Remote Work and Lower Productivity

I was standing
You were there
Two worlds collided
And they could never tear us apart
--INXS

For more than a year, I've been wondering when the negative productivity effects of remote workplaces encouraged by pandemic regulations would show up. Coase's seminal work told us that organizations exist to reduce the transaction costs inherent to individual contractors trading on the market. 

Stated differently, productivity tends to increase when people work together.

CV19 pulled workers apart. Consequently, transaction costs should go up and productivity should go down.

It appears that the data are finally starting to reflect this reality. For Q1 and Q2 of 2022, non-farm business labor productivity has printed in negative territory (FRED graph here). Parenthetically, the FRED graph seems to paint a more positive picture than the actual BLS data series, which currently indicates 4 negative prints in the last 8 quarters, including huge -7.4 and -4.6% YOY declines thus far this year. Not sure why the difference.

Some commentators are attributing lower productivity to increased 'sloth' associated with employees being able to get away with goofing off when working remotely. There is certainly some truth to this, as one way to cope with agency problems is increased monitoring. Monitoring is a type of transaction cost, one that certainly increases when distance between employee and supervisor increases.

But the larger point is that costs of trade among workers endeavoring toward the same end go up when they are not working in close proximity.

We're witnessing a large-scale example of this currently.

Premie Retirees

"I'm gone. Don't try to find me. You won't. I'm on strike."
--Ellis Wyatt (Atlas Shrugged: Part 1)

This article suggests that the pandemic taught many people, especially young ones, that work doesn't pay. It is better to stay home and goof off rather than to toil one's life away.

Makes sense when the government was sending stimulus checks that paid people to stay home--given axiomatic aversion to labor that steers human behavior. However, it doesn't explain how those young non-workers will continue to not work once the stimmy checks dry up.

That said, it is entirely possible that an older, yet still capable cohort has indeed left the workforce for good as part of the Great Resignation. Many people approaching retirement age became disgusted with restrictive pandemic work policies, such as masking and mandatory vaccinations and hit the silk rather than deal with unpleasantries that conflicted with their principles.

Unlike younger workers, this cohort has a substantial nest egg that can be used to fund unexpected early retirement. Because they are still productive, premature retirees could always step back into the workforce if they change their minds, or if their budgetary situation changes.

Given the still-oppressive regulatory overhang governing many workplaces, however, many of these premies may be gone for good a la John Galt.

Obeying Absurdity

"Private, I know they brainwashed you in boot camp. But sometimes you gotta QUESTION authority!"
--Chief Petty Officer Casey Ryback (Under Seige)

When a reasoning mind reflects on what's gone on, like this nurse has done, it is difficult not to conclude that a large fraction of the population will unquestionably obey authoritarian 'guidance.' 

No matter how absurd.

Tree Truth

See the stone set in your eyes
See the thorn twist in your side
--U2

This little decision tree captures lots of logic.

Adding a branch or two for side effect risk would make it even better.

Handshake Contagion

When it almost seemed too much
I see your face and sense of grace
And feel the magic of your touch
--Thompson Twins

When it is time to 'offer each other a sign of peace' at mass, the new normal has become waves, good old fashioned peace signs, or other non-contact gestures. Certainly no handshakes.

Every now and then, however, people can't resist doing what is natural.

Today, the two people in front of me both offered their hands, which I gladly shook. A person behind me saw our handshakes and got in on the action as well. Genuine smiles all around too.

It felt good to defy the nonsensical and to do instead what humans were made to do. 

True contagion.

Institutional Confidence

Oh, but I gotta think twice
Before I give my heart away
And I know all the game that you play
--George Michael

New Gallup poll indicates confidence in many US institutions continues to decline.

Outside of small business and the military, the percentage of people expressing considerable confidence is below 50% and, in many cases, in the teens moving toward single digits.

Some institutions, including the presidency, are down more than 10 percentage points in a year.

While these results might concern members of those institutions, they are unlikely to surprise the average person on the street.

Viral Spreads

There's a room where the light won't find you
Holding hands while the walls come tumbling down
When they do
I'll be right behind you
--Tears for Fears

Ponder the differences indicated here.

Hard to imagine that there are more significant predictors of these spreads than underlying ideologies that determine political party affiliation.

