Trends continue until they don't
Lately blogging has been difficult because it's hard to believe good policy is even possible, so why bother? I've been watching us stagger inevitably towards lots of unnecessary COVID, ever-crazier elections, an ever-larger epistemic split, permanent Republican supremacy with all that implies for policy, etc.
So it's useful to take a look at a trend I thought was unchangeable, and how it ended.
When I graduated in the late 90s the job market was pretty hot. Then there was a dot-com bust, a 9/11-driven recession, and then cycles of recessions and jobless recoveries ever since. Until now.
At the time I chalked it up to globalization. Since I thought we would coast down to the global average, this made sense. I learned a bunch about econ researching all that, and got to understand how the Fed drives the overall speed of the economy, and how it could lead to inflation.
Learning about that, it seemed like we would get into this dynamic:
- Fiscal stimulus is weak to nonexistent because "ZOMG deficits!!!"
- Fed cranks up the economy.
- Before the job market ever gets good, various people start hollering "ZOMG this might cause inflation if it keeps up!!!"
- Fed yanks away the punchbowl.
- Jobless recovery.
- Next recession.
To be fair, this is pretty much how the next couple cycles played out. This led me to believe that Our Betters would never again allow a tight job market.
This time was different
The 2020-21 COVID-19 recession was different, in being mostly intentional (we wanted people to stay home from work and superspreader businesses to close). We hit it hard with fiscal stimulus (IMO partially because we couldn't paint people as deserving of their financial problems), and the Fed kept money flowing. This led to pretty quick recovery, and now employers have to compete for employees.
Digression: I wonder if businesses will have to re-learn how to handle this. A lot of HR people, managers (even senior ones), and entrepreneurs have had their entire careers in these bad job markets.
Another part of this was Trump's Fed chair, Jay Powell. Instead of hitting the brakes at the first sign of green shoots, he's been keeping it going until we actually see inflation. As of this writing, we're starting to see some inflation, and the Fed is talking about rate hikes in the next couple months.
Great to see
I'm not personally leaving my job anytime soon (it's an excellent fit), but I'm glad to see workers gaining some power again. So I'll say something I never thought I would: