Mailbag, incl: AI financial armageddon? May 3, 2026

26:09I think Amazon could be bigger if it does this than that and the other. Okay. At some point, you know, either the growth or value or both just kind of gets eroded. The edge gets eroded away because machines find patterns that otherwise aren't obvious to the vast bulk of people. So David Gardner, Motley Fool co-founder, brilliant investor. invest in growth companies early on and statistically just does it and makes a lot of money doing it. I find that hard to believe because he's been stupid successful, right? So he's found a system, I don't mean system in a capitalist, I mean an approach that works for him.

26:39And that computers couldn't at some point go, hey, we've analyzed 125 years of data. We found these things. We should buy growth companies when they're young. Statistically, most will fail, but some will do really well and some will do extraordinarily well. A basket of those wins. And if that's true, they buy and buy and buy and buy and the price opportunity goes away because everyone's paying higher prices because they all understand the opportunity. So I suspect more information, more analytical now, and frankly just brute force, makes it harder to outperform for the average sock picker. I would find it remarkable if that wasn't true.

27:13I just think having this much more computing power, like thousands and thousands worth of people worth of research power in a chat GPT prompt. And not even chat GPT, but the LLMs, the things that actually just go, You say, here's the data. Go and find the patterns. Go and find the opportunities. Maybe it's when the founders leave. Maybe it's when they don't leave. Maybe it's three years after a new CEO is appointed. Maybe it's whatever those things are. Statistically, they're likely and they've been consistent. And I'm not talking about share price chart reading. I'm talking about actual business performance that allows you to pick a price to pay that's attractive.

27:46I suspect that gets eroded. Not compared to a way entirely, but eroded. I think the opportunities for outperformance, like Ben Graham finding, hey, people aren't looking at this stuff. man, there's all these companies that have more cash than they're worth. It's like, who doesn't want to buy that? Of course you do. When that goes away, it's like, okay, now what do I look? And so I think more people, more analytical effort, more computing power probably erodes it. I think, James, to your question, it'll be more volatile as well, because that'll happen. But I don't think it's the Windows 95 version, because that would be the same AI with the same question and the same inferences competing against itself.

28:21And we know from AI that if you and I ask the same question slightly differently, we'll get different outcomes. If we use different data, different data points, different timeframes, if we phrase it differently, we'll get different results. And so if we said to ChatGPT, run the ASX with one instance and compete against yourself, you may have that and you will have more volatility either way. But I think if you've got a million people using 20 different chatbots slash LLM slash machine learning algorithms in different ways, it's not going to be that deadlock freeze. I just don't think it's the most likely outcome because you'll have – there will always be different views out there, rightly or wrongly.

28:57But we do know that – and the most – was it the 87 crash, mate, I think? Was the first time computerised trading kind of really nuts? So, James, those feedback loops are real. And I think we'll absolutely get more volatility in the short to medium term as those things start to get used and they get ironed out. And there'll be fortunes made and lost in the ironing. That's why I wouldn't use them up front because letting it do itself is a bad thing. But I do think AI will, if I use AI, I wouldn't say, hey, ChatGPT, here's my account details. Go and trade and see how you go. What I would say is, hey, ChatGPT, find me circumstances where I am likely to beat the market based on fundamental stock picking information.

29:36And the more information it's got data access to, it's like, take all this stuff, go and do it. Your point about the PDF rem of the annual report. At some point, you can upload the entire contents of every business article, every company for every publication since day dot. and the share price results and the fundamental data, because these things just chew through data. It's all right, take all this stuff, go and find me some opportunities and tell me what they are. And then also whether or not to make a trade. I think that makes me better stock picker. So you made the point, mate, of using it rather than being replaced by it.

30:03I think it's absolutely true. So I really do think that's true. I do think if the gaps are smaller, if the outperformance opportunities are smaller, there'll be fewer people who can do it consistently. So I suspect the ranks of the professional investors get thinned out, but I don't think the opportunities for the professional investor get thinned out. I think there's still plenty of opportunity there using AI, but you're going to have to be good and you're going to have to use AI well and human intuition. Because if everyone knows what everyone knows, as you say, Ram, if we all know the same information, then where's the different outcome?

30:31It's got to be a variant perception to use the jargon. But I think that's AI enhanced and supported. But I do think, and we're seeing with superannuation funds, they've gone from hundreds to scores, there'll be tens, and then there'll be probably less than 10 at some point because the outperformance opportunity is not there anymore. It's being competed away. I think AI just does more of that. I reckon. I could be wrong. No, yeah, I think that's fair. I guess it's fun to think about, but it doesn't, I guess, I'm going to say this as a guy that works in the space. I just, I don't look at, how do I say this?

31:05It sounds so hubristic, but I feel as though I have a bit of an edge in the market, certainly not through IQ, but experience counts for a bit of stuff. And I think just having a framework that is logical and empirically validated over very long periods of time. Unfortunately, I don't know how to do it quickly. I mean, I think getting rich slow is pretty straightforward. But it's just very, it's not as appealing as getting rich quick. That's the sort of thing that everyone sort of wants. But I think that opportunity will often, will remain there for a long, long, long, long time. At the end of the day, no matter how smart these things get, they can't predict the future.

31:49And the thing I've learned over time too is that more and more of the emphasis for me, at least personally, is put on stuff that's just not in an annual report, frankly. You know, it's not in it. Companies are just groups of people, you know, and it's like, how do I model a group of people, you know? How do I model, how do I account for culture? How do I account for work ethic? How do I account for that one in a million spark of genius that just comes out of an R &D lab in the basement of a Bell laboratory. You know, like these things are just, they will often be there and then you will often have an inertia in institutions.

32:26You'll often have doubt, fear, uncertainty, doubt, all of that kind of stuff. So patient, common sense, farsighted capital, I think is good for a while yet, hopefully so. Yeah, I have no short term. You're not saying otherwise. I have no short term view and I have no forecast. I just think it's likely if you're adding more computing power, it just makes it more likely that extra computing power you're adding, almost by definition, must, well, not must, very, very likely improves the ability to make more efficient, more accurate decisions just because it does, right? More data being interrogated more intelligently should drive more insights.

33:03If it drives more insights, and those insights are available to everybody, it should minimise price and efficiency. Just directionally, like the net nets, the computerisation itself, the fact we could use computers to start trading, the buy, sell, spread closed. Those things are just directionally likely. It could be 100 years away and it could be never. It could be three years away. I was kind of only half joking about the feedback loop. I mean, we've got this new clawed AI model coming out, right, that apparently found holes in all these supposedly secure IT systems. And so they didn't release it.

