Ness 358 – Er Norge på vei i grøfta?

NES, a podcast from the news. >> A warm welcome to Harald Magnus Andreassen, Chief Economist at Sparebank i Markets. And I'm a bit bewildered. One is the Epstein files and, yes, uh, the spice with the royal family, but underlying that, I feel that perhaps an even bigger piece of news came on February 10th when new inflation figures were released, and they were at 3.6%. That is, yes, some chief economists said a slap in the face to Norges Bank. Used and shocked. Used otherwise sober people. Interest rate further interest rate cuts were postponed. And I'm a bit like many who run their own businesses with a bit of a curse because, uh, price increases mean lost money for me. It's a real, uh, uh, real wage decrease, and, uh, yes, they had promised something else. This was supposed to be a different year. What is happening? Why can't Norges Bank get inflation down to 2%? Why are we more than 50% over? First, just to say that I'm not, not everyone is just irritated by the inflation figures. I was at Norges Bank's annual dinner last year, and then the last point was from Jonas Gar Støre, who for some reason was very angry at the bank economists who could say one thing one week and another the next, but what we said last week was, of course, quite unanimous that inflation had become higher than we expected and higher than Norges Bank expected, and whether we should use "coffee in the gullet" or "slap in the face" is something we can discuss. Normally, I try to moderate my language, hint to Bjørn. Ehm, eh, but the figures were, as I said, higher, and it was the second time in a row that prices rose more than Norges Bank had assumed. Eh, and there are several different stories here. Eh, one can say that we are perhaps moderating ourselves a bit because the monthly figures fluctuate up and down. Eh, I expect we will get significantly lower inflation in February. We will get those figures on March 10th. Ehm, both due to electricity prices, eh, which are now looking at the Norwegian price in relation to what it was last year, eh, but also because other price increases were somewhat unusually high in, eh, eh, February last year. So, but the reality is that inflation has increased slowly or, at best, been flat at 3% plus. While in other countries, it has crept down a bit. Eh, and there we are now between, yes, between 2 and 3%. Eh, the British are also a little bit above. Ehm, but we are now a little bit above others. And as you say, inflation, it's not something anyone likes. And we see it in all measurements, consumer sentiment, other things. That inflation is a negative, a negative thing for people for understandable reasons. Fortunately, it's like that, then we take the big picture. So it's possible you haven't had time to write a new, set a new price for the job you do for others. That is, you take better hair and what you earn money from. Ehm, wage settlements have reflected that price increases have been high. And last year, wages rose much more than prices. And we had a tremendous, or yes, a sharp increase in real wages. We also had it the year before. And wages in relation to inflation have never been higher than they are now. We have caught up the loss from the period of high prices, to put it very simply. Because we have had good wage growth, eh, and faster than price growth. And all indications are that the same should happen in 2026. So, regarding the causes, we have, we have plenty of time to talk about it here, but I can give you the headlines. Ehm, so the truly remarkable thing is that Norwegian inflation has not been higher than it actually has been. And when I say that, it's because if I compare price changes in Norway with Sweden, the Eurozone, the UK, and the USA, prices have risen, I would say, exactly by the same percentage from 2019 to today. It's around a 25% take or give. You can barely see a difference on the graph. And so the Danes, Denmark has seen prices rise a little less, and prices have risen a lot more in the UK. This means that Norwegian price growth has been just like everyone else's. And if you look at the graph for distance, you see very little difference in inflation in Norway today and inflation in the others. And the surge in inflation was completely identical. Eh, and then I say it's strange because, and this is due to the fact that the krone exchange rate has fallen quite a bit in the meantime. So if you are in Europe looking at Norway, prices have only risen by 9%. While we in Norway, we see that it has risen by 26%. And the difference is the fall in the krone exchange rate during that period against the euro. So from the outside, Norway looks cheap. And in good economic terms, we call that purchasing power parity. We compare price levels in Norway. What can you buy for a euro in Norway? For what can you buy for a euro in the Eurozone? So that difference has become very large. And if we take all our trading partners, the krone was at its weakest, so weak that we became 20% cheaper than we usually were on average. And we have also been far above 100. That is, we were much more expensive than we have been on average over a period. Up to 110, I think. Then we went down to 80. And it's rare to see such large changes without other processes kicking in. And the other process is that when something has become too cheap, gravity will often pull it upwards, meaning Norwegian prices will rise faster and Norwegian wages faster than abroad, to correct the error that Norway has become too cheap, and now people will scream that Norway is very expensive, and that's correct, we are still expensive, but much less expensive than we used to be. We see that in the streets. We have had many more foreign tourists, and of course, the Northern Lights and cold climate and all that, good marketing has certainly contributed in its way, but the most important thing is that we have become much cheaper than before, and we see that in Norwegian business, especially those that compete with foreign countries, actually only those that compete with foreign countries. We call it industry or the front-end sector, and there, industry can sell its goods in competition with foreigners. And when the krone is weak, they get a lot of kroner in revenue. And their expenses in kroner have risen far less because wages have not risen much more. About the same as abroad. Now they are rising a little faster. And that has led to their operating results being larger than they have almost ever had. So Norwegian industry, Norwegian business, if we call it business, that's not entirely correct, but industry has rarely had it better because Norwegian wages have become low compared to foreign ones. And that's what we are now seeing some effects of, that this is in the process of being corrected, that Norwegian inflation, and I believe also Norwegian wage growth, will be higher than abroad for a period, because otherwise the price and wage level in Norway will be too low, and industry will earn too much. It sounds strange to say, but that's the reality. Ehm, and then, eh, gradually correct the imbalance that the fall in the exchange rate has caused. Now, much of that fall in the exchange rate over the last, yes, 12, 13 years, has been fantastic for Norway. Why? Because in previous years, we had wage growth in Norway that was miles ahead of wage growth in other countries. And we could do that because commodity prices were high, oil prices were high, things were going well in Norway, and companies, and we needed to move labor to that part of the economy. We also used more oil money, or not oil money, but returns from an oil fund we had saved because we hadn't used oil money at all. We use capital income, but it became larger, and we used more. But eventually, the combination of us having allocated ourselves, and mainly rightly so during that period, much higher wages than in other countries, and the exchange rate being very strong at the same time. We were at the 7s against the euro and 5s against the dollar. That meant that Norwegian wages were 60% higher than the rest of the world at their worst, at their best, the rest of Europe. And that was a level that I at the time believed was completely impossible for Norwegian companies to survive. It was a consequence of a market that went too far in the currency market and an economy that went too far on a good and long commodity cycle. China helped us very well with that. Gave full throttle during the pandemic, for example. Oil prices were high, oil investments were very high. But we couldn't stay there. And what has happened since then is that the exchange rate has fallen and helped to correct the costs for Norwegian business from being 70% higher. If we were at our worst, down to about 10, 12, 13% higher, now we are just under 20% higher. And I think at 20% higher, we are roughly back. Or perhaps a little higher than we were in the 90s into the 2000s. But I still believe that's a level that results in too low Norwegian wages compared to abroad, because Norwegian business is good enough. It can handle it. And we also have returns from the oil fund that pay for a quarter of our report. So we should have worse competitiveness. We should have a higher cost level than others. Eh, and but the big fall in the exchange rate, which ultimately I think went too far, and it should be said here, the majority of the fall in the exchange rate is identical to the fall in other commodity currencies like the Australian dollar against the Norwegian krone. And until the start of 2023, it was not possible to see a difference between the two graphs. I started it back in 2010-11, and we were at the peak of our sickness. It was nothing Norwegian. It was nothing Norwegian about the fall in the krone. The Canadian dollar fell approximately correspondingly. The Swedish krona also fell a lot, as all three had benefited from the good commodity prices beforehand. But then we got a little extra in 2023. And there can be many reasons for that. Norges Bank suddenly had much lower interest rates than everyone else had. We were far ahead of normal, and suddenly we had a little lower, and it was a drag. Politics, many discussed it. Tax changes that were quite good, and some consider brutal. So much happened with taxes in all other European countries, so it's not entirely obvious that it was so much worse here. But the narrative about it was quite serious, and many talked about the "sweat emigration." Eh, and there was a bad sentiment