Great piece as usual. One thing in particular that caught my attention was:
"I certainly have considered whether to leave New York for the same reason, and almost did so at one point. I ultimately decided to stay put, but I am paying a hell of a lot of money to be here."
As a New Yorker I've had similar thoughts over the years, but also have ended up staying. If you did leave, where would you go instead? Have you considered splitting your time to have residence somewhere else but just stay in New York for a few months a year?
I was seriously considering Seattle (technically would have been Bellevue), for tax reasons and to work at Valve. If I had passed the interview I would have done it.
I also looked at Puerto Rico for the pure tax play, there was a period where it would have been worth a lot, but family put the kabosh on that quickly.
I haven’t read the EMH iff P = NP paper in detail yet, just skimmed the first 10 pages, but my low confidence guess is that it makes no sense. Certainly the conclusion is implausible, as I can perfectly well encode a PSPACE-complete problem into a market. And also their definitions take ages to express and seem unlikely to hold up on a closer reading.
Excellent piece overall but I think you're overselling the advantages of overbooked flights (although I can't claim that you lack experience). The trouble with airline delays is that the airlines virtually never offer to just cut you a check. Instead, they offer a voucher with an expiry date that will predictably be a pain in the ass to redeem to and can only be used to buy services from the same airline that just fucked you by overbooking an (often predictably) high-demand flight.
The issue isn't that the airlines are paying people based on the elasticity of their schedules and marginal utility of money, it's that they're "paying" people with a combination of scrip and transaction costs with radically lower (if non-zero) value than face amount, instead of just giving out actual cash.
It's more useful if you live in a place like Chicago, Seattle, or Dallas, e.g. major hubs for the carriers, where you are likely taking 90%+ of your flights with the same airline regardless. In these cases the voucher is almost cash.
If you live in an airport with a lot more competition for routes, the voucher is less valuable.
You also have to be taking a flight on your own dime within the expiration window with said airline. Lots of folks don’t fly all that frequently, especially for personal rather than business reasons. If the voucher had the same value as cash, the airlines would just offer cash.
Agreed. I don't think Zvi is disputing this, but it is the case that for some people, in the correct circumstances, it's a good deal. If you forced the airlines to offer cash, everyone would get the same shitty deal.
I think you’re wrong about Federation warships. Starfleet doesn’t optimize for defeating near peer competitors militarily. They live in a universe where liberalism works, so they try to reach diplomatic solutions with other liberals or near-liberals, and they can play for time and out-scale any non-liberals.
The fleet and its officers and rules are set up to make things easier on the diplomatic front and to not piss off any of the godlike entities that litter the galaxy, while still trying to follow their ideological commitments.
(Also, like so many things this breaks in DS9, but in TOS and TNG things work like in the Age of Sail, there are huge offensive and defensive advantages to just being the bigger ship.)
I mean, I buy that this is the theory, but you have the Romulan war, the Klingon war, the Cardassian war, and the Borg, and the Dominion, and... yeah. You better believe I'm going to be spending a few % of paradise's GDP.
I think it’s hard to say how much of the Federation’s economic activity is dedicated to Starfleet. Even though they don't optimize for it, it does seem that the Enterprise D is even or better 1-on-1 with any other ship fielded by powers like the Romulans, Klingons, Ferengi, etc. and I don’t think we get the sense that Starfleet is generally outnumbered by its rivals.
(The Dominion War is a special case. DS9 comprehensively rejects the End of History and Roddenberry’s golden age sci-fi optimism and speculates about a universe that superficially resembles prior Trek while running on fundamentally different rules under the hood.)
Re: other specific threats
-The Klingons present as peers of the Federation in TOS, by TNG they’ve been decisively out-scaled and pose no serious threat.
-The Cardassians did fine in ground battles close to their home turf, but I don’t think there’s any evidence they ever had a chance in fleet engagements, and so they were never a credible threat to the Federation core.
-The Borg, at the beginning of TNG, dramatically outclass the Federation, but when we see visions of the galaxy in the future, we see that the Borg usually fail to scale like good liberals can.
-The Romulans are interesting, in that they are an exception that seem to be near peers in both TOS and TNG, but the internal contradictions in their society seem likely to lead to trouble in the near future.
Big picture, before you second-guess Federation anti-militarism you have to look at stuff like the Q. The Q’s trial of humanity was a close-run thing, and that’s with Captain Picard at the helm. Re-running that with a captain from a more belligerent society could have led to very bad outcomes.
Why is humanity being put on trial like that? If Q had put the Klingons or Romulans or Cardassians 'on trial' in similar fashion, and failure would have denied them travel through space, what happens? I don't notice those other races constantly being taken out by Q-level threats, so presumably this is only happening to humans because of our unique situation and approach? And also the tests are very clearly scaled to available resources. It's not a cold hard universe thing.
