Biden Buries Trickle Down Economics

Adam Keily: [00:00:51] Hello and welcome to comedian versus economist, we demystify the world of money and help you get a handle on the bigger picture. My name is Adam and I'm joined, as always by my little older brother and real life economist, Thomas. Hi, Thomas. How's it going here? [00:01:05][13.4]

THomas Keily: [00:01:05] Good. Everyone, how are we doing? [00:01:05][0.7]

Adam Keily: [00:01:06] Good, thank you. Now, Thomas, big show coming up today. We want to talk trickle down economics. Hmm. There's something a bit funny, a bit of a puzzle happening in the rental market. And in case anyone has been wondering where we got to with our comedian versus economist, NFTE Sayle, I'm going to fill you in on that a little bit later on following our listener question. So stick around. Lots to come. But first, trickle down economics. Thomas, what is trickle down economics is this sounds a lot like where I end up with biger, or is that what we're talking about? [00:01:45][38.3]

THomas Keily: [00:01:45] Yes. Yet no trickle-down economics is dead. Is that's the end of the story? [00:01:50][4.6]

Adam Keily: [00:01:50] Yeah, it's, um. I didn't know it was alive. [00:01:52][2.2]

THomas Keily: [00:01:54] Yeah, well, yeah, it's sort of it sort of was. But Biden came out in the speech recently and said trickle down economics has never worked. It's time to grow the economy from the bottom and the middle out. This is his first address to Congress. So this is a bit of a turn in yet another one of the shifts in thinking that we're seeing at the moment. But there was sort of this idea for a long time and particularly sort of out of Reagan and Thatcher in the 80s, that if you cut taxes, particularly cut taxes on the wealthy, that would stimulate economic activity, the rich would get richer and then that would trickle down through the economy, through the population to everyone else. And so a wealthier, wealthy class would lead to a wealthier, lower class. [00:02:44][50.3]

Adam Keily: [00:02:44] Eventually, they could pay their their servants and slaves a little bit extra, a bit more their way. What a good idea. That sounds like a horrible idea. It was that really the best we could come up with for hundreds of years of economic data, we decided trickle down economics would would work. [00:03:02][17.5]

THomas Keily: [00:03:02] Yeah, I mean, I think I think the term cut [00:03:05][2.2]

Adam Keily: [00:03:05] taxes to the rich and wealthy. [00:03:06][1.4]

THomas Keily: [00:03:07] Yeah, yeah, yeah, yeah. There's a famous story about the what's called the Laffer Curve. But this guy, this economists don't know someone, someone Laffer let's say Joe, like a solid, solid American family. You get no argument from me. But yeah, he was in a restaurant having so I really should have researched this story before I got into it. [00:03:38][30.7]

Adam Keily: [00:03:38] Look, we don't ask you to do a lot of research on the show. [00:03:40][2.5]

THomas Keily: [00:03:42] No, no. Yeah. [00:03:42][0.7]

Adam Keily: [00:03:43] Before you tell a story and I learned this on the stage, you got to know your material. [00:03:48][5.5]

Adam Keily: [00:03:50] Anyway, it's a Joe Laffer was at a restaurant and he ordered a cocktail or. [00:03:54][4.7]

THomas Keily: [00:03:55] Let's say it was with Ronald Reagan. It wasn't Ronald Reagan. But let's just say it was Ronald Reagan because he took it up. It was one of his aides or something. Anyway, they said to him, we want we want an argument that's going to allow us to cut taxes. Right. And he sort of drew this curve, which sort of had tax rates and activity on it and said like this, there is a point and inflection point where if you cut taxes enough, it stimulates the economy so much that the increase in revenue that you get from the increase in activity offsets the decrease in revenue from the cut in the tax rate. So it was sort of this idea that if you cut taxes enough, eventually it would stimulate economic activity so much that you would actually end up with more revenue than before. [00:04:42][47.4]

