The Buy Nothing Movement
The rise of inflation and the unease over climate change are fueling the growth of groups designed to help people share goods rather than buy them.
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Here are today’s highlights:
Is pet cloning the next step in the pandemic puppy craze?
Retirees are starting to return to the workforce.
Job growth has been much stronger than we thought.
Mark Zandi says inflation is a real but overblown issue.
PROFILES
Here’s how a popular commercial bakery in Florida is trying to cope with a whole range of supply problems: “For months, supply chain issues and labor shortages have been putting the squeeze on Mike’s Pies, a popular commercial bakery here that’s been selling pies based off owner Mike Martin’s mother’s recipes for three decades. But another powerful factor — climate change — is heightening those challenges. Its impact is less visible but more enduring, and its consequences are playing out right as the food industry is struggling to avoid holiday season shortages.”
“Many of the ingredients in Mike’s Pies’ pies — wheat, berries, honey, soybean oil, among numerous others — have been hit hard by climate and weather effects, including droughts, wildfires and power shutdowns around the world.”
“That’s sending prices soaring and, combined with a scarcity of workers and other hurdles, is causing mayhem throughout the global food supply chain. ‘We are cutting every order that we ship; we can’t fulfill the obligations,’ Martin said.”
“Economists broadly expect that the labor and supply chain disruptions should work themselves out as the pandemic fades, but they say climate and weather impacts will remain major threats to food and a growing number of other industries.” READ MORE
A Texas company is capitalizing on the pet craze by trying to take pet cloning mainstream: “This is no regular horse farm, and Blake Russell is no regular horse farmer. Russell is the president of ViaGen Pets & Equine, a prolific commercial animal cloning facility. The company primarily clones cats, dogs, and horses, though it has also cloned pigs, cows, and sheep. More recently, ViaGen started applying its technology to conservation efforts, cloning an endangered Przewalski’s horse, Kurt, for the San Diego Zoo Wildlife Alliance, and an endangered black-footed ferret named Elizabeth Ann for the U.S. Fish and Wildlife Service.”
“You name it, ViaGen can clone it for you—just as long as ‘it’ is a non-primate mammal and ‘you’ are someone with tens of thousands of dollars to spare.”
“Replicating your beloved Pomeranian will set you back $50,000; cloning a horse costs $85,000. Cats are a steal at $35,000.”
“Russell said the cat side of the business hasn’t taken off the way the other two have, though. He’s not sure why but offered, ‘Cat people and dog people are very different.’” READ MORE
HUMAN RESOURCES
Retirees are starting to return to the workforce: “Early retirements among older Americans were among the many labor distortions related to the Covid-19 pandemic, according to economists, as health risks and other factors led many to leave their jobs. But there’s an open question: Are these retirements permanent, or will these workers rejoin the labor force? The answer could have big implications for the U.S. economy and even the finances of everyday Americans, at a time when overall labor force participation has remained stubbornly low.”
“In October 2021, the unretirement rate was 2.6 percent, above the 2.5 percent rate for September and 2.4 percent in August, Bunker found.”
“Of the people who’d reported being retired in 2020, this rate measures the percentage who said they were employed 12 months later.”
“Even seemingly small upward shifts in that rate can have a meaningful impact since it applies across a huge swath of people, according to Aaron Sojourner, a labor economist and associate professor at the University of Minnesota.” READ MORE
The Great Resignation is spurring interest in a four-day work week: “American workers are quitting in record numbers — 4.3 million in August, and another 4.4 million in September. Managers across industries are having trouble hiring, even as they raise wages and offer incentives. But a new survey offers support for a not-so-radical but still uncommon solution: The four-day workweek. Researchers for financial firm Jefferies asked young Americans (ages 22 to 35) who had quit their jobs recently what their former bosses could have done to persuade them to stay. Thirty-two percent said they would have stayed if they'd been offered a four-day work week. That was the second most-common answer, right behind the 43 percent who would have stayed for more money.”
“The study also found 80 percent of respondents support a four-day workweek. As for the remaining 20 percent: Only 3 percent said they were against a shorter week, and 17 percent were ‘neutral.’”
“When Microsoft tried a shorter workweek in Japan in 2019, it found productivity went up by almost 40 percent.” READ MORE
THE ECONOMY
Economist Mark Zandi says concern about inflation is understandable but overdone: “Consider that inflation is up in part because businesses that suffered a direct hit from the pandemic, such as clothing stores, hotels, rental car companies and restaurants, are simply restoring prices they slashed earlier in the pandemic to survive. This is a one-time adjustment in their prices.”
“The higher inflation is also the result of businesses only slowly increasing production in response to recovering demand. This isn't unusual coming out of a recession. Businesses are unsure whether the stronger demand has staying power and are cautious about ramping up production.”
“And it takes some doing to get shuttered factories, oil rigs and hotels back up and running. But if history is a guide, the higher prices will convince consumers to buy less of what costs more and convince businesses to increase production given how much money can be made at these higher prices.”
“Frictions that slow supply catching up with demand ease, and inflation moderates.” READ MORE
The government has been underestimating job growth by quite a bit: “In the most recent four months with revisions, June through September, the Bureau of Labor Statistics reported it underestimated job growth by a cumulative 626,000 jobs — that’s the largest underestimate of any other comparable period, going back to 1979. If those revisions were themselves a jobs report, they’d be an absolute blockbuster. In an average month before the pandemic, estimates would be revised by a little over 30,000 jobs, or just 0.02 percent of all the jobs in the United States. The recent revisions to the jobs reports have been much larger.”