Then comes the real research question: Why should this be--particularly in the context of public health? 

Deep Church

Desolate loving in your eyes
You used to make my life so sweet
Step out like a God-found child
I saw your eyes across the street
--Culture Club

Interesting interview with an Italian Catholic archbishop concerning the state of the world and of the church. He suggests that events of the last couple of years have been perpetrated by proponents of the Great Reset. Moreover, he argues that officials of the Catholic Church have done little to stop these people and that some are likely complicit.

He draws parallels to what is happening inside the church to the secular political world. Just as we have a deep state, we also have a deep church, with officials sympathetic to un-Godly principles reaching the highest levels of the church hierarchy.

Ultimately, he believes, the Great Reset is destined for failure because "it is inspired by inhuman and diabolical principles." However, its end may take time, depending both on human capacity to oppose it and on God's plans for Divine Providence.

His views will certainly not win him a ton of friends inside the deep church contingent. But his forthright challenge of status quo corruption instills confidence that God is indeed positioning for victory.

Pendleton Act

"You guys think you're above the law. Well, you ain't above mine."
--Nico Toscani (Above the Law)

In July of 1881, President James Garfield was shot and killed by an attorney who was furious that the president did not give him a job in the new administration. Operating on the theory that it had to eliminate the system of patronage in government if it was to prevent future assassinations, Congress passed the Pendleton Act.

Signed into law by Chester A. Arthur in 1883, the Pendleton Act created a permanent civil service that could not be undone each election cycle. The administrative, or 'deep,' state was born.

The Constitution does not provide for a permanent class of bureaucrats that possess authority outside of the three branches of government. The Pendleton Act created a layer of statist imposition that the democratic process cannot control.

Perhaps the original intent was to make the civil service class apolitical, but it has become anything but. Indeed, any political party worth its salt would endeavor to place operatives inside the administrative state so that agendas could be advanced regardless of who is in office.

We have seen this in the spades over the past few years as partisans installed at the highest levels of agencies such as the CDC, EPA, DOJ, Federal Reserve, FBI, and CIA render decisions that favor particular political agendas.

I don't know whether the constitutionality of the Pendleton Act has ever been challenged in court. If not, then it should be. This week's West Virginia v. EPA SCOTUS ruling moves in that direction.

Meanwhile, people must continue to wake up to the reality that there is currently a fourth branch of the federal government, one that arguably possesses more power than the other three branches, that essentially operates at its own discretion, and that is largely untouchable by the ballot box.

Commitment to Stupidity

"He chose...poorly."
--Grail Knight (Indiana Jones and the Last Crusade)

The larger question for big government types is this: Have not the past couple of years demonstrated the sheer ineptitude of central planning?

Public health. War and sanctions. Economic and monetary policy. Et al.

Hayek called it the fatal conceit--the belief that bureaucrats in a room can choose better than billions of individuals.

Ongoing belief in central planning constitutes a genuine commitment to stupidity.

That Ain't Workin'

We got to install microwave ovens
Custom kitchen deliveries
We got to move these refrigerators
We got to move these color TVs
--Dire Straits

One factor that influences price pressures is the number of people in the workforce. Less workers mean less supply. Less supply at constant demand means higher prices.

The labor force participation rate has been in secular decline. The 'Great Resignation' resulting from CV19 policies added fuel to the fire as able-bodied people hit the silk.

How are markets likely to compensate for the labor shortfall? Offer higher wage rates--which also, by itself, is inflationary.

As one policy distortion begets others...

Surprise?

It happened one summer
It happened one time
It happened forever
For a short time
--The Motels

Shut down production. Let demand go. Print money to fund demand.

What should happen to prices?

Why should our current predicament be surprising?

Correlation, Causation, Consequence

"There's a storm coming, Frank."
--Col Keith Davenport (Twelve O'Clock High)

They say correlation isn't causation.

Increasingly, however, many prospective voters think it is.

Unless they can scare people back into their houses again this fall, the consequence of these antecedents projects to be an election bloodbath.

Public Health Philosophy

Sometimes you're better off dead
There's a gun in your hand 
And it's pointed at your head
--Pet Shop Boys

Robert Malone proposes that public health policy is built on two philosophies: utilitarianism and Malthusianism.

