Keynes vs. Hayek Rap: Round Two

[Hubbs]

A year and a half ago, some very smart people brought the worlds of rap and economics together to produce a video that's been watched over two million times:

d0nERTFo-Sk

Now, those same very smart people are back, to give you... the second round:

GTQnarzmTOc

[Predicto]

Very well done. Biased towards Hayek, of course, but that is because it was produced by George Mason University, pretty much the only place that Austrian Economics is taken seriously.

I'd love to see them do one between Keynes and Milton Friedman.

[Destino]

I suspect most won't enjoy economist rap. It's funny hearing the "Hayek" fellow arguing that big financial industry is in bed with big government when his Austrian School was repeatedly listed as a major influence in the creation of supply side economics and it's deregulation movement. That movement allowed financial houses to merge and allowed them to get large enough to be considered "too big to fail" and created the need for a bailout that he was so dead set against. Hayek would not be pleased.

[Hubbs]

Very well done. Biased towards Hayek, of course, but that is because it was produced by George Mason University, pretty much the only place that Austrian Economics is taken seriously.

True, nowhere else is Hayek even considered an economist. I'm pretty sure Princeton categorizes him as a short order cook.

[Spec138]

Hayeksplosives!

I liked it, very well put together and a decent tune.

[PeterMP]

First, the recent situation isn't all that comparable to the Great Depression, and I'm not at all sure that Keynes would have advocated more deficit spending. I think it is pretty clear that Keynes didn't suggest that global credit market was completely irrelevant. Keynes clearly didn't suggest deficiet spending during normal economic times.

Second, I don't think anybody living at the time of the great depression, except maybe those that remained extremely wealthy, complained about Keysian economics "moving them around the chess board" or ignoring their "dreams".

[drtdrums]

Hayek pwns Keynes. Always has, always will.

Honestly, at this point Keynesian econ theory is like flat earth theory. How much proof do you need that it doesn't work? The fact that career politicians and the ruling class embrace it should be a huge red flag to any working class citizen.

PS: Do not take this as a full embrace of supply side. Simply put, supply side ignores many of the same factors that Keynesian theory ignores, and these factors are what cause economies to fail and the middle class to suffer. Hayek, however, did not ignore these factors. Supply-siders using Hayek have to ignore swaths of his theory. Perhaps the most important and profound basis of Hayek's philosophy is that the economy is not the markets. Keynesian theory believes that the economy is the market and engages in ways to make the markets look better. In addition, Hayek was more liberal than most give him credit for, and a full understanding of his work would cause many liberals to totally reject Keynes out of hand while causing many current "conservatives" to abandon him as their champion.

"Conservatism is only as good as that which it conserves," is one of the many quotes from him that show how sharply his wit cut to the skeleton of the issue. Hayek truly is the people's champion. Keynes, on the other hand, engages in pulling scarves from sleeves while the children applaud.

[Hubbs]

First, the recent situation isn't all that comparable to the Great Depression, and I'm not at all sure that Keynes would have advocated more deficit spending. I think it is pretty clear that Keynes didn't suggest that global credit market was completely irrelevant. Keynes clearly didn't suggest deficiet spending during normal economic times.

You're right about keynes and normal economic times, but are you saying that you think Keynes would consider these to be normal economic times?

Second, I don't think anybody living at the time of the great depression, except maybe those that remained extremely wealthy, complained about Keysian economics "moving them around the chess board" or ignoring their "dreams".

It's simplification for rap. If you want complex monetary theory, I've heard that the Interwebz hold all kinds of nifty information.

[PeterMP]

They talked about the bailouts in the 2nd video. They always seemed kind of non-Keysian to me so I went to look for what somebody that I think everybody would agree was a Keyesian ecomonists said:

http://www.nytimes.com/2009/02/22/opinion/22friedman.html

"Thomas Friedman

Commentary: America shouldn't bail out Big 3 losers

Invest the public's money to nurture the next Google

Reading that General Motors and Chrysler are lining up for another $20 billion or so in government aid -- on top of the billions of dollars they have already received or requested -- leaves me with the sick feeling that we are subsidizing the losers and for only one reason: because they claim that their funerals would cost more than keeping them on life support. Sorry, friends, but this is not the American way. Bailing out the losers is not how we got rich as a country, and it is not how we'll get out of this crisis.

