A View From NYC: The Diaspora and the Midterms

0:00David McWilliams: Coming up on the podcast, we are coming live from the United States. It's all going to be about the relationship between Ireland and the United States, the diaspora in the United States. Can we do anything to bring our immigrants home? Should we be welcoming the diaspora in a much more liberal, open and constructive way? That's the first part. And the second part of the podcast is all about the American midterm elections, which are coming up in four weeks time. We assess the risks, who's likely to win and the consequences if the man with the orange face doesn't win the House and the Senate. All coming up in a couple of minutes.

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1:43To understand the economy, you have to understand human nature. This podcast is powered by Acast. How you doing there? It is the podcast and we are coming, as Biel O 'Hurley used to say, live from New York City, where I am here. I have just done a lovely event in the Irish Arts Centre. If you are in New York, if you're interested in Irish arts, Irish culture, Irish history, go up to 11th Avenue and about 50th Street and you will see the new Irish Arts Centre recently opened. I've actually done a gig in the old Irish Arts Centre which was a little bit shabby, a little bit down at heel, a little bit less than looking its best.

2:33There is now a new Arts Centre. It has been financed by both a combination of the state, the New York State, New York City and private donations by Irish philanthropists and it is a wonderful, wonderful space. And last night, John, I was on stage with Doni O'Sullivan and we had a total laugh on stage. Yeah, how did it go? How did it go? It's great, I'll tell you about it in a second. But interestingly, the night before, because I don't know Doni, so we said, look, you know, let's go for a quick scoop, you know, just to see what we're going to talk about and all that sort of stuff. First date kind of thing.

3:08Very, very, very much a first date. Very much a first date. We went to some swanky place and I can tell you that Donio Sullivan has now become Manhattan media aristocracy and I will tell you why. I'm sitting down with him and up comes this very glamorous woman, Sean, and it is Tina Brown, the world famous, the editor of Vanity Fair, of all things. Tatler, all those American magazines. I felt like I was a male extra in Sex and the City. Okay? That's what I felt. So that confirms my suspicion that Donio Sullivan has now taken his position in the pantheon of American media giants. Yeah, it's far from Tralee that those kind of events are.

3:55Exactly, from Cahar Syveen. It's far from Cahar Syveen. But anyway, we had a lovely night and he had to get up very early this morning to get on a 7am flight to Tennessee to cover a Trump rally as part of the run up for the midterm elections. Brilliant. Where Trump is not doing well. In fact, he's at the lowest, lowest rating of any president. So we'll talk about that in a minute. But did the event in the Irish Arts Centre, Full House, which was great. talked about economics, talked about America, talked about Ireland, talked about all sorts of aspects of Irish culture. Yeah. He asked me a question about kneecap.

4:36I referred to them as Jedward for provost. It got a bit of a, there's obviously a big kneecap fan base in the audience. But it was so talking about many questions, one of which was the sort of increasing anti-American feeling in Ireland, you know, particularly when Trump arrives and particularly over Gaza, particularly over American foreign policy and whether or not he felt, or that I felt that this would eventually crash into the reality of corporate America. I thought we probably had a few more years of it yet. So we kind of talked about lots of things that are concerning Irish Americans, you know.

5:12And I suppose the weakening of the kind of love of Ireland by Irish Americans as well, you know, the numbers in the ranks of the Trump administration.

5:24David McWilliams: Well, I mean, there are many, many Irish Americans in the Trump administration. And there are many, many Irish Americans in the right Trump-leaning media. And we know that, like the Bill O 'Reilly, the Hanratty, all these guys, right? But what we were talking about was just the changing relationship between Ireland and the United States. And what I was making the point was, you know, never underestimate the role of the Irish Americans in the peace process, for example, 30 years ago. Oh, of course. You know, there's a great book called The Greening of the White House, which was written by Conor O 'Cleary, which was about the Irish American lobby in particularly the Clinton White Houses.

