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Krugman: "Sticky Wages I Win, Flexible Wages You Lose"

Tyler Durden's picture




 

Submitted by Robert Murphy via Mises Canada,

The fun thing about Paul Krugman is that you often can use his own charts against him. For a recent example, consider the issue of “sticky wages.” One of the typical complaints against a hardline “the market always clears” position is to say that, for whatever reason, employers are reluctant to actually reduce nominal wage rates. Therefore - the interventionist argument goes - the normal mechanisms of market recovery to a drop in demand don’t work if the new market-clearing wage rate is lower than before. This leads to involuntary unemployment because the market is simply stuck. Therefore, we need the State to come in and run budget deficits to boost Aggregate Demand.

In a recent post, Krugman thought he laid down a trump card making this point, with the following commentary and chart:

But there’s a lot of denial out there. Recently David Glasner deconstructed a WSJ op-ed calling for a return to the gold standard, which was as out of touch as you might expect. But what got me was the approving citation of Robert Mundell from 1971 (!) declaring that the Keynesian model was irrelevant to modern economies because it assumed pessimistic expectations and rigid wages. Right: no pessimism out there these days. And no sticky wages; oh, wait:

 

Spain Nominal Wage Adjustment

 

I mean, seriously, at this point even long-time skeptics about short-run wage and price stickiness are coming around in the face of overwhelming evidence.

Now look more closely at that chart Krugman posted. In case it’s not obvious, Krugman’s point is that the distribution of wage changes in 2011/12 shows a big spike at 0%. In contrast, the changes in 07/08 looked more like a bell curve. Therefore, the obvious implication is that the wage changes that “should” have been negative got piled up at the 0% mark, because those employers were reluctant (for whatever reason) to actually reduce nominal wages; instead they merely kept wages constant.

Now that we understand the claim Krugman is making, we have to ask, Is this really decisive when it comes to the issue of allowing labor markets to clear on their own? If we assume (as Krugman himself seems to be doing) that the red wage distribution “should” have been like the blue one, only shifted to the left, then the presence of the 0% boundary looks as if it bulked up the distribution of changes by about 13 percentage points or so, higher than what it “should” have been at the 0% mark. Just eyeballing the chart, from 2011-12 in Spain more than half of the labor force saw an increase in their nominal wages, and there were still about 20 percent or so who saw a reduction in nominal wages. (Since the people who saw no change represented about 28 percent, that means the other two groups have to add up to 72 percent.)

Indeed, the chart shows that around 5 percent or so of the labor force saw a one-year drop in wages between 5 and 10 percent. That’s a pretty big drop, for 5 percent of the labor force, when we’re talking about “sticky wages.”

All in all, Krugman’s chart about Spain suggests to me that there’s nothing inherent in market economies per se that prevents nominal wages from falling. In practice, at best the case of Spain shows that 13 percent (or so) of the labor market had its wage adjustments significantly hampered by this psychological barrier.

That means we can now go back to Krugman and spit this in his face, right? Ha ha, innocent reader, if you thought that, it shows you don’t know Krugman. For example, when Chicago’s Casey Mulligan wrote a critique of the (New) Keynesian position, in which Mulligan assumed sticky wages and prices were central to their case, Krugman responded in a post entitled “Why Casey Can’t Read”:

If he had read anything — anything at all — that Keynesians have written about policy at the zero lower bound, he would have learned that there is no reason to expect falling wages and prices to raise employment — in fact, quite the contrary in the face of a debt overhang.

 

If Mulligan wants to argue that point, fine — but he presents as “the New Keynesian position” something that is just what he imagines, on casual reflection (or, again, maybe after talking to some guy in a bar) to be the New Keynesian position.

 

OK, so from now on I’ll assert that the Chicago position on unemployment is that we can cure it by sacrificing goats.

This would be a great analogy, if Casey Mulligan had posted graphs of goat sacrifices in Australia in a discussion of why they didn’t get hurt so bad in the crash.

In summary:

(1) Krugman can’t believe the idiots who try to reject the Keynesian policy prescriptions by denying that there are sticky wages and prices. Just open your eyes, guys! Wages are clearly sticky and so the classical solutions fail; that’s why we need bigger government deficits.

 

(2) Krugman can’t believe the idiots who try to reject the Keynesian policy prescriptions by looking at the empirical relevance of sticky wages and prices. Try reading what the Keynesians are actually writing, you liars! If wages fell it would exacerbate nominal debt burdens; that’s why we need bigger government deficits.

