Tomas Sedelack "The Economics of good and evil"
Advises the Hungarian goverment on policy.
Studied economy in myths and religious texts, then studied myths and religious texts in economics.
triggered an idea– model the evolution of the fairy tale?
Governments have two tools: Fiscal policy, that is the ability to put the people into debt, and monetary policy, that is the ability to print money (or remove it)
Fiscal policy: Jacob/Pharoh, 7 rich years and 7 lean years.
Interesting that it has been 7 rich years, from 2001 until 2008…
Jocob advised Pharoh to set aside 20%
We ate everything, and in fact did more, we borrowed recklessly during the good years.
Compare GDP to deficit growth, US had a net of -28% over the last few years. GDP by itself is not enough, since you can only borrow money from your future (unless you default..)
Hungarian policy is to keep the GDP growth and deficit at a fixed ratio. Save in the rich years, spend in the lean years.
Monitary policy. Analogy to the One Ring in LotR. Great power, but corrupts and destroys. He is here talking about the ability to print money.
Interest rate is like alcohol. Alcohol doesn’t give you more energy, it merely lets you move some energy to Friday night from Saturday morning. Nothing wrong with that. A bit of a problem if you move energy from Monday morning to Sunday night, esp. if you have an important meeting.
Problem with interest rates is you time-shift the money more than a few days, and you do not know what the conditions will be when the energy deficit hits.
Our society has a built in weakness. It says you need the money at the start of your career, to pay for college, house, car. And you have the money at the end of your career. Which is a problem if you don’t become CEO.