Economics in a Tent: Live at Electric Picnic 2025

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1:00David McWilliams: How are you doing there? Hope all is well. Today's podcast is the highlights of the live podcast that John and I did in Minefield at the Electric Picnic. It was a brilliant, fantastic weekend. Did you enjoy it, Charlie boy? I loved it. Full house and all. Absolutely. And as you said, you know, economics in a music festival. Who knew? Who knew exactly? It's a reflection of the paucity and pathetic degradation of popular culture that economics has elbowed its way in to a live music festival. You rock and roll, Mac. You rock and roll. You rock and roll. We saw lots of bands. We stayed up very late, far too late.

1:37David McWilliams: But this podcast goes out to three particularly fascinating, great, fun women that I met on Sunday afternoon as I was trying to get my head together to come back to Dublin after Electric Picnic in the great bar that is Morrissey's of Abbey Leaks. It is a beautiful, beautiful bar. They are the three dangin' women Niamh, who lives in Portugal and listens to the podcast Every single week Karen, who lives in Brighton Just back from Australia And Anne-Marie, who lives in Bexhill In East Sussex Three of you, you're a total hoot We could have stayed in the bar all day with you But thought the better of it So it goes out to yourselves It's the highlighted version of the podcast Minefield Electric Picnic 2025 Thank you How are you?

2:28David McWilliams: Happy to picnic? Yes! Brilliant. Listen, it's wonderful to see so many people here. I was saying to John, it's a pathetic state of modern culture that an economics podcast gets a big house at a music festival. Thank you all for coming. Thank you for supporting the podcast over the last five years. I think you might know that John and I are very old friends. In fact, when we were kids and John grew up in the house opposite us on this estate, he was the music guy. So he is the person who should really be here. And I was kind of the swatty pants who was into sums and mats and tissue ginaduct and all that sort of stuff.

3:13David McWilliams: So it's great really to see so many people here. And again, as I said, this guy should have been here years ago because he's actually the music person. and he's the person who understands bands, who understands music, understands chords, progressions, all that sort of stuff because, of course, John was originally a sound engineer until after seven pints in a pub called McKenna's one night about five years ago, I said, you know what we should fucking do? A podcast. And you should ask the questions. So give it up for John Davis, ladies and gentlemen. Thank you. Thank you. Actually, I was going to say, T-Rex is great kind of icebreaker and that's how we kind of met.

3:55Came over to Macro with a T-Rex Records under my arm going, you've got to listen to this. Yes, exactly. It was... Pinned them down and... But since then, we've been going to gigs and festivals and all that kind of stuff. But I was actually thinking about this over the last few days, about coming to Electric Picnic. And I was thinking that festivals like the Electric Picnic are very... They're a really good example of how the music industry has changed over the last one. What I mean by that is it's a little bit like a Spotify playlist in that you know while we know that the headline acts and stuff we don't necessarily know the smaller bands by name but you go into a tent and there's some banging tunes you go oh I know this oh I love this tune you know what I mean but I think my point is that technology has always been the driving force in music and innovation, creating new sounds and giving rise to new genres, whether it's, you know, disco or hip hop or whatever.

5:02But now technology has actually changed the way we listen to music. Like before it used to be a case of, you know, we'd go and buy albums and CDs and all those but the whole shift the whole economic shift of the music industry and maybe we'll come back to this a bit later but the whole economic shift of the music industry has gone from ownership buying stuff to streaming and at the end of the day artists don't get paid as much as they should or used to well you know I think we'll probably come back to that because

5:39David McWilliams: I think it is a little bit of a microcosm of what's going on in the world but it was just interesting you know anybody who's made music who tries to make music who loves music will know that all the returns are going to it's funny that Daniel Eck who is the head of Spotify said the other day that music now the cost of music is almost zero and I felt like really for who well exactly and do you know what we will come back to it but I'll just give you one little stat we spend more on crisps, bags of potato, than we do on music. You certainly do. We don't get to look like this eating lots of crisps.

6:18Anyway, we might come back to the economics of music and festivals a wee bit later on. I think we should definitely come back. Yeah, yeah, absolutely, absolutely. So, shoot, we've got lots to talk about as always, but let's start with the big orange man, as in across the water in in america trump trump as you know as you know we know all about the terrorists and all that kind of stuff but he's been attacking the the american central bank the fed and he's fired the governor and he's also fired the labor statistics person and he's you know put civil guards on on the streets of washington and trying to do chicago blah blah blah all that kind of stuff.

