Why Everything Is So Expensive - Financial Expert Patrick Boyle Explains

27:11But the steel industry can't work here with, you know, the current setup. Patrick, I was really excited to have you on because of everything that we're talking about, but also because, as I mentioned before, this rise of extremely left-wing economic ideas, which I find quite terrifying. Would you be able to explain to people why the tax-rich and wealth taxes is not going to work and it's not going to do what people hope they do, which is create a fairer society and wealth redistribution. Yeah. I mean, you know, in truth, like in sort of difficult times like the UK is in right now, many other countries, you see the rise of populism and there's both left and right wing populism.

27:55But essentially what populism often is, is it's giving voice to anger without necessarily any real solutions. So like you said, an idea of borrowing way more money than the country has ever and probably could borrow, that's not a solution. And a lot of, you know, huge improvement could be made to the tax system in the UK. It's kind of interesting that actually the average British person has lower taxes on average than in a lot of the developed world. But then the middle and wealthier cohort pay very high taxes. You know, so then all of these ideas of wealth tax and whatever. It's a funny thing because really what needs to be done is you need to spur productivity and growth in the UK.

28:48You know, you can't tax an economy into growth. and you know a lot of the solutions that are put forth on really either side are more about voicing anger than about providing real solutions and they're often I don't like to beat up on people because they're often very well meaning if sort of economically illiterate like they don't understand why that policy just wouldn't work it's even like you know an awful lot of government interference in business tends not to work. Like I'm not a fan of, you know, Joe Biden subsidies or Donald Trump's tariffs, for example, because I don't feel that these are the government doesn't need to make business better.

29:33They need to essentially get out of the way of business to allow it to be better. And once again, people then get offended when I say that because they think I'm advocating for sort of a sort of Chinese type situation where you allow, you know, huge pollution. You know, deregulation doesn't mean, you know, allowing terrible things to happen, but it often does mean sort of toning down the most extreme regulation that is often prohibiting sort of any project from going forward. So if we did bring in a wealth tax, which is what a lot people on the left want and certainly the green party want there's people in the labour party want it as well yeah why is it why would that be so disastrous one reason even is that it's just not enough money like a lot of the argument around wealth tax is sort of about this idea it's kind of uh you know politics of envy and i i'm not awfully interested in in politics but if If you, let's say you took every, I don't know how many billionaires are in the UK, but let's look at the United States.

30:41If you took all of the billionaires and took 100 % of their wealth from them, handed it to the government as a one-off tax, the problem is that that would only pay for a few months of the US government spending. It would by no means pay down the national debt, and you'd probably have shut down every big business, or you'd have disincentivized them. Now, that's not to say, you know, is there a fairer tax system? Probably everywhere, you know, because every tax system is sort of a hodgepodge together of sort of prior government ideas that didn't didn't work. There's a guy, his name is Dan Needle, who he writes some pretty good things on UK tax policy.

31:25And he shows the sort of the lumpy nature of UK taxes often means that it disincentivizes you. like once you hit 50 or 100 ,000 pounds a year, you sort of, because taxes are often combined with sort of other government transfers. And as you pass through certain prices, you know, means tested things fall away. And you could have an example of a doctor where if he worked an extra hour and, you know, earned, we'll say went from 100 to 101 ,000 pounds, he would lose like child care for his children and things like that that would set him back 20 ,000 pounds. And so, you know, a better progressive system straight away makes sense.

32:06Like often the biggest problems are just rules that are in place that provide perverse incentives that destroy productivity.

32:16Francis Foster:Well, and one of the things that people, I think, don't understand, you know, we're not sort of talking about these things in a political way, but much more in a practical way, particularly when it comes to economics. So we have a friend who runs a couple of restaurants in Kensington. They're great restaurants, really, really good. The food is great, the service is brilliant. I was talking to him the other day, and he was saying to me that business had become a lot harder as, you know, it's Kensington, so wealthier people are leaving the country. And I think this is where people have this sort of myopic idea.

