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Fight of the Century: Keynes vs. Hayek Round Two

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    I’m watchin’ you.
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    Lord, Keynes, wow! It’s, it, it’s such an honor.
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    Indeed, sir.
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    Please, just go, just go right on through.
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    woo, woo
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    Identification, please.
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    Hayek?
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    No. Hayek, like high explosives.
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    High explosives?
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    Yeah.
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    We have a 10-66, HQ I repeat, we have a 10-66.
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    [Copy that, Mike. Proceed.]
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    What is a 10-66? That was just an example of how to pronounce my name.
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    Ladies and gentlemen.
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    Members of the committee.
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    We are here today to consider the impact
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    of government spending on our economy.
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    We’re fortunate to have two world-reknowned
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    economists to offer their testimony on the matter.
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    I see you took a detour down the road to serfdom.
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    Talk about the end of laissez-faire.
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    Well, shake it off, Freddie,
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    I’m not pullin’ any punches in there.
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    I’m ready. Are you?
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    Prepare for the return of the master.
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    John Maynard Keynes
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    F. A. Hayek
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    Round Two
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    Round 2.0
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    Same economists,
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    same believes,
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    new microphones,
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    new moustaches.
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    Here we are… Peace out! Great recession.
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    Thanks to me, as you see, we’re not in a depression.
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    Recovery, destiny, if you follow my lesson,
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    Lord Keynes, here I come, line up for the procession.
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    We brought out the shovels but we’re still in a ditch
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    and still digging, don’t you think that it’s time for a switch
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    from that hair of the dog? Friend, the party is over,
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    the long run is here, it’s time to get sober!
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    Are you kidding? My cure works perfectly fine.
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    Have a look, the great recession ended back in ’09.
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    I deserve credit. Things would have been worse.
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    All the estimates prove it, I’ll quote chapter and verse.
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    Econometricians, they’re ever so pious.
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    Are they doing real science or confirming their bias?
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    Their “Keynesian” models are tidy and neat,
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    but that top down approach is a fatal conceit.
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    Which way should we choose?
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    More bottom up or more top down?
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    The fight continues,
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    Keynes and Hayek’s second round.
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    It’s time to weigh in
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    more from the top or from the ground.
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    Let’s listen to the greats,
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    Keynes and Hayek throwing down.
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    We could have done better, had we only spent more,
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    too bad that only happens when there’s a World War.
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    You can carp all you want about stats and regression,
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    do you deny World War II cut short the Depression?
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    Wow. One data point and you’re jumping for joy,
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    the last time I checked, wars only destroy.
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    There was no multiplier, consumption just shrank
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    as we used scarce resources for every new tank.
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    Pretty perverse to call that prosperity,
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    rationed meat, rationed butter, a life of austerity.
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    When that war spending ended, your friends cried disaster,
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    yet the economy thrived and grew faster.
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    You too only see what you want to see,
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    the spending on war clearly goosed GDP.
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    Unemployment was over, almost down to zero,
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    that’s why I’m the master, that’s why I’m the hero.
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    Creating employment’s a straigtforward craft,
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    when the nation’s at war, and there’s a draft.
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    If every worker was staffed in the army and fleet
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    we’d have full employment and nothing to eat.
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    Which way should we choose?
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    More bottom up or more top down?
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    The fight continues,
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    Keynes and Hayek’s second round.
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    It’s time to weigh in
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    more from the top or from the ground.
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    Let’s listen to the greats,
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    Keynes and Hayek throwing down.
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    Jobs are the means, not the ends in themselves,
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    people work to live better, to put food on the shelves.
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    Real growth means production of what people demand,
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    that’s entrepreneurship not your central plan.
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    My solution is simple and easy to handle,
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    it’s spending that matters, why’s that such a scandal?
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    Money sloshes through the pipes and the sluices
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    revitalizing the economy’s juices.
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    It’s just like an engine that’s stalled and gone dark,
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    to bring it to life, we need a quick spark.
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    Spending’s the life blood that gets the flow going,