7:01So he's basically tearing down the system. What's going on? And should we be worried? Okay, well, that's what the way we're going to try and do this podcast is we're going to start

7:13David McWilliams: with the States because America is still by far and away the most important country in the world. And it is by far and away the most important country for Ireland. And then we'll see what's happening in America, what's likely to happen in the next year or two economically, how that's going to percolate down here, but also how it's already percolating down here, and then the implications for us, because what is weird when you do economics in college or whatever, you kind of forget that not all economies are the same, that Ireland is so small. As I say in the podcast all the time, John, we are a rule taker, not a rule maker.

7:49We'd like to think we're rule makers, but we're actually rule takers. So the quality of our strategic thinking is of much more higher premium in Ireland than if you're a big country because you make your own rules. So I think the interesting thing about Trump for me is that the way I look at economics isn't like through short-term cycles, which is one year or two years, whatever.

8:16David McWilliams: I think the best way to look at economics and politics is through multi-decade cycles. That basically what happens, if you look back at history, is that over time, certain periods become defined by a certain way of economics, a certain way of monetary policy, fiscal policy, a certain philosophy of life, and a certain background culture. So to look at our world in the last three or four generations, you can see a cycle that began in 1945 at the end of the Second World War. And it went up to about 1980, 1975, 1980. So let's say 30-odd, 35-year cycle. What changes the cycles, though? Well, in this case, it was the Second World War changed everything.

8:59David McWilliams: Yeah. And they started again. So we come from a fascist cycle before the Second World War into the American, let's say, 40 years domination of the world, where America led everywhere. But wages were rising. Trade unions were very, very strong. Democracy was strong. in Western Europe and America. Corporations were not that particularly all expansive. And what you had was a sort of a 40-year period where America led a social democrat world. Yeah. And then that all changed with Ronald Reagan. There was a real difference between Republicans and Democrats. There wasn't really. That's the interesting thing.

9:38There wasn't such difficult. There wasn't such difficult. And then you see Ronald Reagan comes in and says, we're going to smash trade unions. we're going to give capital loads of money,

9:48David McWilliams: we're actually going to change the way we work. And Reagan and Thatcher, 1980, 1981, 82, pushed us towards globalization, the end of the Berlin Wall, the rise of China, but more importantly, the reduction of interest rates around the world. And as interest rates fell around the world, and this is kind of crucial to understand, And what happened was wages also fell because people who were exposed to China in manufacturing, they saw their wages fall. But as interest rates fall, the prices of assets go up. And one of those assets is house prices. So what we see, we're in a 40-year period where asset prices go up and the real wage of workers go down.

10:33And that's from about, let's say, 90 to around now. Just quickly, why do assets go up when interest rates go down?

10:40David McWilliams: Because what happens when interest rates go down, the cost of borrowing goes down. Right. So what you do is you borrow excessively, you leverage excessively. And of course, part of this whole world was deregulation of finance and all that malarkey. Anyway, this all comes to an end in the last five or six years. And I think what we see now is the beginning of a new, maybe 30-year super cycle. I hate to admit it because I don't like what I'm going to say, but I think Trump represents a version of the future, which is more likely to be persuasive to voters than what went before. So I think, therefore, when we look at Trump, what happens in Ireland in particular, people say, oh, Trump's a wanker and he's this, that.

11:23All that's true. But the point is, he's in power and he's exercising power in a way in which I think nobody really expected, which is he understands the instruments he has in his hand and his assault on the United States status quo is real. It is ongoing. It is multifaceted. And it's bringing the United States into a MAGA world, the likes of which we haven't seen since the 1920s. And he's only getting started. And he's only getting started. We are in the sixth month of what could be a four year presidency, maybe an eight year if he goes again, right? Or more. So what I think is crucial is to get a framework in your head of, have we seen this creature before?