Adam Keily: [00:04:43] Right. Hang on. So so we're cutting the taxes. Yeah. Which means there's way more money to spend in the economy. Yeah. People go out and spend. They're like, oh, I got like I don't have to pay as much tax anymore. I'm free. So they go out and I spend up big time. And even though you've cut the rate of tax, you're just collecting more volume of tax. [00:05:04][21.7]

THomas Keily: [00:05:05] Yeah, yeah, yeah. That's. [00:05:06][1.3]

Adam Keily: [00:05:06] So instead of collecting 80 cents in the dollar, you're collecting 70 cents. But instead of collecting tax on a thousand dollars, you're collecting tax on a million dollars. [00:05:16][9.9]

THomas Keily: [00:05:17] Yeah. Yeah. Something like that. Something like that. That was the essence of the argument. It wasn't a particularly sophisticated argument. It was sort of drawn on a napkin as well as the legend goes. But that sort of took off in that. And that I mean, that was sort of the political right, was looking for sort of an economic arguments to drive that sort of small government agenda that sort of dominated the 80s, deregulation, freeing up, you know, the financial sector, all of that. Yeah, that was sort of the drive of that. And I think that that. All sort of suite of political policies came to be known as trickle down economics, [00:05:56][38.6]

THomas Keily: [00:05:58] I don't think it was like the proponents were calling it trickle down economics. I think it was sort of people on the outside of it, maybe some of its detractors. Right. [00:06:07][9.3]

Adam Keily: [00:06:07] It's not the most flattering name, is it? [00:06:09][1.2]

THomas Keily: [00:06:09] No, no, no, it's not. [00:06:10][1.7]

Adam Keily: [00:06:11] It just seems a bit like the people at the bottom aren't going to get much. [00:06:14][3.0]

THomas Keily: [00:06:14] Yeah, they're going to get trickle down, [00:06:15][1.2]

Speaker 3: [00:06:18] which is kind of how capitalism works. [00:06:20][1.3]

Adam Keily: [00:06:22] Right. So. So they need a new name. It is branding it a brand because modern monetary theory, you know, like the latest kind of craze, it's kind of cool. [00:06:32][10.5]

THomas Keily: [00:06:33] It's going to be listening to it. [00:06:34][1.1]

Adam Keily: [00:06:34] Yeah. I like the sound of modern monetary theory, trickle down economics, not so much like I said. Biden saying that that's dead now. [00:06:42][7.7]

THomas Keily: [00:06:42] Yep, yep, yep. Saying it's never worked. It was all a lie. Yeah. Time to grow the economy from the bottom and the middle out. Yeah. So there's Biden's announced a huge spending package to point to five trillion in the latest one I think is getting close to five trillion in total now since covid. But that's got to come is what he wants to pay for that through increasing the corporate tax rate. He says here it's time for corporate America and the wealthiest one percent of Americans to just begin to pay their fair share. Right. Just their fair share. He said, yeah, we're going to reform corporate taxes. They pay their fair share and help pay for public investment. Their their businesses will benefit from as well. And we're going to reward work, not just wealth. [00:07:22][40.1]

Adam Keily: [00:07:23] I was going to say, isn't that the same kind of premise? So we we're maybe not of the corporate tax rate goes up like, what is it in Australia? It's like 30 cents, 30 percent. So if that goes up, then corporations start paying more tax. Presumably they'll pass that that expense on to consumers, which means maybe they'll spend less. And so you haven't really. You haven't really achieved anything if. Corporations start charging more for their services, then less people who will avail themselves of those services. [00:07:57][34.5]

THomas Keily: [00:07:58] So, yeah, yeah. I mean, I think it's yeah, that's that's a that's a valid point and it's a valid concern. Um, yeah. Where we're how it all balances out, you know, is an interesting question. I mean, you look at the argument, might the response to that might be like, well, why don't we just rein in CEO salaries, for example, like the salaries that there's a sort of a competitive arms race going on where, you know, all the surplus profits get funneled into high CEO salaries and relative to median worker salaries, it's it's mushroomed in recent years. So maybe that's that's where that's where the adjustment comes in. [00:08:36][38.2]