32:50Francis Foster:It's like, well, you tax the rich, and then all that happens is you get money. but but that's not all that happens those people spent that money paying other people who are not the super rich yeah for goods and services now those businesses are going to struggle they're not going to hire as many people or close down and there's this whole effect for as you say not a massive amount of gain on the other end yeah well there's also just this thing where the world is kind of more complex you know it'd be easy if you could just sort of say oh we do this thing and it'll work but there's sort of this economic law of unintended consequences you know even um you know people have sort of said they come up with an idea of like well what if when someone dies all of their wealth uh you know death tax it all goes to the government that's a thing you could do because why should their children better you know you could make this argument but you forget that you would change every incentive of that person like if i knew that all of my money was going to zero the day that I died.

33:52I couldn't pass it on to my children. Well, I would spend it on my children or I would spend it on myself. I would get them an education that would put them in a place. I would buy their way into certain things because, of course, you know, parents have this urge to look after their children. It's sort of parents have more of an urge to look after their children than after themselves, you'll often see. And so there's, you know, the problem with really simple solutions is that you're leaving out the fact that that people will be you know they'll adjust their behaviors based on the incentives so um you know usually the truth is that a government can kind of tax however they want to like you know if you once again the tariff thing i don't think tariffs are a good way of taxing but are they reasonable i mean sure you know like if a government is sort of spending money on its citizens they need to raise money for that and you can sort of choose however you want to bring it in but you usually want to bring it in in a way that's not too distortive you know like that doesn't provide a bunch of incentives for people to do weird things that might slow or harm economic growth or that might cause you know productive people to leave for other locations and that kind of and especially in the modern world i

35:09Francis Foster:think that's true because people are more mobile than they've ever been. And so the more you pursue high tax policies towards the higher end, you are actually pushing out people who are actually very good at moving. Fume is a flavored air device designed to help people quit vaping and smoking by breaking the hand-to-mouth pattern. It's simple, natural, and honestly kind of genius. No nicotine, no batteries, no vapor, just weighted, twisty, fidget-friendly tool that gives your hands something better to reach for when cravings show up. I used to be the person standing outside in the cold, telling myself I'd quit next week.

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36:23Don't just try to quit. Upgrade the habit loop. Fume has already helped over 700 ,000 people take steps towards better habits. Use code TRIG to get a free gift with your journey pack. Head to tryfume.com and use code TRIG. That site again is T-R-Y-F-U-M.com and use code TRIG to claim your free gift today. Yeah, well, it's the business is more mobile. Because if you go back 50, 60 years, you know, when like a big business was auto manufacturing or something like that, you could kind of do what you want to that guy. And how's he going to move his factory out of the country? But more and more business is sort of intellectual property.

37:10It's software, it's ideas, it's patents. It's especially in Western countries, you know, like it's all, you know, it's legal work. It's things like that. and these are highly paid, good jobs. But, you know, if you're going to, like, really aggressively go after these people, it's not, they don't have to move, like, a coal mine out of the country. They have to move a laptop out of the country. Another one of these ideas I've seen starting to bubble is rent control. Yeah. And I get it on the surface. You know, you look at London rents are insane. Yeah. And you think, well, why should we pay that amount?

37:48like£2 ,000 to live in a one-bedroom flat in a nice area, that's obviously ridiculous. But why is rent control a bad idea? Because there's a lot of people, like I said, online talking about it. You see, once again, it's a simple solution and it sounds great, but you just have to look at New York City where they implemented this in the past. It's about all of these distortions that it causes. Because in a way, with rent control, you're often picking a favourite class, like a group of renters who will get it. But it also disincentivized landlords to, we'll say, repair and improve their buildings.

38:25You end up with funny things. Like I had a friend who had a rent control apartment in New York that, you know, this is my parents' age. She rented it in the 1970s and, you know, left New York, like was living in another state, but like kept that as her main address because it was, you know, she's paying 1970s rent in 2025. 2025 right like i mean it costs nothing and so you know and the landlord would go to all sorts of extremes to try and knock her out but she had a good lawyer she's not getting knocked out but that apartment she would live in it like a you know a week a year kind of thing if even you know and i i used to joke with her i said i know you've got low rent but actually your rent is still more than a hotel room in new york but you know you cause these distortions where things get locked in um it's just you know the the problem with real estate is often a supply and demand problem you know the reason like why is it why do you have to pay really high rent for apartments in london well there's a lot of people and there's not so many apartments so you need to build more you need to deal with planning regulation and there's a lot of really bad planning where you You know, like, I had a friend who owned a place, and, you know, it's one of these apartments in Hampstead.