12:11And if we've seen this creature before, do we have any sense, therefore, of what is likely to happen? This is the politics that is, if you look in the UK, the Reform Party is miles ahead in the poll. The last podcast we did yesterday on Germany, about the ADF, the ADF have come out of nowhere. Le Pen, all these populist movements are the movements who are telling the best story. They're telling the story that people want to hear or enough people want to hear. And I think that that's what we've got to do. We've got to figure out, is this an aberration or is this the future? And I unfortunately think it looks to me...

12:51This could be here for a while. Well, I think, given that I think the way economics works is in big cycles, I think it could be here for a long time. But then, okay, so if we're using the example of Argentina and Peronism as a lens to look at America, Peronism failed miserably, as you just said, from 7th to 77th. Yeah, yeah. So the way Trump is going about stuff and, you know, attacking all the institutions, then is Trump going to fail? And what happens? And should we just leave him at it then? Well, I think that what is going to happen is that the Trump first presidency or second presidency, this one, is going to end in a crisis.

13:30A fiscal crisis, a monetary crisis and a debt dollar crisis. Explain that. So basically, the United States has got a serious problem, which is it borrows too much money. It doesn't generate enough money. And it hopes that everybody believes the dollar is king. But every time he chips away at the dollar, eventually people will say, you know what? we're not necessarily going to believe in this currency anymore. So my sense is that over time, people will gradually, the rest of the world, and the people who invest in the United States, America depends on foreign people buying American assets. So my sense is that that will gradually erode.

14:08Because it's taken the Americans about 100 years to build up the credibility of the dollar. Yeah. Right? So when sterling became less of the global reserve currency, the Americans picked it up. I think what is going to happen is gradually but progressively there will be a currency crisis, a fiscal crisis. This is what happened in Argentina, but that happens everywhere. But Trump will blame everybody else. Of course. This is the whole point. And he is an amazing political operator. You think about Donald Trump. America used to be dynastic. The Bushes, the Clintons, the Obamas. These were the big families, right?

14:47almost like political mafia families in their own right. Trump has destroyed them all. That's an amazing thing. He can connect with people in a way in which liberal people can't and don't want to or don't have the courage to or not saying the right things. Basically, Trump gets people in their heart. Now, my point is that all of this economic analysis is grand, it's fine, it's persuasive, it's logical, it's rational. But it's not inflaming people in the way he's doing it. So my sense is that we in Ireland and in Europe have to live with the fact that this is, unfortunately, the future. You see what he's doing to central bankers now.

15:37The reason he hits central banks, John, is because they're the fellows who print the money. Yeah. Well, OK, just on the central bank, I mean, there was... I think we were talking about this the other day. There was the Jackson Hole, which is a place in Wyoming, that all the central bankers turn up to every year, and they set out monetary policy and all the rest. And I was asking Mac about this the other day, about, you know, all these guys, hugely powerful people, but unelected people. So does Trump have a kind of a point? Yeah, I think populism has a point. Yeah. It has a point. Maybe the pendulum went too far.

16:15I mean, years ago, I was an economist in the central bank,

16:18David McWilliams: and I was really just out of college and really wet behind the ears, and I thought it was going to be the best thing since sliced bread. And when I left, my mother couldn't believe it, like a good job in the bank. The 1990s and a pension and all that carry on. And they were wearing a suit and everything. But I learned a lot just observing central bankers and the central bank. And in about 1992, so I was just in the door, and there was a crisis in Ireland. Very few people in this room were either born in 1992, but very few people remember it. But there was a currency crisis, and this gave me an insight into central bankers.

16:54So what happened was sterling collapsed. The English currency collapsed, it fell, and because the rest of the world thought

17:00David McWilliams: that we were just basically part of Britain in effect, they thought, well, the Irish will devalue their currency in sympathy with the British. But of course, in Ireland, that went down really badly in the central bank, and they're like, no, no, we're not going to devalue. We'll never do that. We're not British. We're different, et cetera, et cetera. And of course, the problem was that we felt that, but nobody else believed us. So everybody kept selling the Irish currency. Interest rates started to rise. Then we were given, it was amazing. One day our boss came in and said, you can't talk in public about the currency.

17:33And I was like, I'm going to the stag's head.

