I remember seeing a report in America showing how many new unemployed were willing to take jobs that paid considerably less than their previous job because a low-paying job is better than none at all. It also showed people were willing to take a pay cut and work longer hours because being employed is better than being unemployed. Hence even in the modern era wages are not sticky.

Great article.

Every interventionist, statist, Keynesian pseudo-intellectual on the Internet thinks that wage “stickiness” is the ultimate trump card that invalidates free market economics.

There’s so much more to the economy than nominal wage levels. For example, look at the employment patterns among today’s young adults in their early to mid 20s, which includes recent college graduates. It’s a graduation ceremony joke that these new workers are returning to live in their parents’ basements, but it’s true. Also, more young people will, when possible, get jobs with Daddy’s company, whereas in better times, more of these people would have gotten independent jobs, which are now almost impossible to come by. In other words, these are the kinds of economic adaptations that don’t appear on wage and price statistics charts.

Or, I went shopping for a small office lately. The realtors HATE lowering their rental prices per square foot, so they adapt in other ways, typically by throwing in all kinds of freebies — lower deposits, free months on the front and back end, extra services like phone and data hookups, etc. They will do almost ANYTHING to keep those hard, square-footage prices from falling, but the true total cost of renting space rises and falls in other unmeasured ways.

Is money and banking the most important parts of an economy?
If so, then opponents of money and banking capitalism are not
basically advocates of capitalism. Eg, Friedman. Mankiw’s
_Macroeconomics, 3rd Ed.,_ has no clear, systematic distinction between govt
and market in banking and money. This is a result of his claim
that “markets are usually a good way to organize economic
activity.” Usually?! Is 2+2 usually 4 and two atoms of
hydrogen and one atom of oxygen usually water? This
is not the scientific study of causes but the primitive, pre-scientitic mentality
of (traditional) coincidences. Throwing virgins into volcanos
is usually a good way to grow crops. If it doesn’t work,
try statistical studies of virgin-throwing with lots of graphs.
And discuss “policy” a lot, Especially to justify the “equity”
Mankiw uses to judge markets. He “defines” equity as “fairness.”
First, this is mere word association, not a definition, by essentials
of a concept. Second, he does not define “fairness,” thus, in effect,
leaving it to the arbitrary and the conventional. Where is objectivity,
ie, knowing reality by the method of logic?
This is the indirect, abstract destruction of reasoning and thus science.
Don’t be intellectually defrauded by mere scholarship that has not been
scientifically organized. Observation, definitions by essentials, induction,
hierarchy, and system are part of the basics of scientific method.