The Failure of South Park Economics (part 1)

In a previous post, I lauded the economic lessons of South Park’s “Cash for Gold” episode. In this post, I must reverse my praise for the economics in an earlier episode, “Margaritaville.” The episode originally aired in early 2009 amid intense public debates over the global financial crisis.

The episode took on the cornucopia of public opinions in classic South Park fashion: sarcastic, over-the-top, and acerbic. One story follows Randy Marsh as he begins to lead a cult preaching the wrath of a vengeful economy. At the same time the episode follows his son Stan as he unravels the the economic mess.

Before moving on to the economic analysis, a note about the episode itself. “Margaritaville” was released near Easter and mirrors the Easter story. If you are at all sensitive about religion, Easter and Christianity in particular, this episode might not be for you.

Randy, angered by the stagnant economy, rants against consumerism. He starts preaching that the economy is exacting revenge on consumers who have taken it for granted. Randy’s solution is extreme frugality to appease an angry economy.

His suggestions are as far-fetched as they usually are: bed-sheet clothing, llama transportation, squirrels instead of video games, and cloud-watching over television. It is no secret what Matt Stone and Trey Parker are getting at. Standard economic logic dictates that spending drives the economy. So during slumps we really need more spending to revive the economy, even when our instinct is to pay off debts and spend less(both individually and politically).

Randy is the avatar of austerity and this narrative is nothing new. Keynesian logic radiates from Kyle Broflovski who becomes Randy’s foil by preaching faith in spending. Kyle argues that the economy is composed of humans, so it is absurd to view the economy as spiteful. Kyle urges people to resume spending to restore the economy. Ultimately Kyle takes on everyone’s debt in order to get people to resume spending, becoming the economy’s savior.

This story is wrong for one simple reason. Consumer spending regained its pre-recession levels by the end of 2010. If spending drove the economy, we would be done with this recession, right?

If that were it, the economics would be flat out wrong. Fortunately, the episode shows another side of the story, which you can read about in my next post where I will discuss what Stan learns and what the real purpose of austerity is.

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