The Tech Crash, The Demographic Time Bomb, and Ireland’s Future 40

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1:29David McWilliams: To understand the economy, you have to understand human nature. This podcast is powered by Acast. How are you doing there? It is yet again a time for the podcast. And today's podcast is going to be split in two. First of all, John has questions about technology. About life. I mean, about life, about life, about technology, but the fusion of love, art, emotion. What is it to be masculine in the early 21st century? These are the sort of issues that keep him awake at night. Yes, I feel I'm still on that journey, you know. He's on that journey of discovery, let's say. He has been on all sorts of American self-help websites for the last couple of days.

2:23David McWilliams: And he is now, he is now the truth. He's going to come up with seven steps to be a better man. Anyway, apart from that, no, number one, we are going to talk about the incipient signs of what we were talking about last couple of weeks, which is a tech crash, number one. Then number two, I want to talk about Ireland because the Department of Finance, now, not the greatest forecasters in the world, a little pinch of salt, right? They came out with a thing called Future 40, which is their view of what Ireland's going to look like by 2040. Is that anything like WD-40? Yeah, it's like WD-40 for economists.

2:59David McWilliams: Exactly. You spray it on little bits that don't work, little rusty bits, and lo and behold, the whole thing works, right? Yeah, perfect. So we're going to talk about the tech crash and WD-40 economics, but it's basically about Ireland. And of course, the solution seems to be, don't worry about anything. We're just going to throw more and more workers at it. If we don't have our own workers, we'll get some somewhere else, et cetera. And we're going to have to pick that apart and see what it means. But first, John, what was on your mind in the technology space? Yeah, well, if you cast your mind back, your adult mind back to Nimbin in Australia.

3:35Ah, yes.

3:36David McWilliams: If you can. When we were doing our... Exactly. When I met my bikers, when I was the biker's bitch for the afternoon. Yeah, exactly. But we spoke about the possibility of a tech bubble. I had all the signs. Now, since then, and to be honest, I'm not sure if it's because of that pod, but I'm hearing more. Of course it is. We are mavens, John. Mavens. But I'm hearing more and more noise about the tech bubble and people beginning to ask a lot of questions and all that kind of stuff. So much so that in the last couple of days, the tech stocks are beginning to slide. Like last Thursday, they slid by 2%.

4:19It's not enormous, but it's still a bit of an indicator. Now, I was kind of looking into this a little bit more, and it turns out that the job figures, apparently, according to independent research in America, have dropped enormously for October, so much so that apparently U.S. employers had announced more than one million job cuts since the start of the year. And the October figures were the worst figures for a single month in any year since 2003. So are we seeing the beginning of this now? What's going on?

4:57David McWilliams: Okay, so the interesting thing is that 2003 there, 2003 is just after the dot-com collapse, where the ramifications, the legacy of the dot-com collapse begin to be felt in the United States. But it has been, and it's been a theme of the pod really since the beginning of the year, that all this concentration of risk, all this concentration of investment, this monumental bet on AI in the United States, which is driving the tech stocks, which is sucking in all this extraordinary amount of investment, which is all based on a perception that AI is going to change the world, which it may well do. but all of that increases the concentration of risk all the time in an economy that's the first thing yeah the second thing it's interesting to talk about jobs is that ai doesn't produce that many jobs like data centers nobody really works in a data center right you don't turn on and off the lights in fact you don't even turn off the lights you just keep them on you give it a bit of a dust now and then exactly yeah you turn exactly you press the computer on and off just to see is everything working but you hoover around these are these are not labor intensive jobs right or these are not labor intensive investments so it's up to the rest of the american economy to shoulder the burden of employing people so what you have is a sort of a media tech online gambling bubble where everybody's obsessed with the share price of nvidia and the share price of this, that, and the other.

