Speaker 1: Bloomberg Audio Studios, podcasts, radio news, single best idea and
Speaker 1: what's so interesting about the guests, from guests to guests
Speaker 1: to guests is to pay attention to their lineage, their background,
Speaker 1: how they became notorious or famous or both. Today is
Speaker 1: a tour de force. It is two moments with James Glassman.
Speaker 1: First of all, there's two James Glassman. It's wicked confusing.
Speaker 1: There's James Glassman, wonderful academic on Dow thirty six thousand
Speaker 1: and the uproar years ago with a wonderful book. This
Speaker 1: is a different Jim Blassman. This is Jim Glassman, who
Speaker 1: was legendary at JP Morgan. Like a lot of retired economists,
Speaker 1: he's like pseudo fake retired. He delivered a forty nine
Speaker 1: page power point for his retired interview. But Jim Glassman
Speaker 1: today and the first idea here is really important. Doctor
Speaker 1: Glassman came out of Northwestern in the Crucible the Combine
Speaker 1: of freshwater economics with Robert Gordon. He's always at a huge,
Speaker 1: huge respect for what we can't see in the labor market.
Speaker 1: Here is Jim Glassman on your twenty twenty six, two
Speaker 1: thousand and thirty Technology you would.
Speaker 2: Think that if labor markets are so tight and you
Speaker 2: got people retiring, and you would think the wind would
Speaker 2: be at the back of the labor sector. But in fact,
Speaker 2: the share of income going to them has come down
Speaker 2: from before the pandemic and really has been coming down
Speaker 2: for the last twenty five years. And I think that
Speaker 2: tells you something really important about the dynamic that's playing out.
Speaker 2: It's all about technology and the changes in the US economy,
Speaker 2: and it exposes a real weakness in the thought process
Speaker 2: in the economics community about the role of labor. We
Speaker 2: sort of came out of school with this idea that
Speaker 2: if labor markets are tight, that can be inflationary. But
Speaker 2: when you see what's going on and you think about
Speaker 2: all the changes going on in the economy, how competitive
Speaker 2: it's become, what's going on with technology, it's becoming more
Speaker 2: clear to me that we got this story backwards. It's
Speaker 2: really wages don't drive prices. It's more that prices are
Speaker 2: driving wages. And that picture tells you that if you're
Speaker 2: worried about tight labor markets, tight labor markets are not
Speaker 2: inflationary if the share of the pie going to workers
Speaker 2: is not really down.
Speaker 1: Textbook Jim Glessman can't say enough about that in the
Speaker 1: opposite there if you will, the price theory or the
Speaker 1: microeconomics the dynamics of labor. Is it rising wages affect
Speaker 1: prices or is it rising prices affect wages. It's just
Speaker 1: some food for thought. You can pick up any labor
Speaker 1: economics textbook and your eyes will glaze over by page
Speaker 1: twenty five over the ambiguities in the dynamics of each
Speaker 1: part of the of the labor economy. It speaks to
Speaker 1: what Mike McKee does every day. Don't take for granted
Speaker 1: the complexity that Mike McKee has to deal with in
Speaker 1: driving all of our labor force coverage. Here now is
Speaker 1: short and sweet. Jim Glassman on the Fed.
Speaker 2: None of us really know where the neutral rate of
Speaker 2: the Fed funds rate is. My guess is it's around
Speaker 2: the terminal rates, around three percent. If you ask both
Speaker 2: Fed people, I'll bet most of them will tell you
Speaker 2: that's where we should be in the long run. Now
Speaker 2: that this inflation scare has really kind of disappeared, and
Speaker 2: when you get the kind of data we're getting, it
Speaker 2: tells you there's no big rush to get there. But
Speaker 2: the really The debate about the FED is not about
Speaker 2: today's economy or today's labor market. It's about where do
Speaker 2: you think they should be in the long run if
Speaker 2: they don't want to do trouble for the economy.
Speaker 1: Jim Glassman formerly with JP Moore, just a tour to
Speaker 1: force effort by him today on this odd labor economy.
Speaker 1: And we make note the ginormous number with the revisions
Speaker 1: that we saw on Friday, and now it's shifted here,
Speaker 1: we'll shift into this week. The other part this week
Speaker 1: will be earnings with JP Morgan on Friday. It'll be
Speaker 1: good to hear Lisa Abramo. It's with James Diamond. I
Speaker 1: believe we do that tomorrow. We're out on YouTube. Subscribe
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