17:35David McWilliams: Nobody talks about the fucking currency, the stag said. But anyway, they said that to us. That was Grant. And it was about three or four weeks of crisis. I remember the moment I thought I knew it was all over was when there was a 10-mile queue of Toyota Corollas outside Sainsbury's in Uri, right? Snaking back all the way to Dundalk of Irish people buying cheap booze for Christmas, right? Because we figured out if we devalue after Christmas, the booze will be cheap, so you better buy the booze quickly. and I remember the boss of the central bank was a fellow called Morris Doyle and he was a really...

18:15David McWilliams: Do you remember in the old days, the way you got on in the world is you never saw your boss, you never spoke to them, you never addressed them. Like, not now they're all playing fucking paddle with their boss or what, right? But back then the idea was, he was austere and he was up here and you were a little minnow and you'd never speak to him. And I remember one day in the middle of this crisis, I was sitting, probably reading the Irish Times or the Indo or something Yeah, good for being a Marietta Biscuits. Marietta Biscuits, the tea trolley coming in. Don't lock the tea trolley. And I get this sort of boom, boom, boom on my window.

18:49And I look up and it's the fucking governor of the bank. And I am shitting myself. And he says, Mr. Mike Williams.

18:57David McWilliams: And I said, yes, hi, hello. Hi, how are you? That's me. He said, I think you might be aware we're having some problem with the currency. And I felt like I said, no shit, Sherlock, really. and he said what are you doing on Thursday and I said I hope I'm coming to work yeah exactly my diary and anyway he said would you go to London and would you convince some investors and I said who are they they're Swiss and German investors and Italian investors and they own 10 billion euros of Irish government debt and if we devalue they will lose their shirts So we basically have got to ensure they don't panic.

19:40Right. I said, okay. And he said, will you go over and articulate government policy

19:46David McWilliams: because you're loquacious, you're young, la la la. And then he said to me, on Thursday morning, go over. He said, do you know the Dorchester Hotel? And what he didn't know, John, was that my last job but one was as a kitchen porter in the Dorchester Hotel. Right? And I was shitting myself that I'd be caught by all the Jamaican lads that I used to skin up with in the Jacks, in the Dorchester Hotel, as I was representing Ireland. So I remember going, oh my God, fuck, fucking... And I was sent out to represent Ireland, and I was like Father Dougal, right? I was really young, I was about 24, and I looked about...

20:23David McWilliams: Your cheap suit. Communion suit! I really did look like a fella, if there had been a rosette on my thing, and I'd just made my communion. and I went over to London and I remember walked in and the Dorchester Hotel is very posh and there was a massive big room, not one like this, but there was only about 16 people in it. Big, big, long table. And I said, hi, how are you? I'm David McQuinnion from the Irish Central Bank. I'm going to explain to you why your money is safe in Ireland and don't worry, maybe you should give us even more. And so I gave this speech and I remember seeing one guy and do you remember mobile phones looked like if your man it was like if he had a Doc Martin stuck to his head.

21:07Yeah, yeah, yeah. And all I could hear is sell this country at anything. Sell the stocks, sell the equities, sell the houses. You should see what's in here

21:15David McWilliams: trying to defend their fucking currency. And I'm like, oh. He's not well. I'm just thinking, oh my God, my economist career is over. And then they all filed out except one guy came down, a big, huge guy. And I'm looking at him and he's looking at me and I'm thinking, he's going to attack me. He's actually going to hit me. And he looked at me and I was kind of wincing like this and he said, very impressive. I said, really? He said, unbelievable. I said, wow, thank you. He said, your ability to explain economics, the complexity of economics and finance is really quite impressive and remarkable. I said, thank you.

22:00He said, for somebody so young and with a smile on your face, your ability to lie for your country is impressive. Would you like to lie for me? And I said, who are you?

22:16David McWilliams: Now, at the time, UBS was the biggest bank in Europe, and I had never heard of it. I thought there was only two banks, Bank of Ireland and AIB, the whole world. but worse I thought your man said UPS I think fuck I'm going to be a postman with your little brown suit with your little brown suit exactly bing bong and about three weeks later I was working for UBS the big European bank it left the Irish Central Bank the Irish Central Bank did capitulate but what that lesson taught me as a really young man was that central bankers don't know, and investment bankers don't care. And once you put those two together, that the people who are supposed to be in charge are not in charge, they're having a rashers, and that the people who they are supposed to be disciplining don't care, that's why we have recurring crisis.

