Read the article and decide which famous Economist you most identify with. Then watch the two youtube videos at:
Fear the Boom and Bust: http://www.youtube.com/watch?v=d0nERTFo-Sk
and Part II of the Epic Battle at:
Fight of the Century: http://www.youtube.com/watch?v=GTQnarzmTOc
Identify at least 3 points from either Economist that you agree with. List the point and the video that it came from. Don't copy your classmates responses.
50 comments:
The raps are really good, but it's still rather hard to determine who is right, both of them seem to have valid points..but i guess i agree more with Keynes(I came up with 2 pro for Hayek, 3 for Keynes so..)
1.If everyone was saving, the economy sure would tank, just like he said in the first video.
2. It is true that we are not spending enough to cut down the unemployment, and I also agree that it's impossible to spent as much in peace time compared to war times like he said in 2nd video. If there is a draft, indeed the unemployment would be near zero, and that helps the economy. (Although that's political suicide)
3.Government regulation is somewhat needed. the freemarket is very easy to fail, the government should control the economy to the extend to make sure that it does not.
-Kevin Ma, Period 4
After reading the article and watching both videos, I'd have to say I agree more with Keynes than I do Hayek.
1) Keynes said that boosting aggregate demand in any situation will help out economy flourish.
2) Our Economy needs to SPEND! Like he said in the first video, spending helps regulate the circular flow model, which, in turns, helps regulate our economy, and keeps businesses in tact and the people happy.
3)In the first video he said that saving=DESTRUCTION. Savings does us no good. Our money is planted into banks and not circulating in the economy, which is ultimately hurting everyone.
Caitlin Donovan, period 7
Though both economists prove valid points in their beliefs, I am partial to agree more with Hayek's libertarian mindset. Whenever our nation is in an economic slump, people turn to the government in expectation of a solution, yet are almost always dissatisfied with whatever plan the government forms. America, a capitalist country, is based on the notion of succeeding or failing on your own efforts. We should not feel the need for our government to solve every single economic problem that arises.
1. In the first video, the man representing Hayek says "Real savings come first if you want to invest. The market coordinnates time with interest."
2. In the first video, Hayek says, "The capital structure is key. Mal-investments wreck the economy."
3. In the second video, Hayek says, "Consumpution just shrank as we used scarce resources for every new tank."
After watching the two videos, I am more biased to Hayek’s views, but like the video says, Keynes’ ideals have been proven to work for the economy in the past. But, there are still recessions. Therefore, I don’t think one economist’s ideal is better than the other’s. It all depends on the situation of the economy. We have to wait and see what happens. The “fight of the century” shows that both ideas are not completely perfect.
Most people work because they need to work. They need to feed their family and buy the necessary resources through the wage they make. – Hayek
War only creates disaster. Keynes said that government increase spending during war, but what happens if we have a recession or a depression when there is no war? Moreover, war creates more pain than gain. –Hayek
We know little about the economy and the economic cycle of the whole world. In addition, Hayek is not simply sitting still during depression, but he tries to improve the economy through his own means. – Hayek
I agree with Hayek more than I do Keynes.
1. "That simple equation, too much aggregation Ignores human action and motivation"- Hayek (First Video)
2."Last time I checked, wars only destroy There was no multiplier, consumption just shrank As we used scarce resources for every new tank
Pretty perverse to call that prosper" -Hayek (Second Video)
3. "So the boom turns to bust as the interest rates rise With the costs of production, price signals were lies The boom was a binge that’s a matter of fact Now its devalued capital that makes up the slack." -Hayek (Second Video
I'm more inclined to agree with Hayek, although it's really difficult to decide because both seem entirely logical.
