Cisco To Slash Up To 6,000 Jobs -- 8% of Its Workforce -- In "Reorganization"

alphadogg (971356) writes Cisco Systems will cut as many as 6,000 jobs over the next 12 months, saying it needs to shift resources to growing businesses such as cloud, software and security. The move will be a reorganization rather than a net reduction, the company said. It needs to cut jobs because the product categories where it sees the strongest growth, such as security, require special skills, so it needs to make room for workers in those areas, it said. 'If we don't have the courage to change, if we don't lead the change, we will be left behind,' Chairman and CEO John Chambers said on a conference call.

Comments

While Buying Back $1.5 Billion In Stock

[BradMajors]

http://www.zerohedge.com/news/...

Re:While Buying Back $1.5 Billion In Stock

[luis_a_espinal]

http://www.zerohedge.com/news/...

One cannot blame Cisco since, like any company, it will operate at the margin of the law irrespective of the consequences to the national economy. A country's economy is an national strategic asset not a free-for-all playground. Hell, this concept is not anathema to reasonable interpretations of capitalism. A balance must exist between allowing companies to flourish without falling in cannibalism (stakeholder capitalism vs shareholder capitalism kinda thing.)

That balance is lost in this country. Or perhaps it never had it but it was never a problem until globalization and other factors kicked in.

Regardless, this is another reason to tax capital gains the same (or as close) as income. This buy-back (on top of the layoffs) is pretty much a swap from income gains to capital gains which are taxed more favorably.

Or better yet, this is another reason to revamp our entire tax system : close all loopholes (including offshoring ones), lower tax brackets (both capital and income) while broadening the tax base and/or implement a value-added tax, eliminate double taxation, don't penalize companies from moving capital and operations abroad, BUT instead create incentives for *all* companies (national and foreign) to invest locally.

This Cisco thing is just a symptom of a greater malady.

Re:While Buying Back $1.5 Billion In Stock

[udachny]

Like I said, companies are borrowing in the USA from money supply inflated by the Fed using their foreign reserves that companies earned and are holding abroad as collateral in order to consolidate ownership and try and beat inflation. The money is borrowed at very low rate of interest due to money not coming from any savings but being brought into existance with Jannet Yellen's magic touch. This is absolutely rational behavior, since the Fed wants to inflate asset bubbles and provides existing large companies with the cash to do it, people do it.

Of-course this misallocation of resources is destroying the dollar, preventing people from making any interest on savings and inflating savings away, which is why senior citizens are working again, in this economy those who want to work are laid off and those who want to retire cannot.

Re:While Buying Back $1.5 Billion In Stock

[purpledinoz]

I don't get it. You borrow money for free and buyback your stock at its top. How are they going to pay back this debt, especially if/when the stock tanks? Issue double the amount of shares at half the price? Why not just buy treasuries with the borrowed money and earn risk free interest? Then buyback stock when the stock market tanks.

Re:While Buying Back $1.5 Billion In Stock

[Ryanrule]

"broadening the tax base" is code for tax those poor people more.

Re:While Buying Back $1.5 Billion In Stock

[AmiMoJo]

One cannot blame Cisco since, like any company, it will operate at the margin of the law irrespective of the consequences to the national economy.

To be fair, the country screwed them. The NSA's spying has cost Cisco a lot of money. I expect they will try to move more jobs and manufacturing overseas soon.

Re:While Buying Back $1.5 Billion In Stock

[aralin]

... so is the value-added tax or sales tax, which hits poor and middle class disproportionately to the percent of income taxed.

Re:While Buying Back $1.5 Billion In Stock

[bjdevil66]

Yes, the rich should be paying more back into the economy (through taxes or spending) instead of hoarding wealth, and the H-1Bs and other outsourcing of costs has to be curtailed.

However, when the poor stop getting earned income credits totaling in the several thousands every year (which goes up with the number of children claimed as dependents), while they don't pay a penny in income tax because they're unemployed for whatever reason, then you'll have a solid argument. Until then, too many of the "poor" are getting a free ride on the backs of bad government policy - and they have no skin in the game. Maybe they need to get rid of their iPhones, stop buying $250 Nikes, and cut their cable to pay some taxes back into the system that's paying for those luxuries.

Re:While Buying Back $1.5 Billion In Stock

[Great Big Bird]

But the concept of broadening the tax base is great from a government perspective. The broadening at this point would be better understood as diversifying sources of taxes — so that interruptions in any one area do not affect the whole (unless it is a systematic decline, like a recession).

Re:While Buying Back $1.5 Billion In Stock

[mlts]

Cisco isn't perfect, but I wouldn't be surprised to see their stock remain strong. IPv6 rollouts, security issues, and future IPv6 items [1] will ensure that existing customers will be buying new equipment.

Cisco also benefits from the fact that fiber channel is getting tossed for FCoE. With FCoE or iSCSI, it just takes one fabric to handle both storage and networking, while FC requires a separate switching network to handle zoning and I/O. With 40gigE around the corner, fiber channel is going to be left in the dust until faster HBAs come in 2016.

Would I consider Cisco stock a "buy"? I'm not going to give investment advice, but I wouldn't consider their stock tanking anytime soon. They are the biggest player in a core industry that isn't going away anytime soon.

[1]: IPv6, while getting deployed, still has yet to go through the real-world torture testing the IPv4 stack went through back in the late 1990s with land, teardrop, ping of death, smurf, and other packet based attacks which would drop machines.

Re:While Buying Back $1.5 Billion In Stock

[udachny]

I already explained it here, but let's address your specific concern.

When your conclusions stop making sense, challenge your premises. You assume that US debt is risk free and that Cisco stock will tank and that Cisco will have to pay the debt back. Let's examine these assumptions.

You base your assumption that US debt is risk free on the GDP and CPI and other inflation numbers provided to you by the helping hand of the government and some non-government organizations that rate debt (like Moody's, Standard & Poor's, Fitch) but the licenses that these rating agencies hold depend on government allowing these companies to rate sovereign debt (and especially USA debt).

A while back we already talked about another rating agency, that had its license to rate US bonds suspended by the government for providing a junk bond rating to the US bonds, Egan Jones. Egan Jones is paid to rate securities by buyers of securities, while Moody's and such are paid by the issuers of securities. So there is first of all huge bias and secondly the entire business model of the rating agencies requires that they do not rate US bonds anything but 'risk free', but in reality US bonds are junk, I talked about it too.

The other assumption is that Cisco stock will tank, well, if Cisco is using the borrowed money to consolidate its stock (buy it for itself) then it doesn't have to tank, it actually is going to grow in value relative to the US dollars. With the layoffs, the US operations will be much cheaper for Cisco, US workers are extremely expensive given all of the government labor laws, 'anti-discrimination' laws, taxes and all other regulations.

Finally will Cisco have to pay back the cost of borrowing? Sure, but they do have money off-shore they can use, after all, that's how they are securing these loans. Secondly, they borrow in US dollars and that currency is being devalued on a daily basis. The Fed is making sure that inflation will wipe out Cisco's debt in real terms, and since the interest rates are very low, it won't be much of that they will have to pay back in nominal terms either.

AFAIC Cisco stock is more valuable than sovereign USA bond market. Bonds are a promise to pay US dollars in the future, and AFAIC the dollars are being destroyed, so dollars in the future are also destroyed. The only reason it didn't collapse yet is people like China are not dumping their entire position yet, but they are hedging by buying and mining more and more gold.

Re:While Buying Back $1.5 Billion In Stock

[Archangel Michael]

Another fine example of "All taxes are regressive".

The people who can least afford taxes, are hit the hardest, while the people who can afford spending money to save even more will. Even when targeting "the rich", it never works out the way people expect.

TAXES are regressive, all of them. Until the left realizes this, we're stuck being turned into serfs unto our government masters.

Re:While Buying Back $1.5 Billion In Stock

[anmre]

Oh yea - keep on blaming the poor for being poor! Have you ever lived paycheck-to-paycheck? If not then count your lucky-ducky stars because you are in the minority of Americans (assuming that you live in the US).

when the poor stop getting earned income credits totaling in the several thousands every year

You're thinking about this in the wrong way. Social safety nets are not about altruism, or even making it easy for the poor to get subsidies (it's not). When poor people lose their jobs, they lose their homes and end up on the streets. When large swaths of the population are homeless, you end up with filthy slums where basic necessities are rare and diseases flourish. Walls, police and even social ostracism may be able to keep undesirable people out of your pristine life, but they won't prevent diseases from spreading from poor communities to the rich who've managed to deny them even a damn toilet to shit in.

Keeping the poor from becoming that poor is a necessity for any civilization. Subsidies for the poor do far more for the common good than tax breaks for the rich.

Re:While Buying Back $1.5 Billion In Stock

[RabidReindeer]

Yes, the rich should be paying more back into the economy (through taxes or spending) instead of hoarding wealth, and the H-1Bs and other outsourcing of costs has to be curtailed.

However, when the poor stop getting earned income credits totaling in the several thousands every year (which goes up with the number of children claimed as dependents), while they don't pay a penny in income tax because they're unemployed for whatever reason, then you'll have a solid argument. Until then, too many of the "poor" are getting a free ride on the backs of bad government policy - and they have no skin in the game. Maybe they need to get rid of their iPhones, stop buying $250 Nikes, and cut their cable to pay some taxes back into the system that's paying for those luxuries.

