Sunday Drive - 10/02/2022 Edition
👋🏻 Hello friends,
Greetings from Ellicottville, NY and Ft. Worth, TX!
For my wife and I, it's been a whirlwind week of travel to help with our elderly mothers. We are both card carrying members of the Sandwich Generation and this is what we do. That, coupled with another week of turbulence in the financial markets, leaves me ready for a few quiet days ahead.
Let's take it easy and enjoy this week's leisurely Sunday Drive around the internet.
The Vibe of the Week is 1971's Riders on the Storm by The Doors. A combination of smooth, chill, melancholy, and introspection seems about right this week.
💡 Quote of the Week
"People mistakenly see optimism as an excuse for inaction. They think that it’s pessimism that drives change, and optimism that keeps us where we are. The opposite is true. Optimists are the ones that move us forward."
- Hannah Ritchie
📈 Chart of the Week
💭 Thought Bubble of the Week
The Chart of the Week depicts U.S. labor participation rates pre- and post-COVID. According to Capital Group economist Jared Franz, given the average growth rate of the U.S. labor force prior to COVID, we should have four to five million more workers than we have today.
In 2021, a popular media narrative developed around the idea of “the great resignation,” inspired by U.S. government data showing that roughly 47 million people voluntarily quit their jobs that year and seemed to disappear from the workforce.
Further data and myriad surveys helped shed light on the reasons. Many quit to ultimately take better-paying jobs. Some older workers opted for early retirement. And roughly 600,000 Americans decided to start their own small businesses, a trend which is hard to track through monthly employment data.
Now we have the Federal Reserve, hell bent on fighting inflation and raising interest rates at a pace never before seen:
So let me get this straight...
We have a labor shortage, a very low unemployment rate, and many unfilled jobs, at least in certain industries.
The Fed's answer to this labor supply/demand imbalance is not to allow the cost of labor to be revalued higher to address the demand for workers, as I have argued here and here.
No, apparently the Fed's solution to the labor imbalance is to raise interest rates until the economy weakens to the point that all those excess jobs go away and we are in (quite likely) a severe recession.
I worry in the near term of the global impact of these policies, e.g. global currency crises and competitive responses in the UK, Eurozone, and Asia to defend their currencies from an historically strong dollar.
However, I remain as optimistic as ever in my belief that we are on the cusp of many significant advances in productive longevity and personalized medicine. These advances will owe to the benefit of our collective human capital, and not necessarily to returns on our financial capital.
🤔 Alzheimer's Progression Slowed by Drug in Trial - Eisai and partner Biogen said their drug significantly slowed Alzheimer's disease, making it the first medicine to blunt progression of the most common type of dementia in a definitive, large-scale trial.
🤔 Another Alzheimer's Breakthrough from the UK - 'Historic moment' in race to beat Alzheimer's: Experimental brain plaque-busting drug 'significantly slows decline of patients battling early stages of the disease
💡 An End to Doomerism - Pessimism sounds smart. Optimism sounds dumb. It’s no wonder, then, that pessimistic messages hit the headlines, and optimistic ones hardly get a middle-page snippet. It’s why doomsday thinkers get respect and accolades. They’re the smart ones that can see what the rest of us can’t. They’re the ones that speak truth to power.
🤓 The Law of Accelerating Returns - An oldie, but a goodie from 2001. If Ray Kurzweil is right, or even close to right, he may go down as the person with the greatest ability to predict the future in human history.
👀 Productivity is Easy to Fix - If businesses want more-skilled workers so they can produce more, then business must teach them those skills. Either spend the cash to do it yourself, or make sure schools have enough funding to provide that training. Then, when you get that additional productivity, share the fruits of it with workers, proportionate to their increased contributions.
If you have any cool articles or ideas that might be interesting for future Sunday Drive-by's, please send them along or tweet 'em at me.
I hope you have a relaxing weekend and a great week ahead. See you next Sunday...
Your faithful financial provocateur,
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