global economies for, among others, the Los Angeles Times and The Boston Globe, focusing on the lived experiences of working people. He is the author of "High Wire: The Precarious Financial Lives of American Families."

    Ariana Tobin is an engagement reporter at ProPublica, where she works to cultivate communities to inform our coverage. She was previously at The Guardian and WNYC. Ariana has also worked as digital producer for APM's Marketplace and contributed to outlets including The New Republic , On Being , the St. Louis Beacon and Bustle .

    Production by Joanna Brenner and Hannah Birch . Art direction by David Sleight . Illustrations by Richard Borge .

    [Oct 30, 2018] Cutting 'Old Heads' at IBM

    Notable quotes:
    "... I took an early retirement package when IBM first started downsizing. I had 30 years with them, but I could see the writing on the wall so I got out. I landed an exec job with a biotech company some years later and inherited an IBM consulting team that were already engaged. I reviewed their work for 2 months then had the pleasure of terminating the contract and actually escorting the team off the premises because the work product was so awful. ..."
    "... Every former or prospective IBM employee is a potential future IBM customer or partner. How you treat them matters! ..."
    "... I advise IBM customers now. My biggest professional achievements can be measured in how much revenue IBM lost by my involvement - millions. Favorite is when IBM paid customer to stop the bleeding. ..."
    Oct 30, 2018 | features.propublica.org

    I took an early retirement package when IBM first started downsizing. I had 30 years with them, but I could see the writing on the wall so I got out. I landed an exec job with a biotech company some years later and inherited an IBM consulting team that were already engaged. I reviewed their work for 2 months then had the pleasure of terminating the contract and actually escorting the team off the premises because the work product was so awful.

    They actually did a presentation of their interim results - but it was a 52 slide package that they had presented to me in my previous job but with the names and numbers changed. see more

    DarthVaderMentor dauwkus , Thursday, April 5, 2018 4:43 PM

    Intellectual Capital Re-Use! LOL! Not many people realize in IBM that many, if not all of the original IBM Consulting Group materials were made under the Type 2 Materials clause of the IBM Contract, which means the customers actually owned the IP rights of the documents. Can you imagine the mess if just one customer demands to get paid for every re-use of the IP that was developed for them and then re-used over and over again?
    NoGattaca dauwkus , Monday, May 7, 2018 5:37 PM
    Beautiful! Yea, these companies so fast to push experienced people who have dedicated their lives to the firm - how can you not...all the hours and commitment it takes - way underestimate the power of the network of those left for dead and their influence in that next career gig. Memories are long...very long when it comes to experiences like this.
    davosil North_40 , Sunday, March 25, 2018 5:19 PM
    True dat! Every former or prospective IBM employee is a potential future IBM customer or partner. How you treat them matters!
    Playing Defense North_40 , Tuesday, April 3, 2018 4:41 PM
    I advise IBM customers now. My biggest professional achievements can be measured in how much revenue IBM lost by my involvement - millions. Favorite is when IBM paid customer to stop the bleeding.

    [Oct 30, 2018] It s all about making the numbers so the management can present a Potemkin Village of profits and ever-increasing growth sufficient to get bonuses. There is no relation to any sort of quality or technological advancement, just HR 3-card monte

    Notable quotes:
    "... It's no coincidence whatsoever that Diane Gherson, mentioned prominently in the article, blasted out an all-employees email crowing about IBM being a great place to work according to (ahem) LinkedIn. I desperately want to post a link to this piece in the corporate Slack, but that would get me fired immediately instead of in a few months at the next "resource action." It's been a whole 11 months since our division had one, so I know one is coming soon. ..."
    "... I used to say when I was there that: "After every defeat, they pin medals on the generals and shoot the soldiers". ..."
    "... 1990 is also when H-1B visa rules were changed so that companies no longer had to even attempt to hire an American worker as long as the job paid $60,000, which hasn't changed since. This article doesn't even mention how our work visa system facilitated and even rewarded this abuse of Americans. ..."
    "... Well, starting in the 1980s, the American management was allowed by Reagan to get rid of its workforce. ..."
    "... It's all about making the numbers so the management can present a Potemkin Village of profits and ever-increasing growth sufficient to get bonuses. There is no relation to any sort of quality or technological advancement, just HR 3-card monte. They have installed air bearing in Old Man Watson's coffin as it has been spinning ever faster ..."
    "... Corporate America executive management is all about stock price management. Their bonus's in the millions of dollars are based on stock performance. With IBM's poor revenue performance since Ginny took over, profits can only be maintained by cost reduction. Look at the IBM executive's bonus's throughout the last 20 years and you can see that all resource actions have been driven by Palmisano's and Rominetty's greed for extravagant bonus's. ..."
    "... Also worth noting is that IBM drastically cut the cap on it's severance pay calculation. Almost enough to make me regret not having retired before that changed. ..."
    "... Yeah, severance started out at 2 yrs pay, went to 1 yr, then to 6 mos. and is now 1 month. ..."
    "... You need to investigate AT&T as well, as they did the same thing. I was 'sold' by IBM to AT&T as part of he Network Services operation. AT&T got rid of 4000 of the 8000 US employees sent to AT&T within 3 years. Nearly everyone of us was a 'senior' employee. ..."
    Oct 30, 2018 | disqus.com

    dragonflap7 months ago I'm a 49-year-old SW engineer who started at IBM as part of an acquisition in 2000. I got laid off in 2002 when IBM started sending reqs to Bangalore in batches of thousands. After various adventures, I rejoined IBM in 2015 as part of the "C" organization referenced in the article.

    It's no coincidence whatsoever that Diane Gherson, mentioned prominently in the article, blasted out an all-employees email crowing about IBM being a great place to work according to (ahem) LinkedIn. I desperately want to post a link to this piece in the corporate Slack, but that would get me fired immediately instead of in a few months at the next "resource action." It's been a whole 11 months since our division had one, so I know one is coming soon.

    Stewart Dean7 months ago ,

    The lead-in to this piece makes it sound like IBM was forced into these practices by inescapable forces. I'd say not, rather that it pursued them because a) the management was clueless about how to lead IBM in the new environment and new challenges so b) it started to play with numbers to keep the (apparent) profits up....to keep the bonuses coming. I used to say when I was there that: "After every defeat, they pin medals on the generals and shoot the soldiers".

    And then there's the Pig with the Wooden Leg shaggy dog story that ends with the punch line, "A pig like that you don't eat all at once", which has a lot of the flavor of how many of us saw our jobs as IBM die a slow death.

    IBM is about to fall out of the sky, much as General Motors did. How could that happen? By endlessly beating the cow to get more milk.

    IBM was hiring right through the Great Depression such that It Did Not Pay Unemployment Insurance. Because it never laid people off, Because until about 1990, your manager was responsible for making sure you had everything you needed to excel and grow....and you would find people that had started on the loading dock and had become Senior Programmers. But then about 1990, IBM starting paying unemployment insurance....just out of the goodness of its heart. Right.

    CRAW Stewart Dean7 months ago ,

    1990 is also when H-1B visa rules were changed so that companies no longer had to even attempt to hire an American worker as long as the job paid $60,000, which hasn't changed since. This article doesn't even mention how our work visa system facilitated and even rewarded this abuse of Americans.

    DDRLSGC Stewart Dean7 months ago ,

    Well, starting in the 1980s, the American management was allowed by Reagan to get rid of its workforce.

    Georgann Putintsev Stewart Dean7 months ago ,

    I found that other Ex-IBMer's respect other Ex-IBMer's work ethics, knowledge and initiative.

    Other companies are happy to get them as a valueable resource. In '89 when our Palo Alto Datacenter moved, we were given two options: 1.) to become a Programmer (w/training) 2.) move to Boulder or 3.) to leave.

    I got my training with programming experience and left IBM in '92, when for 4 yrs IBM offerred really good incentives for leaving the company. The Executives thought that the IBM Mainframe/MVS z/OS+ was on the way out and the Laptop (Small but Increasing Capacity) Computer would take over everything.

    It didn't. It did allow many skilled IBMers to succeed outside of IBM and help built up our customer skill sets. And like many, when the opportunity arose to return I did. In '91 I was accidentally given a male co-workers paycheck and that was one of the reasons for leaving. During my various Contract work outside, I bumped into other male IBMer's that had left too, some I had trained, and when they disclosed that it was their salary (which was 20-40%) higher than mine was the reason they left, I knew I had made the right decision.

    Women tend to under-value themselves and their capabilities. Contracting also taught me that companies that had 70% employees and 30% contractors, meant that contractors would be let go if they exceeded their quarterly expenditures.

    I first contracted with IBM in '98 and when I decided to re-join IBM '01, I had (3) job offers and I took the most lucrative exciting one to focus on fixing & improving DB2z Qry Parallelism. I developed a targeted L3 Technical Change Team to help L2 Support reduce Customer problems reported and improve our product. The instability within IBM remained and I saw IBM try to eliminate aging, salaried, benefited employees. The 1.) find a job within IBM ... to 2.) to leave ... was now standard.