The Romulans indeed break apart soon after (see: ST: Nemesis, Picard, etc) although they remain a very real threat (again, see same).
The Klingons are not all that outclassed, they seem to be presented as serious threats and major players in many places. Remember that in one episode an alternative timeline says that if we'd gone to war with them 20 years before TNG, then we lose, and DS9 does not make it seem like we would be confident that we would win. They certainly are key to winning the dominion war. Many potential futures in various places have resurgent Klingon empires, usually in a cold war with the Federation once again.
According to the novels (which have since been overridden) the Borg actually would have, absent Voyager's flagrant violation of the temporal prime directive in S7, have continued to grow too big to defeat and conquered the galaxy - it was only by provoking them into an attack that leads to a dues ex machina from a Q-level race that anyone else survives. And indeed, this is then used to explain (in DTI: Watching the Clock) that this is the reason that no faction of the temporal cold war is allowed to go back before that time, to avoid risking disrupting that, everyone's timeline depends on it. The borg are actually assimilating territory, races and tech steadily. Yes, you can of course 'write them so they lose' but no. Note that this means Q's interventions ultimately save everyone's bacon.
The Enterprise-D can take on a Klingon bird of prey but the D has a 1000-man compliment and is written inconsistently, it is a lot more expensive to build than a bird of prey one must assume, whereas it can typically beat one BoP but not two, I think? And the Defiant tells you how much we are sandbagging ourselves the whole time otherwise.
I don't think Starfleet is outnumbered, but we also should have a massively superior economy, we have dozens of allied races and are constantly expanding. We should be prepared to beat any given coalition. Also think about the alternative timelines, where often we are conquered by various coalitions.
(Obviously if you are going to treat everything after TNG as non-canon then things look different)
Anyway, enough fun, going to get back to work now.
The stated reason for the trial is that humanity has the potential to scale to Q levels, which makes us interesting. Presumably other factions don’t have trials because they lack that potential.
It’s true the Yesterday’s Enterprise messes up my interpretation of things just like DS9 does, god damn Ira Behr…
In ST:6, the Klingons are severely damaged by the destruction of a major power-generating moon. The movie makes a big deal out of how the Klingons are facing literal destruction (at least as a power in the galaxy). In TNG it's clear that they are a fading empire - still powerful but far weaker than they were and trying to relive the glory days. The Klingons are not weak, but they are weakened. By DS9 they are coming back a fair amount and recovering from previous weakness.
All in all I think the Federation is spread very thin. They are expanding quickly and encountering a large number of new races, some of which are hostile. They are not in control of their own space, and surrounded by potential enemies. Both TOS and TNG show this - it's a time when Starfleet is making deals with all kinds of random aliens instead of building on their own. Colonists are dropping in on new planets that will take many years to mature. Even the base nature of DS9 says this - they take over an old Cardassian space station in a deal with a formerly conquered people. If the Federation had the power to build on their own and not reuse an old occupation base, they would have.
I don't think they have the industrial capacity to build warships at the same time they are building exploration vessels, and desperately need exploration vessels to get a handle on their growing civilization. I think Starfleet would need to give up on exploration and growth in order to prioritize war vessels, which would cripple expansion right when that expansion is most available. Waiting a decade or more would fundamentally alter the trajectory of the galaxy (as with the Klingons being resurgent after a few bad years - ditto the Romulans if given a chance).
That first graph with layoffs does not contain enough information to tell us anything about the job market, and I would be very suspicious of anyone who presents that as otherwise, whether from mistake or intent.
Why? Because those are only layoffs, and we don't know what the state of those jobs are, or the total jobs. Did that giant spike in 2020 (~2x the previous yearly average) represent a lot of people laid off and then rehired at the same company or somewhere else, or did those jobs permanently go away, either as eliminated positions or companies that closed forever? That is a massively important point, as it if they represent workers laid off but reabsorbed later it might just be there was a build up of underutilized workers, things correct and we are back normal (although the 5 year average would still bit way above the previous averages). If those jobs went away for ever, then we are just short that many jobs, and getting back to regular levels of layoffs still implies we are at a lower level.
In other words, 2020 might represent a step change in employment that is not shown in a graph of absolute number of layoffs. A more informative graph would be layoffs per worker, layoffs per job. In fact it is a little surprising that isn't the case, because economists almost always normalize in some way.
It is times like these where I feel I must remind myself that the government is the one that typically gathers and distributes economic data, while at the same time being the group that is measured on how well the economy is doing. Perhaps not incentive compatible.