39:43It's nice, but, you know, it's one of the thousands around, you know, sort of red brick kind of thing. And he wanted to put new windows in because, you know, I mean, there was like breezes blowing through his living room. You know, the heating bills through the roof. But, of course, it's, you know, somehow listed such that he would have to sort of have a craftsman build a window like it was built 150 years ago. that costs about 20 grand, you know. So what do you do? You, you know, squirt a bit of caulk into the window and open holes up. And so there's many of these ideas where people think like, oh, well, it's good.

40:18We'll stop people from putting ugly windows in their apartment. And instead you have, you know, the really high heating bills. You have, you know, degrading housing stock all based on like a rule that was sort of meant to keep things looking nice. And it doesn't look nice that the windows are all rotten either. It's such a good point because I think this is the problem in that people don't understand that these ideas that sound good on the surface, when you scratch that surface, they will cause far more harm than good. And I just worry, I guess my question to you is, how do we teach people so that we actually have better ideas, particularly when it comes to economics?

41:06It's hard because, you know, even one of the issues is like I try to think of economics as sort of thinking through the most efficient way to do things. But of course, economics is always intertwined with politics. And that's kind of where it gets ugly. And even just the idea that politicians want to lie to you and say, I have a solution that, you know, I've all these great ideas. One good trick and the British economy will be great. And it's like, oh, well, you said it on the campaign trail. Can't everyone implement? It's not a good trick. You know, it's it's it's and people buy it, you know, because it sounds good.

41:46It sounds like, you know, you're going to fix my problem. Great. And even they'll sometimes recognize, like they'll say, well, I don't think he will fix my problem, but at least he understands I have a problem. So, you know, they'll even vote in a person who they know it's a failed policy, but they hope that it's a step in the right direction.

42:10Francis Foster:And speaking of damage, I mean, one of the issues we covered extensively when it first broke out was the war in Iran. And look, there's obviously a geopolitical dimension to that and a security dimension to that. You might be one of the people who thinks it's really, really important to prevent Iran from getting nuclear weapons. And almost no matter what the economic cost was, it was still worth doing, which, you know, I don't necessarily agree with entirely because it's not clear to me that this will do better than what was already available in terms of achieving that objective. But even if you think that, let's just park that to the side.

42:48Francis Foster:I just want to talk about the realities of the economic impact now and also over time, because most people don't understand that some of the disruption we've seen hasn't actually materialized in outcomes yet. So can you talk to us about the war in Iran and the closure of the Strait of Hormuz and the impact of that? And the issue is that even if it opened up tomorrow, those problems are still kind of in the pipeline, because essentially everyone's sort of saying like, oh, price have gone up a little bit, but we haven't really run out of anything. And one of the reasons we haven't run out of anything is that there's sort of stores all around, like there were ships at sea filled with oil, there's pipelines that have oil in them and so on.

43:33But a lot of infrastructure was damaged over there, like all of the bombing you've knocked out, you know, refineries and things like that, even the ports for like loading oil onto ships or liquid natural gas or whatever. The other issue is that oil wells work very well when they're producing at a very steady state. and a problem occurs we saw this during covid when you had to stop the wells you know you can't it's people think of it as like a big tap and you turn it off and everything's fine but there's all sorts of gases and settling and things that happen inside wells there's even like bacterial growth that can occur to damage the oil and so on and so you have to shut these things down slowly you have to start them up even the the pipes that run the liquid natural gas you know liquid natural gas is when it's compressed very cold right and so when when these things kind of change temperature quickly as you pressurize and depressurize them and so on you you end up with the pipes cracking and that sort of thing so a lot of infrastructure a lot of oil infrastructure can't be turned on and off the way people think it can a lot of it is just damaged and so even if you know we we leave the podcast studio and look at our phones and it says the straight is open, these problems are still in the pipeline.

44:58They're still coming at us. It could be a decade before all of this actually gets sorted out till we're back to the normal levels of production.

