I was catching up on my NYT Sunday reading in our public library, and I caught a wonderful quote from Krugman. In an article comparing Krugman and Thurrow, Krugman says that Thurrow is full of it if he thinks that moving manufacturing to Third World counties was pushing down U.S. wages. According to Krugman, if you shift machines to Mexico rather than the U.S., why wouldn't it bring Mexican wages up rather than bringing U.S. wages down? "If a Mexican worker's output goes from one widget to ten widgets a day, his wages rise to that level. If you strip the story down, this is the only explanation that makes sense." I'm glad that reality doesn't get in the way of his "empiricist" mathmatical models. Anders Schneiderman Progressive Communications
