Monday, May 26, 2008

The freedom to say 'no'

Why aren't there more women in science and engineering? Controversial new research suggests: They just aren't interested.

WHEN IT COMES to the huge and persistent gender gap in science and technology jobs, the finger of blame has pointed in many directions: sexist companies, boy-friendly science and math classes, differences in aptitude.

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Women make up almost half of today's workforce, yet hold just a fraction of the jobs in certain high-earning, high-qualification fields. They constitute 20 percent of the nation's engineers, fewer than one-third of chemists, and only about a quarter of computer and math professionals.

Over the past decade and more, scores of conferences, studies, and government hearings have been directed at understanding the gap. It has stayed in the media spotlight thanks in part to the high-profile misstep of then-Harvard president Larry Summers, whose loose comment at a Harvard conference on the topic in 2005 ultimately cost him his job.

Now two new studies by economists and social scientists have reached a perhaps startling conclusion: An important part of the explanation for the gender gap, they are finding, are the preferences of women themselves. When it comes to certain math- and science-related jobs, substantial numbers of women - highly qualified for the work - stay out of those careers because they would simply rather do something else.

One study of information-technology workers found that women's own preferences are the single most important factor in that field's dramatic gender imbalance. Another study followed 5,000 mathematically gifted students and found that qualified women are significantly more likely to avoid physics and the other "hard" sciences in favor of work in medicine and biosciences.

It's important to note that these findings involve averages and do not apply to all women or men; indeed, there is wide variety within each gender. The researchers are not suggesting that sexism and cultural pressures on women don't play a role, and they don't yet know why women choose the way they do. One forthcoming paper in the Harvard Business Review, for instance, found that women often leave technical jobs because of rampant sexism in the workplace.

But if these researchers are right, then a certain amount of gender gap might be a natural artifact of a free society, where men and women finally can forge their own vocational paths. And understanding how individual choices shape the gender balance of some of the most important, financially rewarding careers will be critical in fashioning effective solutions for a problem that has vexed people for more than a generation.

A few years ago, Joshua Rosenbloom, an economist at the University of Kansas, became intrigued by a new campaign by the National Science Foundation to root out what it saw as pervasive gender discrimination in science and engineering. The agency was spending $19 million a year to encourage mentoring programs, gender-bias workshops, and cooperative work environments.

Rosenbloom had no quarrel with the goal of gender equity. But as he saw it, the federal government was spending all that money without any idea what would work, because there was no solid data on what caused the disparity between men and women in scientific fields.

To help answer the question, Rosenbloom surveyed hundreds of professionals in information technology, a career in which women are significantly underrepresented. He also surveyed hundreds in comparable careers more evenly balanced between men and women. The study examined work and family history, educational background, and vocational interests.

The results were striking. The lower numbers of women in IT careers weren't explained by work-family pressures, since the study found computer careers made no greater time demands than those in the control group. Ability wasn't the reason, since the women in both groups had substantial math backgrounds. There was, however, a significant difference in one area: what the men and women valued in their work.

Rosenbloom and his colleagues used a standard personality-inventory test to measure people's preferences for different kinds of work. In general, Rosenbloom's study found, men and women who enjoyed the explicit manipulation of tools or machines were more likely to choose IT careers - and it was mostly men who scored high in this area. Meanwhile, people who enjoyed working with others were less likely to choose IT careers. Women, on average, were more likely to score high in this arena.

Personal preference, Rosenbloom and his group concluded, was the single largest determinative factor in whether women went into IT. They calculated that preference accounted for about two-thirds of the gender imbalance in the field. The study was published in November in the Journal of Economic Psychology.

It may seem like a cliche - or rank sexism - to say women like to work with people, and men prefer to work with things. Rosenbloom acknowledges that, but says that whether due to socialization or "more basic differences," the genders on average demonstrate different vocational interests.

"It sounds like stereotypes," he said in an interview, "but these stereotypes have a germ of truth."

In the language of the social sciences, Rosenbloom found that the women were "self-selecting" out of IT careers. The concept of self-selection has long interested social scientists as an explanation for how groups sort themselves over time. Since human beings are heterogeneous, self-selection predicts that when offered a menu of options and freedom of choice, people will make diverse choices and sort themselves out in nonrandom ways. In other words, even given the same opportunities, not everybody will do the same thing - and there are measurable reasons that they will act differently from one another.

The concept of self-selection sets off alarms for many feminists. It seems to suggest that women themselves are responsible for the gender gap. It can also be an excuse for minimizing the role of social forces, including discrimination in the classroom and the workplace.

But self-selection has also emerged as the chief explanation in other recent studies of gender imbalance, including a long-term survey done by two Vanderbilt researchers, Camilla Persson Benbow and David Lubinski.

Starting more than 30 years ago, the Study of Mathematically Precocious Youth began following nearly 2,000 mathematically gifted adolescents, boys and girls, tracking their education and careers in ensuing decades. (It has since been expanded to 5,000 participants, many from more recent graduating classes.) Both men and women in the study achieved advanced credentials in about the same numbers. But when it came to their career paths, there was a striking divergence.

