Every music single released has a “B” side – in the physical format of the 45s, there is a recording space on the back of the recorded vinyl single. Most are unremarkable, one-offs that just fill up the space before disappearing. But that’s not always the case: some B-sides have achieved greatness, matching or exceeding A-side hits: The Beatles’ “Hello Goodbye” with the more important “I Am the Walrus” as B-side; The The Beach Boys’ “Wouldn’t It Be Nice” features “God Only Knows” on the back, a song that has stood the test of time; “You Can’t Always Get What You Want” is the Rolling Stones “Honky Tonk Women” B-side; Queen’s “We Are the Champions” B-side is the stage rock hit “We Will Rock You”.

There is another side to data analysis: just like music, the B-side is usually not important. But not always; these anomalies can lead to significant errors, as sometimes complementing events, data points, or problems may be hidden variables that resolve confounding.

Side A is usually immediately reflected in the price, but Side B can represent unrealized value. This is as true in economic analysis as it is in economic analysis invest.

Consider recent concerns Wages soar, especially for the bottom half of salaried employees. (literally) the bottom half of the payroll has seen their wage lag Relative to almost every measure – corporate profits, productivity, inflation, executive compensation. This is especially evident among entry-level employees earning minimum wages. Yet in the 1980s, 1990s, or 2000s, you didn’t see much written about how this low-wage suppression led to deflation. It’s just that economists don’t mention it. This is part of the cost structure of Party B at low prices, cheap goods.

Wages have risen sharply over the past two years and people are panicking about inflation. But to make such a claim, you have to ignore the reality that decades of wage lag has resulted in a much lower quality of life in half the country, creating dissatisfaction, unhappiness, and even crime. The most important thing is the low price.

cheap, as we discussed before, can be expensive.

One yang and one yin, one yang and one yin. This seems to be widely ignored in life. Most of our decisions involve a series of trade-offs that we can lightly take for granted. Even if we are completely unaware of this nuance, we accept some negatives for every positive.

When people discuss how great the poor of today are compared to the kings of the past, you must wonder how bad the poor of the future will be compared to the top 10%.When we discuss the importance of rescue failed company from their own stupidityyou have to consider counterfactual There is no place for rescue. The outperformance of growth stocks over the past decade has meant the underperformance of value stocks. It’s been a couple of quarters for value stocks lately — wondering which stocks cost?

Maybe you’re nervous about soaring inflation? Another option is to have unemployment in the 7-10% range during the pandemic. Worried about the balance sheet the Fed maintained after the global financial crisis? Think how much GDP will fall over the next 14 years.massive fiscal stimulus CARES Act Caused inflation? Consider all the possible personal defaults, bankruptcy and even suicide.

Historically, residential real estate has followed an economic trajectory, with house prices rising as people find jobs and see wages rise. But in the mid-2000s, the combination of ultra-low interest rates and new mortgages created an environment in which real estate led the economy. If you miss this, you miss the signs of an impending crisis.

Every success hides countless failures; survivorship bias changes the way you see the world.

The spike in low-end wages over the past two years is my favorite example.I blame corporate lobbyists and congressional bids Failure to raise the minimum wage commensurate with other economic factors that support this. The market eventually forces wages to their current levels, but market forces can be volatile and disruptive. Instead, we came here in an unruly and disorderly process. Another option is a gradual, smoother increase, which will absorb more easily and reduce dislocation and pain along the way.

If you bother to find them, there are neglected B-sides everywhere. Much of this is not yet reflected in the price…

Before:
real wages (November 22, 2021)

Change the balance of power? (16 April 2021)

intangible assets (21 October 2020)

The long-awaited raise has arrived (January 14, 2019)

All hail the counterfactual! (November 12, 2018)

John D. Rockefeller was richer than you – richer than you… (22 February 2016)

What is wealth? (22 May 2004)

counterfactual