‘Capital’ isn’t just money. November 28, 2025

25:49Even the financial services. Like I'm not going to lend someone money over there. Like I don't know because I am indirectly, you know, going to wear the consequences of their uncertainty as well, so I'm not going to lend you money. So, you know, it's really, really, really hard to kind of, I mean, conceptually it's easy. Yes, that's right. But it is very hard in practice. It's why it's such a special thing when you have seen certain democracies and countries around the world really build that institutional rigour up. and it's why it's such a tragedy and just makes me so sad inside when you see the collapse of, maybe that collapse is too strong a word, but the degradation of a lot of our institutions in Australia, particularly in the US, particularly in the UK.

26:38Like they just, I feel as though they're eroding in a, you know, not that it's all over and done with, but it just feels like it's moving in the wrong direction. You made the point that maybe we're just more aware of it with social media these days, which is probably something to that as well. And I think also too we're always more, we notice it more when things are going badly and we're looking for reasons. There's people to blame. I'm far more comfortable with corruption when I'm personally getting ahead, you know? Yeah, well, but I think... That's just a bit of a real blunt example, but yeah.

27:06It's just you don't look for it. Yeah. Because you're getting ahead. Like, you know, when you have a complaint, you're looking for someone to complain about. You know, who's doing this to me? When you think things are okay, nobody's going to benefit from it. Life is just okay. You get a little less angry about it, right? It's like, well, that sucks, but I'm still, you know. To be topical and political about it, think about the March for Australia thing that's going on, right? Now, there are some absolute morons leading some of that stuff and I happily curse them individually and separately. But there's also a whole lot of people who are there who are seeing that as a viable avenue for them to take exception with things they don't like about what's going on.

27:46And why is that? Well, maybe in some cases the root cause of these sorts of things, not this particular, these sorts of things are genuine and real and maybe that is genuinely a problem. We should fix it. But how many people go to that march if housing is affordable, inflation is low and wages are rising? It's not because things are going great. Right? But, again, that's the point. So same potential issues but the awareness of it, the ability to generate support for those things is just a function of how well people are feeling. Hey, the other good thing about governments is at least they also provide a service with fiat currency, which is lovely.

28:20Let's move on to... I don't like that. That would be fun. Just drop that and move on. Just drop that. Mic drop. So speaking of institutions and all those kind of things, we have to talk about inflation probably relatively briefly because there's a lot more we can add. There's no chance it's going to be brief, but let's try it. I don't want to necessarily go over old ground all the time. No, no, I'll do my best. No, no, no, not you. I'm talking about both of us. Like, there's plenty of things we can say and could, I'll say regularly or we could just play last week's episode and disappear. I'm just going to share some numbers to set the scene.

28:53In July of this year, the annual inflation rate was 1.9%. Sorry, that was June. In July, 3%. August, 3.2%. September, 3.6%. October, 3.8%. The RBA said it was transitory. They're forecasting it to come down. And it may still. And it may still. Well, that's true. That's true. They're not wrong yet. The problem is that even aside from policy responses, it is going in a horrible, horrible direction. Yeah. Things are continuing to get more expensive. Of that 3.8 % of the shares numbers, those who haven't caught up, food up 3.2. Clothing up 5.4. Housing 5.9. With an asterisk because there's energy subsidies coming and going.

29:39Health for education 5.4%. Insurance, ironically, one of the better ones, up only 2.5%. But as you regularly say, we compare inflation year on year. I haven't got these numbers. Right. I haven't got the cumulative numbers back to 2020. But overall, I'm pretty sure I'm right in saying by now, average price drops on like 25 % since the beginning of 2020. I think that's right. I'd have to dub. I actually looked at it this morning. Oh, did you? In anticipation of it. Yes. So pre-COVID to now 25 % on headline inflation. There you go. Bang on. Excellent. I was 24-something. Oh, don't take it away from me now.

30:16Come on. Come on. The rounding errors, right? The quantum wrong. But what was interesting is you, this is, I'm not even going to get into my ideological opposition to why it's kind of measured, but let's just focus on, we've got to distinguish, I think, to have an intelligent conversation between discretionary and non-discretionary. Correct. You know, if my luxury handbag has gone up in price, okay, that's one thing, but that's not nowhere near the tragedy as is when housing or energy or food or healthcare goes up. And so when I was looking at it, let's look at non-discretionary and let's look at cumulative since 2020.

30:59And by the way, we'd already had a big inflation impulse by this stage. But I just went back five years to be consistent and it's 30%. Again, 30 point something percent, whatever. Call it 30%. The pain is real. You might rightly go, yes, but wages have gone up. Well, I looked at that too. Wages on average have gone up 17%. Yeah, right. So we have all, well, the average, if there is such a thing, and there's probably not, but if there is such a thing as the average person, they've gone backwards in real terms. Their savings are worth a lot less and their labour is worth a lot less. It's much better if you don't want to worry about eating or living in a house or having medicine.

31:44Not so bad. That's all right. That's all right. But the other thing just about that. Don't smoke or drink either, by the way. Yeah, definitely don't do that. But the energy. So I read, I haven't verified this myself, but I think it was the Australian, I think, talking about if you remove the impacts of the energy subsidy rolling off, it was still a 5 % increase. Yeah. Which is a lot. I'll put one more thing into that, and this came up when we were talking about workbenchers and basketball hoops. Construction costs have gone up. Yeah, yeah. 32, 33 % since that period of time. So I make that point because I think we, and I always make it because I think we need to, things get lost in the aggregate, things get lost in the average, and two people can have two very different perspectives.

32:37The person with a lot of assets and a lot of earning power and a lot of negotiating power over their salary or wage probably does things go great. If that's not you, then things have probably never been harder in your adult lifetime. And they're both true. And it's just that statistically there's more in the latter camp than there is in the former camp. I'm going to get the numbers wrong. I saw a really fascinating thing from the Wall Street Journal the other day and they were talking about median versus average on a whole bunch of measures. And average household wealth, I'm not going to make up the numbers, I can't remember what it was, but some number.

33:15The median was like 40 % lower. In other words, like what the hell are you talking about, Andrew? is that if you want, so median is just like line everyone up and just pick the middle person. Yeah. The average is we just, we add them all up and we divide it by the number of people. And what happens is, look, if we were trying to measure average wealth in a smallish football stadium and Bill Gates walks in, the average wealth goes up significantly. Yeah, yeah. The median doesn't change barely at all. Can I share three numbers to make this easy? Yes, please do. If you don't mind. So let's take three people.

33:51There's three people in a group and we're working at the average and the median. One person earns$1 a year. Yep. The next person earns$100 a year. The next person earns$1 million a year. Yes. Right? The median is$100. Yep. The average is$333 ,000. Oh, look at that. Nothing's that extreme. Everyone's doing great. Everyone's on an average income of$330 ,000. That's brilliant. Nothing's that extreme. So I'm using deliberately very, very, very large different numbers. Directionally, it's right, though. That's the point. Yep. Thank you so much for that. That's the point. And it was just, again, I'm doing it from memory, which is never a good idea, but they just went down a whole bunch of things, like from incomes to debts.

