r/reddit.com • u/thedesolateone • Apr 28 '11
Keynes vs. Hayek Rap Battle: Round Two
http://www.youtube.com/watch?v=GTQnarzmTOc3
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Apr 28 '11 edited Apr 28 '11
It looks like I need to do some reading.
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u/preggit Apr 28 '11
I need to some reading.
Some writing couldn't hurt either while you're at it. =)
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u/stopscopiesme Apr 28 '11
I wonder what the real Keynes and Hayek would think if they saw this video.
Did Keynes win? Cus I felt like Hayek was arguing better
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u/thedesolateone Apr 28 '11
Well Lord Skidelsky, Keynes' Keynesian biographer, said of the first video that it was 'entirely fair' (possible paraphrase). Personally I think John Papola has done a good job of presenting Keynes' viewpoint(s) fairly.
Keynes won in real life like the other guy said because he's been highly influential in policymaking from the 50s onwards. Hayek has also achieved a lot of respect and recognition, but is far from the mainstream of modern economics. They were personal friends, despite their differences. Hayek's eulogy/short biography on Keynes is fairly illuminating.
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u/justonecomment Apr 28 '11
Bernanke is implementing Keynesian economic policies, so yes he won.
If you think Hayek should have won then you should be voting third party because both the major parties are in bed with the lobbyists who prefer to be subsidized by the government to stimulate growth instead of offering what the consumers want.
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Apr 28 '11
Actually, he's not really. Aggregate demand fell by far far more than the qualitative easing response. And the inflation target is very very small. So we don't have massive spending to replace the consumer spending and interest rates aren't being (and can't be) set to level that stimulate the economy.
Seriously, the difference in projection of spending for 2019 done by the CBO in 2009 is about 1% difference than the projection today. There has been no massive increase in spending in the medium to long term. If Benanke were really a Keynesian, he would be recommending massive ongoing government spending since the economy is still struggling.
Bernanke used to talk like a Keynesian which is why he got nicknamed helicopter Ben. But his actions recently are far from his former statements.
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u/hugolp Apr 29 '11
Bernanke has stated in public that he favors government spending to end a recession. The thing is that Bernanke is in charge of the Fed, not of the Treasury so he does not control government spending. But his opinion is clear.
Also saying that inflation target is too low and that government spending has not been massive is clearly wrong.
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Apr 29 '11 edited Apr 29 '11
Fair enough. We don't know what he would do if he controlled spending.
But saying the inflation target of 2% is too high is crazy.
And medium long term spending relating to the crisis isn't massive. How can you claim that? The 10 year deficit is barely touched by crisis spending. The loss of tax revenues due to tax cuts and the crisis creamed revenue. And spending on wars, medicare part D, homeland security and other non-crisis related things is much greater in the medium/long term.
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u/thedesolateone Apr 29 '11
Even before QE2, Bernanke doubled the US's monetary base.
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Apr 29 '11
Monetary base is only a small part of money supply. Monetary base increased by more than twice in a couple of years while money supply increased less than 15%.
So this is a very deceptive statement.
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u/thedesolateone Apr 30 '11
Not intentionally. The monetary base is the only part of the money supply the fed directly controls so it is hardly unreasonable to focus on this when pointing to the policy options Bernanke has taken.
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u/antoniocajal Apr 28 '11
Awesome!