Fight of the Century: Keynes vs. Hayek Round Two

I'm watching you Lord Keynes, wow, it's... it's... a... such an honor! Indeed, sir! Please, just go! Just go right on through. Wah, wah... identification, please. Heyek? No, Hayek! Like um... high explosives. High, high explosives? We have a 1066, HQ. I repeat, we have a 1066. Copy that, Mike. Proceed. What's 1066? It was just an example of how to pronounce my name... Ladies and gentelmen, members of committee, we are here today to consider the impact of government spending on the economy. We are fortunate we have two world-renowned economist to offer their testimony on the matter. I see you took a detour down the road to serfdom. He talk about the end of laissez faire. Well, shake it off Fredie. I'm not going to pull any punches in there. I'm ready, are you? Prepare for the return of the master! John Maynard Keynes F. A. Hayek Round 2.0 Same economists, same beliefs, new microphones, new mustaches. Here we are… peace out! great recession thanks to me, as you see, we’re not in a depression Recovery, destiny if you follow my lesson Lord Keynes, here I come, line up for the procession We brought out the shovels and we’re still in a ditch… And still digging. don’t you think that it’s time for a switch… From that hair of the dog. The long run is here. It’s time to get sober! Are you kidding? my cure works perfectly fine have a look, the great recession ended back in 09 I deserve credit. Things would have been worse All the estimates prove it. I’ll quote chapter and verse Econometricians, they’re ever so pious Are they doing real science or confirming their bias? Their “Keynesian” models are tidy and neat But that top down approach is a fatal conceit Which way should we choose? more bottom up or more top down …the fight continues… Keynes and Hayek’s second round it’s time to weigh in… more from the top or from the ground …lets listen to the greats Keynes and Hayek throwing down we could have done better, had we only spent more Too bad that only happens when there’s a World War You can carp all you want about stats and regression Do you deny World War II cut short the Depression? Wow. One data point and you’re jumping for joy the Last time I checked, wars only destroy There was no multiplier, consumption just shrank As we used scarce resources for every new tank Pretty perverse to call that prosperity Rationed meat, Rationed butter… a life of austerity When that war spending ended your friends cried disaster yet the economy thrived and grew ever faster You too only see what you want to see The spending on war clearly goosed GDP Unemployment was over, almost down to zero That’s why I’m the master, that’s why I’m the hero Creating employment’s a straigtforward craft When the nation’s at war, and there’s a draft If every worker was staffed in the army and fleet We’d be at full employment with nothing to eat Which way should we choose? more bottom up or more top down …the fight continues… Keynes and Hayek’s second round it’s time to weigh in… more from the top or from the ground …lets listen to the greats Keynes and Hayek throwing down jobs are the means, not the ends in themselves people work to live better, to put food on the shelves real growth means production of what people demand That’s entrepreneurship not your central plan My solution is simple and easy to handle.. its spending that matters, why’s that such a scandal? The money sloshes through the pipes and the sluices revitalizing the economy’s juices it’s just like an engine that’s stalled and gone dark To bring it to life, we need a quick spark Spending’s the life blood that gets the flow going Where it goes doesn’t matter, just get spending flowing You see slack in some sectors as a “general glut” But some sectors are healthy, and some in a rut So spending’s not free – that’s the heart of the matter too much is wasted as cronies get fatter. The economy’s not a car, there’s no engine to stall no expert can fix it, there’s no “it” at all. The economy’s us, we don’t need a mechanic Put away the wrenches, the economy’s organic Which way should we choose? more bottom up or more top down …the fight continues… Keynes and Hayek’s second round it’s time to weigh in… more from the top or from the ground …lets listen to the greats Keynes and Hayek throwing down so what would you do to help those unemployed? this is the question you seem to avoid when we’re in a mess, would you just have us wait? Doing nothing until markets equil-i-brate? I don’t want to do nothing, there’s plenty to do The question I ponder is who plans for who? Do I plan for myself or leave it to you? I want plans by the many and not by the few. We shouldn’t repeat what created our troubles I want real growth not just a series of bubbles Let’s stop bailing out losers and let prices work If we don’t try to steer them they won’t go berserk Come on, Are you kidding? Don’t Wall Street’s gyrations Challenge your world view of self-regulation? Even you must admit that the lesson we’ve learned Is more oversight’s needed or else we’ll get burned Oversight? The government’s long been in bed With the Wall Street execs and the firms that they’ve led Prosperity’s all about profit and loss When you bail out the losers there’s no end to the cost the lesson I’ve learned? It’s how little we know, the world is complex, not some circular flow the economy’s not a class you can master in college to think otherwise is the pretense of knowledge Which way should we choose? more bottom up or more top down …the fight continues… Keynes and Hayek’s second round it’s time to weigh in… more from the top or from the ground …lets listen to the greats Keynes and Hayek throwing down You get on your high horse and you’re off to the races I look at the world on a case by case basis When people are suffering I roll up my sleeves And do what I can to cure our disease The future’s uncertain, our outlooks are frail Thats why free markets are so prone to fail In a volatile world we need more discretion So state intervention can counter depression People aren’t chessmen you can move on a board at your whim–their dreams and desires ignored With political incentives, discretion’s a joke The dials you’re twisting… are just mirrors and smoke We need stable rules and real market prices so prosperity emerges and cuts short the crisis give us a chance so we can discover the most valuable ways to serve one another Which way should we choose? more bottom up or more top down the fight continues… Keynes and Hayek’s second round it’s time to weigh in… more from the top or from ground …lets listen to the greats Keynes and Hayek throwing down Which way should we choose? more bottom up or more top down the fight continues… Keynes and Hayek’s second round it’s time to weigh in… more from the top or from ground …lets listen to the greats Keynes and Hayek throwing down