An Economics Paradox and a Preview

Michael Mandel

Here's a question for you all:

Company A has an R&D staff of 1000 engineers designing innovative new products for the future. In a fit of cost-cutting fervor, the management of company A lays off 500 of those engineers, who then find new work building homes (5 bedroom McMansions, mostly).

Question: Does U.S. labor productivity go up or down?

Answer: See my story in the new issue of BW, on the website tonight.

(Think of this as a movie trailer).

Before it's here, it's on the Bloomberg Terminal.