employment is declining…

The Bureau of Labor Statistics compiles a monthly account of the state of employment in the US.

President Trump fired the former head of the BLS, apparently because the first report after the imposition of tariffs showed the initial negative effects on domestic growth of his economic policies. The first report under her successor came out last week. It showed further economic deterioration, which is, again, what one would expect to have seen. No firing as of this writing, though.

…at the same time…

ICE is shrinking the workforce…

This is coming both by seizing and deporting workers (mostly, it appears, people of Hispanic heritage) and discouraging new arrivals through the intentionally cruel way in which this is being done (with masked, armed men acting violently).

the odd synergy

The negative effect of tariffs on economic growth is resulting in declining employment. But ICE is simultaneously shrinking the size of the workforce, making the loss of employment opportunities less obvious. And any shantytown communities of jobless workers will be in some other country.

I have no idea whether the erasure of workers is intended to obscure the extent of any future decline in US economic activity. But I think that, intended or not, this will be the case. If so, the best stock market strategy will be, I think, continuing with the idea of having costs in $US and located in the US with a substantial chunk of revenues elsewhere.

I’ve also been thinking over the past few months that this idea has worked so well, and has also become enough of the consensus, that I should diversify my portfolio to include two other areas: Chinese “entrepreneurial” stocks, especially tech, and value stocks in the US. I’ve already done a significant amount of shifting.

I think the former is still a good idea. The latter group has, arguably, three virtues: foreign revenues, valuable brand names and you-can’t-fall-off-the-floor valuations. Plus, there’s always the possibility that a foreign acquirer, spurred on by the sharp decline in the world value of the dollar since the inauguration, might pounce. I’ve begun to think, however–maybe reading the Financial Times too much–what happens if the vote for Trump is our equivalent of the UK vote for Brexit. If so, the floor could be a couple of stories lower than I’ve thought. This is by no means my base case, but at least worth thinking about.