Math-precocious men were much more likely to go into engineering or physical sciences than women. Math-precocious women, by contrast, were more likely to go into careers in medicine, biological sciences, humanities, and social sciences. Both sexes scored high on the math SAT, and the data showed the women weren't discouraged from certain career paths.

The survey data showed a notable disparity on one point: That men, relative to women, prefer to work with inorganic materials; women, in general, prefer to work with organic or living things. This gender disparity was apparent very early in life, and it continued to hold steady over the course of the participants' careers.

Benbow and Lubinski also found something else intriguing: Women who are mathematically gifted are more likely than men to have strong verbal abilities as well; men who excel in math, by contrast, don't do nearly as well in verbal skills. As a result, the career choices for math-precocious women are wider than for their male counterparts. They can become scientists, but can succeed just as well as lawyers or teachers. With this range of choice, their data show, highly qualified women may opt out of certain technical or scientific jobs simply because they can.

These studies looked at different slices of the working world, but agree that in a world in which men and women both have freedom of choice, they tend to choose differently.

They have a provocative echo in the conclusions of Susan Pinker, a psychologist and columnist for the Toronto Globe and Mail. In her controversial new book, "The Sexual Paradox: Men, Women, and the Real Gender Gap," Pinker gathers data from the journal Science and a variety of sources that show that in countries where women have the most freedom to choose their careers, the gender divide is the most pronounced.

The United States, Norway, Switzerland, Canada, and the United Kingdom, which offer women the most financial stability and legal protections in job choice, have the greatest gender split in careers. In countries with less economic opportunity, like the Philippines, Thailand, and Russia, she writes, the number of women in physics is as high as 30 to 35 percent, versus 5 percent in Canada, Japan, and Germany.

"It's the opposite of what we'd expect," says Pinker. "You'd think the more family-friendly policies, and richer the economy, the more women should behave like men, but it's the opposite. I think with economic opportunity comes choices, comes freedom."

If the gender gap in many fields has its roots in women's own preferences, that raises a new line of questions, including the most obvious: Why do women make these choices? Why do they prefer different kinds of work? And what does "freedom of choice" really mean in a world that is still structured very differently for men and women?

For example, the choice to drop out of high-paying finance careers appears to be driven by the longer hours required in those jobs, says University of Chicago economist Marianne Bertrand, who studied the career tracks of the school's MBA graduates. Women who want families eventually decide to walk away from the career, at least temporarily.

"I've gone from the glass ceiling to thinking, if these jobs weren't 70 hours a week, women might not need to take so much time off," she says.

Benbow and Lubinski, at Vanderbilt, found that high-achieving women often pick their careers based on the idea that they'll eventually take time off, and thus avoid fields in which that absence will exact a larger penalty. In humanities or philosophy, for instance, taking a year or two off won't affect one's skill set very much. But in quickly evolving technical fields, a similar sabbatical can be a huge career setback.

Beneath those structural questions, though, women still seem to make choices throughout their lives that are different from men's, and it is not yet clear why.

Rosenbloom, the economist behind the IT study, says little research has been done on how interests are formed. "We don't know the role of mentors or experience or socialization," he says.

To some sociologists and many feminists, the focus on self-selection is a troubling distraction from bigger questions of how society pushes girls and boys into different roles.

Rosalind Chait Barnett, at the Women's Studies Research Center at Brandeis, says that boys and girls are not, at root, different enough for such clear sorting to be seen as a matter of "choice."

"The data is quite clear," she says. "On anything you point to, there is so much variation within each gender that you have to get rid of this idea that 'men are like this, women are like that.' "

Sorting through the various factors is extremely challenging, all the researchers agree, and the issue is as complex as the individuals making each career decision. These findings on self-selection only open new areas of inquiry. They do suggest, however, that if the hard-fought battle for gender equality has indeed brought America to a point where women have the freedom to choose their career paths, then the end result may be surprising - and an equal-opportunity workforce may look a lot less equal than some had imagined.

Elaine McArdle is a Cambridge writer. Her first book, "The Migraine Brain," coauthored with Harvard neurologist Dr. Carolyn Bernstein, will be published in September by Free Press.

Correction: Because of a reporting error, an article in last Sunday's Ideas section about women and scientific careers gave an incorrect publication date for Joshua Rosenbloom's study on information technology jobs. His study will appear in an upcoming issue of the Journal of Economic Psychology.

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Far From Always Being Right, the Customer Is on Hold

Agence France-Presse — Getty Images

Switchboard operators at the Empire State Building in 1946. Today, voice response systems are the vogue.

REMEMBER the days when, if something went wrong with a product you ordered, you picked up the phone and there was a live person on the other end? Wait, there is more. You asked for customer service and were transferred — to another human! And that person perhaps even solved your problem.

I get a warm feeling when I think about that, like fondly remembering an old teacher. We have become so used to the impersonal and baffling labyrinth of automated voice systems at just about every company — and then poor customer service when we do reach an actual person — that we just grudgingly accept it.

