Article 43

 

Friday, February 26, 2010

The Corporate Shell Game

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...when such rates cannot be achieved by organic growth in the business, executives start shaving off perceived fat and before they know it they’re cutting off the muscle and then shaving off bone chips. And when they’ve gotten to the bone chips they borrow other peoples money to buy new companies, load up those companies with debt and extract equity form them and then because it looks like the parent is still growing award themselves huge bonuses. It’s a shell game.
- The Agonist

The Corporate Shell Game

By Bob Franken
Huffington Post
February 16, 2010

"Cut costs at all costs.” If there is any holy gospel in the corporate world, that’s it. The god of profits is worshiped by the high priests—highly paid, by the way—who endlessly chant “Cut costs at all costs,” or words to that effect.

Their SALVATION THROUGH DESTRUCTION is camouflaged in expressions like “Efficiencies” and “Synergies” and “Workforce Reductions” and “Belt Tightening” and “Outsourcing” and “Consolidations” and a big one, “Mergers,” where companies get larger and smaller at the same time.

They exact a TERRIBLE HUMAN PRICE for their greed every time they toss millions into the rubble with one layoff after another. In the process, their ONCE-SUCCESSFUL businesses are ground into failure as their product and reputation earned over decades are frittered away leaving empty shells.

The shell game is hardly unique to the US. It’s played all over the world. The latest case in point is TOYOTA. It’s still unclear when the auto manufacturer’s legendary quality became a myth...a fiction that persisted as the reality of deterioration was obscured in the haze of image management.

“Bigger Bigger Bigger” became the Toyota plan instead of “Better Better Better.” The company kept spreading out and spreading thin, until it reached the breaking point. “Breaking Point” means being found out, inevitably getting caught when shoddiness and deception can NO LONGER BE HIDDEN and come crashing down on the carefully cultivated “brand”

As for the CONSUMERS, so many companies in effect tell them to ”LIKE IT OR LUMP IT.” Their claims of SUPPORT FOR CUSTOMERS are bogus.

The usual reply from executives is that they are acting on behalf of the stockholders. But as we so painfully learn, the stockholders get hosed too, sooner or later, usually sooner.

While “Cut Costs at All Costs” is the article of faith, it’s not an absolute. There’s no cost-cutting for THOSE AT THE TOP, who stay there EVEN AS THEIR OPERATIONS CRUMBLE beneath them. And they continue to receive their millions in salary from the money they’ve squeezed out by choking the companies.

In the process, they have done serious damage to them, as well as the millions who depended on them for employment and the security of knowing they could pay for food and medical care and a roof over their heads.

Where no expense is spared is what it takes to keep Washington at bay. Spreading a few bucks around to all the willing politicians works wonders at keeping the United States from reordering corporate policy and regulation.

As for the shells of those one-proud businesses, it’s on to new mergers, new cutbacks new layoffs. Finally, there’s nothing left. It doesn’t matter how big a hull is when it’s empty. It’s like the expression “Cut at all Costs” when there’s nothing left to cut.

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Posted by Elvis on 02/26/10 •
Section Revelations • Section Dying America
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Wednesday, February 24, 2010

Legal Uses of Your Credit Card

Once upon a time, credit reports were used only for credit. Now, companies use it for a lot of decisions. FIND OUT what is legal and what is not.

Companies use it to decide whether to give you a job. Insurers use it to set your insurance premiums. Before long, I wouldn’t be surprised if people start using it before blind dates! (Oh wait, that’s what Facebook is for).

That last one was a little tongue in cheek because, by law, you aren’t allowed to pull someone’s credit to see if they’d be a good date. The law that prevents that is the FAIR CREDIT REPORTING ACT, which specifically states what a credit report can be used for:

· Applications for credit, insurance, and rentals for personal, family or household purposes.

· Employment, which includes hiring, promotion, reassignment or retention. A CRA may not release a credit report for employment decisions without consent.

· Court orders, including grand jury subpoenas.

· “Legitimate” business needs in transactions initiated by the consumer for personal, family, or household purposes. (litigation is not legitimate by 3rd parties)

· Account review. Periodically, banks and other companies review credit files to determine whether they wish to retain the individual as a customer.

