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Minyan Mailbag


We welcome the Minyan's all good!



In my view, one of the most "in-denial" elements of economic analysis is your point on the vulnerability of a service-based economy. Look at any econometric forecast of the U.S. and compare it to history. Forecasts are linear, history is messy. Forecasters hate to go out on a limb. A HUGE limb would be to acknowledge the vulnerability you cite. This will be very much an after-the-fact situation....

Consider this:

  • Service is far more mobile than manufacturing by virtue of the fact that one has no fixed assets, while the other is defined by high value fixed assets.

  • Going forward, productivity growth will hurt service employment growth much more than manufacturing. We've already killed the manufacturing jobs by moving plants to low wage countries (productivity vs. profits denial paradox....), nothing left to lose. Future productivity-driven employment cuts will come from service....

  • The competitive arena in service is defined more by innovation then by price. So, focus on margins (where everyone is) is not the primary long-term issue. Maintaining the U.S. status as the world's leading technological innovator is. There are probably more foreign born PhDs in hard science right now than U.S. Not a racist comment, just underscoring the mobility point above.

  • The culture of service-employment is very different from manufacturing. There will be, perhaps, a cultural war on entitlement vs. ability the context of an insolvent social security system (projected) and distrust of government this is not just whistling by the graveyard.

We are in a new world, a new America. This happened once before. The change from agriculture to manufacturing centric economies precipitated wholesale changes in culture, family life, finance, living, etc. Many for the better. We have entered the next big change, and at this early stage, I agree that the vulnerabilities outweigh the surprise positives.

Keep up the great work.

All the best,

Andreas Calianos
Managing Member & Proud Minyan


No positions in stocks mentioned.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at

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