    While my salary had more than doubled since I left IBM the first time, it still wasn't near other male counterparts. The continual rating competition based on salary ranged titles and timing a title raise after a round of layoffs, not before. I had another advantage going and that was that my changed reduced retirement benefits helped me stay there. It all comes down to the numbers that Mgmt is told to cut & save IBM. While much of this article implies others were hired, at our Silicon Valley Location and other locations, they had no intent to backfill. So the already burdened employees were laden with more workloads & stress.

    In the early to mid 2000's IBM setup a counter lab in China where they were paying 1/4th U.S. salaries and many SVL IBMers went to CSDL to train our new world 24x7 support employees. But many were not IBM loyal and their attrition rates were very high, so it fell to a wave of new-hires at SVL to help address it.

    Stewart Dean Georgann Putintsev7 months ago ,

    It's all about making the numbers so the management can present a Potemkin Village of profits and ever-increasing growth sufficient to get bonuses. There is no relation to any sort of quality or technological advancement, just HR 3-card monte. They have installed air bearing in Old Man Watson's coffin as it has been spinning ever faster

    IBM32_retiree • 7 months ago ,

    Corporate America executive management is all about stock price management. Their bonus's in the millions of dollars are based on stock performance. With IBM's poor revenue performance since Ginny took over, profits can only be maintained by cost reduction. Look at the IBM executive's bonus's throughout the last 20 years and you can see that all resource actions have been driven by Palmisano's and Rominetty's greed for extravagant bonus's.

    Dan Yurman7 months ago ,

    Bravo ProPublica for another "sock it to them" article - journalism in honor of the spirit of great newspapers everywhere that the refuge of justice in hard times is with the press.

    Felix Domestica7 months ago ,

    Also worth noting is that IBM drastically cut the cap on it's severance pay calculation. Almost enough to make me regret not having retired before that changed.

    RonF Felix Domestica7 months ago ,

    Yeah, severance started out at 2 yrs pay, went to 1 yr, then to 6 mos. and is now 1 month.

    mjmadfis RonF7 months ago ,

    When I was let go in June 2013 it was 6 months severance.

    Terry Taylor7 months ago ,

    You need to investigate AT&T as well, as they did the same thing. I was 'sold' by IBM to AT&T as part of he Network Services operation. AT&T got rid of 4000 of the 8000 US employees sent to AT&T within 3 years. Nearly everyone of us was a 'senior' employee.

    weelittlepeople Terry Taylor7 months ago ,

    Good Ol Ma Bell is following the IBM playbook to a Tee

    emnyc7 months ago ,

    ProPublica deserves a Pulitzer for this article and all the extensive research that went into this investigation.

    Incredible job! Congrats.

    On a separate note, IBM should be ashamed of themselves and the executive team that enabled all of this should be fired.

    WmBlake7 months ago ,

    As a permanent old contractor and free-enterprise defender myself, I don't blame IBM a bit for wanting to cut the fat. But for the outright *lies, deception and fraud* that they use to break laws, weasel out of obligations... really just makes me want to shoot them... and I never even worked for them.

    Michael Woiwood7 months ago ,

    Great Article.

    Where I worked, In Rochester,MN, people have known what is happening for years. My last years with IBM were the most depressing time in my life.

    I hear a rumor that IBM would love to close plants they no longer use but they are so environmentally polluted that it is cheaper to maintain than to clean up and sell.

    scorcher147 months ago ,

    One of the biggest driving factors in age discrimination is health insurance costs, not salary. It can cost 4-5x as much to insure and older employee vs. a younger one, and employers know this. THE #1 THING WE CAN DO TO STOP AGE DISCRIMINATION IS TO MOVE AWAY FROM OUR EMPLOYER-PROVIDED INSURANCE SYSTEM. It could be single-payer, but it could also be a robust individual market with enough pool diversification to make it viable. Freeing employers from this cost burden would allow them to pick the right talent regardless of age.

    DDRLSGC scorcher147 months ago ,

    The American business have constantly fought against single payer since the end of World War II and why should I feel sorry for them when all of a sudden, they are complaining about health care costs? It is outrageous that workers have to face age discrimination; however, the CEOs don't have to deal with that issue since they belong to a tiny group of people who can land a job anywhere else.

    pieinthesky scorcher147 months ago ,

    Single payer won't help. We have single payer in Canada and just as much age discrimination in employment. Society in general does not like older people so unless you're a doctor, judge or pharmacist you will face age bias. It's even worse in popular culture never mind in employment.

    OrangeGina scorcher147 months ago ,

    I agree. Yet, a determined company will find other methods, explanations and excuses.

    JohnCordCutter7 months ago ,

    Thanks for the great article. I left IBM last year. USA based. 49. Product Manager in one of IBMs strategic initiatives, however got told to relocate or leave. I found another job and left. I came to IBM from an acquisition. My only regret is, I wish I had left this toxic environment earlier. It truely is a dreadful place to work.

    60 Soon • 7 months ago ,

    The methodology has trickled down to smaller companies pursuing the same net results for headcount reduction. The similarities to my experience were painful to read. The grief I felt after my job was "eliminated" 10 years ago while the Recession was at its worst and shortly after my 50th birthday was coming back. I never have recovered financially but have started writing a murder mystery. The first victim? The CEO who let me go. It's true. Revenge is best served cold.

    donttreadonme97 months ago ,

    Well written . people like me have experienced exactly what you wrote. IBM is a shadow of it's former greatness and I have advised my children to stay away from IBM and companies like it as they start their careers. IBM is a corrupt company. Shame on them !

    annapurna7 months ago ,

    I hope they find some way to bring a class action lawsuit against these assholes.

    Mark annapurna7 months ago ,

    I suspect someone will end up hunt them down with an axe at some point. That's the only way they'll probably learn. I don't know about IBM specifically, but when Carly Fiorina ran HP, she travelled with and even went into engineering labs with an armed security detail.

    OrangeGina Mark7 months ago ,

    all the bigwig CEOs have these black SUV security details now.

    Sarahw7 months ago ,

    IBM has been using these tactics at least since the 1980s, when my father was let go for similar 'reasons.'

    Vin7 months ago ,

    Was let go after 34 years of service. Mine Resource Action latter had additional lines after '...unless you are offered ... position within IBM before that date.' , implying don't even try to look for a position. They lines were ' Additional business controls are in effect to manage the business objectives of this resource action, therefore, job offers within (the name of division) will be highly unlikely.'.

    Mark Vin7 months ago ,

    Absolutely and utterly disgusting.

    Greybeard7 months ago ,

    I've worked for a series of vendors for over thirty years. A job at IBM used to be the brass ring; nowadays, not so much.

    I've heard persistent rumors from IBMers that U.S. headcount is below 25,000 nowadays. Given events like the recent downtime of the internal systems used to order parts (5 or so days--website down because staff who maintained it were let go without replacements), it's hard not to see the spiral continue down the drain.

    What I can't figure out is whether Rometty and cronies know what they're doing or are just clueless. Either way, the result is the same: destruction of a once-great company and brand. Tragic.

    ManOnTheHill Greybeard7 months ago ,

    Well, none of these layoffs/ageist RIFs affect the execs, so they don't see the effects, or they see the effects but attribute them to some other cause.

    (I'm surprised the article doesn't address this part of the story; how many affected by layoffs are exec/senior management? My bet is very few.)

    ExIBMExec ManOnTheHill7 months ago ,

    I was a D-banded exec (Director-level) who was impacted and I know even some VPs who were affected as well, so they do spread the pain, even in the exec ranks.

    ManOnTheHill ExIBMExec7 months ago ,

    That's different than I have seen in companies I have worked for (like HP). There RIFs (Reduction In Force, their acronym for layoff) went to the director level and no further up.

    [Oct 30, 2018] Anyone working at IBM after 1993 should have had no expectation of a lifetime career

    Under neoliberlaism the idea of loyalty between a corporation and an employee makes no more sense than loyalty between a motel and its guests.
    Notable quotes:
    "... Any expectation of "loyalty", that two-way relationship of employee/company from an earlier time, was wishful thinking ..."
    "... With all the automation going on around the world, these business leaders better worry about people not having money to buy their goods and services plus what are they going to do with the surplus of labor ..."
    "... This is the nail in the coffin. As an IT manager responsible for selecting and purchasing software, I will never again recommend IBM products ..."
    "... The way I saw it, every time I received a paycheck from IBM in exchange for two weeks' work, we were (almost) even. I did not owe them anything else and they did not owe me anything. The way I saw it, every time I received a paycheck from IBM in exchange for two weeks' work, we were (almost) even. I did not owe them anything else and they did not owe me anything. The idea of loyalty between a corporation and an at-will employee makes no more sense than loyalty between a motel and its guests. ..."
    "... The annual unemployment rate topped 8% in 1975 and would reach nearly 10% in 1982. The economy seemed trapped in the new nightmare of stagflation," so called because it combined low economic growth and high unemployment ("stagnation") with high rates of inflation. And the prime rate hit 20% by 1980. ..."
    Oct 30, 2018 | features.propublica.org
    Jeff Russell , Thursday, March 22, 2018 4:31 PM
    I started at IBM 3 days out of college in 1979 and retired in 2017. I was satisfied with my choice and never felt mistreated because I had no expectation of lifetime employment, especially after the pivotal period in the 1990's when IBM almost went out of business. The company survived that period by dramatically restructuring both manufacturing costs and sales expense including the firing of tens of thousands of employees. These actions were well documented in the business news of the time, the obvious alternative was bankruptcy.