A lot of those workers retired or semi-retired, such that they were not looking to come back to work when companies were rehiring. They don't show up as unemployed now, despite not working when an alternate timeline without covid would have seen them working still.
A lot of those workers were brought back to their previous jobs, but I don't know the ratios - I would love to know that as well. I know a lot of businesses closed and many others were created, so the whole thing is very complex to figure out.
Bigger issue with looking at unemployment and layoffs (which is the subject of tomorrow's post) is that a secularly tight labor market isn't necessarily a strong one. If a couple million people disappear from your workforce, you will have low unemployment and higher wages, the same way you would have no food waste, and high food costs in a famine. The demand-side of labor is where there's cause for concern. Employee+job posting growth has been flat for two years--demand is flat, but supply took a massive header (which meant LFPR is very high, and unemployment is incredibly low). We're at max utilization, which isn't necessarily a bad thing, but it's also not necessarily a good thing. What we really want is to be growing--more need for work--but we're not (or at least, data suggests that we're not).
Exactly, many states are observationally equivalent via different metrics but have wildly different implications for economic health. The folks completely out of the labor force is worrying, as LFPR dropped after 2008 and never recovered. (I assume you meant to type LFPR is very low in your comment). Why people stopped looking for work, if they actually did, is an important question. Is it because there are not jobs they can or want to do and they gave up? Are there just no jobs period compared to before? It is hard to say.
Nope! I forgot the words "prime age" LFPR. It's super high. Everyone who wants a job, has a job (with some exceptions, esp up market), but we have fewer prime age people as a share of the whole (while LFPR in general fades as the country gets older). That's why I said "max utilization," but having a little slack in prime age LFPR can be a good thing, insofar as it's an un-utilized asset, or an untapped source of growth. The people who left the workforce more recently are the "excess retirees" i.e. non-college ed 55+ who rapidly accelerated their retirements in the first few years of covid, and haven't really come back to the workforce. https://www.therandomwalk.co/p/daily-data-excess-retireeshttps://www.therandomwalk.co/p/gone-fishing
I am skeptical of that story, seeing as how the LPFR rate dropped hard after the 2008 recession and remained low. If it were just retirees I would expect a steadier decline, not a sharp level drop after 2008. According to the BLS, that drop is almost entirely in Men 20 years or older and the 16-19 range, while Women 20 years or older remain flat. So if it were that Baby Boomers were starting to retire starting around 2008 we would expect to see female LFPR drop too, seeing as how half or more of Boomers are women. Even with people living longer after retirement the shape of the curve doesn't make much sense for LFPR to be a function of more retirees than workers only.
Maybe, although I am not sure we should be excited about people 55+ exiting the workforce in large numbers, either.
I am not sure I would call the prime age number "super high" either... BLS seems to only have numbers up to 2023, but that was still just at 2009 numbers. Male Prime Age LFPR was over 90% until 2008 then dropped and never recovered; Women's has been increasing to make up the gap. At any rate, it would seem that Prime LFPR is merely at par with past levels, and really should be higher since fewer women are working in the home.
> However, once we have made that decision to mostly tax income rather than consumption, making an exception in particular for retirement accounts seems like a clear mistake to me given everything we now know, if we assume the revenue deficit is made up for by higher income taxes elsewhere.
It doesn't seem that way to me. You agree it's better to tax consumption than investment, and higher income taxes with retirement exempted will come more from consumption. Whether we've "made the decision" not to have a consumption tax is irrelevant. One could as well say that we've "made the decision" to exempt requirement accounts.
(2) If you were an aging country, with one massive very price inelastic buyer of healthcare . . . what would you expect to see? Would you have some concern that Uncle Sam's "buy-now-pay-later" knee replacements and eldercare would take a dominant share of GDP, and perhaps hide what is otherwise relative stagnation? I think you might, and that's what we're seeing. If you want to be even more pessimistic, consider how much of private construction spending (another big procyclical thing) is subsidized by the IRA? Private real estate construction is flat.
(3) Point about aggregate consumer spending is a less-lagged proxy for employment and an alternate (perhaps better) proxy for growth. Think of it as aggregate revenue growth for consumer businesses. It's generally a good sign that it's up (and consumers are pretty smart about what gets the best bang for their buck), but it's historically a *lagging* indicator for a recession. People lose their jobs first, and then stop spending.
I don't think it makes sense to want people to spend or save or whatever. What you want is for people to move up and to the right, and how they express that, varies on their preferences. If people were saving a lot, you might see it as "having nothing better to do with their money" problem, but then the problem is "lack of good investment options" and not "aggregate savings is too high" (which is macro-tail-wagging-micro-dog). Savings rate are low now because people are spending what they make--"should" it be low or high is depends on what you're trying to learn. Japan "saved too much" (I suspect) because old people save. The problem is that Japan got old, not that the savings rate is too high.
