Sunday, October 20, 2013

Keynes vs. Hayek: Round Two

Ever been aimlessly perusing the internet and get sucked into watching YouTube videos?  Nah, me neither.  Seriously, you're bored out of your mind, surfing the net and you start watching all kinds of crazy cat videos, dumbest stuff on wheels, or world's dumbest criminals.  Admit it, we have all done that a time or two. So, how does this relate to Texas GOP Vote?  Stay with me, I promise it does. 

Since I've been involved in politics, I have been introduced to a new type of video; educational political videos.  I'm not talking about the black panther voter intimidation ones, although those do exist.  What I'm referring to are videos made by individuals or companies in order to educate the public about our in-debt-up-to-our-eyeballs, over regulated, bloated, too-big-for-its-britches-government in lay terms.

Personally, I wholeheartedly endorse these types of videos because not only do they cater to our society's attention span which consists of about thirty seconds; oh look, something shiny! These videos are also great at getting their message across. If they are really good at what they do, they will do it in an entertaining way, so that you don't even realize you're being educated.   

Which brings me to one of my all time favorite YouTube videos:  Fight of the Century: Keynes vs. Hayek Part II.  It fits the criteria of entertaining, definitely educational, but it's a little longer than thirty seconds.  Yeah, it's about ten minutes long, but it's really well done.  EconStories put it together, and they are awesome.

The video is of Keynes and Hayek facing off in a court room full of reporters and jurists even.  The camera shot cuts away and the two are boxing in a boxing ring, sparring about their different economic theories, each delivering their own opposing viewpoints through 'punches' and
'knock-outs'.  They even have a rapping referee.  Did I mention that I love this video? 

A little back story might be in order here.  Ever heard of the two fellows mentioned in the title of the video?  John Maynard Keynes and F.A. Hayek, both economists with two starkly different ideas of how the economy should work.   The video best describes Keynes in this quote: "My solution is simple and easy to handle.  It's spending that matters, why's that such a scandal?  Money sloshes through the pipes and 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 going." Sound familiar?  This is sadly the economic theory that the vast majority of our federal government embraces and employs.

In contrast, one of my favorite ways and quotes from the video to explain Hayek, "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."  Translation: let the free markets work!  Stop bailing out losers!  No one is 'too big to fail'.

One other of my favorites which happens to be the chorus: "What situation we choose.  More bottom up or top down?  The fight continues, Keynes and Hayek, second round.  It's time to weigh in, more from the top or from the ground?"  Again, it's the different economic theories, Keynes believed in a more top down approach, one that doesn't trust the private sector and the free market system to work on its own, where Hayek was a firm believer in a bottom up economy; completely trusting the private sector to develop 'organically' without interference from those at the 'top'.

I love this video;  I do!  It's fun, it's catchy and more importantly, I can relate to it.  I think you will, too.  There are other videos out there just like this one.  Hang with me and I'll introduce you to many more.  Until then, kick back, relax and fire up the crazy cat videos on the old tube; YouTube that is.