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Thursday, July 02, 2009

The Krugman Blues

by Calculated Risk on 7/02/2009 11:41:00 PM

A little night music: Loudon Wainwright III performs 'The Krugman Blues' at Madison Square Park in NYC (June 17, 2009)

Note: The last music video I posted featuring an economist was Merle Hazard's discussion with John Taylor (very funny).

UPDATE: And here is Krugman's column tonight: That ’30s Show

Since the recession began, the U.S. economy has lost 6 ½ million jobs — and as that grim employment report confirmed, it’s continuing to lose jobs at a rapid pace. Once you take into account the 100,000-plus new jobs that we need each month just to keep up with a growing population, we’re about 8 ½ million jobs in the hole.

And the deeper the hole gets, the harder it will be to dig ourselves out. The job figures weren’t the only bad news in Thursday’s report, which also showed wages stalling and possibly on the verge of outright decline. That’s a recipe for a descent into Japanese-style deflation, which is very difficult to reverse. Lost decade, anyone?

Wait — there’s more bad news ...