34:29That's really cool. I haven't seen that. Look it up. Yeah. And it was just sort of like, therein lies the problem. Therein lies the problem. Because again, when you take that top-down kind of approach, you go, well, the average is pretty good. The average is kind of meaningless, right? Yeah. And I think there's something to be said for that when it comes to a lot of these CPI figures as well. Yep. And you're right to point out discretionary and non-discretionary because that is huge and it's really, really impactful. I think that's the issue. We've talked about productivity a little bit, but I want to just raise it very quickly before we move off this one, mate, because there's been a lot of talk about the economic speed limits recently.

35:08I think this is where macro is kind of useful, at least to – I've said – I think you'll agree with this – economists are always better when they're explaining rather than predicting because predictions are useless. It depends on the economist, but yes. Well, yeah, that's true. Economics, let me say economics then is better when it's explained rather than predicting. Depends on your economics too. Let's just say the conversation. Oh, Diesel agrees. Diesel agrees. A branch fell on the roof and rolled off the roof and he saw it move and now he's going to have to. He just got upset. He doesn't like canes.

35:43Oh, man. Enough, enough, enough. He's hiding under the table and barking. That's how tough it is. So the point I wanted to make is... Is it possible? Can I keep talking? I probably can. All right.

35:58The productivity speed limit is really important here in terms of what we're expecting from the economy. And it kind of goes to the reality of how much growth we can have without inflation. And it comes down in the short to medium term, and we've talked broadly about inflation and money supply and other things over the long term. But in the short term, whenever you have demand outstripping supply, you are going to have inflation, price increase it's just it's again economics 101 right and at the moment without it without productivity growth the economy can only grow effectively at population growth and even then on a per capita basis you get nothing because all you're doing is increasing the denominator and having the number get larger and so kind of or the numerator and the denominator sorry and so the average doesn't change the and obviously your point about averages which is also right the challenge for the Australian economy is unless and until we can deliver and again when I say we I don't mean the government, I just mean as an economy, as a group of people.

36:48If we don't improve productivity, we only expect things to grow as quickly as, well, can't expect to grow at all, really, at a per capita level. We've said a million times all that progress has delivered for us over the past, you know, whatever, since the wheel was invented, but particularly since the Industrial Revolution, is all, all, all, all productivity. And so for everything else we talk about, inflation, economic growth, all that kind of stuff, it is just going to come down to whether or not we can get productivity growth. And that's kind of the national challenge, right? And from an inflation perspective, from an interest rates perspective, from an economic growth perspective, and to your very good point, which is not everyone's changing, why aren't you getting wages growth?

37:30Because not a lot of productivity growth. And yes, you can argue about the share of labour and capital in terms of how the national pie is divided up. We can absolutely have a very reasonable argument about what's right or better or worse in that conversation. it sounds very uh right-wing but the whole growing the pie thing is real you know yes we have to care about how it's distributed but if you don't grow it all we're doing is arguing over the slices and again worthwhile conversation but let's do both let's let's let's talk about you know where that distribution looks as you said the median versus the average that matters a lot inequality has got a lot to answer for on some of those measures but also growing the pie helps a lot of that problem because i'd rather be poor in a rich country than rich in a poor country right And so that is a really important part of that conversation.

38:15We talk about macro. The government's role in macro in a large part, not only is the institutions, but is allowing that flourishing to happen in the least onerous way possible. And I don't say not onerous. I'm not an anti-red tape or green tape guy. A lot of that's useful for a lot of reasons. But working out where, and we've seen this before, where you draw those lines, where you put that tape. You're not going to make businesses be more productive because you just say, go out there and do more things. What you can do is provide the right set-up, physical, institutional, all those things, going back to your very good point originally, allowing the best possible flourishing within reasonable constraints is kind of what government can do on that part of the economy to make a difference.

38:58Yeah. Yeah, but, I mean, the thing is I don't disagree. I just think that that's always true. It's like we're talking about it now, but it's like there's two things. One, it's always true that we, quote, unquote, should look for productivity gains. But I even have a problem with that because it's just like I just think it is the natural order of things that people will naturally try and do more with less. Like we will always do that. I don't need a bureaucrat to tell me to be more productive. No, I agree with you. So that's what I said. I completely agree. By getting out of the way or making sure the setup is correct.

39:34You're right. It's not just now, but it's every. when we say what should government do at any time, 1788 today in 100 years' time. Yeah, economy could be going gangbusters like, yeah, we'll still foster the conditions for that to occur. 100%. No matter what you're doing, your job is to, yes, have all the rules you need, every one of them you need. I'm a big fan of that, massive fan, because why not? We're talking about institutions, we're talking about property rights. You know, someone's got to enforce that. Someone's got to make sure kids aren't sent down salt mines and people aren't being, you know, taken advantage of at work, all the things, but also at the same time, work at how you can allow the conditions, create the conditions, stop taking away the conditions that make this work, that allow maximum productivity within those reasonable constraints.

40:15Stop putting ridiculous, unnecessary bureaucratic burden on things as well. And I know it always comes across as sort of like laissez-faire, you know, anarcho-capitalism. It's like, no, it's like there's discretion, there's nuance and that stuff here. But I think we can, I think most people who have ever had any direct experience go, it's too burdensome. I'll tell you a little story. The guy got a plot of land off a fire trail up where I live. It's really, really off the beaten track. There's no utilities or any services there as well. And I often walk up the fire trail. I walked there the other day and he's building this massive fence.

40:50It's like, gosh, you're worried about the zombies, bro. What's going on? He goes, no, the council's got to make me do this. Like, why? He goes, oh, because I'm going to build a house here. It's a construction site. It's like, yeah, but you're in the middle of nowhere. Like there's no one around here. And by the way, if I want to get in, I'm getting in. Like that's not stopping me. I say, I know. Actually, I've also got to build a trench for this and I've got to do this and this and that. He got knocked back with the color of his house was the wrong color. It's just like all of these things. Like I just want to build a house.

41:20And it's like literally in the middle of nowhere. And it's kind of like, this isn't to sort of say he should be able to do anything. It's like, here's someone spending all this time and his resources and his energy and his efforts, building a fence that serves absolutely no purpose, like the bridge to nowhere kind of stuff. That's the kind of stuff we've got to get rid of, right? Like that is absolutely the stuff we've got to get rid of. Can I make an – here's what I wanted to maybe bring to the table, which I don't think we've discussed for a long time on this. And it just occurred to me the other day.

