Morgan Stanley to Cut 580 Jobs in New York

Morgan Stanley headquarters in Manhattan.Richard Drew/Associated PressMorgan Stanley headquarters in Manhattan.

Morgan Stanley will slash 580 jobs in New York as part of a broader wave of layoffs underway at the bank, according to a public filing.

In a notice filed with the New York State Department of Labor, Morgan Stanley cited “economic” woes as the cause of the layoffs. The cuts began Dec. 15 on a “rolling” basis, according to the filing, known as a WARN, or Worker Adjustment and Retraining Notification.

Earlier this month, Morgan Stanley said it would cut 1,600 jobs, or 2.6 percent of its work force, by the first quarter of 2012. The bank plans to spread the round of reductions across all divisions, including investment banking and trading.

The layoffs at Morgan Stanley are the latest round of severe cutbacks on Wall Street, which has suffered a year of humbling returns and enormous cost-cutting. Citigroup recently announced it would shed 4,500 jobs. Bank of America and Goldman Sachs have also begun carrying out major staff reductions. In June, Goldman told the New York Department of Labor that it would layoff 230 New York workers through March 2012.

Morgan Stanley

The job losses have taken a toll on New York City, the center of the financial industry. The securities industry in the city lost nearly $3 billion in the third quarter, according to a report released this month by the New York State comptroller. In October, the comptroller disclosed that an estimated 10,000 Wall Street workers could lose their jobs by the end of 2012.

Some of the cuts at Morgan Stanley in New York, the filing said, will impact workers at the firm’s Midtown Manhattan headquarters, 1585 Broadway. The layoffs will also affect three smaller Morgan Stanley offices in New York: 1 New York Plaza, 750 Seventh Avenue and 1221 Avenue of Americas.

Obama Unlikely to Harness Political Credit From 8.6 Unemployment Rate

Dec 2, 2011 12:50 PM EST

The U.S. jobless rate fell to 8.6 percent in November. It’s a sizable reduction, but it’s still not low enough for the president to get some credit. Daniel Stone reports.

It’s the number that drives Washington, and on Friday, offered some welcome wind at the back of President Obama.

The Bureau of Labor Statistics announced on the traditional first Friday of the month that the unemployment rate in November had dropped to 8.6 percent from 9.0, a statistical blip that translates to about 120,000 Americans who have new jobs.

One unfortunate caveat in otherwise good news is that joblessness hasn’t just gone down. Half of Friday’s drop was because of new jobs added, and the other half because about 315,000 people stopped looking for work, which means they’re still unemployed, just no longer counted in the labor force.

But does the optic of a lower number help Obama make his argument that his policies are working?

“The president can take a little comfort in these numbers, but if I were in his shoes I wouldn’t go too far out on that limb,” says Nariman Behravesh, chief economist with IHS Inc. “If the number drops because people are discouraged, that’s not a good sign.”

It’s also unlikely to numb any of the criticism coming from Republican presidential candidates, who in past months have dinged Obama for a 9-percent rate—and during August, creating zero net jobs. Frontrunner Mitt Romney was nonplussed by Friday’s news, pointing out that unemployment has been above 8 percent for 34 months, almost exactly the length of Obama’s presidency.

“The Obama administration may have come to accept such a high level of joblessness as the new normal. I will never accept it,” Romney said in a statement released by his campaign before the White House could even release its prepared remarks.

There’s reason to believe the depressed unemployment rate could still go right back up in the months ahead–specifically after the holiday spending binge, when campaign 2012 heats up. One is the continued reluctance of many companies to hire, and the other is the spiraling European debt crisis, which is entirely out of U.S. control but still holding substantial influence over American markets.

“The president can take a little comfort in these numbers, but if I were in his shoes I wouldn’t go too far out on that limb.”

“This fragile growth now faces fierce headwinds, with austerity in Europe and Great Britain driving those economies into recession,” says Robert Borosage, director of the left-leaning advocacy group Campaign for America’s Future. “The financial crisis in Europe will impact zombie banks in the United States.”

The White House knows that one month’s numbers don’t necessarily make or break a political argument, especially considering that the BLS frequently revises data from past months to reflect economic dynamics that are hard to quickly measure.

Yet Alan Krueger, chair of the White House Council of Economic Advisers, dusted off on Friday what’s been a frequent administration refrain—and likely to be Obama’s best argument for reelection next year.