33:35They contacted the company and said, hi, I accidentally kind of managed to hack your system. You might want to fix this before we release it. I mean, that's a single release, right? Like flying cars, you know, we have, I mean, iPhones. Think about Star Trek, right? iPhones are here 25 years, 30 years after Star Trek and flying cars are still a million miles away after the Jetsons. Some will happen quickly. Some will happen a long way away. I don't know which is which, right, at all. I just, I wouldn't, I don't, no one knows the pace of change. That's unknowable. I think directionally that's where it's going to go.

34:08I hope it's long after I'm gone, but if it was in three years' time, I wouldn't be surprised, but I wouldn't be shocked because we just don't. The feedback loops here, the virtuous circles of learning, could be much, much quicker than you think or could hit a 10-year roadblock just like that's as good as it got for 10 years until we had another breakthrough and we got to this. I mean, AI didn't exist two years ago already. Yeah, right, exactly. Yeah, yeah. It didn't exist in any consumer-friendly form two years ago or three years ago. All of a sudden, we're now at a point where it's breaking into the back ends of banking systems, not because they wanted to, just because they kind of just realised that they taught it enough stuff and it taught itself enough stuff that it could.

34:42So, oh, okay, now we've got to deal with that. So that's just the way this is going to go, I think. My quiet prediction is that the next big thing, the two things actually, so robotics is less of a hot take these days, but that's been fascinating to watch. But synthetic bio and just biotechnology in general, it's largely a problem of crunching vast sets of data. You know, there's a lot of genes in the human genome. There's a lot of base pairs, you know, and we're doing pretty amazing stuff with all of that. So I think – but anyway, my point is that the nature of technological advancement is never linear.

35:24Correct. The state of refinement is linear. Someone invents the internal combustion engine. War floor kind of stuff, yeah. And then you kind of get better and better and better at it. but there's that zero to one moment and there's often nothing that you can judge as to when it arrives. It's just, you know, one day Sam Altman tweets out, hey, we've released ChatGPT. What? That's right. Oh, then the world is forever different, right? The Wright brothers at Kitty Hawk, you know, 10 gazillion different examples, like zero to one. Nice to have you there, potentially. Yeah, yeah, yeah. And these transitions or these phase transitions are really rapid and then a long period of enhancement there.

36:07So, yeah, I wouldn't bet on it, but, yeah, it's like there very well could be a day where it's just like, oh, okay, this is a thing now. Turns out we know this thing. And that's, you know, the world's information. I mean, I was going to say there's not so much information. There's always more, but realistically at some point the compute power becomes strong enough that anything knowable can be computable and therefore, you know, it's a question of whether you find the right trends and insights. And that's the next challenge. It's exciting. It's exciting. And it should be, if we handle it well, it should actually be an incredible gift to humanity.

36:43Whether we handle it well is another question altogether. Yes. I, for one, welcome our robot overlords. Yes. Here's a question from Adam, mate, which is both technical and a little bit conspiratorial, but also maybe has something to it. So let's see what Adam's got to say. I love those overlaps. That's right in my sweet spot. Hi, Timmy says, I've got a question I'd like to submit for Scott and Andrew on the Motley Full Money podcast. It's about a structural risk in the market that I think your Australian audience should understand. NASDAQ just changed its rules to force Australian superannuation funds to buy a company at peak valuation into a scarcity squeeze while insiders exit.

37:23They're calling it an index methodology update. I'm calling it structural extraction, says Adam. Here's how it works. SpaceX will float only 3.3 % of its equity while keeping 96.7 % insider owned. NASDAQ removed its 10 % minimum float requirement, in other words, the requirement that 10 % of the shares be available for purchase, and shortened the index entry to 15 days specifically to enable this. Now, I haven't checked these facts out. I'm going to take you as read, but I'm going to explain to our audience. So, in the past, you had to have 10 % of your shares available for buying and selling on the exchange.

38:00And you had to be on the exchange for longer before they decided to put it inside a NASDAQ 100 index. And what Adam is saying is they've removed the 10 % minimum float requirements so SpaceX can float with only 3.3 % of its equity. And it only has to wait two weeks, or 15 days, or three weeks, three business weeks, until it can be added to the NASDAQ 100. At that point, that would require funds, if they're tracking the NASDAQ, or just the NASDAQ itself, to buy those shares. And that's what Adam says. When SpaceX lists in June, Australian super funds tracking US indices were mechanically forced to buy this 3 % float within three weeks.

38:34With$30 to$50 billion in forced index demand hitting a$58 billion total float, insiders exit the buying pressure at peak valuation. Your members hold a mega cap with 20 to 30 % price volatility, concentrated risk, and no real price discovery. But this is the template now, says Adam. OpenAI and Throbic and every other mega VC exit being planned in a 2026 or 2027 IPO will use the same structure. NASDAQ's rule change becomes the playbook. We're looking at recurring forced buying cycles into micro float mega caps, extracting Australian retirement capital. My question is this, is NASDAQ's removal of float safeguards a structural risk Australian investors should understand?

39:19Should fund managers be refusing to implement these rule changes? Or is this now just how mega cap IPOs work? And if it becomes the standard, what does it mean for index fund investors long term? Would appreciate your thoughts on this one. Cheers, Adam. What do you reckon, Ram? Yeah, I mean, there's nothing to it. I mean, got to be careful, though, because while you say it enriches insiders, well, it enriches 3.3 % of insiders. By definition, the others aren't listed. So, assuming it's all equally distributed, only 3.3 % is for sale. So the price on the market, absolutely. I think the mechanism that you outline is spot on.

39:58There's only so much, it's domestic supply and demand. There's only so much available. There's a whole bunch of forced demand. It'll drive the price up. And the way that we calculate market caps, it'll drive the market cap higher. But if you're part of the 96.7 % that doesn't have their shares listed, you can't sell them, not through the market anyway. Now, maybe the idea is that you release more and more over time and you sort of elevate it. And absolutely, there's a point to be made there. But, yeah, I do, yeah, I wrestle with it because it's sort of, on one hand, I think actually the CBA is a great example locally.

40:36Like we have a huge amount of force buying on that. It's a big part of the index. I've said to you off air, it's four times book value. It's the most expensive bank in the world. It's like, it's, you know, you get more in their term deposits than you get on their dividend yields, even with franking credits at this point in time. Like it makes absolutely no sense. Who's buying it? Well, there's just mandated buyers each and every year. So there is something to it. But then you go, it's one of those things you can make the case and then you go, well, actually, therefore everything in the ASX 200 should be having the same.

