Speaking too soon again

From Vox Day’s blog A reckoning is here

Once again, Vox is predicting crisis and reckoning where none exists. He predicted in 2018-2019 that there would be arrests and that the dems are in ‘full panic’ mode due to Trump purportedly draining the swamp. As it turned out, there were major arrests, those being Roger Stone and also Michael Avenatti. The former was one of Trump’s early supporters, so a win for the left. The arrest of Avenatti was not attributable to any swamp draining but rather due to a botched attempt at extorting Nike, as well as just being a scummy human who defrauded his clients. Him being opposed to Trump was just a coincidence. We have yet to see any arrests or indictments of major democratic politicians under Trump, nor the dissolution or even setback of major left-wing institutions or businesses. College attendance is still very high, and tuition keeps going up. The wage premium between grads and non-grads is wider than ever. Vox, New York Times, and Vice, despite losing money, keep chugging along. Silicon Valley social networks, platforms, and payment processors keep shutting-down and demonetizing accounts with impunity. Harvey Weinstein was found guilty and stands to spend 29 years in jail, but that, again, had nothing to do with Trump or swamp draining, but rather a consequence of victims finally coming forward.

So regarding the above article, now Vox is crying wolf over an imaginary tech day of reckoning:

Now the layoffs have started coming in droves. Last month, robot pizza startup Zume and car-sharing company Getaround slashed more than 500 jobs. Then DNA testing company 23andMe, logistics startup Flexport, Firefox maker Mozilla and question-and-answer website Quora did their own cuts.


“It feels like a reckoning is here,” said Josh Wolfe, a venture capitalist at Lux Capital in New York.

Around the world, more than 30 startups have slashed more than 8,000 jobs over the past four months, according to a tally by The New York Times. Investments in young companies have fallen, with 2,215 startups raising money in the United States in the last three months of 2019, the fewest since late 2016, according to the National Venture Capital Association and PitchBook, which track startups.

lol 500 layoffs can hardly be considered ‘droves’. To put these figures in context, Silicon Valley employs over 400,000 people in technology. I have never even heard of Getaround , and Mozilla, 23andMe, and Quora have been treading water for years, so such cuts come as little surprise and are in no way an indictment of the health of the tech economy.

Also, layoffs are of little predictive value at the macro or micro level, both in terms of the health overall US economy and the health of the firm that is doing the layoffs. Tesla in June 2018 laid off 9% of its employees. The stock was then trading at around $300. Now it’s at $840. Companies have layoffs, not necessarily because business is doing poorly or the economy is suffering, but as a consequence of shutting-down a project or division. Or due to automation or other factors.

Layoff are just an unavoidable part of business and start-ups. Given that 90% of small businesses fail, that means there will inevitably be a lot of layoffs. Everyday, businesses shut down, lay off employees, and then new businesses are created that then hire employees. Obviously, if you just focus on the businesses that are laying off employees, then things will seem worse than they are. The net inflow vs. outflow is captured by the monthly Bureau of Labor Statistics monthly non-farm payroll data.

The world is not like a Bible story in which good triumphs over evil. There is no assurance of reckoning for the wicked and evil. They just keep doing what they do until they are stopped or lose interest.