MORE RAP VIDEO THOUGHTS.

MORE RAP VIDEO THOUGHTS. Kids, note that the rap video portrays Hayek’s view that a bust is the result of the preceding boom. Rap: “The place you should study isn’t the bust. It’s the boom that should make you feel leery, that’s the thrust.” Explanation: “The “lower [than market rate] interest rate set by central bankers makes excessively speculative investment, especially long term investments, seem less risky and therefore more profitable.” This is consistent with the critics of Alan Greenspan who argue that the Fed set interest rates too low during the period leading up to the crash. Russell Roberts, the genius behind the rap video, argues here that he had thought that Keynes and Hayek had been discredited, but that now they have surged back into favor. He also says that: “I once thought econometrics—the application of statistics to economic questions—would settle these disputes and the truth would out.”This is another confirmation of John Meyer’s prediction of almost 50 years ago that I posted on here: “Nature doesn’t run very good experiments.”