45:07Francis Foster:And can you quantify the levels of oil price changes and other things that have already happened? Like, where are we? Yeah, I mean, so we've seen oil prices go up. There's an interesting thing where, you know, obviously in the UK, we've been hit quite hard by it. There's interesting incentives that even then exist around the world. Like a good example would be even if we go back to Russian invasion of Ukraine and in places like Britain, the government said, well, we're going to try and take some of the impact, you know, we'll reduce taxes on it or whatever. The problem even with doing that is it doesn't send the price has gone up and the price going up is a signal that this thing is rare and to use less of it if the government dampened that signal we continue to use it as normal and of course in wealthy countries we can kind of get away with that but then you see in parts of the world where the governments have no budget to deal with this in the poorest parts of the world like bangladesh and so on uh they just don't get any um they just don't get any energy supplies you know so it causes huge problems everywhere um it's uh yeah yeah i guess once again it's sort of the world is way more interconnected and way more complex than than it would have first appeared because even in the united states there's people saying like well why why are the as petrol gas prices gone up in the united states and the reason for that is there's a whole industry of people trading the global market yeah there's a global market and of course you know in the if someone if you're a u.s producer and you know you can put this stuff on a ship and send it to Europe and get twice the money for it.

46:48You're doing that. And that's driving up the price in the United States.

46:52Francis Foster:And so where are we with the oil price? How much of an impact has this been? It's a big impact in inflation, I think. There's a number of things playing into inflation right now. That is one. There's an argument that that could be a temporary everyone, you know, depending on how quickly things tidy up. And, you know, as I said, it will linger. It'll have a long tail to it, but it could tail off. But there's even just a number of other sort of big global macro things happening in the world that are inflationary, you know, just tied to even things like aging populations and so on that just mean that, you know, the levels of inflation that we've seen in the past.

47:38There's a very good book that I just read a few weeks ago called I think the unanchored central banker and the author is a friend of mine but in it he makes the argument that up until recently you know for the last 20-30 years central bankers around the world have looked like geniuses because they've managed to you know have lots of growth and keep inflation under control but of course there were big macro forces that were keeping inflation under control like even just the fact that we're importing all this stuff from China just you know the demographics the number of people working for versus the number of people outside of the workforce and now as we have aging populations we have all of these inflationary pressures from a variety of reasons the central bankers are no longer in a situation where they can really control inflation as they did in the past um i made a video a little while ago where i talked about you know the example of paul volcker in 1981 you know he's sort of given credit with in the united states he sort of stepped in when inflation was way out of control hiked interest rates to about 20 percent obviously you know ronald reagan at the time would have been furious like you're killing the economy right but it got inflation under control and interest rates come down and the the u.s economy booms and that's sort of a heroic story but the u.s national debt was way way way smaller back in back then than it is today and you can't do that today because if you hiked interest rates that high today the interest that the government has to pay on their debts will cause so much so many problems that it would it just it once again things are you can't all the The same medicine doesn't work the second time around because it's not exactly the same illness.

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51:37There's also fertilizer, liquid natural gas that we've mentioned. So let's talk about what do shortages of liquid natural gas and fertilizer, what does that mean for the global economy? And what does that mean for the average Joe just going to the supermarket and wanting to buy a couple of chicken breasts? You know, there's an interesting thing. There's actually a funny lag that's occurred with the price of fertilizer. And the reason for this, you would expect the fertilizer issue to hit a lot harder here in Europe. but the Europe instituted a new like a higher tax like a carbon type tax or something like that on nitrogen fertilizer that was going to kick in around now and so all of the farmers knew this was coming so they front loaded they stocked up with loads of fertilizer you know a year or two of fertilizer because get it now before the carbon tax hits so the farmers in Europe are great not in the uk because the uk wasn't going to be hit by this but actually europe is kind of okay for fertilizer um but the problem is that the next lot of fertilizer coming out people don't realize this they think what's fertilizer is it you know it's cow poo it's not it's it's natural gas basically you know it's it's a huge basically what we have done uh you know what what the human development has been is just converting energy into into goods and and one of those things is fertilizer like the reason the global population you know you go back a century and people would have said well the planet couldn't hold the amount of people it has right now there's not enough agricultural capacity but actually there kind of is once we worked out how to make uh you know turn energy into fertiliser.