41:09I think that's a really important point. I'd never have bought the whole CBA is expensive because index buyers are buying it. because otherwise the same price impact, as you say, proportionally, every company should be up by the same amount because you've got to buy the same proportion of every company. I don't believe for a second that's – I do think there's international investors, by the way, buying CBA as a proxy. So I think there's excessive demand. We buy all the banks on the – I just buy CBA, that'll do. I believe that's probably part of the problem. But that's just my thought. Yeah, yeah, yeah.

41:36I mean, so it's like it gets really hard and I go – I have sympathies for the view and I'm sure it makes an impact on the margin. The ones that don't do that, maybe there's just enough of a free float where there's enough non-index investors that just go, wow, this is a great price I'm selling. And it's sort of like, there's a reflexive sort of correction in there. Whereas if, I don't know, the free float of CBA is mostly held by never sell super funds. It's like maybe the dynamic changes. There is something to it potentially. I just haven't dug into it enough to know. But if it does worry you, This is why I think there's this place for stock picking, right?

42:16Like it's just like I'm not touching. My view is abundantly clear. I wouldn't go near CBA at this point. I've said that for a while and look how great a move that was. But if you don't like it, you don't have to – well, I've got to be careful. A lot of people don't have a choice just because the way the super funds are sort of run and if you don't have enough of a super there to justify SMSF SMSF and all that other kind of stuff, which is real and an unfair kind of privilege. But if you're in a situation and it does worry you, and I wouldn't fault you entirely if it did worry you to a degree, just don't, you know, play silly games, win silly prizes, you know.

42:52And I just like, I for one have been a little bit negative on Aussie-based index ETFs only for the fact that it's just sort of like, it's like six companies that count for basically half the market cap. A couple of miners, a few banks, and like hypercyclical companies. and that's it that's everything kind of you know and and like for me it's just sort of like no i'd rather be a little bit more selective now i put the other hat on i'm going round and round in circles and arguing my own point here but it's just sort of like well but then again others will go yeah but that's the point you're not picking you're just going with the flow and historically the the going with the flow has been a pretty good bet and you know not the best not the worst but but the average and that that's kind of what you if that's what you're going for then as soon as you start being a bit too cute with it you you sort of throw the strategy out the window so So it's hard, but I would just sort of say if you personally have reservations and no criticism, if you did, then don't do it.

43:49And I don't do it for that reason, whether or not that's we'll see if that turns out to be the right move or not. Nice. I think a couple things to add, Adam. Firstly, that assumes that the IPO price is overvalued or at least that the insiders are getting a too higher price. If people are prepared to pay the IPO price, that's because they believe they're going to make some money from doing it. So the IPO price is going to be set by those buyers. Now, a small proportion, which you're absolutely right, I would rather a larger float too, but a small proportion of those buyers are saying, I think it's worth$100 or$1 ,000 or$10 ,000 a share.

44:20So I'm going to pay that because I'm going to make some money doing it. So the market will set the price either way. If they're exiting at too high a price, the index buyers are part of the demand, but there are still a significant minority of the demand, particularly in the US, where they don't have the same size proportionally as our super funds. So I'd be more concerned in Australia if it was the Australian version of that and index and super funds were 40%, so okay, maybe it's a thing. The reality is the price is set by the marginal buyer and seller. The index buyer will buy at whatever the prevailing price is, but they won't necessarily add meaningfully to the demand and won't necessarily be the, even if they're the marginal buyer, it'll be the cent or two cents above what the active participant, the stock picker, chooses to pay or not pay for SpaceX.

45:02So if the price is too high, short of massive manipulation across the board with, you know, either I'm borrowing money and buying shares at a high price or something stupid to try and make a lot of money, the reality is the market will set the price in the first instance. The index buyers just buy at the market price. So there's no – if the active buyer is stupid enough to pay too high a price, you're right. The index fund is going to pay too high a price as well. The flip side is also true. You and I ran – we talked – speaking of our 1 ,000th episode. You and I both talked, I'm pretty sure I'm right in saying, years ago about the Facebook float, how stupidly expensive the Facebook float.

45:33I was going to mention Facebook, yeah. And so, Adam, you could have said, you know, Facebook's floating at this price, the midsize is getting out, and I would have said, yeah, you're right, it's too expensive. You look back and go, oh, man, if only I had a chance to buy then. So if the Superfund's really been taken for a ride, it depends entirely on how reasonable the market price is, and not only just for SpaceX, but across the board. So do I love the changes? No, I think the changes shouldn't be made. Why? Because there's no good reason to make them other than to make SpaceX happy because Nasdaq wants to get SpaceX, and there's massive amounts of conflicted incentives there and you're right to call them out because it's absolutely true.

46:06Why does Nasdaq do it? If they didn't, New York Stock Exchange would have done it because everyone wants a SpaceX float, right? That's why you've got to be really careful of brokers, of fund managers, of market operators who have incentives to make you trade or to be popular or to do whatever. So you're right. Yeah, the underwriter doesn't want to hold the stock. They don't make their money by being a long-term shareholder. So I think the directional changes are wrong, Adam. I agree with you. I really don't think... I mean, I don't know what the SpaceX outcome will be. There's a lot of hype about it.

46:33Maybe it's overpriced, maybe it's not. You know, would I like to buy Google at the float? Yes. Amazon at the float? Yes. Facebook at the float? Yes. Tesla at the float? Yes. You know, Netflix at the float. Nvidia at the float. I just, you know, I don't think I'm wrong, mate. I just don't think we should assume the worst case, which is it's obviously overpriced. We're obviously losing money. We're obviously being forced to do something bad. If in time SpaceX 10Xs will be going, oh, thank God super funds were made to buy shares at the float, right? So I don't really think – I don't think it's necessarily going to be bad.

47:07I don't think it's necessarily something you should be too worried about. But I do agree with you directionally that making these changes is all about placating SpaceX so they can get the marquee float rather than actually looking after investors. And that's something we should be mindful of. Oh, yeah, for sure. For sure. I mean, that's – I mean, the idea really of markets is to discover price. Actually, that's not even right. It's really just to facilitate trade. And in that process, price is sort of discovered, right? And that's, you know, whether it's a stock or whether it's like a prawn at the fish market, it's like, you know, you've got to look on that with judge.

47:41Like, do I see value in that? And there'll be a million different opinions out there. Only one will turn out to be correct. That's the game. That's the game, right? Like, it's sort of, you know, it's really your job to kind of say, well, what do you think? Is the market right? and if the market's wrong and it's overpriced in your estimation, don't do it. If you think it's cheap, then buy it. That's it. I mean, it's so simple when you say it like this. It's very hard in practice. But that is the whole shebang of it. And if they are – flip it around. If SpaceX is able to sell only 3.3 % of its equity and get a very, very high price for it, I would argue, regardless of what happens after that, that it has been successful in that endeavour.