around the krone. Eh, and then you got an extra fall. But the whole long story is that I think we have fallen a bit too much, eh, and have become a bit too cheap. Now the krone has strengthened by about 45% in the last few months. We are the winner in most rankings. But then it goes up and down. If we stay here as we are today, I think the need for a Norwegian price and wage adjustment will be, yes, it will be proportionally less as the krone rises, and the parenthesis is that Norges Bank would like to see the krone make that adjustment rather than inflation in Norway over many years, and you would say the same because it's so bothersome, inflation, and what I said earlier, people and businesses don't like inflation, even though businesses sell inflation, it creates problems with what the right price is for many things. We as consumers don't remember prices. Many write contracts for fees or for wages, pensions that lose out on it. And and it's in a way, yes, it's not a poison in the machinery, but it's very uncomfortable, and no one wants it, and therefore the central bank has been given the job to try to keep order. And that's one part of the story about why inflation in Norway is now a bit higher than abroad. The other is that the economy has been, all in all, in good shape. Ehm, unemployment is at NAV 2.1%. It has fallen a couple of times in the last couple of months, and all in all, it has risen very little from the bottom. Eh, and for example, we have an unemployment rate that is around half of Sweden's. We have more people employed, by the way, than the Swedes do. A topic that is popular to discuss these days. Ehm, a bit depending on which age groups we look at. We are good among youth and good among the elderly. Some of us persevere even though we have become quite old. You must also have that ambition. It doesn't end. As long as the head holds up, as long as the head holds up. Eh, and the economy has been in good shape. Eh, and that means that some companies can raise prices. And we see that quite broadly. Price increases are broad, they are high across the board. Ehm, the majority of the consumer price index is above 2%. Eh, and yes, a good labor market has also contributed to high wage growth. Cost increases for companies are quite high. Some of it has to do with the adjustment of Norwegian wages, i.e., the front-end model, which then represents, call it, correction of mispricing of Norwegian wages or Norwegian labor, and and actually, the exchange rate. Eh, so a good labor market with few unemployed, many vacant positions. And until now, there have been many more companies complaining about difficulty finding people than those saying it's easier to find them. Has made wages rise. And we see that, yes, there are price impulses from abroad because the krone is weaker, but price increases for what we import from abroad are well below 2%. While price increases for what we produce ourselves in Norway are, of course, influenced by import prices and, yes, through common electricity prices, for example, and many other things. But price increases for what is produced in Norway are well over 4%. And if we hadn't had cuts in kindergarten prices due to state subsidies, which took effect in August last year, then prices for what is made in Norway would not have been far below 5%. A little under 5%, but not far under 5%, because wage growth last year was 5%. So it's a combination of those two, I think, two main stories for Norway. And then I am very curious about how it will go next. I don't know what you hope for when you have heard the story. A long introduction. We must say that we are recording this on Sunday, Sunday >> at 8 in the morning. >> What won't one do for their audience, just say eh, so if we look a bit narrow-eyed and tired and a bit like this, it's because we've woken up, yes. Because I must admit that I am a bit, eh, yes, eh, like many who run their own businesses, I feel that I constantly have to, eh, run a bit faster, eh, but, eh, for a bit less, in a sense. That's what I feel inflation does to me, that it becomes like, now you have to run, because it's not that I can easily increase my invoices by 5%. Mostly, eh, I negotiate, eh, once a year with the few clients I have, that I try to get a lot of value for what I've delivered. And it's always a bit sensitive, because then, eh, my clients might also say that, now, now I'm holding back, so to speak. Now, eh, now we can move on with another advisor or something. Eh, so it's a bit tricky. The best for me is just to send the invoices. 0% inflation, I would have liked. And then I could just forget about it and then see if the value increases or decreases. But the other thing, you're presenting now where inflation becomes a kind of, eh, a natural wave, that is, different equilibria finding new levels. We had, eh, too much good pay, and we had this, you called it the Norwegian exceptionalism, where we got a terrible value boost due to commodity prices. Eh, and then commodity prices have, eh, come down, and we have to adjust back. And then the exchange rate, eh, has taken off a bit, meaning we had the choice, shut down the industry, almost. >> Yes. Or we, or we could cut Norwegian wages by 15-20%, and that would not have been, and that would not have been particularly fun. And it will always, of course, your invoices, right? And but then I get a bit of that feeling, that there has been a kind of, eh, bifurcation, I feel, in business, that you, or in society, actually, where you have, eh, yes, that third that is publicly employed, who I would say, like, follows the front-end sector, eh, all the time, like, if the front-end sector gets 5%, they get roughly 5%. Eh, and and then they have it quite, eh, comfortable and secure. That you can see from the oil fund spending, at least in absolute terms, it goes through the roof. This year, it's over 650 billion kroner. >> Not bad. And then a lot goes to Ukraine, but that's correct. Transfers from the fund have increased a lot. >> Yes. Yes. Right? So it's almost every, almost every, yes. Every fourth krone in the state budget. >> It's more than, it's more than every fourth krone in the state budget. I find that transfers are capital income from transfers. And then I get a feeling that these, eh, and then you have the industry that has received help with a low exchange rate, but then I feel that I might be speaking for that part of the business sector that doesn't, eh, get any help from this. And there, I think, if you take the construction industry, things are going really, really badly, and with all suppliers, and also in that type of consulting industry where I have a small foot in, eh, and where you also get a kind of indignation that here sits the public sector, so to speak, and spreads itself at the expense of the rest of us. That becomes my story. >> Yes. No, and that's what I understand, you share it, it's not a bad story, at least there are elements in it that I understand why you come to that conclusion. And it's absolutely correct that, eh, the fall in the exchange rate and gradually now, a bit higher inflation with a bit higher wage growth, has had different effects on different parts of the economy. Eh, and that's exactly what has happened, that the operating results, the margins of industrial companies, as far as they have figures for it, are not record-high, but they are not far below and far above a normal level. Wage earners now receive a much smaller share of value creation in industry than normal. We can come back to that in relation to the wage settlement, eh, and in a way, what role LO plays and what they should do with it. And the goods have to stand up to it. Eh, and then at the same time, in the rest of the economy, it has not been possible for companies, as you also experience, to increase prices faster than costs have risen. And there, margins on average have come down a bit. Now there are variations between industries, also in mainland Norway, which then sells to, yes, to customers in mainland Norway. And it's absolutely correct that the construction industry, or the building sector, has taken a, yes, a hit, where construction activity has fallen by more than 30%. Eh, and there we see that, I saw it yesterday and then looked at the figures that came in the national accounts last week. They have, so, low, low results for 15-20 years and have fallen significantly. And that's because the interest rate increases that came all over the world, that wasn't a Norwegian phenomenon either. It was exactly the same as the interest rate increases abroad. We were even behind for a while compared to what we usually do. And then the exchange rate did that extra last plunge down. Eh, so it has, of course, hit the construction industry. And there, the number of employees has fallen by about 5-6%, I think. Eh, but that's a fairly small decrease, eh, compared to what it usually is when things are bad in construction. Properly bad. Eh, and there are few construction workers who are unemployed, and there are many vacant positions. In fact, the only figures that came out for that last week, there was a small decrease in vacant positions overall, but it wasn't worse or better than it was in the second quarter, third quarter of last year. No, second quarter. It was the first fourth quarter we got now. Eh, and there are many more vacant positions than normal. And there are many more vacant positions than unemployed people. And all in all, it's, in that sense, a good economy, even though the construction industry has taken a hit because construction activity fell, and it must be said, from a very high level, and construction activity has fallen more in Sweden and more in several European countries. And that's because the price of capital, after being, I wouldn't say artificially low, but it was, so, the lowest in history during the pandemic, and it was also, in reality, the lowest in history, and then I mean, a 3-4,000, 5,000-year history, a 10,000-year history, it was the lowest you've ever had, also after the financial crisis, because then most people, not in Norway, but elsewhere, wanted to get rid of debt because they had borrowed too much, and they continued to pay off debt. We can talk about that a bit later. Ehm, and when interest rates rose, it had a significant impact on construction activity here, as in many other places, but for the economy as a whole, the results or activity have been good, unemployment low. And now, real wages are back to