Less than three years after receiving $10 billion in bailout money from American taxpayers, Goldman Sachs informed its employees recently that it will fire 1,000 workers in the United States and elsewhere, shifting their jobs to the cheaper Singaporean labor market.Ha ha remember when President Obama nominated Judd Gregg to serve as Commerce Secretary? GOOD TIMES!
...Goldman Sachs has also worked to [inoculate itself from the impending blowback] by hiring former Republican Sen. Judd Gregg (NH) as an "international advisor." It is not unreasonable to assume that Gregg's 26 years in Washington will help the investment firm's attempts to placate critics.
Anyway, over at the Atlantic, Daniel Indiviglio makes the point that Goldman Sachs is eliminating the same sort of jobs here that it's taking to Singapore, where the standard of living doesn't make the reorganization a cost-saving maneuver. So why the move? Well, one issue is the shitty US economy. (You didn't actually think global corporations would stick around and help rebuild the economy they ransacked for profits, did you?) The other is the possibility of tougher regulations. Faced with the terrible specter of being forced to do business with some semblance of responsibility, accountability, and ethics, Goldman Sachs is taking its jobs and going somewhere else.
So this move may be best characterized as a bet against the U.S. economy and a way to escape some new U.S. regulation. Put simply: the U.S. is not the place to be anymore for big banking profits.Awesome.
Seeing Goldman begin to take these steps isn't great news for the U.S. The bank tends to be out in front of the economic trends, as it was with its bet against mortgages in the final days of the housing bubble. If Goldman is right, then the U.S. is going to be in for a rough time over the next decade or so. And other Wall Street firms moving more workers overseas will make matters worse, as the U.S. will lose out on some of its highest paying jobs and the contribution to GDP growth that some lost banking profits would have provided.
The Invisible Hand is hailing a cab.