The Shrinking Stomach Effect

I like Krugman's notion that one of the dangers of the recession we are currently in, is that the more manufactures decrease and the longer the unemployed remained that way, the harder it will be for the economy to recover. I see the economy like a stomach; once you have undergone gastric bypass surgery, a procedure that (in its simplest explanation) shrinks your stomach, or once you lose a lot of weight in a short amount of time, it is nearly impossible for your stomach to expand to the size it was before the surgery or weight loss.

Since my oldest brother has his bachelor's degree in construction management, I find Krugman's analysis of the housing market and the role it plays in determining interest rates, inflationary rates, etc. especially interesting. My brother was unable to find a job in the construction field until just this summer ( he graduated from college in 2009) and even now his job is in college facilities, not "traditional" residential or commercial construction. I understand if there is a shortage of funds for construction projects and companies are suffering fiscal losses that we simply can't build new homes or commercial high-rises and the like; however, I think it is safe to say that despite the financial struggle, the demand for homes is rising as the population continues to increase. With construction at a low, demand is going to drive the prices of the limited supply of homes up and that doesn't seem like a win for anyone.

On the Sumner post: I agree that Obama should have taken more economic advice from more people earlier in his term. I do not particularly care for the notion that Obama has created a hostile workplace for women at the White House (I was glad to see that Sumner said he was in no position to make a judgement claim). The new book sounds like a toilet-side reader made for the gossip stands at Bi-Lo checkout lines - one of those infuriating rants that are made popular by media hype. I think promoting garbage like this that might give the average American the wrong impression about a lot of things is a negative role played by our media. I would hate to think that this might be John Doe's only look at Obama's economic discussions and policy progress (or lack thereof). But I have turned this into a "face of American media" rant. I guess that's why I am a communications studies major. :)