 

(3) The empirical evidence for the need for bigger government deficits is overwhelming at this point. The Keynesian model came through this crisis with flying colors. Anyone who denies that is a knave or fool.

*  *  *

 

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Sun, 11/30/2014 - 21:54 | 5503162 ebworthen
ebworthen's picture

Cut up and fry that bearded potato and all his brethren before it's too late!

Sun, 11/30/2014 - 22:03 | 5503192 philipat
philipat's picture

The only way that a Progressive, and more so a Progressive economist will admit being wrong is when the system collapses. Even then, they willl blame someone else.....

Sun, 11/30/2014 - 22:05 | 5503193 El Vaquero
El Vaquero's picture

Yes, but then you're allowed to throw them away, just as you would any other rotten sack of potatoes, bearded or otherwise.

Mon, 12/01/2014 - 00:34 | 5503547 knukles
knukles's picture

Problem with people like Krugman, shills for the Establishment and BizAssNormal is precisely that they are in the full pay and debt, they are thralls of the very perverse system they try ever so hard to convince the plebes that acts in their/society's best interests; which are lies, exaggerations, half-troofs and falsehoods.
They, the Krugmans, Friedmans, Dowds, et al, are an integral part of the PTB's Perceptions Management system, particularity useful in highly politicized environments.
Why, Progressives "believe" "folks" like Krugman not for any intellectual or anymore almost even political reasons, but because they, the individual, must at all costs in the charged environments of today, Win the Argument at All Costs, Be Right in His Own Mind, Feel Superior and Develop and Affinity Group which Cares Not for Information, but Affirmation.

At the Feast of the Egos, Everybody Starves

Mon, 12/01/2014 - 01:41 | 5503676 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Economic theory that comes down to this: Grandma can pick a cheaper brand of catfood, wouldn't want a billionaire to miss a coupon payment

Mon, 12/01/2014 - 00:45 | 5503572 Smegley Wanxalot
Smegley Wanxalot's picture

Why cut him up?  Just fry his retarded ass alive and enjoy the screaming.

Sun, 11/30/2014 - 22:08 | 5503201 WTFUD
WTFUD's picture

If only i had the funds to attend one of Krookman's after dinner soirees.

Sun, 11/30/2014 - 22:13 | 5503215 dexter_morgan
dexter_morgan's picture

figures (or graphs) don't lie, but liars sure do figure.

Not being a trained economist with a nobel peace prize, when I looked at the graph it looked like a lot of red wages at or left of zero for 2011/12 but little or no blue wages left of zero during 2007/08. My conclusions is that a lot of wages either dropped or stayed the same in 2011/12, where lots of people earned more diring 2007-08. That would lead me to believe wages can and do fall, but I have no nobel peace prize so must be wrong.

Sun, 11/30/2014 - 22:24 | 5503250 El Vaquero
El Vaquero's picture

I'm betting that graph doesn't take the people who lost their jobs and had a 100% reduction in their wages into account.  But that doesn't bother Krugtron one bit. 

Sun, 11/30/2014 - 22:24 | 5503248 Creepy A. Cracker
Creepy A. Cracker's picture

Krugman is an economic moron who refuses to debate rational peoiple. 

Didn't he claim that the $1 TRILLION "stimulus" didn't work because it wasn't enough?  I believe he originally called for a $600 billion stimulus.

How's Solyndra's return on stimulus money working out for everyone?

 

Sun, 11/30/2014 - 23:19 | 5503405 Prairie Dog
Prairie Dog's picture

Yes, it wasn't enough. The loss of output post-crisis clearly indicated this and pretty much all Keynesian economists made the point before the stimulus bill was passed. They said it wasn't enough and it wasn't - that's why there was such a tepid recovery.

If you know anything about investment, you know that not all investments succeed or would ever be expected to succeed. It is the aggregate portfolio return on investment that is important.

The Energy Department program under which Solyndra received loans is on track to make profits of more than $5 billion, the department said last month.

All clear now?

Mon, 12/01/2014 - 00:35 | 5503549 disabledvet
disabledvet's picture

Print, debase, save the banks, save yourself.

Yep, crystal clear!

Now who in fact is doing their job and supplying the entire planet with all that gold and silver?  Don't tell me its Wall Street....

