A Left-Wing Conservative Blog
Paul Krugman isn't my favorite economist; as a neo-Keynesian, he tends to for the typical neoclassical ideas like deficit/debt burden and all that. But on this point he is exactly right. If wages adjusted, and thus unemployment goes down as a result, then they already would have done so! Why would additional unemployment "correct" wages if 20% real unemployment for the past 3 years hasn't done the job?
Hi Mr. Gagic, Thank you for the comment. I agree with your assessment of Paul Krugman, although I must say I do enjoy reading him as he usually gives the GOP and the pro-corporate Democrats a good drubbing and does so in an often entertaining way. Exactly! The GOP is much more interested in weakening labor. The Republicans know that labor, and especially organized labor, usually does worse in a recession/depression (with the interesting exception of the American experience during the Great Depression, when American organized labor went on a large recruitment drive).