41:53We've mentioned Bitcoin before just for the record. We overdid it last week, so I'm not going to do it this way. I would love to. Yeah. But there's two types of inflation. There's demand pull and there's cost push. Yes. And they're very different in their cause and they're very different in their remedy. Yes. Demand pull inflation is we're all doing great and I want more, you know, and I'm feeling confident. I've got easy access to credit. Let's get that second jet ski, right? That's the kind of inflation, now inflation is kind of good, but that's kind of the inflation against a backdrop of robust economic growth, low employment, profit margins for companies are growing.

42:37It's kind of like getting too hot, like it's growing really sort of fast. That's also late 80s kind of inflation, right, where it's kind of like everything's great until it's not anymore. Now, the good thing, if you want to call it that, with demand pull inflation is that the RBA, as much as I'm a critic of them, at least their policy response is effective there. You can increase interest rates, you can tighten credit, and you can cool it down. It's really kind of like, you know, it's not a perfect system and don't even get me started on it. You said nice about the RBA, that's progress, Andrew.

43:10In a very narrow, defined way of inflation, you may have a limited role to play. God, that hurt you to say, didn't it? Well, I would still say there are better ways of doing it, but, you know, perfect is the enemy of the good. Cost push inflation is different. Now, cost push inflation, this is where things are just more expensive to make. And you know that we have cost push inflation because corporate profit margins aren't growing. Yeah. Now, there will be some companies, yes. Again, I'm sort of speaking at both sides of my mouth because I'm kind of talking about an average here. And in aggregate, some companies, they'll be absolutely making out like bandits and unfairly so and others are really doing it tough.

43:51But in general, and this is what you and I do for a day job, right, when you look at company results, it's like you've often made the point on here and on Twitter. It's like actually the supermarket margins haven't increased. Actually bank margins are falling. As much as they're bastards, you know, first in line to call them a bastard, their profit margins aren't growing. Oh, okay, well, that's interesting. thing. We've also got an economy that I think in a lot of ways is relatively weak. GDP is certainly moving forward, but not to the degree that, you know, a lot of people would sort of like there.

44:29We've got things, I mean, it's actually got a name for it. It's like, it is the top thing that everyone wants to talk about is the cost of living crisis. Now, cost push inflation is very difficult. Oh, by the way, what is the main cost push here? Wages. We had this massive... Okay, let's draw a very simple line here. Had a pandemic, flew some helicopters up in the air, threw a bunch of money, freshly created money out, caused this massive inflation impulse. Everyone went, whoa, everything's so expensive here. Very naturally and reasonably said, I want a pay rise. Got a pay rise. These things are very sticky and there's very delayed here.

45:05And so we've had everyone, as I've said, 17 % on average wages have gone up there. And so you've gone to a stage now where it's sort of like prices are going high because input costs are going high. I just mentioned building materials before as well, 33 % or whatever, they've gone up. In this environment, the RBA is a lame duck. It's like, well, I can raise interest rates. So everyone's talking about, I'll call that bluff any day. There's no way on God's green earth that they might lift at a quarter of a percent. They'll jawbone it to hell, maybe half a percent at a stretch. There is no way we are seeing a material lift in interest rates.

45:47And they can't. They can't because I tweeted out yesterday a meme which I think captures it well, which is you're between a rock and a hard place. Here's your choice, Javier. You want to fight inflation or do you want to avoid a recession? Now, if you avoid a recession, inflation is going to run hot. No one's going to be happy about that. Or you can fight inflation. Well, you can do that, but you're probably going to provide some very, maybe not a recession, but very close to it, some very significant headwinds to the - Well, that's the headwinds it's designed to do. It dampens demand. And our economy's not growing that much at the moment, so there's not a lot of room to dampen demand to deal with inflation without causing meaningful pain.

46:21Absolutely. Here's another data point for you. 60 % of new mortgagee's household pre-tax income is going towards servicing the mortgage. Now, you've made the point that roughly speaking, if you want to, you know, ballpark it, 25 % of all your income goes towards tax. So you've got like, there's only 15 % of your income that's left over, right? Now, I know there's a lot, well, I'm actually fine. I've paid my house. Again, you've got to look bigger, bigger. We're trying to talk about the country here, the economy here. And you're in it. All of this added together is just, again, between a rock and a hard place.

46:56And this is why I've been saying, I've been pretty consistent on the record here. I'll say it again. Inflation's not over, right? It's not going back to mid-target any time. I've been saying that for at least two years now. And the RBA will talk a tough game, but they will fold like a cheap suit when push comes to shove because when both alternatives suck, from their perspective and the government's perspective, the least sucky option is to I'd rather have hot inflation and avoid a recession than the other way around. And I'm pretty confident of that. No one knows, right? I just said before that no one knows macro.

47:30I actually am cognisant of that. But that is my very firm view because of, and I just wanted to make that point, I think the nature of what we're looking at now is cost push inflation. And that's when you get into stagflation kind of territory. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener.

47:55It's hard, isn't it? I mean, and I think honestly at some point those two are actually also the same thing anyway. Because the reality is, you know, I mean, there are limited reasons why costs go up. A great example is minerals become harder to find. And so it just costs more to get the next tonne of iron out than the last tonne because you've got to dig deeper, put more machines in. But that's a good thing when prices go up there. Right. But in a cost push sense, that's a logical cost push. Otherwise, it kind of is a bit circular, right? So why are costs going up? Well, because you can charge more.

48:28Why can you charge more? Why isn't there a, you know, because you're probably getting demanded more. Unless supply is running short, why are costs going up? Well, generally because more people want it than can get it. So it's a bit circular at some point is all I'm saying. I agree with you. Sorry to interrupt, but the distinction I think might help us here is we've got to have the very adult conversation and acceptance that prices going up can be a good thing. Not in the Keynesian way because if I don't go up, I won't spend in all that stupid nonsense, which is demonstrably false and I will die on this hill.

49:01It's dumb. But in the sense that what it is doing is it's signalling to producers that there is increased demand here. And generally speaking, if everyone in the country decides, because I'm looking at it right now, decides to put up their own basketball hoop and steal, four metres steal poles, becoming like in great demand, guess what's going to happen? The price is going to go up. Now that's different from an endemic inflation because what will happen is all the people who make steel will go, whoa, there's a lot of demand. I might actually expand my capacity. And then the people further upstream from them will go, whoa, there's a lot of demand for iron ore.

49:36Maybe I'll increase capacity. These are things where inflation cures itself because the higher price spurs a supply-side response and it doesn't in recognition of nothing other than the very self-evident fact that more people want steel poles. And at the end of it, when the cycle runs its natural course, we have a much greater productive capacity to produce steel poles. Prices come back down because competition does its thing. And the supply chains and productive capacity reorientate themselves, which is the beautiful thing of the system that we have. And I make that point. That is different from a consistent, broad-based, persistent, long-lasting inflation, which is, yeah, that's prices going up too, but that's prices just going up everywhere and all at once and in a way which feeds on itself, which does not lead to these natural remedies taking shape.