53:23Francis Foster:And so that being the case, if this war carries on, these shortages are actually going to manifest them in the same way that you're talking about, well, we've got stockpiles of certain things, but they will run out, right? Yeah, they'll run out or they'll run low, and that then means that farms are less productive, essentially. At first, less productive because the farmers will continue to fertilise, but just with less. And I'm not really much of an expert on this, but I believe that kind of compounds out over the years. Like apparently there's sort of an optimal level of fertilizer to lay that if you kind of back off on it now, apparently it'll harm things in the future.

54:04I don't exactly understand that. But almost everything we have ties back to energy prices. Like because even just stuff being moved at sea, you know, is a huge energy cost to that. But, you know, almost every product that we have in the modern world traces its way back to the oil and gas industry. Because if we're looking and we're saying there's going to be fertilizer shortages, I'm just a layman. What do I know? But fertilizer shortages to me means less food being produced. It's less food and more expensive. And more expensive, which means inevitably some people aren't going to be able to afford food.

54:43therefore you get food shortages, which means you get a horrific consequences that come from that. One of them will be severe political unrest. Well, you know, once again, like who's going to be hit by this? It's going to be people in poor countries, right? Because it's unlikely that people in, you know, the Western developed world are going to actually be experiencing famine. You know, we'll pay up for the food. and then in other parts of the world where they can't, they have real problems. But you say that, and I know we won't have family in this country, but I'll give you an example. So I live in quite a she-she part of North London, you know, the place where everybody supports BLM, but no one's got a black friend, that kind of area.

55:27And I go into the butchers and I say, well, how's business? And the butcher goes to me, it's a true story. He went, well, it's quite interesting because the people who normally come in here four times a week, they're down to three or sometimes two. And sometimes people come in twice a week, they're now down to once a week. So what we're seeing, I mean, that's meat rationing. Yeah, but that's how people deal with higher costs, right? Because you need a certain amount of calories. You don't necessarily need it to come from caviar. So as prices go up, you would just, you know, you find substitute goods.

56:03And so eventually maybe we'll be like Ireland a couple of hundred years ago and try and get by on potato.

56:10Francis Foster:That sounds like a promising scenario for Britain to embrace. Looking forward to it. But it comes to a point where, look, and we can go, all right, look, you can substitute calories. You're not going to be able to afford chicken thighs. You can get, you know, you can get, I don't know, a Goodfellas pizza, whatever it is. You can get your calories and that. After a while, people are going to get angry, Patrick. I think people are already angry because, like, it angers people even having to downgrade. Like, you know, people aren't angry because they're hungry, but they are angry if their life is slowly getting worse.

56:45Like if they're like, well, I'm working hard, I'm doing all the right things, I'm doing everything I was told was supposed to lead to a successful life. And here I am growing potatoes in my backyard to feed the family, you know.

56:56Francis Foster:Well, and I do, given the historical example you mentioned, I do remember the Irish getting a little bit angry about it. I hope I don't get killed for that joke. But look, we've talked obviously a lot about the fact that there are no simple solutions to complex problems. It's actually one of the things we talk perpetually about on the show. What are some of the things that we should be looking at adjusting in terms of government policy and other things to try and turn the economy around in this country, to be more productive, to generate more wealth? because this is one of the other things that I think I really struggle with, understanding how people can reconcile these two things in their head.

57:38Francis Foster:On the one hand, they want lots of government spending, but on the other hand, they're completely uninterested in growth and doing things that will grow the economy. Well, you can't have those two things happening together. You've got to get the money for welfare from somewhere. Yeah. So how do we adjust things in your opinion? I think for the British economy, like energy is probably the biggest problem. But, you know, often I'll talk about deregulation. People get angry, as I've said earlier, you know, I'm not saying that we need to put poison in people's food. Deregulation, though, sometimes a great example is Hinkley Point C, the nuclear reactor that they're building here in the UK, which is now on schedule to be the most expensive nuclear plant in the world.

58:24And the reason for this, you know, they picked an off the shelf sort of reactor i think from edf in france and then they said well we need to you know make a few adjustments to it right they've made 7 000 adjustments to the reactor it's no longer you know this is no longer a generic thing if you look in places like south korea where they have a more sensible approach they build one reactor they see that it's good and they kind of go okay now let's duplicate you know we'll replicate this we'll put up multiples of the same thing And the problem is that there's almost this problem in the developed world where sort of everyone has a veto.

