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For roughly the last 15 years the Fed’s reckless “easy money”
zero interest rate policy (ZIRP) has encouraged more than just gratuitous
speculation in assets like stocks, cryptos and housing.
In undermining our sense of the value of “money” by encouraging
imprudent uses of artificially cheap debt and discouraging thoughtful uses of real
earned productive capital, the Fed has warped and distorted our entire economic
system thereby creating the “Everything
Bubble”.
But this “Everything Bubble” is NOT constrained to just obviously
absurd examples of strictly financial anomalies like high flying speculative
assets or the seriously distorted and sorry state of public finance; “Everything”
truly refers to EVERYTHING.
Over this historically anomalous period, the Fed’s “easy
money” worked to “zombify” firms, households and institutions alike creating a
massive mis-allocation of resources across the entire spectrum of decisions
rendered by all free market actors including those decision related to business
investment, household formation, higher education, career planning, campaign finance
and ultimately our culture.
It should come as no surprise that while we are witnessing
the most historic crescendo in financial markets, we are simultaneously experiencing
some of the most outlandish human excesses in our social, political and cultural
spheres as over a decade of massive mal-investments in people’s time, attention
and resources has materialized as a truly distorted society with ideals aligned
with fantasy and delusion.
Fortunately, as goes this financial crescendo so will go all
of these excesses too as our economic trends revert to the mean and a harsh reality
bears down on humanity forcing a “rightsizing” of sorts on everyone and
everything.
For example, the recent “rightsizing” of Twitter by Elon
Musk’s aggressive management actions, while still a work in progress, may be a
real harbinger of things to come for software tech and technology industry employment
in general.
To say that the technology space is bloated is a serious understatement
as many years of mal-investment have manifested in epic excesses not the least
of which are employment levels that are well over what is truly required for
the fundamental viability of individual projects, services, firms and the
industry as a whole.
An over-emphasis on the value of STEM disciplines was made
possible by loose financing of higher education coupled with the simplistic notion
that all students should be funneled into highly technical fields where
prosperity was virtually guaranteed.
The problem, of course, is that while many young people may superficially
display the capacity for STEM education, there is no guarantee that these
fields will be correct for these people’s long-term career viability.
Stated simply, no matter how you encourage education and
training in technical fields, probably no more than a few percent of the workforce
will ever truly be able to make an entire 40 year career out of highly
technical disciplines like physics, scientific research and electrical and
software engineering.
That’s not to say that it is wrong to encourage technical
and scientific education but only that ultimately all of our educational goals
should be aligned with the fundamental workforce demands brought about by a reality-based
highly competitive modern economy and NOT the grossly speculative “easy money” debt-fueled
period we have all just lived through.
Further still, more recent innovations in technical project
management techniques (namely, “agile development”, a full description of the
pros/cons of this technology management process would be far too lengthy for
this discussion) have allowed significant staff and process bloat where there
is an over-emphasize human “storytelling” foibles, a lack of scrutiny of actual
hours worked (particularly for remote staff) and ultimately and under achievement
of true reality-based accomplished work.
To “rightsize” the technology industry, executives will have
to follow Musk’s lead and drastically reform their operations with major
layoffs, the implementation of management techniques that verify commitment and
real work performed, and a significant curtailing of many of the superfluous
luxuries tech workers have grown to expect over the last decade.
As we leave the delusional “Everything Bubble” years far
behind, getting “back to basics” will be difficult but ultimately a healthy
trend towards a reality-based future.