6:32But for the vast majority of people, this is sort of noise in their lives that they're hearing about. Yeah, very much so. And the question is, what drives the American economy like drives all economies, John, are personal income, housing wealth is very important because most people have houses. And if they don't have houses, they have debts associated with houses, right? Taxation. Believe it or not, if the government is working, you have a government shutdown in the United States at the moment, which is now the longest shutdown. And these are people who have been laid off by the state and not paid.

7:07So they're not working. So they're not going out buying. So suddenly your average grocery store, for example, has got a serious problem with the fact the punters aren't coming in. That'll feed into online shopping, all that sort of stuff. You also have a situation where real interest rates in the United States, particularly in the mortgage area, are very, very high. So there's lots and lots of, you would call, structural headwinds in what I call Main Street America. Now, very interesting, John. For most of my professional career, there was always been this idea that there's Wall Street and Main Street.

7:44And Wall Street is finance. And what happens in the financial world is incredibly important to those involved in the financial world. But in actual fact, it's quite far removed from your average blue-collar Joe. and to understand your average blue-collar Joe, you've got to go to Scranton, Pennsylvania and all these things, right?

8:03David McWilliams: You can probably argue now in the last year or two that Wall Street has glued itself on to Silicon Valley. So you basically don't have Wall Street versus Main Street. You probably have Cupertino versus Main Street. Cupertino? It's the Silicon Valley area, the headquarters of all these Apple and all these places. This is part of Silicon Valley, right? So I think what we're seeing is the absolute beginning of the end of the biggest speculative mania that the world has ever witnessed. And let's go back to what we talked about two weeks ago. We had half of the American GDP in the first half of the year was directly related to investment in AI data centers in particular, number one.

8:54Number two, we have some crazy statistic, and listeners can actually pull me up if it's wrong, because it changes every day, that 30 % of the gains in the stock market over the last number of years have been in these seven companies. You also have the sort of obsession with what I would call the heroic, almost godlike CEO, you know, the Elon Musks and or any of the other big tech guys. They become superstars in their own right. at this stage.

9:24David McWilliams: They kind of suck up a lot of the oxygen, right? Yeah, yeah. But at the end of the day, what you have is an industry which has failed to make money. So for example, the great one is OpenAI, Sam Altman's company, where they've never made money. And yet they're spending a huge amount of other people's money on the promise that they will make money. And as the market changes and becomes slightly more risk averse and people think, I'm not too sure about that, people begin to look for very old-fashioned things, John. Like there was a thing you might remember a couple of years ago called profit. It's when you actually have revenue and the difference between your revenue and your costs is after you've paid your taxes is called profit.

10:10David McWilliams: It's called your earnings. It's the basis of the EBITDA. It's the basis of earnings per share. Now, this is a very old-fashioned and non-technical idea. It's quite a conceptual thing, really, at this stage. It's very conceptual. and I can't get my head around it. It's a Silicon Valley thing. But once you understand it, John, you get it. Yes, right. Okay. This is for the Silicon Valley guys out there, right? Profit in Latin. A little bit of a lesson of Latin because you know the way tech guys like to deploy Latin, Greek to make them sound clever, okay? So just so you know, that profit is called lucrum in Latin.

10:45David McWilliams: Right. It's lucrative. Exactly. And the origin of the English free lucre. No, Luca. He's got lousa Luca. Filtry Luca. Which is the English expression for money, right? It calls him lucum. Now, over entrance halls in ancient Pompeii residence, they found exclamations, right? Little signs called lucum gaudium. Prophet is a delight. Salve lucum, hail prophet. So, this is a very old thing that even our Romans understood it. And what we have in this tech bubble, John, is the world divorcing itself from profit. So what I think we're seeing is people realizing, hold on a second, in the absence of profit, the only thing that keeps a share price up is the story.

11:41Who has got the best story? So consequently, all the tech guys have been involved in storytelling. Now, there's nothing wrong with storytelling.

