We have so given up on so many other parts of the government, and we only stress the Fed because of the dysfunction in Washington.
It's unfair, because in the halls of the boardrooms it's not the Fed that they discuss. It's the technological change that is happening in front of us and how it wipes out clerical jobs, and it is the industrial change in front of us and how it destroys industrial jobs.
The Fed matters plenty to the stock market. If they take rates up, we see the move into the bank stocks and out of the utilities. Just the talk of rates going higher drives the banks up.
We push out the possibility of a rate change, and the money pours into the companies with decent yields, and the banks lose whatever little momentum they have.
But the Fed doesn't control what's happening in the real economy as much as it used to, because of innovation and job exports.
The politicization of all things export makes it difficult to talk about. But you have to keep coming back to that carrier plant in Indiana, the one that United Technologies (UTX) is closing and moving the jobs to Mexico.
On the one hand, no one in this country, certainly no politician, wants to see those jobs exported. But on the other hand most politicians from both parties wanted NAFTA, which allows those same Carrier products to be made by workers for $3 an hour with no pollution control, no pension payments, little or no absenteeism and no health care costs.
I would think that CEO Greg Hayes, who wants very much for the costs of production for United Technologies' Carrier division to come down, would be crazy not to close that factory. I will go a step further, given that I am hosting a corporate governance conference today for TheStreet's sister publication The Deal, it would not shock me for an activist to come after Hayes if he didn't do these kinds of things.
As long as they are legal if not downright encouraged by policymakers, what's the point of building anything here? Remember, Kansas City Southern (KSU) and Union Pacific (UNP) can ship from there to here just as easily as from Indiana to wherever. There's simply no barrier to making the change and no economic reason not to. Our workers do not hold that much of an edge, especially with an increasingly well-educated Mexican labor force and an increasingly weak currency owing to the oil-based nature of the growth portion of Mexico's economy.
The Fed has nothing to do with that; but the Fed never talks about it, it is only Sanders and Trump that do. Who can blame them, but unless they repeal NAFTA, it's all a lot of hot air.
Now, the other issue, technology, is a simple matter. Just look at your iPhone. Look at your apps. Look at how many different industries have been displaced by your apps. All of retail is jeopardized by technology.
Much of clerical is jeopardized by it: bricks-and-mortar jobs from online banking; shopping at stores from online shopping, newspaper production from online periodicals, taxi drivers, rental car clerks and even the motors companies themselves from online driver services like Uber, companies that make physical calendars and reminders and the little stores that cater to them, photographers, journalists, doctors, travel agents, real estate people, personal computer-related jobs, I could go on and on.
This kind of employment is going away at lightning speed, perhaps even fast enough to appear in the weaker employment numbers. These are productivity increases, and they don't get reflected straight out in the numbers. We just hear about Growth Seeker portfolio holding Amazon.com (AMZN) over and over.
In fact, the real anomaly is: why haven't wages nationally gone up, given all of the minimum wage moves that have been made? I think it is because that involuntary job loss includes jobs taken away by employers who can't afford to pay the minimum and have, instead, gone to part-time shifts that can easily be set up via the Web, just like you can summon an Uber driver.
So we can stay Fed-centric. We can continue to hammer out concerns over half of a percent or even a percent. All it can do, though, without gigantic infrastructure projects to put people to work, is make things worse by spiking the dollar and making new jobs less likely.
It is pathetic to see articles about how companies are doing buybacks and dividends instead of investing in growth because of the Fed. I don't know a soul in business who doesn't want to expand their business. But I also know that with the exception of some tech and health care companies, there's not much to be gained by spending the money otherwise when it comes to growth.
Those are just stories put out, again, by those who think it is all one big, rate-centric debate.
It's about structural change in industry and in white-collar jobs and where to put these people after they are fired, downsized and digitized, and so far I haven't heard any answers except re-training, and I come back and say, re-training with what money? Who has it?