We all have bad service stories and love telling them and they do not always involve giant corporations. One of my favorites is about the dry cleaner who returned two of my husband’s shirts with neatly torn holes in each right sleeve. Clearly, they had gotten caught on a machine.

He showed the clerk the holes and asked for replacement shirts. But she insisted that he must be rubbing his elbows so hard on his desk that the shirts wore through. Never mind that we had been going there for years with no such problem. Never mind that they were symmetrical tears.

She did offer to make good, though. She would turn them into short-sleeve shirts for him — at a price. We switched dry cleaners.

But most of my negative experiences involve trying to get help over the phone, whether for an insurance or an Internet problem. I dutifully push the buttons required or speak to the automated voice, and still I often end up at the wrong department or get disconnected. If the problem is not resolved the first time, I have to go through the process with a different agent.

Complaining about bad customer service is such a sport now that it should be an Olympic event. But I am curious about how it devolved into this, if there is anything I can do about it and if it is ever going to change.

A little history: These interactive voice response systems, known as I.V.R., which recognize speech or touch tones, began in earnest in the 1980s, and the idea was that they would cut costs by reducing the number of people a company needed to respond to customer complaints.

The trouble is, companies were more interested in saving money than customer retention.

“ ‘The customer is always right’ got totally lost,” said Michael Schrider, president of J. Lodge, a call-monitoring business (as in “this call is monitored for quality assurance.”). “It was ‘the customer is a pain.’ ”

About nine years ago, call centers started moving offshore, so that when you called about your computer, you did not know if you were talking to someone in Bangalore or Boston.

Despite common perceptions, however, fewer than 10 percent of call centers are based outside the United States. There are some 100,000 call centers located in this country, said Jon Anton, director of benchmark research at the Center for Customer Driven Quality at Purdue. The number does not include telemarketers.

But whether here or overseas, few of the systems seem to work very well, and the result is customer alienation.

Walter Rolandi is founder of the Voice User Interface Company, which designs and assesses interactive voice response systems for companies. As part of his job, he hears how people use the systems.

“I’ve listened to thousands of people interacting with machines,” Mr. Rolandi said. “You hear sighs of resignation. You hear people swear. If businesses knew what I knew, they would not design them this way. Many people do not take into account the emotional state of the customer. When you call someone for customer service, you’ve got a problem and you’re probably in a bad mood. You hear someone telling you your call is so important that we won’t let you talk to a human. Then they slap people with too many options, and eventually, you’re in a fight with the system. When you do get a customer representative, you’re loaded for bear.”

In general, Mr. Rolandi said, if people can use an automated system in less time than it takes to deal with a human, they will. Who would rather wait in a bank line than use an A.T.M.? And I love the automated prescription refill system at my CVS drugstore. But it is much more difficult when the request is not as straightforward.

John I. Todor, a psychologist and author of the book “Addicted Customers” (Silverado Press, 2007), said that in this fast-paced, complicated world, people were already being pushed out of their psychological comfort zones.

“A lot of people out there already have a hair trigger,” he said. And poor customer service makes us more frustrated and anxious, which increases our distrust of the company.

But things have started changing, for a number of reasons. For one, companies discovered that customer turnover was expensive.

For the first time, American corporations are acknowledging “customer service as something worth paying for rather than just red ink,” said Mr. Anton, who looks at call centers worldwide and, using a number of criteria, compares how well they work. “If you can satisfy customers and keep them buying, it’s as important as marketing.”

He said that in the last year or so some large companies have been creating a chief customer executive, whose success is measured not on profit, but on customer retention.

Another reason for this change is that the very technology that is driving us crazy is helping people fight back.

Consumers are posting their experiences with customer service online and warning people away from businesses that do not offer a good follow-up with customers. Secondly, there are Web sites that tell customers how to get around an automated system.

Two of them are and I tried a few of the numbers posted and some went through easier than others. Nonetheless, they are helpful.

And, in particular, provides a community for consumers to exchange information. Walt Tetschner, the director of the Get Human Web site, is an engineer by trade and now a consumer advocate. The Web site has been up for about two and a half years and has 10,000 visitors a day.

In May, the site also began asking visitors to rank those companies with great customer service. It then lists them on its Web site.

Mr. Schrider said that he would like to see companies have a real person answer the phones and then prioritize the calls, but businesses do not want that for at least two reasons: It would be more costly, and they think that most customers do not like to call in and then get transferred.

Why not at least give more control to the consumer, Mr. Todor suggested, by offering an option upfront to speak to an agent or continue with the automated system? If it will take 10 minutes to speak to a person, then the caller can decide whether to wait, without going through the entire automation system.

Netflix, the movie rental company, for example, last year moved from an e-mail customer service system to giving its subscribers a 24-hour phone number with a live agent. When I called, I got an automated system telling me that someone would be available within three minutes — and sure enough, I was soon talking to a real person.

Mr. Anton said other companies were also recognizing and responding to that desire by using an automated service that in natural language asks the caller initially, “How can I help you?” If the system does not understand what you say, there will be a human guide behind who can direct the call.

