Structural Change ?

Today’s disappointing employment numbers may be a wake up call. Maybe the Reopening is not going to be as strong as all the hope that underlies the Wall Street narrative.

1. Maybe a Sense of Community is actually the new thing, it keeps being talked about, smart people like University of Chicago’s Raghuram Rajan have been talking about this for a number of years, pre-pandemic. Working from home and rethinking one’s priorities, changes the way people live completely. The total amount of money needed in the economy is lessened.

2. Does this change how the government reacts? Handing out free money and not getting work in return has to end. A job retraining program and investment in the total infrastructure picture would seem to make sense.

3. Part of the current issue is the percentage of the population getting vaccinated, young people think they are invulnerable and don’t need to be vaccinated. But older people are not going to flock back to retail in this unsafe environment. And we still have the old guys who think that COVID is all a hoax, time will take care of eliminating this problem, they won’t live forever.

4. What does this say for interest rates? Probably that a sharp increase in rates with this new information is not close now. But the fact that the Federal Deficit will keep getting worse, will eventually have to be addressed. The FED will at some point stop throwing $ 120 billion at the economy every month.