re: Fed Chair Powell: “economy leaning too hard on the rich”

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AI is already taking lower-level jobs

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link?

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My nephew graduated from high school in 2024 and is a welder. He makes $23 per hour. He works a lot of overtime and with overtime he will make abot $70k. He said with a couple more years experience he will get paid over $30 per hour.

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I got a friend's kid, who is a college student, a job at a retail store: $20 per hour plus commission. She will probably get 45k or so this year alternating part time and full time.

There's money to be made, people are stupid and lazy. Mainly lazy.

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My nephew graduated from high school in 2024 and is a welder. He makes $23 per hour. He works a lot of overtime and with overtime he will make abot $70k. He said with a couple more years experience he will get paid over $30 per hour.

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Teenager making $70k is impressive.
How many 20-somethings can say this, let alone a teenager.

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Hard to have a lot of growth when the fed is artificially keeping rates high.

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Homes are unaffordable precisely because rates were kept so low for so long.

Rates need to go even higher and stay there for decades.

Is he in the baton rouge area and is he a combo welder?

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Companies care more about the bottom line than they do work product.

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Yes, until quality hurts sales. This is why competition is essential. Monopolies/limited source providers don’t have to be overly concerned about quality if consumers have no options.
In the race for efficiency we may have cut ourt redundancy too much.
Look at cell phones. Innovation and quality are huge drivers. If there was only one company would probably be stuck with 3rd gen iPhone and zero chip innovations.

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$51,000 is not good money in today's world.

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I'm not sure where BLS get their stats but I find they are no where close to being accurate. It also says median Mechanical Engineer is $100K which is probably closer to starting salary out of college vs what most ME's make.

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Hard to have a lot of growth when the fed is artificially keeping rates high.

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Rates are being kept high to fight inflation. We're already at 2.9% after having seen inflation grow since May's 2.4%. This cut is going to raise inflation more than it helps GDP growth, which will end up hurting GDP growth in the longer term.

Understand this: we aren't getting out of this high-inflation scenario without a recession. Jerry's talk of a "soft landing" has always been as much of a pipe dream as his talk of post-COVID inflation being "transitory". You can't frick over your supply chain and your money supply (M2) like we saw during COVID without serious problems. By "serious problems" I mean a recession. This becomes even more problematic when you factor in that consumers have continued to run up nearly a trillion in new debt each year in order to avoid having to change their lifestyles.

Cutting rates by .5 last year, brought inflation back up to 3% within months. We're already at 2.9% inflation so it's not out of the realm to estimate that we'll be over 3% by the end of the year. That sort of inflation hampers growth in the longer term.

Rates are raised or lowered based on inflation and unemployment, with debt servicing being a distant 3rd. We're in an inflationary growth period, a slowly increasing unemployment environment and a somewhat steady GDP environment.

Cutting rates pushes more money into the economy (remember, inflation is the result of too much money chasing too few goods). While that may spur some growth, it's not going to be enough to outweigh the (3% or more) growth in inflation nor stem the tide of unemployment's slow march upward.

Stagflation is a scenario where inflation is rising, unemployment is high and GDP growth is stagnant. Cutting rates in our current environment is more likely to fuel our trek towards stagflation than anything else. Stagflation in our current environment will absolutely lead to a recession.

Meanwhile, if rates had been held last year we likely would either already be in a recession or coming out of it. In other words, cutting rates is just dragging out the pain to add a stagflation period to the eventual recession.

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I'm not sure where BLS get their stats but I find they are no where close to being accurate.

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Correct. Theyre usually low.

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I pulled my son out his MBA program and told him I’m only paying for welding school going forward

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He is future self may have just flipped:

FROM: owning equity / leadership of company or companies whereby welding is core to its value chain (earning potential from many welders’ efforts)

TO: a welder’s life and salary ceiling

You know your son better than anyone on a family decision such as this. His interests/skills/talents matter most.

I have a son in college now. My advice to him is ownership / equity ceiling is MUCH higher than employment ceilings.

College in large part is about getting larger perspective. In context of MBA or not, it is to learn how to create enterprises that create value across (employee talent, entities, markets, sales channels, etc). Education is about unlocking one’s potential. You only get one life. Go big!