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IBM Hides the Bodies, Eyes US Government Billions
theodp writes "As his company was striving to hide the bodies of its laid-off North American workers, IBM CEO Sam Palmisano stood beside President Barack Obama and waxed patriotic: 'We need to reignite growth in our country,' Palmisano said. 'We need to undertake projects that actually will create jobs.' While Sam positions IBM to get a slice of the $825 billion stimulus pie, Big Blue is quietly cutting thousands of jobs and refusing to release the numbers or locations, arguing that SEC disclosure rules don't apply since the US job cuts are immaterial in its big global picture. The layoffs included hundreds in East Fishkill, coming early in the year after NY taxpayers paid IBM $45 million not to cut additional jobs in East Fishkill in 2008. Some are questioning whether IBM incentives are worth the cost."
Ever got fired for workign for IBM...
It is far better to cut off a dying limb than to have the infection seep back into the whole body.
If the division was in such a pathetic state that the state had to beg IBM not to cut it in good times, is it any surprise that IBM decided to cut it in the bad times?
Business isn't charity, no matter what those enlightened European countries may believe.
Kinda makes you wonder why Apple didn't stick with IBM. Tsk. Nobody ever accused Steve of the smart business decisions.
this is why using tax payers money to solve private businesses problems is never right. at most issue low interest short term loans to ease cash flow issues. never just wholesale billion dollar give aways because it'll slide right into the CEO's and exec's pockets.
If you mod me down, I will become more powerful than you can imagine....
...to the pork barrel highboard, his company has been making billons for decades, but thinks it can screw some more in 'this time of need'.
He steps over the bodies of the fallen, leaps into the air and does a perfect belly flop into the barrel, with a belly laugh for effect - he'll get good style marks for that.
Sixes from five of the judges,only a 5.7 from China and billions for a wealthy corporation! Sam's gotta be pleased with that result.
If he's the Walrus then can I be a penguin please?
Last time they left bodies in their wake, the Allies found most of them...
If we can put a man on the moon, why can't we shoot people for Apollo-related non-sequiturs?
http://www.ibmandtheholocaust.com/
Rather than tell you my background etc. I'll leave this as a blank slate: /.'ers what are good jobs to be in at these times?
Or maybe I'll reword it ... What are good skills to have at these times?
Even in the linked article, they're only questioning how much to pay IBM -- not whether to pay them. It amazes me that local officials do this so often, when there's no real proof these sorts of incentives are a net gain. Localities pay hundreds of millions of dollar for sports team's stadiums and get no direct profit sharing, cities offer multi-million dollar packages - or in Seattle's case, even build an egregious trolley line - for businesses and don't even pretend to have a measure of the monetary benefit to the community for the given initial outlay. I always wonder how much these pointless incentives come from honest incompetence versus corruption of the government officials.
1. There is nothing evil about having made money. Ask George Soros who has billions.
2. IBM is a privately held company, not a government entitity. If they want to buy a jet or rework a division or two, that's (literally) their business, and not the business of Congress, or the president, no matter who he is.
3. Sending money to Washington: not a smart way to create jobs. History shows that.
But never mind that. We've been sane a long while, and change will be good!
--- For a good time mail uce@ftc.gov
IBM has much to answer for. I don't really see why the government of the United States of America should do one dollar of business with IBM. IBM knowingly worked to sabotage the economy of the USA and pocketed the winnings.
pandering to the felonious 'rich as nazis' crowd, & the disillusioned, disenfranchised, still under hypenosys 401Kaput population, will not help.
we're not thrilled with our 'role' yet until we see some transparency regarding the manufactured 'weather' we're living under, with disastrous results, i might add.
So is IBM the bad guy now I just need to know before I comment.
Jonathanjk.com
...they're so disorganized and flat-out dishonest with their employees that I say screw giving them any incentives, stimulus, or any other kind of special help. They need none.
All IBM has done since Gerstner is coast, layoff, reorg, and outsource. No significant new technology, major divestitures (heck, we sold off our entire networking arm to AT&T). The first thing Palmissano did in his video address after taking over as CEO is tell sales "don't let the engineers tell you no". Great idea - it led to vaprous announcements, selling technology we couldn't produce, and atrophied all of our internal systems, investment, and talent. Growth targets are consistently at bubble levels to ensure no one gets reasonable bonuses, and in the lead up to the firings in Fishkill managers were told to downrate employees on their PBC's to limit severance payments.
And no, I wasn't one of the ones laid off. If I had a better nest egg I might welcome it, freeing me from that blasted place. In the meantime, I have a family to support...
Did you ever think that these huge corporations would perform just as well, or even better, if top executives didn't exist, or just never did anything? So, if the company has good products and the economy is good, it prospers. And if the economy is bad, or the products are bad, the company suffers. That's what a company without top brass with golden parachutes, would do. The absurdly overpaid executives should be the ones who can turn a company around, whose leadership actually makes a difference.
But, as we could see with the big 3 car manufacturers and basically every big publicly traded company (in private companies you can bet your sweet ass that there's an owner that will keep an eye on the managers), executives don't do a lick of a difference. When times are tough, these companies tank - and ask for bailouts.
It's a bailout for incompetence, and Obama's administration would be foolish to support them. But it's too late - from the way the big 3 car manufacturers have been bailed out, I see more incompetence being rewarded.
"The agriculture ministry is not in charge of Gundam" - Japanese ministry official.
Forge a revolutionary Leninist-Trotskyist workers party! Sweep away capitalist anarchy and barbarism with international socialist revolution!
IBM have a history of being so patriotic (to the almighty Reichsma^Wdollar).
Let's get this quite clear: any major corporation would happily have (by act or omission) you and your family die if (a) it assisted with profit-making; (b) they could get away with it. Anything less severe, such as shedding thousands of US jobs while demanding money collected at the point of a gun (that's "tax" to you and me), is not even on the radar of morally questionable.
You're an asshole.
It's coming. Just you watch.
M1 Carbines for the US, and Holleriths for the Nazis? What a brilliant business strategy! European explosive manufacturers made tons of money supplying both Iran and Iraq during their war in the 1980's. But I guess you're not supposed to do this if your country is on one side of the conflict.
I suppose that IBM would claim that the Nazis had taken over the subsidiary, and that IBM in the US had no control over it. I believe that Ford and GM (Opel) had the same problem with their subsidiaries, and faced the same allegations after the war.
If the case in the book is so strong, why hasn't anyone sued IBM over it?
