It’s a new year, and that promises new struggles and new opportunities. As I write this, I’m sitting on an empty train on my way into the City, feeling like the only commuter in the entire Northeast. I still haven’t written out my goals for the new year, so with less than 48 hours under our belts in 2015, I’m already behind. On the other hand, we had an awesome day yesterday, so who’s complaining?
Happy New Year!
The unemployment rate stands at 5.8 percent. If it continues on its current trajectory, it will have fallen an additional half a percentage point by mid-2015, putting it at a level that some economists see as effectively full employment.
Yet much of the reduction in unemployment reflects a decline in the share of the population in the work force. If a stronger economy were to induce these people to return to work, the recovery would still have a long way to run before we got to full employment. Moreover, millions of those who are counted as employed remain stuck in part-time jobs but want full-time work.
Analysis I’ve seen indicates that oil is likely to settle somewhere between $30/barrel and $50, and it’ll probably be closer to $30 than $50. It’ll probably stay like that for most of the year. This makes sense because it’s going to take a protracted price war from Saudi Arabia to put America’s oil production out of business, and even then, it’ll only work if technological improvements and increases in efficiency aren’t successful in keeping the profitability at levels where American production can still make money. As of this writing, I wouldn’t bet against American producers.
The labor market is a more interesting question. We’ve had employment expansion for a good long while now, but most of the newly created jobs have been crappy jobs. We’re still in a space where offshoring makes sense, and that puts inexorable downward pressure on wages. Perhaps cheap domestic energy will change this calculus a little, but with slowdowns in China and Europe, it’s unlikely that manufacturing in America is going to get a sustained boost. This may well keep wouldbe workers on the sidelines, and that ought to force wages up, but it may not. In the current economy, there are lots of alternatives to hiring new permanent workers.
What happens when energy costs are low, and the general economy is in good shape, but domestic labor costs stay stubbornly high when compared to rest of the world? I don’t know that this has ever happened before. My guess is that if we have some kind of industry-changing innovation like the Internet revolution of the 1990s, then we’ll have an economic boom to go with it. If that doesn’t happen, then we’re likely to see more of what we’re seeing now--those who have a decent niche will continue to do well while those who’re locked out will continue to struggle.
2. In Limbo, a City in China Faces Life After Graft (NY Times)
For 10 fat years, this mountainous corner of central China was synonymous with the nation’s energy-hungry economic takeoff. Its rich deposits of coal fueled the most frenetic era of the Chinese boom, turning owners of small mines into millionaires and dirty towns into gleaming cities.
Now, Lüliang is at the center of one of the most sweeping political and economic purges in recent Chinese history. As President Xi Jinping’s campaign against corruption enters its second year, the Communist Party authorities have made an example of this district of 3.7 million, taking down much of its political and business elite in a flurry of headline-grabbing arrests.
Seven of the 13 party bosses who run Shanxi Province, where Lüliang is located, have been stripped of power or thrown in jail, and party propaganda outlets have trumpeted the crackdown in the region as proof that Mr. Xi is serious about rooting out corruption.
I can’t say that I know much about domestic Chinese politics, but I’ve been following President Xi’s campaign against corruption with some interest. It strikes me as a totally necessary effort if China is to truly become a world superpower, but it’s also the kind of thing that could easily get out of hand, leading to purely political prosecutions out in the hinterlands. I do not think that we’ve seen political persecution yet, but I’ll bet the party bosses who’re now sitting in jail would disagree with me.
3. Friday Hair Metal: I Remember You
4. Media Companies (and Executives) on the Hot Seat in 2015 (NY Times)
Certain new realities are beyond argument: Clutter is up — more ads, more channels, more content — advertising rates continue to drop, and audiences are programming their own universe in text, video and audio. Consumers don’t want to watch commercials, are fleeing networks, hate reruns, are increasingly bored by reality programming, shun print products and, oh, by the way, don’t want to pay much for content either.
We’re still a few years away from real change, if you ask me. I thought The Interview might do well via video-on-demand, but it only brought in $15M on its opening weekend despite unprecedented press coverage. This tells me that the major studios are liable to keep on keepin’ on for a while longer.
We live in a world where you have to be willing to go out and look for what’s good; where there are a few mega-stars in all kinds of different entertainment and media-type industries, but mostly the town crier is a guy who tells the news from the next town over in exchange for a few free drinks and the goodwill of the local innkeeper. This is something of a return to form. I think it’s unfortunate what’s happened to the news industry and to journalists in general, especially since quality news is so hard to come by and good reporting is serious work, but for the rest, I have to say that I don’t much mind. There is no good reason why we need a million famous performers in every industry, and there are more good writers than ever before if you simply know where to look for them. Sure, it’s a pain in the ass to search through all the dross, but in a world where everybody wants to play, there’s not much alternative.
I thought for sure that Alabama was going to win the National Championship, but instead, I think every SEC team but Mizzou lost this its bowl game. Tennessee still has to play--who puts a bowl game on Friday, January 2nd?--but the Volunteers are unlikely conference standard-bearers, and anyway, their play won’t bail out Ole Miss, Mississippi State, Auburn, or Alabama.
That said, I’ve lost quite a bit of interest in major college football over the course of the year. Maybe if Tennessee comes back to prominence, I’ll come back, but for the time being, college football feels more like a professional minor league. If we’re watching pro’s, I’d rather watch the majors. I like college sports, but this year I preferred watching the Ivies or the academies or even Fordham and the other schools in the Patriot League to the major college teams. The guys playing football at the smaller schools are at least real college students. What they do feels a little like what I did when I competed in college athletics. I can’t relate to major college athletes. You’ll not convince me that the so-called student-athletes of the Crimson Tide are only putting in twenty-five hours/week on their sports, or that they’re also taking Physics and Calculus. We all know that’s not true. A vanishingly small percentage of these guys will ever make it in the pro’s, and yet the NCAA makes a living on their work and pays them nothing. I don’t like it, nor do I find it particularly entertaining compared to watching real professionals and/or real college players.
My real New Year’s celebration is tomorrow. My buddy Ben’s Ironman coach put together a 4600-yard end-of-year workout, and we’re going to swim it in the morning.
It starts off with 3 x 400 on no particular interval, and after that, we do 20 x 50 @ :45 in sets of ascending pacework. The hardest bit promises to be the middle 8 x 50 fast. Swimming 400 yards at tempo pace (90% effort) with minimal rest will be a significant challenge. I don’t remember what comes after that, but in real terms, I think it’s liable to be an extended zombie haze in the pool. I’m supposed to lift tomorrow, but I doubt I’ll make it.
Have a good weekend.