(4) The point of services spend specifically is that aging--a secular shortage of working age people--is the inflationary force that keeps on giving. Fewer people turns into higher wages (especially for "blue collar" workers), which turns into higher prices, which leaves services more expensive, but not better, at least not yet. Where are the wage gains the highest recently? Healthcare. The result (I think, and it's borne out by the data) is a shift from service-spend to goods-spend--if services are worse, people tradedown where they can, but otherwise find more bang-for-the-buck elsewhere. Uncle Sam though doesn't trade down--just keeps putting it on the company card.
Eventually, though, supply-demand being what it is, there's some concern that if white collar wages don't start going up too, then demand for those expensive services will soften, and so too will demand for those service workers. But innovation and efficiency could also close that gap.
Regarding California's taxes, it is absolutely brutal looking at how expensive everything is. I'm making money by moving there, but not very much more. It's incredibly annoying that taxes are mandatory and don't even buy you anything good
Trek is a world where replicators provide a high level of UBI and people have been culturally attuned to a more altruistic use of their time and talents, but scarcity hasn't been completely eliminated. It seems to have a concept of "intellectual property" (though people often give it away for free) and big time energy use seems to have some kind of limitation (dilithium crystals, you can't replicate a starship, etc).
There also appears to be some kind of "money". Sometimes they call it federation credits. Which is clearly less fungible than latinum but still used for trade. My guess is that there still exists some price mechanism for the use of rival goods (space, non-replicable goods, intellectual property, peoples time) and that federation credits are a kind of money with limited convertibility or cultural norms about using it only in certain ways.
There is also probably some universal requirement to work, but perhaps its very limited in scope (say one day a week).
What's puzzling is that the federations rivals seem to engage in artificial scarcity? It's hard to understand exactly what is going on there. Unless replicators are very expensive to produce, you would think every society would adopt them. Do other societies have less access to dylithium crystals? Maybe the implication is that their governments keep them intentionally impoverished? Buy why? The Cardassianians backstory is that they needed to expand to get raw materials, but couldn't they replicated raw materials?
One presumes that replicators don't make matter out of nothing, and are "merely" capable of nano-scale assembly to turn reserves of various atoms into whatever molecular structure is desired - eg. "tea, earl grey, hot"
Thus one could still have a shortage of critical elements - even the expansive Federation is said in a couple of places to have limited supplies of some things, notably said di-lithium crystals (though that specific one is odd unless those crystals involve more than just Lithium in an odd configuration, since lithium is a relatively common element)
One potentially relevant fact about the Minneapolis cab industry (as it was), that the sources you cite don't mention explicitly, is that it's heavily dominated by Somali-Americans. (Yes, really, there's a thriving Somali immigrant community in frozen Minnesota of all places, tracing back to local church organizations historically doing a lot of refugee aid.) I'm not sure how much that implies for the current rideshare landscape but the political situation seems consistent with drivers having unusually high solidarity (compared to NYC, say) and operating as a de facto union that "bargains" with Uber and Lyft via legislation.
The bit on pay transparency seems overly partial. It is not in any obvious way an obnoxious privacy issue; Norway et al handle it quite fine. Now there is certainly evidence that horizontal price transparency has even palpable downward effects of worker wages, even up to 2.7%(!) in the Danish example cited. That Bennedtsen paper also seems to conclude that "the gender pay gap declines by 2 percentage points, or 13% relative to the prelegislation mean", which might in some society be seen as a trade-off worth pursuing. And let's not entirely omit the interesting conclusion of Cullen's article: "vertical and cross-firm pay transparency policies that ameliorate information frictions in the labor market more broadly have shown potential to improve motivation and talent allocation and sharpen competition, and, in so doing, raise wages, productivity, and equity."
Great piece as usual. One thing in particular that caught my attention was:
"I certainly have considered whether to leave New York for the same reason, and almost did so at one point. I ultimately decided to stay put, but I am paying a hell of a lot of money to be here."
As a New Yorker I've had similar thoughts over the years, but also have ended up staying. If you did leave, where would you go instead? Have you considered splitting your time to have residence somewhere else but just stay in New York for a few months a year?
I was seriously considering Seattle (technically would have been Bellevue), for tax reasons and to work at Valve. If I had passed the interview I would have done it.
I also looked at Puerto Rico for the pure tax play, there was a period where it would have been worth a lot, but family put the kabosh on that quickly.