    I told the authors that anyone working at IBM after 1993 should have had no expectation of a lifetime career. Downsizing, outsourcing, movement of work around the globe was already commonplace at all such international companies. Any expectation of "loyalty", that two-way relationship of employee/company from an earlier time, was wishful thinking .

    I was always prepared to be sent packing, without cause, at any time and always had my resume up-to-date. I stayed because of interesting work, respectful supervisors, and adequate compensation.

    The "resource action" that forced my decision to retire was no surprise, the company that hired me had been gone for decades.

    DDRLSGC Jeff Russell , in reply to" aria-label="in reply to">
    With all the automation going on around the world, these business leaders better worry about people not having money to buy their goods and services plus what are they going to do with the surplus of labor
    John Kauai Jeff Russell , in reply to" aria-label="in reply to">
    I had, more or less, the same experience at Cisco. They paid me to quit. Luckily, I was ready for it.

    The article mentions IBMs 3 failures. So who was it that was responsible for not anticipating the transitions? It is hard enough doing what you already know. Perhaps companies should be spending more on figuring out "what's next" and not continually playing catch-up by dumping the older workers for the new.

    MichiganRefugee , Friday, March 23, 2018 9:52 AM
    I was laid off by IBM after 29 years and 4 months. I had received a division award in previous year, and my last PBC appraisal was 2+ (high performer.) The company I left was not the company I started with. Top management--starting with Gerstner--has steadily made IBM a less desirable place to work. They now treat employees as interchangeable assets and nothing more. I cannot/would not recommend IBM as an employer to any young programmer.
    George Purcell , Friday, March 23, 2018 7:41 AM
    Truly awesome work. I do want to add one thing, however--the entire rhetoric about "too many old white guys" that has become so common absolutely contributes to the notion that this sort of behavior is not just acceptable but in some twisted way admirable as well.
    Bob Fritz , Thursday, March 22, 2018 7:35 PM
    I read the article and all the comments.

    Is anyone surprised that so many young people don't think capitalism is a good system any more?

    I ran a high technology electronic systems company for years. We ran it "the old way." If you worked hard, and tried, we would bend over backwards to keep you. If technology or business conditions eliminated your job, we would try to train you for a new one. Our people were loyal, not like IBMers today. I honestly think that's the best way to be profitable.

    People afraid of being unjustly RIFFed will always lack vitality.

    petervonstackelberg , Thursday, March 22, 2018 2:00 PM
    I'm glad someone is finally paying attention to age discrimination. IBM apparently is just one of many organizations that discriminate.

    I'm in the middle of my own fight with the State University of New York (SUNY) over age discrimination. I was terminated by a one of the technical colleges in the SUNY System. The EEOC/New York State Division of Human Rights (NYDHR) found that "PROBABLE CAUSE (NYDHR's emphasis) exists to believe that the Respondent (Alfred State College - SUNY) has engaged in or is engaging in the unlawful discriminatory practice complained of." Investigators for NYDHR interviewed several witnesses, who testified that representatives of the college made statements such as "we need new faces", "three old men" attending a meeting, an older faculty member described as an "albatross", and "we ought to get rid of the old white guys". Witnesses said these statements were made by the Vice President of Academic Affairs and a dean at the college.

    davosil , Sunday, March 25, 2018 5:00 PM
    This saga at IBM is simply a microcosm of our overall economy. Older workers get ousted in favor of younger, cheaper workers; way too many jobs get outsourced; and so many workers today [young and old] can barely land a full-time job.
    This is the behavior that our system incentivises (and gets away with) in this post Reagan Revolution era where deregulation is lauded and unions have been undermined & demonized. We need to seriously re-work 'work', and in order to do this we need to purge Republicans at every level, as they CLEARLY only serve corporate bottom-lines - not workers - by championing tax codes that reward outsourcing, fight a livable minimum wage, eliminate pensions, bust unions, fight pay equity for women & family leave, stack the Supreme Court with radical ideologues who blatantly rule for corporations over people all the time, etc. etc. ~35 years of basically uninterrupted Conservative economic policy & ideology has proven disastrous for workers and our quality of life. As goes your middle class, so goes your country.
    ThinkingAloud , Friday, March 23, 2018 7:18 AM
    The last five words are chilling... This is an award-winning piece....
    RetiredIBM.manager , Thursday, March 22, 2018 7:39 PM
    I am a retired IBM manager having had to execute many of these resource reduction programs.. too many.. as a matter of fact. ProPUBLICA....You nailed it!
    David , Thursday, March 22, 2018 3:22 PM
    IBM has always treated its customer-facing roles like Disney -- as cast members who need to match a part in a play. In the 60s and 70s, it was the white-shirt, blue-suit white men whom IBM leaders thought looked like mainframe salesmen. Now, rather than actually build a credible cloud to compete with Amazon and Microsoft, IBM changes the cast to look like cloud salespeople. (I work for Microsoft. Commenting for myself alone.)
    CRAW David ,

    Now IBM still treats their employees like Disney - by replacing them with H-1B workers.

    MHV IBMer , Friday, March 23, 2018 10:35 PM
    I am a survivor, the rare employee who has been at IBM for over 35 years. I have seen many, many layoff programs over 20 years now. I have seen tens of thousands people let go from the Hudson Valley of N.Y. Those of us who have survived, know and lived through what this article so accurately described. I currently work with 3 laid off/retired and rehired contractors. I have seen age discrimination daily for over 15 years. It is not only limited to layoffs, it is rampant throughout the company. Promotions, bonuses, transfers for opportunities, good reviews, etc... are gone if you are over 45. I have seen people under 30 given promotions to levels that many people worked 25 years for. IBM knows that these younger employees see how they treat us so they think they can buy them off. Come to think of it, I guess they actually are! They are ageist, there is no doubt, it is about time everyone knew. Excellent article.
    Goldie Romero , Friday, March 23, 2018 2:31 PM
    Nice article, but seriously this is old news. IBM has been at this for ...oh twenty years or more.
    I don't really have a problem with it in terms of a corporation trying to make money. But I do have a problem with how IBM also likes to avoid layoffs by giving folks over 40 intentionally poor reviews, essentially trying to drive people out. Just have the guts to tell people, we don't need you anymore, bye. But to string people along as the overseas workers come in...c'mon just be honest with your workers.
    High tech over 40 is not easy...I suggest folks prep for a career change before 50. Then you can have the last laugh on a company like IBM.
    jblog , Friday, March 23, 2018 10:37 AM
    From pages 190-191 of my novel, Ordinary Man (Amazon):

    Throughout it all, layoffs became common, impacting mostly older employees with many years of service. These job cuts were dribbled out in small numbers to conceal them from the outside world, but employees could plainly see what was going on.

    The laid off employees were supplanted by offshoring work to low-costs countries and hiring younger employees, often only on temporary contracts that offered low pay and no benefits – a process pejoratively referred to by veteran employees as "downsourcing." The recruitment of these younger workers was done under the guise of bringing in fresh skills, but while many of the new hires brought new abilities and vitality, they lacked the knowledge and perspective that comes with experience.

    Frequently, an older more experienced worker would be asked to help educate newer employees, only to be terminated shortly after completing the task. And the new hires weren't fooled by what they witnessed and experienced at OpenSwitch, perceiving very quickly that the company had no real interest in investing in them for the long term. To the contrary, the objective was clearly to grind as much work out of them as possible, without offering any hope of increased reward or opportunity.

    Most of the young recruits left after only a year or two – which, again, was part of the true agenda at the company. Senior management viewed employees not as talent, but simply as cost, and didn't want anyone sticking around long enough to move up the pay scale.

    turquoisewaters , Thursday, March 22, 2018 10:19 PM
    This is why you need unions.
    Aaron Stackpole , Thursday, March 22, 2018 5:23 PM
    This is the nail in the coffin. As an IT manager responsible for selecting and purchasing software, I will never again recommend IBM products. I love AIX and have worked with a lot if IBM products but not anymore. Good luck with the millennials though...
    awb22 , Thursday, March 22, 2018 12:14 PM
    The same thing has been going on at other companies, since the end of WWII. It's unethical, whether the illegality can be proven or not.

    In the RTP area, where I live, I know many, many current and former employees. Times have changed, but the distinction between right and wrong hasn't.

    Dave Allen , Thursday, March 22, 2018 1:07 PM
    I worked for four major corporations (HP, Intel, Control Data Corporation, and Micron Semiconductor) before I was hired by IBM as a rare (at that time) experienced new hire.

    Even though I ended up working for IBM for 21 years, and retired in 2013, because of my experiences at those other companies, I never considered IBM my "family."