· Licensing (professional).

· Child support payment determinations.

· Law enforcement access: Government agencies with authority to investigate terrorism and counterintelligence have secret access to credit reports.

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Posted by Elvis on 02/24/10 •
Section General Reading
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Tuesday, February 23, 2010

Bye Bye Boeing

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Boeing prepares to cut nearly 800 IT workers
The layoffs are expected in April

By Patrick Thibodeau
Computer World
February 23, 2010

The Boeing Co. late last week issued 1,000 LAYOFF notices to employees, many of them working in IT.

The company sent 60-day layoff notices to the workers, who are at risk of being laid off on April 23. Of those notices, about 800 went to employees of Boeing’s engineering, operations and technology unit; most of the people in that unit are in IT, according to Tim Healy, a company spokesman.

The aerospace company employs 158,500 people, including 18,000 in its engineering and technology group.

Healy said that between now and the layoff date, retirements and other forms of attrition could eliminate the need for some of the cuts, “although it’s impossible to predict how often that could happen or how many employees will actually leave the company,” he said.

This layoff plan is a continuation of the company’s efforts to cut 10,000 jobs.

BOEING OUTSOURCES SOME OF IT’S SOFTWARE DEVELOPMENT TO THIRD PARTIES IN INDIA, but it’s unclear whether that played a role in the layoffs announced last week. Boeing has outsourced work to a number of Indian IT vendors in recent years.

Last March, Boeing announced the OPENING OF THE BOEING RESEARCH AND TECHNOLOGY INDIA CENTER in Bengaluru, India. The company said that operation is its third advanced research center outside the U.S.

Boeing late last month said that its revenue for 2009 hit a record $68.3 billion, up from $60.9 billion in 2008, and attributed the performance to higher commercial deliveries and growth in the defense, space and security areas.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld.

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Posted by Elvis on 02/23/10 •
Section Dying America
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Monday, February 22, 2010

New Credit Card Rules

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4 Tips About New Credit Card Rules

By Philip Moeller
US News
February 21, 2010

New credit card rules take effect this week. While the rules are good news for consumers, they also are forcing cash-strapped banks and credit card companies to look for other sources of revenue. So, if you have and use credit cards, you need to be particularly vigilant over the next few months to make sure you don’t unwittingly expose yourself to unnecessary fees, avoidable transaction charges, and higher interest rates.

The new rules, as EXPLAINED BY THE FEDERAL RESERVE BOARD, require credit card companies to provide you with 45-day notice of any major changes to your card’s interest rates, fees, and other material terms. Also, overdraft protection is no longer automatic. Your approval is required for such protection, which carries a stiff service fee. If you don’t provide that approval, use of your card for purchases that exceed your card limits may be denied. But at least you won’t be charged a fee.

The new rules also make it harder for companies to raise the interest rates of newly issued cards and provide curbs on high-fee cards. When you get your monthly statements, they must include disclosures about the repayment costs for any outstanding balances. If you make only minimum payments, the statement must tell you how long it would take to pay off your balance. It also must tell you how much you would have to pay each month to repay your balance in three years.

These are welcome improvements, although like a lot of government rules, they were spurred by past problems—huge fees and penalties levied on consumers who were slammed by the recession and struggling with big card balances they no longer could afford. These new rules may limit those problems but are causing the credit-card issuers to seek new sources of revenue that might, if not understood by consumers, become the sources of future problems. After all, the card companies also have been hammered by soaring delinquencies, and their business models need to change.

Here are four things you should be on guard against in the wake of these new rule charges:

Stick to Fixed Card Rates. The new protections require advance notice of changes in your card terms and limit interest-rate increases on newly issued cards. But these safeguards may not apply if your cards carry introductory rates or other variable rate conditions. Avoid such variable terms if you can; if not, understand how these features work and be prepared for unpleasant rate increases.

Carefully Review Rewards Programs. Card companies are seeking additional revenue through new and expanded service fees and awards programs. These might be great for you but make sure you fully understand your financial exposure in these deals.

Foreign Use of Credit Cards. New York Times personal finance columnist Ron Lieber and others have noted that the new rules do not curb credit-card companies’ ability to sock you with stiff fees for using your card to make foreign transactions. This may not even require you to actually travel outside the U.S., as these fees could be applied for simply using your card to buy something from a foreign merchant. Not all credit cards impose such fees; find out if yours does before using the card for foreign transactions.