Why not just have a person initially? Because an automated system can handle four to five calls at a time while a person can handle only one.

“If you can lose callers over a bad call, you can increase loyalty with a good call,” Mr. Anton said.

So if things get so good, we will not have to spend our time wading through endless automated phone systems. Or indulging in long stories about bad customer service.

Life will seem so empty.

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The 10 Most Annoying Habits of Technology Companies

Fed up with rebate hassles, nagging software, and skimpy support? So are we! The everyday practices of hardware, software, and Web firms can drive their customers bonkers. Here's how to fight back.

Rick Broida, PC World

The 10 Most Annoying Habits of Technology Companies illustration
Illustration: Edwin Fotheringham

May we vent for a minute? Much as we love technology, sometimes we get fed up with the companies that provide it. Maybe it's the notice saying that important features of our perfectly good money-management software no longer work just because it's a couple of years old. Maybe it's the new PC we just bought, so loaded with unwanted junkware that it takes minutes to boot and runs like molasses. Or maybe it's the way we're forced to switch to a certain behind-the-times carrier if we want to buy a certain way-cool phone. (Oh, and that fairly new operating system we don't like, don't want, and can't escape? Don't even go there.)

Yeah, we're fed up, all right. And we're not the only ones: We surveyed readers at and found that you've had your fill of such annoying policies and practices as well. (Be sure to see more on the results of our informal poll.) Hoping for a little retribution--or at least some explanations--we went knocking on the doors of Apple, Intuit, Sony, Symantec, and other perpetrators of bad behavior. We didn't always receive good answers (or sometimes any answer--Apple didn't bother to return our calls), but we did put these companies on notice: Annoyed customers frequently turn into ex-customers.

Who got served? Here's our list of some of the most annoying practices (and practitioners), along with suggestions for working around the hassles or avoiding them altogether.

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BBC placed on dirty list for ‘propping up’ Burma junta

The BBC is to be named in a “dirty list” of companies accused of helping to prop up Burma’s military rulers.

BBC Worldwide, the corporation’s commercial arm, will be criticised for promoting tourism to the country, despite pleas from Burma’s pro-democracy movement for holidaymakers to stay away.

The broadcaster has become embroiled in the row following its acquisition of a majority stake in Lonely Planet, which publishes a travel guide to Burma. Critics claim that the guide helps the junta to achieve its goal of luring more western tourists to fill its coffers.

Opponents of General Than Shwe’s dictatorship also claim that forced labour has been used to build facilities such as new hotels and an international airport at Mandalay.

The annual blacklist of companies accused of aiding or helping to fund the junta will be published on June 3 by the Burma Campaign UK, a London-based pressure group.

BBC Worldwide will be the highest-profile new entry. It will join about 150 other companies with business interests in Burma, including Total and Chevron, the oil giants.

Superdrug and 3 Mobile are also on the list because Hutchison Whampoa, which owns both companies, has links to Rangoon.

“Tourism provides a financial lifeline to the regime and the BBC should not be supporting it,” said Johnny Chatterton, the group’s campaigns officer.

Politicians and rival media organisations accused BBC Worldwide last year of “empire building” after it reportedly paid £75m for a 75% stake in Lonely Planet. The deal caused controversy because it appeared to have little to do with the BBC’s broadcasting remit.

Aung San Suu Kyi, the Burmese pro-democracy leader and a Nobel peace prize winner, has previously called for tourists to boycott the country. Rough Guides, another travel publisher, has refused to print a book about Burma.

BBC Worldwide said: “Lonely Planet believes its decision to publish a guidebook to Burma does not represent support or otherwise for the current regime. It provides information and lets readers decide for themselves.”

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Potential Facebook IPO keeps investors speculating

By Anupreeta Das

NEW YORK (Reuters) - Will it, won't it? If so, when? If not, why not? An entire cottage industry of speculation has built up around the public debut of Facebook, arguably Silicon Valley's hottest Internet company.

Mark Zuckerberg, Facebook's founder and chief executive, has remained mum on the social network's IPO plans, except to tell CBS's 60 Minutes in January that a 2008 IPO is "highly unlikely."

That hasn't stopped bloggers and investors from interpreting Facebook's every move as preparation for an eventual public offering.

That Facebook has been steadily expanding its ranks -- it now employs 550 people, according to the company -- and recently hired a string of Google Inc (GOOG.O: Quote, Profile, Research) executives, including Sheryl Sandberg, Google's former sales chief who is the new Facebook chief operating officer, has only fed the speculation.

A Facebook spokeswoman declined to comment.

Venture capitalists say the excitement around Facebook is warranted given the explosive growth in membership. The social network has more than tripled the number of active members to 70 million from about 20 million in April 2007.

Advertisers are attracted by the huge opportunity presented by social networks, where millions of people often post their interests and tastes on their online profiles. This online behavior allows advertisers to target their messages specifically to groups of people.