Mon, 12/01/2014 - 01:25 | 5503645 Prairie Dog
Prairie Dog's picture

So the dollar has been "debased" but oil is at $64 vs $140 in 2008 and gold is at $1152 vs $1900 in 2011. How does that work then?

Mon, 12/01/2014 - 03:38 | 5503795 Clowns on Acid
Clowns on Acid's picture

It works by te Fed suppressing the gold price thru the paper markets. Why no more phizz delivery in Chicago futures markets anymore?

Oil ? Demand is obviously down, and Saudi and neo Bolsheviks are trying to squeeze Russia.

Anymore questions ... ya feckin dawg ? 

Mon, 12/01/2014 - 03:43 | 5503798 Prairie Dog
Prairie Dog's picture

Even a dumb dawg can smell shit from a long way away. 

Buy more gold, clown! It's on sale! You're going to be rich!

 

 

Mon, 12/01/2014 - 07:15 | 5503933 Bioscale
Bioscale's picture

Go away, Krugman!

Mon, 12/01/2014 - 00:37 | 5503554 knukles
knukles's picture

That number was net of losses.  In other words, of the "investments" paying off, they are making a return.
Like my grandmother loosing her teeth and saying that the Corn Puffs caught in her gums are taking their place, so all's simply fine and doo dah.

Government numbers.
Lies and more lies, false statistics and misrepresentations

Mon, 12/01/2014 - 01:29 | 5503648 Prairie Dog
Prairie Dog's picture

Yep, and inflation is actually 10,000 percent. Actually, we're all living in Zimbabwe but the government is just really really clever at hiding the grass and the lions.

 

Mon, 12/01/2014 - 01:44 | 5503680 Augustus
Augustus's picture

IIRC, the amount invested in the Energy Program was in the range of $40 Billion.

That projection of a $5 billion profit was a 30 year forecast.

Take out the injection of Hopium and the return will be more like -100%.

Mon, 12/01/2014 - 04:45 | 5503839 GernB
GernB's picture

No, the guy you responded to is right. The articles are there to read in chronological order. The first stimulus bill was larger than Krugman called for. Like many Keynesians he lies about his own history, since if you repeat the lie enough people like you will eventually believe it. He basis the lie on a later claim for even more stimulus after the first did not work, conveniently forgetting he was dead wrong the first time.

Mon, 12/01/2014 - 21:09 | 5506793 Prairie Dog
Prairie Dog's picture

"The articles are there to read in chronological order."

Indeed. That's the beauty of the Internet. You can find out the truth with a Google search in a microsecond.

JANUARY 6, 2009 9:26 AM

Bit by bit we’re getting information on the Obama stimulus plan, enough to start making back-of-the-envelope estimates of impact. The bottom line is this: we’re probably looking at a plan that will shave less than 2 percentage points off the average unemployment rate for the next two years, and possibly quite a lot less. This raises real concerns about whether the incoming administration is lowballing its plans in an attempt to get bipartisan consens

 

http://krugman.blogs.nytimes.com/2009/01/06/stimulus-arithmetic-wonkish-...


 

 

Mon, 12/01/2014 - 07:38 | 5503957 LikeyMikey
LikeyMikey's picture

so you belive that Solyndra is going to make a $5 billion profit?

 

Uh...yeah when monkeys fly out of your arse!!!!

 

Peddle your lies somewhere where someone will listen....

Mon, 12/01/2014 - 21:29 | 5506873 Prairie Dog
Prairie Dog's picture

Come back when you've learned to read.

Sun, 11/30/2014 - 22:37 | 5503293 NIETSNEREM
NIETSNEREM's picture

Krugman's supposition is that the reason the economy has not improved is because there has not been enough of Keynesian policy, i.e., we need more deficit spending. Krugman goes on to say that Keynesian policies haven't caused interest rates to rise so they must be successful. What he fails to realize is that if deficit spending had been successful, rates would have risen already and inflation would be even more of a problem than the government likes to pretend it isn't.    

Mon, 12/01/2014 - 01:34 | 5503640 Pareto
Pareto's picture

Krugman forgets that rates have been suppressed by the FED's purchase of $85B/month in MBS and UST's, and is the only reason rates remain where they are.  Excess reserves will now find their way to the bond market and suppress them further - some say to 1.5% on the 10 year.  The FED has been whistling past graveyard after graveyard.  And you could argue that effectively there is no bond market since the FED owns something like 45% of it!  Its ironic actually, the very market they sought to own, effectively own them everytime the Treasury rolls the debt over.  There is not enough collateral available to even begin to support future debt obligations of government and shitty MBS's currently at rest on the FED's balance sheet.  This ends in disaster, and it will be, in my opinion, international markets (owners of UST's) that trigger a reckoning.  Until then, the bond "market" lives while true price discovery (the shorts) take cover from a financially corrupt and morally bankrupt institution.  End the FED. 