11:49David McWilliams: In fact, you could argue we are storytellers, right? Yeah, yeah. But we haven't floated our company just yet, John. Stock market, right? Okay, but just think about it. So we are storytellers, right? And the storytelling is the oldest. It's the way humans communicate. It's why I always say when I'm teaching kids about the difference between telling stories and using mathematics to explain economics is that I know that when a child is sick or when a child is awake at night, you soothe the child back to sleep by telling them stories. You never use algebra. So storytelling is how humans soothe each other.

12:31We obviously have pathways in our brains that are evolutionary and have evolved into storytelling. But when it comes to money, an amazing thing is when you get into a speculative mania, what you're actually measuring is who has the best story so who has the best sales pitch so who is creating an impression of the future which is most plausible now once you get into that sort of carry on and away from our friend lucrum profit then you have no way of measuring in the real world whether the stock is good is bad is undervalued is overvalued you're basically in the world of of bullshit. Now, you and I have great respect for the bullshitter, right?

13:19David McWilliams: But these guys pretend they're not bullshitting. They pretend they are cold, scientific, and analytical, and they understand something about the world that the rest of us don't understand, which they may well do. Yeah. But I do think that what we're in, we're at the beginning of the gradual and then decisive end of what was a very good story, which was we have a technology that's going to change the world. It probably will do. But in the same way, as we mentioned before, on the journey to world domination, there are many iterations. And I suspect that's where we're going. So I think that's what you're reading, John.

14:03David McWilliams: That's the first thing. I think the second thing is the underlying fragility of the American economy is not new. It's at a late stage in an economic cycle. It has not necessarily had a proper recession since 2008. That's, you know, going on to close to 20 years. There's a huge amount of problems in the American economy. And you superimpose upon that, John, one last thing, which is the uncertainty that Donald Trump brings to the game. So what we know is that if you are a exporter or a producer in the United States of something which is reasonably labor intensive, right, and you're trying to export to the rest of the world, tariffs, counter tariffs, all those things, what they do is they freak you out.

14:54They

14:54David McWilliams: inject a certain amount of uncertainty. And as that uncertainty drags down the real side of the economy, what you will find is unemployment will rise. But unemployment is what we call a lagging indicator. It actually doesn't lead the cycle, it lags the cycle. And by that, I mean, the investment decisions, which precipitate the fall in unemployment this month have been taken two or three months previously. And I think what's happening is that because of the obsession with AI, and because all the oxygen in the room was swallowed up by AI and because all the media attention was on AI, people haven't realized that the general economy is actually doing quite badly or is fragile.

15:42And Trump's tariffs are making this more and more fragile. So the American economy has become one heavily leveraged bet on AI and not just on AI, on AI through the auspices of this magnificent seven companies. So, yeah, I think what we're seeing is the beginning of what will become a stampede out of tech stocks. Now, it might not happen directly,

16:06David McWilliams: it might happen today, tomorrow, but, you know, profit, as I said, needs to come back into the equation. And when you were talking about, you know, the bullshitters and who tells the best story, what also complicates and amplifies all this bullshit is social media and the kind of post-truth, as they call it, era that we're now living in. Yeah, I think you're absolutely right. I mean, I think that in this world where black is white and white is black and your truth is not my truth, etc., and in a world of bots and in a world of social media and in a world of, in basically a large casino, in effect, is what we're living in.

16:50Yeah.

16:50David McWilliams: The rumor always drives the price. As I've always said before, the difference between economists and real people is that when economists see a price, they see a number. When real people see a price, they get a feeling. Yeah. And it's that feeling that drives the market. It's that FOMO I should be in. So, for example, if people who own houses in Ireland, and we're going to talk about this in a second, see house prices rising, although they might not necessarily admit to this, there's a feeling of, oh, that's quite good. but I'm richer now. I'm on paper richer. Whereas when people who don't own houses see house prices rising, they don't just see a price.