50:39Does that help? Does that mean? I think I still feel like the lead about it for sure because the natural remedies will happen anyway because the price is going up because they still make it more attractive for someone to do a thing where they can make more money doing it. So you've still got that. Someone's getting the benefit of the higher inflation at some point in the supply chain, right? It's not like prices go up, but no one actually gets the money. Someone gets the higher price for the thing. If it goes all the way back to the raw material and it's not cost push at that point, then you have all the incentives you just talked about which come into play.

51:09If the price of lumber is going up, then you can cut down more trees, plant more trees. Regardless of whether it's universal or not, there's going to be an incentive. When a plank of wood costs$15, it used to cost$10. someone's going to be like, well, screw it, I'll plant another tree. And then prices will come down. Correct. As that supply, and this is the difference between inflation as we tend to talk about it, is that's never coming down, like ever, ever, ever, ever is that coming down because we're just pumping more money into the economy. I'm just making the distinction on, in particular, line items when those things go up in response to demand where there is a very easy and natural supply.

51:45That's a good thing. I mean, we want that, Deb. Like in the same way we want prices falling, and that's just signaling to producers, oh, we're making too much of it. People don't want it. These are good things. These are wonderful things. This is how we can coordinate ourselves at scale. That's different to a broad-based, persistent, structural inflation, and that's a bad thing. And you're right, there is someone at the very front of the chain who got, like when prices first, if I've got a warehouse full of iPads and the price of iPads goes up, that's immediate gain to me because I've already bought them.

52:17My inventory cost is set. It's sunk cost. It's paid for. This is all extra money that I wasn't banking on. But after the warehouse is sold, well, now I need to build more. And this is why I'll come back to my Milton Friedman famous quote, which inflation is always and everywhere, at base, at root, a monetary phenomenon. And this is why the response that governments will always lean to, which is, oh, something's in trouble, we're going to stimulate. We're going to borrow a bunch and then ultimately print a bunch of money and pump that into the economy. it will never work. It can't work, right? Because even when it muddies the signals that are trying to be sent between producers and consumers here, it basically says, I actually can't read the ruler anymore because money is a ruler because you keep changing the length of the ruler here because you keep taking money in and putting it out, well, mostly putting it in, very rarely taking it out, and almost never and never sustainably so.

53:13So I think there's a bit of nuance in all of that. But I think that to me is like you have to get that for any of this other stuff to sort of make sense because otherwise, I mean, why is it? You might have seen some of the clips on YouTube the ABC are putting out now. It's just like archival footage of 1962 where a meat pie was increased from 15 to 20 cents. Right. And they're doing the vox pop on the street, you know. Is it vox pop? Is that the term? Yeah, well, yeah. Voice of the people. But the voice of the people will go, well, I'm not paying for my meat pie. That's ridiculous. I kind of want to be like, how?

53:50Does anyone think a meat pie is going back to that level? What's happened? We've gotten far insanely more efficient at breeding cattle, at butchering, at processing. Like everything we've gotten a thousand times better. So how is it$6 for a pie and not 20 cents? The answer is the amount of money that exists and circulates now is orders of magnitude higher than it was. And that's kind of the elephant in the room that no one, I think particularly those in power, ever want to sort of talk about. We haven't even talked about government spending on the fiscal side yet too, which is probably worth a mention.

54:27But it's why it just irks me because reading the papers in response to the inflation read the other day was there's too much demand. In other words, you're spending too much. In other words, we're going to make it harder for you so you don't spend too much. I just want to think that reveals a fundamental misunderstanding to my mind. People will disagree. You might disagree. If you can't actively diagnose the problem, there's no way you can come up with a remedy. I mostly agree.

55:04Putting us, I mean, at a very fundamental level, you have an issue with the Reserve Bank and money printing. I have an issue with money printing and not with the Reserve Bank, so we differ there slightly anyway. removing demand from the economy, even if you are adding to it in one way and taking it out with another is still legitimate. It's still a legitimate tool. It may be the way you would choose to do it. I would stop printing money and so we would not have the issue we have to deal with it. And the benefits and the costs are visited on different people at different times in different sizes because of that.

55:38Generally the poor and underprivileged is just funny that. They're not the politically connected tend to do all right, which is funny. I think it's the middle class because, again, And if you don't own the assets, then it's real incomes that are all the things that matters. The only problem with devaluing currency is if you hold the currency. So actually I think honestly it's the middle class because you're right, the asset owners are fine, the poor don't have it. The middle class who are trying to put some money inside and keep, you know,$100 in the bank, to your point, the$0.15 you had for the meat pie in 1962 is now worth$0.01.

56:06You know, so the currency itself is devalued. So if you hold the currency, you're the one in the absolute gun for me. Or if your only way of getting the currency is by exchanging your labour. But in real terms, you mentioned the meat pie price going to$6, but also over that time we've gone from earning£100 a week to earning, I don't know what the average wage is these days. Yeah, but the lag in there is the killer, right? And I'd almost bet that it hasn't matched. We'll have to dig up the data. I would expect because of productivity, real wages have actually increased massively over that period.

56:35Look at the last five years alone. As I said, the actual data, 17 % increase in average real wages over that period of time, yes. Versus 30 % in non-discretionary items. I'll bet you since 1960 our real wages are massively high. But do you think that they've... We can get into another debate here. The trouble is CPI becomes meaningful over longer timeframes because you're comparing a basket of goods that have no relevance to each other anymore. I think that's actually the point. If you look at the amount of money we spend on those things, housing side for, again, entirely different reasons. Just exclude energy and shelter and food.

57:08No. which are always eternal, right? No, but even energy and food. If you look at the proportion of household budgets spent on those non-discretionary items, and again, I'm putting housing aside, particularly in Australia, and again, we have very specific... You can't ignore it. I'm not ignoring it. It's all related. Kind of. It's not the same overseas. So there are some very specific Australian examples that don't apply elsewhere. So let's... We're an Australian podcast, so I'm going to say ignore Australia for a second, only for the illustration, because housing here is more specifically annoying and problematic than most of the rest of the world.

57:42The proportion of our budgets we spend on food, clothing and heating are through the absolute floor over the last century. We were spending, and what we were getting for that is also down dramatically. If you look at the average... The last century, I'll concede, yes. It lasts 60 years, easily. Bet you. What about the last 25 years? Don't know, I haven't done the numbers. I would suspect the last five makes it scary. So you're an adult's life, our entire adult life respectively. I would say for the first 20 of those years, I'd have a decent bet that that's true. I don't know what the – I would say it's still true because 25 – even the last five years, to your point, real wages have gone backwards.

58:22I don't suspect far enough. In fact, no, we know. Real wages are back to like 2017 levels according to some data that was done for the fin, I'm going to say, a month or two ago. It might have even been longer because time moves very fast when you get old like us. So real wage is back to 2017 levels, but not further than that. In other words, you know, from any point to that point, we're ahead. So the last eight years, I'm absolutely with you, completely 100 % agree that our data is clear. I would bet you that we measure and we're right to measure increases in cost of living against like-for-likes.

