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I’ve always been jealous of the sort of successful writer who can afford to design and build their optimal space for writing. But I’ve also read critiques of the idea: A real writer can write anywhere.

So I’m glad to see Cal Newport pointing out that “can write” might be true, and yet fall short:

“Putting professors into stark and spacious modern offices is functional. But is it as conducive to deep thought as the fire-warmed study of the Oxford Don?”

Source: On Vampires and Method Writing – Cal Newport

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All through the 1990s I was waiting for the labor market to punish employers for their (then new) strategy of laying people off as soon as there was 15 minutes with no work to do, intending to hire them back (or hire somebody else) as soon as they had work again.

Capital markets forced employers to go that route. Any company that tried to resist—keeping on employees beyond the bare minimum—would see its stock price fall so much that it would be taken over in a leveraged buyout, and then the new owner would cut staff to the bone.

As I wrote for Wise Bread back in the day (in What’s an employee to do), it made me sad to watch. Surely, I thought, eventually the labor market would tighten up, and employers who had kept their employees on through a rough patch would have an advantage over employers who had to go out and recruit, hire, and train new employees.

But it never happened. Until, according to a recent article in the New York Times, now: Companies hording workers could be good news for the economy.

It’s a pretty good article.

Employers traumatized by not being able to hire enough people may not be quite so quick to lay them off:

“When the job market slows, employers will have recent, firsthand memories of how expensive it can be to recruit, and train, workers. Many employers may enter the slowdown still severely understaffed, particularly in industries like leisure and hospitality that have struggled to hire and retain workers since the start of the pandemic. Those factors may make them less likely to institute layoffs.”

Jeanna Smialek and Sydney Ember https://www.nytimes.com/2022/10/12/business/economy/companies-hoarding-workers.html

And, if employers do keep workers on as the economy slows, it will help the U.S. economy. As Federal Reserve Board Vice Chair Lael Brainard says:

“Slowing aggregate demand will lead to a smaller increase in unemployment than we have seen in previous recessions.”

https://www.federalreserve.gov/newsevents/speech/brainard20220907a.htm

Perhaps even more important than those things, it will make me happy.

After three decades in which the market was reinforcing exactly the wrong behavior, now maybe it will encourage the right behavior.

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Assets are called “safe” when they’re free of default risk. But that doesn’t mean their prices can’t drop, or that the financial system is safe if systemically important institutions buy them on margin.

What appears to be a liquidity issue will ultimately become a financial stability issue as investors discover their “safe assets” are not safe.

Source: Solvency Constraints – Fed Guy