the peak we had before the period of high prices set in. Ehm, so, and then it's like that, there will always be, I find it fascinating to listen to you and others. I talk to many who run their own businesses. Eh, and what you're saying, right, that's what everyone who runs their own business experiences. It's a fight, not for life and death, but it's a daily fight to satisfy customers, to be able to charge for what you do, to have good earnings from what you do. You face competitors, you face other products, others who deliver something similar to what you can deliver. And in that fight, you continuously work to improve your things, do them smarter, eh, take the podcast on Sunday at 8 o'clock and get people to show up. What won't one do for their audience? Ehm, and, eh, and that's what, in a way, is the engine of capitalism, that we fight every day to do things better. And I understand well then that many feel that they are fighting, because they do a lot. And it's almost, when you look at it, it's almost incredible that some, in a way, dare or, and, and invest so heavily as many do. But it's fortunately a driving force that lies in us in Norway, everywhere else in capitalist countries, that we have a strong, strong desire to do things better. We have ambitions, we have visions, and in all of this, I must say, Norway, like other countries, achieves many wonderful things. But that doesn't mean it's a walk in the park. Eh, but I would say to you, Ole S. that I think your customers will have to accept. And it lies a bit in how the sheltered part of the economy functions. There, customers must accept that when costs rise, and for you, costs rise with what you buy in the store and what is needed to keep, eh, Ole S. going, you live by using, so consumer prices, not as you wish, your costs in a way. Eh, so customers will have to accept, and suppliers in Norway can increase prices because everyone is experiencing the same cost increase, and they can pass it on, as we say, in prices. And the Norwegian model contributes to that, the way we negotiate wages, that, eh, industrial companies, what we call the front-end sector, sets the standard for wage growth. And we have managed to do that with enormous precision. If you look over a 10-year period, you can barely see a difference in who has received more or less wages. There is perhaps slightly faster wage growth in healthcare enterprises than on average. It's us doctors and nurses who believe we should have earned much more than we do. But it's not a big difference, eh, and equality. That is, we're talking about a tenth, a few tenths of a percent per year. So what you see is not wage increases, whether it's one place or another in that part of the economy where we negotiate wages. Eh, and it's also not true that state employees and municipal employees get so much. They haven't received more wage growth than others. They have followed the norm, plus or minus small amounts per year over time, it's the same. Eh, and it's also not true that employment growth has been stronger in what we call public administration in Norway, which is then the majority of, so, police, defense, administration. If I take all the classic state functions, it's around 6% of employment that are, call them bureaucrats, police, justice system, defense. Eh, there's some, I don't remember how much of the growth is there. I don't remember the pace, but in any case, around 6%, and if you include school and health and what the state and municipality do, it's up to 30% of employment. But we were there 40 years ago too. So there haven't been more public employees, as SSB counts between public administration and the rest of the economy. And it's also not true that our state expenditures have increased, of course, but so have our revenues. So if we take and add together the revenues that mainland Norway receives, which is both what we produce in the usual way, as you do today, and hopefully sold and got paid for somewhere, eh, what we produce on the mainland, the value creation here, and then add to that mainland GDP, and then add the money we earn from being a large capitalist and having large dividends and interest income, which is then part of the state's revenue, then state expenditures or public expenditures are at approximately the same percentage as they were before, measured when we take all our revenues together. This doesn't mean it's right that we've done it, but it's not the case that state expenditures have become, or public expenditures have risen as a percentage of the total revenues we have available. And then you can say that it's free rein to discuss, and fortunately, the discussion is happening, how much should we have spent through public appropriations and how much should we have spent of the extra money we have received, at least from tax reductions. We have spent some on that, about a quarter, some on electric cars, among other things, and it's becoming a bit less now, so I hope they come up with other taxes we can cut, but that's a political discussion that we should have had all along, and perhaps more than we have had, and to which many have contributed in recent years, and it's not a, it's not a, it's not many billions of kroner now that are not being discussed, and I think that's very good, that we must go through and see if the money we spend is used wisely, but we, but nevertheless, calm down a bit. That is, it's not as if the state has taken all the money. Not all jobs are in the public sector. Eh, it's not as if we have completely turned our economy upside down, but we have, it must be said, we have increased the spending, the spending on, is on public, or on pensions, transfers back to private individuals, and there is every reason to discuss how we do that. I think most economists, yes. Yes. And most people have opinions, ideas. And then we will meet, yes, in the marketplace, at the election, and discuss how we should do things. Whether we can do things differently than we do. But, but in a way, the understanding that the private sector is being pushed out of Norway by a growing state, especially bureaucracy, which is then taking the life out of Norwegian business, that's not true. I tend to say that the only problem with Norwegian bureaucracy is not that there are too many bureaucrats, but that it can seem like they have become more efficient, so they can create even more laws and regulations, and without thinking about the full consequences of it. I notice that because the monster in my story, to go back to Hans Gelmøyen's stories, eh, yes, he had a story about needing a monster, and in that story in my head, the monster is the state, with more than every fourth, eh, oil fund money in the state budget coming from the oil fund, eh, and at the same time, they have increased taxes. Eh, and and those tax reductions have been, they have done it on something as foolish as electric car subsidies? Perhaps it was smart in 2016, but now it's 2026. >> Yes, but now we have never reduced it. But we are removing much of it next year, what is, yes, but remove it all, like. And we had a good, we had a very good tax system where, like, luxury cars were like a huge revenue, and but but then I get that, and then I get that, that in the story about inflation, I feel that there must be the public sector and fiscal policy that makes Norges Bank unable to get it in order. And then I also feel an underlying irritation towards Ida Volden Bakke, where I think, you have the world's easiest job, so to speak, in terms of achieving your goal, which is to get inflation down to 2%. How long do you need, and why on earth did you lower interest rates last year so that the Labour Party won the election? >> Yes. >> Something is wrong. >> No, I don't think anything is wrong. I'm so bad at conspiracy theories that I rarely fall for them. Eh, first, I must say about taxes, we have that. We have a high tax level in Norway. We have the same tax level as Denmark and Sweden, which also have public schools or, so, jointly financed schools and healthcare. That's what differentiates public spending between countries. It's not the bureaucrats, it's not the defense, it's not the police, the justice system. It's how we organize what we in Norway call welfare benefits, welfare services. And that's where the money goes, mainly healthcare, care, and school. That's where the money goes. Eh, and in addition, in Norway, we have spent an insane amount, and many economists say too much, on road construction and infrastructure building, for which we don't have enough people, we don't have enough traffic to justify many of the investments we are making. And, and as I said, there are many things we can discuss in the budgets, but the tax level in Norway is the same as it was 20 and 30 years ago, and it's the same as in our neighboring countries that have the same organization of society. By and. Yes. And in addition, one more thing about tax that is important to mention, welfare benefits that we receive in the form of health, care, i.e., nursing homes, eh, kindergartens, and school. And in addition, it depends very much on how the pension system is organized. Some countries pay large amounts from employers or employees to pension funds. Eh, elsewhere, they take it from taxes, eh, and pay, call it social security contributions via a public pension system. And that determines the differences in tax levels in different countries. And Norway does not stand out with high taxes, and we have not increased them as a percentage of value creation, i.e., in relation to our income, the tax level has not risen. Individual taxes have risen, and we have had a discussion about wealth tax, for example. Eh, yes, and I think they pushed it unnecessarily hard, and they have appointed a commission that is supposed to help us get back on track. Ehm, and I can discuss many individual elements of the system, but it's not as if we have a tax system that, in a way, kills the Norwegian economy. And that's completely, but that's also completely correct, and also completely correct that >> in Norway we have had a significant income increase, truly, by having an oil fund that is now at 20,000 billion kroner, which gives us 600 billion kroner in free income without working for it. And that makes it, it makes it easier, if we had done it in the form of tax cuts or public spending, the effect would have been that we would constantly be pushing the economy a bit, so it's in a way a bit better off, a bit.