    The way I saw it, every time I received a paycheck from IBM in exchange for two weeks' work, we were (almost) even. I did not owe them anything else and they did not owe me anything. The way I saw it, every time I received a paycheck from IBM in exchange for two weeks' work, we were (almost) even. I did not owe them anything else and they did not owe me anything. The idea of loyalty between a corporation and an at-will employee makes no more sense than loyalty between a motel and its guests.

    It is a business arrangement, not a love affair. Every individual needs to continually assess their skills and their value to their employer. If they are not commensurate, it is the employee's responsibility to either acquire new skills or seek a new employer.

    Your employer will not hesitate to lay you off if your skills are no longer needed, or if they can hire someone who can do your job just as well for less pay. That is free enterprise, and it works for people willing to take advantage of it.

    sometimestheyaresomewhatright Dave Allen , in reply to" aria-label="in reply to">
    I basically agree. But why should it be OK for a company to fire you just to replace you with a younger you? If all that they accomplish is lowering their health care costs (which is what this is really about). If the company is paying about the same for the same work, why is firing older workers for being older OK?
    Dave Allen sometimestheyaresomewhatright , in reply to" aria-label="in reply to">
    Good question. The point I was trying to make is that people need to watch out for themselves and not expect their employer to do what is "best" for the employee. I think that is true whatever age the employee happens to be.

    Whether employers should be able to discriminate against (treat differently) their employees based on age, gender, race, religion, etc. is a political question. Morally, I don't think they should discriminate. Politically, I think it is a slippery slope when the government starts imposing regulations on free enterprise. Government almost always creates more problems than they fix.

    DDRLSGC Dave Allen , in reply to" aria-label="in reply to">
    Sorry, but when you deregulate the free enterprise, it created more problems than it fixes and that is a fact that has been proven for the last 38 years.
    Danllo DDRLSGC , in reply to" aria-label="in reply to">
    That's just plain false. Deregulation creates competiiton. Competition for talented and skilled workers creates opportunities for those that wish to be employed and for those that wish to start new ventures. For example, when Ma Bell was regulated and had a monopoly on telecommunications there was no innovation in the telecom inudstry. However, when it was deregulated, cell phones, internet, etc exploded ... creating billionaires and millionaires while also improving the quality of life.
    DDRLSGC Danllo , in reply to" aria-label="in reply to">
    No, it happens to be true. When Reagan deregulate the economy, a lot of those corporate raiders just took over the companies, sold off the assets, and pocketed the money. What quality of life? Half of American lived near the poverty level and the wages for the workers have been stagnant for the last 38 years compared to a well-regulated economy in places like Germany and the Scandinavian countries where the workers have good wages and a far better standard of living than in the USA. Why do you think the Norwegians told Trump that they will not be immigrating to the USA anytime soon?
    NotSure DDRLSGC , in reply to" aria-label="in reply to">
    What were the economic conditions before Regan? It was a nightmare before Regan.

    The annual unemployment rate topped 8% in 1975 and would reach nearly 10% in 1982. The economy seemed trapped in the new nightmare of stagflation," so called because it combined low economic growth and high unemployment ("stagnation") with high rates of inflation. And the prime rate hit 20% by 1980.
    DDRLSGC NotSure , in reply to" aria-label="in reply to">
    At least we had a manufacturing base in the USA, strong regulations of corporations, corporate scandals were far and few, businesses did not go under so quickly, prices of goods and services did not go through the roof, people had pensions and could reasonably live off them, and recessions did not last so long or go so deep until Reagan came into office. In Under Reagan, the jobs were allowed to be send overseas, unions were busted up, pensions were reduced or eliminated, wages except those of the CEOs were staganent, and the economic conditions under Bush, Senior and Bush, Jr. were no better except that Bush, Jr, was the first president to have a net minus below zero growth, so every time we get a Republican Administration, the economy really turns into a nightmare. That is a fact.

    You have the Republicans in Kansas, Oklahoma, and Wisconsin using Reaganomics and they are economic disaster areas.

    DDRLSGC NotSure , in reply to" aria-label="in reply to">
    You had an industrial base in the USA, lots of banks and savings and loans to choose from, lots of mom and pop stores, strong government regulation of the economy, able to live off your pensions, strong unions and employment laws along with the court system to back you up against corporate malfeasance. All that was gone when Reagan and the two Bushes came into office.
    james Foster , Thursday, March 29, 2018 8:37 PM
    Amazingly accurate article. The once great IBM now a dishonest and unscrupulous corporation concerned more about earnings per share than employees, customers, or social responsibility. In Global Services most likely 75% or more jobs are no longer in the US - can't believe a word coming out of Armonk.
    Philip Meyer james Foster , in reply to" aria-label="in reply to">
    I'm not sure there was ever a paradise in employment. Yeah, you can say there was more job stability 50 or 60 years ago, but that applied to a much smaller workforce than today (mostly white men). It is a drag, but there are also lot more of us old farts than there used to be and we live a lot longer in retirement as well. I don't see any magic bullet fix either.
    George A , Tuesday, March 27, 2018 6:12 PM
    Warning to Google/Facebook/Apple etc. All you young people will get old. It's inevitable. Do you think those companies will take care of you?
    econdataus , Sunday, March 25, 2018 3:01 PM
    Great article. What's especially infuriating is that the industry continues to claim that there is a shortage of STEM workers. For example, google "claim of 1.4 million computer science jobs with only 400,000 computer science graduates to fill them". If companies would openly say, "we have plenty of young STEM workers and prefer them to most older STEM workers", we could at least start addressing the problem. But they continue to promote the lie of there being a STEM shortage. They just want as big a labor pool as possible, unemployed workers be damned.
    Buzz , Friday, March 23, 2018 12:00 PM
    I've worked there 17 years and have worried about being layed off for about 11 of them. Moral is in the toilet. Bonuses for the rank and file are in the under 1% range while the CEO gets millions. Pay raises have been non existent or well under inflation for years. Adjusting for inflation, I make $6K less than I did my first day. My group is a handful of people as at least 1/2 have quit or retired. To support our customers, we used to have several people, now we have one or two and if someone is sick or on vacation, our support structure is to hope nothing breaks. We can't keep millennials because of pay, benefits and the expectation of being available 24/7 because we're shorthanded. As the unemployment rate drops, more leave to find a different job, leaving the old people as they are less willing to start over with pay, vacation, moving, selling a house, pulling kids from school, etc. The younger people are generally less likely to be willing to work as needed on off hours or to pull work from a busier colleague. I honestly have no idea what the plan is when the people who know what they are doing start to retire, we are way top heavy with 30-40 year guys who are on their way out, very few of the 10-20 year guys due to hiring freezes and we can't keep new people past 2-3 years. It's like our support business model is designed to fail.
    OrangeGina , Friday, March 23, 2018 11:41 AM
    Make no mistake. The three and four letter acronyms and other mushy corporate speak may differ from firm to firm, but this is going on in every large tech company old enough to have a large population of workers over 50. I hope others will now be exposed.
    JeffMo , Friday, March 23, 2018 10:23 AM
    This article hits the nail right on the head, as I come up on my 1 year anniversary from being....ahem....'retired' from 23 years at IBM....and I'll be damned if I give them the satisfaction of thinking this was like a 'death' to me. It was the greatest thing that could have ever happened. Ginny and the board should be ashamed of themselves, but they won't be.
    Frankie , Friday, March 23, 2018 1:00 AM
    Starting around age 40 you start to see age discrimination. I think this is largely due to economics, like increased vacation times, higher wages, but most of all the perception that older workers will run up the medical costs. You can pass all the age related discrimination laws you want, but look how ineffective that has been.

    If you contrast this with the German workforce, you see that they have more older workers with the skills and younger workers without are having a difficult time getting in. So what's the difference? There are laws about how many vacation weeks that are given and there is a national medical system that everyone pays, so discrimination isn't seen in the same light.

    The US is the only hold out maybe with South Africa that doesn't have a good national medical insurance program for everyone. Not only do we pay more than the rest of the world, but we also have discrimination because of it.

    Rick Gundlach , Thursday, March 22, 2018 11:38 PM
    This is very good, and this is IBM. I know. I was plaintiff in Gundlach v. IBM Japan, 983 F.Supp.2d 389, which involved their violating Japanese labor law when I worked in Japan. The New York federal judge purposely ignored key points of Japanese labor law, and also refused to apply Title VII and Age Discrimination in Employment to the parent company in Westchester County. It is a huge, self-described "global" company with little demonstrated loyalty to America and Americans. Pennsylvania is suing them for $170 million on a botched upgrade of the state's unemployment system.
    Jeff , Thursday, March 22, 2018 2:05 PM
    In early 2013 I was given a 3 PBC rating for my 2012 performance, the main reason cited by my manager being that my team lead thought I "seemed distracted". Five months later I was included in a "resource action", and was gone by July. I was 20 months shy of 55. Younger coworkers were retained. That was about two years after the product I worked on for over a decade was off-shored.

