Federal Reserve issues FOMC statement (May 3rd, 2023). Low Unemployment and High Federal Interest Rate

The Federal Reserve voted to increase the Federal Funds Rate from 5 to 5.25% Their goal is to get down to 2% eventually. You can read more about that within the 'Federal Reserve issues FOMC statement May 3rd, 2023'. The interest rate hike appears to be trying to slow the economy down more while not jeopardizing the banking system or industries (Its like this imperfect tool that is still dull. As our economic science develops that butter knife could become scalpel in economic policy). Is there something more to it? 

You will also find the following statements:

  -"Economic activity expanded at a modest pace in the first quarter. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated."

  -"The U.S. banking system is sound and resilient. Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain. The Committee remains highly attentive to inflation risks."

There maybe a connection between the high interest rate and the low unemployment rate. Consider, a study that indicates that when the interest fund rate decline unemployment rose. 'The Relationship Between Interest /Federal Funds Rate and Unemployment Rate in American Economy Outlooks.' The researchers state that there is statistically significant inverse relation between the Interest/Fed Rate and unemployment rate.

-"On our compute F-Test Statistics by rejecting H0 if "F" is more significant
than "Fα," the result came out TRUE that our F > Fα. This means the unemployment rate has a
statistically significant effect on the Fed funds rate at α=0.05."

I'm just trying to understand how this functions so try not to judge prematurely. If we have low unemployment and high interest rates it means the economy is running too fast. At the same point, lower interest rates should show unemployment rising. Whether that is a natural relationship or an artificial one I'm not sure at the moment. I would suppose its natural relationship not connected to the science that measures it (meaning its not just a abstraction in science.) 

Unemployment is often seen as available labor units so if we increase technology we would expand that capacity greatly. That becomes increasingly true if we are able to maintain employment through human expanding tech (versus human replacement tech.) If human capital is expanded, we might find increased labor capacity mimicking unused unemployment capacity and create downward pressure on Interest /Fed Rate (I can't imagine this would have an immediate impact but maybe 6 months down the road. Its just an imperfect idea.).

Technology improvements may just shift the productivity benchmark line through improved capacity and utilization rightward thereby maximizing the benefits of human capital based investments. The new technology and capacity is a type innovative platform shift in human capital capacity as enhanced through human advancing industrial-creative tech. Think of all the new tech and AI stuffing coming out and how that is going to expand human capacity quicker then anything we have seen before in history (These are not facts but just possibilities. 🤔)

Let us move down a possible line of logic. Investment in technology at the time when we are having a platform shift would likely be profitable and that in turn could expand human capacity if focused properly into industrial and creative capacities (The right kind of tech and not necessarily the way the tech industry is defined). New products increase labor capacity and in turn national productivity i.e. GDP growth (Its not robotics vs labor but we should thinking about technology as enhancing and expanding human labor. Thus, it keeps the human employment concerns central to design.)

The one thing many emerging market economies (increased GDP growth) have is cheaper labor costs (How modern China started growing through cheap labor). Improved technology reduces the per labor cost while still keeping the population employed and contributing to the economy. I wonder if this is what an American Renaissance could look like where market leading innovation, human capacity/capital and digital platform/infrastructure connect in a meaningful functional way? (I would have to go back through the logic and pull many different studies that theoretically connect it together. Just because they are associated wouldn't necessarily mean they are causative. See GDP Digital US, China 2030 Patent Digital Infra, Economic Value Human Capital, FDI and Human Cap, Post Covid, Start-Up DC)

Folowosele, Oluwatosin. (2020). The Relationship Between Interest /Federal Funds Rate and Unemployment Rate in American Economy Outlooks.

World Economic Forum Indicates 25% of Jobs will Disappear in 5 Years (Platform Shift)

It is encouraged to have our leadership consider the benefits of moving to a higher economic platform and I believe that to be good advice. Of course with all things, everyone wants a little something from the pie, so we will likely get into all the side arguments and that will lower our overall ability to focus on what is important. There will become a point where we become beyond the sweet spot where maximum advantage can come from proactive thinking. (Reactive on big trends is reactive management and often leads to greater loss.). 

