Monday, October 5, 2009

A Question for Dr. Krugman

Paul Krugman is soliciting questions. Here's mine, #453 of the 915 accepted (!) before the editors shut it down:

Dr. Krugman-

It’s commonly assumed that growth is good, unemployment is bad, and deficits are… well, at least unpopular. But I’m left wondering what it all means to me personally.

For instance, unemployment may be nearing a post-Depression high, but I’m self-employed and run a small business. If I needed to shut down my company and get a job the u-rate would worry me greatly. But as it is, what I see are more highly-skilled potential employees demanding lower wages. (That being said, I’m certainly not unsympathetic to those out of work. I have friends and family members who are unemployed. It’s a stress I wouldn’t wish on anyone.)

Similarly, manufacturing output is growing more slowly than manufacturers (and macroeconomists) would like, but I don’t produce those goods; I consume them. If their business is hurting, shouldn’t that lead to lower prices for me?

Economists are well-known for being two-handed, but when they talk about the gloom and doom in the economy these days I don’t hear much “on the other hand”. I’m hoping you can help with that.


If he answers my question (as did Buzz Aldrin—thanks, Buzz!) I'll post his reply here.

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