"Hey, Daryl McBride! Here's your chance to try to sue IBM again!"
Or maybe some militant animal rights groups can sue them over this: http://www-03.ibm.com/ibm/history/exhibits/vintage/vintage_4506VV2154.html
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
The incentives don't appear to work as several states have already found out. Invariably, companies receiving these incentives do not hold up their end of the bargain. And yet this practice continues. This is a kind of socialism too. Where's the outrage?
Wansu, th' chinese sailor
All government intervention must stop. Anything that government touches is only made worse. It does not matter whether it is federal, state or local. The result is the same, the individual/community/nation suffers and the government becomes more powerful.
Who is the most inefficient? Government workers! People who have no accountability, can steal money from taxpayers at a whim, and possess no real incentive to ever to a good job or improve themselves. So now that companies have gotten large enough to fail, the dumbest of all are taking them over. This will lead to greater failure because it is sucking in money from better people. Russia tried this approach, and the people starved... Americans are fat, but how long will we last when our bread lines run dry? Governemnt control of business has always failed, and will always fail. Obama is 100% wrong to "bail out" any company. Bush was no better since he did the same thing. We all knew W was a dummy the first time he opened his mouth, but Obama seemed a bit brighter.
Let the companies go under. Others are waiting to pick up the pieces and start fresh. If you are about to be laid off, sorry, but you are free to start your own business. If you had a brain you'd be working on it now instead of bitching. You don't need big college degrees to make a business. Get good at something and charge for your service.
So, they are getting rid of employees while asking for billions... Yeah, that's a great idea for business and reputation. It couldn't be that bad of an idea...
This is the problem when government does not place restrictions on a bailout package. Our government wrote a blank check on us to bailout the results of extreme corporate greed and stupidity. It was incredibly assinine to think that trading mortgages like securities was a good idea. And, now, Uncle Sam turns around like the patient older parent and says, "Oh it's okay .... we forgive you .... here is an 820b allowance." This money should *not* have gone to corporations but should go towards keeping people in their homes. This is the key to beginning recovery. I must say that I am severely disappointed in Obama not seeing this fundamental fact. We should have let these greedy corporations fold under their own weight. We have set a dangerous precedence now for future troubled economic times wherein corporations can say, "Hey, you helped us before!", as an argument for more welfare.
IBM is one of the largest corporations on earth. It employs around 400,000 workers world-wide (with about 40% in the US). IBM laying off 4,000 people is not the same as Microsoft laying off 5,000 people considering it's 1% of IBM's work force and close to 6% of Microsoft's (they have about 90,000 employees).
I can't remember a year I've been at IBM where there hasn't been layoffs to this degree. Furthermore, a strategic cost cutting plan was announced well over a year ago that aimed to raise the earnings-per-share by reducing overhead.
So a relatively small layoff like this was probably going to happen anyway regardless of the economic situation. That's why IBM is not reporting it specially.
With acquisitions and new hiring, unless your company is growing in size (and IBM isn't), you have to layoff people to make up the difference.
Apparently there has been a shortage of nurses in the US for quite a while, and it is expected to get worse. It's probably not what you were looking for, but it might be worth considering if you place a high value on job security.
Random news report on this, dated January 7 2009: http://cbs5.com/health/nursing.shortage.patient.2.901996.html
The claim that their German subsidiary was taken over by the state is a little shaky; Not only were the same management left in place but they continued to report to Thomas Watson in New York throughout the war. Most importantly, after the war they recovered the profits made selling and maintaining punch card machines for the holocaust.
If we can put a man on the moon, why can't we shoot people for Apollo-related non-sequiturs?
I just don't understand why any American wants to work for IBM. Granted, these days, any job is godsend. But in a year or so, this recession will be over and IBM will probably start growing again, like other tech companies. I have little respect for any American who accepts a job at IBM, given a choice. Years ago I used to work there, and I never got the sense that IBM appreciated its American workers.
And the men who hold high places must be the ones who start
To mold a new reality... closer to the heart
Man, the way they keep printing that money, I'm not really sure if I want to work for it any more. I mean, what's it going to be worth in 5 years? Why bother?
I'm going to make a still and go back to bartering. This money stuff is a total rip off.
-1 Uncomfortable Truth
First IBM manages to post a 'strong quarter' (though in depth analysis by some indicates serious problems underscoring the superficially nice summary).
Then, the CEO sends an email to the whole company saying while other companies are cutting back, IBM is going to be different because they think it is important to invest long term in its people because IBM can afford to.
The next day, they execute the first wave of layoffs.
As layoffs continue, they try to say things about 'accelerating workforce rebalancing through resource actions' to pretend it is somehow different from everyone else. Notably, they have architected the whole thing it so that they feel disclosing the details to the SEC is not required.
I guess it may be different, maybe IBM is trying to finally achieve a goal under the smokescreen of recession-induced lay-offs. They are ditching people in the US with high years of service as they reduce numbers to allow for future overseas growth *despite* relying chiefly upon the US market for revenue still.
I still work at IBM (for the moment), but this recent activity has really frustrated me. The BS is so transparent and yet they shovel it on us anyway. If IBM were at least forthcoming about it, I might retain some shred of respect, but they are being so slimy about it.
My conflict is lack of viable choice in my area and in the industry. Doing in-house IT for various companies has lacked the technical challenge I want, as well as a salary ceiling that goes with that level of expectation. Small business/startups are even less certain than IBM employment. Other healthy hardware providers don't tend to volunteer to help with complex application of the gear. I guess HP would be the other candidate, but they aren't any better and aren't where I live.
The money bubble hasn't hit us yet. But although it will, it's probably a few months out. It really depends on how much synergy the president can get from his former friends.
Anyway, the point is that the solution is not to not earn money, but simply to not hold it. Buy lots of stuff that's cheap now. Like land, and stocks.
The percentage of physical money (notes and coins) in circulation, is actually quite small compared to the amount of money existing as loans on countless accounting records of companies and banks. Banks create money on a grand scale, and contrary to what people would expect, it doesn't cause rampant inflation.
Have a look at this video series.
Just last week, a whole crew of IBM execs were in my office pitching moving my whole support organization to South America. On their charts, they have moved a huge percentage of their workforce to Asia (India included) and now South America. IBM is no longer a US Technology Company. They have no problems moving everything out of the US to make a buck.
[cmontgomeryburns]Schindler and I are like peas in a pod: we're both factory owners, we both made shells for the Nazis, but mine worked, dammit![/cmontgomeryburns]
Weaseling out of things is important to learn. It's what separates us from the animals... except the weasel."