lower unemployment and we must constantly find a little room to use the extra money. And then there is an argument that Norwegian inflation and interest rates will be somewhat higher. And we actually had an inflation target in Norway which was 2.5% because we should have more than two. For that half a percentage point should then give us the weakening of competitiveness so that Norwegian wages would rise faster, Norwegian prices would rise faster, eh, to then make room to be able to use the increased income that we expect to receive via the fund, then it becomes much more.

>> So, so, so I would say that it is about associating the fact that we have 3.6 in Norway now, eh, against 2.5 or 2.7, which is the average among our trading partners. So you don't see it, I, I look at it, because if it blows, then I see that there is a difference, or now, but it is in a way the price level in Norway, was that the idea then from 2019 until today.

Yes. But it is

>> so prices in Norway have risen exactly as much as in our neighboring countries.

Yes, but despite the exchange rate, one thing that makes me, like, raises my blood pressure in your story, medicine against, yes. And that is that we, that we get, eh, more than every fourth krone on the state budget, excuse me, comes from, eh, from the oil fund's spending. But what makes me a bit, like, agitated by that story, is that we have the same tax level as Sweden and Denmark, while the state gets every fourth krone covered, eh, from the oil fund. And then I think, how is it possible that we have, we shouldn't have the same tax level as Sweden and Denmark. I thought we should, Norway should be a tax paradise. You can certainly wish for that. Then you will, then you will have to vote for politicians who want to turn us that way. And that is certainly possible to do over time. In the short term, it is difficult to change much, because the schools are organized as they are, the healthcare system is as it is, and so on. But you can certainly have an ambition that we should have done something different than what we have actually done now. But that is what politics is about discussing. Eh, and it is clear that we could have used more of the extra income to reduce taxes, but then we would have had a little less money for the things that the state and municipalities deal with and to pay pensions. So there are highly real trade-offs as to what is good for, or what the people want to prioritize. It is up to the people to decide.

And then I think we should also, that is, there is nothing to suggest, and this is a discussion that has been going on for a while, years then, that if we look at the economic results in Norway, what private companies and corporate Norway achieve, there is no reason to be particularly worried when we look at the numbers. Eh, we have now revised the Norwegian national accounts and brought them more in line with what is done in other countries. Excuse me. So the value creation per inhabitant, it is absolutely at the top in the world, eh, in mainland Norway, that is, before we take in the extra money from the fund, and productivity growth in Norway over the last 15, 10, 155 years has been higher than almost all other countries. It has been lower than before, but that has happened everywhere and there is no reason for there to be any Norwegian explanation for it. But the growth rate has been among, still then, among the best. Eh, and far above the average of other Northern European, North American, Australia, countries that it is natural to compare ourselves with, we have had a growth in productivity that is actually well over double what the others have had. So much of the complaining about the Norwegian economy, that we have driven into the ditch, eh, and that state spending is the cause of it. Yes, it somehow lacks a smoking gun because the economy has not gone so badly. Ehm, businesses are doing well.

