"We are all Keynesians now."Our anemic economy has dominated the news of late, and will almost certainly be the central issue in the November elections. In spite of record stimulus spending, we still have nearly 10% unemployment and sagging housing sales. The debate over this crisis centers around two economists of the previous century, John Maynard Keynes (1883-1946) and Frederic A. Hayek (1899-1992).
- President Richard M. Nixon
"We’ve been going back and forth for a century
[Keynes] I want to steer markets,
[Hayek] I want them set free
There’s a boom and bust cycle and good reason to fear it
[Hayek] Blame low interest rates.
[Keynes] No… it’s the animal spirits"
- From "Fear the Boom and Bust" by John Papola & Russ Roberts
- In the book "The General Theory of Employment, Interest and Money", Keynes argues that in times of economic downturns, government spending must increase in order to boost aggregate demand.
- Hayek, Nobel prize winner and author of the 1944 best seller "The Road to Serfdom", argued that excessive government spending could make things even worse by creating perverse incentives and blunting price signals.
What about combining economics with pop culture? This unlikely idea occurred to fledgling television producer / directors John Papola and Russ Roberts. Concerned about the current downturn, Papola felt that it was important to get these ideas to a wider audience. Papola and Roberts considered several popular culture renditions of the ideas of Keynes and Hayek, finally settling on a rap video. The resulting video, "Fear the Boom and Bust", has been views 1.3 million times on YouTube. It has been translated into Spanish, French, Japanese and Chinese. Economics professors across the globe have shown this video to their classes. The producers have received kudos from both noted Keynes biographer Robert Skidelsky and rapper Kei$ha.
See http://www.econstories.tv for more about this remarkable video that demonstrates that popular culture can actually promote learning.