17:32David McWilliams: They get a feeling, which is shit, I'm poorer now. I'm out of the game. I'm falling behind. I'm anxious. All that sort of stuff. So what I would say is that we are seeing the, it's quite interesting. We are seeing in tech, one of the great rules of tech was that tech is scientific and it is beyond spoofery and storytelling. It is clear and it is measurable. However, what we now know is that tech is just part of the human condition. And what we've seen is in the last 12 months, 18 months, is the person with the best story wins. But if the best story is based on hot air and no profit, eventually people will say, you know what, I'm going to take some of my money off the table.

18:24As they do that, something very strange happens in markets, which is a market that was full of buyers yesterday becomes full of sellers today. The buyers disappear, the sellers panic. And because so much of the buying of stock has been on margin, has been actually borrowing to buy based on the notional or paper value of your portfolio. Yeah. Once that happens and once prices start to fall, we get what's called margin calls. So the brokers who lend the money to the people to buy the stock

18:56David McWilliams: say, well, hold on a second. You need to stump up more real cash. Yeah, yeah. Those people don't have cash. Gives me money back. But if you don't have cash, you've got to have to sell other assets to gain the cash. And that's how we get into contagion. So I would say that we are looking into a very unusual Christmas period in the United States. I'll be glad I will be in the United States next week, John. I can tell you all about it. I'll actually be in California. Of course you will. I can talk about the destitution of the street. No, I'll be in California. We can probably do a big piece on it from there.

19:30David McWilliams: But I think it's fascinating. Yeah, yeah, I'm looking forward to that. It is fascinating. So come here then. And another kind of bit of curiously bad news was the media reports around the Irish government report Future 40. And the one bit that I pulled out of it was we're going to have a housing crisis for the next 15 years. Yeah, to 2040. Isn't that great news? But let's talk about that after a bit of this.

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22:10So, Mac, the Department of Finance's recent Future 40 report is throwing up all sorts of questions. which I know that you want to get into. So talk to me about it. Tell me more.

22:24David McWilliams: Okay. Right, I will tell you more. But I will start by framing this in a piece of advice I was given many, many years ago. It was really a long time ago. I got the opportunity to interview Tony Benn, this sort of legendary English socialist, in his house, in his basement, years and years ago. And we sat for a whole afternoon and was one of these old basements full of books and full of campaign posters. And you could kind of see the evidence of social activism in the UK for the last, let's say for the 20th century. He was one of the good guys, wasn't he? He was really one of the good guys. He was very socialist, if that's your thing.

23:05David McWilliams: But he was also, he was a really intellectual person, really intellectual person. And we were talking about his career and what went right, what went wrong, et cetera, et cetera. And he just quipped at one stage, He looked at me and he was, you know, he was well on at the stage. And he looked at me and he said, one thing, young man, I really want you to understand about politics is the full man. Young man, it was very, very young man. He said, the young and the old have one thing in common. We are both bullied by the middle-aged. And that expression really staves me. Because when seeing from this perspective, he said the policy is really simple.

23:43David McWilliams: He said middle-aged people set the agenda with their view to feathering their own retirement nests, right? Young people pay on the basis that they can make up their early losses, right? Because they're young. And the old, they just pass away. So if you understand that, what you see is that all policy in democratic countries actually reflects the trepidations, the short-term trepidations and fears and anxieties of whoever is middle-aged at that time. And everything else adjusts to it. And that has remained with me as sort of a piece of sage advice. Now, when I was looking at the Department of Finance's latest utterances on the economy, Tony Benn's succinct kind of intergenerational interpretation of politics came to me.

24:41David McWilliams: Because what the Department of Finance did was they said, here is our forecast for the next 15 or 20 years. Again, made by middle-aged people, talking about their fears and anxieties of the next 20 or 30 years. And what they said was basically, it's pretty sober. The next four odd decades, right? So it's out to 2060, not to 2040, but that's 2060. They said, look, we're going to have slowing economic growth, we're going to have rising deaths, and we're going to have soaring healthcare and old age costs associated with an aging population, right? Yeah. And it basically said there's going to be a big increase in pressure on the public finances because we've got to pay healthcare and pensions and social services.