59:04And, you know, so any project, there was a great example of the Madrid metro system, where I think in the 90s, early 2000s, they tripled the size of the metro system in Madrid. and it makes Madrid a great city. And they managed to do that, I think it was something like 35 miles of underground tube stations for about the same price as they spent on about a mile and a half of the Hudson Yard extension in New York. And the reason they did this was they just simplified it all. Like they said, look, if there's been sort of planning, you know, an environmental analysis for other stuff in this area in the last few years, we can just rely on that.

59:51Instead of each, you know, getting a different architect to build each station, so it's sort of interesting and arty, it's like the same station, we'll develop a good one, build them all the same. And they just sort of simplified, and they built it out way cheaper. And it's a funny thing because, of course, you know, even one of the problems if you want to talk about, like apart from high real estate cost in London, the cost of getting around is really high. And so you might say, oh, well, a young person could live out in the suburbs and come in and it's like, well, what's their commute going to cost them?

1:00:22It's often the commute could be worse than the rent they have to pay, you know. And so getting things like even being able to get people to the places where they work in an affordable manner, boost productivity, you know, having a sufficient amount of energy to run the kind of businesses that can be run in the UK. You know, Britain, I mean, it's where the industrial revolution came from, right? And there's amazing engineering talent in the UK. I think almost, I forget what percentage of Formula One cars are all engineered in the UK, because there's that, you know, history and that education here.

1:00:58But then you kind of, you need to sort of water those seeds, right? And, you know, what is needed is maybe, you know, when I'm talking about rolling back regulation, I'm not sort of saying that we do terrible things, but I'm saying that maybe, you know, certain planning rules and whatever need to be. We need to look at the car because actually, for example, like in Madrid, where they built out this great metro system, you know, you could say, oh, well, what about the environmental damage? But it's like, but now we've got 25 years of people going around on subways rather than driving cars and motorbikes and whatever around the city.

1:01:35There's an environmental benefit to that as well. And so you have to look at the whole project and the overall gains and losses rather than sort of just allowing everyone to object to sort of their neighbor painting the garage door a funny color.

1:01:51Francis Foster:Well, and you've got to produce your own energy to the extent that you can. Yeah. You know, and that's really important, not just economically, but from a security perspective as well. Yeah, yeah. What about, I mean, I don't know if this is true, but it sort of feels like that to me from conversations that we've had, that we, there is a lot of, we have a lot of government spending and we have a lot of taxation, which means, you know, we run a small business effectively with trigonometry. It just makes it that much harder to hire people. It makes it harder to adjust the business as you go. you end up spending a lot of money on taxes and all other things that like we know from our experience if we didn't spend so much money paying tax we would hire someone else to do something else to create something else yeah is is there a room to adjust in that area for the uk as well you know the problem is that there is and isn't right because the problem is that when national debt is as high as it is um you know the answer really is more that that spending has to be cut in certain ways and you know even if you look at it i think that the average uh you know sort of 65 and older british person has maybe a net worth you know this will include their house of around 600 000 pounds um you look at the average 30 year old and they have student debt you know and then you kind of you have all these policies where they're like well we have to maintain the triple lock pension and things like that and it's like well do we you know do do we have to do that like Because you have to recognize that almost every government policy is a transfer from one group to another.

1:03:29That's what governments do. Like a good example is even interest rates. Like who is a hike or a cut in interest rate transferring wealth between? Well, if you cut interest rates, that's good for borrowers. It's bad for savers. Borrowers tend to be the business sector. Savers tend to be the household sector. And you can look through almost everything like that. Like if you wanted to stimulate the economy, you could cut the cost of tube fares, for example. That would benefit the working people rather than retirees, for example. I mean, or you could just bunk, which is what everybody does now in London anyway.

1:04:04It's entirely optional. Sorry, Patrick. I have seen that, actually. Like people just storm through the gates. Anyway, sorry. But I think part of the problem is as well, we've got low growth economy, but we've also got a low wage economy. So, for instance, I was talking to an American engineer and he told me a story that whenever he wants to have a good laugh, what he does is he goes to look at the London branch wages. Of his company. Of his company. For the equivalent. Why is it our wages are so low? So this is quite an interesting thing in the UK because actually the sort of minimum wage is quite high in the UK.