23:17And once you understand, it's a little bit of common sense. Once you understand that, all the economics and the monetary policy and the stuff you learn in university doesn't matter. It's about incentives. And that's why the central bank, him attacking the central bank now, is critical because the central bank don't know, investment banks who really make money don't care, but the rest of us assume that somebody is in control. It's very reassuring. This is something that you write about in your book, Money, Story of Humanity, which is number one bestseller, by the way. Just go out and buy a check.

23:54David McWilliams: Buy two copies. Give it to your... Give it to your... Yeah, yeah. Ex-boyfriends, ex-girlfriends, you know, estranged husbands. They love all that shit, right? Estranged wives. Perfect. Buy two of them. It's going great, and it's been published in America in November. In November, yeah, yeah, yeah. But one of the things that you did say in the book, which I had to read a couple of times, you said about who controls money, which you were just talking about there, that the central banks are the fellows who print money, but they only print about 10 % of the money that's in circulation. Yeah, maybe less.

24:32And the other 90 % is essentially made up by commercial banks. It's all made up. Explain that. I know, it's kind of mad. It's kind of scary. When you realize that money is... First of all, money is a most extraordinary idea because it's entirely, entirely fictitious. It is a product of the human imagination, and that is it. So when you go tapping in a pub tomorrow or tapping in the bar tonight, the money that you tap doesn't actually exist. It only exists because we all believe it exists. It's an act of faith. And that's why faith and trust and credibility and stability are so unbelievably important because money is ephemeral.

25:20It is a social construct. I've argued in the book that it's the most amazing technology that humans have ever created. I don't think you can understand our world in any material way or even any philosophical way, social way or cultural way without understanding this technology that we all use every day. And the fascinating thing about money is we don't ever answer those questions or ask those questions that a 10-year-old would ask. You know, a 10-year-old would say, Where does it come from? Can it run out? Do you have a money tree? Can I get more of it? Exactly. The reason we don't ask, maybe because we don't ask that question, that in itself is an amazing reflection of the success of the conceit that we are all involved in, which is that money has value.

26:07It has value because we bequeath it. And that, I think, is one of the most extraordinary observations about social complex societies that you can make. That we are run and we absorb and we indulge and we repeat a religious canard, as the French would say, which is that money has some value. It has the value that we give it. And that is why what Trump is doing is so dangerous, because the dollar, whether people like it or not, is the reserve currency of the world, and the Federal Reserve is the reserve bank of the world, and if the Federal Reserve is unhinged, unmade, humiliated, besmirched, as Donald Trump intends to do for his own end, then what happens is you precipitate a dollar crisis.

27:02But one last thing on the dollar is, the Americans once said, as I called John Connolly, who was Nixon's great Irish American from Texas, as Nixon's finance secretary, treasury secretary, he said to the French we're jumping up and down over the dollar. He said, look, man, the dollar is our currency but your problem. Yeah. And that's what they think. But there is, if the dollar, he's undermining the dollar as it is, if the dollar goes, what takes its place? Well, nothing at the moment. Could it go? Nothing, no. I think it goes slowly. But I'm just, I want people to understand that we're going into a world which is not the world we came from.

27:38Something has changed philosophically, culturally, certainly politically, and economics and politics are like handmaidens. They move together. So I think, you know, for us in Ireland, because we are so unbelievably dependent on American multinationals, this story should really resonate with all of us because what has changed in my lifetime in Ireland from the economic perspective has been this extraordinary story of the arrival of the Americans in the 70s, in the 80s, and then the hyper-investment of the Americans in the 90s, which we know now, John, throws off billions and billions of... Yeah, absolutely.

28:24But let me ask you about, you talk about the billions that we're earning through our corporate tax rate from our pharma, from our tech companies, all based... From their pharma, their tech companies. Yes, exactly, exactly. But it has made Ireland, on all the kind of metrics and all the kind of stats you see in charts, Ireland is right up there as one of the richest countries in the world. Yeah. But we don't feel rich. Your average Joe doesn't feel rich. Where's all the money? Where's it gone? That's probably the critical question, right? Which is, if you had said to me or anybody in this room 20 years ago that Ireland would have all this money coming in,

29:08David McWilliams: you would have thought, okay, well, we'll fix everything. That will allow us fix everything, and the quality of life of Irish people will ascend dramatically, and our problems will be diminished, and we will be more or less in the land of milk and honey. I think what has happened is this very bizarre... Again, I believe this is the best way to understand Ireland. is that the American multinational money has been unbelievably successful and unbelievably brilliant at one level, which is bringing in taxation, bringing in jobs, and also allowing what you would call a technology transfer from America to here.