My first two points come from the first video:
-Markets should be set free from government control
-Many of Keyne's policies ignore human action and motivation
These two points came from the second video:
-Once WWII spending ended, the economy grew at an even greater rate
-Spending is not free
After reading and watching the two videos felt that the “battle” between Keynes and Hayek was as much an economic debate as it was a popularity contest. Nonetheless, I felt more confident with Hayek’s point f view for his following point:
“Your so called “stimulus” will just make things worse…more of the same…more incentives for burst.”-Hayek (Video 1)
“Let crisis work. If we don’t try and steer them they won’t go berserk” […] “capitalism is about profit and loss…You bail out the losers there’s no end to the cost.”-Hayek (Video 2)
“If every worker was staffed in the army and fleet we’d have full employment and nothing to eat.” –Hayek (Video 2)
I'm more inclined to agree with Hayek because their should be free markets with less government control, and Keynes theory ignores human motivation, and their actions. Why I agree with Hayek
1)"Last time I checked, wars only destroy There was no multiplier, consumption just shrank As we used scarce resources for every new tank
Pretty perverse to call that prosper" Hayek (Second Video)
2) "Real savings come first if you want to invest. The market coordinnates time with interest." Hayek (First Video)
3)“Let crisis work. If we don’t try and steer them they won’t go berserk” […] “capitalism is about profit and loss…You bail out the losers there’s no end to the cost.” Hayek (Second Video)
Chad Taylor 7th^
I have to side with Keynes based on these 3 facts.
From the second video
1. Spending has ended recessions through out history and even recently has done the same.
2. Spending is what families do to contribute to the economy. No one idealistically wants to only make ends meet even though that may be their situation.
3. The government has to provide for the unemployed, its a duty to do so.
After reading the article, I can say that I agree with Keynes more than Hayek because of his proactive mindset.
1) As said in the first video, "waiting for recovery, that's outrageous"
2) Also in the first video, Keynes voices that "it's all about spending...the dough is everything"
3) Finally, in the second video, Keynes claims that "state intervention can counter depression."
Haris Vakil, period 7
sdsds
From the article,I identify myself with Hayek because of his libertarian views on the economy. To me, it seems that the government has worsen the US economy, even though they promise to fix it. If they were to have a limited role with the economy, conditions within a country would improve.
These are 3 points that I agree with Hayek:
From the video "Fear the Boom and Bust":
1. "You must save to invest, don't use the printing press Or a bust will surely follow, an economy depressed" -Hayek
From the video: "Fight of the Century"
1."We need stable rules and real market prices
so prosperity emerges and cuts short the crisis." -Hayek
2."If every worker were staffed in the army and fleet
we’d have full employment and nothing to eat." -Hayek
I would identify myself with Hayek's ideas, primarily because he wants to "set [the markets] free." America is built on the notion of loose governmental regulations (relative to other nations)and free market trade, a direct manifestation of the notions expressed by our basic beliefs: te beliefs of freedom, liberty, etc. If we remove this free market system, a symbol of this freedom will thus also be removed.
Three points from Hayek:
1. I like Hayek's idea on malinvestments. Hayek believes that in order to "boom," the Fed will artificially lower interest rates and artificially boost American credit. Subsequently, the American people will spend without saving. As we consume, we find that the savings are not real and that there are not enough resources to compensate this surge in demand. Interest rates will rise and demand decreases. The economy is now backed by devalued capital. We should have just saved. (First video)
2. Hayek attacks Keynes' claim that wars help the economy by stating that wars inevitably cause destruction and inhibit the American way of living. To begin, Hayek notes that during wars, consumption decreased amid scarce resources, thus lowering aggregate demand and boosting the economy. He also says that this was "fake" prosperity as a result of these scarce resources: food was rationed and an overall despondency epitomized the situation in America. The available resources were allocated to build war materials, yet after the war, when Keynesians believed that "disaster" was inevitable, the economy boomed.(Second video)
3. Hayek notes that spending should be used to complement consumer demand, not bolster the needs of the "central" goverment. Hayek goes on by noting how "too much is wasted" when it comes to government spending, and that the American people, the economy itself, are in control of their futures. Hayek's liberal mindset thus seems very alluring. (Second video)
After watching the video, I have to say that I agree with Keynes more than Hayek.
