U.S. Economic/Financial News

Layoffs in Bankrupted Cities and States Just Beginning

July 17 (EIRNS)—Cities and states that have been eliminating jobs for the last two years are beginning a new round of layoffs of crucial public sector jobs. Meanwhile, the National Governors Association is meeting in Utah this weekend with no answers. Here are some of the latest announced cuts.

Connecticut: 6,500 state employees will be laid off between now and the end of August unless the public employees unions come up with concessions. This week, 328 employees in correctional facilities and 452 judicial employees will be the first to go. Benjamin Barnes, Secretary of the Office of Policy and Management, said the layoffs will continue until the 6,500-job-cut level needed to balance the budget is reached, reported Business Week.

New Hampshire: Gov. John Lynch sent out letters demanding plans from all state agencies to cut a total of $50 million in labor costs by August 2014. Layoffs will begin this year if the cuts don't come about, but the number to be eliminated is not out yet.

Washington, D.C.: The school system laid off 413 employees on July 15, including 206 teachers who failed the "Impact" teacher rating system developed under former School Chancellor Michelle Rhee. There are more layoffs to come.

The Center on Education Policy reported that 70% of school districts in the U.S. had budget cuts in the school year that just ended, and 84% anticipate cuts this year.

Lubbock, Tex.: Mayor Tom Martin says layoffs and program cuts are expected for the Lubbock Health Department. Severe budget cuts will include discontinuing immunization clinics and those that treat sexually transmitted diseases.

Sonoma County, Calif.: After losing over 3,800 public jobs from 2007 to 2010, public sector employment fell another 3% in May 2011, and the drop will be even higher when the June-July figures are computed. At the end of 2010, there were about 20,300 public employees.

Wave of Mass Layoffs in the Private Sector, Too

July 22 (EIRNS)—As if more proof were needed, the announced mass layoffs, just this week, are further evidence that Barack Obama's economic recovery is a fraud. Cisco Systems, defense giant Lockheed Martin, and the Borders Books national chain announced a total of 23,000 layoffs. In the case of Borders, the announcement was actually that the company is going out of business, intending to close its 400 remaining stores by September, leaving 10,700 employees jobless. Even Goldman Sachs, said to be struggling with an "unexpected" downturn in its trading business, announced plans to lay off 1,000 employees. Thousands of NASA employees are losing their jobs after the last Space Shuttle flight landed yesterday, and there are dozens of other examples of layoffs and planned shrinkage in local governments (which have fired 142,000 people so far in 2011), retailers, and other sorts of businesses. According to the consulting firm Challenger, Gray and Christmas, employers announced 42,432 mass layoffs in June, up 11.6% from May, and 5.3% from a year ago. In May, a total of 1.78 million people, 1.66 million of them in the private sector, lost their jobs. According to the Labor Department, the number of people unemployed less than 5 weeks, a measure which is used as a proxy for layoffs, grew 15.5% from May to June, to a total of 3.1 million people, the highest level since October of 2009.

California Gov. Seeks Permission To Cut Medicaid

July 20 (EIRNS)—California's Democratic Governor Jerry Brown wrote to President Obama on June 27, asking for Federal permission to cut the state's Medicaid spending by 10%, which will immediately threaten the lives of more than 7.5 million people already dependent on Medicaid, and the lives of new people seeking assistance daily in this breakdown crisis. All to "save" a lousy $623 million in valueless money.

Should Obama's Federal Centers for Medicare and Medicaid Services (CMS)—headed by the beknighted hachetman Sir Donald Berwick—give California the green light for these cuts, the precedent will be set to open the floodgates for every state in the Union to do likewise.

In his letter, Brown admitted that these cuts would come on top of huge cuts already made; optional benefits have already been eliminated, provider payments reduced, and people receiving aid required to "share" the costs.

Rep. Dennis Cardoza wrote his own letter to Berwick, opposing any such cuts, because, should they go through, they will force the closures of many facilities which care for Medicaid patients.

Mayor Bloomberg Unleashes 'Financial Hell' in New York City

July 17 (EIRNS)—Under billionaire Mayor Michael Bloomberg, New York City is rapidly becoming a model for the fascist nightmare planned for the U.S. as a whole, in which ordinary people are looted into the ground, while the financier parasites are protected.

New York City "is unleashing its latest financial hell" on local restaurants and other businesses, according to the New York Post, which said the Bloomberg Administration was projecting to raise almost $900 million in fees and fines this year, with most coming from businesses.