We Work, or We Suffer
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 22 April 2022
⏱️ 23 minutes
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Summary
If there is one thing that animates me it is the application of real-life economics to investing. I have always been obsessed with economics – both theory and application – but it is in more recent years that I have really found it a calling to synthesize the foundational truths of economics to financial markets.
And truth be told, that calling transcends the applications of economic theory to financial markets. I believe properly understood economics has profound implications for all aspects of human living. My extra-curricular endeavors in economics (the book I wrote last year, the class I teach at the high school I co-founded) are all extensions of this passion I have for a free and virtuous society. But yes, applying these things to financial markets is my real passion, and the inability and disinterest the financial advice community has for applying economic principles to markets is a constant source of irritation.
Today’s Dividend Cafe is about the labor market – the state of jobs in America. For 99% of the media and even economic analysts these days this is an econometric subject. In other words, it is a data point that provides an input to a spreadsheet, and from there carries some numerical relevance to another input (i.e. if wages are here or unemployment is here, then consumer spending is possibly going to be here, etc.). Worse, it is often just a mere political data point, perhaps an even more imbecilic understanding of work than even reducing it to an economic data point.
But economics is the study of human action around the allocation of scarce resources. Our understanding of what is happening and not happening in the world of work will be improved to see it through the lens of the human person. Political and econometric reductions will tell us almost nothing, and in fact, may tell us things that aren’t true at all.
Investors and actors in financial markets need a fuller understanding of current realities in American labor. To that end, we work … (see what I did there). So jump on into the Dividend Cafe.
Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com
Transcript
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| 0:00.0 | Welcome to the Dividing Cafe weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. |
| 0:12.0 | Well, hello and welcome to another Dividend Cafe. |
| 0:17.0 | Appreciate those of you listening on the podcast and those watching the video. |
| 0:21.8 | I am here in the Newport Beach office today and would like to have a little candid discussion about an issue that I think is a profound importance to investors and to financial market actors and is an issue that I think has a lot of economic |
| 0:42.1 | undertones to it and at the same time a lot of social and cultural undertones. |
| 0:48.3 | The issue is work and specifically the present state of the American jobs market. |
| 1:00.2 | And I need to do a little history lesson here, but I'm talking about 25 months of history, not 25 years or a couple of centuries. |
| 1:11.6 | And a lot of this history, and then the applications I want to derive for you today, |
| 1:18.6 | out of what I believe about the labor market and the kind of good, bad and ugly that is incorporated therein |
| 1:25.6 | for those of us in financial markets, a lot of it requires |
| 1:30.2 | an economic understanding that is different, or perhaps I should say, more complete than the |
| 1:38.2 | economic understanding that I think far too many economists have today, let alone non-economist. The notion of every Thursday |
| 1:49.9 | looking at the initial weekly jobless claims numbers and the weekly continuing jobless claims |
| 1:58.1 | numbers or the first Friday of every month looking at the BLS monthly jobs data. |
| 2:06.1 | The Bureau of Labor Statistics, by the way, is across the street from Union Station, Washington, D.C., |
| 2:12.2 | where I frequently take the Acella from New York to when I'm going to DC on business. |
| 2:18.9 | And this building of the BLS is filled with S statistics. |
| 2:27.0 | It is not the arm of the Department of Labor that is there to focus on qualitative considerations |
| 2:33.3 | of the jobs market, to focus on, you know, |
| 2:37.7 | existential thoughts about work. |
| 2:41.5 | It's not strategic in how to improve various elements. |
| 2:45.6 | It's statistical. |
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