Fear the boom and bust

We’ve been going back and forth for a century

[Keynes] I want to steer markets,

[Hayek] I want them set free

There’s a boom and bust cycle and good reason to fear it

[Hayek] Blame low interest rates.

[Keynes] No… it’s the animal spirits

[Keynes Sings :]

John Maynard Keynes, wrote the book on modern macro

The man you need when the economy’s off track, [whoa]

Depression, recession now your question’s in session

Have a seat and I’ll school you in one simple lesson

BOOM, 1929 the big crash

We didn’t bounce back—economy’s in the trash

Persistent unemployment, the result of sticky wages

Waiting for recovery ? Seriously ? That’s outrageous !

I had a real plan any fool can understand

The advice, real simple—boost aggregate demand !

C, I, G, all together gets to Y

Make sure the total’s growing, watch the economy fly

We’ve been going back and forth for a century

[Keynes] I want to steer markets,

[Hayek] I want them set free

There’s a boom and bust cycle and good reason to fear it

[Hayek] Blame low interest rates.

[Keynes] No… it’s the animal spirits

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

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…

because…

Business is driven by the animal spirits

The bull and the bear, and there’s reason to fear its

Effects on capital investment, income and growth

That’s why the state should fill the gap with stimulus both…

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

The multiplier driving higher the economy’s health

And if the Central Bank’s interest rate policy tanks

A liquidity trap, that new money’s stuck in the banks !

Deficits could be the cure, you been looking for

Let the spending soar, now that you know the score

My General Theory’s made quite an impression

[a revolution] I transformed the econ profession

You know me, modesty, still I’m taking a bow

Say it loud, say it proud, we’re all Keynesians now

We’ve been goin’ back n forth for a century

[Keynes] I want to steer markets,

[Hayek] I want them set free

There’s a boom and bust cycle and good reason to fear it

[Keynes] I made my case, Freddie H

Listen up , Can you hear it ?

Hayek sings :

I’ll begin in broad strokes, just like my friend Keynes

His theory conceals the mechanics of change,

That simple equation, too much aggregation

Ignores human action and motivation

And yet it continues as a justification

For bailouts and payoffs by pols with machinations

You provide them with cover to sell us a free lunch

Then all that we’re left with is debt, and a bunch

If you’re living high on that cheap credit hog

Don’t look for cure from the hair of the dog

Real savings come first if you want to invest

The market coordinates time with interest

Your focus on spending is pushing on thread

In the long run, my friend, it’s your theory that’s dead

So sorry there, buddy, if that sounds like invective

Prepared to get schooled in my Austrian perspective

We’ve been going back and forth for a century

[Keynes] I want to steer markets,

[Hayek] I want them set free

There’s a boom and bust cycle and good reason to fear it

[Hayek] Blame low interest rates.

[Keynes] No… it’s the animal spirits

The place you should study isn’t the bust

It’s the boom that should make you feel leery, that’s the thrust

Of my theory, the capital structure is key.

Malinvestments wreck the economy

The boom gets started with an expansion of credit

The Fed sets rates low, are you starting to get it ?

That new money is confused for real loanable funds

But it’s just inflation that’s driving the ones

Who invest in new projects like housing construction

The boom plants the seeds for its future destruction

The savings aren’t real, consumption’s up too

And the grasping for resources reveals there’s too few

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.

Whether it’s the late twenties or two thousand and five

Booming bad investments, seems like they’d thrive

You must save to invest, don’t use the printing press

Or a bust will surely follow, an economy depressed

Your so-called “stimulus” will make things even worse

It’s just more of the same, more incentives perversed

And that credit crunch ain’t a liquidity trap

Just a broke banking system, I’m done, that’s a wrap.

We’ve been goin’ back n forth for a century

[Keynes] I want to steer markets,

[Hayek] I want them set free

There’s a boom and bust cycle and good reason to fear it

[Hayek] Blame low interest rates.

[Keynes] No it’s the animal spirits

“The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.”

John Maynard Keynes, The General Theory of Employment, Interest and Money

“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

F A Hayek, The Fatal Conceit

Created by
John Papola & Russ Roberts

Produced & Directed by
John Papola

Starring
Billy Scafuri as John Maynard Keynes
Adam Lustick as F. A. Hayek
www.billyandadam.com

Co-Produced by
Mike Tome
Lisa Versaci
Aldey Sanchez

Cinematography by
John Papola
Andrew Bell
Josh Meyers

Edited by
Josh Meyers

Line Producer
Megan Milnes
Brian Song

Casting
Lisa Versaci
Kristen Paladino
Emily Derr

Graphic Design
Joanna Andreasson

Assistant Director
Randy Strauss

Production Designer
Josh Hughes

Wardrobe
Tanya Tamburin

Hair and Makeup
Sandra Alexandre

Grip and Electric Supermen
Fred Joslin
Mike Fleming

Production Assistants
Doug Horton
Mariko Phillips
Stacy Chaet

Video Sound Mix
Jesse Ehredt

 MUSIC -

Lyrics by
John Papola & Russ Roberts

Performed by
Billy Scarfuri & Adam Lustick
www.billyandadam.com

Backup Vocals by
Chloe Wepper

Music Company
BlackBoard 3

Composer
Richard Royston Jacobs

Producer
Jack Bradley

Recording engineer
Morgan Stoner

Mastering
Drew Lavyne @ Sterling Studios

Recorded and mixed at
Plush NYC

 THE CAST -
(in order of appearance)

Receptionist……..……….Mathilde Dratwa
John Maynard Keynes……..Billy Scarfuri
F A Hayek……….....…………..Adam Lustik
Limo Driver……….....…………Mike Munger
Keynes Fan #1….……..Ashley Carpenter
Keynes Fan #2…...……Nafessa Williams
Keynes Fan ……....……. Mathilde Dratwa
Female Singer.…..…...…..Chloe Wepper
Ben Bernanke.…....….………..Bob Malkin
Timothy Geithner.…..………….Jon Laskin
Party Extra…………..….Christopher Chan
Party Extra…….…....……….John Usavage
Party Extra………..…….Danny Boushebel
Party Extra……......……………….Carol Wei
Party Extra……….....………….Louis Torres

 Special Thanks -
The Mercatus Center
Off Hollywood Digital
Jason O’Brien at Trinity Place Bar
Terri Farran & the staff of The Millenium Hilton
Pete Konzcal
Handheld Films
That Cat Camera
Jeffrey Weiss
Lisa Versaci

This film was made by The Productioneers, LLC