“Today’s employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression,” Krueger said in a written statement. “But the pace of improvement is still not fast enough.”

Political translation: we’ve still got lots to do, but come on, give us some credit.

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Daniel Stone is Newsweek‘s White House correspondent. He also covers national energy and environmental policy.

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Accusing Obama of Putting Politics Above Jobs, GOP Senators Introduce Keystone Bill

By Penny Starr

November 30, 2011

(Update: Adds State Department statement.)

( – Senate Republicans have introduced legislation that would direct the State Department to issue permits to begin construction of the 1,700-mile Keystone XL crude oil pipeline from Canada to U.S. refineries – a project they say will create 20,000 jobs, increase domestic energy security and generate revenue.

“Jobs will be created right away and billions of dollars in investment will be unleashed through legislation introduced to permit the $7 billion Keystone XL pipeline, the largest infrastructure project ready in the United States, to commence construction,” Sen. Dick Lugar (R-Ind.) told a press conference on Wednesday.

Lugar, ranking member of the Senate Foreign Relations Committee, is lead sponsor of the new North American Energy Security Act.

In a jab to President Obama’s promotion of creating jobs through new or improved infrastructure and “shovel-ready” projects, the GOP senators said the pipeline qualifies as both. Obama’s decision to delay the approval process until after the 2012 election is putting politics above job creation, they charged.

“There is absolutely no reason to delay a permit decision on the Keystone pipeline – and the jobs that come with it – for another year in a blatant attempt to appease the president’s political base,” Majority Leader Mitch McConnell (R-Ky.) said at the conference.

Because the project involves a foreign country, the State Department has jurisdiction over the permitting process.

Following a three-year federal review of the final Environmental Impact Statement a decision had been expected by the end of the year, but the administration last month delayed the decision until after next year’s election. The senators attributed the decision to pressure from environmentalist groups opposed to the pipeline.

Sen. Mike Johanns Sen. Mike Johanns (R-Neb.) said the bill addresses a change in the pipeline path through a sensitive environmental area in his state while continuing construction of the pipeline elsewhere. ( Starr)

The newly-introduced bill does address environmental concerns in Nebraska, whose state legislature recently approved a plan to amend some of the project’s route while not delaying construction elsewhere.

“This bill respects the Nebraska process to protect the Sand Hills while providing a commonsense approach to bring friendly oil and jobs to the U.S. without unnecessary delay,” said Sen. Mike Johanns (R-Neb.).

The lawmakers said the pipeline could reduce the nation’s dependence on foreign oil by bringing as much as 700,000 barrels of oil a day into the country from Canada.

Aside from jobs directly created in construction and pipeline operation, the private sector project is expected also to boost economic growth for the more than 1,400 U.S. companies that sell products and services for oil sands production and transport.

So far, the bill has 37 Republicans sponsors, but it faces an uncertain future in a Democrat-controlled Senate.

State Department spokesman Mark Toner did not have an immediate response Wednesday to the Keystone bill, but told a press briefing, “we continue to work closely and consult closely with Congress as we move forward in conducting our study and our assessment.”

Toner later issued the following statement: “The Department remains committed to ensuring a transparent, thorough and rigorous review of whether the proposed pipeline project is in the national interest. Consistent with Executive Order 13337, after consultations with a broad range of stakeholders, we determined it is necessary to specifically assess alternative routes around the environmentally sensitive Nebraska Sand Hills. Based on past experience and possible total mileage of alternative routes that would need to be reviewed, we anticipate the evaluation could conclude as early as the first quarter of 2013. We look forward to continuing to consult with Congress as this process moves forward.”

DNC may have to respect N.C. right to work for convention


When the DNC announced that it would be bringing it’s convention to North Carolina, the locals were understandably enthusiastic. While it’s really only a temporary sugar rush for the economy, any event of that size represents a valuable injection of cash and jobs into the local economy. But as the plans moved forward, the conversation began to turn to the question of what sort of jobs would be created? Who would get the lucrative contracts associated with the convention?

As the Charlotte Observer reports, local legislators became concerned over whether Tar Heel State workers would have the first crack at these opportunities and – more to the point – if the state’s right to work status would be respected.

