I’m willing to buy your whole argument. I graduated into the start of the recession in ‘07 and it was brutal, I didn’t really get on my feet until ‘12, so I lived the pain you’re describing.
Non competes are terrible, we should ban them. I’m good with stronger anti-trust and more dynamism.
But I’m concerned at the emphasis on interests rates, not just in your piece, but everywhere. Because ZIRP was *really bad!* and I think we’re all still dealing with a hangover from having interest rates historically broken for a very long time.
A 6% mortgage is not *historically* expensive, it’s just *recently* expensive. House prices mechanically ratcheted up, in part because, since the historically high rates of the 80s, every drop in rates meant the seller could demand more cash for the same monthly payment.
Also, zero interest fuels consolidation and crushes dynamism. At 5-8% interest only real businesses can work. At 0% you can get VC money to scale up an imaginary business for years, as long as it has good vibes.
I think we are still dealing with the longer-run pain of having to shift back to a real economy after ZIRP, but we *need* to make that transition.
To your broader point, though, I very much agree that the social consequences for young workers are brutal and we should do more to help them.
To my mind, banning non-competes is a no brainer. As a multi-time entrepreneur, I’d also love to see health insurance decoupled from employment, with a reasonably priced government option, because health benefits are the number one thing where I can never compete with big companies.
What else can we do to create more economic dynamism that can thrive within historically normal interest rates?
I agree AI seems like an excuse to fire people overhired during the pandemic.
I agree with you on non-competes, they should be universally illegal. I found my own annoying but mostly something I could get around. I did turn down an offer from amazon once over a very restrictive non-compete.
I'm indifferent on whether resources shocks should affect Fed policy.
However, I think their tightening cycle post pandemic was correct and they never should have lowered rates during the pandemic. That was a huge mistake. I don't think rates should be set artificially low to try and achieve 3% unemployment.
And I don't think firms are wrong not to make large potentially bad ROI investments in energy infrastructure every time there is a potentially temporary price spike.
As you know I'm deeply against the Iran war.
On firm concentration I'm generally against the idea that we should let the Elizabeth Warrens of the world run around calling our best companies monopolies and trying to tear them down.
"These are not organizations with 50 to 75 percent surplus headcount. They are organizations where management layers, internal politics, and misallocation have made it hard to ship anything well. The people are not unnecessary. The structure wastes them."
This is a terrible argument. If firms can't find ways to use people, then they are overstaffed.
I would even go further to say that having too many people actually decreases productivity in a lot of circumstances. The best teams I've ever worked on have been lean.
If noncompetes are suppressing wages/salaries, that should mean more employment for new grads, not less. If employees cost less, more of the marginal ones should generate revenue greater than the cost of employing them.
I’m willing to buy your whole argument. I graduated into the start of the recession in ‘07 and it was brutal, I didn’t really get on my feet until ‘12, so I lived the pain you’re describing.
Non competes are terrible, we should ban them. I’m good with stronger anti-trust and more dynamism.
But I’m concerned at the emphasis on interests rates, not just in your piece, but everywhere. Because ZIRP was *really bad!* and I think we’re all still dealing with a hangover from having interest rates historically broken for a very long time.
A 6% mortgage is not *historically* expensive, it’s just *recently* expensive. House prices mechanically ratcheted up, in part because, since the historically high rates of the 80s, every drop in rates meant the seller could demand more cash for the same monthly payment.
Also, zero interest fuels consolidation and crushes dynamism. At 5-8% interest only real businesses can work. At 0% you can get VC money to scale up an imaginary business for years, as long as it has good vibes.
I think we are still dealing with the longer-run pain of having to shift back to a real economy after ZIRP, but we *need* to make that transition.
To your broader point, though, I very much agree that the social consequences for young workers are brutal and we should do more to help them.
To my mind, banning non-competes is a no brainer. As a multi-time entrepreneur, I’d also love to see health insurance decoupled from employment, with a reasonably priced government option, because health benefits are the number one thing where I can never compete with big companies.
What else can we do to create more economic dynamism that can thrive within historically normal interest rates?
I agree AI seems like an excuse to fire people overhired during the pandemic.
I agree with you on non-competes, they should be universally illegal. I found my own annoying but mostly something I could get around. I did turn down an offer from amazon once over a very restrictive non-compete.
I'm indifferent on whether resources shocks should affect Fed policy.
However, I think their tightening cycle post pandemic was correct and they never should have lowered rates during the pandemic. That was a huge mistake. I don't think rates should be set artificially low to try and achieve 3% unemployment.
And I don't think firms are wrong not to make large potentially bad ROI investments in energy infrastructure every time there is a potentially temporary price spike.
As you know I'm deeply against the Iran war.
On firm concentration I'm generally against the idea that we should let the Elizabeth Warrens of the world run around calling our best companies monopolies and trying to tear them down.
"These are not organizations with 50 to 75 percent surplus headcount. They are organizations where management layers, internal politics, and misallocation have made it hard to ship anything well. The people are not unnecessary. The structure wastes them."
This is a terrible argument. If firms can't find ways to use people, then they are overstaffed.
I would even go further to say that having too many people actually decreases productivity in a lot of circumstances. The best teams I've ever worked on have been lean.
Yes to the lean part. Too few people have read the Mythical Man Month ! 😎
If noncompetes are suppressing wages/salaries, that should mean more employment for new grads, not less. If employees cost less, more of the marginal ones should generate revenue greater than the cost of employing them.
All great ideas that both parties should be able to implement!