6:05But that is a long, long time ago. And again, it's that weird combination. It's almost like a sort of a paradoxical situation where you have the United States being such a huge part of the Irish cultural, economic, literary, artistic, and social story, familial story, while at the same time, there is a significant anti-American feeling on the streets when you listen to those protests and you listen to demonstrations. And then the question was, can a country like Ireland, which is always and ever because you're a small country, we've said it on the podcast many times, John, you are a rule taker, not a rule maker.

6:53So when you're a rule taker, how do you play off all the various different constituencies that you have? You have the European constituency, you have the American constituency, you've got to remain friendly with the Brits as well. You've got to hold your fire in certain areas that you probably would like to have some influence. And then, of course, you have the very basic, brutal reality of being a small country, which is you have no influence at all, right? So you are always in the sort of theatrical space, the performative space, rather than the realistic space. But again, what I came back and I talked about was the relentless cascade, and we spoke in the last podcast, of American money into Ireland and how that is changing the country dramatically.

7:44But it was funny. But what I've noticed over the last 10 years coming here, John, is those conversations, and I tend to do maybe one a year in the Irish Arts Centre. They always go very well. And just the change in the mood in the room. Yeah. You know, they used to be quite celebratory. And now there's a room, well, a little bit more concern about the position of Ireland and the relationship with the United States. But, of course, the overwhelming takeaway is that that relationship remains very, very strong.

8:15David McWilliams: And I don't think any administration in Ireland, and ironically, any administration in America will change that because the link isn't just economics. It's familial. Yeah, but Mac, as with all relationships, it needs to be nurtured. Yeah, and so I think that I've always felt, remember years ago, I had this odd idea that what we in Ireland should do, this before we get on the podcast, is we should treat Irishness as an asset, global Irishness. And as a result of that, we could look at the homeland, as in Ireland, as being the recharging battery for Irishness to recharge the connection between Irish Americans in particular and Ireland.

9:05And a way we could do this is we could sponsor holidays of Irish American children to come to Ireland in the same way I told you is we went to the Gale Tops. So the idea of going to the Gale Tops is you would be exposed to an Irish language culture, to a Gaelic culture, to a culture that predated Englishness in Ireland and a culture that's worth keeping.

9:30David McWilliams: And in some way that made the English-speaking Dublin kids or Irish kids that little bit more close to the language and that little bit more close to the culture. That's true, yeah. And nobody got hurt. Nobody got hurt, right? And we could do exactly the same thing for American Irish kids. And what that would do then is that would send them back into the world a little bit closer to us. And so consequently, those 50-50 decisions that are made in the corporate world or the artistic world that involve Ireland, they would have that better chance of going our way. So my idea would be that the diaspora is our largest single soft power asset in the world.

10:17There's no doubt of that. And the diaspora now goes from the United States

10:23David McWilliams: to Latin America, to Australia, to Britain, to all these countries. And increasingly, lots and lots of second and third generation half Irish kids from, for example, France and Spain and Germany and all that. And if we were to create a database of those and bring them back to Ireland, and in a way, re-energize their connection with the country, that would have massive and non-quantifiable, but clearly positive impacts in the future. And that would be this idea that you have Ireland, the country, and you have the Irish tribe outside the people. I also think that, for example, when it comes to citizenship, we should extend citizenship to the third generation of Irish Americans.

11:09Why would that do? Well, again, it would just make the connection greater, it would give them, facilitate them. I mean, if you are, I remember I wrote all this years ago in a book called The Generation Game, which I thought that, hold on a second,

11:22David McWilliams: you know, we have this amazing potential, not just workforce, but network, financial heft, cultural heft in what is Irish America. And at the moment, we limit citizenship to people whose grandparents were born here. And that's it. So if your grandparents were born in Ireland, they can get citizenship. And therefore, even if they are dead, you can get it. But I think that cutoff point is far too narrow. It's what the Italians do, isn't it? Yeah. Because the Italians no matter where they are particularly the Argentinian Italians as you were describing earlier at an Italian election they have posters up around Buenos Aires They did they did it was when I arrived John Mendoza which is very far away and there's a massive big poster of Silvio Berlusconi when I go off the plane it's like wow Silvio you're down here but no so I think That could cause its own problem stone itself having that That could cause its own problem stone Maybe it's up for discussion My point is that you know, if you have this emotionally connected people who regard themselves as Irish Americans, who have over generations kept the flag of Ireland going and hoisted high in the United States at every opportunity, who have created a separate but connected identity in the United States, who have ascended political, social, commercial, artistic power, have ascended positions of power in the United States.