25:27David McWilliams: I'll give you a couple of the headline numbers, John. They basically said that improvements in living standards will start to decelerate in the 2030s and the 2040s. annual growth in Ireland. This is called the GNI star per capita, so it takes out the multinationals. It's going to fall to about half a percent per year. Public spending is going to expand dramatically because of what they call the green transition and costs related to climate damage. Again, I'm not too sure about this. It's always one that they drop in. I'm not too sure it's been costed properly. Finger in the air stuff though, isn't it?

26:01Of course it is.

26:03David McWilliams: Of course it is. Of course it is. healthcare costs, long-term costs are going to double, they said, by 2045. They're going to continue rising at a rate faster than other areas of public spending. Housing costs, okay, and this goes back to your point, are going to keep rising until the late 2030s into 2040, right? And basically what they said is Ireland has gone from a period of demographic bonanza where we had loads of working people and very, very few dependents to a period where we're going to get more dependents, less working people, and this is going to have a dramatic impact on living standards, right?

26:46That's the general thing. Read it if you want to, Google it, have a look at the Department of Finance website. There's lots of numbers there. They have any number of spreadsheets and projections, but that's the general idea. Okay. But what they said is, the country's current economic model cannot support tomorrow's demographic profile. So what are we going to do? They have said the solution to all of this is more immigration. So what we're going to do is get in lots and lots of foreign workers because we don't have workers. And that is going to right the Irish economy. So the solution now is to have a central scenario for immigration, which is 40 ,000 net immigrants per year, which is about half of what we have at the moment.

27:33So even their central case, we are twice above that at the moment. They have a high immigration statistic, which is 55 ,000 annually. Ironically, we are way above the high immigration scenario, or we have a no immigration scenario. Now, what they've said is that only in the context of the central to the high immigration scenario can we expect to have living standard in the future that are anything close to us now. So what they've basically said is that the cost of the pensions of today's middle age will be borne by the house prices of today's 20-year-olds. So come back to Tony Benn, what they have said is that because we know that more and more immigration will do lots of things but we absolutely know it will push up house prices because of the constraint on house building.

28:32Yeah, yeah, it's basic demand, you're just importing demand.

28:36David McWilliams: You're just importing people and people have to live somewhere, not their fault, they have to live somewhere, right? So basically what we've said is, what they've said, now think about this, this is official Ireland's view. It can be replicated in parentheses. Yes, the housing crisis will persist for decades. And yes, this is politically, culturally, socially, and economically destabilizing. But to fund the pension system for the already wealthy middle-aged, that is the price that we must pay. So once you see it through those intergenerational lenses or framework, what you realize is this is not just economically questionable, but it's actually politically reckless.

29:21David McWilliams: Because what they're saying in effect is, we know in the housing market we have a supply problem. We know we are constrained. We know we can't actually build enough houses. But you know the solution is? More demand, more people, more immigration, etc. Now, let me just say one thing. it is not the immigrants fault this is the fault of the planners of course because if we if we go out and say to people from india and pakistan and china wherever the hell they're coming from where they're coming from come to ireland if we haven't prepared for them to come here if we haven't got the services in place for them to come here they will end up being the victims of the planners looking the other way.

30:07David McWilliams: Now the planners are looking the other way because maybe it won't affect them personally. But what we have is we have demand side solutions being prescribed for a severely supply constrained economy. Now I would say the way you actually flip this on the head is to say to the middle-aged and our generation, John, look, guys, there won't be that much money around. We are going to slow down. Your pensions are going to take a hit, but you're already wealthy. So what we're going to do is rather than have a pension target and a growth target, we're going to have a housing target and fit the thing on its head.