NY is extremely strict with residency audits, if you try that you should absolutely factor in the cost of an attorney to deal with one.
I haven’t read the EMH iff P = NP paper in detail yet, just skimmed the first 10 pages, but my low confidence guess is that it makes no sense. Certainly the conclusion is implausible, as I can perfectly well encode a PSPACE-complete problem into a market. And also their definitions take ages to express and seem unlikely to hold up on a closer reading.
Excellent piece overall but I think you're overselling the advantages of overbooked flights (although I can't claim that you lack experience). The trouble with airline delays is that the airlines virtually never offer to just cut you a check. Instead, they offer a voucher with an expiry date that will predictably be a pain in the ass to redeem to and can only be used to buy services from the same airline that just fucked you by overbooking an (often predictably) high-demand flight.
The issue isn't that the airlines are paying people based on the elasticity of their schedules and marginal utility of money, it's that they're "paying" people with a combination of scrip and transaction costs with radically lower (if non-zero) value than face amount, instead of just giving out actual cash.
It's more useful if you live in a place like Chicago, Seattle, or Dallas, e.g. major hubs for the carriers, where you are likely taking 90%+ of your flights with the same airline regardless. In these cases the voucher is almost cash.
If you live in an airport with a lot more competition for routes, the voucher is less valuable.
You also have to be taking a flight on your own dime within the expiration window with said airline. Lots of folks don’t fly all that frequently, especially for personal rather than business reasons. If the voucher had the same value as cash, the airlines would just offer cash.
Agreed. I don't think Zvi is disputing this, but it is the case that for some people, in the correct circumstances, it's a good deal. If you forced the airlines to offer cash, everyone would get the same shitty deal.
I think you’re wrong about Federation warships. Starfleet doesn’t optimize for defeating near peer competitors militarily. They live in a universe where liberalism works, so they try to reach diplomatic solutions with other liberals or near-liberals, and they can play for time and out-scale any non-liberals.
The fleet and its officers and rules are set up to make things easier on the diplomatic front and to not piss off any of the godlike entities that litter the galaxy, while still trying to follow their ideological commitments.
(Also, like so many things this breaks in DS9, but in TOS and TNG things work like in the Age of Sail, there are huge offensive and defensive advantages to just being the bigger ship.)
I mean, I buy that this is the theory, but you have the Romulan war, the Klingon war, the Cardassian war, and the Borg, and the Dominion, and... yeah. You better believe I'm going to be spending a few % of paradise's GDP.
I think it’s hard to say how much of the Federation’s economic activity is dedicated to Starfleet. Even though they don't optimize for it, it does seem that the Enterprise D is even or better 1-on-1 with any other ship fielded by powers like the Romulans, Klingons, Ferengi, etc. and I don’t think we get the sense that Starfleet is generally outnumbered by its rivals.
(The Dominion War is a special case. DS9 comprehensively rejects the End of History and Roddenberry’s golden age sci-fi optimism and speculates about a universe that superficially resembles prior Trek while running on fundamentally different rules under the hood.)
Re: other specific threats
-The Klingons present as peers of the Federation in TOS, by TNG they’ve been decisively out-scaled and pose no serious threat.
-The Cardassians did fine in ground battles close to their home turf, but I don’t think there’s any evidence they ever had a chance in fleet engagements, and so they were never a credible threat to the Federation core.
-The Borg, at the beginning of TNG, dramatically outclass the Federation, but when we see visions of the galaxy in the future, we see that the Borg usually fail to scale like good liberals can.
-The Romulans are interesting, in that they are an exception that seem to be near peers in both TOS and TNG, but the internal contradictions in their society seem likely to lead to trouble in the near future.
Big picture, before you second-guess Federation anti-militarism you have to look at stuff like the Q. The Q’s trial of humanity was a close-run thing, and that’s with Captain Picard at the helm. Re-running that with a captain from a more belligerent society could have led to very bad outcomes.
Why is humanity being put on trial like that? If Q had put the Klingons or Romulans or Cardassians 'on trial' in similar fashion, and failure would have denied them travel through space, what happens? I don't notice those other races constantly being taken out by Q-level threats, so presumably this is only happening to humans because of our unique situation and approach? And also the tests are very clearly scaled to available resources. It's not a cold hard universe thing.
The Romulans indeed break apart soon after (see: ST: Nemesis, Picard, etc) although they remain a very real threat (again, see same).
The Klingons are not all that outclassed, they seem to be presented as serious threats and major players in many places. Remember that in one episode an alternative timeline says that if we'd gone to war with them 20 years before TNG, then we lose, and DS9 does not make it seem like we would be confident that we would win. They certainly are key to winning the dominion war. Many potential futures in various places have resurgent Klingon empires, usually in a cold war with the Federation once again.