The Tyranny of a High Credit Rating. Under the new credit-card rules, THE WISE COURSE of action often may be to cancel cards once you’ve received advance notice of UNFAVORABLE CHANGES. While getting rid of cards can, in some circumstances, hurt your credit rating, this still may be the best decision for you. Carrying a high credit score is nice but having a high score is of greatest concern when you’re seeking new loans or renegotiating terms on existing debts. So, if you are not going to be seeking new or revised loan and credit terms anytime soon, downsizing your credit-card portfolio by getting rid of high-rate cards is a sound decision.

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Posted by Elvis on 02/22/10 •
Section General Reading
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Sunday, February 21, 2010

US States Slash Medicaid

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Of all the preposterous assumptions of humanity over humanity, nothing exceeds most of the criticisms made on the habits of the poor by the well-housed, well-warmed, and well-fed.
- Herman Melville

If a TRUE MEASURE of a society is how well it TREATS IT’S POOR, elderly, children, disabled, and retired - WHAT DOES THAT SAY about us?

---

US states slash Medicaid

By Tom Eley
World Socialist Web Site
February 20, 2010

US STATES are imposing major cuts to Medicaid, the health insurance program for low income Americans jointly funded with the federal government. The cuts are being enacted in response to huge budget deficits in states throughout the country and a sharp increase in enrollment fuelled by the unemployment crisis.

Cuts in Medicaid services are a critical component of the attempts by the US corporate and financial elite, led by the Obama administration, to slash government health care costs and reduce care. On Thursday, OBAMA ESTABLISHED A BIPARTISAN PANEL whose central purpose will be to find ways to decrease spending on government health care and pension programs, including Medicaid

Some versions of the Democrats health care overhaul proposals include an expansion of Medicaid eligibility, but without full support for state governments. This will translate into further cuts to services and ensure that larger numbers of Americans have access only to the most limited and inadequate health care coverage, while the wealthy continue to enjoy the best care money can buy.

Enrollment in Medicaid increased by 3.3 million between June 2008 and June 2009 to nearly 47 million cases, according to a study released Thursday by the Kaiser Family Foundation. Caseloads increased in every US state. In thirteen states, enrollment shot up by more than 10 percent. According to a new study by Families USA, for every 1 percentage point rise in the US unemployment rate, 1 million people become eligible for Medicaid and related programs.

With Medicaid already consuming about a fifth of most state budgets - the same as the average outlay for education, both Democrat and Republican governors and lawmakers throughout the country are insisting on deep cuts in the services provided to Medicaid recipients.

Medicaid typically provides insurance to those who fall below the official poverty level, but only within certain categories: children, pregnant women, parents of young children, the disabled, and the elderly who require nursing home care. The program’s reach varies among the states, but the majority of Americans living in poverty three out of five according to one estimate - are not covered by Medicaid.

Because emergency federal stimulus funding for Medicaid bars states from narrowing eligibility requirements, states have instead targeted medical services and payments to doctors for cuts. In recent years the federal government paid between 50 percent and 75 percent of a states Medicaid costs - the poorer the state, the higher the federal proportionbut the stimulus package increased this share to between 61 percent and 85 percent, at a cost of $87 billion. These funds are set to expire at the end of December unless Congress approves a $25 billion extension.

The additional federal funds have been grossly inadequate, and every state faced Medicaid funding shortfalls in the current fiscal year, according to the Kaiser Foundation study. In response, a number of states are curtailing currently covered non-essential” services.

Nevada’s Republican governor, Jim Gibbons, has proposed cutting all Medicaid funding for adult coverage of eyeglasses, dentures, and hearing aids. In order to save about $830,000, the state will also reduce the number of diapers provided monthly to incontinent adults (to 186 from 300), the New York Times reports.

Massachusetts will eliminate coverage for restorative DENTAL SERVICE. Last year a similar revocation of dental coverage in Michigan led to the death of a 76-year-old woman, Blanche D. LaVire, who had been diagnosed with abscesses and advanced periodontitis that required surgery. She died while waiting for state bureaucracies to approve an exception due to a mental health condition.