I have another picture of Norway and Australia. Take the stock market, Australia and Norway back to 1983, I guess it starts after 42, 43 years, then there is not one person who can see a difference between the two. It is at the same amount, eh, after 43 years, must be in a common currency. Eh, and and many stories about Norway when we compare business cycles, when we compare exchange rates, yes, I mentioned the stock market, credit proposals and almost all things I look at, it is in a way Norway is also a, it is a small open economy. We behave quite smartly when we look at the results. And there is no reason to create a whining story about Norway. That does not mean that I agree with the politics. That I believe that things cannot be done better. That I wonder if all the ways or a subsidy scheme we have or different things within the tax system that I want to change. Eh, but it is not such that what we have done has led to us driving into the ditch and that we must have a dramatic policy change to survive. And there is the discussion, that is, I want to have a discussion about everything we are doing. But not based on the premise that this has gone completely to, because it has not. Look at the numbers. What

>> say

And that, and that is, and you say that it is an easy match then, because we have, after all, received extra income, so it would be strange if we didn't have a good economy. But we do. Eh, and and then I believe that these are more political discussions. Yes. Yes. I have something, I use some of my economics expertise as an argument to, for example, clean up housing taxation which is completely unreasonable towards tenants or for people living in small homes and which is unreasonably favorable for those living in expensive homes, for example. We have had a debate about this recently, but we should have done much more than what we are saying now. And also done it over time so you didn't take the cash, that is, didn't kill people with big changes from year to year. But I have many good things we, that is, suggestions for things we can do better, but I don't create, I don't need a crying story about Norway having already driven into the ditch to justify those changes.

>> What if we try to find, eh, the crystal ball and look one year ahead, what do you see then with housing prices, unemployment, real wage growth?

Yes. Number one is Norwegian, the economic development in Norway is not determined in Norway. If I have two variables, I have the world economy and the oil price, neither of which are determined for Norway, then I can explain the business cycles, ups and downs, in Norway very precisely. Eh, and again, right, we are a small, that is, in an economic sense, we are a small cork on the ocean, and we have been that since, I see, late Viking Age, and we have, well, sometimes there is rough sea around us and sometimes it is easier to see us, but we have managed it, eh, and variations in the Norwegian economy largely come from outside and are not determined in Norway. Financial markets contribute, exchange rates contribute, and we are in, we sell a good deal of what we produce. The most important thing is that we act like the others. We think like the others. The central bank largely does the same. There are no big differences in interest rates. It's the same interest rate they have in the UK and the USA. A little bit higher than Europe. But the central bank largely does what Norges Bank largely does what others do. Eh, so that's number one, that it's not determined here.

Number two is that we have now been through a period where the interest rate has gone from the central bank rate from 0 to 4.5, and it is back at 4, and the market expects it to remain at four. That can be a good estimate. Eh, it is, by the way, a completely normal interest rate when we look back in history. Eh, we had abnormally low interest rates for a period after the financial crisis during the pandemic. But that interest rate shock has been challenging for many, and especially for the construction industry, because construction activity has fallen. And the reason for this fall is that it is not profitable to build new when you have to set requirements for the return, the capital return, when interest rates rise. And that sounds technical, but the reality is now it costs money to borrow money. It costs money to take money out of the bank because you don't, then you lose the interest income. And then you have to demand more from investing in a home or in a commercial building or something else, because the alternative of letting the money stay in the bank or investing in stocks or something else gives a better return. So there, but then we took a big hit because housing investments were high and other construction activity was high, and then they have fallen. But the good news is that now it has fallen and now it has also stabilized.

And what happened was very simple, that we went from increasing debt, and especially among households, but also among businesses, from increasing debt clearly faster than income. And we have been doing that largely since we got out of the banking crisis in the 90s. That was also a tremendous period, first with debt increase and then debt repayment. So we have gone from increasing our debt clearly faster than income, that is, the debt ratio, as we call it, rose until the last three years, and increasing debt slower than income, and the debt ratio falls. At that turning point where we go from debt increase to debt decrease, you must, what then happens is that people have to spend less money. You have to turn the cash flow from getting money from the bank that you can use, to, if you will, simply put, save, spend less than income, and go back and return the money to the bank. That savings shock, that is what kills economies, and which we then, if it gets bad enough, kills businesses, and afterwards kills banks, because businesses cannot pay back their obligations, their debt, and we get what we call a banking crisis or financial crisis. This time we got a massive savings shock because interest rates rose and people realized, oh, we have to start spending money differently, that won't work. We have survived, I would say, the second largest savings shock, the largest was what we had at the end of the 80s into the 90s. What followed, what we called the banking crisis. We have survived this savings shock and brought savings up to a level we have never had before, except for forced savings during the pandemic, without the labor market, without the economy as a whole going to the fan.

And after we have made that adjustment, the change of course from building up debt to building down debt, then I have much fewer worries because I know that the adjustment has been made. People have lived within their means and they can use the increased income they receive. Because I believe wages will increase faster than prices also in 2026. And they will use that money to go shopping. Eventually, some will start building again and the economy will drag itself, drag itself further at a, yes, trundle along at a decent pace. And we are now at a growth rate of about one and a half percent. Eh, the population of working age rises by about 0.6, rounded to 0.5 then, and then productivity increases a little, so one and a half percent can be an estimate of the trend growth. And we are there now and a little bit higher. If we look at exactly the last year, it is a few tenths higher. So I believe we will have, if no political shock happens outside. That is, Greenland, what happens? Or, that is, some war in Europe or some unwise financial or trade policy or some other nonsense from the USA, then I believe this will go well, eh, because we are in balance by not increasing debt much. The big downturns come when we have borrowed far too much money and invested in things we neither really needed nor could afford. Then not 10 wild horses can stop us from spending less money and the state can only do little to compensate for that. Now we are not there. Eh, and the starting point is then, eh, which, yes, is neutrally positive.

Also, good news is that perhaps the economy lives with a 4% interest rate. I think maybe it will, maybe it will come down a little, but inflation is a bit stubborn, so there is definitely no rush right now when unemployment might also be topping out. We will see how it goes, but it has fallen in the last couple of months. It has fallen across the country. Ehm, it is even falling in the construction industry. Eh, and then if nothing happens outside and outside, it could be, it could be a stock market crash in the USA. The AI technology wave has given us very high stock prices in the USA. Ehm, and if we look back in history, it has never gone particularly well afterwards. And if stocks burst, then perhaps investments in AI will burst, and that affects the USA, but it will affect risk sentiment and, yes, the Oslo Stock Exchange with, that is, quite, the Oslo Stock Exchange is now at higher prices than normal. So financial risks are starting to build up, and much of that was linked to technology.

>> Do you see any big AI bubbles or or AI productivity growth in the real economy?