According to the novels (which have since been overridden) the Borg actually would have, absent Voyager's flagrant violation of the temporal prime directive in S7, have continued to grow too big to defeat and conquered the galaxy - it was only by provoking them into an attack that leads to a dues ex machina from a Q-level race that anyone else survives. And indeed, this is then used to explain (in DTI: Watching the Clock) that this is the reason that no faction of the temporal cold war is allowed to go back before that time, to avoid risking disrupting that, everyone's timeline depends on it. The borg are actually assimilating territory, races and tech steadily. Yes, you can of course 'write them so they lose' but no. Note that this means Q's interventions ultimately save everyone's bacon.
The Enterprise-D can take on a Klingon bird of prey but the D has a 1000-man compliment and is written inconsistently, it is a lot more expensive to build than a bird of prey one must assume, whereas it can typically beat one BoP but not two, I think? And the Defiant tells you how much we are sandbagging ourselves the whole time otherwise.
I don't think Starfleet is outnumbered, but we also should have a massively superior economy, we have dozens of allied races and are constantly expanding. We should be prepared to beat any given coalition. Also think about the alternative timelines, where often we are conquered by various coalitions.
(Obviously if you are going to treat everything after TNG as non-canon then things look different)
Anyway, enough fun, going to get back to work now.
The stated reason for the trial is that humanity has the potential to scale to Q levels, which makes us interesting. Presumably other factions don’t have trials because they lack that potential.
It’s true the Yesterday’s Enterprise messes up my interpretation of things just like DS9 does, god damn Ira Behr…
In ST:6, the Klingons are severely damaged by the destruction of a major power-generating moon. The movie makes a big deal out of how the Klingons are facing literal destruction (at least as a power in the galaxy). In TNG it's clear that they are a fading empire - still powerful but far weaker than they were and trying to relive the glory days. The Klingons are not weak, but they are weakened. By DS9 they are coming back a fair amount and recovering from previous weakness.
All in all I think the Federation is spread very thin. They are expanding quickly and encountering a large number of new races, some of which are hostile. They are not in control of their own space, and surrounded by potential enemies. Both TOS and TNG show this - it's a time when Starfleet is making deals with all kinds of random aliens instead of building on their own. Colonists are dropping in on new planets that will take many years to mature. Even the base nature of DS9 says this - they take over an old Cardassian space station in a deal with a formerly conquered people. If the Federation had the power to build on their own and not reuse an old occupation base, they would have.
I don't think they have the industrial capacity to build warships at the same time they are building exploration vessels, and desperately need exploration vessels to get a handle on their growing civilization. I think Starfleet would need to give up on exploration and growth in order to prioritize war vessels, which would cripple expansion right when that expansion is most available. Waiting a decade or more would fundamentally alter the trajectory of the galaxy (as with the Klingons being resurgent after a few bad years - ditto the Romulans if given a chance).
That first graph with layoffs does not contain enough information to tell us anything about the job market, and I would be very suspicious of anyone who presents that as otherwise, whether from mistake or intent.
Why? Because those are only layoffs, and we don't know what the state of those jobs are, or the total jobs. Did that giant spike in 2020 (~2x the previous yearly average) represent a lot of people laid off and then rehired at the same company or somewhere else, or did those jobs permanently go away, either as eliminated positions or companies that closed forever? That is a massively important point, as it if they represent workers laid off but reabsorbed later it might just be there was a build up of underutilized workers, things correct and we are back normal (although the 5 year average would still bit way above the previous averages). If those jobs went away for ever, then we are just short that many jobs, and getting back to regular levels of layoffs still implies we are at a lower level.
In other words, 2020 might represent a step change in employment that is not shown in a graph of absolute number of layoffs. A more informative graph would be layoffs per worker, layoffs per job. In fact it is a little surprising that isn't the case, because economists almost always normalize in some way.
It is times like these where I feel I must remind myself that the government is the one that typically gathers and distributes economic data, while at the same time being the group that is measured on how well the economy is doing. Perhaps not incentive compatible.
A lot of those workers retired or semi-retired, such that they were not looking to come back to work when companies were rehiring. They don't show up as unemployed now, despite not working when an alternate timeline without covid would have seen them working still.
A lot of those workers were brought back to their previous jobs, but I don't know the ratios - I would love to know that as well. I know a lot of businesses closed and many others were created, so the whole thing is very complex to figure out.