1)“Boost aggregate demand, C I G all together gets to Y, keep that total growin’, watch the economy fly.” – Keynes (1st video)
2)“Savings is destruction, that is the paradox of thrift.” – Keynes (1st video)
3)“We could have done better, had we only spend more…” – Keynes (2nd video)
As it can be seen from the video no one recognizes Hayek, but all of them seem to know who Keynes is. Just like that, even the economy leans towards the Keynesian ideas. I personally support Keynes because his equation did help this nation recover from the Great Depression, which most of us believed we would never get through. Secondly, it is very true that saving money is not going to get the economy anywhere. The money being saved and put apart from the circular flow is destroying the economy. Spending is the answer to save an economy that is plummeting due to strong recession.
In both the videos they have done a excellent job in explaining about the economy.
1)"You see it’s all about spending, hear the register cha-ching
Circular flow, the dough is everything
So if that flow is getting low, doesn’t matter the reason
We need more government spending, now it’s stimulus season"[Video 1]
2)"So forget about saving, get it straight out of your head
Like I said, in the long run—we’re all dead
Savings is destruction, that’s the paradox of thrift
Don’t keep money in your pocket, or that growth will never lift…"[Video 1]
3)"My solution is simple and easy to handle. It’s spending that matters" [Video 2]
Keynes keeps on repeating on both videos that spending is what the economy needs to do to keep it running. The concept of savings just does not working in this kind a economy. Saving does us no good it only hurts you and everyone in return.
The raps were pretty hilarious, and after listening to both battles and reading the article, I'd have to say that I agree with Keynes more than I do Hayek.
1. Hayek proposes that the free market can cure itself if the government steps out of the way, but areas of the market where the government has stepped out of the way have generally become monopolized and corrupt (the railroad industry, the oil industry prior to the Sherman Anti-Trust Act)
2. In the Great Depression, no amount of laisez fair capitalism allowed people to begin hiring again, and the employment stayed low until both the New Deal and World War II brought Aggregate Demand up to the where it needed to be.
3. The idea that an increase in Aggregate Demand cannot alter the GDP makes no sense. If taken to the extreme and all people stopped buying anything at all, nothing would be sold, and the country would have no GDP. Therefore, Hayek's graph cannot be correct.
1) Keynes first Video- “If the flow is getting low, it doesn’t matter the reason. We need more government spending”
2) Hayek first Video- “Real saving come first if you want to invest”
3) Hayek first Video-“ Mali vestments wrecks the economy. The boom starts with an expansion of credit. The feds set rates low… That new money is confused for real loanable funds but inflation is driving the ones. Who invest in new projects like housing construction. The boom plants the seeds for its future destruction.”
Based upon the article and information learned in class, I tend to identify with Keynes over Hayek. In the video “Fear the Boom and Bust” I agree that (1) stimulating the economy to boost aggregate demand was necessary to get out of the Great Depression rather than waiting for it to end on its own time, and that (2) spending money, not saving, keeps the circular flow in motion. In the other video “Fight of the Century,” I agree that (3) the spending from WWII cut the Depression short.
They both have good valid points but I do agree on:
1: If people save, their wouldn't be any circulation in the economy and business would fall
2: I also agree that the war did pull us out of a depression but Hayek had a good valid point on that all of out resources and rations for food went to the soilders and allies and some of our people suffered even if they did have jobs
3:In the second vidoe I also agree that the goverment should have regulation to an extent. I also agree that why try to help bail out the buisness that keep failing.
Their arguments were both hysterical and entertaining to watch, but I tend to lead more to the Keynes ideas that were brought up rather then Hayek.
The first idea that the government must continue to spend money while public spending also happens in order for the economy to flow is one concept I agree on. Two others from the last video are that Keynes did find a way to help lower the rate of unemployment when war came around and also that Keynes gives reasons that support why free market should not be used because it will only hurt the economy.
