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