58:58But two cars, a million colour TVs, a computer, a phone or whatever, The things we can buy with the average income today, you couldn't get anywhere near with the average income of 10, 20, 30, 40, 50 years ago. There had been a meaningful increase. We didn't have screen TVs and computers. It's a bad comparison. No, it's not because if they didn't exist today, we'd have a shed load. It was a different word. We'd have a shed load of extra cash we couldn't use. I don't have the numbers in front of me. But food would have been 10 % or 12 % of the average wage, now like 5 % of the average wage. To live a 1950s standard of living using a 2025 income, you would have more money than you could know what to do with.

59:42You couldn't spend it all. Normalised for hours worked? Yes. I don't know. Yes, absolutely. Well, we'll have to do the data because otherwise it's just vibe sharing. I mean, I've seen the charts. There's data out there. I haven't got any of my fingertips. So why is it that my dad or your dad or anyone of that sort of cohort could, on a single wage, and I really hate to be gendered here, but, I mean, that was the world of 50 years ago, right? You're not being gendered. You just, that was what it was. You know, whatever. So could buy a house. So housing's - Late 20s, early 30s. 100%. Right? Yep.

1:00:21Raise a family of three or four kids. Yep. On a single income. Yep. Still have a holiday. I mean, it's just, now, we don't have the same kind of consumer choice that we had, but it was, I think money gets so difficult to make comparisons with over time because of the changing nature of its supply and it's such a stretchy kind of thing and because just the nature of what the economy produces and how we participate in it changes so much. I think the only constant is really human time. And so you sort of say, as a household, how much time, whether it was digging a hole or working in a drafting office or doing calculations for NASA by hand or whatever the hell people did 50 years ago.

1:01:06You know, how much time did you have to spend to get what would have been considered a quote-unquote middle-class life? And it feels as though now, despite all our wonderful technological marvels, well, both adults have to work. They have to work harder than they've ever worked before. And the proportion of money that they're spending on the essentials, like housing in particular. Yes. Yeah, I probably am being a bit home biased here. No, you're right. I just don't think it's just clearly harder. Yes. It's clearly harder. Yes. That's why I think, okay, cool, I've got a smartphone, but that hardly makes up for the fact that I never see my kids.

1:01:46The childcare centre is effectively raising them. We're constantly stressed out of our mind. And if the RBA threatens to even threaten talking about a quarter of a 25 basis point increase, I'm going to lose my mind. Right? Like something's – we're not going in the right direction. Yeah.

1:02:06So housing is the elephant in the room, and that's why I'm specifically ignoring that for the purpose of the conversation and get back to housing at some point. I've got some numbers from the ABS here. Since 19 – this is even 1983, so this is not like that early. We were spending about 48 % – I'm eyeballing it because of the graph – 48 % of our income on goods. That's now at about 36 % over that – More services now, I suppose. Correct. And those services are largely going to be new services that didn't exist, right? So now we're not buying fewer goods. So that's changing. I'm trying to find a breakdown.

1:02:41This is something to describe through an RBA thing. We're doing this in real time, as we always do. That's why I find it so hard because it's an apples and oranges comparison, you know, in so many ways. I think that's the point, mate. I think that's exactly the point. Like that, by definition to my mind, illustrates the increased living standards. Okay, okay, okay, I'm with you. Okay, yeah, but is that because of wonderful central bank monetary management or is that because of technological advancement? I would say it's got, if it wasn't for the bungling mess that is, you know, fiscal and monetary policy, all of those things would still be true, but we would have an even higher, We don't have a counterfactual here, you know, which is the hard thing about this stuff.

1:03:26But I would imagine an Austrian economist would basically make the point of that, yeah, but it would be, it should and could have been so much better than it currently is. Yes, it got better thanks to some very clever people doing some very clever things. And these aren't binary things, not like, you know, pure full-on productivity enhancing capitalism on one end and crushing communism on the other. I mean, it's like there's always, thank goodness, that entrepreneurial spirit that is actually out there doing and creating kinds of things. But I would just say without that mess, we would have all of the great things that we have, far more services and all the rest of it, and yet if we chose to, we could probably still do it on one income.

1:04:09Yeah, we might. I will get back to housing. My point was when you're at the 15 cent pie that goes to six bucks, it's as an income earner. So there is a devaluation of the currency which is absolutely 100 % true and unquestionable and unarguable. But for the average income earner, the$6 pie doesn't matter compared to the$0.15 pie if your income has gone up by at least that much or more. Does it matter if which one goes up first? What if there's always a one - or two-year lag in prices versus me being able to effectively negotiate a pay rise that catches me up? So teachers and nurses are in the news a bit recently because particularly in Queensland, they're striking, they're doing things there.

1:04:49I'm across it because it involves our family. And I forget the figures, but they managed to negotiate a pretty good pay rise. Well, I say pretty good because it sounds like a high number until you look at it over the period. It's actually even despite the significance of the pay rise, they're still behind, right? And even if it's little solace to people in those very noble professions who is just like, well, eventually we're going to make things more expensive and difficult for you, but within a few years you'll be able to catch back up before we then push prices up ahead of you again. So you're always, you're on the treadmill and you're always behind.

1:05:29And so, like, when you zoom back and you look at a chart, you can go, well, they kind of move in lockstep, but that temporal lag is very real and biting in the meantime. and I would be pretty confident to put anyone from those professions on stage and go, do you feel as though your wages kept up with the cost of living? I would imagine they'd go, nah. Yeah, but recently that's true. As I said, we are back to 2017 levels. That's unquestionably and completely true. But we're not talking about the lots, well, you were now, but we're talking about the 15 cent pie that's now six bucks. So the nurse who worked for, the nurse who retired this year has done extraordinarily well over that 45-year career in real terms.

1:06:13I mean, I feel it. That's different. But the 15-cent pie they bought in probably 60 years ago, they weren't working then. So I don't know. The equivalent is 1975. Pick your work life and choose your data from there. I'm simply making the point that over time, it's not even – it was almost a tangential point realistically other than to say the fact that a pie's gone 15 cents to six bucks is not in and of itself useful unless you work out whether I can buy more pies than I could have back then, regardless of the way you denominate it. So, again, I know you have an issue. I agree. I share your issue with the devaluation of the currency per se.

1:06:47So if I had, you know, 100 pie vouchers at 15 cents each and I wanted to redeem them today, I couldn't buy a pie with it. So that's absolutely true. But if I'm talking about just my earning capacity over that period of time, I'm actually much, much better off than I would have been had nothing else changed. If my wage and the pie price stayed the same, I was still paying 15 cent for a pie, you get paid$100 a week, I'm worse off than paying$6 for a pie today. That's interesting. Yeah, I get what you're saying. I wonder if I'm just more thinking out aloud. Things, when you look at the M2 chart, it's very interesting, right?