Sun, 11/30/2014 - 22:40 | 5503295 Ralph Spoilsport
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Fuck you Krugman!

Sun, 11/30/2014 - 22:50 | 5503331 FieldingMellish
FieldingMellish's picture

Ahhh! Krugman's flexible stick.

Sun, 11/30/2014 - 22:51 | 5503332 Pareto
Pareto's picture

Krugman's an arrogant prick and he only picks arguments he thinks he can win.  I'd love to hear from him, for example, the Keynesian explanation of the Cantillon effect arriving from current monetary policy and ZIRP.  And that the Philips Curve, not since its original construction, has never held since.  He's a dogmatic dick - plain and simple. 

Sun, 11/30/2014 - 23:03 | 5503359 Bemused Observer
Bemused Observer's picture

Krugman's an ass, as are most other economists, but what is the point of this article? Is the author suggesting that wages ought to be reduced?

Sun, 11/30/2014 - 23:13 | 5503385 DrData02
DrData02's picture

Krigman Is an ass.  Let's just stop paying attention to him.

Sun, 11/30/2014 - 23:12 | 5503388 Prairie Dog
Prairie Dog's picture

So are you a knave or a fool, Mr Murphy? I'm not sure at this point. Anyone who has worked in the real world knows the reality of sticky wages.

 

Sun, 11/30/2014 - 23:55 | 5503480 DOGGONE
DOGGONE's picture

Ask Krugman to defend hiding these simple histories:
http://patrick.net/forum/?p=1223928

Mon, 12/01/2014 - 00:19 | 5503519 WTFUD
WTFUD's picture

If you stuck all these ' ivy leaguers ' into the real world they'd die a slow stinking death like the rest of the sheep.
'If he's there to be shod might as well shear him also.' Lord Bankfiend of Goldman Goldman and Sucks

Mon, 12/01/2014 - 00:25 | 5503534 I Write Code
I Write Code's picture

Krugman's an idiot.

Zero nominal in the face of actual inflation and maybe increased productivity, is actually negative.  It may even be more negative than the reality.  He has no data and no argument, just hairy blather. 

Mon, 12/01/2014 - 01:40 | 5503671 Prairie Dog
Prairie Dog's picture

Here, try to understand. Spain has been in DEFLATION. That is why downward nominal wage rigidity is such a big issue: because you can't reduce labor costs and regain competitiveness by keeping wages unchanged in an economy where prices are falling. 

Not difficult to grasp, is it. But why bother to understand when you can throw abuse instead? That's why I love Zerohedge. I come here to be with the smart people!

 

 

Mon, 12/01/2014 - 02:28 | 5503729 Jonathan Equine...
Jonathan Equine Phallus's picture

Right, pay people less, after massive deficit spending and completely artificial demand and rates - because it's good for the "economy" - as comprehended by neo-Keynesian dogmatists.

 

Ever hear of disinflation?

 

Of course not.

 

Cookie?

Mon, 12/01/2014 - 03:20 | 5503780 Prairie Dog
Prairie Dog's picture

Pay people less? What are you talking about? Do you understand anything at all about this debate? In that case, why contribute?

Mon, 12/01/2014 - 03:40 | 5503796 Prairie Dog
Prairie Dog's picture

Out of the goodness of my heart, I will try to explain it to you in words that you might understand.

It is BECAUSE wages don't decline that you NEED the government to spend and monetary policy to be loose. These are ALTERNATIVES, not COMPLEMENTARY courses of action. If wages and prices adjusted quickly in response to changes in demand, then a new equilibrium would be reached at full employment and there would be no need for activist govenment policy. It is the observed real-world experience that wages DON'T adjust quickly and as a result, after a sudden shock such as a global financial crisis, economies can become stuck with a persistent shortfall in demand. In this situation, governments can spend without driving up interest rates or inflation because these funds are not competing with the private sector. This is in fact the observed experience of the global economy since 2008. Of course, the right-wing hard-money Austrian snake oil salesmen will tell you that the spending and monetary expansion will cause hyperinflation and soaring interest rates. They have been predicting this for six years now and can't explain why it hasn't happened, and why the economy looks exactly as the Keynesians said it would. I can explain, though: it is because the Keynesians were right, and they were wrong.

