Animated Pig Bunnies Explain Quantitative Easing

Still don’t understand quantitative easing? Is it really just “printing money” or something more subtle? These animated xtranormal pig bunnies seem to have a grasp, at least judging by the millions of hits this movie of them explaining it has gotten. “The only thing deflating is the Fed’s credibility,” says one pig bunny to the other.

And if you would like a more grounded approach to the discussion, a college economics professor has remixed the original with his own answers:

Answering the bunnies [Econbrowser]

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Um, Just What The Heck Is Quantitative Easing And Why Are We Doing It?

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  1. Excuse My Ambition Deficit Disorder says:

    I’ll have to show this to my 5 year old…she hates bunnies, but loves economics.

  2. osiris73 says:

    Where’s the site where you can make these videos?

  3. Bohemian says:

    The one where one explains the flaws of the Tea Party logic to the other is pretty funny.

  4. thewildboo says:

    except that deflation IS bad. Sure, lower prices sound good, but if prices start to drop, everyone holds off buying because they expect them to drop more, and it’s a vicious cycle. When prices are increasing slightly, you have motivation to buy now and keep the economy going. I’m not sure if I’m for or against “quantitative easing” as a policy overall, but the video is glossing over the importance of that point.

    • MonkeyMonk says:

      I understand what you’re saying but then how do you explain the profitability of tech companies since they essentially are always operating in a state of deflation?

      If I buy a computer today I can be pretty much assured that something more powerful or cheaper will be available in 6-12 months. And yet people still buy computers, iPhones, gaming consoles, etc.

      • areaman says:

        “…how do you explain the profitability of tech companies since they essentially are always operating in a state of deflation?”

        Because people need the utility of computers in the present. Knowing something better is coming out six months down the road doesn’t get the work done today.

        • dangermike says:

          bzzzt. nope.

          Look at the price of producing computer components vs the price of purchasing them. The thousands of percent markup are due the all the constant research and development required to remain competitive in a rapidly evolving marketplace.

    • areaman says:

      +1

      “…it’s a vicious cycle.”

      As you mention, they seem to discount or ignore the negative feedback loop that comes with deflation. Also they never mention what China is doing to their currency/economy (China printing all sorts of money, using price controls, limiting exports of certain goods out of China, etc). QE or printing money is a reasonable response to artificially cheap imports from China, Vietnam, etc.

      And at the same time the video is done is a tongue and cheek way so I can’t take it too serious.

    • fredbiscotti says:

      First rule of Tea Partying: Never let facts get in the way of taking down the part of the government you hate.

  5. RxDude says:

    “Quantitative easing” is like free coinage of silver, except it’s not even backed by silver.

    • B says:

      I hope it’s not backed by silver. You know silver tarnishes, right? So any quantity of silver would diminish over time. Like deflation, basically.

  6. theycallmeGinger says:

    I thought the first one was going to have knowledgeable reasoning, but even with robotic voices, I still heard it as misleading whining. It really was no different than reading someone’s childish comments about what they THINK is happening, how we’re being personally screwed every day, and how they could do a wayyyy better job at it. The second one was far more informative, but I’m going to assume no one will watch/listen, as their 7 min of goof-off time had been wasted on the first.

    I’m sure the original got so many hits because A) bunnies are not intimidating, like fiscal policy can be; and B) these statements incite fear and anger, which we all love to feed off of.

    • Daemon Xar says:

      And it’s also just plain wrong: taxes are lower this year than they have been since Reagan. The Bush tax cuts (or the absence of the Republican Tax Hikes) are still in effect, and Obama cut taxes further (but hid them in our paychecks by reducing witholding slightly each month instead of mailing every American a check).

      Stupid people . . .

    • tcolberg says:

      While it’s typical of the Consumerist editors to post cute and funny videos, I would have hoped they would have posted something that was informative rather than fearmongering….

  7. FerretGirl says:

    I really hate these animated robot videos. Is it THAT hard to get a friend and read out your scripts to each other? You have to write a script anyway if you’re going to put it up on these robot vid sites and if you have real people read it the tone will convey better and there won’t be those stupid random pauses in dialogue.

  8. Tim says:

    This is pretty the stupid. It is not the informative at the all. It’s just the stupid, uninformed mockery of the fed.

  9. Daemon Xar says:

    Okay, I’m liking the economic professor’s version. Reality > bullshit. But the first one will inevitably get more hits.

  10. coren says:

    THE BEN BERNANKE