1:07:19M2 being? Just for our listeners. It's effectively the amount of money in the system. It counts up cash, which we don't even know why we bother counting cash because it's just a rounding error. Basically, the amount of money in bank accounts. Yeah, it's all. it's all it is for those who hate digital currency you're using it today you weren't going there remember yeah we're sorry we're not we're not going there

1:07:43oh god I've gone blank again on my point help me out sorry mate what was I talking about I know price of money you were going somewhere with that I'm actually not sure what the tangent was because you wanted to guess somewhere else 15 cent oh yes yes yes yes that M2 has accelerated yes and so what you're And this really changed. It started to change, the dot-com. It really changed in the GFC, accelerated during the sovereign crisis, debt crisis in Europe, and then just went out of control during COVID. Yeah. And so I wonder, and I'm just, you know, because I think in some ways we're talking past each other, but I really do get your point.

1:08:21I wonder if what, why is it, and eight years is a long time. Yeah, totally. In a human span of time, right? Yep, 100%. what's changed? I wonder if part of the problem is, and don't forget, over the eight years we've seen the invention of AI, not to mention a gazillion other productivity enhancing kinds of things. Are we seeing, is the situation sort of like to your point is much more amenable in a world where the manipulation, for want of a better term, wasn't as egregious? and in recent times in an era of quantitative easing and open market operations and relaxed lending standards and the private credit, is that why we're seeing it go backwards now?

1:09:11It was never like to a hardcore ideologue like myself, it was like never a great system and it could have been better without it, but it was tolerable because of the march of the capital base was increasing, our productivity, our technology was improving. So all of those things are true and you're right. So price of pie went up, but pay went up. But in the last eight years, that's really just gone in the other direction. And you kind of think, well, what's changed? And I'm thinking out loud here, but I do wonder, I strongly suspect the more I talk, that actually what's changed is all of the helpful help that we're getting from institutions, which is thinking that you can change zeros and ones in a database and actually help people in real terms when demonstrably we are not, right?

1:09:57And again, that's one thing, but if you don't even acknowledge that, not you, but if the powers that be don't acknowledge that problem and worse, think that the cure to the problem is doing more of the thing that has led us to this issue in the first place, that's where things get really start to compound and spiral out of control, as I think is happening in the US at the moment, just purely in terms of their interest, cost expenses. It's compounding away from them at a rate that they can't catch. It's a classic debt spiral. Yeah, I think that's right. And we are kind of talking about slightly different things.

1:10:30So 50 years ago becomes a harder thing. It's like you've got the technology change, you've got the lifestyle change, you've got the social structure change, but you've also got a massive fiscal and monetary regime change as well. And that's probably the dominant factor. I think so. I don't think it's a surprise that wages don't keep up in high inflation times. We saw it in the early 80s at the same time. And that kind of the wage-price spiral, price-wage spiral, call it what you want, the feedback loop, the delays you said, the couple of years to make good, those things are absolutely true. And we are talking about entirely different things at one level and exactly the same thing at a different level.

1:11:07um i i don't have eight year periods are really they're very long if you're living them they're very short in hindsight um whether eight year periods during the last 50 when that was also true probably i suspect during the oil shocks of the late 70s we may have had that sort of environment um we saw inflation spike again the famous paul volcker um you know smashing inflation by racking up rates. I suspect, I don't have the data, I suspect that was... Go on. Sorry. I was going to say it was probably more of a demand-driven inflation back then and in the context of far, far lower household and government debt.

1:11:46So increasing rates to that extent was possible. You couldn't even do it to nearly half the degree without creating everything. No, true. It was kind of demand poor, but it was also coming. The auto shock was literally the OPEC going up you go your prices. Yeah, true. It wasn't really cost push. which was just monopoly power being exercised and affected oligopoly power. So I guess I'm just making the point, I suspect in high inflation times wages lag because they just do, right? The size of the adjustments you have to make are larger and compound quicker so they get away from you more quickly.

1:12:18So I suspect that's true. I would suspect that we look back in hindsight and I don't know. I don't know what will happen. So I don't know the answer to your question, mate. I'm not – I think I'm not defending those decisions. No, they're hard. I know. No, no, as in I think they're wrong. They were – the support for COVID was appropriate and reasonably well-sized. It was overdone but reasonably well-sized. To my mind, the failure was – we've said this before – the failure was not removing the stimulus and getting back to normality. Assuming we could throw the stimulus at it and bugger the consequences rather than what we should have done, which is, hey, we'll throw some more money at it and we'll take that money back out at the appropriate time.

1:13:04That was the appropriate. Now, you all say that they're never going to, and I don't disagree with you, but the failure wasn't in providing the support in my mind. The failure was not then taking the appropriate counteractions to remove, you know, give the patient more fame when they need it and then win them off it, you know. Give them more fame and say, well, you're on more fame now, I guess I've got to give it to you every day because you're addicted to it. It's not very helpful. So that kind of approach, we're kind of miles off the main point. And I'll go back to mine and then you can throw yours and we can go from there.

1:13:34My argument is just that over time we have gone miles ahead with standard of living. The things we can buy with a Wix income have gone up dramatically in quantity, size, type. Innovation, you're a very good point, which is actually you can buy a computer now you couldn't do that but even if the old computers existed if my purchasing power hadn't improved i couldn't buy the computer even though it exists because i'd still be paying x percent of my weekly income for food so the fact that that's that that productivity improvement has allowed me to have the extra disposable income to do those things is is positive your point on housing though is really really really important and why i i want to get back to it because i said a couple of times i put it aside and you can't because it's real yeah i think the housing problem is we talk about housing a lot of times.

1:14:24I don't think it's a direct consequence of the things that have been done more recently because we know it's been a 40-year journey. We know that Australian housing is, Australia has five of the most unaffordable cities in the world in the top 20 or 40 or something stupid. That's insane. Right? And so that talks not to, and I don't think we have been, you may disagree, you actually have the numbers. I don't think we've been any more profligate. And, for example, we talk about the states and their debt issues. Like, you know, we are, you know, I've said before, I don't want to be the least sick guy in the hospital.

1:14:58I'd rather be out of hospital. But if I'm in a hospital, I'd rather be the least sick guy, right? And maybe we're not the absolute best, but we're not miles off it. So the housing issues I don't think we can put down to particularly poor fiscal or monetary balances, if I can put it that way, and I'm getting a bit esoteric. I'm separating that from policy decisions more broadly, like negative gearing or capital gains, sexual population, all the things we can talk about, supply constraints and that stuff. I guess I'm just separating out. You can't say. That's, you know, housing and the cost of living because I want to talk about other things because you just can't, right?