    Through a fluke of someone from the old, disbanded team remembering me, I was rehired two years later - ironically in a customer support position for the very product I helped develop.

    While I appreciated my years of service, previous salary, and previous benefits being reinstated, a couple years into it I realized I just wasn't cut out for the demands of the job - especially the significant 24x7 pager duty. Last June I received email describing a "Transition to Retirement" plan I was eligible for, took it, and my last day will be June 30. I still dislike the job, but that plan reclassified me as part time, thus ending pager duty for me. The job still sucks, but at least I no longer have to despair over numerous week long 24x7 stints throughout the year.

    A significant disappointment occurred a couple weeks ago. I was discussing healthcare options with another person leaving the company who hadn't been resource-actioned as I had, and learned the hard way I lost over $30,000 in some sort of future medical benefit account the company had established and funded at some point. I'm not sure I was ever even aware of it. That would have funded several years of healthcare insurance during the 8 years until I'm eligible for Medicare. I wouldn't be surprised if their not having to give me that had something to do with my seeming "distracted" to them. <rolls eyes="">

    What's really painful is the history of that former account can still be viewed at Fidelity, where it associates my departure date in 2013 with my having "forfeited" that money. Um, no. I did not forfeit that money, nor would I have. I had absolutely no choice in the matter. I find the use of the word 'forfeited' to describe what happened as both disingenuous and offensive. That said, I don't know whether's that's IBM's or Fidelity's terminology, though.

    Herb Jeff , in reply to" aria-label="in reply to">
    Jeff, You should call Fidelity. I recently received a letter from the US Department of Labor that they discovered that IBM was "holding" funds that belonged to me that I was never told about. This might be similar or same story .

    [Oct 30, 2018] There are plenty of examples of people who were doing their jobs, IN SPADES, putting in tons of unpaid overtime, and generally doing whatever was humanly possible to make sure that whatever was promised to the customer was delivered within their span of control. As they grew older corporations threw them out like an empty can

    Notable quotes:
    "... The other alternative is a market-based life that, for many, will be cruel, brutish, and short. ..."
    Oct 30, 2018 | features.propublica.org

    Lorilynn King

    Step back and think about this for a minute. There are plenty of examples of people who were doing their jobs, IN SPADES, putting in tons of unpaid overtime, and generally doing whatever was humanly possible to make sure that whatever was promised to the customer was delivered (within their span of control... I'm not going to get into a discussion of how IBM pulls the rug out from underneath contracts after they've been signed).

    These people were, and still are, high performers, they are committed to the job and the purpose that has been communicated to them by their peers, management, and customers; and they take the time (their OWN time) to pick up new skills and make sure that they are still current and marketable. They do this because they are committed to doing the job to the best of their ability.... it's what makes them who they are.

    IBM (and other companies) are firing these very people ***for one reason and one reason ONLY***: their AGE. They have the skills and they're doing their jobs. If the same person was 30 you can bet that they'd still be there. Most of the time it has NOTHING to do with performance or lack of concurrency. Once the employee is fired, the job is done by someone else. The work is still there, but it's being done by someone younger and/or of a different nationality.

    The money that is being saved by these companies has to come from somewhere. People that are having to withdraw their retirement savings 20 or so years earlier than planned are going to run out of funds.... and when they're in nursing homes, guess who is going to be supporting them? Social security will be long gone, their kids have their own monetary challenges.... so it will be government programs.... maybe.

    This is not just a problem that impacts the 40 and over crowd. This is going to impact our entire society for generations to come.

    NoPolitician
    The business reality you speak of can be tempered via government actions. A few things:

    The other alternative is a market-based life that, for many, will be cruel, brutish, and short.

    [Oct 30, 2018] Elimination of loyalty: what corporations cloak as weeding out the low performers tranparantly reveals catching the older workers in the net as well.

    Oct 30, 2018 | features.propublica.org

    Great White North, Thursday, March 22, 2018 11:29 PM

    There's not a word of truth quoted in this article. That is, quoted from IBM spokespeople. It's the culture there now. They don't even realize that most of their customers have become deaf to the same crap from their Sales and Marketing BS, which is even worse than their HR speak.

    The sad truth is that IBM became incapable of taking its innovation (IBM is indeed a world beating, patent generating machine) to market a long time ago. It has also lost the ability (if it ever really had it) to acquire other companies and foster their innovation either - they ran most into the ground. As a result, for nearly a decade revenues have declined and resource actions grown. The resource actions may seem to be the ugly problem, but they're only the symptom of a fat greedy and pompous bureaucracy that's lost its ability to grow and stay relevant in a very competitive and changing industry. What they have been able to perfect and grow is their ability to downsize and return savings as dividends (Big Sam Palmisano's "innovation"). Oh, and for senior management to line their pockets.

    Nothing IBM is currently doing is sustainable.

    If you're still employed there, listen to the pain in the words of your fallen comrades and don't knock yourself out trying to stay afloat. Perhaps learn some BS of your own and milk your job (career? not...) until you find freedom and better pastures.

    If you own stock, do like Warren Buffett, and sell it while it still has some value.

    Danllo , Thursday, March 22, 2018 10:43 PM
    This is NOTHING NEW! All major corporations have and will do this at some point in their existence. Another industry that does this regularly every 3 to 5 years is the pharamaceutical industry. They'll decimate their sales forces in order to, as they like to put it, "right size" the company.

    They'll cloak it as weeding out the low performers, but they'll try to catch the "older" workers in the net as well.

    [Oct 30, 2018] American companies pay health insurance premiums based on their specific employee profiles

    Notable quotes:
    "... As long as companies pay for their employees' health insurance they will have an incentive to fire older employees. ..."
    "... The answer is to separate health insurance from employment. Companies can't be trusted. Not only health care, but retirement is also sorely abused by corporations. All the money should be in protected employee based accounts. ..."
    Oct 30, 2018 | features.propublica.org

    sometimestheyaresomewhatright , Thursday, March 22, 2018 4:13 PM

    American companies pay health insurance premiums based on their specific employee profiles. Insurance companies compete with each other for the business, but costs are actual. And based on the profile of the pool of employees. So American companies fire older workers just to lower the average age of their employees. Statistically this is going to lower their health care costs.

    As long as companies pay for their employees' health insurance they will have an incentive to fire older employees. They have an incentive to fire sick employees and employees with genetic risks. Those are harder to implement as ways to lower costs. Firing older employees is simple to do, just look up their ages.

    The answer is to separate health insurance from employment. Companies can't be trusted. Not only health care, but retirement is also sorely abused by corporations. All the money should be in protected employee based accounts.

    By the way, most tech companies are actually run by older people. The goal is to broom out mid-level people based on age. Nobody is going to suggest to a sixty year old president that they should self fire, for the good of the company.

    [Oct 30, 2018] If I were a Red Hat employee over 40, I'd be sweating right now.

    Oct 30, 2018 | arstechnica.com

    Morley Dotes , Ars Centurion et Subscriptor 4 hours ago

    jandrese wrote:
    IMHO this is perilous for RHEL. It would be very easy for IBM to fire most of the developers and just latch on to the enterprise services stuff to milk it till its dry.

    Why would you say that? IBM is renowned for their wonderful employee relations. </s>

    If I were a Red Hat employee over 40, I'd be sweating right now.

    Unless I had equity.

    NeghVar1 , Wise, Aged Ars Veteran 4 hours ago
    Reminds me of when Oracle bought Sun
    sviola , Ars Scholae Palatinae 4 hours ago
    Peevester wrote:
    Muon wrote:
    blockquote> We run just about everything on CentOS around here, downstream of RHEL. Should we be worried?

    I don't think so, at least no more than you should have already been. IBM has adopted RHEL as their standard platform for a lot of things, all the way up to big-iron mainframes. Not to mention, over the two decades, they've done a hell of a lot of enhancements to Linux that are a big part of why it scales so well (Darl Mcbride just felt like someone walked over his grave. Hey, let's jump on it a bit too!).

    Say what you like about IBM (like they've turned into a super-shitty place to work for or be a customer of), but they've been a damn good friend to Linux. If I actually worked for Red Hat though, I would be really unhappy because you can bet that "independence" will last a few quarters before everyone gets outsourced to Brazil.

    Brazil is too expensive. Last time I heard, they were outsourcing from Brazil to chapear LA countries...

    informationsuperhighway , Wise, Aged Ars Veteran et Subscriptor 2 hours ago
    CousinSven wrote:
    IBM are paying around 12x annual revenue for Red Hat which is a significant multiple so they will have to squeeze more money out of the business somehow. Either they grow customers or they increase margins or both.

    IBM had little choice but to do something like this. They are in a terminal spiral thanks to years of bad leadership. The confused billing of the purchase smacks of rush, so far I have seen Red Hat described as a cloud company, an info sec company, an open source company...

    So IBM are buying Red Hat as a last chance bid to avoid being put through the PE threshing machine. Red Hat get a ludicrous premium so will take the money.

    And RH customers will want to check their contracts...