GM has become a giant wealth-destruction machine -- possibly the biggest in history -- and it is time that it and Chrysler were put into bankruptcy so they can start over under new management with new labor agreements and new visions. When it comes to helping companies, precious public money should focus on startups, not bailouts.

You want to spend $20 billion of taxpayer money creating jobs? Fine. Call up the top 20 venture capital firms in America, which are short of cash today because their partners -- university endowments and pension funds -- are tapped out, and make them this offer: The U.S. Treasury will give you each up to $1 billion to fund the best venture capital ideas that have come your way. "

[Hubbs]

They talked about the bailouts in the 2nd video. They always seemed kind of non-Keysian to me so I went to look for what somebody that I think everybody would agree was a Keyesian ecomonists said:

http://www.nytimes.com/2009/02/22/opinion/22friedman.html

"Thomas Friedman

Commentary: America shouldn't bail out Big 3 losers

Invest the public's money to nurture the next Google

Reading that General Motors and Chrysler are lining up for another $20 billion or so in government aid -- on top of the billions of dollars they have already received or requested -- leaves me with the sick feeling that we are subsidizing the losers and for only one reason: because they claim that their funerals would cost more than keeping them on life support. Sorry, friends, but this is not the American way. Bailing out the losers is not how we got rich as a country, and it is not how we'll get out of this crisis.

GM has become a giant wealth-destruction machine -- possibly the biggest in history -- and it is time that it and Chrysler were put into bankruptcy so they can start over under new management with new labor agreements and new visions. When it comes to helping companies, precious public money should focus on startups, not bailouts.

You want to spend $20 billion of taxpayer money creating jobs? Fine. Call up the top 20 venture capital firms in America, which are short of cash today because their partners -- university endowments and pension funds -- are tapped out, and make them this offer: The U.S. Treasury will give you each up to $1 billion to fund the best venture capital ideas that have come your way. "

Fair point. I don't think bailouts necessarily fit into a specific school of economic thought.

[Predicto]

True, nowhere else is Hayek even considered an economist. I'm pretty sure Princeton categorizes him as a short order cook.

That is, of course, not what I said at all.

The fight of the century is not between Keynesian Economics and Austrian Economics. True Austrian economics is tiny, a marginalized approach with few adherents. Kind of like pure Libertarianism. Most of its good ideas have been co-opted by other schools, and since Austrian Economics provides no ideas that can be tested with real world data (and rejects any type of testing as inherently biased), it is pretty much useless. As an intellectual exercise, it's fun, but because it refuses to test anything, it is kind of like Aristotelean "science" rather than modern science.

The real fight is between the Keynesian school and the Chicago school, and has been for about half a century. Or maybe between Freshwater and Sal****er economists, if you define your schools differently.

[PeterMP]

You're right about keynes and normal economic times, but are you saying that you think Keynes would consider these to be normal economic times?

No, but if you consider that Keynes believed that deficet spending under some conditions would have a negative effect on the global credit markets, then you have to consider that he would have also believed those conditions might have extended beyond normal economic times and may have included times when the US federal government was running a trillion dollars of deficet.

And given that information, he may have believed that the negative impact on the global credit market might counteract any positive gained from further deficeit spending.

Deficit when the US has essentially no deficit does not necessarily have the same effect as deficit spending when the US is running a substantial deficit.

[drtdrums]

Fair point. I don't think bailouts necessarily fit into a specific school of economic thought.

Sure they do. Lackov.

[Hubbs]

No, but if you consider that Keynes believed that deficet spending under some conditions would have a negative effect on the global credit markets, then you have to consider that he would have also believed those conditions might have extended beyond normal economic times and may have included times when the US federal government was running a trillion dollars of deficet.