48:31The whole point was to raise some capital. You know, like you've got to, like, what are we measuring here? Now, if you want to sort of look at things from a broader societal impact, and by the way, that's always a good thing to do. But like, I guess what I'm saying is the validity of something or the worth of something very much depends on the lens you're looking through and the perspective, the position that you are in. I mean, I've said many times with Guzman Gomez, Guzman E. Gomez, whatever it is. E. Gomez, I think, yeah. E. Gomez. Yeah. Like, if you ever come up with a name, tell me something easy.

49:06That's just too hard. Just Guzman Aldo. G-Y-G. Guzman Aldo. I mean, what a joke of a float, right? Like, on one hand, we were saying it at the time, not that we were, you know, like geniuses. It was just like the metrics were just incredible. however from the point of view of the the insiders that sold into that from the point of view of the underwriter this was one for the ages this was an incredible stonking success no one's as much cheaper as they can the Facebook guys who we said looked expensive at the time missed a massive trick that's all way too cheap but that's all the market was prepared to pay so whether you say well I'll do it at whatever I can get or I won't do it yet because I want a higher price They're willing sellers as long as we're willing buyers.

49:49I mean, look, passive investment is always going to go for the right. The only time there's a fault is if you've lied. If you have misrepresented. Now, if you've got, like, these are the books, these are the numbers, and it's like they're just fact, and it's like, you know, and the market has formed a view for whatever kind of reason. It's like, I don't know. It just is what it is. 100%. Sorry, I'll cut you off. You've covered it nicely. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener.

50:18Let's get a question from Alan. He says, Dear Mr. Phillips and Mr. Page. They're our fathers, Alan. Thank you. An ancient and very long-term listener here. All right, you're not a bastard. But not a first-time questioner. Although I often question what I hear from you, learned gentleman, this is the first time I have put digital pen to digital paper to ask a question. At my age, he says, I don't know how old you are, Adam. Alan, I'll say, I don't know. I don't know how old ancient is these days. Not buying green bananas anymore. Correct, correct. At my age, I get to ask the big questions, like the meaning of life.

50:51If you find the answer, please let me know. And yes, 42 is a valid answer. Yes, I'd like to know too. But I'm hoping you can clarify my thinking on lesser recurring issues so I can go quietly. That's a bit macabre, dude. Unions and the government often argue that a 3 % wage rise is needed to compensate for 3 % inflation. I've heard this repeated on a certain finance podcast from time to time. Okay, it might have been us. My issue is, says Alan, this completely ignores the effect of tax. A 3 % wage rise means only 2 % extra spend at Woolies after the government is finished with it. A reduced cost of living is therefore automatically built into the system, says Alan.

51:26Please tell me it ain't so. Thanks for the long, entertaining and informative podcast. Cheers, Alan. Alan, it ain't so. It's okay. Do you want to take this one, Ray? Yeah, it's... I'm struggling, though, with... I always like with a lot of these things, it's not so much that the question is wrong. I was just, I would frame it in an entirely different way. And I think a lot of the time economic conversations, people just talk past each other. They're both being logically consistent within the axioms that they work with. But like, and to suggest that there is some kind of, I know you're not saying this, Alan, but I guess a lot of the time, I think it is framed this way, is that we need this pay rise to offset a cost of living as if that is how things get priced.

52:18And whether you're talking about bananas or people, I mean, this is what the wages are, the pricing of people, right? And I'm not trying to be some harsh ultra capitalist. I'm just stating the facts, right? We all price ourselves, you know? And you don't, in the same way that I can't decide to take up knitting, put a stall in front of my house and demand$400 a jumper because it just took me forever to make because I'm just really, really bad at it. And by the way, the quality is really bad. And I turn around and go, no, no, no, I have to charge that much because this is what it is. And if I don't do this, I don't make any money, it doesn't make any sense.

52:51Like, yeah, but value doesn't get determined by your cost basis. This is a big debate that they had back in Adam Smith's day. It's got a name. I'm drawing blank on it. But it's a flawed framework. work and and it's it's it's not it's not too it often gets interpreted as sort of diminishing the worth of people or anything like that but it's like you know i'm gonna sell my interpretive dancing skills for two thousand dollars an hour it's like no one's gonna buy it like oh but i did this and it's worth that no it's not the value is determined by the buyer the the the the the consumer is sovereign in all things pricing if you don't if you see value you buy it and yeah I was going to say, very quickly, not the same consumer sets the offered price, but they decide the price at which the transaction happens.

53:39So they don't decide your jumpers are worth whatever price, therefore that's the price that happens. They just say, I'm not going to buy$400. All they know is I'm not paying that. Right. How about$300? No. How about$200? No. How about$100? No. $1.50? Okay, deal. How about I pay you to go away? Awful jumpers. Yeah. So I just want to be clear. It's not that the consumer says, I think the price of Coke should be$1.50, therefore it's priced at that. They just say, I'm only going to buy at a level that makes me happy. And Coke say, well, I'll adjust my price until I get a sale. That's how the price is.

54:08I want to be clear about the set by consumer, that language. People get very upset by it. And it's something easy to get upset about until you're the person in that situation. Because think about if someone was forcing you to buy my jumpers or, you know, some service that you didn't value. And it's just, yeah, but that person deserves it. And it's like, well, not according to the people who are potentially consuming of that product. And so as soon as, again, it's very easy from a distance to say that person should get that. And it's just like, yeah, but who, according to whom, right? The only person it can be according to is the person on the other side of the trade.

54:52Because as soon as, and I know that might sound unfair or harsh, but as soon as you say, no, no, no, it should be determined by someone. Again, we're back to the same problem of having a, trying to find a political solution to a subjective economic problem. And whenever you do that, you start forcing people to spend their money and their time in ways that aren't appropriate to them. When you create all of these kinds of distortions and then you have bread lines. I mean, it just, it's kind of like, I kind of skipped over a bunch of stuff there. So I know that's not the question, Alan, but it's just like, it's too, and I will say that.

55:24And at the same time, speak out the other side of my mouth saying, you know, nurses don't get paid enough. Yeah. You know, and it's just sort of like, well, turns out that they can get enough people paying that rate. So are they not paid enough? I don't know. I think it's more interesting to sort of come at it from an angle of what barriers, even with the best of intentions, are put in place that prevents a more accurate and reasonable price discovery. That is a more interesting question because sometimes when you look at prices that when you might sort of ethically think it doesn't make sense, it's not business people being greedy because business people full stop are always greedy.