No, we generally don't do that anywhere. Some researchers find effects in some places. Eh, and some expect significant effects, while others are very uncertain. This will take much longer. And as an old man who has heard many stories about technological shifts, my attitude is that the short-term effects will probably be smaller than many dream of, rather than it having a very great significance in the long run for how the economy and society are organized. Take the internet, which was the last round then. Eh, there was a hopeless belief that you could do anything on the internet and get rich from it. Eh, and that bubble burst, but it didn't drag the economy down much, for then there wasn't much debt and many bad investments. So there was no deep economic crisis. The financial crisis was something completely different. It was debt and overinvestments. When that burst, it burst like a, yes. Eh, so but we are mistaken about how fast it will go. And then we perhaps underestimate how much it has to say. In the longer term, that we can sit here and sit in Bergen and on Justøya and make podcasts and, of course, do a thousand other things that are useful for us that we didn't do before. And if we are lucky, AI can contribute to the same, and then it is possible that AI becomes so smart and solves all problems that there is no use for anyone now. So I say, now I have become 69 years old and I say, yes, yes, we will see how it goes. Eh, I very much doubt, eh, that we will achieve that. I hope we achieve a lot because we have had in Norway, like all other, with emphasis on all other rich countries, over the last 15-20 years, and that is after the financial crisis, in reality, when it broke, we have had lower productivity growth than before, eh, and that was because we exhausted the effect of the internet wave, if you will, so we didn't come up with many smarter things. And now we have a new thing that hopefully can give us a new productivity wave. But empirically, if I look at history, I would be happy if it increases productivity growth from 1 to 2 percent per year, but that is huge numbers in macro, and if you keep at it for 10 years, then the standard of living has become much higher, which we can take out in short working hours or in increased material consumption or how we choose to do it. So I certainly hope that happens, and it is not unthinkable.

>> Do you think it's started? I think that industries like auditing, eh, lawyers, eh, finance, all such information-heavy industries should be the ones, eh, I myself see it in journalism where it gives such a huge, a huge effect and actually changes everything. I personally believe that Schibsted, for example, is on its way to becoming, eh, super money-making machines, because I believe they will be able to manage with, yes, a third of the journalists they had before, eh, in the long run. That, yes,

let us, let us finally hope that we can save labor, eh, and use it in other areas. Because we have done that historically when we found out that we can, eh, we can have a spinning machine that takes over the job for the spinners, it was a bit troublesome acutely in transition, but it quickly passed, eh, and the economy became richer and the standard of living rose and child mortality disappeared and all that. I, eh, hope that AI can contribute to such a so-called productivity shock in many industries, eh, and that we can do things better. At the same time, it is also such that it does not necessarily mean that the quality of what we get out at the other end will be better. And there are some, many, who are now worried about that. That is, singularity can be discussed on various levels in this world, but one of them is that AI fills the internet with the same type of information that we had before. Eh, and that there will be a lot of junk there and that we will not, we will not get better information from it. Eh, I am not a technologist and have not researched it. I see what others think about it. Eh, but there is something about, eh, that we can have great productivity gains in certain places, but that for the economy as a whole, it will not be that much anyway. But I certainly hope that it will be significant and that we can get tools that make us more productive.

Eh, but then we must also remember that if it is cheap to produce content, then the price for content will be lower. That is, I don't mean content like what we hear about in court cases in Norway today, but I mean information. Then the price of information will be much lower because everyone can produce it. Eh, and that means that a consultant must compete with AI that can solve many of the tasks that his clients have until now paid him to figure out. Ehm, and then it is such that the benefits of AI are spread throughout society. Eh, and it is not such that those who use it, neither those who produce the large computer chips, which are not chips but are probably bricks or much larger than that. That is, the large data centers then. No, they are insane factories. It is not those who make computers. It is not those who build the AI factories. It is not those who store the models. It is not those who put it into use. Not in the first round. That is, it is not those who run train companies, for example, who got rich from trains. It was those who could travel to the city or sell tomatoes in the city. Eh, so that the whole society benefits from it. But it led to restructuring and changes. The spinners had to find a new job. Those who drove horses and carts had to find a new job. So historically, we have managed it surprisingly well. And I mostly believe that we can, we will manage it this time too. Unless then something completely revolutionary happens that makes, eh, the AI engines solve all problems and the robots take all jobs and they can lie around. I don't know what we are supposed to do.

>> I am not at all afraid of, like, unemployment. But, but I am, I really hope that in 10 years I can still make podcasts from here, but that then my Android butler, eh, has woken up a quarter of an hour before me, prepared the coffee, tidied the studio, eh, set it up and and and poured. That is, if Elon Musk manages that. I feel he is such a fascinating guy to follow just because he dreams so big. And I notice how now, like, now, eh, BYD and other Chinese electric car manufacturers have actually come and are almost in the process of outcompeting Tesla as a car manufacturer. And then I notice how Elon Musk, like, says, 'Yes, but Tesla is not about cars. Tesla is about androids.' Eh, and now Model S and X, they are going to become humanoid factories. And that's where the future lies in self-driving cars. What is just a step on the way towards AI? Eh, and then, at least not in Norway, self-driving cars haven't, I remember starting to write about them in 2015 and then Tesla probably promised that they would have them on the road in Norway in 2017, 2018, and we are in 2026. So I'm like, it's still a human driving me around Oslo on those rare occasions I take a taxi.

It doesn't have to be that long. That is, we see in several cities in the USA, eh, where the authorities, where, that is, the technologists take on development when the authorities ease regulations, so it is possible to try it out and and it seems that it works. So now I see that Waymo is going to several European cities which can be a bit more tricky to drive in. That is, London is something completely different from a standard American city with large square grids on the roads and wide roads and all that. So if you can make it work in London, then I would believe it could do a lot in Norway too. And it would be fantastic if we didn't have to use people to sit and hold a steering wheel in a car. That is, just think when you drive up and down to Justøya. Just think that if you press the button home to Ustøya and then you sit down and sleep for half an hour, then you have arrived in Drammen or maybe even further then if we can drive faster when machines take over the driving and drive much better than we do, so when you wake up and then you start to put, you put on a cup, ask for a cup of coffee, then you get a cup of coffee there and then you set it until they start working downwards, maybe they even sit and record the podcast on the way down to Sørlandet.

>> already now, I think I, like many others, have quite a few productive hours in the car, given that I then, that is, it's something else to drive a car because you drive on cruise control which has, like, quite a good overview, and then I take all the phone calls and the long conversations, and, eh, up and down in the car, and I think there are many who, like, already have the car as quite a good, eh, phone meeting place. Eh,

we have been able to do that for a long time, but it is a bit easier, as you say, when cruise control maintains distance to the car, and if you have a self-driving Tesla, then at least one, one

>> on on good roads, it takes over a lot of the work. You just have to sit and hold on to the wheel all the time.

Yes. That is, my, my, I won't name another podcast colleague, so to speak. He tells how he drives every day from his suburb, a good distance outside Oslo, into Oslo in his Tesla without touching the steering wheel.

Mhm.

Yes.

He has even started sitting with his PC on his lap.

But how, yes, that is, one can do that. But you have to hold on, at least on mine, it's a bit of an old Tesla then.

Yes.

But I mean, you have to hold the steering wheel occasionally so that he, that you confirm that you haven't fallen asleep then.

Yes. No, he, that he, he claims he doesn't do it. I don't know how he managed that, some kind of trick then.