 

 

Mon, 12/01/2014 - 07:23 | 5503939 Bioscale
Bioscale's picture

it is because the Keynesians were right,

C'mon, stop this bullshit. All your brave Keynesians  that have not seen what was going to happen in 2008? Or in the '70 in past century?

Stop these lies.

Mon, 12/01/2014 - 07:37 | 5503956 GaitherJ
GaitherJ's picture

You seem to be stuck on "wages adjust quickly ". You are right, wages won't adjust quickly enough to eliminate some negative effects, but they will adjust if given time. I own a business, and have seen this happen at other work places, the first wage decreases happen very quickly by getting rid of employees that are not productive. That decreases labor cost and let's employers keep their good employees. Most of the time those employees do experience sticky wages, but labor cost reduction has already been achieved. 

You also mentioned "keeping full employment" after a financial crisis. That is utopian and will never happen. Employers clear out their useless, unproductive, employees at any down turn. 

 

Austrians simply believe the market will eventually balance itself, that doesn't seem like snake oil to me. Thinking that the market can keep full employment during a down turn through government action seems like snake oil.

Mon, 12/01/2014 - 15:43 | 5505602 nofluer
nofluer's picture

It is BECAUSE wages don't decline that you NEED the government to spend and monetary policy to be loose. ...

...with a persistent shortfall in demand.

Ummm... help me out here. If demand is down, and wages are "stucky" (too high), and you have a "shortfall in demand"... ummm... ummm ... these elements do NOT go together.Can we say "Cause and Effect" boys and girls?

Am I understanding the terms here? Sticky high wages (workers being overpaid) provides the wage earners with EXCESS money... which they will either spend or save. Yes? If they spend that excess... why do you say there would be a persistent shortfall in demand? (We's spending as fast as we can, boss!) And wouldn't "sticky wages" lead to inflation? and so if you have "sticky wages", shouldn't the government policy be to TIGHTEN monetary policy to rein in potential inflation? Having a loose government policy during a time of "sticky wages would seem to me to be a really good way to devalue the currency and lead to hyper-inflation and massive unemployment. N'est-ce pas? (If you doubt this. look out your window at current economic conditions - hyper-inflation and massive unemployment paired with loose govt. money policy.)

And if they do not spend their sticky currency, would they not save it - thus providing capital for industry to expand? Leading to more jobs... etc and wouldn't this also be a good thing?

Or have I missed something?

(I'd have added that Krugman seems an ass... but it has already been said so I'd not want to cause Krugman Insults to become inflated.)

 

Mon, 12/01/2014 - 21:26 | 5506864 Prairie Dog
Prairie Dog's picture

You're so confused! I don't know where to begin. Why would sticky wages lead to inflation? The issue is that wages need to fall to reach a new equilibrium, but they don't, or rather they fall only slowly. Wages would have to rise to cause inflation. Durrrrrr. "Sticky" means they are stuck, ie not moving. Inflation is a rate of change. The issue is that wages are not changing fast enough, but if they could change, they would fall. There is no upward momentum. If there was upward momentum in wages, there would be no demand shortfall!

Um, where's the hyper-inflation? Can you show me? Is the government hiding it, along with the grass and lions?

An excess of desired saving over investment is by definition a shortfall in demand. To reach a new equilibrium, you need to cut interest rates to make investment more attractive and saving less attractive. When you have cut rates to zero and there is still inadequate demand (as shown by elevated unemployment and low inflation), then you are in the liquidity trap.

All clear now? 

Mon, 12/01/2014 - 02:54 | 5503760 I Write Code
I Write Code's picture

What do you mean Spain has been in deflation, they're a part of the west like everyone else, and the Fed's trillions of printing means nobody has been in NOMINAL deflation.  If the trillions do nothing else they blow smoke over true measures of anything.  In the US nothing is supposed to go for less, not your house and not a candy bar.  I'm sorry if something has gotten cheaper in Spain, bring it to Janet's attention and maybe she'll take care of it for you.

Meanwhile we have oil and gold getting cheaper.  Is that deflation?

Mon, 12/01/2014 - 03:18 | 5503779 Prairie Dog
Prairie Dog's picture

Look at the data. Also, they don't use dollars in Europe, they use euro. And the ECB has been shrinking its balance sheet for two years.

