Friday, June 21, 2013
I can't read as much Krugman as a I used to (thanks NY Times paywall!). But as usual his analysis seems spot on.
The term "monopoly rents" basically means that some corporations have such overwhelming control over aspects of a market that they can set prices outside the normal laws of supply and demand.
Additionally - though Krugman doesn't seem to say this outright - what we have created is a form of monopoly over labor. Through outsourcing and offshoring - not to mention a federal retreat from labor rights - labor has lost any leverage to raise wages. Depressed wages means a depressed economy.
Finally, the financialization of the economy, where everything is evaluated by quarterly reports, means that no one really cares at the corporate level about the long term health of their companies or the economy as a whole. If you can boost your stock price 10% by sending all your manufacturing jobs to China and Mexico, then you do it. No matter the cost to community or the long term health of the country or the country's economy on which the company depends.
I'm looking forward to more in this series of how the economy is changing. It should be interesting.