This is a very emotionally appealing "solution". But notice that these "freeloading poor" are contributing to the economy by buying iPhones, $250 Nikes, and cable. Keeping money in circulation and creating jobs.

On the other hand, how many iPhones, numerically speaking, are 1% of the population going to be buying? How many pairs of Nikes? Probably more that any single poor person, but there are so many poor people. Companies like Cartier may be able to prosper serving only the wealthy, but Apple didn't get to be the behemoth it is by selling solely to the well-to-do, even at Apple's notoriously high prices.

We more or less respect the "idle rich" whose money comes not from working, but from investments, whether direct or inherited.

Maybe we can spare a little love for the "idle poor" as well.

Re:While Buying Back $1.5 Billion In Stock

[tomhath]

One doesn't really have anything to do with the other.

Those 6,000 jobs aren't in the company's future plans. It would suck to be one of the employees being terminated, but there's no more reason for them to be on the payroll than for Cisco to go out and hire 6,000 buggy whip makers.

As far as buying back the stock, that's a separate decision that probably makes a sense for the company's future. I don't know or care since I don't pay any attention to Cisco.

Re:While Buying Back $1.5 Billion In Stock

[Jane Q. Public]

... so is the value-added tax or sales tax, which hits poor and middle class disproportionately to the percent of income taxed.

No, it isn't, if you don't tax necessities like food, and tax obvious luxuries like yachts more in proportion.

Re:While Buying Back $1.5 Billion In Stock

[haruchai]

What makes you think they don't have "skin in the game"? A huge number of people below the poverty line have jobs, which means they pay payroll taxes.

Re:While Buying Back $1.5 Billion In Stock

[aralin]

Has that ever happened? You are living in a dream world.

Re:While Buying Back $1.5 Billion In Stock

[tomhath]

There's nothing borderline illegal or unwise about Cisco's move. The purpose of favoring capital gains is to encourage investment. Hopefully the 6000 jobs lost will be replaced by more than 6000 jobs that come from investment and growth.

Re:While Buying Back $1.5 Billion In Stock

[Archangel Michael]

Because being a serf to someone is our only option, right?

I guess Liberty doesn't mean shit to people anymore.

Re:While Buying Back $1.5 Billion In Stock

[penguinoid]

Uhh... it was the criminal Showden who screwed them if that's the route [r] you're gonna take

Yes, because the criminal is the one who points out that a crime has occurred and most definitely not the one that did it. Let me guess, you also propose jailing anyone who calls the police to report a crime.

Re:While Buying Back $1.5 Billion In Stock

[rogoshen1]

Why does someone gaming the system and getting a fancy phone, or a new wardrobe etc draw substantially more ire from those with right/libertarian leanings, than something like the f-35 program?

I wonder what has more of an effect on the economy, lots of people cheating the system for small handouts (IE, the money is spent on useless consumer goods) OR a few large firms (raytheon, boeing, et al) bilking billions of dollars on useless weapons systems that may or may not ever be delivered, let alone needed.

In other words; Shanequia with her 5 kids, WIC, and an iphone vs Mr. Defense Contractor living in a McMansion driving an Audi.. Which is actually more of a parasite to the middle class?

Re:While Buying Back $1.5 Billion In Stock

[TwoEyedJack]

Which is the only rational thing to do given universal suffrage.

Re:While Buying Back $1.5 Billion In Stock

[Rich0]

TAXES are regressive, all of them. Until the left realizes this, we're stuck being turned into serfs unto our government masters.

How do you propose paying for wealth-transfer programs without taxes? It is impossible to use programs like basic income and so on without taxation - the entire premise behind these programs is that it is impossible for some people to earn enough money to survive, and thus somebody else has to earn money on their behalf and then care for them.

The fact that in the US only a small percentage of taxpayers pay such a large share of the total tax base demonstrates that taxes aren't inherently regressive, especially considering that the higher tax brackets used to be taxed much more heavily in the past.

Re:While Buying Back $1.5 Billion In Stock

[phorm]

For core network gear (switches, etc), perhaps, but there are still some strong contenders in the firewall arena (Juniper), and they've more or less dropped out of other areas such as load-balancers with companies such as F5 picking up the market-share.

Re:While Buying Back $1.5 Billion In Stock

[Earthquake Retrofit]

Like the majority of voters in Oregon, I have voted against sales tax here (several times). I feel very strongly about this but I would go for a sales tax that applied to purchases over $100 IF there was also an equal reduction in income tax.

Re:While Buying Back $1.5 Billion In Stock

[SillyHamster]

You're thinking about this in the wrong way. Social safety nets are not about altruism, or even making it easy for the poor to get subsidies (it's not). When poor people lose their jobs, they lose their homes and end up on the streets. When large swaths of the population are homeless, you end up with filthy slums where basic necessities are rare and diseases flourish. Walls, police and even social ostracism may be able to keep undesirable people out of your pristine life, but they won't prevent diseases from spreading from poor communities to the rich who've managed to deny them even a damn toilet to shit in.

So welfare is not charity, but a bribe for the poor to stay out of your own life. It is a payment for services rendered - the service of not pillaging and looting your property.

This mentality breeds resentment and ill will. "Rich guy gave me this money because he's afraid of me. I deserve this money because I did not harm him. If he don't pay up, then I can harm him to get what's due to me." Pray that you don't taste the backlash.

Keeping the poor from becoming that poor is a necessity for any civilization.

Civilization is not built by rich people giving hand-outs to poor people. It is built by nations developing cultures that enrich and improve the next generation. It is continuous investment in a nation's people so that the net contribution of each person is higher than the previous generation.

Welfare is not an investment - as you yourself described it, it's to keep them out of your backyard. Ignore how it's spent, they'll act like savages and bring disease and crime to you if you don't use tribute to pacify them. That's not building civilization, that's breeding barbarians next door.

Re:While Buying Back $1.5 Billion In Stock

[SillyHamster]

This is a very emotionally appealing "solution". But notice that these "freeloading poor" are contributing to the economy by buying iPhones, $250 Nikes, and cable. Keeping money in circulation and creating jobs.

Broken window fallacy. They didn't earn the money to buy those iPhones, $250 Nikes, or cable.

That money was taken from someone who worked for it, who knew the value of their time and the value of money, and instead given to someone who thinks, "Free stuff!"

The economic contribution of what the original owners would have done with that money is invisible, because it is a lost opportunity that didn't happen - yet it's still a loss. Much like an apple tree cut down before it bears fruit is a loss of future apples.

You see a shiny subsidized iPhone in a poor person's hand and think, "net gain!" Don't get distracted by the shiny stuff you can see, and look at the big picture.

We more or less respect the "idle rich" whose money comes not from working, but from investments, whether direct or inherited.

Maybe we can spare a little love for the "idle poor" as well.

We can respect the ancestors of the "idle rich" for making the choices to secure their children's future. We don't have to respect the ancestors who used underhanded means to do so, and we don't have to respect the idle rich who squander their talents and wealth.

Love for the poor is more than just giving them free stuff. Love for the poor is to attack and destroy the culture that keeps them poor. If you've raised kids, you know it is more than just giving them shiny toys, but developing the right mental habits and a useful bank of knowledge. That is far more loving than to spoil them with toys and leave them incapable of taking care of themselves.

Re:While Buying Back $1.5 Billion In Stock

[schnell]

when the poor stop getting earned income credits totaling in the several thousands every year

I get your drift, but the Earned Income Tax Credit program is a poor example of something to pick on. EITC is one of the very few financial aid programs out there that both Republicans and Democrats like because they agree it's effective. The short version is that the EITC rewards you for going out and getting a job, which is where the "earned income" in the name comes from. It was created to combat the paradox that getting a low-wage job can disqualify you from getting certain types of welfare, resulting in you making less money by working than if you just lived off government assistance. So EITC "grosses up" your working income to make sure you have an incentive to be gainfully employed and you aren't losing out on benefits because you're working.

You don't get the EITC by being jobless or living off public assistance; it in essence gives you an additional incentive to work. So while you may think that our welfare programs are busted in general, EITC is not the piece of that program to criticize.

Re:While Buying Back $1.5 Billion In Stock

[lgw]

The government does nothing to protect us from corporations. I can't fathom where this meme even comes from, that reducing the power of government would give corps more power. Not in this country, anyhow, where the government is already just an extension of corporate power. You reduce both together, or increase both together, your choice.

Re:While Buying Back $1.5 Billion In Stock

[SillyHamster]

Rich people get to enjoy the benefit of having a large manual labor pool available at their whim. When all the truly poor are dead an gone, it will not be very easy to get much work done at the wages the wealthy will command to do stuff like lawn services.

The poor have always been with society, but most of those would laugh at your idea of poor is cable TV and AC. Or that paying for those is necessary for survival, or for someone to be capable of mowing a lawn. (a high school/college student is "poor")

Never lived outside a first world country, I take it?

Re:While Buying Back $1.5 Billion In Stock

[RabidReindeer]

Broken window fallacy, or robbing the Dog in the Manager?

That money might just as easily have been taken from someone who never worked a day in their life, just like the undeserving poor. Except for having been born to the right parents. You know, the ones that can afford to spoil them with toys instead of teaching them to take care of themselves.