A tree, some rope, some pissed off unemployed workers, and the executives that got a bonus while the workers were laid off...lets see what happens.
What were the German IBM managers supposed to do? Say "no" to Hitler??? I don't think that would have worked.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
800 laid off in rochester MN
Credit can appear and disappear relatively quickly without causing rampant inflation. That doesn't mean the total money supply can simply increase forever without doing so. Be very careful overgeneralising from the last decade. I think there's a specific reason we've gotten away with it for so long, which is China. They willingly hoarded ever more of our dollars and tied their currency to ours. Part of the reason is because they hold so many US dollars, if they tried to circulate them they'd become almost worthless. If they ever call in our debts by spending those dollars, we are in big trouble.
"Ever Onward IBM": http://de.youtube.com/watch?v=L9oh3gqOEKU
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
Last I checked, the Japanese had the highest amount of US dollar holdings. Or did the PRC suddenly gobble up the extra few hundred billion that were desperately necessary?
Printing money is not a smart idea, but at least it's an improvement. I know my money has some value, unlike batering, where you're never quite sure what you'll end up with.
As it is now, taxes are too low to pay for the government programs that the public seems to really want. Remember: Health Care, Defense, Social Security, and interest on our debt make up literally 90% of the federal budget. Unless someone is to propose deep cuts in these programs, any populist moaning on taxes strikes me as a bit annoying.
I have to agree; task #1 would be to balance the budget first, long before you start lowering taxes.
Instead, I'd concentrate on fixing our tax structure so people aren't spending $50/year to figure out their taxes. Reducing pork - there's all sorts of incentive programs out there the feds run that state and local agencies chase to buy equipment and run programs that, if it was 'their own' money they wouldn't touch with a ten foot pole - See the bridge to nowhere(local airport), Alaska.
We have more federal employee jobs today than manufacturing ones. That's another one that needs fixing. Personally, I'd be lowering employee taxes, even offering incentives. Something like making employee wages of up to $50k per employee deductible to businesses at 115% instead of 100% - the extra 15% would make employees somewhat cheaper, reducing the benefit of outsourcing.
Or go whole hog and get rid of income taxes in favor of sales taxes.
I don't read AC A human right
I'll tell you what - you give me a few suitcases of that soon to be worthless money, I'll give you some worthless goods in exchange (perhaps some brightly colored beads?), and we'll call it even.
I don't know what kind of crack I was on, but I suspect it was decaf.
Frankly, yes. They did have a choice, even if none of the outcomes of that choice were particularly pleasant.
If we can put a man on the moon, why can't we shoot people for Apollo-related non-sequiturs?
So it's not just China, rather Japan and China.
Nobody is proposing to abolish money and go back to bartering. I'm not even sure this stimulus is such a terrible idea, maybe it will work (though we'll never really known either way). What worries me is we've been doing this since the 80's (Reagan), long enough to know that even in good times, we never quite get around to repaying the debt we rationalize in the bad times. Where will it end?
That's what the parent is saying. China keeps their take from sales of cheap stuff mostly in US banks... the same ones that turn around and put the money back into loans for high interest credit cards and ARM home loans.
In a sense it was their money that fueled the housing boom... People borrowed to buy more stuff. Which increased Chinese profits and they make the money available to borrow so interest stays low. It works well until the bankers screw it up by fixing the books.. because they are "competing" to turn sub-prime 5% loans into 20% plus returns to investors.. take a guess how long that lasted?
What were the German IBM managers supposed to do? Say "no" to Hitler???
Yes. Yes, they were.
Sam Palmisano is doing more to gut the long term future of IBM then anything else. His constant reorgs, layoff's, "global sourcing" and other questionable business practices to meet his single goal of stock earnings is nuts.
This year managers were delayed on giving PBC ratings because they had to match layoff goals. So the managers want to keep their people and hence their jobs so they rated people as high as they could.
I'm so tired of hearing Indian accents and seeing the poor work we get out of them. On one project out of 4 people hired in Indian one was fired a few days in for lying on his resume, another quit for no announced reason. It wouldn't be so bad if the Indian we were hiring were competent but IBM must be paying so little over there that we get crappy people. I still have people after 5 months that have trouble using Putty to login to AIX servers. Don't even get me started on the Indian System Administrators. They have no clue of security and happily ignore every security policy even when it has repeatedly been shown to them.
My resume will be going out very soon, I'm just using IBM to get one more certification then giving them the finger.
CEOs of American companies beg for fed money and H1B visas for foreign workers saying they can't hire enough qualified Americans. They bitch about the poor quality of US schools that don't prepare Americans adequately. These are the same assholes who work deals for tax breaks to relocate factories/offices. Those are the tax breaks that no longer pay for schools. This process is no accident, it is a planned, systematic gutting of the American education system to allow companies to import more H1B visa workers from foreign countries.
Why do they want H1B visa workers? Because they are little more than slaves. H1B workers can't get a job at a different company if they don't like the work conditions or compensation at their sponsor company. They either suck it up or go back where they came from.
Eat the rich!
Especially PWC. Please, please start digging into the RCA's given to you on findings. For the last year and a half the so called Audit buddies and other middlemen between you and the people doing the work rewrite RCA's. If an RCA mentions that the problem is because of staffing it is unacceptable to turn that into an external auditor. IBM is deliberately lying to auditors and making up decent sounding reasons as to way an Audit Defect happened because there can be no stink attached to the layoffs and outsourcing to other countries.
So if any auditors are reading this get the word out to those auditing IBM and dig into the reasons. Unless we stop this practice of hiding layoffs being the failures IBM will not re-evaluate layoffs and outsourcing.
The author of the book was Edwin Black. He sued IBM at exactly the same time that he released the book and the suit was dismissed. Unfortunately for some strange reason, the dismissal of the lawsuit did not get nearly the same amount of media coverage that the initial suit timed with the book release got.
An interesting and little known fact about Mr Black is that before writing this book, he was publisher of "OS/2 Professional" when it went out of business due to IBM's killing off of the doomed OS. He seemed to have no problem with IBM's past while he was making money from a financial association with them.
Also, at least one historian who specializes in the Holocaust has called into question many of his accusations.. Again, few people care to listen to the other side, and prefer to simply assume everything Mr Black says is true.
Banks create money on a grand scale, and contrary to what people would expect, it doesn't cause rampant inflation.