Spain Consumer Price Index YoY change:

November: -0.4%

October: -0.1%

September: -0.2%

August: -0.5%

July: -0.3%

 

Mon, 12/01/2014 - 00:30 | 5503542 patriotone
patriotone's picture

This chart means nada in the actual purchasing power of those wages yoy because they are nominal & don't consider inflation. The supposition that the folks in Spain are just as good as last year is pure BS. 

Mon, 12/01/2014 - 00:36 | 5503555 hedgiex
hedgiex's picture

Economic Schools are akin to religious dogmas. The Keynesian brand redefined by Krugman and his breed is not appealing to the intrinsic driving greed/fear of the markets.

Like a Jesuit preaching the Word at the wrong place and time to their imaginary natives.

Perhaps the only brand that has some credibility is Behaviorial Economics.

Mon, 12/01/2014 - 01:36 | 5503663 Prairie Dog
Prairie Dog's picture

Actually, it is rather appealing to people who like to make money rather than be led astray by Austrian charlatanss predicting imminent hyperinflation and soaring gold prices because of the Fed's "debasement" of the dollar.

 

Mon, 12/01/2014 - 12:02 | 5504640 ClowardPiven2016
ClowardPiven2016's picture

The only economists making money are the brainwashed Keynesians teaching at universities and those with a front row seat to the manipulation, gorging at the trough of easy money compliments of the corrupt Ph.D. morons running the Fed.

But speaking of charlatans, I noticed you quietly disappeared when called out on your false claim of a net 5 billion dollar return to the economy from crony investments in energy. Perhaps you could enlighten us on what’s happened to the fallacy known as the Keynesian multiplier.

Mon, 12/01/2014 - 21:46 | 5506939 Prairie Dog
Prairie Dog's picture

Well, hey, if you took the Austrians' advice and bought gold and sold Treasuries and the dollar short starting in 2009, you.. er, lost a lot of money. Whereas if you took Krugman's predictions seriously, you'd have done pretty well. Simple!

Mon, 12/01/2014 - 02:21 | 5503722 Jonathan Equine...
Jonathan Equine Phallus's picture

krugman is master of myopic analysis and cherry picked data.

What about 5, 10 years down the road, or more, when extra taxes must service the debt - might this not result in wage stagnation and/or fewer highers?

Black economic magick consists largely in the illusion that something can be created from nothing, and that the best way to get out of a hole is to buy more shovels.

Mon, 12/01/2014 - 06:17 | 5503907 Debugas
Debugas's picture

falling wages simply mean politicians will not get reelected hence the drive to prop up the demand

Mon, 12/01/2014 - 15:56 | 5505674 nofluer
nofluer's picture

Escuse... but if wages are falling, "proping up demand" would not lead to more sales... just the opposite.... (If you gots less money, you buy's less STUFF) assuming prices remain stable. If wages are falling, demand would fall 'cause the workers wouldn't be able to afford as much STUFF, so demand would fall because no one could pay for the STUFF.

How would the govt "prop up demand"? By being the only customer? By regulating lower prices? By hyper-inflating the currency so that the "buyers" could once again afford the STUFF, but ... ummmm... hold it. If the government inflated the money to prop up demand, wouldn't costs to the Mfg "folks" rise and thus LOWER demand still more due to rising prices? ... Hummm... this Keynesian stuff is too hard to understand 'cause it makes absolutel NO sense in the real world. It only works in Fantasy land, and my bank doesn't take Magic Twinkle Dollars.

Mon, 12/01/2014 - 07:32 | 5503948 Raoul_Luke
Raoul_Luke's picture

There's lots and lots of evidence of workers being forced to take jobs that pay less than the one they lost in the recession.  History is repleat with anecdotal evidence of this phenomenon.  But they are only the ones who want to work.

What tends to make wages "sticky" is the rich plethora of government assistance that, for many people, makes not working just as lucrative as working.

Mon, 12/01/2014 - 09:25 | 5504134 BeetleBailey
BeetleBailey's picture

ANYONE....STILL...listening to fucking Krugman is;

doing it to mock the fucker...as in here

or...

totally fucking stupid.

Shut...the fuck ....UP Krugman you cunt.

Mon, 12/01/2014 - 12:11 | 5504663 ClowardPiven2016
ClowardPiven2016's picture

Agreed…who cares what this panty waist bearded turd has to say? Empirical outcomes have consistently discredited his bullshit academic theory.

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