There is this thing called freedom of speech that leaders and people use to bring forward ideas and solve problems. Some believe in it and some don't (I have seen stifling and encouraging). The reason why we have this freedom is to improve society and improve coordination. Wise use of that is to help people think beyond the obvious and our own self interest to something more important and beneficial for society (from a generation to generation perspective). 

Coming up with a reasonable economic plan makes sense. Let us consider this tree I have been barking up about human capital. Let us consider the WEF report

'Future of Jobs' (Lots of big data in this report. Methodology seems ok and its insightful for sure. Definitely worth reading.)

What we find is that there is a platform shift where new jobs will be created, old ones will be destroyed and the very nature of commerce and social life shift. Digitization and new innovative strategies that bridge the gap between the human and robotic capacities. Our world is likely to change quickly and I would like to see if the rest of our society can adapt (My theory I'm working on is about economic and social adaptivity to innovation and change.)

We are changing and we only partially see that change and it will have impact on all aspects of our society in one for or another. We can talk all day about human capital development, innovative capacity systems (i.e. innovative systems), human rights, education, research, big data (changing our narrow lens) government platforms and the like. Its just rhetoric unless we seek to meet the emerging trends and strengthen our nation.

None of that conversation is going to come to much benefit unless we have the leadership that has the capacity to think over the horizon, work with multiple stakeholders (i.e. both parties) and follow their own internal compass (Easier said then bragged about or done.). Good and wise leadership should step forward to encourage the nation to adapt. That leads me to this drivel....

'Our Two Biggest National Threats Post Afghanistan? (Decision Making and Human Capital Management'

*We will also need to discuss the importance of ensuring increased integrity of institutions as we move through these transitions. That is a very difficult thing to do sometimes because everyone has an opinion and their opinions are seen as 100% fact. Yet institutional trust is what allows these transitions to be more coordinated and manageable. Its sometimes confusing why integrity is important from a human capital level and economic growth level but let us just go with it for the moment. Let us call it the benefit of doubt. Its not the Santos Method but hey...at the end of the day you got to work with chips you have. Monkeys and Social Learning

The Power of Hate and Corruption (The Subtle Undercurrent of Right over Wrong)

In my life I have seen people do good and I have seen people do bad. However, when it comes to hate and corruption there are sometimes little to no backstops for those behaviors. Each time the power of hate and corruption gains a footing it also erodes the official system (While I can find the short term logic I cannot find the long term logic of corruption). I'm a believer in moral conscious within governance and the transcendent power of truth over falsehood. As such I oppose corruption and believe the potential for corruption should be investigated and accounted for when it occurs.

While some may not officially make changes there are always undercurrents and consequences for leaders who fail to live up to their professed values and delve into the secret arts of corruption and hate. They are not obvious reasons at first but they do grow over time through a more natural order of life and the need for a healthy society. It might very well be that the need for good social governance supersedes the short term gains of corruption (See short and long term logically failures)

The One thing Modern Voters Hate Most

These are not obvious consequences as a direct 1 for 1 relation you might find in official systems (This is why we encourage transparency, accountability and strong decision making). When there is corruption the goals are often self benefit and/or benefit a group/clan. Of course in hidden form. That benefit comes in financial or social form that takes resources away from society as a whole. Where corruption gains, the society feels a decline and struggles. If we find this to be a regular occurrence we tip the scales from growing societies to weakening societies (Let's take a good look here at what actually is patriotic on a root level).

I have talked in the past about how unchecked corruption spreads and leaks to others places and venues where it eventually creates a shadow system. While all systems have shadows the strength and power of that shadow system to function without checks and balances is a sign of the health of the entire system. Where the official system beats out the corrupt system we have health where the other wins we have illness. Its a matter of extent. That is why integrity in all our decision making is necessary.