As for me, I have "earned" more money getting other people to work for me than ever I did by working myself.

The point is, if wealth is tied up in static resources, it hurts the economy, and if you hurt the economy bad enough, even rich people can suffer. A society filled with envy is not a stable society, nor is one that's full of desperate people. One way or another, money must circulate. Better via "theft" at tax time than via bloody revolution, I think.

You don't "love" somebody when you refuse to do anything in the name of not doing something counter-ideological. Or expect someone to step up an volunteer to do it for you. If volunteerism were all that common, then Communism would have been successful. It failed because people wouldn't do enough without being granted incentives.

Re:While Buying Back $1.5 Billion In Stock

[ScentCone]

Have you ever lived paycheck-to-paycheck?

Yes, sometimes for surprisingly long stretches. And one of the reasons for that is the incredibly high taxes that chip away at what would be a middle-class (especially self-employed) income even as other costs of living go up (including especially, spectacularly because of Obamacare, health insurance - in our case, our bottom line was reduced by almost $1k per month more, even as our deductible went up from $2k/year to $12.5k/year - what a deal!). A large part of my income is transferred - very inefficiently, via many poorly run, redundant layers of city, county, state, and federal government - to other people. The only time something the recipients of those transfers transfer something back to me is when I take yet more money - out of what I have left after taxes - and buy something they do, if they work to provide goods or services. And no, not becoming criminals, or not living in diseased squalor isn't them doing something for me in exchange for those taxed days of working, just like you offering to not burn down my house isn't you working to maintain civilization.

Subsidies for the poor do far more...

Like allow the purchase of snack food, smokes and booze via an absurd mechanism for doling out other people's money through debit cards. Like paying for advertising to push government dependency programs that the program administrators (whose pay bonuses depend on getting more people hooked on the programs they run!) find sometimes frustratingly hard to make stick because of that pesky self-reliance instinct found in some communities. Quick, put together a weekly radio drama preaching the entitlement lifestyle! True, media coverage finally shamed the feds into shifting that program a little more under ground.

We recently moved out of our neighborhood of 20 years where, for example, a house a few doors down (like several more within blocks) was owned by the city. It was provided for free (no rent, no utilities to pay for, free Verizon FiOS bundle, free city-paid landscapers coming by regularly to mow the grass) to a 19-year-old woman that a judge decided would be better off no longer associating with her drug-dealing father and brother. The rule? It had to be a no-males-allowed household. So, her mom moved in, too. Hmmm? Who are all of those guys that we see pulling up at all hours? Ah, the local off-hours county cop hired by the neighborhood to hang out near our houses at night (big problem, locally, with MS-13) reported that the two women were now running a flop house and brothel, and a couple of drug dealers they'd invited in were scary enough that he (armed, and in uniform) would never venture near that house without substantial backup. The social workers and city rental property inspectors refused to set foot in the place, having had threats delivered to them at home by MS-13 messengers.

So, every day I got to wake up, put in 12 or 16 hours of work, and might as well have just walked some of my cash right up the street and handed it over to the "poor" household that was receiving 100% county housing subsidies worth about $3500/month, free food, free medical care, free transportation (each of the women piled it on over 12 months until they were morbidly obese, and thus being deemed handicapped, qualified for on-demand free door-to-door personal driver service from the local county transport system's fleet of taxpayer-funded and fueled minivans), and all of the tax-free cash they could squeeze out of the gang members who operated out of their all-female, family-only city-approved Nurturing, Safety, And Growth house. Out on the curb for trash pickup? Boxes for new 60" Sony TVs and similar purchases, week-in, week-out. The house's "guests" and clientele were blocking everyone's parking, leaving trash and broken bottles everywhere, and the home owners' association's attempts to have the residents evicted was met with a legal interception and law s

Re:While Buying Back $1.5 Billion In Stock

[chromaexcursion]

Yeah, because their stock in the the dumps.
I have 100 shares. hoping they'll do something to make it worth selling at a profit. I've had them for a decade. just waiting for a good time to sell. I'll keep my eye on the price.

Re:While Buying Back $1.5 Billion In Stock

[Dutch Gun]

Someone who buys a product with others' tax money is still a drain on the economy, because not only was there a loss of revenue from an actual worker / producer used to buy that product, there was also overhead in the transfer of that revenue. It can no more be a net benefit back to the economy than a perpetual motion machine can sustain its own energy.

Whether or not you feel someone is "working" or not, if their capital is invested, that money is then being used to move the economy forward. Business borrow money in order to expand product lines or upgrade equipment. Individuals borrow money to purchase a car or a home. However, it's dependent on people having capital to invest. In other words, even if someone isn't working, their money probably is. And make no mistake, there's not enough wealth at the top to pay for the government's current spending levels. We could tax the top 10% at 100% rates and it wouldn't even fix our current deficit.

It's unwise to base fiscal policy on emotions such as jealousy towards wealthy people or a desire for social justice. Blaming the rich for not paying their fair share make for great politics but poor fiscal policy.

Re:While Buying Back $1.5 Billion In Stock

[micahraleigh]

Taxing capital gain as income means you lose your shirt in a bad investment and lose your profit to taxes if you succeed.

And so the investiment capital (which creates jobs) goes under the mattress -exactly what Keynes didn't want!

Re:While Buying Back $1.5 Billion In Stock

[RabidReindeer]

A lot of things are inefficient. In fact, one of the great weaknesses of today's economy is arguably too much efficiency. Where we have calculated things out so nicely that the least little unexpected thing can leverage into a massive wreck. And has.

Not all capital is invested productively. A prime example would be someone who buys land or shiny stones and doesn't do anything with them.

But this is more than mere envy, I'm referring to. Granted, that if the entire population of the Earth had waylaid Bill Gates in a dark alley, taken every cent he owned and divided it up equally, a fairly large number of those people would consider it as 2 days income, but the point isn't to kill the geese that lay the golden eggs. Or anyone else, for that matter. That's an absolutist solution, and we both know that absolute solutions are almost invariably not going to work. We'll live them for the pimply-faces dweebs who live in mommy's basement (literally or figuratively) and never have to come head-on with problems in practical day to day terms because the really hard problems in their case were handled by mommy.

It is, however, blatantly obvious that things are changing and that things need to change. On the one hand, even without stretching efficiency to the limits, we're so efficient at so many things now that some believe that the absolute need to work is soon to be a thing of the past. On the other hand, people who do work are feeling pinched by job insecurity, accepting lower wages, longer hours and all the other badges which by rights should be indicative an economy that cannot produce enough, even though in actuality it's the opposite. But what good is a 72-inch TV for $1.99 when you don't have $1.99? And what good is being able to produce a 72-inch TV for $1.99 if no one's going to buy it? We already know that "trickle down" only works to the extent that you can row a boat by pushing it with a rope - we've have 30 years of that particular experiment and it has yet to produce the promised prosperity no matter what type of administration is in charge. Ergo, it's either a failure from the ground up or it's so fragile that it's useless for real-world application.

The increasingly wide gap between a few "haves" and the many "have-nots" is not healthy. You cannot drive an economy when virtually nobody can (or at least dares) to buy anything. You cannot have a healthy society when a large segment is fearful or insecure. If someone has a better solution than falling back to the types of taxing and regulation that we managed to be historically prosperous under, I'm willing to hear it, but it had better be a demonstrably practical one, not one that "should" succeed because ideology. We've had entirely too many of those, and enough is enough.

All I can say is that I wasn't 1%, but I was a helluva lot more prosperous when my own personal tax rate was 35%, lived a lot more comfortably, and fed a lot more cash into the general economy - not just government coffers.

Re:While Buying Back $1.5 Billion In Stock

[KapUSMC]

You forgot probably the largest subset of the population. Those that believe and providing a TEMPORARY safety net (like 6 months), but want to curtail long term lifelong entitlement distribution to those that aren't children, elderly, or disabled.

Re:While Buying Back $1.5 Billion In Stock

[SillyHamster]

That money might just as easily have been taken from someone who never worked a day in their life, just like the undeserving poor. Except for having been born to the right parents. You know, the ones that can afford to spoil them with toys instead of teaching them to take care of themselves

Unless you want to argue that all tax money comes from such people, this is not even an argument. "Tax money comes from bad people!" No it doesn't.

As for me, I have "earned" more money getting other people to work for me than ever I did by working myself.

Organizing people to work together to produce value is adding value. It's leadership.

The point is, if wealth is tied up in static resources, it hurts the economy, and if you hurt the economy bad enough, even rich people can suffer. A society filled with envy is not a stable society, nor is one that's full of desperate people. One way or another, money must circulate. Better via "theft" at tax time than via bloody revolution, I think.

Wealthy people don't sit on their money. They use their wealth to buy income-generating assets, like rental property, or stocks, or invest in ideas.

The idea that wealth is generated by moving money is retarded. If that were the case, we should print a trillion dollar bill and pass it around in a circle all day to create the wealthiest society in history!

Wealth is created by building useful things/ideas, and a major driver of that wealth production is voluntary win-win transactions. Involuntary transactions (tax the rich to give to poor) are win-lose, and likely to destroy wealth, in the transfer and in the redirected use of the money.