30:53Yeah, but Mike, like at the same time, I know we're part of the middle-aged, but we do need a pension. We do need a pension, you know, and so pensions are necessary. So how do we deal with this? How do we pay for a pension? So I think what the state should do,

31:17David McWilliams: and again, I come back to Tony, then the reason the state isn't doing this is because it's run by the middle-aged. And it's basically saying to the young, you know, suck it up. Now I'm just thinking, if I was a 20-year-old and I read this today and I hadn't decided to emigrate, I'm sure this would actually change my mind. Because you say, hold on a second, that people are in this country saying, people are in this country saying, we will have a housing crisis till 2040. That's 15 years. If you're 25 now, that means until you're 40. You're thinking, hold on a second. Yeah. We're going to have a housing crisis till then.

31:51David McWilliams: The solution to this is we're going to not build more houses rapidly and change our planning laws and change everything. What we're going to do is we're going to just import more people who are already going to be in competition with you. But please stick around and pay very high taxes to pay my pension. Yeah. Yeah. I know, I know. It's bonkers. And this is the official line from the Irish state, right? As articulated by the Department of Finance. But do you know what I think? I mean, the last couple of times I've been in America, over the last few years, I was at two different conferences. And you know the way they have huge conference centers, like they have massive cathedrals with loads of different rooms.

32:36But one thing that really stuck out to me was it was full of old people. sitting in little chairs, guiding people, directing people. There's the toilet. There's meeting room 205, blah, blah, blah. And they're all employed. And they're all employed on union wages. And it just struck me as, you know, these were 70-plus-year-olds outworking still. Well, I think that there has to be a happy medium. I think that in Ireland, what we need to be is... very honest with people. We need to invert this pyramid where the young are paying the price for the luxury of the old.

33:23David McWilliams: Because the only way a society grows is if young people feel that they have a chance to flourish. If they don't, I've just come back from Oz, as you know, lots of Irish people there. Why? Because they feel they have a chance there, for rightly or wrongly. so I think let's come back to it what I'm saying is that we have been given an editorial from the Irish state as to what it thinks the solution to the next 20 years is and the solution to the next 20 years for the Irish state is to lumber onto young Irish people the costs of the pension of already wealthy middle-aged people why are they already wealthy because they probably own their own houses and they bought them cheaper than they are today so they have a wealth right But not only are they going to be wealthy, what we've said is your income, which is your pension, is going to be paid for by younger people.

34:17Now, I get all this, but the question then is who loses and who gains? That's the first thing. The second thing is that if the issue is demographic and not having enough babies, then surely you can see that one of the reasons people don't have children is because house prices are so expensive, is

34:40David McWilliams: because they are renting, is because they don't have a stake, is because they don't feel secure. So what we're saying to younger people is we will make your sense of precariousness even more acute, while at the same time trying to strong arm you to having babies, all the while not giving you any economic incentive to have those kids in the first place. And what we're going to do when you choose not to have kids because it's so bloody expensive and you don't have a place to live, we're going to import foreign workers to substitute that. Now, that would seem to me to be a recipe for disaster because that inflames people.

35:19David McWilliams: People get pissed off. People start talking about cultural issues. They start talking about, you know, who is the country being rung for, et cetera. So I would say that the political party that comes in and says, hold on a second, we're going to fix the housing market. How do we fix the housing market is we realize that we have a supply constraint. Now, it could be 35 ,000 houses a year. It could be 50 ,000 houses a year. But at the moment, the supply constraint is not a policy discussion. It's a reality. And then work backwards, say, how many houses can we build? How many people can we absorb in?

36:01And what does that mean for immigration, for the types of immigration, all that sort of stuff? Very briefly, John. Four things dominate the demand for housing in the country.

36:12David McWilliams: One is the natural increase in the population, the difference between births and deaths. We're only about 20 ,000 in Ireland. There's about 30 ,000 people die a year, about 50 ,000 babies born. So about 20 ,000, number one. Number two is the amount of Irish people living in each house. It's about two and a half people living in each house. I'm the half person. You're the half person. No, we're quarter people. We're quarter people. Number three, that's why we're stuck down the basement. Yeah, exactly. Number three is what we call obsolescence, which is the amount of houses that fall down. So in the case of Ireland, it's about a half a percentage point of the housing stock.