You mean, US banks print money on a grand scale, and trade that money for real goods from foreign nations who never redeem them for American made goods because they'd rather trade them back and forth for oil, so the devaluation effects are never felt in the US?
Sorry, that was last millennium. This is the new millennium. The money is starting to come home. Those greenbacks are now bad cheques that MUST bounce, and so protectionism is the new order of the day.
-1 Uncomfortable Truth
Somehow they avoid the mass layoff rule. 49 laid off here, another 49 another day, another city and you can do it.
I'll tell you what - you give me a few suitcases of that soon to be worthless money, I'll give you some worthless goods in exchange (perhaps some brightly colored beads?), and we'll call it even.
Replace the beads with rare earth magnets and spools of copper wire for my turbines and motors, throw in a cow, some chickens and some tempered glass to expand my aquaponic setup and you've got a deal.
-1 Uncomfortable Truth
That's not what I was talking about. The video I provided explains what I was talking about. Banks can and are not allowed to "print money". Only the US government can print notes and create coins. The way in which banks manufacture money is by granting loans.
Just watch the video I linked to in my earlier post, it's really quite an eye opener.
The bailouts were supposed to preserve jobs for US workers. But, the execs pocketed the money, and fired the employees anyway. I guess the US public never learns.
At least, that I what I learned from watching Southpark, which seems to be as reliable a source as the US pop-media.
Actually we are in a period of deflation in which a dollar becomes more and more valuable. It can get so carried away that all of us may pray one day to be able to afford a dollar! Printing more money could well help all of us out.
As for the IBM lay offs some employees get really great severance packages. All of us should be so lucky as to be laid off from IBM.
This IS the same company after all that helped Hitler keep track of his concentration camp prisoners.
Expecting moral behavior from a corporation in general and IBM in particular is like expecting the sun to shine at night.
Until we change the things that make corporations amoral, we will never change their behavior.
It's no secret that our business schools teach our MBAs how to be absolute slime and justify it with the mantra of 'capitalism'.
An ideology of greed and selfishness breeds this, which is why the GOP is the party of the corporation... not that the Dems are much better, but at least they give lip service to something else.
"There are laws that enslave men, and laws that set them free. " - Sean Connery as King Arthur
Where will it end?
Where congress ends.
Consider yourself spoken to.
Yeah I'm sure you would have sacrificed your life just to stop Hitler from getting IBM-produced punchcards. Not. I certainly wouldn't.
Instead I'd ask to transfer to a different nation, but if I was denied I'd just continue my routine. Somewhat akin to what Oskar Schindler did, albeit not that grandiose.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
You wouldn't. As soon as an SS officer pointed a gun at you, you'd cave and start punching those IBM cards again.
In fact right now, I bet you have a job with questionable output which is harming someone/somewhere. You should quit. But you don't.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
The bailouts were supposed to preserve jobs for US workers. But, the execs pocketed the money, and fired the employees anyway. I guess the US public never learns.
Then get some means to put some real teeth to the bill. Make it near-impossible for them to do anything but preserve US work on the long-term.
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
Or go whole hog and get rid of income taxes in favor of sales taxes.
The problem with this "fair tax" is that it's not really fair.
As a percentage of income, the wealthy spend much less than average americans.
Additionally, the lower your income, the more debt you're likely to incur as economic times get tougher, and the fair tax taxes debt, not income.
The "fair tax" will be much more painful to the unemployed and middle class, and will have the poor screaming for anesthesia.
VLC FOR MAC IS DYING! IF YOU DEVELOP, PLEASE SAVE IT!!
Close the loophole and ignore their protests.
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
I want an aquapony too.
"Only the US government can print notes"
Bullshit. This hasn't happened since JFK printed United States Notes. The Federal Reserve Notes are printed by a PRIVATE bank. The shareholders of the bank are private individuals and not the government.
Well, you've got it backwards.
When they are printing money like mad, you want to work because inflation is eating away at your savings. The money you're being paid isn't worth as much, but balancing that is that you're getting a lot more of it.
When you have disinflation (which we're seeing signs of), you may be less inclined to work if you have savings, because those savings will go farther. On the other hand, nobody is spending their money because they expect that money to farther tomorrow. This may sound like a good thing, until you take the currency glasses off for a second and take a good look at what's happening: people have stopped making things. As in every economic situation, some folks do better than others and a few people do very well, but overall the economy stops creating value.
Of course, that's an extreme and simplistic scenario, but the bottom line is disinflation is really, really bad. I suppose 0 inflation would be ideal, but as a practical matter low but positive inflation is the safest and best state for things to be in.
It is because disinflation is so bad that stimulus package is so huge. It needs to be huge and swift and (this is overlooked) sustained. The idea it should only include short term stimulus is, in my opinion flawed. People need to factor the inflationary effect of spending into their plans for the next two years at least.
Of course, we'll pay in the end, but it's rather like worrying about whether you can afford the surgeon who's taking out the bullet lodged next to your spine.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
IBM, UBM, We all BM for IBM.
Not a problem.
Privatize the profits and Socialize the losses.
My ism, it's full of beliefs.
We are friends and all, but if our currency keeps tanking, releasing a few billions may help keep it stable against speculation....
IANAL but write like a drunk one.
Let the wizz kids in Wall Street decide instead.
They are real clever and driven by greed and profit, which means we are insured because if we lose they lose.
That is going to work *real* well.
With politicians at least you have democratic accountability. What have your dollars decided if they are gambled or literally burned by people that should have known better?
A wise person should know when it is time to try new ideas. The geniuses at Wall Street had their chance and blew it, enter the politicians to try to clean up the mess.
IANAL but write like a drunk one.
Patriotism is all well and good (not really, but I will humour you) but by buying first local and USian you are only deciding economical matters using non economics reasons.
That is great if that makes you feel happy, but if the businesses you are supporting are inefficient you are making yourself a disservice by paying too much for your goods and services, and thus supporting companies that are not getting more efficient....
IANAL but write like a drunk one.
They kept descendants of former slaves and other minorities complete and utter poverty, denying them any services that were offered to other citizens.
If you think that those people hadmuch sanitation, education and general public services, well, I have a bridge in San Francisco I would like to sell you ....
IANAL but write like a drunk one.
What has your family have to do with finding a new job in a different place?
Lots of folks around here use their family to cover for lack of integrity and principles ...
