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Finance a la shmoop. Who is Keynes? That's John Maynard and Keynes rhymes with

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vaccines all right well he was a British economist and founder of modern-day [Someone getting vaccinated]

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macroeconomics yeah popular in the 1960s his big book yep everybody poops well [Book titled 'Everybody Poops']

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yes that one but his big economics book well it was called the general theory of

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employment interest and money and that was actually the original title of [Woman running from a dinosaur]

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Jurassic Park but a lot of people don't know that so you get that information

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for free at Shmoop. All right well the book was published in 1936 written in

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the middle of the Depression when spending was hugely well declining and [Pictures of people during the depression]

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the notion of putting all your cash in your mattress was actually not such a [Hand sliding cash under a bed]

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bad idea at least it didn't appear that way at the time. Keynes also wrote that [Keynes writing at a desk]

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once employment dropped a new balance with low employment was created and the

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depression might continue on and on and on unless the government started

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spending to you know kind of stimulate the economy and fix things and get [Chargers being attached to the economy]

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things going again well according to Keynes the big

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solution aside from lowering taxes so that the wealthy would spend more in

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hire bartenders for their wild and crazy parties was to have the government spend [Someone spraying champagne and the bartender is drinking it]

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and spend and spend to get things moving economically even if it meant that the [People passing a dollar along]

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government had to go into debt to do so well the big goal here was to stimulate

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demand and this went against the ideas that economists had before i.e. that

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the economy would eventually correct itself no interference needed well not

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everyone likes Keynes ideas but President Roosevelt and the rest of the [People chucking tomatoes and Keynes presentation]

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administration eventually did create what was called the New Deal which took

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on a broadly Keynesian quality of bigmama government taking care of us it [American Economy as a baby]

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was characterized by major and unprecedented government interventions

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in the economy tons of spending and that's where that whole thing about [Someone giving out 100 dollar bills]

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paying people to dig a hole and then fill it back up it all came from people [Someone digs a hole and then puts the dirt back in]

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kind of did that... Well Keynes also believed that the

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economy could not function on its own it needed parental help to correct it [Parents pushing a kid along on his bike]

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kind of always that is in times of depression [They let go and he speeds up and starts screaming]

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the government needed to lower taxes and increase spending or the economy would

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stay in a funk like a generally unfed cranky child and at the other end of the [Kid sat on a toy bike crying]

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stick to control inflation like when times were good and everyone was

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employed and people were spending and spending and spending well then the

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government needed to raise taxes and decrease spending and little things

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matter a lot in Keynesian economics. Witness the multiplier effect and no [Blackboard full of complicated equations]

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this has nothing to do with rabbits it's kind of like that TV commercial you know [Rabbit in snow]

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or the woman with the awesome hair well she tells two friends about her

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conditioner and they tell two friends who tell two friends who tell two

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friends who then tell these guys it's a multiplier. [People on the phone to each other]

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It grows fast that is a government tax cut puts an extra 5 grand in the

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hands of a lawyer who spends most of that five grand on well yes parties [Confetti falling]

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because that's what they do you got to to offset being a lawyer employing caterers

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and deploying his friend Mr. Walker black who then deploys money on wheat

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and rye distilleries such that while the tax cut of five grand ends up being an [Money cascading down through all the people]

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economic stimulus of some ten to twenty times that number like 5 grand becomes a [Small pile labelled tax cut next to big pile of cash labelled economic stimulus]

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hundred grand or something like that in GDP.

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Well Keynesian demand focused ideas went on to dominate academic and government

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thinking about political economy through the 1960s right about the time the first

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edition of everybody poops hit the shelves... [Someone taking 'everybody poops' off a library shelf]

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okay so Keynes didn't write that one but you know still stimulating the economy

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stimulating your bowels yeah six and one half a dozen on the other and it's all [Someone sat in a toilet cubicle]

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about your !$%*

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