You don't "love" somebody when you refuse to do anything in the name of not doing something counter-ideological. Or expect someone to step up an volunteer to do it for you. If volunteerism were all that common, then Communism would have been successful. It failed because people wouldn't do enough without being granted incentive.

Your desire to create a society where the "idle poor" are given stuff just because they exist has so much in common with Communism ("from each according to ability, to each according to need"), I'm boggled that you're criticizing that ideology for being impractical.

You love the poor by embracing the impractical and unsustainable? How does that work?

Re:While Buying Back $1.5 Billion In Stock

[cavebison]

Hooray for the Job Creators!

Re:While Buying Back $1.5 Billion In Stock

[Jane Q. Public]

It happens in a number of states right now, including some around here. Go ask them if they're dreaming.

Re: While Buying Back $1.5 Billion In Stock

[purpledinoz]

Secondly, they borrow in US dollars and that currency is being devalued on a daily basis. The Fed is making sure that inflation will wipe out Cisco's debt in real terms, and since the interest rates are very low, it won't be much of that they will have to pay back in nominal terms either.

Actually, this explanation makes so much sense. My assumption about Cisco stock has nothing to do with Cisco specifically, but just that the indexes have been hitting all time highs. I'm expecting that a significant correction will occur in the stock market in general...

Because the internet don't need no stinkin routers

[Anonymous Coward]

The cloud will replace routers. Cisco fuk yea.

A complaint

[DaMattster]

From the article: “If we don’t have the courage to change, if we don’t lead the change, we will be left behind,” Chairman and CEO John Chambers said on a conference call. In reality, Cisco doesn't have courage at all. If they had courage, they would work to retrain a capable workforce and buck an ever growing trend in employment. By laying off 6,000 people, they are showing cowardice and a lack of confidence in their existing workforce. They would sooner send 6,000 people to the unemployment line then work work with a known, reliable quantity. The move is shortsighted because it costs money to hire someone and the new person must then learn the culture, infrastructure, and the business. Add to it the potential for the starting salary to be higher and any positives from the "courage to change" are negated. Bravo on another epic failure of the corporate world. I would have had more respect for honesty and integrity.

Re:A complaint

[geek]

The move is shortsighted because it costs money to hire someone and the new person must then learn the culture, infrastructure, and the business.

No they'll just hire some idiot Indian slave labor and offshore them. Cisco's been at this for over 10 years.

Re:A complaint

[Anonymous Coward]

ob disc: I work at cisco.

cisco has extremes in terms of talent. some really bad idiots work here (and many products show ugly warts and horrible design, including poor docs) and yet there are some really amazingly smart people here, too.

hiring has clearly been 'hire the cheapest foreign workers we can find'. you can walk the hallways and not hear any english (I'm talking about san jose buildings, here). for an 'american' company, its shameful. clearly, they don't hire the best and brightest, overall; they follow the silly valley standard of cheap h1b's for the most part.

tech support (internal) is the worst I've ever seen. wait times on phones for int support is 15 minutes, min; and you get someone who has such a thick accent, you can't understand them. they can't do much, they waste a lot of time asking dumb questions and it takes forever to get anything done.

cisco should strip more than 10% of its workforce, but I know the reality: they'll strip the higher waged folks and keep the crappy folks around since its cheaper for them and that's mostly what matters, these days.

cisco is also planning on ripping out all the cubicles and going 'open office'. chambers is convinced its 'better' (its not, but its cheaper and they refuse to admit what the real motivation is). everyone I talked to is in fear of this open-office conversion and many will work from home to avoid the noise and distraction, or they'll just give up and quit, which I also heard is part of the unspoken plan.

I recently saw this kind of thing in the router production source code (paraphrased, just to show the concept):

function_a()
{
    FILE f=open(...);
    read(f, ...)
    do_stuff();
    return;
}

not kidding. opened a file inside a routine, did some i/o and then returned. doh! no need to close the file handle? really?? must be a java guy who didn't know how C really works. and yet, this was in production code and no one seemed to have done a code review or even a smoke test! unbelievable!!

like I said, we have really smart people here and some really lame idiots that, somehow, got hired here and are farking up the production code, designs and even the docs. we are just too large and have hired cut-rate 'programmers'. unfortunately, those are the ones that will likely stay and the higher cost, more experienced folks will be told go leave.

Re:A complaint

[bjdevil66]

If they hire new people back from the same general neighborhoods and they make the same money, then the CEO will have done the right thing. Besides - the bottom 8% of any workforce usually has some serious dead wood in it.

If they don't fill those slots back up to increase quarterly earnings, go overseas to essentially hire the same people back at a fraction of the cost, or say a WORD to Congress about how there's a "major talent shortage" in the USA and call for more H1-Bs, someone needs to go punch that guy in the face.

Re:A complaint

[Great Big Bird]

In fairness, that 'java guy' has to close it too. The difference is that most Java IDEs will tell you in a warning about it. That is why we have try (Resource r = ...) { .. } style now, where r must be 'autoclosable'.

Re:A complaint

[LordWabbit2]

Sometimes the 6000 are being laid off because they ARE a known quantity (i.e. lazy or incompetent and hired by mistake)

Re: A complaint

[smaddox]

I don't work in IT, but poor documentation does seem to be the standard for all of the hardware and software we purchase. The only exceptions are Stanford Research Systems (created by PhDs well versed in publishing methods) and MBE Komponenton (German precision).

Re: A complaint

[RabidReindeer]

A java guy who doesn't explicitly close a file isn't much better than a C guy. I knew someone like that, and he left resources hanging loose right and left. And occasionally lost data, since it didn't flush to disk until the file was closed. And maybe not then, if the close was done by the garbage collector.

But Cisco was at the forefront of the cheap offshoring boom. They outsourced support ages ago, then their outsourcers offshored it. Connoiseurs of Cisco support knew which country was going to provide the most helpful people and tried to ensure that their calls got directed there.

Cisco got a lot of its growth through mergers and acquisitions, not direct technical excellence, which is one reason why their stock stalled after they ran out of victims to buy.

Re:A complaint

[Moskit]

By laying off 6,000 people, they are showing cowardice and a lack of confidence in their existing workforce. They would sooner send 6,000 people to the unemployment line then work work with a known, reliable quantity.

If you have a hardware design (say, cooling) engineer and whole world moves to the new fancy software networking (say, you need a COBOL programmer), it might not quite work to shift existing person to a completely new area of knowledge.
Part of adapting to new conditions is changing what has to be delivered to customers, instead of trying to keep selling them a hammer just because you have a hammer.

As for "replace people with cheaper people", that's the way capitalism seems to work. This is not even enforced from the top by corporations, but from the bottom by customers, who will buy anything that's cheaper, even if lower quality.
Same thing happened in other industries.

Whether this move is shortsighgted or not, remains to be seen in a year or two, when restructurization effects come into force.

Re:A complaint

[kamapuaa]

I had a friend who was a lawyer working at Cisco, him and the other lawyers had essentially no work to do and spent their time playing card games. After half a year they lost their jobs. Good. That is how the system is supposed to work. Eventually my friend found a job where he did use his skills, training. It wouldn't have made sense for Cisco to teach him how to install routers, and he wouldn't have been interested in that anyway. He didn't get a job with Cisco expecting lifetime employment.

Sucks to get layed off, but companies don't owe us jobs, and we don't owe the company our lifetime dedication, and it's pretty well understood in the Silicon Valley and really all of the US.

Re:A complaint

[ColdWetDog]

Does your department get dinged for using the caps key too many times?

Re:A complaint

[Codeyman]

Actually it makes sense from Cisco's perspective (leaving aside its morality for a moment). Normally the people laid offs are either the bottom performers or the product that they were working on is no longer seen as a cog in the wheel. People are never laid off from units for which growth is projected. And the business units where the people are being added would most definitely have a completely different set of core competency than other folks at Cisco. Most people would not willingly accept a work in some random domain either. Seems like a no brainer to me.

Re:A complaint

[Anonymous Coward]

I used to work for Cisco.

Pretty much everything you said rings true to my experience (as a remote worker outside of San Jose).

We had some really excellent products eventually turned into unmaintained rotting software. The entire team used to be in one location, now it's 80% QA overseas, 60% development in a different out-of-country location, no sales staff (and it's amazing how 3rd party vendors don't magically get excited about selling something they don't understand), 30% reduction in support staff, etc.

So they cut the costs to a very profitable product line (that's why they bought us), so it must be gushing cash. However, it's also gushing customers. Our customer base was growing 20% year over year, and now it's shrinking by 12% year over year. Sure, there are more sales as the line gets "appended" to large orders, but fewer people are really using the software. In five years, they'll probably de-brand the product; because, from the complaints I still get on the message boards, it is clear that it went from market leader to nobody at the helm.

Thanks Edward.

[rmdingler]

Sales in foreign markets are plummeting as Cisco suffers the political fallout of being an American-based multinational.

Re:Thanks Edward.

[Anonymous Coward]

No, any "thanks" go to the NSA.

Re:Thanks Edward.

[Anonymous Coward]

So that is Snowden's fault? That is the equivalent of a rapist blaming someone who reports a rape for his ruined reputation.

Re:Thanks Edward.

[SpzToid]

Not to mention OpenSwitch, which Cisco hasn't exactly embraced: http://arstechnica.com/informa... also: http://arstechnica.com/informa...