IANAL but write like a drunk one.
but the future of ibm is in bangalore. and we're not even talking about retaining top and middle management in new york either. ibm's future hudson river valley presence will be a token afterglow, and we're talking on the scale of 2-3 years, not 20-30. it's a long established trend btw, its not a sudden change. ibm has been pulling up its roots from the hudson valley: kingston, poughkeepsie, fishkill, westchester county, binghampton and endicott, for decades. they'll probably keep the big "art warehouse" on 57th and madison though, that's a nice gem
furthermore, i really don't know why anyone has a problem with this. if you can get a guy to do your job for 1/5th of what you are paid in bangalore, what do you want ibm to do? if they refuse to compete on those terms, then some other company will capitalize on that talent and beat ibm at its own game, and weaken the company, and result in american layoffs thataways. protectionism never works. it just delays the inevitable
if some guy in bangalore can do your job at 1/5th your payscale, you are going to suffer for that, on eway or another, no matter what the corporate or legal or political environment. simple economics prevails. go ahead and fight that. while you are at it, fight the tides and the rising and setting of the sun. just accept reality already
nothing in this world, no natural law, no morality, says you are priveledged to keep your job unchalleneged forever. move on, get into another industry, or don't: sit and whine and complain. that's all you are good at? that's the content of your character? you think you are priveledged and entitled, apparently
intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
You're right, but their world-leading rate of growth for all 30 of the last 30 years wasn't based on bankrupting countries that represented 20% of their exports, then, either, was it? Besides, if they fucked us, like that, they'd also be fucking the Japanese, big time, and then they can kiss 35% of their export market bye-bye.
Ironically, given the brilliance of the Chicago school and all the right-wing wage slaves that vote Republican, economists, almost unanimously, cite China's huge government investments in their own economy as the primo genitur of that entire 30 years of growth. That investment, on average? 40%. And foreign investment? 2.5% at the most. Of course, any "smart" American knows that investing in your own economy is for sissies, because the only problem with our Economy is that the super-rich don't have enough money yet.
Seriously? If we really wanted to destroy them we should have sent them Reagan, Milton Friedman, Alan Greenspan, and one or two others. Oh well, better luck next time ... oh wait.
What would happen if you crossed an Ivy-league educated politician with a rapper? And elected him President?
I can hear it now:
Pres: Yo, Yo, Yo! Bailout hos listen up!
You ain't gettin' none of my money - you heeere me? None of it!
What? - your outsourcin', no good, H1-B hirin' firm is going into the toilet? Welcome to the free market, bitches!
Laissez faire muthafockers!
Peace out.
The society for a thought-free internet welcomes you.
Hate to break it to you, but the commodities bubble has already gone bust. Dollars and Yen are the only things going up in value these days.
A slashdotter who didn't build his own computer is like a Jedi who didn't build his own lightsaber.
You're right it is, however it shouldn't getting taxpayer dollars either.
Falcon
Should there be a Law?
the TARP program mostly involved capital injections in exchange for equity in the companies
TARP, Troubled Assets Relief Program was originally supposed to buy troubled assets from banks but instead the money was given to banks without any strings. What did banks do with the money? They used to buy other banks.
Falcon
Should there be a Law?
With politicians at least you have democratic accountability. What have your dollars decided if they are gambled or literally burned by people that should have known better?
With my own money I can decide who I will invest with, but when government takes my money I can't decide.
Falcon
Should there be a Law?
Palmisano stood beside President Barack Obama and waxed patriotic
Did anyone else read that as "waxed pathetic?"
Your brain is not a computer.
Your last line shows that you've misdiagnosed the problem. This isn't a gunshot wound, it's an illness that has been building for a long time due to the poison of fiat money, the most obvious effects of it being the bubbles we've experienced for decades. The housing bubble is by far the most damaging to date, and if we keep it up it won't be the last unless we destroy the currency while trying to "fix" it.
The way to counteract the effects of mismanaged fiat currency is absolutely NOT to inject more of it into the system. Rather, the Federal Reserve needs to be regulated (most of you love regulation, now's your chance to make some good ones) or abolished entirely. I think the former far more likely, but I hear nobody talking about it except for Ron Paul's camp. Thankfully they're getting some credit for the accurate prediction of the current crisis, but it's apparently still not enough to warrant listening to the guy.
Your brain is not a computer.
Printing money is an improvement on what? On bartering? Perhaps, if you print money responsibly. I don't think any closed, private organization (like the Federal Reserve) can do that. I'm skeptical that a public one could.
We used to have a nice middle-ground in the gold standard, or any standard where paper scrip is backed by something physical. Gold is nice because it has traditionally been a very stable store of value: it's a hell of a lot harder to get more than just by turning on the press. You're right that bartering, while a nice alternative option for small communities, makes for a poor system of trade. Money is pretty necessary. I guess I'm just a little pickier about how sound I'd like it to be than most people.
Your brain is not a computer.
"I'll give you some worthless goods in exchange (perhaps some brightly colored beads?"
If your beads are metallic gold, silver and platinum colored.... you've got yourself a deal.
The grandparent does have a point. If we do pull out of this recession/depression in a couple years, chances are high hyperinflation is going to destroy the dollar. You simply can't print and borrow trillions of dollars without the consequences coming home to roost some day. Only thing allowing it right now is the dollar is still considered the global reserve currency and its the safest place to be at the moment after the yen.
America simply can't continue to run huge current account deficits forever. It has to A) stop borrowing money B) stop buying more goods than it produces. dot.com, housing and banking bubbles have allowed us to put off the crash but I'm thinking we are pretty much out of bubbles at this point and we are soon going to start seeing how really destitute the U.S. economy really is. Its increasingly a bunch of service jobs that produce very little real economic value. The Obama plan to strengthen labor unions is going to make it even worse. Unionizing manufacturing jobs will just hasten their flight overseas. You can unionize service jobs that can't be moved but it will just make healthcare, teaching, civil service, fire and police and all the other heavily unionized service jobs more expensive and they will suck even more life out of the rest of the economy.
@de_machina
Pretty great for a while. Less great when the roads start falling apart, criminals realize the police can't afford bullets, the jails have to release all the inmates at once, the number of under-educated people around you starts increasing because the schools have shut down
Tax on fuel should pay for roads and property tax pay for law enforcement, the fire department, and schools. With people keeping more of the money they work to earn they can use it to pay for more higher education.
It's not like bailouts are the only thing we fund with taxes, you know. There are actually a hell of a lot of services that benefit you directly on a daily basis. Eliminate taxes and you'll end up either losing those services entirely, or else paying for them out of pocket anyway.