"Social media is going to be mainstream, it's going to be ubiquitous," said Mayfield Fund managing director Navin Chaddha at the Reuters Global Technology, Media and Telecoms summit this week.

"It's where people are going to hang out," he said, adding that the next Yahoo Inc (YHOO.O: Quote, Profile, Research) or Google Inc is going to emerge from among the crop of these Web 2.0 start-ups.

WEB 2.0

That's the main reason why Web 2.0 companies -- called so because the Web-based programs they offer are more dynamic and interactive than dot-com era companies -- are getting large valuations.

Software giant Microsoft Corp (MSFT.O: Quote, Profile, Research) took a $240 million stake in Facebook last year, valuing the four-year-old company at $15 billion.

That's slightly more than the $14.7 billion market value of HJ Heinz Co (HNZ.N: Quote, Profile, Research), according to Reuters data, but less than half that of Yahoo, whose market cap was $37.6 billion.

"(Facebook) is not riding a crest," said Bob Davis, general partner at Highland Capital Partners. "It is the crest in terms of what's taking place out there today."

Following the Facebook funding, in January Slide Inc -- a start-up that lets people create their own photo slide shows to put on their social network profiles -- received a $50 million round of funding, valuing the company at about $500 million.

Facebook's popularity is so immense that "despite the lackluster IPO market, if they chose to go public tomorrow, they could," Davis said at the Reuters Summit.

But the overall market for initial public offerings remains daunting for most companies this year. Only five U.S. venture-capital backed companies went public in the first quarter of 2008, compared to 18 in the same period last year, according to data from the National Venture Capital Association, a trade group.

The founder of A Small World, the Facebook for high-fliers, told the Reuters Summit in Paris that market turbulence was also preventing it from making a public debut in Europe.

"If the market was super-hot, we'd be considering a flotation," said founder and Chairman Erik Wachtmeiste.

Some venture capitalists said they've asked start-ups they fund to shore up cash for the next year or so, until the public markets open their wallets for their debuts.

"But Facebook is in an enviable position," Highland's Davis said. "It can afford to sit it out."

(Editing by Brian Moss)

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Awash In Profits, Exxon Extracting Every Penny From Its Franchisees

Every time Sohaila Rezazadeh rings up a sale at her Exxon station on Chain Bridge Road in Oakton, her cash register sends the information to Exxon Mobil's central computers. If she raises the price of gasoline a couple of pennies, chances are that Exxon will raise the wholesale price she pays by the same amount.

Through a password-protected Web portal, Exxon notifies Rezazadeh of wholesale price changes daily. That way the oil giant, which is earning about $3.3 billion a month, fine-tunes the pump prices at the franchise Rezazadeh has owned for 12 years.

Now, however, Rezazadeh says she cannot stay in business. Credit-card fees are eating her profit margins. Exxon, which owns the station land, last week handed Rezazadeh a new lease raising her rent about 30 percent over the next three years. She stuck a copy on the window of her station to show customers who are angry about soaring pump prices. Rezazadeh has told Exxon that she cannot make money with the rent that high. Her territory manager's reply, she said, was simple: When you go, leave us the keys.

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10 Things to Remember About

Memorial Day is more than just a three-day weekend and a chance to get the year’s first sunburn. Here’s a handy 10-pack of facts to give the holiday some perspective.

1. It started with the Civil War

Memorial Day was a response to the unprecedented carnage of the Civil War, in which some 620,000 soldiers on both sides died. The loss of life and its effect on communities throughout the North and South led to spontaneous commemorations of the dead:

• In 1864, women from Boalsburg, Pa., put flowers on the graves of their dead from the just-fought Battle of Gettysburg. The next year, a group of women decorated the graves of soldiers buried in a Vicksburg, Miss., cemetery.

• In April 1866, women from Columbus, Miss., laid flowers on the graves of both Union and Confederate soldiers. It was recognized at the time as an act of healing sectional wounds. In the same month, up in Carbondale, Ill., 219 Civil War veterans marched through town in memory of the fallen to Woodlawn Cemetery, where Union hero Maj. Gen. John A. Logan delivered the principal address. The ceremony gave Carbondale its claim to the first organized, community-wide Memorial Day observance.

• Waterloo, N.Y., began holding an annual community service on May 5, 1866. Although many towns claimed the title, it was Waterloo that won congressional recognition as the “birthplace of Memorial Day.”

2. General Logan made it official

logan.jpgGen. Logan, the speaker at the Carbondale gathering, also was commander of the Grand Army of the Republic, an organization of Union veterans. On May 5, 1868, he issued General Orders No. 11, which set aside May 30, 1868, “for the purpose of strewing with flowers, or otherwise decorating the graves of comrades who died in defense of their country during the late rebellion….”

The orders expressed hope that the observance would be “kept up from year to year while a survivor of the war remains to honor the memory of his departed comrades.”

3. It was first known as Decoration Day

From the practice of decorating graves with flowers, wreaths and flags, the holiday was long known as Decoration Day. The name Memorial Day goes back to 1882, but the older name didn’t disappear until after World War II. Federal law declared “Memorial Day” the official name in 1967.