North Carolina lawmakers approved a nonbinding resolution Tuesday asking the Democratic National Convention to change its rules and “respect North Carolina’s right-to-work laws.”

It comes after Republicans raised concerns about North Carolina firms not getting contracts for the September convention because they are not unionized shops.

The resolution asks the DNC to refrain from hiring workers and companies from outside North Carolina when qualified businesses or workers are available within the state…

“It may astonish you – it’s not about politics, it’s about jobs,” said state Rep. David Lewis, the Republican sponsor.

Lewis said he supported the convention in Charlotte, but he wanted to make sure local workers are hired.

“I think it’s only fitting that Tar Heel workers at least have the opportunity to benefit from (the convention),” he said.

So far the report only identifies one contract which went to a union shop at the expense of a local, non-union outfit. It involved printing services, which is unlikely to be such a rare skill set that it couldn’t be accommodated by the local talent. But we’re still early in the process, with many more contracts yet to be awarded, so the legislature is probably wise to nip this in the bud.

It’s important to note that this isn’t an effort to legislate the hiring process. The measure is a non-binding resolution which simply calls upon the DNC to do the right thing by the state’s workers and to respect their local labor laws. But it brings the issue very much into the public eye, and since it involves Jobs, Jobs, Jobs it’s obviously an embarrassment that the DNC won’t want to have hanging over their heads – or those of their candidates – just as we get into the hottest part of the campaign cycle.

Detroit mayor: 1,000 job cuts amid budget crisis

By AP Staff November 18, 2011 1:20 pm

DETROIT (AP) — Detroit plans to cut 1,000 jobs by early next year to help deal with the city’s budget crisis and avoid the possibility of a state-appointed emergency financial manager, Mayor Dave Bing announced Friday.

The mayor’s office said in a statement that layoff notices will be delivered the week of Dec. 5. Bing said the cuts, which represent 9 percent of the city’s about 11,000 employees, will save about $12 million.

“Solving our cash crisis requires a combination of concessions and tough cuts,” Bing said. “Layoffs will be strategic. We will limit the impact on residents, protecting core services like police and fire protection as much as we can.

“Our fiscal crisis will require everyone to share in the sacrifice. We need support from our residents to help push our unions, businesses, vendors and elected officials to enact the common-sense changes we need.”

On Wednesday, Bing said in a TV and radio address that the city faces a $45 million cash shortfall by the end of its fiscal year in June.

Bing said the positions will be eliminated by Feb. 25. He said additional 2,000 positions have been eliminated since he took office in 2009. And he has outlined concessions needed from unions representing municipal employees, such as ending furlough days and making pension reforms, to save $40 million.

Bing also ordered an immediate hiring freeze for all civil service positions except the Detroit Water and Sewerage Department. He said the department was exempted because of court orders involving its operation.

To Increase Jobs, Increase Economic Freedom

Business is not a zero-sum game struggling over a fixed pie. Instead it grows and makes the total pie larger, creating value for all of its major stakeholders, including employees and communities.


Is the United States exceptional? Of course we are! Two hundred years ago we were one of the poorest countries in the world. We accounted for less than 1% of the world’s total GDP. Today our GDP is 23% of the world’s total and more than twice as large as the No. 2 country’s, China.

America became the wealthiest country because for most of our history we have followed the basic principles of economic freedom: property rights, freedom to trade internationally, minimal governmental regulation of business, sound money, relatively low taxes, the rule of law, entrepreneurship, freedom to fail, and voluntary exchange.

The success of economic freedom in increasing human prosperity, extending our life spans and improving the quality of our lives in countless ways is the most extraordinary global story of the past 200 years. Gross domestic product per capita has increased by a factor of 1,000% across the world and almost 2,000% in the U.S. during these last two centuries. In 1800, 85% of everyone alive lived on less than $1 per day (in 2000 dollars). Today only 17% do. If current long-term trend lines of economic growth continue, we will see abject poverty almost completely eradicated in the 21st century. Business is not a zero-sum game struggling over a fixed pie. Instead it grows and makes the total pie larger, creating value for all of its major stakeholders—customers, employees, suppliers, investors and communities.

So why is our economy barely growing and unemployment stuck at over 9%? I believe the answer is very simple: Economic freedom is declining in the U.S. In 2000, the U.S. was ranked third in the world behind only Hong Kong and Singapore in the Index of Economic Freedom, published annually by this newspaper and the Heritage Foundation. In 2011, we fell to ninth behind such countries as Australia, New Zealand, Canada and Ireland.

