Krugman on recession

While viewing the Sunday forums on the state of the US and world, I heard Professor Krugman present his analysis of our current economic state. This same perspective appeared in his NY Times editorial.

I respect Dr. Krugman as an astute economist with a strong Keynesian philosophy. While I was not educated in the Keynesian school myself, I have come to embrace it more as I teach economics with the Mankiw text.

That said, I fear this global economy has injected conditions not as condusive to Keynesian solutions. We are definitely facing challenges from a global economy. I am not sure that traditional monetary and fiscal policy is as effective as it may have been in the past. Perhaps twenty-first century economists need to come up with new approaches to aleviating some of the misery that accompanies a cruel recession.

As an educator, I am fond of turning to education for the formation of more human capital, but incentives are needed in this sector also. Potential students need to understand the demands of the labor market and brand themselves with skills and experience that will sell.

My hsuband is in the food service business. In this time of high unemployment, he is having trouble finding workers. He actually found that his managers were resorting to rehiring people they had fired last year for poor performance. Is there a disconnect in some labor markets? Do prospective employees need to be more mobile? Oh that's right,if they own their home they cannot sell it to become more mobile. It seems like this economy is full of "Catch 22's". I show my age with that phrase.