4. The holiday is a franchise

Calling Memorial Day a “national holiday” is a bit of a misnomer. While there are 11 “federal holidays” created by Congress—including Memorial Day—they apply only to Federal employees and the District of Columbia. Federal Memorial Day, established in 1888, allowed Civil War veterans, many of whom were drawing a government paycheck, to honor their fallen comrades with out being docked a day’s pay.

For the rest of us, our holidays were enacted state by state. New York was the first state to designate Memorial Day a legal holiday, in 1873. Most Northern states had followed suit by the 1890s. The states of the former Confederacy were unenthusiastic about a holiday memorializing those who, in Gen. Logan’s words, “united to suppress the late rebellion.” The South didn’t adopt the May 30 Memorial Day until after World War I, by which time its purpose had been broadened to include those who died in all the country’s wars.

In 1971, the Monday Holiday Law shifted Memorial Day from May 30, to the last Monday of the month.

5. It was James Garfield’s finest hour—or maybe hour-and-a-half

On May 30, 1868, President Ulysses S. Grant presided over the first Memorial Day ceremony at Arlington National Cemetery—which, until 1864, was Confederate Gen. Robert E. Lee’s plantation.

Some 5,000 people attended on a spring day which, The New York Times reported, was “somewhat too warm for comfort.” The principal speaker was James A. Garfield, a Civil War general, Republican congressman from Ohio and future president.

“I am oppressed with a sense of the impropriety of uttering words on this occasion,” Garfield began, and then continued to utter them. “If silence is ever golden, it must be beside the graves of fifteen-thousand men, whose lives were more significant than speech, and whose death was a poem the music of which can never be sung.” It went on like that for pages and pages.

As the songs, speeches and sermons ended, the participants helped to decorate the graves of the Union and Confederate soldiers buried in the cemetery.

6. God knows, not even the Unknown Soldier can avoid media scrutiny these days

unknown-soldier.jpg“Here rests in honored glory an American soldier known but to God.” That is the inscription on the Tomb of the Unknowns, established at Arlington National Cemetery to inter the remains of the first Unknown Soldier, a World War I fighter, on Nov. 11, 1921. Unknown soldiers from World War II and the Korean War subsequently were interred in the tomb on Memorial Day 1958.

An emotional President Ronald Reagan presided over the interment of six bones, the remains of an unidentified Vietnam War soldier, on Nov. 28, 1984. Fourteen years later, those remains were disinterred, no longer unknown. Spurred by an investigation by CBS News, the defense department removed the remains from the Tomb of the Unknowns for DNA testing.

The once-unknown fighter was Air Force pilot Lt. Michael Joseph Blassie, whose jet crashed in South Vietnam in 1972. “The CBS investigation suggested that the military review board that had changed the designation on Lt. Blassie’s remains to ‘unknown’ did so under pressure from veterans’ groups to honor a casualty from the Vietnam War,” The New York Times reported in 1998.

Lt. Blassie was reburied near his hometown of St. Louis. His crypt at Arlington remains permanently empty. [Image courtesy of]

7. Vietnam vets go whole hog

On Memorial Day weekend in 1988, 2,500 motorcyclists rode into Washington, D.C., for the first Rolling Thunder rally to draw attention to Vietnam War soldiers still missing in action or prisoners of war. By 2002, the numbers had swelled to 300,000 bikers, many of them veterans. There may have been a half-million participants in 2005 in what organizers bluntly call “a demonstration—not a parade.”

A national veterans rights group, Rolling Thunder takes its name from the B-52 carpet-bombing runs during the war in Vietnam. Rolling Thunder XXI (and you thought only Super Bowls and Rocky movies used Roman numerals) is Sunday, May 25. [Image courtesy of]

8. Memorial Day has its customs

General Orders No. 11 stated that “in this observance no form of ceremony is prescribed,” but over time several customs and symbols became associated with the holiday.

It is customary on Memorial Day to fly the flag at half staff until noon, and then raise it to the top of the staff until sunset.

Taps, the 24-note bugle call, is played at all military funerals and memorial services. It originated in 1862 when Union Gen. Dan Butterfield “grew tired of the ‘lights out’ call sounded at the end of each day,” according to The Washington Post. Together with the brigade bugler, Butterfield made some changes to the tune.

Not long after, the melody was used at a burial for the first time, when a battery commander ordered it played in lieu of the customary three rifle volleys over the grave. The battery was so close to enemy lines, the commander was worried the shots would spark renewed fighting.

The World War I poem “In Flanders Fields,” by John McCrea, inspired the Memorial Day custom of wearing red artificial poppies. In 1915, a Georgia teacher and volunteer war worker named Moina Michael began a campaign to make the poppy a symbol of tribute to veterans and for “keeping the faith with all who died.” The sale of poppies has supported the work of the Veterans of Foreign Wars.