Yes. Yes, I believe that. I know it's possible that a new Tesla has that function. I doubted it because they haven't come far enough in generations to do that. But what we know is that this is possible. It is already being implemented in many cities. Well, China has also come a long way with it. And that can lead to us having to have a car in a completely different way. That is, car as a service, you might call it. That is, that we, we should not have our own car. We just press a button on an app that we want a car. Then the car comes and drives where we want to go, which can be a very significant improvement in prosperity. Eh, and of course, that we can then save a lot of labor that today sits and holds a steering wheel, eh, which can do other things that are useful for us. And I don't think it's impossible to come up with other things that those people can do. Not that I lack the imagination for it, but I'm not worried that capitalists won't have the imagination or consumers for other things we can use people for. And perhaps over time also, on average, lower working hours, ehm, shorter working days and more leisure and and holidays. What Keynes had as his vision, that we should be poets and fishermen and how we should live our lives. But, eh, so, so I think it will at least be a long time until I worry that we will free up so much labor that technology takes so many jobs that it is not possible to get those people into something else. But it can lead to a period where we can have good growth in the economy, but also with low inflation because labor is freed up that can be used, yes, eventually then, to other industries, other businesses. And then a means must be that interest rates are low so that it becomes easy to start new businesses and and a demand when the economy is strong so that then people come, come into work elsewhere. But today, the effects are so small that we don't see it. And then, but it would be fantastic if these androids now, if they came by 2030, eh, so that we could start to get, eh, yes, home help androids.

>> I understand where the parent burden lies. Yes.

Yes, I understand where your challenges in the house lie. Eh, yes. No, that is, let us finally hope that we have, after all, gotten robot vacuum cleaners that eventually cross several thresholds and do smart things. Eh, but let us finally hope that we can do things. Now it is such that with housework, we should not exaggerate, because it is not that many hours a week that are spent, at least not by many of us, eh, that are spent on housework. Ehm, and and the benefit of having coffee served is quite marginal compared to pressing a button and the next coffee comes into the cup and you carry it up to the office yourself. Eh, so I don't think we should exaggerate the welfare gain from that. But if you start adding up the various things that happen, everything from what you mentioned from lawyer, eh, firms that can get contracts done faster and and information retrieved better and so on, to being able to get help with having coffee served, then in sum, that is, in sum, it can then become something that really makes a difference, and I truly hope for that, and one must remember that it is what has brought the world forward all the way, that new technology is invented. It often starts at universities, eh, and researchers. And then eventually, eh, the research has come so far that we understand that it is possible to do something with it. And that can happen 10, 20, 30 years after the researchers start on it. Eh, and then the capitalists also understand. So then they start then and contribute and want to invest head over heels. Either in canals, railways, in ships or in radio factories or car factories or internet companies or in AI factories, and they accelerate the implementation of new technology by contributing a lot of capital. History has shown that they have lost most of it because they don't understand that all other capitalists do the same, so we get more than enough of it, and the profits do not end up with those who build the canals or operate the canal boats or the AI engines. Unless then we get, call it, monopolies or oligopolies. That is, a few companies with very great market power. So that can happen. Ehm, and there is a bit of a schism between the USA and Europe on regulation to try to ensure that the profits do not end up in the pockets of a few companies. And there are some who do not only think about the few companies, but about the few men who then gain immense power over society by controlling technology and money. There are strong works written about that risk. And I must say that I can share some of it. One can say a lot about Musk, who is a skilled technologist and has enormous execution power. But I would not subscribe to many of his views on how society should be. Eh, and share some of the other tech oligarchs' views as well. So if they are to decide everything, then I am a little uneasy. But I think we will manage that somehow. But we almost have to conclude with, eh,

>> wasn't it about inflation we were going to talk?

Yes. Yes, but now, now I felt like concluding with what has been the big topic of the week, because it has been EPS or the last two weeks actually with the Epstein files, because something that is fascinating about the Epstein files, if we disregard the, eh, yes, the abuses and perversions then, to the extent that is possible, I also feel that it gives an insight into an elite, eh, who meet and wine and dine and talk to each other. And I get, I must admit that if there is one thing I would wish as a journalist happened now, it was that Økokrim (Norway's National Authority for Investigation and Prosecution of Economic and Environmental Crime) released all the other emails of Torbjørn Jag, Terje Rød Larsen, Børge Brende, and of course, as a little juicy orange for us podcast hosts, eh, all the emails of the Crown Princess, that we had gotten to see them and and and gotten to see the others. Because then we get the answer to whether it's like, is this what they are doing, apropos such tech elite Musk, eh, one, yes, Epstein is constantly inviting him.

Yes, that is a huge question, and there is no doubt that this is not just something happening in Norway now. There have been downfalls elsewhere too, in the UK with a trade minister and, eh, our ambassador who leaked information directly to Epstein about things the government was working on before it made market-sensitive decisions, so it's quite scandalous, eh, to then more like, yes, you call it wining and dining and relationships that don't taste good. And then it is, when we know that Epstein was a, had a side business, an activity that does not tolerate daylight at all, to put it mildly. Eh, a modification here. I just checked with Norwegian newspapers what they had written about Epstein before 2019. Eh, and it is possible that the national, eh, National Library's archive was not correct here, that is. But in Aftenposten there had been an article about Epstein in 2011. It was in connection with Prince Andrew. There had been an article in Dagens Næringsliv in 2011 about the same, and two or three articles in VG. One in Dagbladet or whatever it was then. That is, Epstein was not a topic. Now we all know that Epstein was a rapist and engaged in activities that were very harmful. At the time when people had contact with him, it was not as prominent as it now appears obvious that everyone should have known. And what I mean is that I, I myself believe that I knew it long before, that I had become aware of the verdict from 2008, 2009. Eh, and that is perhaps because I sit and watch CNN and CNBC, or that is, American media and read foreign newspapers, that is why I know it. But Norwegian newspapers had nothing.

But and then it is such that I believe, and that is my belief and not my opinion. Eh, it is clear that people who are leading in positions in business and politics, organizations, talk to each other. They meet in many different places. Take the security conference in Munich now or the UN General Assembly or Davos or wherever it may be. Eh, and they associate and, as powerful people, have relationships with each other. And I believe that is impossible to avoid. That's how it has been throughout world history when leaders in large companies, that is, those, that is, those who are in the airline industry or in the tech industry, they know each other. Not because they are competitors, but they also need to, in a way, understand each other. So that is not criminal. Eh, the criminal part is, of course, that relationships are used in a way that is not in line with the, in a way, normal rules of decency or normal security rules or and bribery rules and all the rest. That is something completely different. But there, my belief is still that this does not apply to the elites as such, that they have contact with each other, they know each other, and it is a thank you without an alternative, that without that knowledge and acquaintance between politicians in different countries, and preferably also with decision-makers in organizations and businesses, I believe the world would be a quite unpleasant place. So, call it diplomacy then, in an extended sense, I believe is incredibly useful for resolving conflicts at a lower level than if they did not know each other. Then I don't think there are many politicians who

