US labor force participation has been declining since the early 2000s

Something has always bothered me about the reported US unemployment rate. Last month (September 2022) it was reported at 3.5%. Yet it definitely feels like there are a lot more than 3.5% of the US working age population who don’t have a job.

And this number is one of the key data points (alongside consumer inflation) that the federal government and the Fed Reserve use to guide policy decisions.

But unemployment is expressed as a percentage. Which has both a numerator and a denominator. We tend to think the denominator is roughly constant; in reality it’s been anything but.

US labor force participation rates have been in steady decline since the early 2000s:

Hypothetically, if we were to keep the numerator constant, then unemployment rates would have steadily fallen over the last 2 decades without any change in the number of people with jobs!

This aligns more with my own intuition and observations — clearly there are more than 3-4% of Americans without jobs. Something just doesn’t make sense, and this is one potential factor.

I’ve yet to closely examine data on workers comp benefits and Social Security disability benefits, but my belief is that these probably show rising cumulative enrollments over time as well.

I am just larping as an economist here. But I have increasingly come to distrust our government’s official data, whether on consumer inflation or unemployment. Some of you may say, well, duh.

It reminds me of the old Twain quote, there are 3 kinds of lies: lies, damn lies, and statistics.

If we use this data to make decisions, and the data is bad, then necessarily it follows that the decisions are bad.

Please tweet me and tell me where I’m wrong / what I’m missing.

PS:

Arthur’s latest essay on Central Banks, yield curve control, and geopolitics

Very much worth a read if you’re interested in global macro.

Source: https://blog.bitmex.com/contagion/

Some snippets:

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Of all the types of money printing, the most disastrous for the value of fiat currency – and by extension, society – is YCC. […] Central banks that engage in YCC are essentially pledging to infinitely expand their balance sheets such that a particular interest rate metric does not rise above an unnatural ceiling set by the central bank. The market ALWAYS wins, and the market wins by inflicting crushing inflation on the entirety of human civilisation.

The entire goal of modern European history has been preventing Germany and Russia from joining forces. The manufacturing prowess of the Germans combined with cheap Russian commodities could be a game-changing force from a geopolitical point of view

The EU is an artifice – a political ploy of France to keep Germany down, which the Germans only went along with due to their guilt over WWII. The US shares France’s interests, and it too lurks in the shadows, standing ready to prevent any real alliance between Germany and Russia. A weak EU serves the political interests of America quite well

France, to its credit – and I find very few geopolitical things to give France credit for – actually did the intelligent thing and went all in on nuclear energy. Roughly 70% of electricity generation is nuclear powered. Therefore, their manufacturing base can withstand the cessation of Russian gas flows. Germany, on the other hand, cannot

America is self-sufficient in food, fuel, and people. China, Europe, Japan, and the UK are not so blessed. America can be an autarky if it pleases. As a result, the Fed has the luxury of being able to prioritise domestic political concerns regarding inflation over and above supplying the world (and most of its allies) with a constant flow of dollars. A constant flow of dollars allows the rest of the world to print their currencies and still afford to buy energy in USD terms. It’s a relative game, and if the strongest player goes their own way, everyone else is left to suffer.

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Some meditation advice from an experienced meditator

I was struck by this HN comment (source):

I have been practicing meditation for 15 years, sometimes in batch of 100 hours.

The more I practice, the more the time slows down. Not just while meditating, but after the fact as well. Although it fluctuates and I’m not back to my kid self, it feels that I have tremendously more time now than a few years ago.

I suspect that it’s tied to how much present you manage to be.

When you are a kid, you are deeply immersed in whatever you are doing, and less and less so after that, especially in our age of distractions, multitasking, and intellectual work loads.

I think that the more you are immersed in the daily boring stuff, like just walking, doing chores, or taking your shower, the more you register the time you spend doing said activity, and the time seems to pass slowly.

In fact, I am sometimes under the impression my minutes, not just feel longer, but actually contain more, because I do so many things and then looking at the clock, it hasn’t moved much. This sensation increases when I meditate a lot.

I emailed the writer. I was struck again by his reply, some of which I’m sharing verbatim below (with his permission):

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Meditation is uninteresting repetition, again and again, no matter the technique. It’s only natural to find it uneasy.

This is not a race. It’s the opposite of a race. The faster you try to go, the slower you will progress. Yet efforts will lead to results. You have to be motivated without avidity, and it’s not an easy balance to find.

There is a huge difference in effects, between a casual practice (a few minutes, some of the days) and a robust practice (long sessions every day).

It’s a long term work. It’s, in fact, a life work. Our teacher jokes that at the center, we are at “Vipassana Kindergarden”. We are just beginning. Now we have to carry on and on. Half of the secret of success is simply showing up, every day.

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Some excerpts from the new Cosmos ($ATOM) whitepaper

I’m a big supporter of the Cosmos vision and an investor in the ecosystem’s $ATOM token. A new Cosmos whitepaper was recently published [source]. I’m sharing a few excerpts and diagrams below that I find interesting / consequential.

Here are a few tweet threads explaining the upcoming changes

https://twitter.com/delphiintern/status/1574489770776051723/photo/3

https://twitter.com/route2fi/status/1575831540155629568?s=46&t=UfvY0glUmZzrIdz1PMrsDw

And some food for thought from Jae Kwon, one of the Cosmos founders who is no longer actively working on the original Cosmos:

https://twitter.com/jaekwon/status/1576869177796620290

All the excerpts below are copied verbatim.

—

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The Cosmos SDK has a history of pioneering governance innovations, such as an advanced delegation system; governance-activated node upgrades; and a gen- eralized message passing system that allows any account, whether individual, group, smart contract, or chain, to execute arbitrary transactions, locally or over IBC.

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The Cosmos Hub gave rise to the internet of blockchains. Interchain Security and Liquid Staking are the final building blocks required for a secure interchain economy, which in turn, enable the creation of the Hub’s application-specific functionality, the Interchain Allocator and Interchain Scheduler.

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The transition phase starts the moment that Cosmos shifts to the new monetary policy and ends 36 months later, at which point the steady state phase begins and lasts indefinitely. During the transition phase, issuance temporarily increases for the first nine months as it bootstraps initial funding for a new Cosmos Hub Treasury. Issuance signifi- cantly reduces thereafter. As an additional safety measure, during the transition phase no more than 10% of the Cosmos Hub Treasury can be deployed within a 21 day period.

—

At the beginning of the transition phase 10,000,000 ATOM are issued per month. This issuance decreases at a declining rate until it reaches steady state issuance 36 months later. Steady state issuance will be 300,000 ATOM per month (a nod to the speed of light, 300,000 km per second).

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PG on what startup founders need to unlearn from schooling (an oldie but goodie)

Why did founders tie themselves in knots doing the wrong things when the answer was right in front of them? Because that was what they’d been trained to do. Their education had taught them that the way to win was to hack the test. And without even telling them they were being trained to do this. […] That’s why the conversation would always start with how to raise money, because that read as the test. It came at the end of YC. It had numbers attached to it, and higher numbers seemed to be better. It must be the test

And

In practice, the freakishly specific nature of the stuff ambitious kids have to do in high school is directly proportionate to the hackability of college admissions. The classes you don’t care about that are mostly memorization, the random “extracurricular activities” you have to participate in to show you’re “well-rounded,” the standardized tests as artificial as chess, the “essay” you have to write that’s presumably meant to hit some very specific target, but you’re not told what

Source: http://www.paulgraham.com/lesson.html?viewfullsite=1