What are these services? A cut in defense spending can be paid for by a sales tax. Many of the other federal agencies and departments are not constitutionally authorized. Others like the Agricultural department can have their budgets cut, congress has given big businesses like Archer Daniels Midland and Cargill billions of taxpayer dollars, in January 2008 congress passed a farm bill with about $200 billion in subsidies. Agricultural subsidies, which were supposed to be temporary, are nothing more than Corporate Welfare.
Falcon
Should there be a Law?
An unelected private organization you can decide not the do business with. You can't decide not to do business with the government, not unless you fancy jackbooted storm trooper thugs at your door.
Falcon
Should there be a Law?
crinimials
I agree that law enforcement can be wasted on minor vices, but a lot of laws which involve non-violence need to be enforced, such as traffic, fraud, corruption, health codes, etc.
The US has one of if not the highest per capita prison populations and something like half of them are in prison for nonviolent drug offices. Just possession can mean years in gaol. On the other hand without these victim-less crimes on the books not only would the prison population be cut in half but they free would be paying taxes. And if these drugs were legal then they could be taxed as well.
Falcon
Should there be a Law?
Here's a thought: Why don't we make schools about things kids DON'T see on television or the radio - like Reading, Writing, and Math. Gosh. What a concept. ;-)
Another thought, let's cut funding for reading and writing too. Big Bird, Elmer, and a bunch of other TV characters teach those. I think there are shows that teach math too.
Falcon
Should there be a Law?
until 1913?
Actually the US had an income tax before 1913. You must be thinking of the 16th Amendment, ratified in 1913, which authorized an income tax. However there was an income tax that was used to pay for the Civil War. Between $600 and $10,000 the tax was 3%, above $10,000 it was 5%. In 1864 the income was lowered and tax raised, below $5,000 the tax was 5% and over $5000 it was 10%. This income tax was not repealed until 1872.
Falcon
Should there be a Law?
It's not, as libertarians like to believe, that government's scope has increased. It's that the areas under the government scope have become much more expensive.
Oh but government's scope has increased. Before 1970 there was no Environmental Protection Agency. The EPA started operations on December 2, 1970. Before 1977 there was no Department of Energy. It was created on 4 August 1977. HUD, Housing and Urban Development was created on 9 September 1965. Centers for Disease Control and Prevention is dated to 1 July 1946. And on 3 March 2003 United States Department of Homeland Security was created. The list can go on.
Falcon
Should there be a Law?
If we really wanted to destroy them we should have sent them Reagan, Milton Friedman, Alan Greenspan, and one or two others.
I hate to break this to you, but we did send them Milton Friedman, and the Chinese are largely taking his advise. We, on the other hand, are not, which is probably the reason China is on the ascendant, and we are in decline.
Progressivism: Parasites helping parasites to help themselves - to other people's stuff.
And even that much assumes that you have at least one parent home all the time, and free to pay attention to the kids at least 4 or 5 hours a day which rules out any real job, even remote ones.
So you don't think it's good the have a parent at home? They used to call kids like that latchkey kids. And no it doesn't mean no real job, but I guess you don't consider raising kids as a real job. I bet my brother-in-law would argue that with you. Home schooling children are getting more and more popular, and it doesn't even require a child's parent to stay home, instead a group of families may get together and they'll decide who teaches. With a groups of families the children will get their socializing.
Falcon
Should there be a Law?
You know, there really ought to be a prize for getting something perfectly backwards. [You must have meant "advice", I take it, but it's still backwards]
Tell me something; how much of their growth is due to tax cuts? Take a wild guess. I'll assume you aren't going to walk off a cliff and try to maintain that they latched on to his laissez-faire deregulated greedy classes will work it all out theory, are you? Because that's foolishness, if that's your "case." Reagan was Friedman's boy. He had to be, I mean do you think Ronnie did the family bookkeeping? That was Nancy. Reagan was senile, he was what stock brokers refer to as "told and sold." And no, it isn't usually a compliment.
You can stretch your hyper-elastic misread of clearly logged history all the way to Beijing and back, but the fact is laissez-faire approaches and "letting the banks regulate themselves" has the World teetering on the abyss. Totally discredited. That's your boy, Friedman, in a nutshell. He had a lot of good ideas, too. I don't see him as being stupid, at all, but wrong? That's another kettle of fish. I'm sure it looked better on paper than it played out over the last 8 years, what do you think?
Now, explain the Chinese dynamo, versus the volatile and, for the last 8 years, disastrous American economy, in terms that show Friedman impacting Chinese economics, rather than his theoretical support of American policy, and it's destructive impact on our economy over here.
The Americans bitch about China manipulating a bit of currency (really a vastly overblown "excuse" for poor American theory and economic health), and the Chinese intervene bigtime, as in nationalization, and if you're going to sit there and pretend that China is anything except intensely-regulated (The name Keynes ring any bells?), and that we aren't, well, come up with some real citations, or head back to the ivory tower, and don't worry, you guys will no doubt have another chance to ruin the world's economy, in a generation or two. Just have to be patient.
Milton Friedman, for whatever the flaws that were accentuated by an unbalnced (as in "mentally") application of his theory, definitely did not ever say that the biggest banks should devise ways to pacage "risk" in a format that nobody could evaluate with certainty, AND that regulators should overlook the fact that none of the banks had near enough capital to cover the risks in case of some systemic default. He wasn'[t fucking crazy, in other words, or greedy. But Wall Street exists for greed, and the laissez-faire dismantling of oversight, under Clinton, following Reagan, with Bush upping the ante on both of them, was, indeed, crazy, if long term health means anything to a thinking person anymore.
He posts rather a lot of anti-corporate shit, doesn't he?
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
The video is shit. No doubt the clowns who are into "intrinsic value" think it's great.
Your first line shows that you take analogies too seriously.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Other contractors on the project were forced to take a large cut in rate, even after having a signed contract from IBM. Many found out about their new pay structure when paychecks showed up light. The pay rate for Indians were not cut. In my mind taking money from US workers this way puts IBM on the same level as the chain and purse snatchers at the local mall.
Then right after all this IBM posted a profit for the last quarter of 2008. But it was done on the backs of US workers. In the meantime with a nice fat year end profit I suppose Sam Palmasino and the Board of Directors got their bonus. I have no confirmation of this yet. But as a stock holder I will find out. But that is how it works in corporate USA these days. The top guys run the company into the ground while making it look good on paper so they get big bonuses, and now they line up for bailout money.