Adam Keily: [00:08:37] Who could do that? I mean, who could that's a private company decision, isn't it? Like a public company. [00:08:43][6.5]

THomas Keily: [00:08:43] So you would you would hope you would hope in a competitive market, you know, foreign firms, unless they're a monopoly, they don't they don't have the freedom just to increase prices willy nilly. Like, if they could do that and the customers would bear it, they would you know, they are charging the customers the most of the customers are willing to pay. [00:09:00][16.6]

Adam Keily: [00:09:01] So unless you give the customers a tax cut at the same time, you give them a tax cut [00:09:06][4.9]

THomas Keily: [00:09:07] at the same stimulus. Stimulus check, for example. [00:09:09][2.1]

Adam Keily: [00:09:10] Yeah. Yeah. Hmm. Stimulus. Yeah. The consumer and then increase the corporate tax rate then they can afford to cover the difference. [00:09:20][9.9]

Speaker 3: [00:09:21] Yeah. [00:09:21][0.0]

THomas Keily: [00:09:22] Yeah. Now we've just backwood about the Biden's fiscal policy from first principles here I think. Well yeah. So this is huge. And I mean it's interesting. The corporate tax rates have been declining for four decades, pretty much since the 80s. They've been sort of coming down and down and down. And the other part of that is that of, you know, sort of the offshoring and the construction of foreign entities and foreign holding companies. And all that means that corporate tax rates are coming down and corporations ability to avoid tax has gone up. And so the corporate tax take has fallen substantially. And so what we're seeing here is, is I think it's a really interesting shift in the sense that the Bidens now championing this. So this is like it's not just something that Trump wouldn't have said. It's something that Obama wouldn't have said sort of coming out and gunning for corporations. That's that's new in the American political theater right now. Like, it's not something that, you know, it's Bernie Sanders, Elizabeth Warren kind of policy. It's not something you would expect Biden to be running with. And I would have thought like, it surprises me that he's coming out and gunning so hard for this to say, like, yeah, we've got to increase corporate tax rates. We've got to make the one percent pay their share lower. [00:10:44][81.6]

Adam Keily: [00:10:44] Because he was also talking about we covered a few episodes ago, I think a few weeks ago, um, like a globalized corporate a global corporate tax rate. Wasn't he was talking about trying to. Yeah. A tax floor. That's right. Um, to try and I guess negate the effects of hiding taxes through shell companies offshore or through the Cayman Islands or wherever it is. So this is part of that same kind of. Yeah. [00:11:12][28.3]

THomas Keily: [00:11:13] Speech. Yeah. Yeah, that's right. I mean, that's that's sort of the bond and more like the challenge with raising corporate tax rates is that the companies will move to work to places where the taxes are cheaper, which then sort of creates this sort of race to the bottom where just to sort of hold onto profitable companies and get any revenue out of them, nations have to push their tax rates lower and lower and lower until you don't. Right. To get to the sort of the more it becomes a competitive market for taxation. And that sort of is that doesn't sound ideal. [00:11:44][31.1]

Adam Keily: [00:11:45] Now, that's not good, is it? If you just shop around, shop around different countries to find. Yeah. Wasn't that why a lot of a lot of technology companies ended up in Ireland? Where was Ireland. [00:11:56][11.9]

THomas Keily: [00:11:57] Yeah. Yeah, that's exactly right. Yeah. Ireland did it [00:11:59][2.1]

Adam Keily: [00:11:59] all came up with a cracking tax deal [00:12:02][2.2]

THomas Keily: [00:12:02] and it kind of worked for them like it was a competitive policy, like tech companies came and set up in in in Ireland and it became a tech center out of out of nowhere like it would. That was never going to happen until they sort of tech this tax policy encouraged that. And I saw, you know, our Irish politicians commenting or saying like this is this talk of a tax, will they get where it's coming from? But it's a concern for Ireland because. Oh, to be sure. To be sure. Otherwise, tech firms could be in sunny San Diego. They don't want to be in trouble. [00:12:34][31.5]