Bigger issue with looking at unemployment and layoffs (which is the subject of tomorrow's post) is that a secularly tight labor market isn't necessarily a strong one. If a couple million people disappear from your workforce, you will have low unemployment and higher wages, the same way you would have no food waste, and high food costs in a famine. The demand-side of labor is where there's cause for concern. Employee+job posting growth has been flat for two years--demand is flat, but supply took a massive header (which meant LFPR is very high, and unemployment is incredibly low). We're at max utilization, which isn't necessarily a bad thing, but it's also not necessarily a good thing. What we really want is to be growing--more need for work--but we're not (or at least, data suggests that we're not).
Exactly, many states are observationally equivalent via different metrics but have wildly different implications for economic health. The folks completely out of the labor force is worrying, as LFPR dropped after 2008 and never recovered. (I assume you meant to type LFPR is very low in your comment). Why people stopped looking for work, if they actually did, is an important question. Is it because there are not jobs they can or want to do and they gave up? Are there just no jobs period compared to before? It is hard to say.
Nope! I forgot the words "prime age" LFPR. It's super high. Everyone who wants a job, has a job (with some exceptions, esp up market), but we have fewer prime age people as a share of the whole (while LFPR in general fades as the country gets older). That's why I said "max utilization," but having a little slack in prime age LFPR can be a good thing, insofar as it's an un-utilized asset, or an untapped source of growth. The people who left the workforce more recently are the "excess retirees" i.e. non-college ed 55+ who rapidly accelerated their retirements in the first few years of covid, and haven't really come back to the workforce. https://www.therandomwalk.co/p/daily-data-excess-retirees https://www.therandomwalk.co/p/gone-fishing
https://www.frbsf.org/research-and-insights/publications/economic-letter/2024/03/to-retire-or-keep-working-after-a-pandemic/
I am skeptical of that story, seeing as how the LPFR rate dropped hard after the 2008 recession and remained low. If it were just retirees I would expect a steadier decline, not a sharp level drop after 2008. According to the BLS, that drop is almost entirely in Men 20 years or older and the 16-19 range, while Women 20 years or older remain flat. So if it were that Baby Boomers were starting to retire starting around 2008 we would expect to see female LFPR drop too, seeing as how half or more of Boomers are women. Even with people living longer after retirement the shape of the curve doesn't make much sense for LFPR to be a function of more retirees than workers only.
Oh sure, I mean, the GFC definitely wrought some structural changes. Probably also accelerated some secular trends.
I just mean that right now prime age lfpr is super high. The people who unexpectedly exited the workforce now are 55+ no-college.
Maybe, although I am not sure we should be excited about people 55+ exiting the workforce in large numbers, either.
I am not sure I would call the prime age number "super high" either... BLS seems to only have numbers up to 2023, but that was still just at 2009 numbers. Male Prime Age LFPR was over 90% until 2008 then dropped and never recovered; Women's has been increasing to make up the gap. At any rate, it would seem that Prime LFPR is merely at par with past levels, and really should be higher since fewer women are working in the home.
> However, once we have made that decision to mostly tax income rather than consumption, making an exception in particular for retirement accounts seems like a clear mistake to me given everything we now know, if we assume the revenue deficit is made up for by higher income taxes elsewhere.
It doesn't seem that way to me. You agree it's better to tax consumption than investment, and higher income taxes with retirement exempted will come more from consumption. Whether we've "made the decision" not to have a consumption tax is irrelevant. One could as well say that we've "made the decision" to exempt requirement accounts.
Thanks for mentioning!
A few things:
(1) re. healthcare, it is the data--it's also what the BLS itself chooses to highlight (that growth is driven by healthcare consumption). It's not the only source of growth, but it's a large share. It's also a very large share of job growth (most recently, here https://www.therandomwalk.co/i/142756846/high-earners-we-hardly-knew-ye but also here https://www.therandomwalk.co/i/140486836/healthcare-makes-all-the-jobs)
(2) If you were an aging country, with one massive very price inelastic buyer of healthcare . . . what would you expect to see? Would you have some concern that Uncle Sam's "buy-now-pay-later" knee replacements and eldercare would take a dominant share of GDP, and perhaps hide what is otherwise relative stagnation? I think you might, and that's what we're seeing. If you want to be even more pessimistic, consider how much of private construction spending (another big procyclical thing) is subsidized by the IRA? Private real estate construction is flat.
(3) Point about aggregate consumer spending is a less-lagged proxy for employment and an alternate (perhaps better) proxy for growth. Think of it as aggregate revenue growth for consumer businesses. It's generally a good sign that it's up (and consumers are pretty smart about what gets the best bang for their buck), but it's historically a *lagging* indicator for a recession. People lose their jobs first, and then stop spending.