56:08Do you think there's no greed in communist countries? Greed is an ever-present condition of the human condition, right? But communism falls over, frankly. It's literally the bug in the system, yeah. Yeah, like, so, well, that's not what it is. And sometimes, like, oh, someone's kind of tried to come in and they've added a well-meaning but not well thought through regulatory kind of oversight there. There's some kind of limited competition because we need to protect Australian jobs. Something, something, there's a million, the list, I could go on for hours, the list is a mile long where you have the unintended consequence of your actions which distorts things in a way that leads to the unfairness itself.

56:55And just as a political mandate, when I say political, I don't really just mean sociological, you know, the subjective values of a small panel of people. As soon as you start using that as the solution to your problem, and a problem that has in many cases arisen by that exact mechanism, you tend you tend to sort of throw petrol under the fire and you kind of make it work and you're left up you're left off with these sort of regulatory regimes and legal structures that are completely labyrinth like impossibly opaque very hard to break into no one can really accurately get at proper price signals because it's so confusing and no one can get up there and compete without having to do this that and the other and then and then we sort of see this thing as being unfair and think, well, more, more of that stuff will fix the problem.

57:50And it just, as a historical observation, and not in all cases, nothing is black and white, but more often than not, it just doesn't tend to work. So I'm kind of rejecting a bit of the premise of the question. Having said all of that, then yeah, the other angle I would take with it as well is like, well, what if inflation goes up 3 % and then you go up 3 %? Let's even take tax out of it. you're only made whole up to now going forward, assuming there's no more inflation. So in other words, you've fallen behind, fallen behind, fallen behind, fallen behind. Oh, back to even. Fallen behind, fallen behind.

58:29The order of events is important. And if you disagree with me, then give me a pay rise and then I'll wait for inflation to catch up. No one ever does that. It'll track more or less broadly over time. I was like, great, I'll take my 3 % pay rise in anticipation of the mandated targeted inflation, and then I'll let it catch up. I was like, no, we can't do that. So it's kind of, I don't know, do you see there's an issue there? And I think that's what we actually see in a lot of the numbers is that things do tend to, we talked about it on Friday, things do tend to track over time. But you're right, Alan, you throw in some tax.

59:07You also throw in the fact that we're using a very average and for most people, definitionally irrelevant measure of an average spend. And, you know, it's all messy all to begin with. And it's never, ever going to match up. And it certainly can't be matched up by political decree based on what certain people sort of think is fair. We need to let prices be discovered because in the same way is that I might not like that my house doesn't have more square metres. But you know what? Solving the problem isn't by changing the length of a metre. And that's how we do it with economics, which is just insane.

59:41A metre is a metre is a metre. A litre is a litre. A dollar is a dollar. Oh, actually, except it's not. And then we wonder why we get into sort of trouble. Sorry, mate, all over the place. Oh, good, good, good. Alan, so you've done a great job, Rem. I'm going to just go back to your calculations, mate, because I think you are wrong nicely. And let me tell you why. You're comparing the increase in the before-tax inquiry or salary or pay with the after-tax component, but only on one of the two sides of the transaction. So you're concerned the 3 % wage increase, you're right, you get 3 % more, and then you'll lose some of that 3 % tax.

1:00:22That's absolutely true. What you've got to remember, though, is you lost the original amount to tax as well. and let me do a really simple example with big numbers and nice round numbers because it makes my life easier and i i will ignore bracket creep but i'll come back to it so just just hold that thought for a second because that that is a real issue alan to your point but let's say you get a 10 wage rise from 100 bucks so you're getting 100 bucks a week you get a 10 wage rise you go to 110 now you would say alan but hang on of that 10 i'm paying 30 tax again because it makes my life easier uh i pay 30 tax therefore i'm going to lose three dollars of that increase i'm only getting a $7 increase, that's not 3%.

1:00:56That's only, to your point, 2%, or it's whatever the number is, 2 point something percent. That's true, except that's comparing the before tax increase against the after tax money you're getting. If you do what we should do, which is compare the after tax in both cases, at the current moment, you're getting$100 a week and you're paying 30 % tax. So you've got$70 left over in your pocket. When you get a 3 % increase, you get 10 % more, so you get 100 to 110, makes sense, right? You're going to pay$3 tax on that 10 bucks, 30%. And so you're going to go from 70 to$77 after tax. In other words, before tax, 100 to 110, up 10%.

1:01:38After tax, 70 to 77, which is also an increase of 10%. So if you don't believe me, do the numbers yourself, grab Excel and grab what you need to do and pull the numbers together. I get why it feels like, hang on, I'm getting a$10 payroll, I only get$7 left over at the end of the day. It feels like you're losing some of that money, and you are losing some of it, but your after-tax income goes from that 70 to 77, so you're still getting 10 % more after-tax. So, yes, it feels different. It feels like something's being lost. It's not. I mean, the taxes are being lost, but your after-tax, which we really should care about, frankly, is how much I've got left over, still increases by that 10%.

1:02:17Now, there is a wrinkle, which I mentioned at the beginning, which is if you go up a tax bracket and you go from 30 % to 45%, for example, then, yeah, you would actually, of the$10 increase you got, you'd get to keep$5.50 of that, and your pay would go up. What's$5.50 out of$70? I don't know,$70? 7.8%. 12. I've gone the other way. So, yeah, you guys, whatever it is, 4.5%, 5%. So, yeah, the reality is that if you increase, if you go up in a marginal tax bracket, The incremental amount you get might not cover inflation, but that's only on the very edge cases where you do change tax brackets for that particular pay rise.

1:02:55Before and after that, all that matters is the proportion you get to keep versus the proportion that goes away. Now, it's a little more complex than that because I've just used marginal tax rates rather than average tax rates. And you're also right, if you use the average tax rate, you pay nothing on the first 20 grand, you pay 20 % on the next lot. So there is a very slight reduction, mate. You're right in that sense because you pay marginal tax on the increase, but you paid average tax on what you've already got. So my math is a little bit – cheeky is not the right word – simplistic that I've given you.

1:03:24But the reality is that the only bit you lose is the amount by which your average tax rate increases from – and it might be 23.4 % to 23.5 % or something average tax. So you're setting 3%, you might get 2.92 % increase or something because your average tax rate changes. So yes, it's true on the very, very, very, very, very margins. But realistically, of all the issues we've got to deal with, it's not as bad as you think it is because of the way the maths works on after-tax incomes, not the fact that you say, I'm getting increased to pre-tax income, I'm paying more tax, therefore I'm worse off.