Michigan, which eliminated not only dental but vision benefits for adult Medicaid recipients in fiscal year 2010, is considering a bevy of new cuts for 2011, including mental health services, prescription drug coverage, treatment for deformities, and artificial limbs.

Similarly, New Mexico’s Democratic governor, Bill Richardson, is proposing cuts to Medicaid that could include prescription drug coverage, vision and dental care, hospice care for near-death patients, and physical therapy.

Maine is moving to limit outpatient mental health visits for adult Medicaid recipients to 18 per year and to cap outpatient hospital visits at 15 per year.

Many more states have reduced the amount that they pay to doctors, clinics, hospitals, and nursing homes who treat Medicaid recipients. Already Medicaid is rejected by many health care providers because it tends to pay at a level far below private insurance and Medicare. These reimbursement cuts ensure that fewer Medicaid patients will be able to find treatment, and those clinics and hospitals that do so will be further driven to reduce costs and quality.

Among the states likely to enact major cuts for Medicaid reimbursement are New York, Texas, Pennsylvania, Maine, Louisiana, Maryland, Missouri, Virginia, and Vermont. Maine is contemplating a 10 percent across-the-board cut, and New York Governor David Paterson is proposing to slash $400 million from Medicaid reimbursement.

After Kansas’s Democratic governor, Mark Parkinson, imposed a 10 percent cut in provider payments beginning January 1, Dr. C. Joseph Beck, a Wichita ophthalmologist, ended treatment for his Medicaid patients. “I’m out, Im done,” Dr. Beck told the New York Times. “I didn’t want to. I want to take care of people. But I also have three children and many employees to take care of.”

Some states are cutting essential services that, by triggering the removal of federal matching funds, will effectively double the funding cut. Tennessee’s Democratic governor, Phil Bredesen, is proposing cuts that would set up a $10,000 limit on inpatient hospital care, a sum easily surpassed by serious car accidents, heart attacks, and treatment for serious illnesses. Bredesen would also impose limits on specific hospital services, including X-rays, laboratory services and doctors office visits, the Times reports.

Arizona’s Republican governor, Jan Brewer, has proposed kicking 310,000 adults without dependent children off Medicaid rolls and scrapping the states Children’s Health Insurance Program (CHIP), a program that secures federal matching funds for states that subsidize health insurance for children from low-income households that earn more than the income cutoff for Medicaid. The state has already frozen enrollment in CHIP.

CALIFORNIA governor Arnold Schwarzenegger has proposed reducing adult eligibility for the states Medicaid program, Medi-Cal, from 133 percent to approximately 72 percent of the official poverty threshold, and to reduce eligibility for children and pregnant women from 200 percent to 133 percent of the poverty level. If enacted, these restrictions would cost an estimated 250,000 people their health insurance within six months.

Schwarzenegger has also threatened to end the state’s CHIP program, Healthy Families. The cut would affect nearly 900,000 children now enrolled in the program. California lawmakers are already moving to cut eligibility in CHIP from 250 percent to 200 percent of the federal poverty level and to impose increased premiums of $14 per child, even as private insurance costs in the state skyrocket. The legislature will also likely eliminate CHIP vision coverage.

The cuts enacted against Medicaid and CHIPS will disproportionately affect the most vulnerable sections of the population, especially children.

Yet Americas’ children are in desperate need of high-quality health care. According to a recent study whose results were published in the Journal of the American Medical Association, over half of all US children will suffer from a chronic illness during their childhoods, a two-thirds increase since the 1980s. Much of the increase is associated with obesity, asthma, and diabetes, conditions strongly linked to poverty and other environmental factors.

The reductions to Medicaid services and providers, even as the program’s rolls swell, demonstrates the basic INCOMPATIBITY OF THE RIGHT TO DECENT HEALTH CARE with the PROFIT DRIVE of Americas financial aristocracy. Having enriched themselves before, during, and after the financial crisis of their own making, the financial elite - acting through their two partiesare now demanding “tough choices” and discipline by cutting what remains of the nation’s limited social SAFETY NET.

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Posted by Elvis on 02/21/10 •
Section Dying America
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