13:01David McWilliams: I believe that it is ridiculous of us to turn our back on this resource at a time when Ireland is absorbing in immigrants anyway. Yeah. So, you know, it's not as if Ireland is closed to the world. We're not. And I would think that jaundicing, biasing, whatever you call it, that sense of Irish citizenship or Irish connections to the Irish Americans would be a very clever move, particularly when so many of them now are feeling unloved in America. So many of those Irish American Democrats feel unloved in the MAGA movement. So many Americans feel that their country is not going the right way. And maybe the idea of opting to emigrate out of America, which never crossed their mind three or four generations ago, now becomes actually a reality.

13:51And, of course, the fact that we are so close to the United States.

13:55David McWilliams: I mean, it's five, six hours. It's not far physically. So all these things we're going through are... And I was also asked last night, there's a lot of young Irish people there who wanted to come home. You know? And I've always felt that we do not... At a time when we are, again, expanding citizenship to all sorts of people, what would we do to attract back our own immigrants? Yeah, absolutely. And I really believe this should be a policy. What we should do, why don't say to every immigrant who wants to come back, for the first two years, you will come back, you will pay no income tax. Just none.

14:33Yes.

14:34David McWilliams: Because we don't get any income tax from them anyway at the moment. So saying you pay none, it's not a net negative right now because we don't even get tax from them now. Secondly, it would change the incentive to come home. right thirdly it would actually send a signal from the island that you are part of the tribe that you are part of the family and of course what it would do is it accelerate the movement back of younger people because at the moment when you talk to them they say well i'd love to come home but house prices are very expensive or i'm not too sure about getting a job or i couldn't find a a place to live, or the tax system is very high.

15:14Yeah.

15:14David McWilliams: You know, we're paid a lot of tax. So what did you say to them? For the first three years you come home or two years, you don't pay any tax. Now, how would you finance this? I mean, that's a great idea and a very simple one as well. I suppose the only argument against that is that, you know, it'd be great to have all the young people back, the ones that were educated here who have now gone off and got a bit of experience and are a bit more worldly-wise. the only problem is them coming back puts even more pressure on the housing market so it kind of needs to go in tandem doesn't it maybe you say well look we said before maybe we're going to put a limit on other immigrants coming in you know we'd say 30 ,000 as opposed to 100 ,000 and we're going to bring back our own and the reason we're going to bring back our own is because they're from here and the most important thing is we give them an incentive but the critical thing is when you lose highly educated migrants Irish people going abroad, you lose the investment that you've made in them.

16:12David McWilliams: This is the key. Yeah, yeah, yeah, exactly. It seems to me on the back of an envelope calculation, it costs about half a million euros to educate every single Irish child from junior infants, John, up to the end of university, taking in all the costs of education, all the costs of teaching, the costs of the buildings, all sorts of things, right? So every time we lose an educated Irish worker, not only are families shattered and they're changed and people don't see each other, whatever, all that sort of stuff, but we actually lose the investment that we have made. Yeah. And the state should be bending over backwards to get back that investment.

16:54David McWilliams: Not to just throw its hands up and say, well, that's the way the world is. To actually get back because America is enriched and Ireland is impoverished by that transaction. And so a way of bringing them back would you say, look, come back, don't pay tax for two years. Of course, what's going to pay for that? The American multinational money. Because the American multinational money is running 32 billion at the moment. We are talking hundreds of millions in this trade, not billions, right? You could pay for it so easily. It could be net neutral. It could change the perception of migration. It could change the perception of the heart as opposed to the head of the country, that the heart of the country is in the right place, that we actually have a responsibility to these people.