1:03:57It just doesn't work that way. So don't worry too much about that one. Worry more about RAMS issues and some of the other questions about broader standard living increases and real wages that we talked about on Friday. Don't worry too much about this bit. Yeah, this bit is not just... It really is. I find it so hilarious, if that's not, it's totally not the right word.

1:04:20Embarrassing, maybe that's a better word. Yep. That when it comes to workers demanding wage rises, it's always, oh, we can't because of inflation. Can't do that. It's going to make a wage price spiral. It's going to make everything more expensive. It's kind of a bit of tough love. We kind of need you to not have that pay rise because otherwise we'd have inflation and that'd be even worse for you. It was like, but I'd just be catching up. But what's hilarious about it is that no one seems to care when we're talking about structurally imbalanced budgets and insane levels of borrowing and deficit spending.

1:04:55It's like, no one gets it, which is by far, which is by far the more dominant factor. The debt price spiral around the wage price spiral. Exactly. No, no, no. How much for the submarines that we're never going to get? Oh, no one talks about inflation then. Giving a nurse enough pages to make it even possible to try and rent a house like that? We can't do it for the economy. Or we can do all this other stuff. That's not a problem whatsoever. So it's a very selective. I would have more sympathy for the argument if it's kind of like, no, it's sacrosanct. We must do everything we can to keep inflation within this bound.

1:05:30And that means we look at everything. It's still true. It's just hypocritical. It's very selective, right? It's like, I can't, it's just like, yeah. You can't have it, but I can. Yeah, yeah. Again, it comes, and this is the problem, this is the problem with putting any human kind of in charge because it's going to be subjective. It's like, I think that this is better. It's like, oh, okay, so you're taking a pay cut? Oh, no, no, no. Goodness, no. Goodness, no. As a central banker, my pay has increased a greater than inflation rate for forever. So, but you know what I mean? It's very easy from an econocratic sort of standpoint to sort of say, to point to something that is technically true in a narrow sense, and then to sort of say, it's just tough love, we just have to do it, I'm sorry, it has to be done, just not for me and my mates.

1:06:22You guys have to take the pain so the rest of us can continue to enjoy the lifestyle that we live in. And I think that's what sticks in people's sort of craw. you know and and but but also even beyond all of that i i i just think that you know the the the the price of anything is a very very important signal and if you're finding so i've said before my wife's a teacher they're having all kinds of trouble anyone who's worked particularly in the public system we're in new south wales will know just how much of a uh a faster clock it is if i can use that term um and you know how we can't attract teachers we can't do it no it's just impossible.

1:06:59We've done this and we've done that. And you're like, from someone who's more economically minded, you look at it and go, I've got an idea, pay them more. And not to contradict myself. I'm not saying because it's the right thing to do. I'm saying like, people want to be teachers, right? A lot of people want to be teachers. The reason people are leaving in droves, even new teachers are like, I can't support myself. I can't do this. The workload's too big. oh we can we can't get anyone to work at this particular school it's like i i bet you i could i bet you either hey there's a really difficult school in this plan we just can't attract any teachers wave of magic one anyone who wants to take that job gets 10 more wow wow that just fixed the problem and again it should fix the problem right because everyone has you said before everyone's got a price for something so it's it's really done from an allocation kind of standpoint if you're not getting enough of a human resource somewhere, you know, generally it's probably because you're not offering enough.

1:07:58So it's more of a, rather than a more union oriented sort of social good kind of angle, it's more pure hard-nosed economic angle. It's like, well, pay more and you'll get more people. Supply and demand, right? Is there a demand for teachers? Yes. Is there enough supply? Well, not at this price. Start paying teachers$500 ,000 a year. I wonder what will happen to the supply of available teachers. Like, you know, it's a stupid example. The extremes are useful, though, because once you accept the extremes are true, then it becomes a question of where are we on that scale. All we need to do is figure out where the line is, roughly.

1:08:35It's always super useful, right? I've had the same conversation with people, and I don't want to reopen the immigration population conversation, but they say, oh, we need immigrants because no one's going to do this job. Who's going to look after our old people? It's like, well, the people you pay enough to do it. What you're effectively doing is saying... We need immigrants because I don't want to do that for that pay. Correct. But let's give it to the immigrants because that's cool with me. We are systematically depressing wages by bringing in people who will work for us and people who are already here will work for.

1:09:01And if we want to do that, we can. That's the choice. But the reality is, well, hang on, who will do it? Well, the people you pay enough to make it worth their while. Australia's going to do that. Okay, so how much is it going to take? This much? Well, no, let's have more immigrants then. And again, I'm not going to get into immigrants. and I'm pro-immigration as we've talked about many, many times so it's always a dangerous thing to reopen but it's the same conversation I had someone say to me well who's going to we've got no GPS in the bush that was a nice example who's going to pay them more well pay them more but we you know they're not coming I know pay them more and increase the pay every week increase the amount you've got to pay by 10 grand a week until someone signs up yep but that's the end well no we need we need immigrants no we don't I mean for lots of reasons immigration is great but that's not the solution that is just I want to keep wages artificially low, literally, right?

1:09:45We are flooding the system with supply in this instance to specifically keep aged care workers' wages low. So if you're in the aged care system, you are getting paid less than you should be because we're saying, we don't want to pay you more. We'd rather bring in other people who are paid to work for less. And we wonder why, to your very point about real wages, that's kind of part of the problem, right? Like the average wage in Australia is lower. And again, it's not anti-immigration. It's not a justification for no immigration. It's not a justification for being a xenophobic knucklehead. It's just a description of the accuracy.

1:10:11It's just an accurate description of the economics of the situation is all it is. You don't have to put a value judgment on top of it, you know. Correct. It just is what it is. Well, let's take the other side of that argument. Like the other one you get particularly within is a lot of very hardworking public servants. I'm not trying to get into some stupid culture war kind of thing. But some of the senior public servants, I mean, I don't know if you've seen the pay rates of these people. I'm talking heads of department, like incredibly, incredibly big, big numbers. And the argument is, the argument is, oh, that's what they get in the private sector.

1:10:47So if we don't pay them that. And again, someone's made a value judgment. I've always thought just on the line of inquiry that we've been going down here, it's like, call me crazy. Call me crazy. I reckon you could find, I looked it up once, I forget what it was, but it's really not far off a million dollars, like many, many, many, many hundreds of thousands of dollars per year for the heads. And just in fact, senior people within a lot of these departments. I reckon you could cut that pay in half and you will still get a line out the door. How much? $400 ,000 to do this job? What? Double the super that everyone else gets?

