The Death of Macroeconomics

Social engineering giveth and political engineering taketh away

This is not a good time to be an expert. In our recent political season, the experts are doing about as well as Aaron Rogers’ Green Bay Packers. They threw long bombs, easily picked off by well-funded and aggressive ballot collecting candidates. Political experts missed “bigly” by calling for a red wave midterm election when we barely got a red trickle. Talking head political commentators followed in lemming-like lockstep with their election analysis. Even the betting market experts, which had a republican red wave at 95%, missed the boat on the midterm election predictions.

Expert missteps are not just reserved for political analysts, economics experts are racking up a string of losses as well. Janet Yellen, first said that there was no significant inflation, then said there was inflation, but it is transitory, only to finally admit that record level inflation is real but was expected and is no big concern. Talk about having so much job security that one can be categorically wrong at every stage of this important debate and still command the worlds largest money manipulation organization. Janet Yellen’s inflation predictions were so dismal and off the mark that even weather forecasters cried foul!

Now, I am just a philosophy major from a small, Midwestern liberal arts university. I experienced one macroeconomics class 30 years ago and I was able to predict that Covid lockdowns would upset supply chain markets and cause inflation. By the way, I never once believed lockdowns were justified or necessary. I took a lot of arrows for calling out governors and CEOs for their fear of the Covid boogeyman. I did not make my case because I wanted people to get sick and die, my dire warnings came from my knowledge of business markets. I knew that we could not shut down the world economies for even a day, much less months, without major consequences. With an entire world spending decades perfecting just in time inventory models, there was no way to artificially turn the economy off and back on again. I, the mediocre philosophy student from the Reagan era, called what no modern economic expert with media access could see.

Speaking of shrinking economic expert accountability, this recent headline from the Washington Post had me scratching my head:

U.S. workers have gotten way less productive. No one is sure why.

Bosses and economists are troubled by the worst drop in U.S. worker output since 1947 Here

Really! No one knows why productivity is at a 60-year low? Are our news organizations now run by Captain Louis Renault? Are they truly “shocked, shocked to find out that US Workers are less productive?”

It certainly appears that everyone knows what is going on, but no one wants to address the elephant in the room. It is either that, or our economists and news directors are merely on the take to look the other way.

Let’s look at that elephant and review what has happened to the labor markets post-pandemic. In the last two years wages increased, benefits have been expanded, work life balance is the new mantra, and work-from-home is sacrosanct! Private industry is preforming back flips to attract and retain these newly empowered employees. Time and again, we executives are told that WFH and all the attention lavished upon our workers is increasing productivity. So why is this investment not translating to a hyper-productive workforce?

Could it be that WFH, although it may make an individual worker more productive, is a drag on overall company productivity because of diminished collaboration? The individual employee is not caught up in the rat race commute, water cooler gossip and “Milton-like” cubical distractions, but they are also less accessible to spontaneously create innovations and support company missions. I had written, much to the chagrin of WFH enthusiasts, that productivity inefficiencies of WFH employees are picked up by the customers and thus are a hidden landmine in an organization’s financial statements. It appears that corporate managers are now starting to trip on those landmine as they stagger forward with their more expensive, yet less productive work force.  (A side note, if you are one that believes that viral hate on social media platforms still raises your personal brand, post on LinkedIn that there is no evidence that Work-From-Home is more productive than in-person work.)

Now onto our free latte drinking, rock wall climbing and other quirky perks demanding work force. Employers have been sweetening the comp pot over the past two years offering ever greater pay and benefits with no link to productivity. Quite the opposite, everything from expanded PTO, bring your pet to work and paid time for volunteerism are drags on productivity. Any executive willing to be honest with themselves, know this, yet they keep upping the perks de jour while scratching they heads as to why their firm is spending more on labor but are less productive. Here is a little hint to the C-suite suits for how to fix this problem. Take all the money wasted on worker rompers room antics and spend it on your most productive workers. You will be shocked, shocked to find out how quickly your workforce separates into productive verses past employees.

Macroeconomics is the rational study of how socioeconomic factors affect broad economic trends. In effect, macroeconomics is the study of how broad issues, like interest rates, unemployment, and group behaviors impact large economic spectrums. Macroeconomics is basically the gathering and analyzing of giant sociology experiments on human behavior. It really isn’t that hard, because given a large enough population size, the macroeconomist merely reports statistics relative to the middle of the bell curve. There is not much ambiguity to this type of economic tealeaf reading. Sure, macro-experts may differ on the edges, but the middle of the curve is straight up human behavior regarding a certain set of tested data.

Why is our current batch of macroeconomic experts so baffled and unable to spot why worker productivity is at a 60-year low? Because they stopped reviewing sociological behavior data in favor of projecting stated political desires. The prevailing political desire by economists, and the reporters that follow them, is that WFH is super productive and that benefit lavishment motivates workers to work harder. Macroeconomics experts must be entirely devoid of children because surely if they had children, they would know that giving a child a gift of Nintendo without any preconditions of behavior only means that next Christmas there better be a Super Nintendo under the tree or else there will be discord in the house.

Macroeconomics is no longer the socio-study of human behavior based on current economic conditions, but a discipline of political objectives issued by learned elites. Larry Fink’s ESG BS is only one example. The costs to implement and maintain ESG standards makes no sense from an operational or financial point of view but is all the rage from a political feel-good perspective. The same goes for fund managers that bought into that shaggy little D&D playing crypto dude’s FTX. That “whiz kid” checked all the right political boxes, thus his crypto empire was given legitimacy, even when common sense and history would have dictated differently.

The economists know why productivity is down, they just are telling the public they are baffled because the “productivity” paradigm shift of increased wages, benefits, and WFH is far more important to the big political picture then the actual lower productivity reality. The great reset cannot be achieved in a super productive economy because productivity yields self-sufficiency, self-sufficiency breeds personal responsibility and personal responsibility shuns government manipulation and overreach. Thus, the new macroeconomists must remain bewildered at the very real drop in productivity output.

The world has not been in a socioeconomic experiment over that last three years, we have been in history’s largest political experiment. And this grand experiment is trying to prove, not God’s, but government's ontology. With the tears of Jeremiah, I warn that following this global political science experiment will lead to sorrow as the incoming Babylonians (World Economic Forum) care not a wit about our culture and our God, they mean only to enslave people to build their temples to Marduk.

If labor managing executives still are still skeptical of my productivity prognostication, I offer one shining example of how kowtowing to worker demands for more pay, benefits, and work-from-home with no link to productivity played out in the US K-12 education system. Since Jimmy Carter signed into law, the Department of Education in 1979, our nation has poured billions of dollars into education to increase teacher salaries, benefits, and retirements with little to no impact on education output. In fact, US student rankings on the world stage were higher pre-Department of Education than current rankings. To exacerbate this situation, states that lockdown schools during and after Covid saw an even larger educational disparity between students taught in-person vs. remotely.

A true Macroeconomists would study the US educational system and conclude that raising wages, enhancing benefits and limited hours worked had zero impact on educational output and would offer that same analytical conclusion to corporate America. However, that analysis does not fit into the prevailing political narrative promoted by the Washington Post. Regarding validity of all future macroeconomics studies, all I can say is, “caveat emptor, what social engineering giveth and political engineering taketh away.”