1:15:29I do think the specific Australian housing issues are not the generic monetary and fiscal issues that come from excess money printing and excess debt spending. Oh, that's interesting. Otherwise, we would have the same impact around the rest of the world, and we don't. There's something very Australian that doesn't correlate with fiscal and monetary decisions and housing in the same way. The correlation between Australian fiscal and monetary decisions and housing is different, doesn't correlate, non-correlated, or at least only very loosely, with those same decisions and those same housing outcomes in the rest of the world.

1:16:03I stumbled over that. You get what I'm saying. I can't explain Aussie housing without a monetary angle. I mean. There's an angle to it, but if it's only monetary, then you have to explain. A very big, the dominant angle. Then you have to explain why it's different elsewhere where the same monetary decisions have been taken. Well, it kind of wasn't. It was the same there, but they just all crashed. Ireland, Spain, US, they had their housing, but that was the GFC, right? So they absolutely had affordability issues. And because of our importance to China, which was just on the ascent and on the rise and the rise, we just dodged a bullet there.

1:16:41And I feel, and it was like we turned around, it was like, oh, so we're somehow different, back to the party. And all we have done since then is make, is just prime demand, whether that's through direct, I mean, it's a multivariate kind of issues. I don't want to put it all on one thing. Yes. But all of it has sort of enabled, has been incredibly enabling to the banks who do create almost all of the money. Central banks create at home and they clean up the mess that the banks make. which they will make because there's a massive moral hazard. Why wouldn't you make up money if you can do it? So I would argue it in that way.

1:17:19It's just like why hasn't, why aren't, look, Canada's a very interesting example because they, like Australia, are very resource dependent, right? So up until, by the way, Canada's not done well on their housing market. By the way, neither is New Zealand. All these other ones where you go, well, Australia's different, but aren't there other things here? But that's the politicians that are different. I think that's my point. I think it's the other policies those two countries have made in the meantime that do explain the difference rather than the monetary decisions. I think they just collapsed under their own weight in a lot of those places where it was just like they had no choice but to correct and correct massively.

1:17:52We just never had that there. Usually they made tax decisions and Canada made population decisions. I think that's too myopic a lens to say. And we made decisions to not do those decisions. That's literally my point. That's entirely my point, which is if you said it was just purely monetary, this couldn't be avoided, I think New Zealand and Canada are the example of if monetary may be enabling or fuelling or other things, I don't disagree with you in the slightest. My argument is why are we different, though, from the rest of the world if we've done the same things as them? The answer is we haven't.

1:18:20It's those other policy decisions which have made the difference that we are not doing, not the monetary decision. Yeah, but they feed into each other. They do. If you have got lots of immigrants coming in, you've got lots of potential bank mortgagees that you can lend to. But you can't, as we've often said, when everyone does it, right, go to the mortgage broker. It's just the middleman rent-seeking proxy, sorry, mortgage brokers. They're not listening anymore. They stopped listening months ago. Dude, you do a great job of filling out forms. It's wonderful, wonderful work. Almost as good as the door openers.

1:18:55Sorry. Oh, dear. How much can I borrow? Yeah, totally, 100%. And that determines everything. So if it wasn't for a banking sector that was bending over itself, you know, bending backwards to provide freshly created M2, create money to provide into housing. Now, when I buy a house, someone else is selling a house, so they get that money and they go spend it. And like people, we bought the house off downsize, so they actually took part of that money and they're now spent, they're living their best life doing whatever they're doing, right, in a smaller house but a whole bunch of dry powder that they can spend on their grandkids or travel around the country in their brand new, you know,$200 ,000 RV.

1:19:36I don't know. I don't know what they're doing. But all that extra money is sort of pumped into things, right? And it's sort of, it just, demand for housing is always there. Australia's a great place to live. Most of the world would love to, you know, give their left arm to come and live here, right? And they will bid up whatever they can to buy a house. But it's only, yes, it's all related. We're not disagreeing, as is usually the case. I just think we're probably putting emphasis on different things. And all of those things lead that you're talking about are important, but they kind of lead into the ability for banks to do this.

1:20:07And when they do do this, that's when house prices go up. And then everything is downstream. Morgan Housel made the point on Twitter the other day, which I thought was gross, like everything is downstream of housing. Correct. I would go, well, everything's downstream of money, and money is just very immediately downstream of – housing is very immediately downstream of money. But it's the same thing, right? And it's why you say you can't talk about – you can't talk about inflation. How do we start talking about quarterly CPI and get to housing? Because it's the elephant in the room. You can't not talk about it.

1:20:32It's everything. And if you don't think it's everything, I'd love to meet someone out there who's just like, yeah, it's like the least thing that I think of is the mortgage. Like, no, it's everyone, you know? And so it's just a mess. All I can say is, again, it always, we just, we go round and round in circles. And it's like, so what do you do? It's like, I don't know. But I tell you what, they are going to try and, you know, get their way out of it by employing methods that got us into it in the first place?

1:21:03Kind of. Here's a bet. Let's not make a bet. Well, up to you. But we will talk, and everyone in the country will talk about this inflation impulse and, oh, what does it mean? And interest rates this and all of the economists have come out and they've changed their models. And I know we were forecasting this, but now we're forecasting that. And their forecast changes like their undies change, right, very regularly. And the RBA will talk tough. They'll have interviews. There'll be inches and inches of columns written about all of this kind of stuff. They may increase it a little bit. But the second there is any kind of wobble in the economy to any meaningful degree, even if that just means, because we said last week, now the economy has become synonymous with the stock market.

1:21:50I reckon if the stock market fell 20 % tomorrow, we would all be talking about interest rate cuts. And it's like, and then the natural, anyone who's been paying attention would go, well, what about inflation? It's like, yeah, but this is more important. That's my point. That's my whole shtick at the moment. And that's the so what bottom line for this very roundabout convoluted conversation is they've got no good, they've got no easy choices here. Well, that's 100%. And they're going to talk a good game with inflation, but they really care about the economy as they measure it, to go right back, as they understand it, which is incorrectly framed.

1:22:26And particularly for a government who really only cares about getting elected, they will spend like drunken sales. They will be enabled by the banks and by the central bank. And the central bank, as independent as it might like to pretend it will be, will do everything in its power to make sure that we do not enter into a recession. And if that means letting things run hot, so be it. All I'm telling you good people out there is like a world, the only world in which we get back to a kind of inflation that most of us would agree is less painful and more desirable is if we have a pretty nasty economic shock.

1:23:00We're not having both. We're not having great economy and low inflation anytime soon is my hot take. I hope I'm wrong. Yeah, I mean, I said bottle of wine. I don't really have a strong view. I don't have an opposing view or an aligned view to advance. Yeah, I don't know. Because how? How? I just don't know how you do it. How what? You're the, so I'm king of Australia all of a sudden. I'm a benevolent dictator. I can do whatever I like. Well, it's not benevolent, but let's be honest. You're a few actions to go on. Extremely benevolent. I would all of a sudden return to a balanced budget as quickly as I possibly could and structurally change that, which is the fancy way of saying I'm going to take a lot of spending out of the economy.