    They will lay off Redhat staff to cut costs and replace them with remote programmers living in Calcutta. To big corporations a programmer is a fungible item, if you can swap programmer A woth programmer B at 1/4 the cost its a big win and you beat earnings estimate by a penny.

    Rotoars , Ars Centurion 2 hours ago
    bolomkxxviii wrote:
    No good will come from this. IBM's corporate environment and financial near-sightedness will kill Red Hat. Time to start looking for a new standard bearer in Linux for business.

    This will kill both companies. Red has trouble making money and IBM has trouble not messing up what good their is and trouble making money. They both die, but a slow, possibly accelerating, death.

    [Oct 30, 2018] Cutting Old Heads at IBM by Peter Gosselin and Ariana Tobin

    Mar 22, 2018 | features.propublica.org

    This story was co-published with Mother Jones.

    F or nearly a half century, IBM came as close as any company to bearing the torch for the American Dream.

    As the world's dominant technology firm, payrolls at International Business Machines Corp. swelled to nearly a quarter-million U.S. white-collar workers in the 1980s. Its profits helped underwrite a broad agenda of racial equality, equal pay for women and an unbeatable offer of great wages and something close to lifetime employment, all in return for unswerving loyalty.

    How the Crowd Led Us to Investigate IBM

    Our project started with a digital community of ex-employees. Read more about how we got this story.

    Email Updates

    Sign up to get ProPublica's major investigations delivered to your inbox.

    Do you have information about age discrimination at IBM?

    Let us know.

    But when high tech suddenly started shifting and companies went global, IBM faced the changing landscape with a distinction most of its fiercest competitors didn't have: a large number of experienced and aging U.S. employees.

    The company reacted with a strategy that, in the words of one confidential planning document, would "correct seniority mix." It slashed IBM's U.S. workforce by as much as three-quarters from its 1980s peak, replacing a substantial share with younger, less-experienced and lower-paid workers and sending many positions overseas. ProPublica estimates that in the past five years alone, IBM has eliminated more than 20,000 American employees ages 40 and over, about 60 percent of its estimated total U.S. job cuts during those years.

    In making these cuts, IBM has flouted or outflanked U.S. laws and regulations intended to protect later-career workers from age discrimination, according to a ProPublica review of internal company documents, legal filings and public records, as well as information provided via interviews and questionnaires filled out by more than 1,000 former IBM employees.

    Among ProPublica's findings, IBM:

    Denied older workers information the law says they need in order to decide whether they've been victims of age bias, and required them to sign away the right to go to court or join with others to seek redress. Targeted people for layoffs and firings with techniques that tilted against older workers, even when the company rated them high performers. In some instances, the money saved from the departures went toward hiring young replacements. Converted job cuts into retirements and took steps to boost resignations and firings. The moves reduced the number of employees counted as layoffs, where high numbers can trigger public disclosure requirements. Encouraged employees targeted for layoff to apply for other IBM positions, while quietly advising managers not to hire them and requiring many of the workers to train their replacements. Told some older employees being laid off that their skills were out of date, but then brought them back as contract workers, often for the same work at lower pay and fewer benefits.

    IBM declined requests for the numbers or age breakdown of its job cuts. ProPublica provided the company with a 10-page summary of its findings and the evidence on which they were based. IBM spokesman Edward Barbini said that to respond the company needed to see copies of all documents cited in the story, a request ProPublica could not fulfill without breaking faith with its sources. Instead, ProPublica provided IBM with detailed descriptions of the paperwork. Barbini declined to address the documents or answer specific questions about the firm's policies and practices, and instead issued the following statement:

    "We are proud of our company and our employees' ability to reinvent themselves era after era, while always complying with the law. Our ability to do this is why we are the only tech company that has not only survived but thrived for more than 100 years."

    With nearly 400,000 people worldwide, and tens of thousands still in the U.S., IBM remains a corporate giant. How it handles the shift from its veteran baby-boom workforce to younger generations will likely influence what other employers do. And the way it treats its experienced workers will eventually affect younger IBM employees as they too age.

    Fifty years ago, Congress made it illegal with the Age Discrimination in Employment Act , or ADEA, to treat older workers differently than younger ones with only a few exceptions, such as jobs that require special physical qualifications. And for years, judges and policymakers treated the law as essentially on a par with prohibitions against discrimination on the basis of race, gender, sexual orientation and other categories.

    In recent decades, however, the courts have responded to corporate pleas for greater leeway to meet global competition and satisfy investor demands for rising profits by expanding the exceptions and shrinking the protections against age bias .

    "Age discrimination is an open secret like sexual harassment was until recently," said Victoria Lipnic, the acting chair of the Equal Employment Opportunity Commission, or EEOC, the independent federal agency that administers the nation's workplace anti-discrimination laws.

    "Everybody knows it's happening, but often these cases are difficult to prove" because courts have weakened the law, Lipnic said. "The fact remains it's an unfair and illegal way to treat people that can be economically devastating."

    Many companies have sought to take advantage of the court rulings. But the story of IBM's downsizing provides an unusually detailed portrait of how a major American corporation systematically identified employees to coax or force out of work in their 40s, 50s and 60s, a time when many are still productive and need a paycheck, but face huge hurdles finding anything like comparable jobs.

    The dislocation caused by IBM's cuts has been especially great because until recently the company encouraged its employees to think of themselves as "IBMers" and many operated under the assumption that they had career-long employment.

    When the ax suddenly fell, IBM provided almost no information about why an employee was cut or who else was departing, leaving people to piece together what had happened through websites, listservs and Facebook groups such as "Watching IBM" or "Geographically Undesirable IBM Marketers," as well as informal support groups.

    Marjorie Madfis, at the time 57, was a New York-based digital marketing strategist and 17-year IBM employee when she and six other members of her nine-person team -- all women in their 40s and 50s -- were laid off in July 2013. The two who remained were younger men.

    Since her specialty was one that IBM had said it was expanding, she asked for a written explanation of why she was let go. The company declined to provide it.

    "They got rid of a group of highly skilled, highly effective, highly respected women, including me, for a reason nobody knows," Madfis said in an interview. "The only explanation is our age."

    Brian Paulson, also 57, a senior manager with 18 years at IBM, had been on the road for more than a year overseeing hundreds of workers across two continents as well as hitting his sales targets for new services, when he got a phone call in October 2015 telling him he was out. He said the caller, an executive who was not among his immediate managers, cited "performance" as the reason, but refused to explain what specific aspects of his work might have fallen short.

    It took Paulson two years to land another job, even though he was equipped with an advanced degree, continuously employed at high-level technical jobs for more than three decades and ready to move anywhere from his Fairview, Texas, home.

    "It's tough when you've worked your whole life," he said. "The company doesn't tell you anything. And once you get to a certain age, you don't hear a word from the places you apply."

    Paul Henry, a 61-year-old IBM sales and technical specialist who loved being on the road, had just returned to his Columbus home from a business trip in August 2016 when he learned he'd been let go. When he asked why, he said an executive told him to "keep your mouth shut and go quietly."

    Henry was jobless more than a year, ran through much of his savings to cover the mortgage and health insurance and applied for more than 150 jobs before he found a temporary slot.

    "If you're over 55, forget about preparing for retirement," he said in an interview. "You have to prepare for losing your job and burning through every cent you've saved just to get to retirement."

    IBM's latest actions aren't anything like what most ex-employees with whom ProPublica talked expected from their years of service, or what today's young workers think awaits them -- or are prepared to deal with -- later in their careers.

    "In a fast-moving economy, employers are always going to be tempted to replace older workers with younger ones, more expensive workers with cheaper ones, those who've performed steadily with ones who seem to be up on the latest thing," said Joseph Seiner, an employment law professor at the University of South Carolina and former appellate attorney for the EEOC.

    "But it's not good for society," he added. "We have rules to try to maintain some fairness in our lives, our age-discrimination laws among them. You can't just disregard them."

    [Oct 30, 2018] The Watson family held integrity, equality, and knowledge share as a formidable synthesis of company ethics. With them gone old IBM was gone...

    It not Watson family gone it is New Deal Capitalism was replaced with the neoliberalism
    Notable quotes:
    "... Except when your employer is the one preaching associate loyalty and "we are family" your entire career. Then they decide you've been too loyal and no longer want to pay your salary and start fabricating reasons to get rid of you. ADP is guilty of these same practices and eliminating their tenured associates. Meanwhile, the millennials hired play ping pong and text all day, rather than actually working. ..."
    Oct 30, 2018 | features.propublica.org

    Zytor-LordoftheSkies , Thursday, March 22, 2018 11:55 AM

    A quick search of the article doesn't find the word "buy backs" but this is a big part of the story. IBM spent over $110 BILLION on stock buy backs between 2000 and 2016. That's the number I found, but it hasn't stopped since. If anything it has escalated.

    This is very common among large corporations. Rather than spend on their people, they funnel billions into stock buy backs which raises or at least maintains the stock value so execs can keep cashing in. It's really pretty disgraceful. This was only legalized in 1982, which not-so-coincidentally is not long after real wages stalled, and have stalled ever since.

