The ideas of British economist John Maynard Keynes, born 1883, have come back into vogue thanks to the financial crisis and the stimulus spending based on his theories.
In this part of his series on Making Sense of financial news, Paul Solman looks at the debate about the man behind the idea of government intervention in the economy with this educational rap video about Keynes economic theories.
According to Keynes biographer Lord Robert Skidelsky, Keynes believed that markets were inherently volatile, large-scare unemployment can develop and there's nothing to stop that unemployment from growing unless the government pumps money into the economy when private consumers are not spending enough.
Nobel Peace Prize winner Friedrich Hayek was Keynes' intellectual opponent in the '30s and '40s and now serves as a hero to fiscal conservatives who oppose the Obama administration's stimulus package.
This video includes the education economics rap as well as a debate about Keynes' cure for today's great recession.
"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 will school you in one simple lesson." - Billy Scafuri, writer/comedian
"We have been going back and forth for a century. I want to steer markets. I want them set free. There's a boom-and-bust cycle, and good reason to fear it. Blame low interest rates. No, it's the animal spirits." - Billy Scafuri and Adam Lustick
"Well, my claim is that, in our attempts to engineer our economy from the top down, we have actually made, in many -- many cases, the world less secure, workers less secure, and lowered our prosperity, and hurt people." - Professor Russ Roberts
1. What is happening to the American economy? What is the recession?
2. What is a free market?
3. What happens when the government increases its spending to help people hurt by the recession?
1. What did you think of this video? What did you learn from it?
2. Whose side would you take in the rap battle? Explain your answer?
3. Do you believe that it is the role of the federal government to spend taxpayer money to create jobs? Why or why not?
4. Has the recent economic downturn affected your community in any way? If so, how?
5. Compare what you know about what happened in the Great Depression to the recession that the U.S. is currently experiencing. How are they similar? How are they different?
6. What do you think about the term the "Great Recession" to describe what is happening now?
7. Write your own rap lyrics about Keynes' and Hayek's economic theories. Do you agree with him or not?