29:52David McWilliams: So people who work in the multinational sector are using the best technology, the best networks, the best management techniques, all that sort of stuff, right? But there is a downside, which we spoke about in the podcast a couple of weeks ago, called Dutch Disease, that basically what happens is when, if you regard the multinationals like finding oil, when a country finds oil, it completely skews the way in which the country is governed. And the reason is the following, is there's so much money coming out of this monetary spigot, the American multinationals. $29 billion last year, without taking into account the Apple tax money, the 13 billion that we denied we had for ages and ages and ages.

30:37David McWilliams: Don't worry, you owe that money. No, we don't need it. No, no, it's in a jar over the telly and we're watching Coronation Street and don't be talking about it, right? What happens is, and this is, I think, a very crucial way of understanding our society, is that because this is the crock of gold, because this is spewing out money, all the political class, and it goes into the public sector, become obsessed with getting a bit of this. And what it does is it totally compromises governance because all the political class want is just to keep this thing spewing out money, right? And at our core, I think that Irish governments should now be thinking of actually slowing down the economy actively.

31:29and realizing that we are a rich country. We are not as rich as we think we are, but we're not a poor country in the sense that you don't have to drive the machine so hard all the time. You don't have to worry. Now, I think that basically the relationship with the multinationals is a bizarre thing because I think it underscores an insecurity in our political class about who we are and what we are. And it's very, very deep in Irish culture. And I think it's akin, John, and I look at it akin to... Did your granny have a good room? Yes, we all had a good room. Right, OK. So my granny's good room in Cork was so good, I wasn't good enough to go into it, right?

32:18It was kept for people who were gooder than us, right? But what was going on in the good room, what was actually going on in the good room was the following. the posh people pretended that we were posh. We pretended we were posh. They knew that we weren't posh. We knew that they knew that we weren't posh. But we never said it. And that allowed the social status quo to exist and was profound insecurity of our people vis-a-vis people we thought we were better, right? So we put on a show. And I think with the American multinationals, we have the same psychology, that we put on a show. We go into the good room, and rather than say to them, look, we're partners here, you've done well, we've done well, you're making lots of profit, we're making lots of tax, we should maybe tone it down a bit, maybe can we figure a way out?

33:17Or, if you don't mind, we're going to try and look after the local economy a little bit better rather than always driving the economy with immigration and house prices for not just their agenda but an agenda that isn't really suiting the nation and I think that maybe hopefully that eureka light might go on in the next few years that we don't need constantly to absorb all this money in because what's happening is the money's coming in It's driving up prices everywhere. The state then gets all this cash.

33:54David McWilliams: What the state does with this cash is, oh, fuck, we can't build enough houses. Well, why don't we buy all the houses? Yeah. So I did a little thing last week. We did it on the podcast. I looked at the accounts of one of the big house builders. It looks as if, from my looking at it, about 75 % of the new homes that are being built, being ordered at the moment, from the biggest home builder in Ireland, are going to the state. Yeah. What that does is it makes first-time buyers not only in competition with each other, they're in competition with the state. So it squeezes the amount of homes available to first-time buyers.

34:30It pushes everybody into the rental sector. Who is benefiting? I think the PR is benefiting. But again, why don't we explain this to the multinationals? We need to figure out a way of spending the money differently in order to configure the society. because that is why Ireland looks rich on paper but feels poor in reality. Yeah, yeah, yeah. So, okay, so we do have this money squirreled away somewhere and it keeps coming in every year for now until Trump pulls all his... The farmer won't go. The farmer are hoping what the Irish Times is hoping, that he'll go away. Right? I know, I work for the Irish Times.