1:04:44So we'll say like, you know, entirely unskilled work, like the kind of job a teenager could get pays much higher in the UK than anywhere else in Europe and in the United States. It's really high. But then it's that kind of university educated, like, you know, it's sort of the worst thing where if you're like a junior engineer, you might be earning, you know, 10 percent more than the guy making the coffees in the cafeteria. And that, of course, you know, I mean, once again, it's not for me to decide who gets paid what, but it does sort of, it makes people miserable. It makes, you know, there's very highly educated people in the UK who are quite angry, you know, because what was it, maybe a decade, 15 years ago, they introduced like the, you know, much higher university fees and things like that.

1:05:39And so you graduate, you've got a load of debt. And then you're not really earning the premium for your education that you earn in other parts of the world. And that is upsetting. In fact, in many parts of the world, this feeling of the squeezed middle, it's slightly an interesting thing is that often the poorest people, like when we look at inequality, the lowest paid, we'll say in the United States, are doing a lot better now than they were. in the past decades, the extremely wealthy are doing a lot better as well. And it's sort of that middle class is sort of seeing, you know, the guy who works at McDonald's sort of catching up on his wages.

1:06:23And then he's seeing his, you know, the person who owns his business buying his 50-odd. And it's kind of like, well, what's going on with me? Like, this isn't the American dream anymore. There's no English dream, is there?

1:06:37Francis Foster:Not as far as I know. Patrick, it's been great having you on. Before we head over to Substack, where we ask you questions from our supporters, the question we always end with is, what's the one thing we're not talking about that we really should be? Gosh, what are we not talking about that we should be?

1:06:57I am stuck. I think we had a good conversation.

1:07:01Francis Foster:I mean, one of the things we've touched on but haven't really talked about is you made what I think is an incontrovertible claim that the debt we've all accumulated has to be paid off. Except I don't see any government anywhere remotely attempting to even say we should. Forget about paying it off. That's definitely true. All of the talk is about how can we deal with the tax system? How can we boost this and that? But the truth is, yes, no one running for government. And that's back to that idea that the problem, You know, we have these sort of middle-of-the-road politicians who are sort of the status quo, and people point at them and say, you got us in this trouble, and there's very strong arguments for that.

1:07:47But then you kind of have the sort of populists shouting outside the gate, both on the left and the right, and they are angry, but they're not providing solutions, or the solutions they are suggesting are, you know, entirely useless and ill-thought-out.

1:08:05Francis Foster:So how are we going to pay this off? Is there a way to actually do this without extreme pain? I think that, you know, the biggest issue for the UK is energy. Like I think, you know, energy, I think more building is needed so that people can afford to live and work where they are. And I think that in almost everywhere in the Western world, retirement benefits probably have to go down because we're in a situation there's sort of an interesting demographic thing where in the post world war ii period a lot of this sort of social contract came in and at that time there were probably about eight workers to every retiree now we're reaching the point where it's sort of one worker for you know because well there's economically inactive people which is both children and the elderly um and and you've got a ratio of one to one where we're starting to reach so essentially you've got one person wage that is supposed to support uh you know more people and and there's not really the that social contract of sort of um you know cradle to grave uh social insurance sort of idea doesn't really work you know and in particular you look in places like italy where I think in a few years' time, there's going to be 0.8 workers for every economically inactive person.

1:09:37And whenever you try and sort of cut pension benefits, you look to France, right? I mean, they set the whole city on fire every time anyone suggests it. But the truth is that in order to balance the books, we need to balance the books.

1:09:50Francis Foster:Well, whenever anyone brings up this point, which I think is very valid, I always make the point. and I'm from Russia originally, Vladimir Putin tried to increase the pension age and he had to backtrack. Yeah. So that tells you... That's the thing is there's some difficult conversations. You can literally be an authoritarian dictator and you will still have to reckon with the public's vitriol about this. Patrick, great to have you on. Head on over to triggerpod.co.uk where he's going to answer your questions. What do we have to do to stop governments printing money. Governments are living beyond their means.

1:10:27Invent a problem, spent big on it, repeat. How do we stop this?

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