Corruption and complexity: a scientific framework for the analysis of corruption networks

What this study indicates is that 1.) a structural analysis helps explain the interconnect nature of corruption, 2.) it is possible to measure the degeneracy of companies (I think this can be applied to any entity including governments and/or departments). 3.) hidden complexity where there is lack of information (hidden information found during an investigation), and 4.) corruption can create an emergent system (I talked in past about embedded networks). 

Corruption is a system within a system. While individuals may have corrupted souls these are called crimes but when connected to a coordinated group where public resources are used it is called corruption. When we know these things are occurring and we do not act on them we have come to accept corruption as a normal state of affairs (Many countries work off of shadow systems. i.e. bribes, social connections, religious castes, ethnic groups, corrupt courts, etc. This isn't something new. The official and shadow co-exist). If issues are repeated enough they can be called a system failure based on systemic failures and lack of capacity to correct.

No matter the type of corruption we are talking about it is incumbent on people to stand up to it and report it. Those in official positions who hear about that corruption have an obligation to investigate and determine its validity. If they fail to do that or they do that in a way that is inherently inaccurate then we have bigger issues we have to deal with as a nation and as a people. An existing system of corruption (part or whole) and no mechanism with checks and balances is not a wise place to be in any form of governance. Thus integrity is needed (It doesn't apply to any specific place or incident but a general need for integrity across all systems in any place)

As such systems function and consume resources and create masses of victims it also begins to create its own objectives (Its own objectives not stated publicly). Despite the best attempts to hide corruption people become increasingly aware, they become more disdainful of that corruption, and those institution that are engaged in corruption begin to decline in institutional trust (This is becoming more common and I encourage avoiding this as much as possible. Words into the wind). Its a natural system outside the hands of any official. The natural system exists in every society and nation. People understand falsehood on a deeper level and they know intuitively what is right and what is wrong. They begin to act in subtle ways that continues to expose that corruption and thwart that corruption for the health of all of society. There is a subtle undercurrent of power of right over wrong that those who engage in and/or support do not always factor into their prospects (any level of system). 

From a research perspective:

Sometimes you get to see two systems functioning and battling for official and unofficial dominance. We have the corrupt system (potential) and we have an official system (assumed). All types of interesting things are likely to be found in emerging corruption scandals such as who knew what, when did they know it, who acted with integrity and who shirked their responsibilities, who is protecting the public and who is harming the public, who was lying and who was telling the truth. etc, etc., etc.... If you get the rare chance of watching corruption unfold it is definitely worth learning from such situations. Sometimes societies make improvements and sometimes they just ignore it to their own detriment in the future. If I was a corruption researcher, or government official who believes in system integrity, I would be giddy about the opportunity to investigate corruption in live form. Its rare, so if an example comes along I think its beneficial to take a good look so as to improve the health and vitality of our nation through combating corruption (and indifference to corruption) in other places. The later being of fairly big concern. The difficulty our protective systems sometimes have in consistently standing up for certain central principles. Sometimes they do and sometimes they wait. That is why emerging issues tell us a lot as to who acts on their values, who is indifferent, which agencies have more integrity and which leaders walk the talk . It's a proof in pudding learning situation. Always check the assumptions. We dont know if corruption actually exists until we have the moral integrity and wisdom to stand for our shared American values and fulfill the duty to investigate. Useless philosophical drivel. Discard quickly please. Blah blah blah Soap box!

What Makes A Person Better Than Another: Hardwired for Hierarchy

Six Tuscan Poets (1569) by Giorgio Vasari

We are a social creatures and we constantly seek to find our worth to each other, to ourselves, to society. Some would say that it is built into us and others will say that it has been invented. There is research that indicates that social hierarchy may actually be hardwired into us. Somewhere deep in our brain we have the encoding that pushes our mental hardwiring to chronically compare ourselves to others. Consider, 

Human Brain Appears "Hard-Wired" for Hierarchy

I honestly don't believe you need to be a brain scientist to figure out that most animals have a pecking order and that humans also have one. Likewise, we probably could intuitively understand that there are some advantage and pleasure to winning over others. We might even go as far as to say it is based in our need for survival and pushing our species to adapt (Yes I know its way way out there!)

