on Health Jobs

I'm starting to think that while growth in the healthcare sector is good for the economy in the current jobs crisis over the long run it is not ideal. Here is Ryan Avent in his book The Gated City:

(People are) moving to places where job growth is heavily concentrated in non-export industries with very low productivity growth: largely health care and education.

It is less likely to innovate and as Sarah Kliff points out, with 1 in 5 people moving into the profession we are less likely to stem the debilitating cost growth in the health care sector. What I am personally worried about is that this going to draw highly intelligent, productive members of our society away from densely populated, highly productive regions of the country (New York, San Francisco, DC & Boston) to less desirable, sprawl ridden areas of the country. Drawn away to fill jobs, while very much needed and admirable, that will give little in the way of innovation and economic growth. These individuals would be better suited working in a densely packed metropolis with a multitude of biotech, pharmaceutical and health research firms to feed off of and innovate. Not parts of the countries whose greatest claim to fame is the availability of cheap land.

on Farming and Manufacturing in the South

You  can thank/blame better farming equipment for the conditions that led to "Right to Work" laws in the South:

Agricultural productivity pushed millions of farm workers off their land and created a large pool of poor, jobless workers. Finding employment for those workers became a high priority for southern politicians, many of which underwent a dramatic political transformation -- from a focus on protecting southern culture from the federal government, to aggressively recruiting new enterprises from the industrial portions of the country. State leaders began to wave generous incentive packages at northern firms, including tax breaks and right-to-work laws, in order to attract production facilities. And many were successful; industrial employment rose sharply across the south, turning the southern Piedmont into the country's second industrial heartland. 

That is from Ryan Avent's book The Gated City.


All of this makes sense; a large pool of labor puts pressure on politicians who, to save their own jobs, bend over backwards to entice business to their states. Which in turn hurts labors position in said states. A sacrifice locals don't mind because having a low paying non-union job is better than not having a job at all, but to workers in the midwest it was a death sentence. A well played game by management.

Links! Links! Links!

Biden policy lives (The Economist)
Long live the blog (The Economist)
More on what they are arguing about (The Economist)
Co-Working: Not exactly working from home, but not exactly going into the office either. (The Economist)
The Problem with Naming Transit Stations (Atlantic Cities)
Layaway is making a comeback, and that's a good thing (Free Exchange)
We take the historical site bullshit a little too far (Matt Yglesias)
Finally! Recess! (Plain Blog)

on Sin Taxes

The Economist has a piece on how the effectiveness of sin taxes is leading to a government shortfall in revenues (UK Government). What they fail to address is how the gains lifespan, that will result from such a change in behavior, will effect the economy. A longer life span will lead to more productivity per person, an expansion of the work force and therefore a greater expansion of the economy in comparison to one with more drinking, smoking and gas consumption. While a short term problem it certainly is (much in the same way the EPA's critics claim higher environmental standards are bad for business) the long term gains far outweigh it.

on The Big Short

I used to feel bad when I thought of layoffs on Wall Street, no one should go wanting for work, least of all those trained for a particular trade. Then I read Michael Lewis's narrative of the financial crisis and came to a much different mindset; Wall Street attracts the ambitious and that ambition is promptly wasted. Innovation is directed at ways to better fuck over one's counterparts through convoluted and hard to understand financial vehicles. So it is my opinion that the less attractive the finance industry appears to be then the the fewer talented individuals will be lured away; which in turn leads to fewer morons (Germans in this case) being fucked over.

While I was aghast at the over all ruthlessness of the industry, Mr Lewis is more focused on how the lack of responsibility and accountability has led to a culture in which fees and personal enrichment purvey rather than loyalty and good faith in regards to ones clients. A likely outcome when the utter destruction of a clients portfolio at worst leads to an early, yet cushy, retirement from finance.

To me what is most striking about the book is the lack of mention of the authorities. This is not a testament to the reporting, on the contrary, the characters reported on in the story approached the authorities only to be rebuffed (more like stared at with confused looks). It's shocking to think that such pervasive fraud and deception went on with the authorities having little to no knowledge of it. Those with the responsibility protect the markets should never have to rely on the market players themselves to do the right thing. We should be spending vast sums of money to employ individuals to understand the markets and their potential weaknesses. The cost is a fraction of the lost productivity that occurs after a financial crisis and in my opinion is money well spent.

In closing I find it rather humorous that Martha Stewart received more jail time than any individual that was complicit in the largest financial disaster since the Great Depression. We could do better.