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"Fear the Boom and Bust" a Hayek vs. Keynes Rap Anthem

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    Lord Keynes! Welcome Sir!
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    It's a Pleasure.
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    The Pleasure is all mine.
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    Your agenda?
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    That won't be necessary.
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    I am The Agenda.
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    Tell them I've arrived.
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    And then tell them, I've arrived.
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    And, your name is?
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    Hayek! F.A.Hayek!
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    [Phone ringing]
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    [Crowd chattering]
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    [Phone ringing]
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    Freddie.
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    Yup!
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    It's Keynes.
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    Hey listen, party at the Fed.
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    Already?
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    20 minutes. Lobby!
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    John Meynard Keynes.
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    F.A.Hayek
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    Yeah. We're opposed.
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    We oppose each other philosophically.
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    In the same studio.
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    We’ve been going back and forth for a century.
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    I want to steer markets.
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    I want them set free.
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    There’s a boom and bust cycle and good reason to fear it.
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    Blame low interest rates.
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    Naah! It's the animal spirits.
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    John Meynard Keynes
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    wrote the book on Modern Macro.
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    The man you need, when the economy is off track.
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    Depression, recession, now your question's in session.
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    Have a seat, and I will school you in one simple lesson.
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    Boom, 1929. The Big Crash.
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    We did it bounce bank. Economy is in the trash.
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    Persistent Unemployment.
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    The result of sticky wages.
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    Waiting for recovery? Hayek: Seriously!
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    That's outrageous.
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    I had a real plan. Any fool can understand.
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    The advice is real simple.
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    Boost aggregate demand.
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    C(Consumption), I(Investment), G(Govt. Spending)
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    Altogether gets to Y(AD).
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    Keep the total rolling and watch the economy fly
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    We have been going back N' forth for a century.
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    I want to steer markets.
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    I want them set free.
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    There is a boom and bust cycle.
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    And good reason to fear it.
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    Blame low interest rates. Keynes: Naah!
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    It's the animal spirits
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    You see, it's all about spending.
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    Hear the register cha-ching.
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    Circular flow, the dough is everything
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    So if that flow is getting low, doesn’t matter the reason.
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    We need more government spending, now it’s stimulus season
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    So forget about saving, get it straight out of your head
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    Like I said, in the long run—we’re all dead. Ohhhhhh!
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    Savings is destruction, that’s the paradox of thrift.
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    Don’t keep money in your pocket, or that growth will never lift.
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    because…
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    Business is driven by the animal spirits
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    The bull and the bear, and there’s reason to fear its......
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    effects on capital investment, income and growth
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    That’s why the state should fill the gap with stimulus both…
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    The monetary and the fiscal, they’re equally correct.
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    Public works, digging ditches, war has the same effect
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    Even a broken window helps the glass man have some wealth
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    The multiplier driving higher the economy’s health
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    And if the Central Bank’s interest rate policy tanks
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    a liquidity trap, that new money’s stuck in the banks!
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    Deficits could be the cure, you been looking for
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    Let the spending soar, now that you know the score
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    My General Theory’s made quite an impression
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    [a revolution] I transformed the econ profession
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    You know me, modesty, still I’m taking a bow
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    Say it loud, say it proud, we’re all Keynesians now
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    We’ve been goin’ back n forth for a century
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    [Keynes] I want to steer markets,
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    [Hayek] I want them set free
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    There’s a boom and bust cycle and good reason to fear it
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    [Keynes] I made my case, Freddie H
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    Listen up , Can you hear it?
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    I’ll begin in broad strokes, just like my friend Keynes
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    His theory conceals the mechanics of change,
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    That simple equation, too much aggregation
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    Ignores human action and motivation
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    And yet it continues as a justification
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    For bailouts and payoffs by pols with machinations
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    For bailouts and payoffs by pols with machinations
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    You provide them with cover to sell us a free lunch
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    Then all that we’re left with is debt, and a bunch
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    If you’re living high on that cheap credit hog
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    Don’t look for a cure from the hair of the dog
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    Real savings come first if you want to invest
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    The market coordinates time with interest
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    Your focus on spending is pushing on thread
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    In the long run, my friend, it’s your theory that’s dead
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    So sorry there, buddy, if that sounds like invective
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    Prepare to get schooled in my Austrian perspective
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    We’ve been going back and forth for a century
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    I want to steer markets,
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    I want them set free
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    There’s a boom and bust cycle and good reason to fear it
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    Blame low interest rates.
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    No… it’s the animal spirits
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    The place you should study isn’t the bust
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    It’s the boom that should make you feel leery, that’s the thrust
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    Of my theory, the capital structure is key.
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    Malinvestments wreck the economy
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    The boom gets started with an expansion of credit
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    The Fed sets rates low, are you starting to get it?
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    That new money is confused for real loanable funds
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    But it’s just inflation that’s driving the ones
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    Who invest in new projects like housing construction
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    The boom plants the seeds for its future destruction
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    The savings aren’t real, consumption’s up too
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    And the grasping for resources reveals there’s too few
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    So the boom turns to bust as the interest rates rise
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    With the costs of production, price signals were lies
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    The boom was a binge that’s a matter of fact
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    Now its devalued capital that makes up the slack.
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    Whether it’s the late twenties or two thousand and five
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    Booming bad investments, seems like they’d thrive
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    You must save to invest, don’t use the printing press
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    Or a bust will surely follow, an economy depressed
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    Your so-called “stimulus” will make things just worse.
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    It’s just more of the same, more incentives perversed
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    And that credit crunch ain’t a liquidity trap
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    Just a broke banking system, I’m done, that’s a wrap.
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    We’ve been goin’ back n forth for a century
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    I want to steer markets,
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    I want them set free
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    There’s a boom and bust cycle and good reason to fear it
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    Blame low interest rates.
  • 5:33 - 5:35
    No it’s the animal spirits
Title:
"Fear the Boom and Bust" a Hayek vs. Keynes Rap Anthem
Description:

Econstories.tv is a place to learn about the economic way of thinking through the eyes of creative director John Papola and creative economist Russ Roberts.

In Fear the Boom and Bust, John Maynard Keynes and F. A. Hayek, two of the great economists of the 20th century, come back to life to attend an economics conference on the economic crisis. Before the conference begins, and at the insistence of Lord Keynes, they go out for a night on the town and sing about why there's a "boom and bust" cycle in modern economies and good reason to fear it.

Get the full lyrics, story and free download of the song in high quality MP3 and AAC files at:

http://www.econstories.tv

Plus, to see and hear more from the stars of Fear the Boom and Bust, Billy Scafuri and Adam Lustick, visit their site: http://www.billyandadam.com

Music was produced by Jack Bradley at Blackboard3 Music and Sound Design. It was composed and performed by Richard Royston Jacobs.
http://www.blackboard3.com

**Charging Bull© Arturo DiModica, 1998

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Video Language:
English
Duration:
07:33
Retired user added a translation

English subtitles

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