Posted by
Brett Stevens on Thursday, May 07, 2009 11:44:57 AM
Paul Krugman, economist extraordinaire at the official mouthpiece of the Democratic Party – The New York Times, opined yesterday about American wages shrinking. He explained in detail the reasons businesses ask or demand wage concessions from workers. He elaborated without missing a beat on how it negatively impacts the entire economy. He was elegant in his lament about the growing plight of workers. He admitted this trend would weigh down any recovery that may be imminent. Krugman got all the facts right and all the impact correct but he missed the cause of this malaise. He missed the reason businesses are contracting workers and wages. He myopically ignored the most important part being how to really fix this situation.
Krugman believes that government is everything. It is the be all and end all of existence. Therefore, he cannot believe there could possibly be people who don’t want government dictating the terms of their existence. Krugman believes he is the smartest person in the room and his colleagues and he can tell us how to live our lives. Our lives are so empty and shallow, we need their guidance. Because of this basic philosophic belief, he misses the point.
Businesses are contracting their jobs and wages to workers because the economy slowed. That we all understand. Businesses pay their workers from their sales. If sales slow, they need to layoff workers and/or request lower wages. That is fine. But what Krugman misses is this is going on throughout the country and even in industries that are doing fine. The contractions are occurring even in sectors that are seeing growth. Not all businesses are hurting. Some are actually excelling in this economy. Any yet, they are also shrinking their workforce and costs. Some of this is opportunism because of a surplus of workers. But most of it lies deep within the Obama agenda for America. Businesses are getting ready for the apocalypse.
The apocalypse will occur when the federal deficits shrink the credit markets, the cap-and-trade taxes come into play, the requirement for health care is enacted, and the inflation from an inflated money supply begins to increase. They have been listening and watching this president engage in a war on the free enterprise system and realize they have to hunker down. The business community understands the broad and negative impact each of these programs will have on the economy. Furthermore, they have been listening to the tone of this president. They are scared.
This president has ordered the firing of the head of a private business. He helped lead a lynch mob to take the heads of people receiving their contractual due. He has talked of limits on pay of private businesspeople. Obama has inserted himself deeply in the ethos of the free enterprise system. They have no idea what this presuming tyrant may do next. They are waiting for the proverbial shoe to drop. In the mean time, they are preparing for the worst. The worst, which may never occur, certainly doesn’t include hiring full-time workers. Instead it means they will continue to try and do more with less. This will continue our economic contraction because of Obama’s bullying and derisive tactics. Krugman don’t get it.