While Keynes’ points seem very rational, I tend to agree more with Hayek’s points.
1)“When the nation’s at war and there’s a draft -- if every worker was staffed in the army and fleet, we’d have full employment and nothing to eat” (Hayek- second video -3:55)
2)“Real growth needs production of what people demand”(Hayek-second video)
3)“I want plans by the many not by the few”(Hayek- second video 5:58)
4)“The lesson I’ve learned is how little we know, the world is complex not some circular flow”(Hayek- second video-6:35)
In the first video I found several of Keyne's quotes that I identify with. First, he said that waiting for recovery of the economy does nothing. Secondly, he said that savings is destruction to the economy, and that to stimulate it you must not be too frugal. Third, he said that if the economic flow is getting low, we will need more government spending. All three of these Keynesian ideas are valid to the economy.
I think that Heyek is correct if you remove the human element, but Keynes is more applicable to the world. While I do not agree that these ideas are what SHOULD be (with the exception of the 3rd one) they are what should be in the world we live in... with the stupid people we live with...
1. Spending promotes more spending. while people shouldn't rely on the government for the economic status of the country, if the government spends its borrowed dimes, the people will as well...
2. If no one spend any money, the economy would fail. no/ little spending = no income for others, which would mean firing of employees, which would reduce the income and thus saving/spending ability of the people that saved... rather ironic that savings create job loss...
3. I do agree with Heyek with letting bad business fail. While it is not the "nice" thing to do, letting the business that cannot compete die is much better than spending money to keep them alive.
I agree more with Keynes. He seemed to have to more points that made sense to me. Though Hayek had a few as well.
1. The first point I agree with comes from the first video. Keynes states that in 1929, when the market crashed, the economy did not come back. He advises that we should boost aggregate demand.
2. My second point also comes from the first video. Keynes says that the economy is all about spending and that we need more government spending. He says to forget about saving because it is destruction.
3. The third point I agree with comes from the second video. Keynes says that the only time there is more spending is during a World War, but more spending is the only way to cure a recession and depression. I agree with this, our spending always increases in a time of war.
Lauren Swindell, 4th period
I agree with Keynes because spending is the only way to keep the economy going.It is especially necessary when economy is in recession.
1)Government spending: "We need more government spending. Now it's stimulus season".(Video 1)
2)"Money revitalizes the economy"(Video 2).
3)"State intervention can counter depression". He says that free markets can fail easily without regulation(Video 2).
After viewing both of these raps I tend to agree more with Hayek rather than Keynes. Hayek seemed to have more of a secure reasoning to ease economies out of recession than Keynes did.
1. In the first video, Hayek mentions (raps) that in order to invest in stock and to buy, one must have savings.
2. Also in the first video, Hayek mentions that the "boom gets started with expansion of credit" which is simply just inflation
3. In the first video, Hayek also believes that the government is supposed to act in order to save the economy.
Brooke Follett Period 4
I agree with Hayek but Keynes has a good ideas about the economy.
1. Malinvestments wrecks the economy. (Video-1)
2. Real growth means production of what people demand- entrepreneurship. (Video-2)
3. The curios task of economics is to demonstrate to men how little they really know about what they imagine they can design. (Video-1)
Since Keynes is the most popular when it comes to Free Market, I'm going to have to side with him on this one. And he is easier to think of Pro's for.
1) Like the video described, if we all saved our economy would suffer, and Keynes is definitely in favor of spending
2)Without Government Support we would fall into economic as well as structural turmoil, government programs keep us afloat in times of difficulty and without regulation the economy would struggle even harder during recessions
3)Spending fixes things, during months of greater spending even now every thing else tends to shift positively as well
On this particular topic, I agree with Keynes more. His approach is much more proactive than Hayek's. Plus, you can never go wrong with Keyne's, right?
