Stratego Oversimplifies Economics

[Stratego]

Over the years, I've learned that I have a knack for oversimplifying things. So I'm going to write a book called "Stratego Oversimplifying Things" Please let me know your thoughts about the presentation and the accuracy of the things I'm oversimplifying or any concepts you want me to oversimplify.

Topic 1: Economic Theories
Economics, the study of how to efficiently allocate resources to get them where they're needed. Let's simplify them using traffic and how to get you home as fast as we can.

Unregulated free market: No rules in the market. You make your decisions and thrive or die by it. It's like driving in the desert, no road. You see your house, just drive straight to it. Accidentally passed it? Just turn around wherever you want and get back on the right direction again. This is super efficient when there aren't a lot of other people around too. If you get in an accident, other people can still go around you and get home. But once you get more and more people, the chance of accidents with unrestricted traffic increases.

Solution? Build some roads so you don't get T-boned while driving home

regulated free market: With regulated free market, there are some restrictions. They reduce the efficiency in certain cases, but they're designed to protect you. Now, you have to drive on roads. Missed your house, can't just spin around right there, and instead have to wait for the next exit. It's not the most efficient path to get home, but it prevents you from experiencing what it feels like to drive in an Indian traffic circle. As the number of people grows, you may need to implement more and more regulations to prevent accidents.

What happens if an accident does happen, like if a cat jumps out and dies on the road? Free market says, don't do anything. People will navigate their way over/around the cat. Maybe a vulture will eat it, or worms will decompose it. In the long run, thing would be back to normal.

But what happens if a f**king elephant falls out? You can't really driver over it, you have to drive around it. People will still adapt to go around it and get home, but the overall speed of traffic (the economy) would slow down for a while. Sure, in the long run the elephant would decompose too and things would be back to normal, but before that happens everything slows down.

Keynesian Economics: Before the Great Depression, government really did nothing to stimulate a slowing economy because in the long run the market adjusts. But after the Great Depression, which is the f**king elephant on the road, Keynes says "in the long run, we're all dead," meaning that it'd be too long to wait for the market to self correct. The government needs to step in and stimulate the economy. We need to remove the elephant that's blocking the road, and in comes the bulldozer. In comes the New Deal to stimulate the economy.

What if a gazelle dies? What if a dog dies? What if cat the size of the original cat dies? We already have a bulldozer, so let's use it. Maybe build a smaller bulldozers so we have multiple bulldozers. Over the past 100 years, the government has been trying different sizes and different types stimulus to get the economy going again, but now they have a lot of bulldozers.

After the economy is going smoothly for a while, you'd realize that the nicer cars drive faster and get home faster. If you encourage people to get nicer cars people would get home faster on average. Maybe create a special lane for faster cars. When the nice cars get off the slow lanes, it'd also allow the crappier cars to go faster as well.

Reagonomics: Maybe give the bigger corporations a tax break. When they do well, the rest of the economy would do well too. If you see someone driving a BMW, try to give them enough money to buy a Lamborghini. That way they can sell their BMW to someone with a Pinto and they'll both get home faster. There's no point in spending money on the people with the Pinto. The only way to get the economy going is to help people get more Lambos. You already have a Lambo? Upgrade to a faster Lambo. Maybe we dedicate a special lane just for Lambos. Maybe we add conveyor belts to the Lambo lane to help them go faster. Maybe we take away one of the lanes from the regular cars and dedicate two lanes to Lambos and use a jet to help tow the Lambos. This would encourage people to want to get a Lambo therefore help the traffic go faster.

[The Grandmaster]

That's not bad actually.

[Medius]

I'd make a slight tweak myself, regulations are the bulldozers that directly target and hit the obstacles.

Keynesian is more of building a new road around the dead elephant, but being a part of macro economics... really means building a road around the dead elephant before it dies.

[Stratego]