Today, a couple of big Wall Street firms announced another round of cuts:
- Citigroup plans to slash 11,000 jobs and close branches worldwide as part of a broad restructuring effort it hopes will save about $1.1 billion in expenses,
- JPMorgan Chase became the latest Wall Street firm to scale back in an uncertain economy, announcing plans Tuesday to save $1 billion through various costs cuts and about 4,000 job reductions.
- Goldman – which has already let 3,300 employees go worldwide in the past two years – announced another round of layoffs to cut costs by a cool billion dollars
OK, so 3 companies are cutting over $3 billion in expense.
No gnashing of teeth ,,, no “the sky is falling”
Just “times are tough … we’ve gotta do it.”
No so on the Sequester front … apparently the torch has officially been passed from the 12-21-12 Doomsday crowd to Team Obama …
Today was another day of .hysteria … and silly rhetoric.
Allegedly, Obama said that – because of the Sequester – an already closed agency would have to be shuttered.
Say, what?
And, here’s the gem of the day …
CNN’s Candy Crowley – you know, Obama’s favorite fact-checker — was interviewing Secretary of Transportation Ray LaHood.
Spewing the party line, LaHood pitched the FAA version of the Sequester nightmare: “Air travel will go haywire if the sequester cuts take place”
To which, Crowley pointed out that
- Even with the sequester, the FAA will have more money in this year’s budget than last year’s
- In real dollars, the cuts bring the FAA back to their 2008 funding level
- The FAA budget has increased 47% since … while the number of domestic flights has dropped by 27%.
It’s worth a minute to watch LaHood stammer through the interview.
His best line “budgets go up, and budgets go down.”
OK, Ray, so let them go down for once.
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The Homa Files 
February 27, 2013 at 8:06 am |
Great post
February 27, 2013 at 12:39 pm |
Prof. Homa,
Great post. I was thinking the same thing. Even the federal contractors are smart enough to make agile adjustments. SAIC is splitting into two and slashing jobs to be more efficient, same thing at Booz Allen Hamilton where a big re-org is on the horizon.
The idiocy is in the furlough approach for government employees who will soon be working four days a week, albeit for 20% less pay. A well-run organization would simply layoff low-performing individuals and get rid of redundant or ineffective programs.
February 27, 2013 at 2:42 pm |
Citi, JP and Goldman are private companies?
February 27, 2013 at 5:13 pm |
TK – I realize you’re shilling for the president here, but Prof. Homa never claims these companies are “private companies;” he says that they are in the private sector – i.e. NOT public/governmental agencies. Maybe it’s time to review your econ 101.
Great post, Prof. Homa.
February 27, 2013 at 5:24 pm |
I’m with TK on this one. Citi, GS, and JP have a lot more of my tax money than some Federal agencies do.
February 28, 2013 at 12:19 pm |
Steve – I think Obama would be more sympathetic to your viewpoint than mine. I understand that the banks needed to be supported, but let’s not pretend that the banks are making money because of their business savvy. They are making money because the Fed is shoveling money into their vaults.
But I agree that the hysteria and politicizing is completely unproductive.