36:47There's about 2.1 odd million houses in the country. So a half a percentage of those fall down every year because they're very old, particularly in the countryside. There's a lot of houses over 100 years old. That's probably about 10 ,000 houses. And then you have net immigration, right? So if we build 35 ,000 houses a year, and if we have a natural increase of 20 ,000, and of those 20 ,000, each house has two and a half people. So that means 8 ,000 houses need to be built every year just to supply the natural increase. Yeah. If obsolescence is a half percent of 2 million, it means 10 ,000 houses disappear every year.

37:33So that's 18 ,000 new houses we've got to build, right? Then you think, okay, how many immigrants can we take in without there being an increase in pressure on the housing market? That means if it's 2 ,500 and we've got, let's say, we've got 17 ,000 houses left, we can probably at most accept in about 40 ,000 immigrants or a little bit less. Okay, okay. That means at the moment we're taking in about 80 ,000, so twice as many. Yeah, yeah. So what it means is we've got to come up with, and I know it sounds harsh, but it's so much better to introduce a little bit of numerical precision to this than all the hot air about, it's not that Irish people don't have hearts, we do have hearts, right?

38:21It's just the question is, where's your head at, right? So it seems to me that unless we can expand house building to 100 ,000 houses a year or to something enormous, which I don't think we can given the constraints, we can't have a situation where we keep absorbing in more than 40 ,000 immigrants. Now, if we can't absorb in more than 40 ,000 immigrants, the government's framework for paying for pensions has to be revised. Because if we can't do this without imperiling the welfare of our younger people who need homes to live in, then the older generation, as in us middle-aged people and older people, have to pay the bill.

39:13And that will require a political party or a political piece of analysis to be done that is honest, that is dangerous because older people vote more, but that is refreshingly innovative and jaundiced towards young people. And I suspect that what we're going to see in Irish politics in the next couple of years is something along those lines emerging. And the interesting thing is I'm not sure it can emerge from the left. Because I think the left are wedded to, culturally, are wedded to notions of high migration. Because they see migration not necessarily as an economic issue, but as a social issue, as an obligation, as part of the burden of Ireland of being a rich Western country.

40:05We need to extend the hand of friendship and decency to others. so until the left begin to adopt the policies of the Danish left which is to look after the welfare of Danish workers over and above everybody else I don't think we're going to see that coming so I think that although the movement John is towards the left in Irish politics I think this particular issue is the one issue that's going to actually stymie them because it'll need a party of the left to say we can only preserve the living standards of young Irish workers if we are prepared to look at immigration in a precise numerical way and say there are only so many people we can allow into the country, not because we don't want to, but we can't absorb them.

40:59I think this is going to be the politics of the future. And this kind of goes back to what John Byrne Murdoch was researching, his piece on the disconnect between politics and politicians and the guy in the street, you, me and everyone else.

41:17David McWilliams: Yeah. And so there's a gap opening up in the political market, which is many, many, many people do not have a home to go to at election time. Yeah. And that gap is going to be filled by some political dispensation. Last week in Ireland, with the presidential election, there was a euphoric left-wing vote, which we know about. I'm not too sure that that is the actual future. Now, it could well be, but I'm not too sure because I think the numbers that the Department of Finance put up yesterday are not left-right. They're young versus old. And I think and leave it here, the battle in Ireland is not between the left and the right.

42:06David McWilliams: It's not between ideology that was set in Moscow or ideology that was set in Washington. It's not between multinationals and local employees. It's not between pro-European and anti-European. It's not between religious and liberal. It's not between male and female, country and urban. It's between the young and the old. and we are sitting on a demographic, political time bomb. We'll chat to you on Thursday.

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