17:44David McWilliams: And that, I think, would be so dynamic. A government could do that. It would be unbelievably popular. It could create a whole new pattern of migratory behavior between Ireland and the diaspora. and taking that and extending population, I think would copper bottom this policy that I talked about, which is to use Ireland as the charging and recharging battery for Irishness of the tribe outside, because the tribe outside are our greatest, intangible, but greatest source of soft power. So that's what we were talking about. It sounds like a great night, actually. And I can see by the head in you, you followed up in the bar afterwards.

18:33Well, there was a few scoops were had, you know. But you kind of have to do that. But yes, you get up the next day, John, and you're feeling a little bit happy. You're like the Vincent Hanley of podcasting there.

18:48David McWilliams: Fab Vinny. Fab Vinny. What was the name of the show? It was... MT USA. MT USA. And poor old Fab Vinny. There was always photographs. It was always in the winter on Fifth Avenue here. Yeah, yeah, yeah. The wind would be coming up Fifth Avenue and he'd be freezing sitting beside one of those hot dog stands. Yeah. So anyway, Mac, the midterms are coming up very fast. In fact, in less than a month, four weeks away. Yeah, four weeks. So what's the vibe? I know New York is very different in many ways to the rest of America, but you can still kind of take the temperature a little bit. What's going on there?

19:27And what was Doni saying about it as well? Well, the first thing is that one month to go, right? It looks like the president's party are heading for a hiding in the House, right? And it's probably a coin flip in the Senate. Trump himself is the least popular midterm president in modern polling. He's at 33 % in Gallup's late August. Fake news, fake news, right? So he is below every president who has faced midterm since 1974. So that's Mr. Trump, right?

19:56David McWilliams: The House looks to be gone to the Republicans. So that's the Congress. The Senate is a real fight. And the Republicans have to hold on to the Senate. And of course, the background noise is the economy. So the economy isn't in bad shape, right? But the problem is that inflation has risen. and it feels more like stagflation here. The economy is growing at about 3%, which is good, but petrol prices are up around 3%. Prices in general up 3.4%. Petrol is back above$4 a gallon here because of the war in Iran. Hiring has stalled only last month. Usually the American economy creates about 100 ,000 jobs.

20:42David McWilliams: It only created 29 ,000 last month. And of course, Trump's own Federal Reserve chair, Warsh, has just raised interest rates. Actually, Mike, in fairness, the petrol prices are way up over four, as you say. But more importantly, from an agricultural and industrial perspective, diesel is up at nearly$6, I believe. So that's all the farmers and the truckers and all that sort of stuff. So basically the base, Trump base out in the heartlands has been very badly affected by inflation. And inflation undermines political credibility in a way that unemployment doesn't, John. And this is important to appreciate, which is when the rate of unemployment spikes, let's say from three to seven, that still means that 93 % of people still have a job.

21:33Yeah.

21:34David McWilliams: And therefore, if you are suffering from the unemployment, it affects you profoundly, but it only affects those people who don't have jobs. Now, of course, it affects people around them, it affects the mood, but it has nothing like the same effect as inflation because inflation affects everyone. And so the real wage squeeze is the whole story here in America, right? The economy is getting richer, but people do not feel it. This is the vibe session that Kyla Scanlon talks about. So pay is up about 3 % a year, but prices are up 3.4 % per year. So Americans are getting poorer in real terms, right?

22:16David McWilliams: And this is exactly the condition that sank Biden in 2022. Affordability is the word of 2025. Well, it's funny you should say that because Trump says that affordability is a hoax and that the diesel prices are a small price to pay to keep nuclear weapons out of the hands of Iran. Well, of course, but you see, as you've pointed out, and anybody who's pointed out in America, Americans don't care about Iran. The vast majority of Americans don't care about Strait of Hormuz, they don't care about Iran, they don't care about Gaza, they don't care about Europe, right? What Americans care about is the cost of living in the United States, the cost of houses in the United States, mortgage rates in the United States, and all those financial aspects that affect their day-to-day life.

