04 May 2009

Dueling Banjos

Today's Times has Paul Krugman, Nobelist and all around smart guy versus Allen Meltzer, capitalist toady dueling flation. Krugman looks at the data and concludes (and not the only economist or financial journalist) that deflation, motivated by falling wages, is clearly on the horizon.

Krugman's argument, and mine since I started this endeavor, is that without a return to a true middle class median income, depressed economic conditions have to prevail. There is no other way. One can redefine normal full employment as 10%, but that doesn't make it normal or full employment.

Meltzer goes on and on about the evils of inflation, motivated by the government intervention in the banking meltdown. Phooey.

I'll leave it to you to figure out which is the sophisticated city guy, and which the inbred hillbilly. Read for yourselves, and decide.

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