Wages and benefits paid to U.S. workers posted a modest gain in the fourth quarter, ending a year in which recession-battered workers saw their compensation rise by the smallest amount on records going back more than a quarter-century.
The anemic gains have raised concerns about the durability of the economic recovery. The fear is that consumer spending, which accounts for 70 percent of economic activity, could falter if households don't have the income growth to support their spending.
As Frank rightly notes: "With 10% unemployment, you'd think it just might dawn on them that wages might fall or remain relatively flat as part of the great recalculation."
It's not going to dawn on anyone as long as the worst fallacies and biases of economics continue to live on in the mind of the public and the second-hand dealers in ideas.