The NSA screwed over Cisco in a big way (and other American companies, of course): http://arstechnica.com/tech-po...

Re:Thanks Edward.

[DickBreath]

Blaming Snowden for NSA abuses is like blaming Al Gore for Global Warming.

It is shooting the messenger.

If that messenger didn't tell us, some other messenger would have sooner or later. It was inevitable.

People only keep secrets (like global warming) when they feel it is their patriotic duty to do so for love of country. When they see widespread abuse, contrary to the values of a democracy, little or no oversight, and their peers feel the same way, it is inevitable that somebody is going to blow the whistle about global warming. If it hadn't been Snowden, it would have been someone else, eventually. This was never going to stay secret forever.

Re:Thanks Edward.

[johanw]

Thank him for saving the rest of the world for buying inferior American-made spyware. This is like blaming a consumer organisation that points out serious flaws in a product.

Re:Thanks Edward.

[TheGratefulNet]

cisco is betting on their onePK SDN strategy; not openflow or any other 'open' switch tech.

no one else has this level of advanced API support (yet). its proprietary but its very rich and capable. time will tell if it catches on or not; but it leaves things like openflow in the dust.

Re:Thanks Edward.

[bulled]

The OP title is idiotic, Mr Snowden did not make the decision to backdoor all USA made networking equipment and he certainly didn't force Mr Chambers to accept the NSA's "help".

Re:Thanks Edward.

[penguinoid]

If we had a million Snowdens, we'd be the only country anyone would buy security-related stuff from.

Re:Thanks Edward.

[rmdingler]

We do have a million,

just not too many of the models come with the brass balls.

Re:Thanks Edward.

[penguinoid]

You aren't a whistleblower if you kind of want to speak up but are too chicken to deal with the consequences of doing so. Most people, it seems, don't want to risk speaking up even anonymously. Worse, most people aren't willing to demand the NSA go to prison for all their illegal activities (and no "my boss told me to" is not an excuse).

Re:the change, will do us good!

[Anonymous Coward]

Thank the NSA for the distrust they created!

I have a better idea

[slashmydots]

They need to shift focus on lowering prices and not letting the NSA spy on people.

Re:I have a better idea

[TheGratefulNet]

the nsa has nothing to do with this spying stuff. CALEA is at fault and that was put in place decades ago, and forces ALL us companies to install backdoors for, cough, 'law enforcement' use.

its not cisco and its not nsa. in this case, at least.

blame the law enforcement lobby. they keep complaining they don't have enough power or tools, and congress is always afraid to be called 'soft on crime'. that fully explains that.

Slashdotters, do not disappoint me!

[macson_g]

Comments about H1Bs in 3... 2... 1...

Re:Slashdotters, do not disappoint me!

[BonThomme]

This has nothing to so with H1-Bs. It about having the courage to lay off your existing employees so you can hire new ones for your jobs that require 'special skills'. You know, special skills...

Re:Slashdotters, do not disappoint me!

[RabidReindeer]

You mean "special skills", nudge, nudge, wink, wink? 'Cause they told us that we're all interchangeable cogs and therefore don't deserve to be paid like we had really special skills. As in Upper Management. People who deserve to get paid more for their failures than us cogs get paid for working hard and then being laid off.

Courage...

[Junta]

If we don't have the courage to change

It can be debated as to whether this is a necessary thing or a prudent thing or whatever, but regardless of those debates, this s a pretty stupid thing to say. I don't think a CEO should ever characterize their decision to terminate other people's jobs as 'courageous'. There really isn't anything remotely courageous about any of the strategy he laid out. It's not even particularly bold or daring, it's basically the exact thing every executive of every tech company has been saying about their respective companies now.

Not having much of a horse in the race (not working for cisco or even a cisco client), I can't comment on whether it's the right choice or whatever, but it really rubbed me the wrong way to see him refer to layoffs as an act of courage.

Re:Courage...

[timeOday]

Hey, for all we know, one of the 6000 jobs eliminated in this objective, impartial assessment of Cisco's evolving business needs might be his own, and he will be kicked to the curb. That could happen, right? I mean, he did say "we" need to have courage to lead change. If he were actually exempt, he would have had to say something else, like, "a bunch of you people are about to get buggered."

Re:Courage...

[mycroft822]

I think it must come from some sort of CEO Bullshit Handbook they all get when they start the job. The CEO at my company has been saying this exact same phrase for about 5 years as she continually does rounds of layoffs, while increasing stock buyback and dividends.

Re:Courage...

[Junta]

The funny thing in your story is that the word that makes it narrow down the most is the pronoun 'she'. I would guess you either work for HP or IBM. Massive stock buybacks and continual layoffs is the modus operandi of most of the companies, but female ceos are a little bit more rare. Of course they do and say the exact same things so they could all probably replace their CEOs with chatbots that just always says 'buyback some more stock and layoff more people' and no one would notice.

Re:Courage...

[penguinoid]

but it really rubbed me the wrong way to see him refer to layoffs as an act of courage.

It really rubs me the wrong way when people refer to number of jobs as if it were a good thing. Just because some people benefit from low productivity, doesn't mean low productivity is a worthwhile goal. Even hiring foreigners would be an excellent thing for our country (a net export for us, since you only hire someone if what they produce is worth more than what they cost), if it weren't for our own high rate of unemployment.

Re:Courage...

[eclectro]

but it really rubbed me the wrong way to see him refer to layoffs as an act of courage.

Real courage would have been to retrain those fired workers for what they needed. But he much rather pull in H1B workers who really do not have the skills either, but are a whole lot cheaper.

This really does set off the BS flag.

Byebye greybeards, hellow headwobblers

[Gothmolly]

Cisco is cutting out the fat (literally) by shuffling out the older, more expensive (salary, 401k, healthcare) employees, so that they can bring in cheap new talent.

Switch to Huawei

[johanw]

In another posting, Huawei announced it has open positions for thousands of experienced people. However, since lie detector tests are required to rout out foreighn spies, US candidates are mostly turned down.

we need 6000 more H1b's now must be able to work

[Joe_Dragon]

we need 6000 more H1b's now must be able to work a min 0f 60 hours a week going up to 80 at times.

Re:Need to get rid of Americans and bring in more

[johanw]

H1B's are less likely to be NSA spies anyway.

Yeah whatever

[Anonymous Coward]

Cisco will hire a bunch of H1-Bs and offhore their work with the typical BS of "we can't find any qualified Americans" or some other bullshit.

And one day it will be true because the sharp kids are only going for the 'M' in STEM degrees. That is where the opportunities will be in the near future and your career lasts much longer.

Why bust your ass in engineering or CS when you top out at 40, your job has a huge chance of being off-shored and your competing with every Third World nation that can get some cheap ass Dell's?

How much did move to cable/DSL cost Cisco?

[swb]

Back ~15 years ago if you wanted Internet access in a business you pretty much had to get a T1 and almost always this connection was terminated with a Cisco router.

Nowadays nearly a lot of business Internet is delivered via DSL or Cable via Ethernet hand-off from some cheap device provided by the ISP. Even at places still using T1s its often a vendor-supplied Adtran.

Did this change cost Cisco much business, or did they just make it up and then some on larger routers at providers, large customers and places willing to pay a premium for Cisco LAN equipment?

Re:How much did move to cable/DSL cost Cisco?

[DigiShaman]

Cisco is also way overpriced for what you get. Forget the hardware, it's the contracts that will bleed you dry.

Re:How much did move to cable/DSL cost Cisco?

[swb]

HP has made a business model around this with their Procurve networking equipment, offering for-life software updates and I think even in some cases advanced replacement of failed gear.

I've worked at a couple of places that were Cisco oriented that would buy two of everything instead of a support contract. It doesn't do anything for software updates, but their attitude was it was in some ways cheaper than SmartNet over time and for devices where they didn't use advanced functionality (like switches) their experience was that they didn't need them anyway, and if they did it made sense to buy a new after 3 years anyway.

Re:How much did move to cable/DSL cost Cisco?

[amorsen]

Procurve is getting killed by software development. They are behind their competitors, and getting left further behind each day.

If you can make do with the limited software features (and you avoid the rebranded 3com stuff) they are great switches.

Re:How much did move to cable/DSL cost Cisco?

[swb]

I agree. I think they had a good thing going for quite a long time and HP's management just failed to see the value of this division and its now dying on the vine.

Dell N series is better than Procurve now and that's sad.

The Only Courage Displayed Here...

[Anonymous Coward]

...is the courage to make a hasty course correction after being caught flat-footed.

What would have been better is if they had been able to have a better vision and work to steer the ship in the direction rather than dropping 8% as ballast in order to cut a corner. I am sure that there are capable folks within those 8% that are dedicated employees that could have made what my seemingly be a rather abrupt transition in their careers had the company announced a long-term plan 18 months ago. Other of that 8% may have been rather happy to begin searching for new jobs.

In related news...

[jrumney]

A notable absense of a certain recently hyped technology in Cisco's list of things they need to refocus on.

Re: the change, will do us good!

[jd2112]

I don't think the Crimson Tide had anything to do with this.

New Cisco Certification

[Virtucon]

CCGC - Cisco Certified Got canned.