I don't think it makes sense to want people to spend or save or whatever. What you want is for people to move up and to the right, and how they express that, varies on their preferences. If people were saving a lot, you might see it as "having nothing better to do with their money" problem, but then the problem is "lack of good investment options" and not "aggregate savings is too high" (which is macro-tail-wagging-micro-dog). Savings rate are low now because people are spending what they make--"should" it be low or high is depends on what you're trying to learn. Japan "saved too much" (I suspect) because old people save. The problem is that Japan got old, not that the savings rate is too high.
(4) The point of services spend specifically is that aging--a secular shortage of working age people--is the inflationary force that keeps on giving. Fewer people turns into higher wages (especially for "blue collar" workers), which turns into higher prices, which leaves services more expensive, but not better, at least not yet. Where are the wage gains the highest recently? Healthcare. The result (I think, and it's borne out by the data) is a shift from service-spend to goods-spend--if services are worse, people tradedown where they can, but otherwise find more bang-for-the-buck elsewhere. Uncle Sam though doesn't trade down--just keeps putting it on the company card.
Eventually, though, supply-demand being what it is, there's some concern that if white collar wages don't start going up too, then demand for those expensive services will soften, and so too will demand for those service workers. But innovation and efficiency could also close that gap.
As promised, don't confuse labor tightness, with labor strength. They are not the same. https://www.therandomwalk.co/p/labor-market-is-tight-but-its-not
Regarding California's taxes, it is absolutely brutal looking at how expensive everything is. I'm making money by moving there, but not very much more. It's incredibly annoying that taxes are mandatory and don't even buy you anything good
Trek is a world where replicators provide a high level of UBI and people have been culturally attuned to a more altruistic use of their time and talents, but scarcity hasn't been completely eliminated. It seems to have a concept of "intellectual property" (though people often give it away for free) and big time energy use seems to have some kind of limitation (dilithium crystals, you can't replicate a starship, etc).
There also appears to be some kind of "money". Sometimes they call it federation credits. Which is clearly less fungible than latinum but still used for trade. My guess is that there still exists some price mechanism for the use of rival goods (space, non-replicable goods, intellectual property, peoples time) and that federation credits are a kind of money with limited convertibility or cultural norms about using it only in certain ways.
There is also probably some universal requirement to work, but perhaps its very limited in scope (say one day a week).
What's puzzling is that the federations rivals seem to engage in artificial scarcity? It's hard to understand exactly what is going on there. Unless replicators are very expensive to produce, you would think every society would adopt them. Do other societies have less access to dylithium crystals? Maybe the implication is that their governments keep them intentionally impoverished? Buy why? The Cardassianians backstory is that they needed to expand to get raw materials, but couldn't they replicated raw materials?
One presumes that replicators don't make matter out of nothing, and are "merely" capable of nano-scale assembly to turn reserves of various atoms into whatever molecular structure is desired - eg. "tea, earl grey, hot"
Thus one could still have a shortage of critical elements - even the expansive Federation is said in a couple of places to have limited supplies of some things, notably said di-lithium crystals (though that specific one is odd unless those crystals involve more than just Lithium in an odd configuration, since lithium is a relatively common element)
One potentially relevant fact about the Minneapolis cab industry (as it was), that the sources you cite don't mention explicitly, is that it's heavily dominated by Somali-Americans. (Yes, really, there's a thriving Somali immigrant community in frozen Minnesota of all places, tracing back to local church organizations historically doing a lot of refugee aid.) I'm not sure how much that implies for the current rideshare landscape but the political situation seems consistent with drivers having unusually high solidarity (compared to NYC, say) and operating as a de facto union that "bargains" with Uber and Lyft via legislation.
The bit on pay transparency seems overly partial. It is not in any obvious way an obnoxious privacy issue; Norway et al handle it quite fine. Now there is certainly evidence that horizontal price transparency has even palpable downward effects of worker wages, even up to 2.7%(!) in the Danish example cited. That Bennedtsen paper also seems to conclude that "the gender pay gap declines by 2 percentage points, or 13% relative to the prelegislation mean", which might in some society be seen as a trade-off worth pursuing. And let's not entirely omit the interesting conclusion of Cullen's article: "vertical and cross-firm pay transparency policies that ameliorate information frictions in the labor market more broadly have shown potential to improve motivation and talent allocation and sharpen competition, and, in so doing, raise wages, productivity, and equity."
"standard caveat that of course much of healthcare is highly valuable, as was driven home to me this past two weeks"
The cancer that's killing me is being held at bay only by healthcare that seems, at least from my vantage point, to be high value: https://jakeseliger.com/2023/12/07/tentative-fluttering-optimism-the-surprising-hot-r-d-ferment-in-head-and-neck-cancer-treatment/