Now they are trembling in their pants because they have participated in things and done things they shouldn't have done. I spoke with a former minister the other day who, when he was a minister in the same government as Brende, among other things. Uh, they had very strict rules about what they could accept. They couldn't participate in a flight that someone else paid for. That would cast doubt on their independence. And they had to cover it themselves, of course. They had to cover hotel bills for events. They even had to pay for meal tickets they couldn't get. That's when they arranged a seminar that a minister for Norway participated in. Then I think they went too far, and I don't think that was the norm either. But I don't think it's the case that Norwegian politicians have been completely or half or fully bribed by others, that they have asked for loans or entered into property transactions or done things that look like it, and that Økokrim is suspicious of and has issued indictments for, that this has been the way the elite operates. Uh, so I think I understand the aggression, but I think we are taking the criticism too far and affecting too many people. I saw a former minister, Jan Petersen, write an article in an interview with him in Morgenbladet the other day, where he had to try to separate the wheat from the chaff, uh, and for example, to make the Epstein case and the Rød Larsen case into a reckoning about Norwegian foreign policy at large, uh, and aid policy. I think that is, and many have disagreed with Norwegian foreign policy and Norwegian aid policy, and then the argument comes that here we see how rotten it is. I believe that rot is not as widespread as many in the comment sections would have it today. And it's not easy for me to subscribe to conspiracy theories. I give up when the information comes, and I am wrong. Uh, and I truly hope that many stones will be turned. But my starting point is that I don't think the vast majority have been, or I think it was a small minority who have done things that Rød Larsen, for example, has been involved in. It's one thing with Rød Larsen that I find peculiar, and that is that the Norwegian elite has apparently lived in or been in companies in his grandiose residence. And I assume they must have known about this palace in Greece. And he apparently also has an apartment in Abu Dhabi. And then I think, is this really the case? Why don't these people ask themselves how an ambassador and a uh, yes, what should one say, a helper, to call him that, or a kind of leader of a think tank, manages to build up these assets here? This is, this is assets that crush what a uh, well, this is like the super-elite of financiers and lawyers live like in Norway. It's not like, to say, uh, lawyers and the elite in Norway, they probably have at least the uh, the economic benefits that the couple, Mona Jul and Ferd Larsen, uh, possessed or still possess. We'll see how this case goes. Um, and I think Økokrim has issued an indictment because they have reasonable grounds for suspicion here. But it's not like Terje Rød Larsen was a social entrepreneur in Norway. He established Fafo. He was involved in research projects. He had at least a hand in the Oslo Accords. There is a big discussion among researchers and others, also here at NES, about what he did and what others contributed. And many in the Ministry of Foreign Affairs were angry that he received much more credit than they thought he deserved. But he also had a tax case against him, not Findus, but Findeko, I believe it was called. And many were very skeptical of the way he operated. But the fact that people have been in an apartment, that people have been to parties, not with them, but have I met him at a party? Yes, that's certainly happened at some point. I was involved in a project where he was the project manager in the early 90s in LO, or for LO, through Fafo.

>> How was he as a person then?

>> No, he is an incredible propeller. Yes. With full initiative, lots of ideas. I spoke with someone who, from the sam, he was a sociologist and wrote in journals and things like that. It was brilliantly done. He was damn good, and he was a prime mover and had enormous drive to get things done. And then that drive has probably led him to do things that don't stand the test of time and that he never should have done. But I think when it comes to, you know, that he, that an ambassador and an international leader of an international institute, that they have an apartment, they rented an apartment in Frogner for 44,000 a month, so they must have had some cash income, but the rent was probably around market price, I would think at the time, and the fact that some of them live in apartments that are in the dimension of 20 or 30, 25 million kroner, many people do that in Oslo. And the most important thing when we look at the Norwegian elite, the political and organizational elite in Norway, where is the good question, make a list of where they live. Look at what cabins they have. And you will find that we have a, I mentioned a foreign minister, he lived, he still lived in Kolbotn there. I had to call him and say that I agreed. I thought it was a good article he had written. I could have called former prime ministers. Because they also lived in Kolbotn, in that area where you have always lived. We have, uh,

>> I am from Myrbå, so I know that Kolbotn is not, Kolbotn is not Saint-Tropez. It might be. And the thing is that there are not many rich Norwegian bureaucrats, top bureaucrats, and politicians. And that's good, and we would perhaps like to have a better overview of what they had when they came, and what they had when they left, and what they got afterward. But it's not the case that Norwegian politicians are nobility in Norway. If I were to go through what my clients, and skilled business people, investors, business leaders, have in terms of assets, Norwegian politicians on average are miles away. Mine, without me having done the research on it, miles away from those in the business world. And call it those who have been skilled and good and lucky in business, of course, investors, possess in terms of assets and spend of money. So we must be careful here that we create a story that politicians are dishonest and cheat at everything they can cheat and have become rich at our expense, that the top bureaucrats are the same. I don't think we have a pervasive culture of corruption in Norway. There are mistakes in local administration. I have seen some cases regarding building permits and things like that. Yes, there is probably more of that. But it's not the case that we have an elite that has received resources through politics. And that we have managed it in a country that has found a great natural resource in its backyard, the oil sector. I don't believe that. Perhaps Canada can be an example of the opposite, perhaps parts of the USA, but there the assets have been distributed completely differently than in Norway. How many rich oil billionaires are there in Norway? Yes, there are some in the supplier industry, but it's not. You can count them, you won't fill a hand. Røkke has made money from oil and many other things, but the assets have not been created. It's not them who are the billionaires in Norway and the bureaucrats who have been on it. It's a top bureaucrat in the oil ministry who has had an international career afterward. No one has accused him of using information or operating in a dishonest way. He has probably made some money from it. But then we have almost come to

>> Who are you thinking of now? Who was it?

>> Yes, his name is Tore Sandvold. A very skilled Norwegian.

>> Yes, that was him. He started, yes, he was a department director, he was.

>> Yes.

>> What did you say? He was,

>> He was a department director. Yes. As far as I remember. But I haven't heard anyone say that what he has done afterward has been unfortunate, and it's wrong to bring up his ex, his name here. But we don't have a class of elite politicians, bureaucrats who have become rich, and it's a pretty transparent society. It's not easy. How many other palaces on Paxos do Norwegian politicians and bureaucrats have? We should start with that. How many others have enormous holiday homes in Marbella, Paxos, or Saint-Tropez? Which Norwegians have property in Saint-Tropez or Southern Spain somewhere? I think that tells more about the distribution of wealth and power than the stories we get from the Epstein files.

>> We'll leave it at that. Uh,

>> I hadn't really thought about it before, and I think it was well formulated.

>> Yes, it was very well formulated. It's a kind of cold, uh, it's a bit like drinking cold water for a podcast that thinks it's more fun to stir the glass. But you are filling it with cold water and calming me down a bit.

>> Yes, but that's good. Then I've got it. It's an early Sunday morning, and we've managed to calm down.

>> Yes, just call me again when you think things are starting to get a little heated in your head, and we can see if we can calm it down again.

>> We will. Thank you very much for your time, Magnus.

>> Thank you so much for being allowed to participate. It's fantastically fun to sit and discuss with you early and late.

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