He's also advocating for tax hikes for the rich

[zerofoo]

I get that bashing the rich, while pitying the poor, gives everyone a feeling of moral superiority, the parent post did mention taxing capital gains the same as income.

So if you are a rich guy paying 15% tax on your capital gains investments, taxing that as regular income could push the rate well beyond 25%. That's a tax increase or "broadening the tax base".

Taxes should be flat across the spectrum. You shouldn't get a break because you are extremely rich or poor. Besides, a flat tax is naturally progressive. If you make more, you pay more.

Better still, let's not tax income or property. Since all money in the economy is eventually spent, let's simply tax consumption and fund our society that way. Everyone consumes - those that consume less will pay less tax.

Re:He's also advocating for tax hikes for the rich

[Intrepid imaginaut]

Better still, let's not tax income or property. Since all money in the economy is eventually spent, let's simply tax consumption and fund our society that way. Everyone consumes - those that consume less will pay less tax.

That might increase the cost of some goods or services beyond the benefit provided by the removal of income tax though. Let's say you're earning 300 euros a week, and being taxed 50 of those. You're fifty euros better off, but the overall doubling or tripling of sales taxes (whatever the different in income tax versus sales tax revenues are) has likely increased your expenditure far more than that. It disproportionately targets the poor while providing huge benefits to the likes of landowners who are renting out their properties, leading to a tremendous concentration of wealth, ie a landowning aristocracy. Plus, taxing consumption retards consumption, and the economy needs consumption.

Re:He's also advocating for tax hikes for the rich

[Archangel Michael]

a flat tax is naturally progressive

This is flat out error and wrong. All taxes are regressive, even the ones that "target" the rich. Remember the "Luxury Tax" during the Clinton era? It was short lived because it didn't collect any revenue and cost thousands of jobs or regular people as the rich suddenly stopped buying Luxury Items (boats, planes, limos etc). It didn't hurt the rich, it hurt the people who made stuff for the rich.

It was so bad, so quickly that it was repealed in very short order. You don't hear about it, because it doesn't fit the "Progressive" mantra of "Progressive" taxes.

The fact of the matter is, taxes are a necessary evil, because they are regressive, either intentionally (Cigarette Taxes), or unintentionally (Medical Device Taxes under Obama Care).

Demonize the rich all you want, I don't care. But the moment you try to take from them via "Taxes" you're not going to hurt them at all, you're gonna hurt those that work for the rich. That's the thing about "disposable income", they don't have to use it at all or they can use it to keep more of their own money and avoid taxes, and that always hurts those whose incomes depend on the rich spending that money.

Re:He's also advocating for tax hikes for the rich

[TubeSteak]

Taxes should be flat across the spectrum. You shouldn't get a break because you are extremely rich or poor. Besides, a flat tax is naturally progressive. If you make more, you pay more.

A flat tax is only "progressive" if you abuse the word to mean something else and completely ignore how everyone else is using the word progressive.

Here's a letter from the 3rd President of the USA to the 5th President.
Thomas Jefferson to James Madison
28 Oct. 1785

Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise. Whenever there is in any country, uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right. The earth is given as a common stock for man to labour and live on.

That's the author of the Declaration of Independence writing to the "Father of the Constitution" and author of the Bill of Rights.

Better still, let's not tax income or property. Since all money in the economy is eventually spent, let's simply tax consumption and fund our society that way. Everyone consumes - those that consume less will pay less tax.

How did this get modded up.
Everyone has a basic level of consumption: food, water shelter, clothing, transportation.
For the poorest, this basic level of consumption makes up most of their spending.

It's the difference between a 10% tax on 90% of your income or 1% of your income.
That's not progressive, that's not better, that's not fairer.
And the founding fathers thought it was dumb.

Re:He's also advocating for tax hikes for the rich

[anmre]

It's fine for the rich to "be rich". They can sit on their cash all they want. It's when they want to do something with that cash like buying/selling stocks, moving their operations overseas, or passing their fortunes on to their children, it needs to be taxed. The taxes then go into social welfare programs (which include roads, schools, police) for the betterment of the society which they've used to become rich in the first place.

If they want to take their ball and go home crying, then so be it. Thanks to social safety nets, there will be a robust middle class eager to fill the void. The rich aren't the only ones capable of producing markets!

Re:He's also advocating for tax hikes for the rich

[penguinoid]

Taxes should be flat across the spectrum. You shouldn't get a break because you are extremely rich or poor. Besides, a flat tax is naturally progressive. If you make more, you pay more.

I used to think that too, but it is simply a fact that it is easier to make money when you have more money -- you are proposing a feedback loop that would promote the rich getting richer and the poor getting poorer. At the very least you have to deduct the cost of necessities. Compare this to a business -- imagine what would happen if you taxed businesses based on revenue, rather than profit. Yet, people see no problem proposing the same for individuals.

Re:He's also advocating for tax hikes for the rich

[cyberchondriac]

Nobody "sits" on cash unless it's stuffed in their mattress. All the money they have in savings accounts, bonds, stocks, whatever.. is being used by the banks to make loans or investments. It's a huge pool. Money is in constant circulation. That alone generates tax revenue.

Re:He's also advocating for tax hikes for the rich

[Archangel Michael]

You have failed to realize the shrinking Middle Class is caused by government strangling the economy with taxes, fees, regulations and laws. You speak of "robust middle class" when there is less of it everyday. Taxes are regressive, and if you look at the combined taxes people pay (hidden sales, excise, non-hidden sales, income, fees, duties and property taxes ...) you realize that we all are serfs to government. Tell me, when was government ever satisfied with the taxes it collected?

Re:He's also advocating for tax hikes for the rich

[mrchaotica]

Taxes should be flat across the spectrum. You shouldn't get a break because you are extremely rich or poor. Besides, a flat tax is naturally progressive. If you make more, you pay more.

A flat tax is not progressive. A flat tax is flat, i.e., a linear equation:

[tax] = [constant tax rate] * [income]

A progressive tax is where the rate increases with income, a quadratic equation:

[tax rate] = ([scaling factor] * [income])

and

[tax] = [tax rate] * [income]

so

[tax] = [scaling factor] * [income] ^ 2

(give or take some lower-order terms).

Re:He's also advocating for tax hikes for the rich

[mjwalshe]

the problem is if you tax capital gain the same as interest there is much less incentive to invest in company's which damages the economy - trust me lack of capital kils company's

Re:He's also advocating for tax hikes for the rich

[Anonymous Coward]

Ugh, philosophically this point is wrong and technically it is wrong.

"Progressive" taxation is taxing more on higher income -- flat taxes cannot be renamed "Progressive." The reason they are Progressive is the RATE PROGRESSES UP. They just happen to fit the enlightened Progressive mindset.

There are a lot of costs associated with being poor. Not the least of it is never being able to pay in full, bounced check fees, and every utility and service you HAVE to get having a penalty for late payments. They spend more on interest rates and insurance because credit rating agencies are now the source for determining who to shaft with higher fees.

But while a poor person probably dedicates as much as Mitt Romney to "cash poor penalties" -- and I could be adding a lot more costs of being poor -- the ECONOMIC reality is; Progressive Taxation helps the economy and the society.

If everyone has housing, healthcare and education for their kids -- THEN let some rich guy get a 2nd home. But not before. And whenever we reduce capital gains, we reduce actual investments in capital.

It's depressing and obvious that this country grew great when all the "evil socialism" was being mean to the rich. Somehow they survived! But if you make less than $30K like a dang lot of us with good educations and work ethics -- then it is truly painful to exist in this country.

Eventually we will either have a dystopia or a national allowance. I don't know why anyone in their right mind would want the former choice.

Re:He's also advocating for tax hikes for the rich

[Whorhay]

You are talking about sales or use taxes. And of course when you increase those suddenly spending on those items drops like a rock. And that is why sales and use taxes are generally hated by every class of consumer. And you'll see even consumers in the lowest income brackets deliberately avoiding having to pay it. Where I live the city has a total sales tax rate significantly higher than the neighboring communities, guess where everyone goes to make their big electronics purchases? The bottom line is that sales and use taxes are rather easy to dodge, especially on things like luxuries.

Income makes the most sense to tax because everyone has to have some kind of income. Even the Amish have income. How the income should be taxed is a good matter for debate in my opinion. A flat tax % is morally appealing because each person would then pay the same proportion of their income. But you can also morally argue that only the income above the absolute minimum for survival should be taxed. And then it's a relatively easy step from there to people making extraordinary amounts of money could afford to chip in a little more because they would arguably be much worse off in the event of anarchy prevailing or something, than the proles.

Personally I'm for all income being counted as income for the sake of taxes, abolishing capital gains as a special class. I'm for that tax rate being progressive. I think that the top rate should be higher than it currently is, but also not happen until a higher threshold is met. I think that the rate should scale more smoothly than it currently does. And I think that the amounts for standard deductions should be evaluated and adjusted better, which should enable the elimination of credits that result in actually paying out tax money that wasn't paid in the first place.

Re:He's also advocating for tax hikes for the rich

[mrchaotica]

Every definition I've seen disagrees with you.

Your flat tax is actually defined as "proportional," not "progressive."

Re:He's also advocating for tax hikes for the rich

[anmre]

Tell me, when was government ever satisfied with the taxes it collected?

Never.