Throughout all of my experience and people I have met I do believe I understand what actually makes one better then another. It isn't the toys they have, the amount of friends they have, the hierarchy of their position, the accumulation of power or any such things. It has nothing to do with their religion or their professed values. It comes down to a concept called...

Character 

You can read more about that in 'Character Strengths as “Values in Action”: Linking Character Strengths With Values Theory – An Exploratory Study of the Case of Gratitude and Self-Transcendence'

Character is the defining trait that cuts across our social system. Those who have it will act with honor and integrity and those who do not have character will fall back to maintaining or pushing their social position. The quest for character or the quest for status have been a raging debate for centuries. Where the pendulum swings determines the nature and social expectations of our society.

Character still counts as a contributing factor in subjective worth, in society I will say some others are more focus on the hierarchy side of things. Micro and macro. Encouraging character above superficial social perception is important least we manage to a floor benchmark. Building a great nation needs new ideas, new inventions, new ways of doing things and that doesn't typically just come from a sliver of society. Character comes from any background but often is found in increased frequency among those who had opportunities to build it.

NOAA Status of Fish Stocks Went Up 2022 (Legends of the Lakes)

Much of the world has overfished its population. We have done so within this country as well. According to 'Status of Stocks 2022' our fisheries improved. Who knows maybe someday I will have my part-time commercial fishing boat hobby idea. :)

Jogging, Its Benefits and Amount Needed (Motivational Video)

Jogging is a great way to improve health and fitness. Jogging is cheap to do and is natural. Recently I started jogging again and am approaching the activity differently then I did in the past. Now it is about balance to maximize benefits between exercises. Some jogging, some biking, some boxing/martial arts, some surfing, some swimming,  some yoga, some walking, etc. 

Its the variety that maximizes the outcomes because each exercise uses different skills and abilities. For example, running is great for cardio, but should be balanced with yoga. Dance increased cardiovascular health, brain health, strength and range of motion and those same skills can be found in self-defense. 

One could possibly create a plan with different activities to create total body health. I'm a fitness trainer but have not used it in any real capacity. So I will share some of my thoughts and ideas if they are helpful to you. 

Try not to engage in the same activity over and over so as to ensure you are maximizing adaptation while avoiding injury. Overuse injuries are common when we get stuck on an activity and do it over and over without variety. Our bodies can become weaker and we can lose muscle tone. Mix it up. 

According to the study below jogging at my own pace for 50 minutes a week would provide me with the most return for my effort. My goal is to jog 3 x per week at 40 minutes in each session to provide the health benefits and ensure recovery time in between. The added benefit of more calories burned. I do other stuff so I don't need to focus on one thing. 

'Review Across 230,000 People Shows How Much You Need to Run to Lengthen Your Life'

60 Car Dust Cloud Crash on Illinois Highway: Maybe New Technology Can Help.

This is so sad. I do a lot of traveling and I would say that we drive too close almost all the time. I rarely drive over 60 miles an hour and I will say that without fail there is either a car or semitruck that would like to pass but instead gets within a car length or less of the back bumper. While this might be ok 99% of the time, besides coming off as an aggressive driver, it takes something like snow or dust to cause major accidents. 

Hopefully, technology will give huge warning signals when they are too close to another car going over 50 miles an hour. That might annoy people enough to stay back from each other. We pray for the victims and families of the crash. More enforcement on aggressive driving might also help. 

Pay particular attention to truck drivers who can't stop anywhere near as fast as a the cars. We would of course need to balance technology with new recruits to avoid these situations in the future. 

In my opinion, we are reinventing the old car into the EV car so let us consider these spacing and speed distances.