35:09I write for the Times. Well, you said we're in here for the long haul. I think we are. I think we are. But I mean, corporate America is a power in and of itself. Yeah. And Trump will be flattered by and will be persuaded by, will be moved by. So I don't think it's going to be black and white. I think it's a gradual process. Okay. So if we are to kind of some sort of redistribution or some way of energizing the local economy and local businesses, how do you think that money should be spent? The Apple money, for instance, or some of the corporate tax money? I think we have a big problem in Ireland when it comes to figuring out what to do with money that comes in as a windfall.

35:53We're obsessed by pension funds, right? Now, a pension fund is a reward for getting old. It doesn't do anything for the economy. I would much prefer to see the money in the, for example, new multi-annual fund that we're saving to be used as a startup fund. I think one of the problems in Ireland is that young people don't have access to capital to risk to start their own businesses because they don't own property. So the banks are very happy to give you a loan if you can show them a flat in Dublin or in Cork or whatever as collateral. Young people don't have their own properties. So therefore, what could we do in Ireland that de-risks the younger generation, facilitating them to take risk?

36:49What you could do is you could use some of the Apple money as, for every individual, as collateral to give to the banks to allow money to flow out of the banks into the entrepreneurial sector to create new companies. Because at the moment, we are strangling all the young people who want to set up companies. Why? Because they're too risky. Why? Because they have no collateral. And yet all the while, the country gets richer and richer and the money is being put into funds that are essentially offshore. Yeah. Now, I would think that what Ireland needs with our population demographics, whatever, is a startup fund.

37:30because in the end, societies only get rich by innovation. And innovation comes from people backing themselves, saying, you know what, I can do that better than that product. I can do better. I have an idea. If you facilitate that, magic stuff happens. Lots of hit and misses, lots of things will fail, etc., etc. But it doesn't matter. The money is free. But we also have the educated people with ideas raring to go. We spoke to a guy on the podcast who was into tech, but he tried to start up a bunch of companies in Ireland, and he gave up. And the reason why he gave up was because he couldn't afford a house.

38:17Of course. He didn't have a base. He could have done it from his parents' front room, box room, the good room even. Yeah, yeah, yeah, yeah. John, I think we are, in this country, two or three good decisions away

38:30David McWilliams: from creating a really, really positive society. But we're also two or three bad decisions away from chaos. And I really believe that. And when I say chaos, I mean, we spoke about Argentina. Good countries go bad quickly. You know, they go bad quickly. You make the wrong decisions. You can't recover. You know, when you travel around the world, nobody is waiting for Ireland to get its act together. Nobody's saying, oh, we'll give you a head start. Don't worry, we'll hang out. So I think that there is an urgency which I don't detect from the political class that there should be an urgency, that we're on the cusp of something really interesting.

39:13We have, for the first time in our history, in our history going back 200 or 300 years, for the first time ever, we have the wherewithal to create something, and what we need is the decisions. And the decisions are so obvious, but it needs leadership. And not just leadership, but clarity of thought.

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41:45We started kind of about music. Yeah. And I want to get your take on the changing music. Like, artists aren't making money. No. What's the kind of general economic thinking behind this? Like, I was explaining how technology has changed the way we listen to music and the way music is produced. But now, like, we're a big fan of Schumpeter. And Schumpeter is all about the gales of creative destruction. So we welcome innovation and stuff. We seem to be working against the music industry. Yeah, what's very odd, I was just half an hour ago listening to my daughter, Lucy, who writes music, sings, plays.

42:29and it's incredibly difficult for any young person to figure out how to make a living with music. And I think that what has happened is that every time there's a technological development, something bizarre happens to the economy. So, for example, John, 120 years ago, before the gramophone, Italy was full of basically tenors and sopranos who basically traveled around singing. And they could sing, they could go to a music hall, and they would sing and people would turn up to hear them. All the little villages. All the little villages. And then something came in called the gramophone. And this came in, and then suddenly the Italians could listen to the best singer ever.

43:15So the Pavarotti, vis-a-vis the guy who was just a little bit worse than Pavarotti, but better than everybody else. So suddenly that guy ends up unemployed. So everybody, so the gramophone, the record player, what we use the record player, had the effect in certain industries of absolutely destroying the second best. Just say the second best. And this is what you call in economics, the winner takes all markets. And I think that what is happening now in tech is exactly the same, is that the gains are concentrated in tiny, tiny, tiny people. and everybody else needs to recalibrate, figure out what's going on.

