Deutsche Bank To Axe 500 Jobs In Corporate Banking And Securities, Mostly Outside Of Germany (DB)

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Deutsche Bank announced today that it will eliminate 500 positions in the bank's corporate banking and securities corporate division.

Big cuts at DB have been rumored and feared for awhile now. They haven't materialized much, though some people were cut in June.

Today the German bank said in its release that the main reason for the layoffs is the uncertain economic environment stemming from the ongoing eurozone crisis.

According to Deutsche, the debt crisis has resulted in "significantly reduced volumes and revenues" from the corporate banking and securities division.

From the release:

In response to the significant and unabated slowdown in client activity, Deutsche Bank will consider additional cost controls beyond those already implemented as part of the recalibration of the Corporate & Investment Bank (CIB). This will lead to a reduction in headcount by around 500 positions in CB&S during Q4 2011 and Q1 2012, primarily outside Germany.

The bank said it still expects a profitable third quarter as well as a profitable full year for 2011.

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Obama's Jobs Plan: Mostly More Of The Same

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Email Zip Obama's Jobs Plan: Mostly More Of The Same Megan McArdle, The Atlantic | Sep. 9, 2011, 4:36 AM | 163 | 3 A A A   x Email Article From To Email Sent! You have successfully emailed the post. Megan McArdle URL Megan McArdle is a Business and Economics Editor for The Atlantic

Recent PostsCourt Denies Both ObamaCare ChallengesCongress Needs To Decide Whether The USPS Should Function As A...One Reason Why The Government Will Have A Difficult Time Suing The... Obama's New Stimulus Obama's Job Plan: Mostly More of the Same Obama's Jobs Package: A Smart Plan, if Not a Game Changer

So we've been standing by all week for Obama's big jobs speech, promised in response to the awful jobs numbers last month.  Here are the details, as outlined by the White House; I've added in the amounts on the major categories as best I can figure them:

Tax cuts: $250 billionPayroll tax rebate on first $5 million in payroll, which the president says will reach 98% of American companies, plus complete rebate for new hires or raisesExtending payroll tax cutExtending 100% expensing of business investment(A bunch of regulatory streamlining that is likely to have little effect and is bizarrely classed as a tax cut)Tax credits for hiring unemployed veterans, particularly those with service-connected disabilities$4,000 per worker for hiring workers who have been unemployed for more than six monthsInfrastructure: about $100 billion$50 billion for new infrastructure projects$10 billion for an infrastructure bank$15 billion to rehab vacant and foreclosed homes/businessesSome undisclosed sum for getting high speed wireless to "98% of American"$25 million to rehab schoolsDirect assistance: About $100 billion (?)Continuing the extension of unemployment benefitsVarious retraining/wage support ideas that are supposed to help the structurally displaced to transition into new careers.$35 billion for preserving/hiring teachers, cops and firefighter.

All this will be paid for by asking the Supercommittee to find another $400 billion or so in new taxes and spending.

So, what do I think?That the president apparently has some sort of numerical compulsive disorder which has caused him to become fixated on "98%"; his stump speeches have always been larded with promises that 98% of American families would get all manner of goodies, while paying absolutely nothing in new taxes, but the mystical figure is now being extended into the realm of companies and high-speed wireless internet subscribers. But aside from the snark, I think that it's generally solid on the spending/tax cut side. The targeted employment stuff is basically a decent plan--we should be aggressively looking for ways to keep the long term unemployed from turning into the permanently unemployed.  At worst, we put a little extra money into the pockets of taxpayers.  The biggest worry is that the stimulus from the accelerated depreciation won't actually make much difference in America--Austan Goolsbee's work suggests that these sorts of tax cuts mostly end up in the pockets of people who produce investment goods, and many of those people are not in America.The infrastructure stuff will be fine, if we choose good projects--America needs roads and airports and so forth. But as we discovered with the previous round, the better the project, the worse the stimulus.  There are no terrific infrastructure projects sitting around, waiting to break ground next week . . . nay, not even if we streamline the regulatory red tape.  
For that matter I'm not even sure that the president has the authority to streamline most of that red tape, and I'm highly skeptical that Congress is going to get busy undoing several decades worth of environmental and anti-corruption protections.  So most of that $100 billion is not going to be spent next year--presumably, even the school rehab is going to have to wait until summer, when what we need is jobs right now.The direct assistance stuff is a little bit mixed: yes to unemployment insurance extension, meh on maintaining government payrolls.  Transition assistance is good in theory, but in practice, all the programs I'm aware of have very little proven success at actually improving peoples' employment prospects.
But while all the proposals are well enough, they're hardly an exciting new direction for the administration.  These aren't new ideas; they're things we're already doing, like unemployment assistance and the payroll tax cuts, or things that Obama has been proposing for a while, like the infrastructure bank.  Even the "new" proposals, like added money for infrastructure, is a retread of ARRA.Economically, this is mostly treading water while we wait for something to change.  And politically, though liberals are cheering the more aggressive tone of the speech, I'm pretty skeptical that this is going to turn around Obama's sliding poll numbers: as one of the talking heads on Fox News said, he needed a game changer, and this was small ball. 