Adam Keily: [00:12:35] Was nothing wrong with Alan called? Oh, that's lovely. Yeah, I'm rolling the rolling hills. Yeah. Panpipes, but I don't know, I guess for me, I always think about taxes, it's just, you know, it's the old thing. It's like two certainties in life, death, and taxes. You never think like a corporation does shopping around you tax like it's your home loan or something like you just it's very difficult, I think, as a layperson to wrap your head around the even having the ability to go, I might set up in a different textures. [00:13:11][36.3]

THomas Keily: [00:13:14] I met someone in Sydney when I was doing that. They were a management consultant and the their company had them domiciled in Singapore. Right. Because the tax rate was a lot lower and they got paid in Singapore dollars. [00:13:25][10.6]

Adam Keily: [00:13:25] But they said, what does that mean, domiciled in Singapore? [00:13:27][1.8]

THomas Keily: [00:13:29] That was where they resided on paper. [00:13:30][1.9]

Adam Keily: [00:13:31] Right. But he didn't reside there. [00:13:32][1.3]

THomas Keily: [00:13:33] No, I lived most I think it's some of the year, but did a lot of the year in Sydney, because [00:13:38][4.6]

Adam Keily: [00:13:38] you have to there's I think it's the same with a lot of professional athletes, tennis players, um, Formula One drivers. You know, it's not just because of it's not just the Monaco Grand Prix, which is why I live in, uh, in Monte Carlo. There's enormous tax benefits to living there as well. Hmm. There you go. Right. So trickle down economics. So so we're going to have so he's going to increase the corporate tax rate. Um, they'll pay more taxes, fingers crossed, if they don't just move to Ireland. What does it mean for me? Is it going to be is it going to be more. Am I going to have to pay more? [00:14:18][40.4]

THomas Keily: [00:14:20] It's an interesting one. Like, it really depends. This is two hands going here. So, you know, on one hand, Biden's giving money to Americans, particularly lower income Americans. That money's going into the economy. And then with the other hand, he's taking it away out of corporate America and the other wealthy. That's sort of how it's been cast. There's a lot more nuance to it. But that's sort of the idea. If if it was just increasing taxes without any of that, then you would think that that that would be a drag on growth. That would that would slow things down some degree. How much is it? And this is not is not totally settled. This question, because how the economic ecosystem responds to different tax rates is is not clear cut. It's it's it's something that's debated in economics like this. Obviously, thresholds like if you tax someone 100 percent of their labor income, they just wouldn't work. Like, that's that's obvious. But if you tax them at zero percent, they don't work an infinite amount. So it's sort of like it's not it doesn't seem to be a consistent relationship through the tax income spectrum. I don't think and I think the same is true for corporations. [00:15:35][75.1]

Adam Keily: [00:15:36] Yeah. So is it and is it likely to have? I mean, we probably would have seen it play out the initial reaction already, but is it likely to have a big impact on outlooks for companies and share prices and those kinds of things? Is that is this a fundamental change? Like a bit like when inflation spiked the other day and we had the what was it? [00:15:56][20.2]

THomas Keily: [00:15:56] The bond quake? [00:15:57][0.6]

Adam Keily: [00:15:58] The bond quake, if you don't mind. You know, is it likely to cause something like that or is it just kind of companies going out will say, well, whether we move or whatever later. [00:16:09][11.2]

