A self-licking ice cream cone

Palantir accidentally demonstrated that VC is in worse shape than anyone seems to think, but our general lack of productivity means good(ish) times are right around the corner . . . maybe?

There’s a massive embedded risk in the VC ecosystem that’s hiding in plain sight, but you must first brave a wall of text to find it. Before you get there, check in on the ongoing “more with less” saga, which inexplicably seems to be going just fine, for now at least.

Things we think

We’ve got a lot to do, so let’s try to get a little less done

Random Walk keeps a close eye on how much we’re working, how much work we need, and how much we’re getting paid. In the long-run, we seem (unreasonably) committed to doing more with less, without any clear (or unclear) plan for making that happen. In the short-run, we need to do just enough without expecting all that much because if we start paying ourselves too much then central bankers will punish us (which will hamper our ability to solve our “more with less” problem, among other things).

The wrinkle in all of this is that the fewer workers we seem to have, the harder it will be to do even “just enough” without paying ourselves “too much”—especially as we try to “do more” by reshoring and the like. It’s a pickle.

Plenty of “good” bad news

The near-term “good” news is that there are plenty of signs of a slowdown that’s neither too hot nor too cold. The WSJ noted that manufacturing workers are still working (and making a higher hourly wage), albeit fewer hours and less overtime—that solves the “less” half of the “more with less” equation:¹

Wage growth is also slowing:

Manufacturing contracted, but not as much as it did last month:

Shipping rates are beginning to normalize (although I suspect that some of this is Zero Covid—blue and red—and energy shipments to Europe—the still elevated green):

. . . and well pretty much every other productivity indicator (except construction spend) is somewhat overcast, but not a downpour:

That folks are working, albeit somewhat less—and unemployment and continuing jobless claims remain historically low, even as the job market continues to contract²—is precisely the fine line that needs walking. The question is do we have enough fine-line walking boots to keep this up . . .