1:11:21Sorry? Yeah, that will do it, right? And so it's something to, we have distorted things. And when we distort things, what do you really do when you distort prices? What you're doing is you're signaling a demand or a supply that's not true. Yeah, great. That's what you're doing, right? And it's just like, and what does that do? Well, that means we put efforts into things that people, by definition, don't want. Yep. Or not enough of things that people want more of. Yeah, yeah, yeah. That's why I bang the drum about this price manipulation. It feels very sort of wonkish and like, well, I don't get it.

1:12:00And it's just like, no, we're actually distorting what we understand as to the true supply and demand of things. When you do that, by definition, you misallocate resources. Tariffs, subsidies, wages. All of that. Yep. All of that. Now, again, the argument usually comes, people will find valid, and I'll emphasize that word, valid exceptions to the rule because you can find them. It's like, oh, yeah, but what about this? They go, oh, yeah, that's true. So ideologically, people get hung up on things, but it's just sort of like just because something is a bad idea 3 % of the time but a really good idea 97 % of the time is a really dumb argument to do.

1:12:37Why don't we just do it that way? And then for those very rare exceptions to the rule, we don't do it that way, right? Like it's just, oh man, it's crazy. I've got a simple example for you and it's the minimum wage. We as a society agree that having people work for less than a minimum wage is not something we socially want. Now we are literally and frankly deliberately and sometimes unconsciously or unaware of it, we are making our economy less efficient by doing that. We are. Oh yeah. By definition, because we are paying people more than the market thinks they're worth. Now, I personally think, and I'm pretty sure you agree, mate.

1:13:10We're probably creating less jobs than there otherwise would be. So you have to look at the silent evidence of what would otherwise be true. The counterfactual, 100%. And that's okay. We are saying we think it's appropriate and good and better and all those things for us to pay those people more than they were, otherwise we'll earn in the open market. And as a result, we will have inefficiencies in the economy. Now, you can say, and this is where I really, really get my back up. He's like, oh, we need the most efficient tax system we can. So, no, no, no. We want the most effective tax system we can have, which achieves the outcomes that we want because money is a tool.

1:13:48Money is not the end. Efficiency is not the goal of anything, right? Efficiency describes the simplest, cleanest, fastest, least painful, problematic way to do something. That's not an end of itself. Some people who like elegant systems are like, yeah, but only to the point in time which it stops actually serving us and what we want. So we could have 2 % unemployment, mate, to your point, I million percent agree. We have 2 % unemployment and we get a minimum wage to be half of what it is now. And we have to decide as a country, do we want that level of efficiency? So we say, oh, I'm slightly better off.

1:14:18My living standards are slightly higher because the guy working at Macca's is getting five bucks an hour, which would be true. It would be absolutely true. The economy would be larger. GDP, we talked about that on Friday, would be bigger. We would be better off overall as a country if you just tottered up the numbers and said, we've gone from X to Y, not Y is bigger, because we threw a whole lot of people on minimum wage to a lower amount, and we put some more people in work, so that's a real positive. We're better off. And it would be true. But you also then say, but would I swap some of that efficiency for treating people in a more humane way where they actually have a reasonable standard of living?

1:14:51And by the way, we should do the same thing with Job Secrets, a whole different conversation. We can choose a different system. We can choose to be less efficient and take better care of people who would otherwise be paid less. And we've chosen that. And I think that's an entirely appropriate thing. By the way, speaking of efficiency, you know what's really efficient? Killing off the old people. We're late in the podcast, right? If we reduce the age of care. Extract the valuable nutrients. Right? Plants and trees. No, seriously. We waste, in inverted commas, again, thinking of the transcript here where tone doesn't come through, Money, keeping people alive for an extra few years.

1:15:32We would be a far more efficient economy if we told them, sorry, no, no, you've hit this level of infirmity or this age, you're on the ice wall, off you go. And we'll be more efficient. I'm so glad you put it all that way. I really don't want to suggest that we should or should. I mean, these are conversations that we definitely need to have. But what I love about how you've put it, you're just saying that there is an opportunity cost and there's a compromise. It's not a free lunch is all you're saying. You know, it's like, should we do this? Okay, maybe. I'm not saying we shouldn't, but can we just not pretend it's a victimless crime?

1:16:05That's not even the right term. Yeah, but yeah, essentially a victimless crime. There is a cost that is born that. There is a distortion that's born of that. We might willingly accept it. And there's a lot of distortions I'm really going to get behind. Like, you know, again, it starts getting political and I'm trying not to do that very badly. But that's the point. Yeah, I understand. It's when these things get thrown around as if there's zero downside and it's all upside. The other great one that is rent controls. You know, what a noble, and I say it as a former rent, we should do this and we do that.

1:16:38It's like, yeah. Think about the unintended consequences. Think about what that sort of happened. There are definitely massive problems in the rental market, and I will wax lyrical longer than anyone else on this planet about how diabolically unfair and difficult it is. you know but i'm not i'm i'll be up there carrying a placard in a protest saying let's not implement you know um right uh rent controls because because in every single instance it's been tried it's actually hurt the very people it seeks to it seeks to help right um and again it's you've got to look at it in the aggregate because absolutely people are actually i was here and now that rent's not put up and no one can kick me out and i'm actually individually i am better off under this set of circumstances but when you're making policy you've got to look at everyone right and and that is the thing and it's like so soon as you start saying i will favor this group over that group it's something that we can all get behind if we're in that group or we have sympathy for that group and it's something we all hate if we're not and so it's all it's all good and then you know which is the right decision which is which is the perspective that you have which is which is the one that impacts you personally and which was the one that doesn't which you know and it's just like that's That's why there can almost, it's almost there can be no one right answer because there isn't one right view.

1:17:53You know, who's the best musician of all time? There's no, you can't answer that. It's a stupid question. What's the best color that's out there? I don't know. I like blue. Well, I like green. Well, you're wrong. No, you can't. It's not even, it doesn't even make sense to sort of discuss it because it can't be anything other than subjective, which is why I think a lot of these sort of principles I try and espouse here, It's not trying to sort of say, you know, it's better because I think it's better, because the way I want the world to be, you know, it's more just about saying the only way to allow preferences to be revealed and to allocate resources and direct our collective efforts in a way that is most fair is to allow each individual person to contribute to the overall.

1:18:44It's an emergent phenomenon that sort of bubbles up from the top. How? Just because that's what everyone is doing. I guess people like Airbnbs. How can you possibly say that? Well, because everyone doesn't. That's how I can say it, right? That's how I know. Well, because that means people disagree with you. And that's fine. Here's something. Late in the podcast, I'll put my foot in it, and I'm going to anger a lot of people here. Excellent. Well, I sometimes get into discussions about women's sport, right? It's like it's not fair they don't get paid the same. Scott's like, don't, don't, don't, don't do it.