That's if it passes.  And there's rather a big poison pill for Congress in here: Obama has proposed no pay-for.  Or rather, he proposed that Congress figure out how to pay for it:
The agreement we passed in July will cut government spending by about $1 trillion over the next ten years. It also charges this Congress to come up with an additional $1.5 trillion in savings by Christmas. Tonight, I'm asking you to increase that amount so that it covers the full cost of the American Jobs Act. And a week from Monday, I'll be releasing a more ambitious deficit plan -- a plan that will not only cover the cost of this jobs bill, but stabilize our debt in the long run.One gets the dreadful feeling that the more ambitious plan may consist of asking Congress to find another couple of trillion under the couch cushions.

As MuniLass said over Twitter,
Obama: "Here's the deal: I take credit for the new spending now; you take credit for making politically unpopular cuts later."
This is becoming a signature move for Obama.  As far as I can recall, he has never taken the risk of proposing anything even potentially unpopular; even with something like health care, he let Congress take the lead.  Eh voila--anything you like in the plan is a product of his wise leadership, while anything unfortunate is, y'know, the not-perfect stuff he had to sign in order to get Americans health care.

But it's hardly been a rousing success when Democrats tried to maneuver the Republicans into putting their sticky little fingerprints all over the unpopular parts of their plans while taking credit for the successes, which is what this boils down to.  During the speech, Justin Wolfers tweeted to the effect that the GOP wouldn't dare vote against these hard-to-dislike provisions.  I take it that this sentiment is common among liberals, who expressed approval that Obama was finally taking it to Republicans.
I'm less sure.  For one thing, they've got a legitimate critique: it isn't paid for.  Of course, if you want more stimulus, you don't want it to be paid for next year . . . but it isn't paid for at all.  Select committees are turning into the Laffer Curve of the left: every time you want more money to pay for something, assign a committee to make unspecified cuts years in the future.  Republican complaints that the spending will happen and the pay-fors won't aren't unreasonable, and I suspect they'll get some traction with independents.For another, they don't have to let it come to the floor; they control the House, and they have the filibuster in

the Senate.  Six months from now, how many constituents will even remember that this speech took place?  Unfortunately for Obama, most of the people who will remember live in DC, which doesn't have any votes in the legislature.

Should they pass it? Yes, at least the tax credits and the extension of unemployment benefits.  A career is a terrible thing to waste.  
But it's hard for Obama to call for altruism on the part of Congressional Republicans when he wasn't willing to take the manly risk of saying out loud what taxes he'll raise or spending he'll cut.  The speech may have appeased his base.  But I doubt it did much to advance either of what were clearly his twin goals here: enacting policy, and wooing independents. Please follow Politics on Twitter and Facebook.

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Receive email updates on new comments!cvszEmail3 Comments 1 0 Flag as Offensive Conservative Reader on Sep 9, 4:48 AM said: This is the bold plan that took him so long to formulate while languishing in Martha's Vineyard? Reply 0 1 Flag as Offensive Maybe he should have gone to Texas on Sep 9, 5:20 AM said: @Conservative Reader: to fight wildfires with Ricky Goodhair instead. Except Ricky's off campaigning instead of working in TX.

sauce for the goose............

Hey it's mostly tax cuts. GOPers should be in heaven or do you now admit tax cuts don't do much? Reply 3 0 Flag as Offensive Skull & Bones on Sep 9, 4:55 AM said: It will never work.....we're doomed......... Reply Join the discussion with Business Insider
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Krugman: Contemporary Economics Is Bitter, Ignorant And Mostly Useless

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The world's most famous economist gave a bleak outlook for his profession in a speech published in the Eastern Economic Journal.

Krugman says contemporary economists were useless in preventing the crisis and probably made it worse. Now the profession is in disarray:

In short, in responding to the crisis, the profession presented a sorry spectacle of unnecessary ignorance that didn’t even recognize itself as ignorance, of bitter debate over issues that were resolved many decades earlier. And all of this, of course, made the profession mostly useless at a time when it could and should have been of great service. Put it this way: we would have responded better to this crisis if macroeconomics had been frozen at the level of knowledge it had in 1948, when Paul Samuelson published the first edition of his famous textbook. And the result has been to leave actual policy discussion without any discipline from the people who should be shaping that discussion: politicians and officials have been free to follow their prejudices and intuitions, never mind the lessons of history and analysis. Economists have failed to fulfill their social function.

I’m sorry if I have painted a bleak picture of the role of economists in the crisis. Unfortunately, that's the way it looks to me. So what can be done to improve that picture?

Some economists are pushing forward with new macroeconomic models that incorporate the lessons of the crisis. Me too! And by all means, let's do that. But as I’ve said, our big problem was not lack of models.

There are also many calls for new economic thinking; there's even an institute dedicated to that project. Again, fine — but the biggest problem we had as a profession wasn’t failure to keep up with a changing world, it was failure to remember what our fathers learned.

What we really need is a change in the destructive social dynamics that brought us to this point. And I wish I knew how to do that. But my problem is obvious: I’m an economist, and it seems that we need some kind of sociologist to solve our profession's problems.

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