THomas Keily: [00:16:10] Yeah, it hasn't it hasn't seemed to have been too big an impact. I mean, you got to remember that what Biden is talking about. So Trump came in and cut the corporate tax rate from 35 to twenty. So something like that was massive. You know, bonds unwinding that he's winding back to twenty-seven percent. So it's not even going all the way back. So it's it's a little bit hard for to to make the case that the tax rate is too high because it's still seven percentage points lower than it was four years ago or five years ago or something. So. Yeah, yeah. So it hasn't people don't I mean I don't know, I haven't watched stuff that I'm reading hasn't people aren't too scared about it. It doesn't you know, they're not happy about it but they're not, it's not, it's not the end of the world. It doesn't seem like it. What is interesting I think is the way that the Republicans are responding to this. So typically the Republicans sort of you big business allies in the political sphere. But there's also some quotes here from Ted Cruz and Josh Hawley. Both of those is sort of setting themselves up to be presidential runners in twenty twenty four. Mhm. Yeah. So is it Ted Cruz. This is starting today. He tweeted. That's right. On Twitter, which is where all political announcements go these days. Sure. Hey, starting today, I no longer accept money from any corporate PACs. So corporate PACs are like a political action group. So fundraising bodies to donate to politicians. So I'm not any PACs tied to corporations. I'm not accepting money from them. I urge my Republican colleagues to do the same for too long. Republicans have allowed the left and their big business allies to attack our values and ship jobs overseas with no response, no more. Right. And then Josh Orli came in and retweeted and said, yes, corporate America has put Americans last. They ship our jobs to China. More middle America's way of life tried to control our speech and run our lives. It's time we stood up to them. I won't take corporate donations and offer our fight to break up their monopoly power. Right. So it's it's pretty out there. I reckon that that's a that's a big turn to sort of to be attacking corporations and one to refuse corporate donations, political donations. That's pretty massive. That's a big turnaround. But then to sort of attack big, big business, to sort of paint them as well. I mean, one is that funny thing, that they're somehow involved in bed with the left, the big business and the in the left to sort of somehow in cahoots to attack values is a that's an interesting idea, but that seems to so well in America. [00:18:48][158.4]

Adam Keily: [00:18:49] So something must have changed then. Obviously, this is must be a response to I don't get too deep into the politics of it all. But that's something that must be some focus group, somewhere that have gone. You know what? People people don't like this. [00:19:01][12.2]

THomas Keily: [00:19:02] Oh, yeah, not totally. This I mean, this is this is this is the base that Trump energized. Right. So this was sort of the working-class people who were left behind by globalization had seen their sort of communities hollowed out by the offshoring of jobs. Yeah, all of that. And so, yeah, they were genuinely angry and they were angry with the big businesses that closed up the manufacturing plants and shipped it all off to China. So they're angry with them. They're angry with the progressives who then turned around and called them racists for wanting a job. Yeah, yeah. That's that's their base. So Cruz, they're speaking directly to that base. And, yeah, big business is no longer the friend of anyone in the political sphere anymore. Um, so. Yeah. So I think it's a really interesting, interesting time. [00:19:51][49.1]

Adam Keily: [00:19:51] Bizarre situation, [00:19:51][0.5]

THomas Keily: [00:19:52] really. It's a very it's a very unusual situation. So some Republicans are saying, come on, we we need to push back on this. We need to push back on that. And then Cruz is like, no, the corporate I'm going to stick it to the corporations. They deserve [00:20:03][11.4]

Adam Keily: [00:20:04] it. And so both sides of politics are sticking it to the corporations that bring in billions of dollars in America. Because so on both sides of politics, in the response to corporations shipping jobs offshore, is the drive the boot into corporations where we teach you corporations that disrespect us, take our jobs offshore, we'll treat you like dirt here like [00:20:40][36.0]

Adam Keily: [00:20:41] it doesn't make any sense. [00:20:42][0.6]

THomas Keily: [00:20:42] Well, no, I mean I mean, there's yeah, there's a political element that Biden does have some measures to reassure jobs and to sort of encouraging companies to set up back in America. And some of that is happening naturally anyway as relationships with the relationship with China deteriorates. Yeah, yeah. So that that that is happening. But it is it is interesting so that yeah. The big business and like whatever that term actually means, big business. But big business doesn't have a political ally at the moment that normally could rely on the Republicans to and all the normally could rely on both sides of politics to have their back really. But now the Democrats have turned fully and the Republicans are splintered into two camps, sort of the pro Trump anti-big business camps. And you got to wonder how committed they are to their posturing around being anti-business or anti big business. And then there are others in the Republican Party that is sort of toeing the line and trying to trying to build sort of a unified front against this sort of increase in corporate taxes. But they struggling. [00:21:51][68.5]

