A Century of Economic Debate in One Easy Rap Battle

In a recession, everyone starts thinking about economics, and I'm no exception. You may have heard a lot of folks out there claiming that Obama's $787 billion stimulus package is just another attempt by a liberal Democrat to increase the size of government and spend the U.S. into oblivion. The truth is naturally a little more complicated than that, and it's rooted in the ideas of a turn-of-the-century economist named John Maynard Keynes. Keynes was one of the first and most popular economists to argue that during an economic crisis, the government could flood the market with money to kick-start the economy and reverse a rapidly cumulative economic downturn. Classical economists, such as Friedrich von Hayek and later Milton Friedman, argued that the government trying to influence the market in this way would ultimately lead to inflation, cheap credit, debt, and bad investments. In the long run, classical economists argue, the market will correct itself in an efficient way without large government spending measures. Keynes famous response to the classical perspective was, "In the long run, we're all dead." How many years of unemployment are citizens willing to weather until the market corrects?

Hayek/Friedman's ideas were largely respected and adhered to in the U.S. from the late 70's until our recent crisis emerged two years ago, due in part to influential figures such as Ronald Reagan and Alan Greenspan. But the recent economic downturn has caused a great deal of skepticism regarding the classical view, and current figures such as Obama and Paul Krugman have trumpeted Keynesian ideas once again. The debate is over a century old, and it's incredibly hard to determine whose perspective is more helpful. Keynesian economists say the New Deal brought us out of the Great Depression and helped us avoid a similar disaster last year. Classical economists counter that revised monetary policy by the Fed, lower taxes and tariffs, and essentially market correction ended the Great Depression and the current stimulus package is only spiraling our debt. I tend to lean towards the classical side, but the arguments on both sides are complex, intelligent, and strong.

But now to the fun stuff. Last week a music video director from Spike TV and a popular economics professor got together and released the following video, which frames this century-long debate in the form of a hilarious rap battle between Keynes and Hayek. As white nerd rap goes, I think it takes its rightful place among such classics as Mac or PC, Lazy Sunday, White and Nerdy, and of course, Robot Cat.

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