The October Jobs Report from the Bureau of Labor Statistics (BLS) came out last Friday, and it was incredibly positive. 204k jobs were added by the official measure, enough to send the stock market up and make everyone happy. Well, not everyone. There were some strange features in this report that only accelerated the criticism of this report that started the month before and sharpened the political debate over jobs in the new economy.
Much of this is long overdue, but some of the criticism was weak and pointless all the same. Labor force participation has fallen from 63.2% of all workers to a 35 year low of 62.8% – a figure that may or may not be important. And anyone paying attention to the ADP Employment report has to question where the great news came from seeing as the latter had a gain of only 130k jobs. What on earth is going on?
The short answer is that everyone is starting to question everything. It’s a good thing – if we can sort it all out. Let’s give it a try.
To every thing there is a season, and a time to every purpose under the heaven.
Ecclesiastes 3:1 (KJV)
Anyone who has been close to the edge knows what “survival mode” is like. Small flashes of adrenaline propel you from one day to the next. Each fitful dawn is a mix of dread and possibility, all of them taken one at a time. Next week? Worry about it when it comes. Next month? Forever away.
Many people find themselves in “survival mode” through this Depression, especially those without either work or unemployment bennies. For them it is a slowly unfolding tragedy, but in great numbers they become a society, a culture, and an economy that is unable to function. That’s because a free market only reaches equilibrium in the long run, actually running on small differences in the short term. But in the very longest term the magic of market forces become something else altogether.
Everything has its own time. When we start to understand that “The only thing we have to fear is fear itself” it helps to appreciate the short, long, and very long term that are all whipping us through each day and all of our days.
Long ago, most Americans lived as Laura Ingalls Wilder chronicled in the “Little House” series. Pa Ingalls and family were out in the wilderness, surviving with the rhythm of the land and putting away what they could to survive long winters and perhaps beyond. The family’s net worth was what they had around them – nearly all put toward surviving on their own.
That life has been replaced with interdependence based on a dollar value assigned to absolutely everything. We all get by with any extra scratch, should there be some, not stored up to get through the winter but properly invested in convertible assets. This means that everyone is subject to the values of the Free Market™, which determines the value of all assets including experience, talent, and work.
The real lessons from successful financial companies like Bain Capital are the demonstration of what these values of interdependence are – and how our world far beyond Pa Ingalls has become as hostile as any winter on the Great Plains.