    Suzan Zytor-LordoftheSkies ,
    Thanks for this bit of insanely true reporting. When laid off from Westinghouse after 14 years of stellar performance evaluations I was flummoxed by the execs getting million-dollar bonuses as we were told the company wasn't profitable enough to maintain its senior engineering staff. It sold off every division eventually as the execs (many of them newly hired) reaped even more bonuses.
    Georgann Putintsev Suzan ,
    Thank you ... very insightful of you. As an IBMer and lover of Spreadsheets / Statistics / Data Specalist ... I like reading Annual Reports. Researching these Top Execs, BOD and compare them to other Companies across-the-board and industry sectors. You'll find a Large Umbrella there.
    There is a direct tie and inter-changeable pieces of these elites over the past 55 yrs. Whenever some Corp/ Political/ Government shill (wannbe) needs a payoff, they get placed into high ranking top positions for a orchestrating a predescribed dark nwo agenda. Some may come up the ranks like Ginny, but ALL belong to Council for Foreign Relations and other such high level private clubs or organizations. When IBM sells off their Mainframe Manufacturing (Poughkeepsie) to an elite Saudi, under an American Co. sounding name of course, ... and the U.S. Government ... doesn't balk ... that has me worried for our 1984 future.
    Carol Van Linda Suzan ,
    Sears is doing this also
    Suzan Carol Van Linda ,
    Details? Thanks!
    vibert Zytor-LordoftheSkies ,
    True in every large corporation. They use almost free money from the US Government to do it. (Taxpayer's money)
    DDRLSGC vibert ,
    Yeah, it is amazing how they stated that they don't need help from the government when in reality they do need government to pass laws that favor them, pack the court system where judges rule in their favor and use their private police and the public sector police to keep the workers down.
    Johnny Player DDRLSGC ,
    Why do you put disqus in your name? . Is that so you can see if they sell your info and you know where it originated from?
    Theo Geauxvan Zytor-LordoftheSkies ,
    I wonder how many billions (trillions?) have been funneled from corporate workers pockets this way? It seems all corporations are doing it these days. Large-scale transfer of wealth from the middle class to the wealthy.
    Stevie Ponders Theo Geauxvan ,
    It's called asset stripping. Basically corporate raiding (as in pillage) from the inside.
    R. J. Smith , Thursday, March 22, 2018 9:06 AM
    "Member of the IBM family" -- BS. Your employer is not your family.
    Randall Smith R. J. Smith
    Not anymore. With most large companies, you've never been able to say they are "family." Loyalty used to be a thing though. I worked at a company where I saw loyalty vanish over a 10 year period.
    marsto R. J. Smith
    Except when your employer is the one preaching associate loyalty and "we are family" your entire career. Then they decide you've been too loyal and no longer want to pay your salary and start fabricating reasons to get rid of you. ADP is guilty of these same practices and eliminating their tenured associates. Meanwhile, the millennials hired play ping pong and text all day, rather than actually working.
    DDRLSGC marsto
    Yeah, and how many CEOs actually work to make their companies great instead of running them into the ground, thinking about their next job move, and playing golf
    Mary Malley R. J. Smith ,
    I have to disagree with you. I started with IBM on their rise up in those earlier days, and we WERE valued and shown that we were valued over and over through those glorious years. It did feel like we were in a family, our families mattered to them, our well-being. They gave me a month to find a perfect babysitter when they hired me before I had to go to work!

    They helped me find a house in a good school district for my children. They bought my house when I was moving to a new job/location when it didn't sell within 30 days.

    They paid the difference in the interest rate of my loan for my new house from the old one. I can't even begin to list all the myriad of things that made us love IBM and the people we worked with and for, and made us feel a part of that big IBM family.

    Did they change, yes, but the dedication we gave was freely given and we mutually respected each other. I was lucky to work for them for decades before that shift when they changed to be just like every other large corporation.

    Georgann Putintsev Mary Malley ,
    The Watson family held integrity, equality, and knowledge share as a formidable synthesis of company ethics moving a Quality based business forward in the 20th to 21st century. They also promoted an (volunteer) IBM Club to help promote employee and family activities inside/outside of work which they by-en-large paid for. This allowed employees to meet and see other employees/families as 'Real' & "Common-Interest" human beings. I participated, created, and organized events and documented how-to-do-events for other volunteers. These brought IBMers together inside or outside of their 'working' environment to have fun, to associate, to realize those innate qualities that are in all of us. I believe it allowed for better communication and cooperation in the work place.

    To me it was family. Some old IBMers might remember when Music, Song, Skits were part of IBM Branch Office meetings. As President of the IBM Clubs Palo Alto branch (7 yrs.), I used our Volunteer Club Votes to spend ALL that IBM donated money, because they <administratively> gave it back to IBM if we didn't.

    Without a strong IBM Club presence, it gets whittled down to 2-3 events a year. For a time WE WERE a FAMILY.

    bookmama3 Georgann Putintsev , in reply to" aria-label="in reply to">
    Absolutely! Back when white shirts/black suits were a requirement. There was a country club in Poughkeepsie, softball teams, Sunday brunch, Halloween parties in the fall, Christmas parties in December where thousands of age appropriate Fisher Price toys were given out to employee's kids. Today "IBMer" is used by execs as a term of derision. Employees are overworked and under appreciated and shortsighted, overpaid executives rule the roost. The real irony is that talented, vital employees are being retired for "costing too much" while dysfunctional top level folk are rewarded with bonuses and stock when they are let go. And it's all legal. It's disgraceful.
    OrangeGina R. J. Smith , in reply to" aria-label="in reply to">
    very true, however for many of us, our co-workers of a very long time ARE family. Corporations are NOT people, but they are comprised of them.
    HiJinks R. J. Smith , in reply to" aria-label="in reply to">
    It was true at one time, but no more.
    Herb Tarlick R. J. Smith , in reply to" aria-label="in reply to">
    This one was until the mid eighties.

    [Oct 30, 2018] Eventually all the people who I worked with that were outsourced to IBM were packaged off and all of our jobs were sent offshore.

    Oct 30, 2018 | features.propublica.org

    Joe Harkins , Saturday, March 24, 2018 12:12 PM

    I recall, back in the mid-1960s, encountering employees of major major corporations like IBM, US Steel, the Big Three in Detroit, etc, There was a certain smugness there. I recall hearing bragging about the awesome retirement incomes. Yes, I was jealous. But I also had a clear eye as to the nature of the beast they were working for, and I kept thinking of the famous limerick:

    There was a young lady of Niger
    Who smiled as she rode on a Tiger;
    They came back from the ride
    With the lady inside,
    And the smile on the face of the Tiger.

    JoeJoe , Friday, March 23, 2018 10:25 AM
    As an ex-IBM employee, I was given a package ( 6 months pay and a "transition" course) because I was getting paid too much or so I was told. I was part of a company (oil industry) that outsourced it's IT infrastructure support personnel and on several occasions was told by my IBM management that they just don't know what to do with employees who make the kind of money I do when we can do it much cheaper somewhere else (meaning offshore).

    Eventually all the people who I worked with that were outsourced to IBM were packaged off and all of our jobs were sent offshore. I just turned 40 and found work back in the oil industry. In the short time I was with IBM I found their benefits very restricted, their work policies very bureaucratic and the office culture very old boys club.

    If you weren't part of IBM and were an outsourced employee, you didn't fit in. At the time I thought IBM was the glory company in IT to work for, but quickly found out they are just a dinosaur. It's just a matter of time for them.

    [Oct 30, 2018] To a bean counter a developer in a RH office in North America or Europe who s been coding for RH for 10 years is valued same as a developer in Calcutta who just graduated from college

    Notable quotes:
    "... There's not an intrinsic advantage to being of a certain nationality, American included. Sure, there are a lot of bad companies and bad programmers coming from India, but there are plenty of incompetent developers right here too. ..."
    "... A huge problem with the good developers over there is the lack of English proficiency and soft skills. However, being born or graduated in Calcutta (or anywhere else for that matter) is not a determination of one's skill. ..."
    "... I get what the intention of the first comment was intended to be, but it still has that smugness that is dangerous to the American future. As the world becomes more interconnected, and access to learning improves, when people ask you why are you better than that other guy, the answer better be something more than "well, I'm American and he is from Calcutta" because no one is going to buy that. The comment could've said that to a bean counter a solid developer with 10 years of experience is worth the same as a junior dev who just came out of school and make the same point. What exactly was the objective of throwing in Calcutta over there? ..."
    "... I have dealt with this far too much these VPs rarely do much work and simply are hit on bottom line ( you are talking about 250k+), but management in US doesn't want to sit off hours and work with India office so they basically turn a blind eye on them. ..."
    Oct 30, 2018 | arstechnica.com

    dmoan, 2018-10-30T07:32:29-04:00

    Drizzt321 wrote: show nested quotes

    A.Felix wrote:

    Drizzt321 wrote:

    Dilbert wrote:

    motytrah wrote:

    bolomkxxviii wrote:

    No good will come from this. IBM's corporate environment and financial near-sightedness will kill Red Hat. Time to start looking for a new standard bearer in Linux for business.