1) I agree that spending circulates the economy. Saving money does not do anything positive for the economy. (First Video)
2) Also, Keynes says that the future is hard to predict when the outlook is bad, so we need something like "state intervention" that we can count on in order to "counter depression" (Second Video)
3)Lastly, Keyne's plan is also very simple and can't really be done wrong. All you have to do is spend money, and it will "slosh through the pipes" and fix the economy (second video)
I tend to side more with Hayek.
1st video-
1) Your so-called "stimulus" will make things worse - Hayek
2nd video-
2) Put away the wrenches, the economy's organic - Hayek
3) Stop bailing out losers, it's not going to work - Hayek
Alex Collins Pd 4
I can identify with Keynesian economics better than Hayek's ideas, although both of them provide valid data and resoning, Keynes' argument that government regulated economic policy can help the economy grow is the most logical to me.
1. Spending in World War 2 did cut short the depression-Keynes, Fight of the Century
2. The recession didn't really end in the war because the standard of living and the quality of life plummeted due to rationing-Hayek, Fight of the Century
3. Steering markets by increasing government spending and thus overall spending (C+Ig+G+Xn) is needed to get the economy out of Depression-Keynes, Fear the Boom and the Bust
I enjoyed both of the videos, although there were a few things that I agreed with:
1.We need to spend more to avoid recession- "boost aggregate demand". (1st video)
2."don't keep money in you're pocket or the grow will never lift" (1st video)
3."it’s spending that matters" (2nd video)
After watching the videos i am inclined to side with Keynes rather that Hayek.
1: Keynes ideas prove to be true even now with the current recession. Spending helps the economy bounce back from recessions.
2: We cant wait for the economy to fix itself, something must be done. In the great depression boosting demand helped stimulate the economy
3: Money must be spent in order to keep the circular flow in motion rather than saving money which hinders the economy especially in times of recession
The whole rap goes with a solid flow throughout the whole video. Mr Hayek and Keynes have their own prospective on on the economy could be dealt with during Inflation years or the recession years. Hayek looks to be more of a less popular character than Keynes who is recognized easily without any second glances. The Hayek guy is the exact opposite to Keynes when it comes to personality and appearances.
1) I agree with the aggregate demand and the determinants for determining this demand sung by Keynes in the 1st video.
2) I agree to the paradox of thrift which saves that you have to spend more than you should save in order to save the economy. This idea is proven in the first video by Keynes.
3) The information that caught me strongly was that real savings come first if you want to invest and market coordinates with time and interest. This idea is proven by Hayek in the first video.
I agree more with Hayek for less gov control. Poeple always go to the government to solve their problems and blame them for everything. THey wouldn't have to blame them if there was less gov control and regulation.
1) Hayek says Mal-investments wreck the economy.
2) The more you invest, the more you will have to spend later
3)"Consumpution just shrank as we used scarce resources for every new tank." -Hayek
After reading the article and watching both videos I would have to say that I am more of a Keynes kind of person based on these points:
1: Keynes was right in that the government is a very good spark to the economy and can start the economy spending again.
2: I liked the way he ignored the human factor of the economy and had the government control how the economy does through its spending.
I do, however, and rather hypocritical, have to agree with Hayek on one point in particular:
1: If we constantly rely on the government to save us then we begin to start seeing it as the economy when we are in fact the economy as well.
I believe I have to agree with Keynes the most even though at times I did understand what Hayek was saying.
1)If everyone tried to put their voice in when it comes to the economy or try to save it, it would be a mess. The government is their for a reason (first video)
2) It’s spending that matters" (second video).
3)Savings do not help. If everyone saves how do people expect for the market to go up if their is no money flow. (Second video)
P.S Both videos were really long and the raping really didn't help because I was mostly listening to the beat rather than what they were saying, so I had to watch them twice.
-Jenifer Galan
4th
Amy Nguyen
Period 6
After reading the article and watching the videos, I agree more with Hayek than Keynes.
1. During wars, consumption does decrease due to the fact that most economies focus more on making military equipment.
2. The government should not do the planning for the people, instead people should do the planning.
3. The economy is too complex to be only fixed by the reduction of spending or the increase of spending.
Amy Nguyen
6th period
All three came from the second video.