23:08And so the Democrats have decided

23:11David McWilliams: they were going to hit Trump on all sorts of issues, on sleaze, on corruption, and these were not sticking. But what was sticking is affordability. So the Democrats have decided that they are just going to do to Trump what Trump did to Biden and basically say Biden will tell you the economy is going well, but you're not feeling it, right? So that's the first thing. Then, of course, is the war tax, right? The Institute of Taxation and Economic Policy here reckons the war in Iran has cost the average household around$820 extra at the petrol pump since the 28th of February. Now, that is having a real impact.

23:53David McWilliams: So the peace plan in Iran briefly pushed petrol down under$4. But by late August and the escalation in the Strait of Hormuz, that petrol price is back straight up above$4. Trump's line has been, John, prices will fall as soon as the war ends. But he's been saying this all year. And of course, the Iranians know this. So they have no incentive to make Trump more electable. And they have every incentive to keep the whole thing going. Absolutely. And of course, you know, as well as that, there was that outrageous and ridiculous deal he's done for diesel with Putin. You know, not only will that not make a damn bit of difference to the diesel prices because it's actually so little.

24:39Apparently, it amounts to something like three and a half days of US diesel consumption. but in the one deal he's also alienated Europe further, played into Putin's hands, and above all, shafted Zelensky in Ukraine. Yeah, so John, there's two other economic things going on, which is Trump's own Federal Reserve chair, Kevin Warsh,

25:02David McWilliams: just increased interest rates, okay? And you might have been noticing there is a carnage at the long end of the bond market at the moment because investors are selling off bonds. The long-term rate of industries is moving towards 6 % in America. And the reason is the credibility of America's overall position with respect to fiscal policy, right? So it's borrowing about 6 % of GDP. It is offering American people no sense and no party is offering American people a sense that we're going to adjust, we're going to have austerity, we're going to raise taxes. So there's a sense that, number one, American fiscal policy is off the rails.

25:45Number two, the super scalers, those AI companies,

25:49David McWilliams: are borrowing so much that they're actually elbowing out the American treasury in the demand for capital. And what you see is the Fed has reacted by raising interest rates. This is what Trump doesn't want, because long-term interest rates are short-term interest rates with a risk premium. And long-term interest rates set the rate of mortgages in America. And mortgage interest rates are now at around 8 % in the United States, which is spectacularly high. And because Americans own their houses and use their houses as proxies of wealth, if house prices begin to fall in the United States, it's not just that house prices begin to fall, but perceptions of wealth begins to fall.

26:36David McWilliams: And this, of course, feeds into the feel-good factor, all of which Trump demands and requires to win these elections. And then finally, of course, you have the tariffs, John. Can I just ask you, before you talk about the tariffs, is that, so Trump's pick for chairman of the Fed, your man Warsh, he's not turning out to be such a Trump lackey as expected then. No, no, he's not. In fact, his first move was to raise interest rates. Yeah. So that's, of course, because basically, again, it's like a lot of these things in politics, John. A lot of these guys, Warsh is a young man. He's looking beyond Trump.

27:19Yeah.

27:19David McWilliams: He's thinking, look, no matter what happens, this guy's only in for another two years. Yeah. That's if he does leave, John. Yes. But you were going to say something about tariffs, Mac. Well, just again, you know, like the impact of tariffs has been an increase in the cost of living for Americans. That's the key. And what Americans are now feeling is, you know, hold on a second, are those imported cars from Korea expensive? Oh, because of tariffs. From Japan, oh, because of tariffs. And suddenly what they're looking at, they're thinking they were very much behind the whole MAGA sort of suite of policies.