Everything hits poor people harder

[zerofoo]

Poor people also pay a disproportionate part of their income on food, clothing, energy, housing and transportation. Should all of those things be cheaper for poor people as well?

Should I have done an income analysis on my neighborhood and if I found that I was on the low-end of the income spectrum, should I have demanded a lower price on my house simply because I make less than my neighbors?

I understand charity for the poor, but demanding that poor people pay less for everything simply because they are poor defeats the point of a market economy. If you are going to do that, why not go all the way to a state planned economy?

I'll tell you why that sucks. Capitalism, even with all its problems, is the best way to distribute limited resources in a world with unlimited demand.

Re:Everything hits poor people harder

[RabidReindeer]

Poor people also pay a disproportionate part of their income on food, clothing, energy, housing and transportation. Should all of those things be cheaper for poor people as well?

Should I have done an income analysis on my neighborhood and if I found that I was on the low-end of the income spectrum, should I have demanded a lower price on my house simply because I make less than my neighbors?

I understand charity for the poor, but demanding that poor people pay less for everything simply because they are poor defeats the point of a market economy. If you are going to do that, why not go all the way to a state planned economy?

I'll tell you why.

Because a pure 100% ideological solution to anything is a recipe for failure.

Sometimes a capitalistic approach works. Sometimes a socialistic approach works. Sometimes some other approach entirely works.

If you can achieve a good blend, where you take advantages of systems at their strong points and use some better approach at their weak points, you'll be better off than you will if you live in a binary all-or-nothing world. Where you may get the best of an ideology, but you'll pay for it by getting the worst as well.

Re:Everything hits poor people harder

[aralin]

You are completely misunderstanding the difference between the taxes, which are decided on by the society and prices, which are decided by the market.

Capitalism has nothing to do with the actual percentages of different taxes that we vote into laws. The poor and middle class are hit by taxes the most proportionately to their means. We cannot expect one group of people to pay 50% of their income in various taxes and fees and another group to pay 15% or less. Our tax system is completely broken and that has very little to do with capitalism, socialism or whatever.

Also, capitalism was great, when the basic resources, like shelter, food, education, healthcare and protection were in shorter supply than the demand. But we live now in society where covering the basic needs of everyone would cost less than 50% of the GDP. A system which leaves some citizens unable to afford to cover their basic needs is not necessary anymore. And since keeping someone without shelter, food, healthcare or education is a choice of the society and not a necessity as it used to be, one can easily argue that such choice is amoral.

Re:Everything hits poor people harder

[anmre]

But poor and middle class people don't pay less, they pay more.

Ever hear of the Social Security tax cap?

The rich who make more than $117,000 annually do not have to pay Social Security taxes on anything earned above that amount despite the fact that every US citizen is expected to draw from the pool. As the rich inevitably get richer, the taxable dollars become fewer.

Please do the logic in your head and tell us how you think that is "the best way to distribute limited resources".

Re:Everything hits poor people harder

[OhPlz]

Social Security should be capped. Anyone making more than the cutoff will almost certainly have their own retirement savings plan. Social Security isn't worth anything to them. If you want to have more money when you retire, start saving and investing. It's not Bill Gate's job to pay for your retirement for you.

Re:Everything hits poor people harder

[anmre]

The rich have robust retirement savings accounts AND pull social security once they've turned 65.

It most definitely is worth something to them, otherwise the cap would not exist.

Re:Everything hits poor people harder

[wulfhere]

I wish I had mod points.

Re:Everything hits poor people harder

[rahvin112]

Communism is a great idea as long as every actor is altruistic and interested in the welfare of the society above themselves. Because of that base assumption about human behavior it's a terrible system.

Libertarianism is a great idea as long as every actor is altruistic and interested in the welfare of the society above themselves.

Laissez-fair capitalism is a great idea as long as every actor is altruistic and interested in the welfare of the society above themselves.

Etc...

All these "improvements" on the system we have only work if you assume people aren't self-interested greedy pricks that will screw over their own mothers for $5. As soon as you insert the real world into these system it collapses from the sociopaths gaming the system for themselves. As you said you need checks and balances, capitalism with regulation to prevent the abuse of the system that is common appears to be the most functional system, that is as long as you don't get people that are so stupid they think the regulation is the problem.

Re:Everything hits poor people harder

[towermac]

That's because you've exceeded the maximum benefit you're going to get for that income. It would be 'illogical' to tax you for benefits you have no chance of getting.

Assuming that the 'rich' (heh, as if $117K in NY or SF makes one rich) cannot be taxed too much in your world; would it not be more logical to simply raise the income tax, which is arbitrary; rather than Social Security, which is ostensibly tied to benefits?

Re:Everything hits poor people harder

[aralin]

Or you make "I shot the bastard because he was a greedy prick who would screw his mother for $5" an acceptable excuse to tell the judge and jury.

Re:Everything hits poor people harder

[OhPlz]

I would rather plan for my retirement entirely on my own and not have those funds stolen from my paycheck. I live in a free country, so that option is not available to me. So yes, despite the fact that I will have my own money when I retire, I will still take social security. Why wouldn't I? I was forced to pay into it, you're darn right I'd fight to get back as much as possible. The real question is why are we not allowed to take ownership of our own future? I don't want your retirement plan. I don't want your healthcare plan either. We're not living up to the ideals that this country was founded on.

Re: Everything hits poor people harder

[zerofoo]

Social security is not a capitalistic system. It even has the word "social" in the name.

Let's just call social security what it is supposed to be...insurance against poverty in old age.

The problem with SS is that people that don't need the insurance benefit are drawing from it. It would be better to treat the entire thing as an insurance policy...not a defined benefit, but one that exists if a set of conditions is met.

Re:Everything hits poor people harder

[penguinoid]

Poor people also pay a disproportionate part of their income on food, clothing, energy, housing and transportation. Should all of those things be cheaper for poor people as well?

Why not? We already removed the sales tax on food, why not a similar thing for other necessities? I suppose it would be harder to distinguish where necessity stops and luxury starts.

Re:Everything hits poor people harder

[Anonymous Coward]

What about people that are so stupid that they think the regulation couldn't be a problem? What about them?
 
I'm not saying regulation as a concept but actual real world examples where regulations certainly do favor the same greedy pricks you're ranting against. Regulation isn't a catch all answer because, like any other power/money equation, there are sociopaths gaming the system for themselves who also just happen to be writing, interpreting and enforcing these regulations.
 
The problem here is an inherent and flawed idea that corporations somehow work under a different nature than their governmental counterparts. You don't even have to look closely to see that they're pretty much the same entities capable of the same gambits. So while you may be shouting down the corporation for twisting the law to its will you're forgetting a pretty simple idea; you can't buy what isn't for sale.

Re:Everything hits poor people harder

[SillyHamster]

Because a pure 100% ideological solution to anything is a recipe for failure. Sometimes a capitalistic approach works. Sometimes a socialistic approach works. Sometimes some other approach entirely works.

Your "pragmatic" ideology is still an "ideological solution". You think that you can take two extremes and always find some superior "moderate" compromise between the two.

Two wolves and a sheep vote on dinner - the two wolves want to eat the sheep, the sheep doesn't want to be eaten - your pragmatic solution is for the wolves to eat half the sheep - or maybe just two legs today, and the rest tomorrow. You haven't found a real compromise, you've given the wolves everything they want under the lie that this is "balanced".

Worshiping compromise does not make your position inherently more balanced. It is in fact a self-negating idea of "never stand firm on principle" - you hold to a principle that all principles as "recipes for failure"

Sometimes principles are the only foundation to work with. Sometimes you do need a "100% ideological solution" - because everything else is instable and self-destructive.

Re:Everything hits poor people harder

[aralin]

It is always some asshole who does not even remotely comprehend the state of the poor in US that spouts this type of nonsense.

Providing shelter, food, education and healthcare to everyone is in the best interest of the society and leads to economic and social stability. There are many countries that do that mainly in Scandinavia and they are on top by almost any index measurable. On the other hand, try to visit Detroit for a great example of downward spiral of destruction.

Re:Everything hits poor people harder

[RabidReindeer]

The "two wolves and a sheep" argument is a favorite among people of a certain ideology.

But we're not talking wolves and sheep here, or the poor people at the top wouldn't be wailing about the theiving masses and the masses wouldn't have ever have done things like the French Revolution when they got fed up with the people at the top. Or would be doing them every day instead of as a last resort. Everybody at this table has more wolf than sheep at some point.

As for the "Standing on Principles" thing, that's made for a really effective government over the last few years, hasn't it?

Re:Everything hits poor people harder

[SillyHamster]

As for the "Standing on Principles" thing, that's made for a really effective government over the last few years, hasn't it?

It's not just having a principle. It's having a correct one - which you will not find by just trying to average two competing solutions without looking at the different assumptions and logic underneath.

"I'm going to do whatever the hell I want" is a principle. That doesn't mean that avoiding all principles, on principle, will solve your problems. That just means you're going to adopt some principles without critically considering them.

Re:Everything hits poor people harder

[mbkennel]

| Poor people also pay a disproportionate part of their income on food, clothing, energy, housing and transportation. Should all of those things be cheaper for poor people as well?

Yeah. But because that's hard (higher wages works the best), you should start by not making things worse for them and benefit others by extracting more tax revenue from the poor so you don't have to get as much from the rich.

