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Early Thursday Morning Exam Blogging

The Regional Pattern of the Recession

Paul Krugman:

Southern discomfort: Southern discomfort Heartrending story in the Times about the woes of South Carolina. In fact, unemployment rates in the Southeast have risen more than in the United States as a whole; there’s a sort of Slump Belt extending from the industrial Midwest down to the Carolinas. Why is this happening? The Slump Belt does sort of look like the “auto corridor”; maybe what we’re seeing is the geographical location of cyclically sensitive manufacturing industries. Anyway, it’s striking that the worst of the crisis is hitting states that largely didn’t experience a housing bubble...

This is news to me. I had been confidently expecting the dollar to fall and manufacturing to pick up and lead the economy out of the recession. Time to rethink what is going on.

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