Give One Point to Scott Sumner
By Arnold Kling
David Leonhardt looks at the behavior of real wages in the latest recession.
A big reason wages have held up this time is inflation has been nearly absent. As some economic historians have pointed out to me, there is a historical parallel here. During the Great Depression, real wages for people who managed to hold onto their jobs did far better than one might have expected, thanks largely to deflation.
The implication is that if the Fed had pursued more inflationary policies in 2008 then we might not have had such high unemployment.