Radical Chic Economics & Mau-Mauing the Bailout

Katie Hallen -- If there ever was a more hated word in the political etymology of 2009, it was "bailout."  An unfortunate word choice from the start, the Obama administration used it to describe its loan program with the banks, and then it quickly morphed into catch-all phrase to sum up the problems of corporate excess in the face of unbridled government spending. 

Everybody hated the bailout, it would seem. President Obama told us in his first State of the Union last week hatred for the bailout was the "one thing" that united the Democrats and Republicans. "I hated it. You hated it. It was about as popular as a root canal," Obama said.

Meanwhile, behind the scenes and largely out of the media glow, economists were hashing out at academic conferences - and increasingly on the blogosphere and YouTube - the merits of the administration's fiscal mascot, the man behind the bailout's reasoning, as it were: John Maynard Keynes.  

Challenging Keynes, the economist who helped us understand the cause and solutions to the Great Depression, is a pretty radical move.  A long line of presidents and plenty of modern economists have worshiped Keynesian theory and turned to it to justify government stepping in to help manage market downturns, invest in public works, stimulus programs and hire the unemployed.

But George Mason University economist Russ Roberts, it seems, thought old-man Keynes was getting a little too influential in the new administration - and even more critically, worried that the politics of the "bailout" were diluting what could be a powerful economic discussion.  In response, he and producer John Papola launched an educational video to give attention to a lesser-known Keynes peer: F.A. Hayek. Hayek, a staunch advocate of free markets, famously warned against the boom-and-bust cycle that could be spurred by inappropriate government initiatives like artificially low interest rates.

"Fear the Boom and Bust" rap debuted a couple of weeks ago, and it's already climbed to 480,000 views on YouTube.  Rivals Keynes and Hayek, in comedy troupe fashion, argue their differences during a night of partying in New York before an economic conference - or shall we say it's Keynes who partakes in the bulk of the debauchery (symbolic comedy, of course). 

Check out the video.  Who knew a funny video might make the hated "bailout" worth debating again?

Comments

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We all hated the bailout.

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[Dlanyer]

Bob Mack I expect you will find Econ Stories isinreettng.T2T I expect at least the next couple years will be freaky and random. There is so much nonsense coming out of the Obama Administration there is no way to keep up with it. In addition, even if we win big in the next election, Democrats will still run many big institution. So we have to watch out for the big stuff, stuff that will be hard to undo once we throw out the Democrats.The Judicial Watch “senior staff” children is simply ludicrous. Michelle enjoys passing herself off as senior diplomat and spending our money. Surprise! Surprise! Did she accomplish anything useful? We can hope. However, if all she did is waste some of our money, it is a relatively small sum. On the other hand, another $447 billion dollar bill with who know what laws in it that we cannot afford. That we must fight. We must keep the main battles front and center. We must focus on elections. Unless we win 60 votes in the Senate, the presidency, and retain Congress, we may not be able to undo all the damage Obama and the Democrats have done. We may not succeed in reversing their agenda.

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It was about as popular as a root canal," Obama said.

[Anh Mulligan]

I hated it. You hated it. It was about as popular as a root canal," Obama said.

[Ahmed]

Besides being an economist (not frianokomecs, not undercover, simply economics ), Regina Ip is also a mobilizer (for hate on her), a (failed) campiagner, an organizer of an alumni association (sorry a think tank )and most important of all, a historian . See this:　對於全國人大常委會委員長吳邦國早前在基本法座談會上提出「剩餘權力」的問題，，葉劉淑儀認為只是提醒大家中國的國情，不像美國、加拿大般行聯邦制，各州省有「剩餘權力」，「中國立國以來……自秦始皇以來，地區便沒有剩餘權力，都是中央授權的……香港人發展民主要面對的現實，不能當自己是獨立國家。」(Source: 文匯報 , 17 June 2007, p. A15)Maybe she and Ma Lik can both chaired as the professors of a history department in universities!

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