1:19:16Oh, no. Well, 1 ,000 episodes were very finished up. Well done. Thanks, everybody. To be fair, I'm not interested in sport in general, right? But the reality, and I'm not saying we've got to remove the subjective value from this. Do I think it's fair? No, it's not. Why is that absolute superstar female soccer player not going to get the same as Ronaldo? There's nothing within that that feels right. but there is one entity which as an economic activity generates incredible sums of revenues and there's one that doesn't now am I happy about that? No whose fault is it? It's your fault and it's my fault and it's all the people who don't watch the matches fault and the advertisers don't go there because the audience isn't there the audience doesn't go there because they hate women you know the audience isn't there because I don't like I mean you can even I shouldn't have gone down the gendered thing because it's a very slippery slope but but it's like bobsledding right what why does that's a better but it's the same example right like desperately tries to dig himself out of this hole it's the same example why does the world's best bobsledder have to have a job on the side and why does the world's you know best uh you know quarterback for you know name your name your favorite american football team get or basketball or get literally hundreds of millions of dollars because the economic supports that.

1:20:42That's, that is why, because more people watch it. Does that mean that the, the, the Bob Slater isn't as a human worth as much? They're not training as that? No, it's not. And again, it's, it's, it's, it's just this, it's separating a value judgment just from the, the observed reality of it. Why, why is it, why is it that, you know, uh, uh, Nokia's aren't as prevalent as iPhones? Well, they suck. That's why. How do I know they suck? Because no one buys them. That's why. Apple's charging too much for a phone. Are they? I don't know. Because whatever they seem to put on it, people buy it. Maybe they're not charging enough.

1:21:20If it's too much, don't buy. Again, with economics, the hard thing is finance in general, and you need to know this stuff if you're going to ever invest, is to distinguish and dissociate yourself from how you would have the world in an idealized framework per your subjective preferences versus just how it is right and it just is that way and we we might sort of say you know what the bobsledder let's do it we're going to pass the law they get the same as that it's like well all of a sudden we're pouring all of this and every single you know budding sports was like i'm actually going to get into bobsledding because that's where the money is and we're doing all of this stuff and all of this money is moving around for something that no one's watching and no one cares about Like it's silly, right?

1:22:04And the opportunity cost of that is, well, we actually, this thing over here that absolutely everyone loves, or far more people do, we're just not doing enough of that. And it feels like that's wrong. Yep. Can I extricate myself? No, you did. I'm glad you changed mine because I was going to go with change the sport. Shouldn't it be sports first be paid exactly the same because they all work hard and train hard and play hard. And on one level, you can say yes. You can absolutely say they should be paid the same. And then you say, okay, even within a sport, mate, even within a sport, your favourite player...

1:22:38Even within a league. Within a single team. Yes, within a team. There's 13, 15, 17, 21 blokes on the field, girls on the field. Even within women's sport, the girls will play different amounts of money based on their value to the team as subjectively, nothing's objective, subjectively determined. They should all be paid the same. Right. Yep, yep. Can I be paid the same? No, you're a man and you suck at sport. No, but I should because it's not fair. It gets very prickly very quickly. And again, the intent, it's hard to be critical because the intent, it comes from a really good place and I have huge sympathies for it.

1:23:13Yep. And, yeah, anyway. No, I agree, Matt, agreed. I forget the original question. It's been a while. So, yes, this was Alan asking about the 3 % wage rise for 3 % inflation, which we asked about an hour and a half ago. and we've got to hear it somehow. I guess it's just, it's just, it's just, it's generally about, I think we have to respect individual choice and preference. And you go, well, imagine if I came to your house and said, my God, I opened your cupboard and it's like, you've got Nutella in there? You shouldn't have that. You should have peanut butter instead. But I wasn't, who was it?

1:23:53Screw you, don't even get to tell me. And it's a silly example. But as soon as someone else starts putting value judgments on other people and distorting what they might otherwise want, we just lead to a less optimal point of satisfaction. And I'm not even from an economic sense, just like general human happiness and flourishing. Call me crazy. We should try and maximize. and the amount of damage that has been done by very well-meaning people trying to mandate things that they personally don't think is fair and things that a lot of the time, I think most of us would probably think, yeah, I agree that that's unfair, but just as you said originally, okay, just acknowledge the unintended consequences and the opportunity costs that come with that because they're not nothing.

1:24:44And the more that you push down that path, the more the distortion gets. And actually, you know, you end up in a far worse situation than if things were just done a bit differently. I'm going to shut up at this point. Can we end the podcast, I feel? We said before, I was like, how many times do you do a podcast and you clock off and go, oh, cringe? I think this is one of them. I think this is one of them. Episode 1001, the women's sport podcast. You're welcome, listeners. No, mate. And honestly, if anyone wants to have a go at you, they can have a go at you, but they'll be wrong. um that's what i'm saying there's a market price market price balance but also by the way and just really quickly back to it minimum wage might also be true we want to support women's sports we think it needs a leg up and so we will we will make it inefficient and support it knowing that there are opportunity costs and trade-offs totally and we can choose to make pay everyone the same money if we want to just know that i'm doing so i mean russian bread lines this is not hard right this is now you can do it and you still do it you can still say i don't care i want russian red lines because the ideology is more important to me than the outcome you can have that view and it's totally reasonable go for it knock yourself out i will vehemently disagree but you can have that view it's just a question of the view you have and what it what it means for the first order impact which is great everyone gets the same bread and it's all free or it's all the same price great cool cool cool uh except there's not enough of it that's the trade-off and you gotta wait in the line for six hours that's the trade-off do you is that a is that a valid trade-off for you if it is go for it you want women support paid the same as blokes cool who's going to fund it and how are you going to get the money for it?

1:26:14And who's, you know, taxpayers. Okay, cool. How much more tax are you going to pay? This much. Yep. Okay, cool. That's cool. If that's your view, then campaign on that view. Very quick example. I had a friend who got to Egypt recently and he says, you know, it was really funny. Again, funny is not the right word. Interesting. He said, the number of taxis I caught where the driver was a doctor. Oh, wow, really? And you go, what? And it's like, why is that? That's a really good question. Why is a medically trained doctor driving a cab. And it's just like, because the economic incentives are all kaput.

1:26:46That's why. Yeah. On that note, we will finish up this podcast our thousand and first and as soon as we don't get cancer, we'll be back next Friday. Sorry. Hopefully Ron will be here. He may not be here. He might be different. We'll wait and see. Until then. Fool 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.