Adam Keily: [00:21:51] But I mean, it's a problem in the whole problem. No, I'm no expert, obviously, but that the big problem is the dependency that the political parties in America have on on fundraising. Mm. I like yeah. They need to fundraise and the money that is going to come from somewhere is always going to come largely from big business. So where are they going. Well, I don't know where they get their money from, but it can never you never get money for your political party without something in return. No one's ever going to give you, you know, like say to me, that's the fundamental problem is you can't ask people for money for a political party and say, look, this comes with no promise that we're going to push any of your agendas. Like, you kind of have to make some you have to give something. So to me, it seems broken. [00:22:41][49.7]

THomas Keily: [00:22:42] Yeah. Yeah, for sure. Yeah. I mean, the whole whole idea of political donations is pretty wonky. You know, like this is claim that the companies that are donating to political parties just to support democracy. Yeah. In general, [00:22:56][14.8]

Adam Keily: [00:23:00] yeah. [00:23:00][0.0]

Adam Keily: [00:23:00] Yeah. I support democracy and that highway that bypasses that town over the place. [00:23:05][5.1]

THomas Keily: [00:23:06] Yeah. Yeah. [00:23:07][0.5]

THomas Keily: [00:23:07] No that's right. I mean it's. Yeah that's Corporate donations and it's a real struggle to get sort of good democratic outcomes in that kind of environment, which is what I think crews standing up and saying he's not going to accept corporate donations is massive and that that that opens and opens up an interesting road that I don't think America would have looked at. [00:23:28][20.4]

Adam Keily: [00:23:29] Yeah. All right, we're going to take a break there. Grab a word from this week sponsor and we'll be right back with a puzzle in the rental market, as well as tell you about what happened with our NFTE from a few weeks ago. [00:23:43][13.9]

THomas Keily: [00:24:11] Now let's get into the show. [00:24:12][1.2]

Adam Keily: [00:24:15] And we're back, comedian versus economist. We would love it if you would leave us a review on iTunes, on the writing on there, that would help us out a lot. So if you got some free time, why you're listening to the rest of this episode? Be sure to log on and check that out. In the meantime, Thomas Puzzle in the rental market, WTF are you on about? [00:24:34][18.8]

THomas Keily: [00:24:37] So rents are booming right now. Rental prices are up four point nine percent nationally. So one of the strongest growth rates in a long time. Regional areas, rents are up 10 percent year on year. So really going through the roof, that's on the back of a record low rental vacancy rate. So there's this thing called a vacancy rate, which measures how many apartments and houses are on the market for rent relative to the stock. [00:25:06][28.9]

Adam Keily: [00:25:07] I flashed that neon sign when they run out. [00:25:09][2.4]

THomas Keily: [00:25:09] Yeah, and so currently nationally, the rental vacancy rate is one point nine percent and that's the lowest. Wow. Yeah. So really tight. And the kind of the rule of thumb in property is that a vacancy rate around three percent is a balanced market. So at three percent you're not you're not putting any pressure, upward pressure on rents, anything below three percent. You're starting to put pressure on rent because it's just super competitive to get a house. So one point nine percent is is very tight. And that's and that's that's a number that's being held up by the high rise sector in Sydney and Melbourne. So if you could take that out, the Hiero sector in Sydney and Melbourne out of that equation, it'd be much tighter than that, maybe even sub-one percent. So there's a real shortage of houses, it seems, and that's what's driving super-strong rental outcomes. The puzzle is that the population is falling more because net immigration has turned negative. So net immigration normally adds people to the Australian population. But with covid shutdown and so on, we've now gone negative. And so we lost ninety thousand people to immigration in twenty, twenty, twenty one and were projected to lose another seventy thousand in twenty one twenty two. So we're going negative and and natural population growth is always pretty, pretty, pretty small in the scheme of things. So we've got population falling and yet the rental vacancy rate is tightening. Hmm. So that's a puzzle. [00:26:52][103.2]