28:02And now what you see is across the board,

28:04David McWilliams: approval ratings falling, the record lows. The Democrats are now, as a party, are 50%. The Republicans are 41%. This is like across the board. These are huge, huge changes. Democrats are 75 % to win the House and 56 % on the betting markets to win the Senate. Polymarket believes the Democrats are going to sweep across the House and Senate. So this is a disaster for the Republicans. Let me ask you then, Mac, you know, if all these polls are right and it's going to be a blue wave, as they call it, in the midterms, what does that mean for Trump? Where does that leave Trump and his policies? But before you answer that, let's go and do a bit of this.

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31:00So, Mike, all the polls in America are pointing to a blue wave. And Trump's personal poll is way down. He's the lowest approval rating ever of an American president since, I think he said the 70s or whatever. So what is the upshot of that for Trump? and America?

31:23David McWilliams: Well, John, the first thing to look at is that since 1974, the President's Party has lost the House in the midterm election 11 times out of 13. So it's not just Trump. It's basically people get fed up, right? And they say, I'm fed up with this. He said this would happen, etc. So this is normal fare, right? The only exceptions were in 1998 and 2002, where the presidential party held the house but that was a time when the presidential's approval ratings were at 60 percent that was clinton and george bush jr and of course george bush was you know following up on the 9-11 the year before exactly there was the 9-11 effect and and clinton was the beginning of the dot-com boom and the economy was going extremely well and america was top dog and all that sort of stuff, right?

32:19Yeah. Trump today, as I said, heads into this one at 33 % in the ratings, lower than any other American president since the 70s, right?

32:28David McWilliams: One poll had him at 29%, actually. So, yeah, he's in big trouble. But history tells us that swings are not that dramatic. But, of course, the problem for Trump is that if the Democrats win, both the House and the Senate. He becomes an immediately lame duck president. And that, at the moment, the market odds is 65%. The polymarket says that's going to happen. Whoa. Then there'll be massive investigations. Every bill will be blocked. Every nominee will be blocked. And impeachment is possible. Yeah. Is possible. I mean, removal will be almost impossible. but he could well be impeached in a whole host of areas.

33:19David McWilliams: It's, as you would call it, the Trump crime family then, will be extremely worried. Not just Trump, Lutnick, all these guys, right? All these deals they've done behind the scenes, all this sort of crypto-driven sort of favoritism, all that sort of stuff. What about if the Democrats get the House, but the Republicans keep the Senate? And the market odds for that are 28%. right? That's a kind of a rerun of 2019 in terms of Biden. There'll be lots of House subpoenas. Senate, of course, will keep confirming judges who will be Trump's judges and officials. So that might be the worst outcome for American democracy, because what it would do, it would kind of accelerate the Trumpification of the institutions.

34:12But there is also the fact that if Trump does lose badly that, you know, the Trump luster and shine will have gone and Republicans might be less afraid of him and less afraid to go against him, which would be a good thing.

34:29David McWilliams: Well, that's definitely true. That's definitely true. But imagine the Republicans hold both the House and the Senate. Very, very low margin. That's about 7%. In that case, Trump doesn't become a lame duck. he's two more years, then you are going to get gerrymandering, which is they're doing wholesale, and you get that Trump 28 crowd, that chant will get louder. About half of Republicans, already back the unconstitutional third term, half of them, a party that survives the midterm with him at 33 % approval rating, will conclude that it needs him rather than anything else. Yeah. So there is a very significant change of story if the outside miracle happens for the Republicans, which is they hold both the House and the Senate.

35:27David McWilliams: They will then become unambiguously, if they're not at the moment, the Donald Trump party. Yeah. And then what will happen after that is the Trump 28 unconstitutional chance will get larger and more robust and more widespread. But what looks much more likely is that the Republicans will lose in the House, the Congress, and they might lose in the Senate. And of course, there's a couple of big bellwether states, the big senatorial race is the one in Texas, which is where Trump is spending most of his time, because that is a significant, significant bellwether for what is happening. And that's where our friend James Tallarico is.

36:21Yes, yes. And he is the sort of the great white hope of the Democrats. Yeah.

