On May 18, 2010, at 1:54 AM, Michael Pollak wrote:
> The average falls won't be as savage as this, which is a system-wide
> financial crisis on top of a cyclic downturn. But they will always
> be savage because they can only happen by cutting nominal wages --
> which is the definition of savage wage cuts.
The underlying problem is the productivity mismatch I've been writing about since 1998! How can Greece and Germany be in the same currency zone? Wages will have to adjust - esp. since the Germans have kept such a tight lid on wages in recent years.
Doug