If anyone has had to endure Lawrence Kudlow’s cheerleading as to how wages have continued to grow, I would at least hope that you recognized that this National Review nitwit was talking about nominal wages and not real wages. Well, it seems that his good buddy – Donald Luskin is similarly challenged about this incredibly basic economic concept:
From the Krugman column yesterday: “In fact, wage growth actually seems to be slowing” Hasn’t he been telling us for 7 years that wages have been going down? How then is wage growth suddenly slowing?
Time to turn the microphone over to Brad DeLong:
The answer, of course, is simple: Measured real wages–that is, the number of dollars you have paid divided by the price level–have been at best flat or falling for almost this entire decade. That is because measured nominal wages–how many dollars you get paid–have been growing more slowly than prices. And just now the rate of nominal wage growth has been falling. If you understand that real wages and nominal wages are two different things, you don’t get confused. Does Luskin understand this? I think not. I remember a similar mistake from the past: Luskin’s attempt to compute the real exchange rate
I’ll let you check out the rest – but tell me something. Why does anyone bother to listen to either village idiot (Kudlow or Luskin)?