36:26David McWilliams: Kind of Christian Democrat, kind of speaks like a Republican, but acts like a Democrat. at, that is where people will be focused on, on the night of the 3rd and 4th of November. But what is interesting, if you just stand back, John, it's so clear, America is so divided. Yeah. Red people don't talk to blue people. Democrats don't talk to Republicans. It's an extraordinary situation. I was thinking last night, you know, in the case of Ireland, you know, I don't think any Fine Gaeler doesn't talk to a Fianna Foller or any Labour Party or any Social Democrat. Yeah, yeah. Or even Shinners, you know, like, you sit down in a bar with people and, you know, you're sitting down with a couple of Shinners, you just chat away.

37:13There's not that extreme culture war

37:16David McWilliams: going on in Ireland. But isn't that what politics is supposed to be? You know, it is supposed to be a dialogue between different sides and that's what democracy is, is coming to some sort of a consensus, a workable consensus. But the United States is not like that. The United States, you're either one or the other. But I'll just leave you one last thought, right? And it's the sense that I get of AI. We're going to pursue this a lot more over the course of the next couple of weeks and months, John. AI is the massive financial story here. And I think hundreds of billions of dollars of American wealth is being destroyed at the moment through this jamboree of companies, of markets, of banks, of finance companies, throwing everything they have and more at the AI bubble.

38:12David McWilliams: It really is, it really feels like the dot-com. It feels like houses in 2008. It feels like the railway boom. It feels like the Japanese property boom. all the ingredients of a mass extinction event are there for American finance. And you really, really feel it. And this week, while I was here, the tone, the coverage towards AI has changed profoundly. How so? Even up to about three weeks ago, it was very much America leads the world. this is the new technology that's going to change the world and we own it and we're going to come out the top. That triumphalist narrative has been chipped away at simply because as interest rates rise, the cost of financing and refinancing and rolling over these debts have risen dramatically.

39:16David McWilliams: none of the AI super scalers are making anywhere close to returns that would allow them even over the next 20 years to pay this money back. The Chinese, as we've said before, are rolling out open source AI, which is much cheaper. And therefore, what the Americans are hoping is that American consumers will buy the more expensive American AI over the cheaper ones. I'm not too sure American Gen Zers who are pinned to their collar, if they're going to be involved in AI, will care where the AI came from. Do you remember not so long ago, do you remember the whole hoo-ha over TikTok here? That the American government was going to ban TikTok because it came from China.

40:05Yeah.

40:06David McWilliams: And the kids said, we don't care where it comes from. We use it. We like it. We love it, right? Yeah, yeah, yeah. So I think what you're finding is you've got the internal dynamics of a massive speculative bubble. And you've the external threat of an active enemy called China, which will only benefit if that bubble bursts. And that external enemy is serving to undermine the business model of the Americans. All the while, you have a massive debate going on about AI. Inside AI, certain people like Anthropic are saying we need to slow down because we are creating a new form of humanity, which will and has the potential to take over from us.

40:58The cynic in me says they're doing this simply to get regulated because once they get regulated, they're soldered onto the state. and therefore when the bust happens, the state has to write a check. But this cacophony of noise

41:12David McWilliams: all comes at a time when both of the two big IPOs, the Anthropic IPO and the Open AI IPO, have been pushed out. And that's never a good sign. Yeah. Because that means that investor attitude is softening towards them. So I think the big story, even though the big story in four weeks' time will be Trump, the news and all that, The Senate, the nature of the Trump presidency, which is huge. But I think the one to watch is this slow but steady increase in skepticism about the AI revolution. And the fear that that will all end in tears in the next year or two. Matt, can I just correct you on one thing?

42:00apparently if you call it AI and you don't call it SI super intelligence you're an enemy of the White House according to Trump and what awaits you is a firing squad alright Bosco I'll talk to you I'll be home next week I'll talk to you then see you Fab Vinnie by the way

42:24David McWilliams: if you want to get this podcast early and with no ads Join us on Patreon. That's patreon.com forward slash David McWilliams and join the gang.

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