How can IBM need a bailout and still show a profit?
You can unionize service jobs that can't be moved but it will just make healthcare, teaching, civil service, fire and police and all the other heavily unionized service jobs more expensive and they will suck even more life out of the rest of the economy.
The State of New York currently has fifty billion dollars in union public employee retiree health care obligations. Completely unfunded.
Looks like it's free nose jobs for retired cops and poverty for the rest of us saps.
--saint
Oh, thanks for filling up such a blank in my knowledge. Someone ought to slap a +1 Informative there.
But it is very different from the 1913 tax in that it was levied to fund a war, and although it was not repealed when that ended - what a surprise! - it DID get repealed AND later considered unconstitutional; which it was was, since it was not apportioned among the several states on the basis of population as the Constitution mandates for direct taxes.
Americans have been paying a sizable chunk of their earnings to the government for a good 96 years now with new taxes churned out like flavors of ice cream. If there is an unfair comparison, this is it.
Send your spendthrift head of state this
Your analogy says that this crisis was a sudden, unexpected, unpredictable scenario and that drastic action needs to be taken to save the economy. My analogy says that this crisis has been predictably gestating for decades, and that the drastic action you are calling for will kill the economy or the currency. I decided that the contrast in analogies lent insight to the differences in our proposed methods for handling the crisis, which is why I opened with it. My point still stands if you omit them.
Since I'm commenting again, I may as well mention that you seem to have confused "disinflation" with "deflation," as the spending cuts etc. you mentioned are a sign of the latter.
Disinflation is lower inflation. Prices are still rising during disinflation, but at a lower rate. The general price level still rises, but, at a slower rate resulting in a continued, but, lower rate of real value destruction in money and other monetary items. A lowering of inflation is not deflation but disinflation. ...
Deflation means the general price level is not increasing at all, but, actually decreasing continuously and the internal functional currency â" money - and other monetary items are worth more all the time. Deflation causes an increase in the real value of money and other monetary items.
Inflation destroys real value in money. Disinflation destroys real value in money more slowly. Deflation creates real value in money.
Countries have little experience of deflation. Deflation is generally regarded as a very serious economic problem that everyone is trying to avoid at all costs especially after what happened during the Great Depression.
(source)
Your brain is not a computer.
Americans have been paying a sizable chunk of their earnings to the government for a good 96 years now with new taxes churned out like flavors of ice cream.
And for more than 100 years before then, except for the Civil War, there wasn't an income tax. And like all those flavors of ice cream, once politicians tried taxes they liked them.
Falcon
Should there be a Law?
Although modern antibiotics are probably the biggest factor, life expectancy was around 50 in 1913 and is about 75 now; I bet you that things like potable water, health departments making it less likely that I get tainted foods and the FDA, among other government functions have helped this.
And the reason any of this cannot be offered by a private company?
Water privatization has been and is being privatized. Atlanta, GA offers a cautionary tale. Once the water was privatized the water became bad. Eventually the city had to take the water system back. Water was also privatized in Cochabamba, Bolivia. As soon as Bechtel, the largest engineering company in the US, bought the water system they raised the price of water. It was raised so much many rioted. Several people, including a teenage boy, were shot and killed and a lot of other injured to protect Bechtel.
Falcon
Should there be a Law?
I don't know what 'average' is :) but I'm looking at my W2, I made slightly more than 100K (which puts me way above median salary), and pay less than 25% counting ALL deductions (including social security). Adding sales and property tax would make it close to 1/3 of my income.
Roads are funded by gas taxes, AND federal and state contributions (from other taxes). Schools are funded by local school taxes AND federal and state contributions. And the original post referred to taxes in general.
Yes, there is waste in government functions, but many of those functions are essential, and we haven't found better ways to do them.
I wish. Easier said than done, though.
Ubuntu on primary work desktop since Dapper Drake (2006).
No, my analogy actually says none of those things, because I'd expected the economic policies of the prior administration to end in disaster, and I was aware that there was a housing bubble, although I'd be lying if I said I'd been perspicacious enough to connect the two.
The salient point of the analogy is that swift action is needed to stabilize the patient.
Yes, I agree, the correct term is deflation.
In any case, we agree the problem has been built up over the last several decades. It's not just Bush's fault; I wouldn't even say it's primarily his fault, although he made it worse. Aside from moving the country towards fiscal insolvency, the reaction to the growing crisis was ineffectual. Don't get me wrong, I think Hank Paulson is a decent guy, but he was trying to be agile and flexible, but what Wall Street really needed was stability.
In a way it's ironic that John Snow left, in part, because his brokers had invested some of his money in Fannie and Freddie's securities (like everybody else did, directly or indirectly). I don't think that was a substantive ethical violation, although the rule is sound and divesting should be sufficient. The problem is that I think that was a really bad time to switch leadership at Treasury. A few lonely analysts were sounding the alarm as early as 2004, and 2007 was when the leading edge of the crisis was obvious for everyone to see, which means 2006 was a bad time for a new secretary to be learning the ropes. In part that may account the way Paulson always seemed to be a step behind developments.
That's why I don't like the politics of political vendetta. As long as Bush was president, I wasn't going to get policies I approved of, although Paul O'Neill might have made a difference if he hadn't stuck his hand in the Iraq meat grinder. But as long as the policies were going to be Bush policies, it doesn't really help the country to have a secretary who's still learning the names on the organization chart.
Where we really disagree is the treatment (a cure is not to be hoped for). If we were talking in 1998, I'd agree completely with you. Right now we're very obviously past a tipping point. There's nothing in my opinion, that government can do to to stop things from getting worse. The question is how much worse and for how long? That's the only thing we can affect.
Keeping on our highly misleading metaphor, it is often said that the difference between medicine and poison is dosage... But it should also be said that the difference is timing. Stimulus packages are inflationary in their effect. In an economy with full employment, inflation under control, and steady growth you need it like a healthy person needs a shot of (to mix a medical metaphor) digitalis. Austerity measures are more like a shot of curare -- just the stuff for poisoned arrows or treating severe tetanus.
It's the context that makes it a poison on one hand or a medicine on the other. Belt tightening would have been the best possible thing when the private sector was producing full employment, regular growth with modest inflation. Unfortunately that's not how the politics of budgeting works: when growth is strong we feel easy about spending, even though it pushes the economy in an inflationary direction. When times are tough, the government sector contracts (stimulus notwithstanding; state government is about 6% of GDP, smaller than Federal spending, but larger than Federal discretionary spending).
