The Great Debate

Keynes and Hayek are back. As rappers. For those who don’t know about these two economists, or can’t keep their philosophies straight, there’s a great rap video just out that clearly explains the warring ideologies of those two men, titled “Fight of the Century: Keynes vs Hayek Round Two.” And it is the fight of the century, or at least, right now. If Hamlet were giving a soliloquy about the economy, it would start, “to spend or not to spend. That is the question.” For John Maynard Keynes, the answer is to spend. For Friedrich August Hayek, the answer is to not.

What is interesting, and less known, about this economic rap video is that the idea for it didn’t come from an economist. Or anyone remotely close to being one. Instead, it came from a video producer named John Papola, who went to Penn State for film. And despite having worked at MTV after graduating from college, it’s also his first dive into rapping.

Papola become interested in economics partly because of the Ron Paul campaign in 2007. He was struck by what Paul was saying and how the economy played out in 2008. “Nobody else was saying what [Ron Paul] was saying,” Papola says.

With his growing interest in politics and the economy, and a sense that what was unfolding following the collapse of Bear Sterns was history in the making, Papola started to listen to audio books about American history and important political figures like John Adams and Ben Franklin on his two hour-plus commute between Vernon, New Jersey and Manhattan. He also listened to various podcasts, including’ EconTalk, Russ Roberts’ “economics podcasts for daily life”.

“You start to get a little bit of history under your belt and it comes alive,” Papola says. “Those were real people going through real life, and it makes for great stories — and movies. (I don’t know why it makes for such bad lectures).”

– John Kemp is a Reuters columnist. The opinions expressed are his own. –

With clear signs the U.S. and world economies have returned to growth, investors are trying to guess when the Federal Reserve will begin to raise interest rates again.

Voting to maintain the federal funds target at 0.00-0.25 percent at this week’s meeting, the rate-setting Federal Open Market Committee (FOMC) reiterated that low rates of capacity utilisation, subdued inflation trends and stable inflation expectations were “likely to warrant exceptionally low levels of the federal funds rates for an extended period”.

– Christopher Swann is a Reuters columnist. The views expressed are his own –

It’s not just California that threatens to sabotage the Obama stimulus. State and local governments across the nation are gradually unravelling federal efforts to revive growth.

The states have been inveterate stimulus eaters in the past. For most of the 1930s the expansionary policies of the federal government were just sufficient to offset the shrinking of state and local governments. Click here for PDF.