The reforms we need to make are extensive. I want to make a few suggestions that, as an independent, I hope will stimulate thinking and constructive discussion among concerned Americans no matter what their politics are.

Most importantly, we need to radically cut the size and cost of government. One hundred years ago the total cost of government at all levels in the U.S.—local, state and federal—was only 8% of our GDP. In 2010, it was 40%. Government is gobbling up trillions of dollars from our economy to feed itself through high taxes and unprecedented deficit spending—money that could instead be used by individuals to improve their lives and by entrepreneurs to create jobs. Government debt is growing at such a rapid rate that the Congressional Budget Office projects that in the next 70 years public money spent on interest annually will grow to almost 41.4% of GDP ($27.2 trillion) from 1.4% of GDP ($204 billion) in 2010. Today interest on our debt represents about a third of the cost of Social Security; in only 20 years it is estimated that it will exceed the cost of that program.

Only if we focus on cutting costs in the four most expensive government programs—Defense, Social Security, Medicare and Medicaid, which together with interest account for about two-thirds of the overall budget—can we make a significant positive impact.

Our defense budget now accounts for 43% of all military spending in the entire world—more than the next 14 largest defense budgets combined. It is time for us to scale back our military commitments and reduce our spending to something more in line with our percentage of the world GDP, or 23%. Doing this would save more than $300 billion every year.

Social Security and Medicare need serious reforms to be sustainable over the long term. The demographic crisis for these entitlement programs has now arrived as 10,000 baby boomers are projected to retire every day for the next 19 years. Retirement ages need to be steadily raised to reflect our increased longevity. These programs should also be means-tested. Countries such as Chile and Singapore successfully privatized their retirement programs, making them sustainable. We should move in a similar direction by giving everyone the option to voluntarily opt out of the governmental system into private alternatives, phasing this in over time to help keep the current system solvent.

In addition, tax reform is essential to jobs and prosperity. Most tax deductions and loopholes should be eliminated, combined with significant tax rate reductions. A top tax rate of 15% to 20% with no deductions would be fairer, greatly stimulate economic growth and job creation, and would reduce deficits by increasing total taxes paid to the federal government.

Why would taxes collected go up if rates go down? Two reasons—first, tax shelters such as the mortgage interest deduction used primarily by more affluent taxpayers would be eliminated; and secondly, the taxable base would increase considerably as entrepreneurs create new businesses and new jobs, and as people earn more money. Many Eastern European countries implemented low flat tax rates in the past decade, including Russia in 2001 (13%) and Ukraine in 2004 (15%), and experienced strong economic growth and increased tax revenues.

Corporate taxes also need to be reformed. According to the Organization for Economic Cooperation and Development, the U.S.’s combined state and federal corporate tax rate of 39.2% became the highest in the world after Japan cut its rates this April. A reduction to 26% would equal the average corporate tax rate in the 15 largest industrialized countries. That would help our companies to use their capital more productively to grow and create jobs in the U.S

Government regulations definitely need to be reformed. According to the Small Business Administration, total regulatory costs amount to about $1.75 trillion annually, nearly twice as much as all individual income taxes collected last year. While some regulations create important safeguards for public health and the environment, far too many simply protect existing business interests and discourage entrepreneurship. Specifically, many government regulations in education, health care and energy prevent entrepreneurship and innovation from revolutionizing and re-energizing these very important parts of our economy.

A simple reform that would make a monumental difference would be to require all federal regulations to have a sunset provision. All regulations should automatically expire after 10 years unless a mandatory cost-benefit analysis has been completed that proves the regulations have created significantly more societal benefit than harm. Currently thousands of new regulations are added each year and virtually none ever disappear.

According to a recent poll, more than two-thirds of Americans now believe that America is in “decline.” While we are certainly going through difficult times our decline is not inevitable—it can and must be reversed. The U.S. is still an extraordinary country by almost any measure. If we once again embrace the principles of individual and economic freedom that made us both prosperous and exceptional, we can help lead the world towards a better future for all.

Mr. Mackey, co-founder and co-CEO of Whole Foods Market, is a member of the Job Creators Alliance, a nonprofit devoted to preserving free enterprise.

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