    I agree. Redhat has dev offices all over. A lot of them in higher cost areas of the US and Europe. There's no way IBM doesn't consolidate and offshore a bunch of that work.

    This. To a bean counter a developer in a RH office in North America or Europe who's been coding for RH for 10 years is valued same as a developer in Calcutta who just graduated from college. For various definitions of word 'graduated'.

    I'm just waiting until some major company decides that some of the nicer parts of middle America/Appalachia can be a LOT cheaper, still nice, and let them pay less in total while keeping some highly skilled employees.

    I don't know about that. Cities can be expensive but part of the reason is that a lot of people want to live there, and supply/demand laws start acting. You'll be able to get some talent no doubt, but a lot of people who live nearby big cities wouldn't like to leave all the quality of life elements you have there, like entertainment, cultural events, shopping, culinary variety, social events, bigger dating scene, assorted array of bars and night clubs, theatre, opera, symphonies, international airports... you get the drift.

    I understand everyone is different, but you would actually need to pay me more to move to a smaller town in middle America. I also work with people who would take the offer without hesitation, but in my admittedly anecdotal experience, more tech people prefer the cities than small towns. Finally, if you do manage to get some traction in getting the people and providing the comforts, then you're just going to get the same increase in cost of living wherever you are because now you're just in one more big city.

    Costs of life are a problem, but we need to figure out how to properly manage them, instead of just saying "lets move them somewhere else". Also we shouldn't discount the capability of others, because going by that cost argument outsourcing becomes attractive. The comment you're replying to tries to diminish Indian engineers, but the reverse can still be true. A developer in India who has been working for 10 years costs even less than an American who just graduated, for various definitions of graduated. There's over a billion people over there, and the Indian Institutes of Technology are nothing to scoff at.

    There's not an intrinsic advantage to being of a certain nationality, American included. Sure, there are a lot of bad companies and bad programmers coming from India, but there are plenty of incompetent developers right here too. It's just that there are a lot more in general over there and they would come for cheap, so in raw numbers it seems overwhelming, but that sword cuts both ways, the raw number of competent ones is also a lot.

    About 5% of the American workforce are scientists and engineers, which make a bit over 7 million people. The same calculation in India brings you to almost 44 million people.

    A huge problem with the good developers over there is the lack of English proficiency and soft skills. However, being born or graduated in Calcutta (or anywhere else for that matter) is not a determination of one's skill.

    I get what the intention of the first comment was intended to be, but it still has that smugness that is dangerous to the American future. As the world becomes more interconnected, and access to learning improves, when people ask you why are you better than that other guy, the answer better be something more than "well, I'm American and he is from Calcutta" because no one is going to buy that. The comment could've said that to a bean counter a solid developer with 10 years of experience is worth the same as a junior dev who just came out of school and make the same point. What exactly was the objective of throwing in Calcutta over there? Especially when we then move to a discussion about how costly it is to pay salaries in America. Sounds a bit counterproductive if you ask me.

    I think a lot of the dislike for Indian developers is that they usually are the outsourced to cheap as possible code monkey developers. Which can be a problem anywhere, for sure, but at least seem exacerbated by US companies outsourcing there. In my limited experience, they're either intelligent and can work up to working reasonably independently and expanding on a ticket intelligently. Or they're copy a pasta code monkey and need pretty good supervision of the code that's produced. Add in the problem if timezones and folks who may not understand English that great, or us not understanding their English, and it all gives them a bad name. Yet I agree, I know some quite good developers. Ones that didn't go to a US college.

    My impression, totally anecdotal, is that unless you can hire or move a very good architect/lead + project/product manager over there so you can interact in real-time instead of with a day delay, it's just a huge PITA and slows things down. Personally I'd rather hire a couple of seemingly competent 3 years out of college on their 2nd job (because they rarely stay very long at their first one, right?) and pay from there.

    Companies/management offshore because it keep revenue per employee and allows them to be promoted by inflating their direct report allowing them to build another "cheap" pyramid hierarchy. A manager in US can become a director or VP easily by having few managers report to him from India. Even better this person can go to India ( they are most often Indian) and claim to lead the India office and improve outsourcing while getting paid US salary.

    I have dealt with this far too much these VPs rarely do much work and simply are hit on bottom line ( you are talking about 250k+), but management in US doesn't want to sit off hours and work with India office so they basically turn a blind eye on them.

    [Oct 30, 2018] IBM is bad, but it s just the tip of the iceberg. I worked for a major international company that dumped almost the entire IT workforce and replaced them with managed services , almost exclusively H-1B workers from almost exclusively India.

    Oct 30, 2018 | features.propublica.org
    netmouse , Saturday, March 24, 2018 10:49 AM
    Outstanding. I had to train people in IBM India to do my job when (early) "retired". I actually found a new internal job in IBM, the hiring manager wrote/chat that I was a fit. I was denied the job because my current group said I had to transfer and the receiving group said I had to be on a contract, stalemate! I appealed and group HR said sorry, can't do and gave me one reason after another, that I could easily refute, then they finally said the job was to be moved overseas. Note most open jobs posted were categorized for global resources. I appealed to Randy (former HR SVP) and no change. At least I foced them to finally tell the truth. I had also found another job locally near home and received an email from the HR IBM person responsible for the account saying no, they were considering foreigners first, if they found no one suitable they would then consider Americans. I appealed to my IBM manager who basically said sorry, that is how things are now. All in writing, so no more pretending it is a skill issue. People, it is and always has been about cheap labor. I recall when a new IBM technology began, Websphere, and I was sent for a month's training. Then in mid-2000's training and raises pretty much stopped and that was when resource actions were stepped up.
    TVGizmo , Friday, March 23, 2018 10:36 PM
    IBM started downhill as a result of many factors.

    But the single most cause was when.....Respect for the Individual (the first Basic Belief) was ignored. Everything else was collateral damage.

    Former 'Manager of the Year' in the old Field Engineering Division.

    CRAW , Friday, March 23, 2018 9:51 AM
    IBM is bad, but it's just the tip of the iceberg. I worked for a major international company that dumped almost the entire IT workforce and replaced them with "managed services", almost exclusively H-1B workers from almost exclusively India. This has been occurring for decades in many, MANY businesses around the country large and small. Even this article seems to make a special effort to assure us that "some" workers laid off in America were replaced with "younger, less experienced, lower-paid American workers and moving many other jobs overseas." How many were replaced with H-1B, H-4 EAD, OPT, L-1, etc? It's by abusing these work visa programs that companies facilitate moving the work overseas in the first place. I appreciate this article, but I think it's disingenuous for ProPublica to ignore the elephant in the room - work visa abuse. Why not add a question or two to your polls about that? It wouldn't be hard. For example, "Do you feel that America's work visa programs had an impact on your employment at IBM? Do you feel it has had an impact on your ability to regain employment after leaving IBM?" I'd like to see the answer to THOSE questions.

    [Oct 30, 2018] Neoliberal way of screwing up people is via HR

    Notable quotes:
    "... I too was a victim of IBM's underhanded trickery to get rid of people...39 years with IBM, a top performer. ..."
    Oct 30, 2018 | features.propublica.org
    xn0 , Monday, April 2, 2018 1:44 PM
    These practices are "interesting". And people still wonder why there are so many deadly amok runs at US companies? What do they expect when they replace old and experienced workers with inexperienced millenials, who often lack basic knowledge about their job? Better performance?

    This will run US tech companies into the ground. This sort of "American" HR management is gaining ground here in Germany as well, its troubling. And on top they have to compete against foreign tech immigrants from middle eastern and asian companies. Sure fire recipe for social unrest and people voting for right-wing parties.

    nottigerwoods , Friday, March 30, 2018 1:39 PM
    I too was a victim of IBM's underhanded trickery to get rid of people...39 years with IBM, a top performer. I never got a letter telling me to move to Raleigh. All i got was a phone call asking me if i wanted to take the 6 month exception to consider it. Yet, after taking the 6 month exception, I was told I could no longer move, the colocation was closed. Either I find another job, not in Marketing support (not even Marketing) or leave the company. I received no letter from Ginni, nothing. I was under the impression I could show up in Raleigh after the exception period. Not so. It was never explained....After 3 months I will begin contracting with IBM. Not because I like them, because I need the money...thanks for the article.
    doncanard , Friday, March 30, 2018 1:33 PM
    dropped in 2013 after 22 years. IBM stopped leading in the late 1980's, afterwards it implemented "market driven quality" which meant listen for the latest trends, see what other people were doing, and then buy the competition or drive them out of business. "Innovation that matters": it's only interesting if an IBM manager can see a way to monetize it.

    That's a low standard. It's OK, there are other places that are doing better. In fact, the best of the old experienced people went to work there. Newsflash: quality doesn't change with generations, you either create it or you don't.

    Sounds like IBM is building its product portfolio to match its desired workforce. And of course, on every round of layoffs, the clear criterion was people who were compliant and pliable - who's ready to follow orders ? Best of luck.

    [Oct 30, 2018]