Re:Everything hits poor people harder

[roman_mir]

Libertarianism is a great idea as long as every actor is altruistic and interested in the welfare of the society above themselves.

Laissez-fair capitalism is a great idea as long as every actor is altruistic and interested in the welfare of the society above themselves.

- wrong and wrong, libertarian and laissez-fair capitalist ideas do not require anybody to be altruistic at all, in fact the entire point is only to think about yourself and in the free market economy to think about yourself means to provide the market with solutions it pays for, thus helping the society not by being altruistic but by chasing profits, which is why free market capitalism is the most moral system - it relies on self interest and the invisible hand of the market rewards self-interest that helps the market.

Your definitions are off-base, no wonder you don't understand what is going on and your conclusions are all screwed up.

Re:Everything hits poor people harder

[msobkow]

The fundamental problem is the basic concept of "earning." It places an arbitrary value on the contributions of an individual to society, when in an equitable society everyone would receive the same compensation for putting in a decent day's work, contributing to society as a whole, whether they were making sandwiches for others to eat or performing surgery.

As long as society focuses on the concept that one has more "worth" than others based on what they do, there will never be equitability.

However, money and worth are intrinsic to the societies we have developed on this planet. And until we evolve beyond that, we're doomed to resemble the Ferengi more and more each day.

Re:Everything hits poor people harder

[msobkow]

Note: I'm not talking about communism, which dictates what a person is going to have the opportunity to do. I'm talking about a social evolution more akin to Star Trek than anything else.

Re: Everything hits poor people harder

[OhPlz]

It would be better to treat the entire thing as an insurance policy...not a defined benefit, but one that exists if a set of conditions is met.

Great. So if you save nothing, you get to steal from someone else. But if you save responsibly, you get denied access to the money that you were forced to contribute. That's got "fair" written all over it.

What planet do you people come from?

Re: Everything hits poor people harder

[OhPlz]

now, lets say you haven't gotten sick, broken a bone, etc, in your 5 years at that company - you've been paying for everyone else (your coworkers, your boss, etc) on that policy who did get sick. So, even though you haven't gotten sick, you're paying for everyone else at your job to have healthcare.

Choosing not to save for retirement is the same as getting diagnosed with cancer? Horrible analogy. I don't know when or if I will get sick. I purchase insurance to guard against the unknown. I do know that I'm going to need to support myself after I retire, therefore I save for it. No one is going to magically skip forward a number of decades and find themselves retired without savings. You know when you'd like to retire, and you should be saving so it becomes a reality. It's not anyone else's responsibility to fund your retirement because you chose not to.

Re:Everything hits poor people harder

[ultranova]

I understand charity for the poor, but demanding that poor people pay less for everything simply because they are poor defeats the point of a market economy. If you are going to do that, why not go all the way to a state planned economy?

The ultimate purpose of economy is to provide goods and services to people. If people can't afford them, the economy fails at its primary task, and will soon fail, period. Since US - and increasingly other Western countries - seems hell-bent on making almost everyone poor for the sake of a few ultra-rich, it's quickly approaching the point where it must indeed switch to planned economy, since a capitalist one is inherently controlled by demand, yet people who can't afford what they need can't send signals to control production.

Viewed alternatively, US already is a planned economy, since that's what a "supply-side" economy is. It's just that the planners are laboring under the delusion that they're capitalists, and thus doing piss-poor job.

Capitalism, even with all its problems, is the best way to distribute limited resources in a world with unlimited demand.

Demand is not unlimited. You only generate demand for things you actually (try to) buy, and you only buy things you can afford. Just because some kid wants a pony doesn't mean he's generating demand unless he or his parents go shopping for one. And since wages have long since stagnated, employment has become a precarious prospect, and keeping consumption up with debt has finally hit a wall, the economy is now collapsing since the demand needed to keep it going simply isn't there.

Re:Everything hits poor people harder

[cthulhu11]

Libertarianism is a great idea as long as every actor is altruistic and interested in the welfare of the society above themselves.

Exactly. Everyone Libertarian I've ever encountered is exactly the opposite.

Re:Everything hits poor people harder

[udachny]

The fundamental problem is the basic concept of "earning."...... in an equitable society everyone would receive the same compensation for putting in a decent day's work, contributing to society as a whole, whether they were making sandwiches for others to eat or performing surgery.

- wow, that's not an equitable society, that's a society that cannot differentiate between value and cannot discover relative prices for things. Question to you: is an airplane worth more than a keyboard or a voodoo doll?

Once you realise that things are not worth the same to people then you will realise just how retarded your ideas on what an 'equitable' society are.

I don't care about voodoo dolls but if I need a surgery I can't avoid having it or I may die. To me the value of a voodoo doll is 0, the value of surgery is the worth of my life (to me), which is infinite. So I would pay exactly 0 for a voodoo doll and would pay what it takes for a surgery, which is why the voodoo doll maker will never make the same amount as a surgeon, you moron.

Courage

[Anonymous Coward]

There's nothing quite as impressive and personally moving as the courage exhibited by an executive, when taking actions that cost others their jobs, and cost him nothing.

Are employment levels really that stellar?

[walterbyrd]

I am in Denver, CO. I am not seeing great improvements in employment here, or anywhere.

Microsoft, and now Cisco, are announcing huge job cuts.

Pay for IT jobs, here in Denver, is way down. Typical pay for PC techs used to be over $20 an hour, now it's usually around $16, sometimes as low as $12. Pay for CISSP certified used to over $100K a year, now it's more like $70K a year.

My wife, and I, are both unemployed, which is very unusual for us. Our friends are unemployed as well. I have one friend who used make $90K a year as a logistics manager, now he works temp jobs on assembly lines, side-by-side with people who have master's degrees in stuff like biotechnology.

Again, I am not sure where they get these stellar employment numbers, all I see is huge layoff, and declining salaries.

Re:Are employment levels really that stellar?

[timrod]

They're not. What's happening is that unemployment numbers are down for several reasons:

1. People who aren't looking for work actively aren't counted as unemployed. This accounts for a very large group of people.

2. People who are finding jobs are finding jobs that do not pay well (see: thousands of college graduates getting minimum-wage jobs out of college because nothing else is available).

3. Unemployment numbers do not count people who are underemployed, such as your friend who is working as a temp when he probably wants to be working full-time hours. There are separate (usually much higher) numbers for underemployment.

In reality, the job market is not getting any healthier - people are finding jobs, but they're finding jobs that don't pay.

Re:Are employment levels really that stellar?

[Virtucon]

Exactly the unemployment numbers from the Department of Labor are not telling of the true picture.

Re:Are employment levels really that stellar?

[plopez]

Go to the Bureau of Labor Statistics and look at the criteria for the U6 unemployment rate. I think it will cover your criteria. he rate most reported in the news is the U3 and is easier to understand and considered a harder number as it is difficult to count people who have stopped looking or do not show up at job centers as they are working part-time or under-employed.

Re:Are employment levels really that stellar?

[walterbyrd]

  I just came across this article. I wonder if there is anything to it?

> "Inflation-adjusted median income has dropped over the last five years, more people are leaving the workforce than joining it, the bulk of new job gains are part-time and millions are woefully under-employed."

http://seekingalpha.com/article/2314525-value-versus-momentum-what-should-you-buy-for-your-etf-portfolio

Re:Need to get rid of Americans and bring in more

[RabidReindeer]

H1B's are less likely to be NSA spies anyway.

Hey, H1B's like money too! How else are they going to earn as much as the people they displaced?

Shortage of tech workers :P

[scamper_22]

So I hear there is a shortage of tech workers.
Apparently, we need more education, more IT and engineering grads, more H1B Visa.

This makes total sense considering the massive layoffs we keep hearing about. It's all nicely packaged.

Cisco is changing directions

[streaming1]

Changes are difficult! I think Cisco is trying to go in a different direction. Technologies are changing with everything going to cloud. If they don't change I believe they will get left behind. People are not buying network gears like they used to.

Re:Because the internet don't need no stinkin rout

[lgw]

The cloud will replace routers. Cisco fuk yea.

Cisco doesn't make money from $20 routers. The cloud is definitely replacing really expensive hardware load balancer with cheap software load balancing. I'm not sure how customer network boundaries and firewalling is done on Azure or EC2, but I doubt it's expensive networking hardware - like just routing through Linux boxes somewhere. "Software defined networking" is gradually replacing a lot of other high-end custom hardware with cheaper solutions. None of that gives Cisco a bright future.

Re:Because the internet don't need no stinkin rout

[KapUSMC]

Azure and EC2 don't have an effect on the necessity for networking equipment on the perimeter. They are still going to be sitting behind a screening router handling BGP. Also, in many ways the SDN (regardless of Cisco ACI or VM Ware NSX or whatever pops up next) doesn't eliminate the need for networking equipment in the DC. To move to a single fabric where the software can control traffic flow between hosts and tieds actually performs better with higher end equipment. As you said, Cisco is making their money from $20 routers, and the consolidation to cloud or private cloud (large data centers) vice distributed computing is increasing the move back to their core business, but will ultimately reduce the number of customers. Their problems hasn't been route/switch, its losing out to Riverbed for optimization, to F5 for load balancing, etc... Its a growth issue, and they need UCS or ACI SDN to really take off to expand their market cap.