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
There are a couple of reasons why I don't think you'll see a functioning free-market health-care system.
1) The cost of catastrophic care is high enough that people will need insurance.
I didn't say there wouldn't be insurance. Insurance is part of the plan. Right now most people can't buy insurance on their own and have to get it through their employers. This is because if an employer offers health insurance the employer will get a tax break, but if an individual buys health insurance they do not get a tax break. With a free market system everybody can get insurance and have a tax break. Allow people to choose what type of insurance coverage they want and can afford. If a family wants comprehensive coverage they can pay more for insurance but if an individual only wants catastrophic coverage they can pay out of pocket expenses to see a doctor. For major expenses the insurance will cover it. And if they want coverage for a disability they can buy short term disability insurance. With a plan like a Health Savings Account they can pay for regular expenses. Obviously those who choose such a plan will pay less for insurance than the family who buys comprehensive coverage.
2) Insurance doesn't work very well in the free market due to game theoretic reasons.
There's this thing called person responsibility I happen to believe in. When I've gone grocery shopping I've compared prices. With a freemarket in health care I'd also compare prices. When I can I shop for what I consider the best deal, which may be different than someone else's best deal.
3) Doctors in certain specialties have essentially monopolies in their local areas, forcing their salaries to absurd levels.
Encourage people to go into those specialties and introduce competition. As I say above, if I can shop for a service I can get the best deal.
4) Most importantly, society is not going to let anyone die from lack of healthcare. And so, many people will free-ride off of this and not get health insurance.
What do you think socialized medicine is? It's exactly like that. I don't now but I used to watch my health and try to live as healthy a life style as I could. Because I tried to take care of my health I should have been able to pay less for insurance. Under socialized medicine I wouldn't have that choice, I'd pay the same as the person down the street who eats 5 days a week at McDonald's or the corner greasy restaurant. Under a freemarket though if I wanted to I could join a local healthcare coop. As I'm already a member of two coops, Lakewinds Coop and The Wedge I probable would join one.
Those are some reasons why I think a France-style healthcare system would be cheaper and provide better heath-outcomes then a perfectly free-market one.
And under a system like France's I end up paying for the person down the street who eats at McDonald's 5 days a week even though I eat health food.
"Instead most of the money was simply given to banks, those banks aren't lending money instead their using the money to buy other banks."
No, it was given in exchange for equity, as I said...
Read the name of the program, Troubled Assets Relief Program. It was approved by congress to buy troubled assets from banks, not to give money to banks and that exactly what it should have done. If people wanted the money to go to banks then it should have been named something more appropriate. Heck congress wasn't even happy with what was done to the money.
Falcon
Should there be a Law?
Also check out "The Third Wave". A group of high school students asks a teacher how the German's can allow the Holocaust to happen, so he shows them. Wiki says it was a tv movie however I saw it in my philosophy class in college.
Falcon
Should there be a Law?
Thanks for the substantial response. I was surprised by your terseness before, as I had befriended you, and I tend only to befriend people who I deem insightful or clear thinkers. I am now reassured that I was justified in doing so.
There's nothing in my opinion, that government can do to to stop things from getting worse. The question is how much worse and for how long? That's the only thing we can affect.
On this point we are in full agreement, and you are also correct that we disagree on what actions to take and, possibly, which situation is worse: a short, sharp, painful depression or a milder prolonged one. Government stimulus will result in the latter, but the root problems (see below) are still not dealt with. They aren't necessarily dealt with if no stimulus is given either, but IMO we would be in a more stable position once we recover.
I'd expected the economic policies of the prior administration to end in disaster, and I was aware that there was a housing bubble, although I'd be lying if I said I'd been perspicacious enough to connect the two.
I will refrain (this time!) from assuming I know which policies you're referencing, and simply say again that I believe this crisis has been building for a long time, and the housing bubble happens to be the one that tipped the scales. In my view, it is the loose monetary policies of the Federal Reserve that are the root cause of our financial bubbles, and that the business cycle accepted as normal is one byproduct of it. This is likely a big reason we disagree on what actions should be taken. (Another less-than-useful medical metaphor, just for kicks: the bubbles are infections and colds, while fiat money is the HIV that exacerbates their effects.)
To close on a bizarre note, it appears that Vladimir Putin agrees with me...
Your brain is not a computer.
Make it the same authority that licenses cars and taxes gasoline and tires.
I think it depends on the state who taxes what. I don't think the same authority taxes licenses, gas, and tires where I live. And we have the same recycling tax on tires, as well as batteries. I don't recall for sure but I think there's a deposit on batteries that you get back when you return a battery.
Falcon
Should there be a Law?
Blegh, gold standard? The same one that has to deflate?
No thank you sir. I like printed money better. The current situation is not the ultimate one, but it's better than the alternatives.
In 5 years, assuming the current rate of inflation, $1 will be worth about $0.80 of today's money.
It is true that the gold standard has to deflate in the same way that fiat currency must inflate: that is how the system is designed. It is not a problem in either case as long as the rate stays within a couple percentage points of zero. With fiat currency the rate of inflation can be pretty easily manipulated by whoever controls the money supply, in our case the Fed. If the Fed could be trusted to maintain a low, positive rate of inflation then we would probably be okay, but that has not been the case:
Celent calculates that the M0 money supply [currency in circulation and bank reserves held at the Federal Reserve] "has recently increased at a pace never seen before in US history," and has increased as much in the last 90 days as it has in the last 83 years.
By the week of 3 December 2008, the money supply was a staggering $630 billion, or 74% higher than it was during the week of 3 September 2008. An increase of this size in the past took on the order of a decade.
(source, Dec 2008)
In addition, inflation at any positive rate devalues the currency over time. As long as you have a decent income you won't be racing the inflation rate, but any uninvested savings will steadily lose value. Contrast this with the deflation of a gold-backed currency (or one backed by any physical store of value): the rate is low, so you won't notice much day-to-day, but your long-term uninvested savings steadily gain value. As the economy grows, everything gets cheaper.
This is all a little simplistic, of course, but one important item keeps being forgotten in the mostly unheard debate about our currency: the US was on the gold standard (with a few deviations here and there when government moved to fiat currency to fund wars) for 300 years, and the dollar remained very stable throughout that period. We have been on a fully fiat currency for 38 years and now the Fed is using all the tricks of its trade to try and restore the semblance of stability.
Your brain is not a computer.
You mean Indian Business Machines?