Evlin Babu
1. Keyness: (Fear the boom and bust) Don't wait for recovery, do something to help the people. "Even a broken window helps the glass man gain some wealth."
2. Hayek: (Fight of the Century) Real growth means production of what people demand.
3. Hayek: (fight of the century) Plans by the many is greater than plans by the few.
I side with Keynes more
A) one reason I dont agree with hayek is because he believes that the government should not intervene but that is where the same thing with the invisible hand is talking about which did not help the economy at all
B) Another reason why im with keynes more is because when he talks about how demand is important, it is very true because when demand is high people tend to buy more which means more cash flowing which equals to a better economy
C) also I agree with Keynes because the people should not be saving because in the long run it will ruin the economy so it is not bad to go spending on goods
Based on the arguments, I have decided to side with Hayek.
1. you cannot use an equation to judge what people will do with their money. as Hayek said. CIG crossing “ignores human action and motivation”.
2. Hayek is correct with his reasons to fear the boom: the expansion of credit causes confusion due to inflation, ultimately negatively impacting the economy.
3. Hayek blames the “so called stimulus” for “mak[ing] things worse” in response to Keynes statement that we need government spending, calling it stimulus season. I agree with Hayek because the boom will eventually lead to a bust.
-Elaine Thong
2nd period
Both Hayek and Keynes made valid points, what Hayek proposed seemed rather idealistic and didn't account for irrational human behavior (mainly greed) by not allowing the government to step in although he does seem to propose a long term solution while Keynes proposes a temporary solution as all economic booms eventually lead to a bust.
1)"The monetary and the fiscal, they’re equally correct. Public works, digging ditches, war has the same effect. Even a broken window helps the glass man have some wealth" Keynes' lyric from Fear the Boom and Bust suggests that government interference helps create jobs which creates stimulus in an economy.
2)"I want plans by the many, not by the few." Hayek's lyric (Fight of the Century) suggests that government interference goes against free market ideals, which is not wrong, but in times of crisis there does need to be order.
3)Keynes' main point is that spending is the key to boosting the economy and that savings hurt the economy by not boosting aggregate demand which is true as money just sits and waits.
Aileen Ramirez 1st Period
I agree more with Keynes because
1) I believe that the government should get involved in economic matters in some cases. In order to keep the economy relatively stabilized the government needs to be involved.
2) aggregate demand is the most vital part of the economy.
3) savings do no good for the economy because they reduce consumer spending and therefore reduce aggregate demand.
Jessica Merhav
2nd period
I agree more with Keynes:
1) The economy should be steered to a degree during a depression. Waiting for the problem to fix itself is unpredictable and by boosting aggregate demand, the economy is most likely going to start pulling out of the depression and improving. (Fear the Boom and Bust).
2)A way to boost the economy is through spending ( government spending in particular) as it shifts the economy from contractionary to expansionary. (fear the boom and bust).
2) a great example is war, as it decreased unemployment drastically and stimulated the economy through the increase in government spending. (fight of the century).
Aileen Ramirez 1st Period
I personally agree more with Hayek.
1. The government has a tendency to side with big companies rather than care for citizens
(Fear of Boom and Bust)
2. Capitalism is more about profits than actual people
(Fear of Boom and Bust)
3. There are cases when government interference can do more harm than good
(Keynes Vs. Hayek)
Lauryn Ewens
2nd Period
I agree more with Keyne’s arguments about the economy than Heyek’s.
Quotes from Fear the Boom and Bust
1. “Persistent unemployment is a result of sticky wages”. Keynes explains that the invisible hand is not always going to aid in a recession.
2. The addition of C, I, G makes up the concept of aggregate demand, and stimulating the spending of one helps in the overall health of the economy.
3. Circular flow only recycles old money. By adding government spending, money can now flow to other parts of the aggregate demand components.
Angelica Miranda
Period 2
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