As State Street Lays off 1400 Workers, Their Profits Soar
I am in between about the most recent move by Obama to extend the Bush tax cuts. While I do believe that increasing taxes doesn’t do much to stimulate the economy and create jobs, a column by Joan Vennochi in the Boston Globe did make me pause. It was about State Street Corp, which recently announced they were laying off 1400 workers despite profits of $427 million, up 20% from a year ago.
These people tapped into billions of dollars of federal funds when Uncle Sam bailed out banks of all stripes at the beginning of Obama’s term. Their management is making huge bucks, including CEO Jay Hooley, who made $13 million in 2009. While we are battling unemployment rates of nearly 10 percent, the corporate world is doing quite well, thank you, with profits up 57% from last year. Yet State Street merrily fires these 1400 who by the grace of a pen will be lucky to have extended unemployment benefits that are part of the tax cut continuance.
But how do the unemployed pay for their mortgages, for their car payments, and for their student loans? They often can’t, so they default and then they will need to get state-supplied health insurance. So the actions of State Street will ripple down to mess it up worse for all of us.