Traditional thinking considers the impact of societal conditions on the economy. High rates of drug use, crime, incarceration & divorce leads to a weak economy. Right? What if it is the other way around, and a weak economy is the primary driver of societal ills? In other words, maybe we should consider that productively employed people are too busy to become problematic. Of course, not all of them, but hopefully the majority. The chart below clearly shows a low, stable unemployment rate in Switzerland which compares favorably with a high, volatile unemployment rate in Chicago. Not surprisingly, Switzerland’s incarceration rate is a fraction of the US’ rate (the highest in the world). In conclusion, the answer to a thousand problems is an abundance of job opportunities – something typically provided by small businesses as discussed in this post. Hopefully, the Fed gets this memo before it continues to target a higher unemployment rate to combat inflation driven by a shortage of things we need employed people to produce in greater quantity. Target’s recent report that it lost $400MM from theft during the first 3 quarters of 2022 should make it clear to us all that the last thing society needs are more unemployed people with nothing left to lose.
Which Came First Incarceration or Unemployment?
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