Andy Kessler

WSJ: Dear Grads: How to Slay Dragons in the Business World

https://www.wsj.com/articles/how-to-slay-dragons-in-the-business-world-11558294469

Dear grads: Finish streaming Bird Box, stop moisturizing with CBD, lace up your Allbirds and listen up on how to get ahead. Dressed in medieval gowns and tassels, you’ve been drowned with graduation platitudes and advice.

This year didn’t disappoint. Former CNNer Soledad O’Brien told University of Oklahoma grads, “I think what [my mother] was saying is most people are idiots, so you might be a bigger idiot if you listen to them all the time.” ABC’s Jimmy Kimmel had a surprisingly capital idea for the University of Southern California’s newly minted doctors, telling them that even though the health-care system is unfair, “you should still make a lot of money.” He added: “You deserve it for working so hard and eating so much ramen over these years. And not even the Top Ramen, the bottom ramen.” My favorite is this take on “be yourself” from the Rev. France Davis, who told applauding University of Utah graduates: “Be what you is and not what you ain’t, ’cause if you ain’t what you is, then you is what you ain’t.”

Now for some other realities. It’s the best job market in two decades. But be warned—the working world is very different from campus life. You need to stand out, but how? There are plenty of faceless drones. At your new job, you’ll quickly notice people of no particular talent who are successful inside organizations. I had an old boss who explained an incompetent rival’s political rise: “He climbed the ladder of success, hand over hand with knives in other people’s backs.” Don’t be that guy!

Instead, here’s my simple advice: Be a hero. You’ll have a job with a vague description. Sales. Physician assistant. Manager. Business intelligence. Everyone comes in with a task. Don’t let your job description be a straitjacket. Do something above and beyond. That’s what your employers want, whether they admit it or not.

I’ve seen it again and again. I heard from a woman named Carol working in international marketing for a Midwest company. She was asked by a superior working on a board deck for a list of European competitors. She came up with a single PowerPoint slide that visually showed the reach of each competitor overlaid with her company’s distributors and analysis of how it could best compete. The slide was a huge hit. The chief operating officer thanked her. She got a raise and more responsibilities.

On Wall Street, I used to work with a salesman named Steve. A deal to raise money for a paper company was stuck. No one would touch it at $20. It was uglier than Dunder Mifflin. Steve had a new account in Milwaukee and insisted it buy several million shares, but at $18. On hearing someone was willing to buy, other accounts piled in. Steve is still known as the guy who got the ugly deal done—a hero.

WSJ: The Federal Reserve Is Flying Blind on Inflation

https://www.wsj.com/articles/the-federal-reserve-is-flying-blind-on-inflation-11557688767

I never bought into the “Maestro” description of former Federal Reserve Chairman Alan Greenspan. Mostly because of, well, the 1987 crash, the ’94 bond massacre, his ’96 “irrational exuberance” speech, boosting the money supply before the nonexistent Y2K glitch, which poured gasoline on the dot-com fire, lowering interest rates in the early 2000s to chase the ghost of deflation and then not raising them fast enough to stave off the mortgage mania, which led to the financial crisis and Great Recession. Other than that, Mrs. Lincoln . . .

It turns out Mr. Greenspan was flying blind. The most important economic indicator, the inflation rate, is flawed. Don’t take my word for it. In an interview at Wharton last month, Mr. Greenspan noted: “We have a problem with measuring inflation.” He’s right. April’s 12-month consumer-price index came out Friday at 2%—and it’s wrong.

There’s a simmering controversy over which measure of inflation is best: the CPI, the GDP deflator, the chain-weighted CPI, or even the trendy personal-consumption expenditures index—each of which typically shows an inflation number within 0.3 percentage point of the others. Choosing the right inflation number is vital because it’s used everywhere: cost-of-living adjustments for wages, the Fed’s interest-rate decisions, and tracking wages over time to determine, for example, how the middle class is doing. Inflation is really important. Get it wrong and you’ve blindfolded every economist.

I’m convinced that all of the common measures overshoot by at least 2 percentage points, and maybe even 5 or more. That’s because of the flaw in the Bureau of Labor Statistics’ hedonic adjustment, which totally misses the way the cost of technology declines over time. As we noted a year ago, “by the time the BLS puts something new in the CPI basket, it’s already cheap, so it misses the massive human-replacement price decline.” Google Lens on a $35 phone, for example, can now translate and read aloud signs in 14 languages. Does the BLS capture the costs that technology saves compared with the services of human translators.

Mr. Greenspan is no tech fanboy. He told “60 Minutes” he writes longhand with pen on paper while sitting in his bathtub. But he acknowledges the impact of technology on prices. “Because products are continuously changing,” he said in last month’s interview, “when new products go on the market, they come in at relatively high prices. Henry Ford’s Model T came in at a very high price, and the price went down as technology improved. You didn’t start to pick up the price level until well into that declining phase.”

Mr. Greenspan continued: “So there is a bias in the statistic. You’re getting statistics which are not correct.”

WSJ: Blue and White Collars Don’t Fit Every Job

https://www.wsj.com/articles/blue-and-white-collars-dont-fit-every-job-11557090321

“Give me a job, give me security / Give me a chance to survive / I’m just a poor soul in the unemployment line / My God, I’m hardly alive / . . . I’m gonna be a blue collar man.” So sang Styx in 1978. Now headlines blare “Joe Biden Makes Appeal to Blue-Collar Workers.” But is that a unified voting class anymore?

The moniker was born 95 years ago when the Times newspaper in Alden, Iowa, suggested, “If we may call professions and office positions white collar jobs, we may call the trades blue collar jobs.” It stuck. In “The Audacity of Hope,” Barack Obama worries that “the wages of blue-collar Americans” are held back by illegal immigration. Anthony Scaramucci even titled his nine-long-days-in-the-White-House memoir “Trump: The Blue-Collar President.” They evoke a workforce divided between brains and brawn, lunch pails vs. three martinis.

But today there is no such clear divide between blue and white. According to the Bureau of Labor Statistics, goods-producing jobs—manufacturing, mining, construction, textiles—averaged 38% of nonfarm payrolls in the 1950s. They’re only 14% today. Manufacturing was 30%, but it’s less than 9% today. Service jobs—from cashier to caterer to caretaker—are now 71% of total employment. Was bus driver Ralph Kramden blue-collar? Sure. But is your Lyft driver, or your Starbucks barista?

Country singer Travis Tritt tried his own definition of blue collar in 1992: “I make my livin’ with these two hard workin’ hands / Won’t ever be no millionaire / I’m a blue collar man.” Now it’s much fuzzier.

Politicians trying to attract idealized blue-collar voters will be aiming their appeals at a small and shrinking group. The range of industries Americans fill is now more diverse than the “Star Wars” cantina. Here are some new “collar” categories.

Horse collar. Transportation is a giant industry staffed by millions of workers moving people or things from one place to another. It includes everyone from pilots to truck drivers and tour guides. All work with their hands (and often feet), and their fate is tied tightly to energy and technology. When oil prices rise, jobs disappear. When autonomous vehicles show up, many jobs may vanish for good. These are vital issues for this slice of Americans.

Red collar. Doctors work with their two hands and cut into you. Nurses draw your blood. Orderlies clean it up. Most are on their feet all day. It sounds blue-collar, but it’s a huge service industry that will represent 20% of the economy within a decade. U.S. health-care workers care most about one thing: who’s paying. Talk of Medicare for All scares them, because employees in socialized health-care systems, especially doctors, sometimes make half as much.