9. There is still a gray Memorial Day

Several Southern states continue to set aside a day for honoring the Confederate dead, which is usually called Confederate Memorial Day: Alabama: fourth Monday in April; Georgia: April 26; Louisiana: June 3; Mississippi: last Monday in April; North Carolina: May 10; South Carolina: May 10; Tennessee (Confederate Decoration Day): June 3; Texas (Confederate Heroes Day): January 19; Virginia: last Monday in May.

10. Each Memorial Day is a little different

No question that Memorial Day is a solemn event. Still, don’t feel too guilty about doing something frivolous, like having barbecue, over the weekend. After all, you weren’t the one who instituted the Indianapolis 500 on May 30, 1911. That credit goes to Indianapolis businessman Carl Fisher. The winning driver that day was Ray Harroun, who averaged 74.6 mph and completed the race in 6 hours and 42 minutes.

Gravitas returned on May 30, 1922, when the Lincoln Memorial was dedicated. Supreme Court chief justice (and former president) William Howard Taft dedicated the monument before a crowd of 50,000 people, segregated by race, and which included a row of Union and Confederate veterans. Also attending was Lincoln’s surviving son, Robert Todd Lincoln.

And in 2000, Congress established a National Moment of Remembrance, which asks Americans to pause for one minute at 3pm in an act of national unity. The time was chosen because 3pm “is the time when most Americans are enjoying their freedoms on the national holiday.”

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The New Global Hunt for Tax Cheats

By forming multinational investigative teams, the IRS and other tax collectors are cracking down on evaders and giving new meaning to globalization

German Chancellor Angela Merkel and the Prime Minister of Liechtenstein Otmar Hasler give a joint press conference at the Chancellory in Berlin on February 20, 2008.

Government authorities from Australia to the U.S. are hunting big game together. Their prey? Wealthy tax evaders—as well as the asset managers, banks, and accountants who help prosperous people conceal cash in offshore bank accounts. For decades, globalization has afforded an edge to tax cheats. Now it's working for the tax cops, too.

Buoyed by new multinational investigative teams, agreements with banks to open once-secret records, tougher penalties for cheats and third parties, and a thirst for billions of dollars in recoverable revenue, the new globe-spanning tax man has got the world's mega-rich worried they could run afoul of the mounting crackdown.

With so much money at stake, it's no wonder the U.S. Internal Revenue Service, Germany's Bundesministerium der Finanzen, Britain's Her Majesty's Revenue & Customs, and other international colleagues are eager to nab wealthy tax evaders. Almost $6 trillion is estimated to be hidden from tax authorities across the globe—Germany's central bank suggests $775 billion in German assets alone have been secreted out of the country. In the U.S., the IRS reckons $295 billion of potential tax revenue goes uncollected—much of it because of underreported income. With governmental budgets strained everywhere, leaders are eager to mop up those missing payments.

A Collaborative Effort

To close this "tax gap," U.S. investigators and their comrades overseas are cooperating as never before. Since the September 11 terrorist attacks, tracking money movements has become a priority. In response, law enforcement and banks have started to share more information about possible tax evaders. Governments also realize they have a lot to gain from stiffer penalties that return more money to underfilled coffers.

"There's a lot of offshore tax evasion, so governments are trying to find tools to combat that," says Grace Perez-Navarro, deputy director of tax policy and administration at the Paris-based Organisation for Economic Co-operation & Development (OECD). "Governments realized there was greater value in working multilaterally."

Cross-border collaboration has become a buzzword in global law enforcement circles. Under an OECD-negotiated treaty, 19 countries, including states as diverse as the U.S., Italy, and Azerbaijan now can prosecute tax evaders within their jurisdictions on behalf of other signatory countries. The European Union passed a similar law in 2000, while Brazil, India, and South Africa began cooperating with each other to identify suspect transactions in 2006. Their targets typically conceal assets in the roughly 40 nations generally seen as tax havens, which are analyzed routinely by international organizations such as the OECD and the International Monetary Fund.

The IRS Joins Forces

These days, an investigator following a lead need not even cross a border for help from his international colleagues: He or she merely has to walk down the hallway. Since 2004 tax shelter sleuths from five countries—the U.S., Britain, Australia, Japan, and Canada—have shared work space, tactics, and information in a joint office at IRS headquarters in Washington. The success of the operation led to its expansion last year, including the opening of a London-based outpost at Her Majesty's Revenue & Customs.

The physical setup of this so-called Joint International Tax Shelter Information Centre reflects the sensitivity of the work. Each member of the unit—which is physically separated from the rest of the IRS—has a separate, closed office, allowing for confidential communication with counterparts back home, as well as discreet one-on-one conversations with local colleagues and the IRS. "The office space is configured in a manner that reflects the critical need to protect the privacy of taxpayer information," according to an IRS spokesman.

The IRS argues that such cooperation is essential in a world of globalized money flows. "Cross-border migration of capital and people has made this a more integrated world, and the IRS is working closely with other national tax administrators to ensure that we have a global view of our work," says the top tax official in the U.S., IRS Commissioner Douglas Shulman. This close work with other tax authorities, he adds, has allowed the IRS and its equivalents in other nations to achieve "a new level of cooperation in identifying, developing, and sharing leads on abusive tax transactions and schemes."