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    where it goes doesn’t matter, just get spending flowing.
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    You see slack in some sectors as a “general glut”,
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    but some sectors are healthy, only some in a rut.
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    So spending’s not free, that’s the heart of the matter,
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    too much is wasted as cronies get fatter.
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    The economy’s not a car, there’s no engine to stall,
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    no expert can fix it, there’s no “it” at all.
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    The economy’s us, we don’t need a mechanic,
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    put away the wrenches, the economy’s organic.
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    Which way should we choose?
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    More bottom up or more top down?
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    The fight continues,
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    Keynes and Hayek’s second round.
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    It’s time to weigh in
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    more from the top or from the ground.
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    Let’s listen to the greats,
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    Keynes and Hayek throwing down.
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    So what would you do to help those unemployed?
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    This is the question you seem to avoid.
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    When we’re in a mess, would you have us just wait,
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    doing nothing until markets equilibrate?
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    I don’t want to do nothing, there’s plenty to do,
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    the question I ponder is who plans for whom?
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    Do I plan for myself or leave it to you?
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    I want plans by the many, not by the few.
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    Let’s not repeat what created our troubles,
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    I want real growth not a series of bubbles.
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    Stop bailing out losers, let prices work,
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    if we don’t try to steer them they won’t go berserk.
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    Come on, are you kidding? Don’t Wall Street’s gyrations
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    challenge your world view of self-regulation?
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    Even you must admit that the lesson we’ve learned
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    is more oversight’s needed or else we’ll get burned.
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    Oversight? The government’s long been in bed
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    with those Wall Street execs and the firms that they’ve led.
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    Capitalism’s about profit and loss,
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    you bail out the losers, there’s no end to the cost.
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    The lesson I’ve learned? It’s how little we know,
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    the world is complex, not some circular flow.
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    The economy’s not a class you can master in college,
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    to think otherwise is the pretense of knowledge.
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    Which way should we choose?
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    More bottom up or more top down?
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    The fight continues,
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    Keynes and Hayek’s second round.
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    It’s time to weigh in
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    more from the top or from the ground.
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    Let’s listen to the greats,
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    Keynes and Hayek throwing down.
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    You get on your high horse and you’re off to the races,
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    I look at the world on a case by case basis.
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    When people are suffering I roll up my sleeves
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    and do what I can to cure our disease.
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    The future’s uncertain, our outlooks are frail,
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    that’s why free markets are so prone to fail.
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    In a volatile world we need more discretion,
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    so state intervention can counter depression.
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    People aren’t chessmen you move on a board
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    at your whim – their dreams and desires ignored.
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    With political incentives, discretion’s a joke,
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    those dials you’re twisting, just mirrors and smoke.
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    We need stable rules and real market prices
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    so prosperity emerges and cuts short the crisis.
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    Give us a chance so we can discover
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    the most valuable ways to serve one another.
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    Which way should we choose?
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    More bottom up or more top down?
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    The fight continues,
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    Keynes and Hayek’s second round.
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    It’s time to weigh in
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    more from the top or from ground.
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    Let’s listen to the greats,
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    Keynes and Hayek throwing down.
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    Which way should we choose?
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    More bottom up or more top down?
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    The fight continues,
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    Keynes and Hayek’s second round.
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    It’s time to weigh in
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    more from the top or from ground.
  • 8:37 - 8:39
    Let’s listen to the greats,
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    Keynes and Hayek throwing down.
Title:
Fight of the Century: Keynes vs. Hayek Round Two
Description:

"Fight of the Century" is the new economics hip-hop music video by John Papola and Russ Roberts at http://EconStories.tv.

According to the National Bureau of Economic Research, the Great Recession ended almost two years ago, in the summer of 2009. Yet we're all uneasy. Job growth has been disappointing. The recovery seems fragile. Where should we head from here? Is that question even meaningful? Can the government steer the economy or have past attempts helped create the mess we're still in?

In "Fight of the Century", Keynes and Hayek weigh in on these central questions. Do we need more government spending or less? What's the evidence that government spending promotes prosperity in troubled times? Can war or natural disasters paradoxically be good for an economy in a slump? Should more spending come from the top down or from the bottom up? What are the ultimate sources of prosperity?

Keynes and Hayek never agreed on the answers to these questions and they still don't. Let's listen to the greats. See Keynes and Hayek throwing down in "Fight of the Century"!

Starring Billy and Adam from http://www.billyandadam.com
more » « less
Video Language:
English
Duration:
10:10

English subtitles

Revisions

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