And given that information, he may have believed that the negative impact on the global credit market might counteract any positive gained from further deficeit spending.

Deficit when the US has essentially no deficit does not necessarily have the same effect as deficit spending when the US is running a substantial deficit.

He may have suggested all sorts of things. If we're going to enter the realm of speculation, I'm sure we can come up with plenty of things that Keynes theoretically could have said.

[PeterMP]

He may have suggested all sorts of things. If we're going to enter the realm of speculation, I'm sure we can come up with plenty of things that Keynes theoretically could have said.

I agree, but isn't that what your video is essentially doing and what a lot of people have done (speculating what Keynes would have thought about the recent economic crisis and prescribing their speculation actually to him).

I'll give them a break in terms artistic license, but the implication is that Keynes would have lined up 100% behind the governments actions to the economic crisis.

I seriously doubt that. I doubt that Keynes actually liked everything that FDR and the other world leaders did during the Great Depression when he was alive.

With respect to current times, I think a reasonable arguement can be made that Keynes would have gone completely the opposite way as the government did during the recent crisis.

I think a lot of what Keynes said at the time of the Great Depression made a lot of sense. I think things like the TVA made a TON of sense at the time.

I'm not at all sure that more deficit spending was the answer in 2008, and I'm even less sure that the deficit spending the government actually undertook made any sense.

I understand a lot of "modern" Keysians did support more deficit spending, and as Keynes is the father of that school of thought, in something like a rap video, it makes sense to depict of him as representing that schoool, but I'm not sure in the recent crisis where he would have actually fallen at all.

Even given a Keysian leanings, I think a reasonable argument can be made that further deficit spending was not the answer.

[Hubbs]

I understand a lot of "modern" Keysians did support more deficit spending, and as Keynes is the father of that school of thought, in something like a rap video, it makes sense to depict of him as representing that school

I was going to say that I think you're putting way too much thought into this, but then I got to this part. It's a rap about economics. They're going with today's most common interpretation of Keynesianism, and I think it would be pretty damn hard to make a video with at least some shred of mass appeal if they didn't.

[PeterMP]

I was going to say that I think you're putting way too much thought into this, but then I got to this part. It's a rap about economics. They're going with today's most common interpretation of Keynesianism, and I think it would be pretty damn hard to make a video with at least some shred of mass appeal if they didn't.

You know my real problem is the 2nd one just reeks of misinformation and propaganda.

I think they put out the first one just as a bit of a joke. Its biased, but basically accurate. I think then they were surprised about how much attention it got, and then put out the second one and figured the skewer Keynes irregardless of the truth, and so they associated every "bad" part of the governments response (e.g. the bailout) to Keyensian economics.

[luckydevil]

I suspect most won't enjoy economist rap. It's funny hearing the "Hayek" fellow arguing that big financial industry is in bed with big government when his Austrian School was repeatedly listed as a major influence in the creation of supply side economics and it's deregulation movement. That movement allowed financial houses to merge and allowed them to get large enough to be considered "too big to fail" and created the need for a bailout that he was so dead set against. Hayek would not be pleased.

Are you a parody poster? You do realize Hayek was a critic a supply-side. There is deregulation and how republicans define deregulation, it's an important distinction.

[Hubbs]

irregardless

Come on, you know better than that.

Anyway, I think you're reading too much into the second one. I'm sure you're aware that I'm more of a Hayek guy, but I didn't think it was a big celebration of his superiority or anything. I honestly wasn't posting it to make a point, i just knew that a lot of people liked the first video and figured they'd like the second, too.

[Destino]

Are you a parody poster? You do realize Hayek was a critic a supply-side. There is deregulation and how republicans define deregulation, it's an important distinction.

Did you miss the "Hayek would not be pleased." He gets referenced I didn't say he fathered it.

[CurseReversed]

Just saw this for the first time. Good stuff.