Utilitarianism posits that the morally right action is the action that does the most good. It is a form of consequentialism--the correct action is assessed solely in terms of results produced. 

Utilitarianism fosters what these pages have deemed 'greater good accounting.' If a program is deemed to help more people than it hurts, then it is deemed a winner.

Malthusianism springs from the writings of political economist Thomas Malthus, who believed that population growth would outstrip food supply and other scarce resources, consequently triggering global poverty and death. 

The central implication of Malthusianism is population control. Limit the number of births so that future standard of living won't be compromised by too many people walking the planet.

Two hundred plus years, and billions of people, later and the world has yet to hit Malthus' dreaded upper bound of population. Why? More people produce more, which alleviates the scarcity that worried Malthus. Moreover, those people innovate, applying capital in manners that improve productivity even more.

Meanwhile, countries that have seen birth rates decline significantly, such as Japan, face major demographic headwinds likely to restrain standard of living in the years ahead.

None of that matters to public health officials, or climate alarmists, or socialists in general. The ingenuity that flows from liberty must be restricted in favor of utilitarian and Malthusian central planning. 

Never mind the misery and chaos that such planning creates... 

Return or You're Fired

Come on and let me know
Should I cool it or should I blow?
--The Clash

Unlike many CEOs who have been pussyfooting around the issue, Tesla (TSLA) CEO Elon Musk has made it clear. Come back to the office in person or seek employment elsewhere.

Musk seems to understand the productivity decline likely from remote work.

btw, lower productivity exacerbates inflation...

Hardship by Force

So glad we almost made it
So sad they had to fade it
Everybody wants to rule the world
--Tears for Fears

How often have you read something to the effect that the virus, or the pandemic, caused current supply chain woes.

No.

It was not the pandemic. It was government response to the pandemic. Shutdowns, lockdowns, rules about testing, rules about isolating in the event of a positive test, attendance restrictions, et al.

CV19 did not impose economic hardship on billions. Governments did.

Hardship by force.

Imagine the Compliance

Now did you read the news today?
They say the dangers gone away
But I can see the fires still alight
They're burning into the night
--Genesis

Pfizer's CEO dazzled the audience at the World Economic Forum with the spectre of ingestible computer chips that signal to authorities that a drug has been ingested.

"So imagine the implications of that...the compliance."

Surely the audience did just that. After all, the WEF is the home of the Great Reset and Build Back Better agendas.

And Pfizer (PFE) is the producer of one of the primary pharmaceutical vehicles employed during the pandemic to help advance those agendas.

Imagine the compliance indeed.

no position

Futility of Saving

Who's gonna tell you when

It's too late?

Who's gonna tell you things

Aren't so great?
--The Cars

Nice graph (taken from this article) showing the futility of saving cash as a means to beat inflation. The inference is that cash hasn't covered cost of living increases in years.

This graph is conservative, given that inflation numbers under-report price increases. Stated differently, the actual ability of saving to cope with price inflation is significantly worse than suggested here.

What corresponds to the step changes down in earnings on savings? Easy Fed monetary policy that went into overdrive with the onset of the quantitative easing regime in 2009.

Embargo Better

"You know how I'm always trying to save the planet? Here's my chance."
--David Levinson (Independence Day)

Intuitive thesis about the real reason behind the EU/NATO drive to embargo Russian oil. Build Back Better zealots will stop at nothing to reduce fossil fuel production and (especially) consumption. Regulation has morphed into more extreme measures such as pandemic lockdowns and even war--perhaps of the nuclear variety.

The Russian oil embargo fits right in. Heck, if these folks could enact a law that banned all fossil fuel tomorrow, they would surely do it.

It doesn't matter how many people are destroyed in the process. In the eyes of the BBB crowd, it's all in the interest of the greater good.

Unmasked

Evey Hammond: Who are you?
V: Who? Who is but the form following the function of what, and what I am is a man in a mask.
Evey Hammond: Well, I can see that.
V: Of course you can. I'm not questioning your powers of observation. I'm merely remarking on the paradox of asking a masked man who he is.
Evey Hammond: Oh...right.
--V for Vendetta

Article includes a couple of nice graphics that summarize the futility of masks. States with and without mask policies vs reported CV19 infections:

Germany and Sweden vs CV19 deaths:

Will be looking into Miller's book as a shelf reference.