1:23:49is one way. Or add some taxes. Or add some taxes. Another way of taking spending out of the economy. I'm also going to increase interest rates because they're artificially suppressed. They're way too low, right? And what's going to happen as a consequence of that is we're probably going to have a pretty nasty recession. Yep. And you go, why would you do that as a benevolent dictator? Because there's no easy answers. Because, again, think about it from that position. What would you do to fix it? You go, well, no, no, no, no, we can't do that because that'll cause a recession. Okay, then. so we're living with high inflation.

1:24:20If you're a bit of a lead dictator, though, wouldn't you try and find the middle path, which is just take a bit longer? Again, I think we agree entirely on the outcomes. I maybe in my Pollyanna usual way would say I agree with what we need to get to. I think we can do it in a way that allows for less immediate – I would go with lower growth for longer rather than do those things immediately and cause a recession. No, I won't argue against that. Yeah, yeah. So when I say immediate, like, this is what we're doing. From now on, no increase in spending. Every year we must reduce the deficit by X percent and maybe there's a five-year plan.

1:24:57God, could you imagine a civilisation in which had a five-year plan? Like, wouldn't that be a wild concept, right? Like, five years? I mean, I would nervously suggest, you know, a 50-year plan is probably not a terrible idea, but anyway, that's never going to happen. And, yeah, so, yeah, I don't disagree with that. But the reason for the cynicism and the pessimism is just like it's not as if we're even talking about it, let alone slowly moving towards it, where, in fact, we're – this is my point. This is why I'm so firm in this view is that we're doing every – we're doing the opposite of that.

1:25:35Yeah, correct. And expecting it to get better. Correct, correct. That's the madness of it, right? I agree with that. And it is the, I think it's actually misguided but well-intentioned, which is effectively the old Keynesian thing of like, if we just fix now, worry about later, later. And that's tempting, right? Because of course it is, you know. Oh, it's much more politically palatable. Right. But even personally palatable. Like even just, you want to believe, right? It's like, I want to try and find a way through this that doesn't cause pain because that's just, I'm not a monster. And so if you give me the tools, like, can you find a way?

1:26:09oh, maybe we'll just increase spending over here and that'll solve unemployment now and... Because it's never worked before, but I got a good feeling about it this time. I honestly think that's it. I genuinely think that's exactly... Not even a good feeling, just I am going to... My time preference as a public official is to solve today's problems now. Yeah. As opposed to... Which is simplistic, naive. Yes. Naive to the point of reckless and dangerous, I would say. I'm not even arguing you're right but clearly that's not possible it's obviously not possible you've said it before you're either stupid or you're cynical which one do you want there's no third option of no you're incredibly far sighted reasonable and you can thread the needle and there's probably some in the multiverse there is probably a reality where someone does thread the needle which is your benefit of the dictatorship Right.

1:27:07You could decide now to have less upside, in other words, lower growth, not cause direct pain. Now, here's the other problem. There's still a counterfactual to that, which is you'll have higher unemployment than you otherwise could have if you'd done different things right now. Yeah. So there is always going to be some pain to be felt. I just, and maybe I'm giving them way too much credit. I just don't think. I think so. That the bureaucrats, policies are different groups. The bureaucrats, I think, are trying to find the least worst solution under their watch. And I think that's a 50-year plan problem, which is not a conversation.

1:27:41We sat around and said, right, guys, here's the thing. We are where we are. This is crap. If we don't feel the pain, our successors will feel the pain. If they don't, their successors will feel the pain. And worse. Right. We have to plan for an outcome that, you know, I don't know if I'm another can of worms, but it has those parallels with charity, right? and Buffett's been through this of, do you wait till you die and ask as much money as you possibly can help a lot of people then? Or do you give away a smaller amount of money now because there's people who need your help right now? And it's that in reverse, which is just, you know, do you cause a little bit of pain now or do you cause a lot of pain later?

1:28:16And it's a, you know, I think it's a reasonably - It's the second choice every time, which is human nature. But even ethically, I don't know. I mean, do you, the charity example is a nice one to be able to take it away from the policy decision and say, well, if I could help five people now or 50 people in 10 years time, what should I do? it's the exact equivalent of the reverse of your... Let's have that conversation. We're not even acknowledging that as an... No, I agree with you. You're right. You're 100 % right. I agree. But the conversation is the opposition going, oh, they're making a mess of it.

1:28:48Vote us in and we'll fix it all for you tomorrow. No, no, no. Everything's great. We can fix it. Give us a bit more long. We'll fix it. And it's disingenuous. And they're fixing both cases. Exactly. Yeah, that's right. You know? And it's like we're just gaslit. And that's what really gets me particularly... I know you've not said it, but you see so many talking head pundits say it. It's just like the gaslighting of it's like it's kind of your fault for spending too much. Your demand is too high. I just think screw you. God forbid I demand, if you want to use that term, a nice place to be able to raise a family, you know, and that we have an average style lifestyle.

1:29:25But I'm demanding too much and you need to punish me because of inflation, which is somehow my fault, which is the way it gets framed and it just, that's just so far, it's like a million miles away from what you're talking about. Yeah. And so, which is why I land on the firm conclusions I do. It's like, you're not, theoretically speaking, I mean, you're 100 % right, but just in reality, back in reality, like it's not going to happen. It's just not. I've got a little bit of a detail who actually says, actually, we need to talk about it. Which we're not going to have. Correct, correct. Peter? On that happy note, we're 90 minutes in.

1:29:59Should we recommit on Sunday? Was it 90 minutes? God, I was going to say we've got five more topic agenda items, don't we? No, we're done. I've taken the agenda. I've burnt it with my cigarette lighter beside the desk, dropped the refuse in the metal bin. We're done. We're over. You did say that we'll just do inflation quickly. Yeah. I tried. It's such a big topic. It is. Should we do a mailbag on Sunday? We should. and can I, I know this is normally your shtick, but let me put the call out because Christmas is coming and we normally do a few pre-records. Yes. And when we do pre-records, we can't sort of react to the news of the day.

1:30:40So if there's anything evergreen that you're kind of interested in that you'd like to hear us rant and rave and have our ill-informed opinions sprayed all over the internet. I love that you think people actually want to hear us rant and rave. That's very generous of you. It's our brand. They're going to lean in, give the people what they want. I'm not saying it's right. Thanks for listening, Mum. There's a lot of sound and fury. Signifying what? I don't know. There's something very cathartic about shaking your fist at the sky. It makes us happy. It makes us happy. If it helps anyone else, then yay.

1:31:09Until Sunday, full on. Cheers. The Motley Fool and people appearing in this program may have positions in the companies mentioned. General advice only. Please speak to your financial professional to understand how it may pertain to your situation. Subscribe to the free newsletter at fool.com.au forward slash listener. The Motley Fool operates under Financial Services Licence 400691.