Such cooperation will only increase as governments clamp down on tax evasion, says Daniel Feingold, senior partner at Britain-based global tax consultancy Strategic Tax Planning. "There's a definite push for this sort of thing," he says.

Squeezing Tax Havens

All of this has put the squeeze on tax havens such as Liechtenstein and Andorra that have long-held traditions and laws supporting no-questions-asked banking for wealthy clients. "The number of countries safe for this activity is dwindling," says Beverly Hills-based tax lawyer Edward Robbins Jr., a former assistant U.S. attorney who oversaw tax prosecutions in California. "There aren't that many left, frankly."

For decades, banks in places such as Switzerland have flourished by offering seemingly ideal havens from the tax man. Switzerland's code of silence, for instance, goes back at least 200 years. And during World War II, Nazis and Jews alike made use of Swiss bankers' discretion. Since then so have corporations and non-governmental organizations—as well as drug traffickers and corrupt dictators.

Yet even this Alpine paradise has conceded to mounting international pressure (, 5/21/08). Most major Swiss banks have signed up with the U.S. to be "qualified intermediaries." The system gives the IRS access to any account containing U.S. securities and requires the filing of tax and other forms with the U.S. that identify clients and balances—not exactly the image of tight-lipped discretion portrayed in movies such as The Spanish Prisoner and The Bourne Identity. Even the Swiss government admits to a disconnect between tradition and current reality. "Swiss banking secrecy is in no way absolute," cautions the Swiss embassy's Web site.

Often under pressure, other tax havens have followed suit. Agreements with traditional ports-of-call for evaders like Malta and Bermuda have aided the IRS and its international counterparts. Now tax collectors don't even have to pick their way through complicated avoidance schemes: They can make a case against alleged tax cheats simply by catching missing or falsified paperwork.

Elaborate Web

Here's how it works. For years, a bank client with any kind of interest in an overseas account valued at more than $10,000 has had to file a special form with the IRS disclosing that fact. But to avoid taxation, he might not file the form, or might underreport the value of the account on his tax return. More deviously, he might conceal transactions in an elaborate web of trusts and holding companies. Now, thanks to more international sharing of data, the IRS may find out about the account anyway—from the bank itself.

The recent high-profile indictment of former UBS (UBS) banker Brad Birkenfeld shows just how tough the authorities are getting. Birkenfeld's wealthy client, Igor Olenicoff, has pleaded guilty to filing false tax returns and agreed to pay $52 million in back taxes. Both Olenicoff and Birkenfeld, who was born in Boston and lives in Switzerland, are believed to be cooperating in a continuing investigation that began with the discovery of $200 million allegedly concealed in European tax havens on behalf of Olenicoff, a Russian émigré-turned-California real estate developer.

As a result of that probe, the extended arm of U.S. law may reach not just other clients of Birkenfeld (and those of an alleged collaborator in Liechtenstein named Mario Staggl, who specializes in the intricacies of tax havens and trusts) but also other employees of UBS. "This is not an isolated incident," says David Schwedel, a Florida entrepreneur who is now an investment partner of Birkenfeld's. "He won't be the last banker called in for questioning. There will be a lot of bankers called into this. They're going after others at UBS and any U.S. individuals involved with the bank."

Alerted About the Risks

Kevin Packman, a Miami lawyer who represents taxpayers running afoul of the IRS, says he's amazed that even sophisticated CPAs with major corporate and individual clients seem unaware of the international push against money held offshore. Tax lawyers around the world tell of clients—often expatriates—who are becoming increasingly worried about being ensnared in the tightening net, thanks to publicity surrounding tax avoidance test cases in Europe and the U.S.

One lawyer tells of trying to alert a client in Argentina about the risks of failing to disclose information to authorities in the client's home country. Even so, the client persisted in wanting to keep income under wraps. But tax lawyers and wealth managers from Basel to Boston say the risks of doing so are rising. "It's obvious that there's a growing intolerance of tax avoidance in the Western world," says Ted Wilson, a senior consultant at Scorpio Partnership, a London-based strategic consultancy to those who advise wealthy clients.

Of course, when the cat is in Zurich or Malta, the mice will find other havens. Asset managers, tax lawyers, and investigators tell BusinessWeek that wealthy evaders are taking a closer look at new frontiers for concealment. One such nation is the Republic of Vanuatu, a tiny, tax-free South Pacific archipelago 1,000 miles from Australia. Local officials even promote their tax haven status to potential clients. "Attractions for the foreign investor" include "extensive secrecy protections," according to a Vanuatu business and taxation guide.

Wealthy individuals looking to evade taxes likely will always find ways to circumvent the law. Yet as enforcement finds new ways to share information, the number of prosecutions is expected to rise. That has put pressure on well-known tax havens, such as Liechtenstein, either to shape up or face the full brunt of global tax authorities. In fact, there are signs things are already changing. Says Strategic Tax Planning's Feingold: These days, "among experienced practitioners, no one would ever use Liechtenstein."

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