43:57You see it in football, you see it in sports, you see it actually in some professions as well, that superstars emerge and they get superstar salaries and the rest don't. But the optimistic thing to say, John, is that culture has to be young. Culture cannot be old. And by that I mean if you look at every cultural innovation, every breakthrough, every brilliant novel, every great painting, every great musical breakthrough, it tends typically to come from the youth. So culture will recalibrate. I mean, for example, you take the Oasis concerts, right? Yeah. What the Oasis concerts tell us is that nostalgia is a much better bet than novelty if you are a promoter.

44:51And then it gets to this idea of the inappropriate owners. There are inappropriate owners of things. And what is happening is if you look now, last year on Spotify, to take Spotify, 78 % of downloads were of old music. Yeah. Not new music. Yeah. Now that is a recipe for an ossification of the art, right? Yeah. What will happen is you're going to get indie labels, you're going to get indie music, people are going to get sick of the old stuff, but it takes time. But people take the path of least resistance, and when algorithms take hold of people's Spotify... I fucking hate that word. I really wish I lived in a world where the word algorithm didn't exist.

45:38It's awful. Because you know what algorithms are, John? Come on. Algorithms are driven by the familiar, not the new. Exactly. So what is familiar is you default to what is familiar. What is familiar is what has already been. But great art and great culture is new. It could be derivative. It could be, you know, it could be direct ripoff. Yeah. But it's absolutely new. But it is the difference with kind of, or the idea of abundance versus scarcity. and in music there are so many bands so much music so much of it is fantastic and there's a lot of crap as well as opposed to kind of the scarcity model where where it has more value and it it drives creativity it does drive creativity and i think the way this society

46:28David McWilliams: works is this idea of every good thing gets replaced by something better i think that's It's a story of humanity. It's a story of evolution. It's a story of the way society works. But maybe just to conclude, what is interesting is what we see in music is being replicated in society, which is the gains are going increasingly to the 1 % or the 2 % or the 5%. For example, there was an article yesterday, I think, that showed that the richest 10 % in Ireland own 50 % of the assets. and this is a socially democratic country that has tried to reverse that, change that over years. So I think what we're seeing, and this comes back to our point at the top, why is the pendulum swinging towards MAGA?

47:17Yeah. The pendulum is swinging towards MAGA because the wealth or the perception of wealth or the perception of who was getting all the readies has become too extreme. So the promise of MAGA, it doesn't matter whether it's delivered or not, But the promises, the message, the thing that's animating people, the thing that people want to hear is that you can get shit back from those guys who've had it for long. So, for example, the anti-elite movement in the United States has been driven from the fact that it's been said to me once or twice before, working class people are what they call working Americans.

47:53Yeah. Don't hate the rich. They hate the professional classes. Right. They don't like professionals because professionals are the people who've lectured to them all the while. Whereas the rich offer them a path, however remote, they offer them a dream, a path for self-improvement. And I think what is happening now is that what we see in the music industry has basically lagged what we're seeing in politics. Absolutely. And the reason our politics is so unbelievably anxiety-inducing at the moment, and it's so difficult for all of us to appreciate, to accept, to acknowledge, to digest, is that we are at this tipping point where technology and finance and demography and a lazy political class has allowed people to become so disenfranchised that they have said, you know what?

48:51Burn the fucking place down. And that is what is happening. Yeah.

48:59David McWilliams: What a way to end the podcast. There you go. Thank you.

49:21Hi, this is Paige from Giggly Squad, and today's episode is brought to you by McDonald's. Honestly, Caesar sauce and a Diet Coke at McDonald's might be the perfect girl dinner. And McCrispy strips dipped in Caesar sauce? No notes. Right now at participating McDonald's, the$2.99 Caesar snack wrap is making me rethink my entire go-to order. Caesar sauce is at participating McDonald's for a limited time, so go try it before it's gone. Prices and participation may vary. This message is brought to you by Cologuard. If you recorded songs off the radio for a mixtape, it might be time to screen for colon cancer.

49:57The Cologuard test is non-invasive, requires no special prep or time off, and you start screening right from your home. It's just three simple steps. Set up, sample, and ship. If you're 45 or older and at average risk, ask your doctor about the Cologuard test. Available by prescription only. Learn more or request a prescription at colaguard.com slash podcast.