“In August, when economists expected a strong follow-up to the 943,000 jobs the economy added in July, the BLS announced the U.S. added only 235,000 jobs. Headlines dubbed it a ‘colossal miss’ as job growth took a ‘giant step back.’”
“Two months later, revisions based on additional data showed August jobs grew by 483,000, more than double the anemic original reading. It was the biggest positive revision in almost four decades.” READ MORE
MANUFACTURING
Cities are competing to become hubs of computer-chip manufacturing: “One of those towns is Taylor, a Texas city of about 17,000 about a 40-minute drive northeast of Austin. Leaders here are pulling out all the stops to get a $17 billion Samsung plant that the company plans to build in the United States starting early next year. The city, its school district and the county plan to offer Samsung hundreds of millions of dollars in financial incentives, including tax rebates. The community also has arranged for water to be piped in from an adjacent county to be used by the plant.”
“But Taylor is not alone. Officials in Arizona and in Genesee County in upstate New York are also trying to woo the company. So, too, are politicians in nearby Travis County, home to Austin, where Samsung already has a plant.”
“The Senate passed a bill to provide chip makers $52 billion in subsidies this year, a plan supported by the Biden administration that would be Washington’s biggest investment in industrial policy in decades. The House has yet to consider it.”
“‘Something like this can be a shot in the arm,’ said Ian Davis, the chief executive of Texas Beer Company, which opened a taproom in downtown Taylor five years ago.” READ MORE
TRENDS
Concern about waste and inflation are fueling a rise in “buy nothing” groups: “With inflation hitting a 31-year high and supply-chain issues making it difficult for people to get the goods they want on time, some have found an answer in online groups where members give things away free. Such groups have risen in popularity in recent months, and one effort known as the Buy Nothing Project hit 4.27 million members as of August. Members post items to give away or lend, or post for items they are seeking. Items in Buy Nothing groups range from food to furniture to, in at least one case, hair clippings.”
Liesl Clark, a co-founder of one of the biggest online gifting groups, says she expects membership to hit five million next year. Other informal gifting groups between friends and neighbors have existed online and off for years.”
“Ms. Clark and Rebecca Rockefeller, residents of Bainbridge Island, Wash., started the Buy Nothing Project in 2013 out of concern over the amount of waste households create and a desire to reduce the environmental harm caused by the plastics they throw out.”
“The group added two million members between March 2020 and October 2021, and there are nearly 7,000 Buy Nothing communities world-wide in about 44 countries.” READ MORE
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VENTURE CAPITAL
The climate crisis is changing the way L.A. venture capitalists invest: “Many leading venture capitalists in Los Angeles say they've altered their investment strategy because of climate change, and some are responding to the crisis by pouring more cash into clean-tech startups. A majority, or 60 percent, of the more than two dozen investors polled by dot.LA said climate change is affecting how they invest. The trend is fueling a record-setting year for the sector, as investors put billions behind Southern California-based companies such as electric vehicle maker Rivian and home energy storage firm Swell.”
“Most of the venture capitalists polled said the climate crisis has prompted them to fund more clean-tech startups. One investor noted they were on the lookout for ‘more novel solutions to these problems.’” READ MORE
INTERNATIONAL
It’s not just here. Inflation in the UK has hit a 10-year high: “The biggest contributor to higher inflation was a surge in energy costs, including wholesale natural gas, which has caused nearly two dozen energy suppliers in Britain to collapse and disrupted manufacturers. The cap on energy bills, which protects about 15 million households, was raised 12 percent in October. Other large contributors were higher prices for gasoline and at hotels and restaurants, the statistics agency said.”
“The Consumer Price Index rose 4.2 percent from a year earlier, the highest since November 2011, and up from 3.1 percent in September, the Office for National Statistics said on Wednesday.” READ MORE
Covid is surging in Europe: “As Europe finds itself at the center of the Covid-19 pandemic once again, experts say it should serve as a warning to the U.S. and other countries about the coronavirus’s unremitting nature. Case numbers have soared across the continent — more than 50 percent last month — and the worrying trend has continued this month as winter begins to bite.”
“The WHO said Friday that nearly 2 million cases were reported across Europe in the previous week — the most the region has had in a single week since the pandemic began.”
“‘It’s not due to lack of vaccines,’ he said, noting that the joint procurement of vaccines at the European Union level meant all 27 member states ‘were able to buy equivalent quantities of vaccines.’”
"’Despite having access to vaccines, those countries did not manage to convince their population to get vaccinated,’ he said.” READ MORE
THE 21 HATS PODCAST
It’s Bonus Season. Are You Feeling Generous? This week, Paul Downs, Jay Goltz, and Laura Zander talk about the bonuses they plan to pay this year—and how their bonus plans and philosophies have evolved over time: Are the payments a reward for company performance? Are they a reward for personal performance? Are they supposed to motivate? Or are they just a thank you? Then the owners talk management, a discussion inspired by last week’s episode with Dana White about navigating the space between being a pushover and being a jerk. Plus: Are 360 reviews good management or are they kind of creepy?
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