Keynes/Hayek Rap: The Schooling of Keynesian Economics

February 2, 2010 at 16:51 (Economy, Funny, Politics, Video)

Well done comparison of the two schools. I was fascinated to note that the Keynes character used the broken window fallacy in his argument. The argument basically boils down to using destruction to create.

Say you break a window. This idea says that because you broke the window, now the glass makers, the carpenters and installers, hammer and nail and tool companies, etc, all have jobs and thus wealth is created. Unfortunately, although Obama prints like no tomorrow, you just can’t create wealth with a snap of your fingers.

At the simplest level, this falls apart. Sure, the glass guy made something, but what about the other guy? What other guy? The other guy you would have spent the money on had you not been forced to spend it to fix the window! See, you didn’t create wealth, you shuffled it around! And that’s best case – once you start factoring in foolishness like the government ‘spending our way out’ of the mess, it gets worse. Where do they get the money? From YOU. What would you have done with that had they not stolen it (and used it inefficiently no doubt)? And while it might be nice to just print your own money, there is a reason that it’s illegal most places, what with it being imaginary and all. Let’s not even get into that, even though our children and their children may be paying for it..

So why do people keep doing it? Watch the video. It’s flashy, it’s exciting, and it’s doing ‘something’! What that something is is not important at all. But people feel like they are doing ‘something’. And if you wait long enough, eventually things WILL get better, even if you delay it with Keynesian lunacy. Then all you have to do is say, “See? I told you it would work!”. That game has been around a long time. I believe they were called shamans. Ask them for rain and they would tell you to keep doing what they told you to. If it didn’t rain you must not have done it enough. Do it long enough and it actually rains. Problem solved and shaman gets the credit. Idiots.

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