Adam Keily: [00:26:54] That is a puzzle. What about, uh, so there's one big factor that comes into these expats returning. [00:27:03][9.0]

THomas Keily: [00:27:04] Well, now that's picked up in the net immigration numbers. So that's a that's a net that ninety thousand that's net. So that includes people returning and people leaving. Yeah. Right. Yeah. Yeah, that includes expats. [00:27:18][13.5]

Adam Keily: [00:27:22] Well, I'm out of ideas when he said you had a puzzle. Were you looking for me for support in solving it? Um, like what I came first of all, do you actually know the answer or do you know do you have some thoughts on why that's the case? Or do you want me to keep having a stab because I have other ideas. [00:27:40][18.8]

THomas Keily: [00:27:41] Yeah. And I think I'm done with your stabs in the dark. [00:27:44][2.9]

Adam Keily: [00:27:46] Well, and truly in the dark. [00:27:47][1.0]

THomas Keily: [00:27:48] Yeah, it is a puzzle in the sense that no one really knows the answer to this. It's a bit odd. It does seem to suggest that household formation must be increasing. So when so you mentioned a household with, you know, some teenagers, they become 18 or whatever and move out on their own and they form a new household. And so you have that. So that four person household becomes two two person households. Yeah. So the same number of people has now become more households. So it would seem to suggest that household formation is increasing, that more people are going out on their own, starting new houses, share houses are breaking up and going into, you know, couples or something like that. It's not surprising, though. Why isn't it? Well, I'm wondering why that would be the case through covid. What's your question or thought? [00:28:43][54.4]

Adam Keily: [00:28:43] You hit the nail on the head covid. Everyone's been locked up together for however long. People are sick of living with each other. [00:28:50][6.8]

THomas Keily: [00:28:50] Yeah, right. [00:28:51][0.3]

Adam Keily: [00:28:51] Um, and so they're coming out of the other side of covid. It's giving everyone a proper taste of what like their their house mates. Dirty habits are life-like a day in, day out. It's like this guy's a pig. [00:29:06][14.6]

Adam Keily: [00:29:08] OK, I live. I never know. I sort of didn't realize this was going on. Maybe like, you know, or it was so like, I'm out all the time. I'm busy. I'm kind of I'm a sport. I got social Nippo Wednesdays and those days I've got whatever. And then covid comes along and it's like I'm just home all the time with this filthy animal. [00:29:30][22.2]

THomas Keily: [00:29:32] I'm going to move out. Yeah, well, pretty good theory that that [00:29:36][4.7]

Adam Keily: [00:29:37] and also a lot of, dare I say, a lot of relationships would have been tested through. [00:29:42][4.2]

THomas Keily: [00:29:42] That's true. That's true. [00:29:43][0.9]

Adam Keily: [00:29:43] A lot of relationships would have been, you know, all kinds of relationships, whether that's husband and wife, parents and kids. Um, it was a tough time when people were living on top of each other. Um, a lot of especially if you were in a smaller house and you were sort of already a bit packed in as it was, then you come out of that and you'd be like, let's say I mean, I can't and I can't live with mom anymore. Um, she's driving me nuts. I'm getting out. [00:30:13][29.3]

THomas Keily: [00:30:14] Yeah. I think that's pretty good. And it's probably been empowered by we know household incomes are up. We know people flusher than they were pre covered. They've got some money. [00:30:23][8.6]

Adam Keily: [00:30:23] Exactly. People have got enough for a for a deposit because that was it. I mean, when we talk about housing deposits, you still need to put like a bit of a deposit down on a rental. When you're you know, when you're when you're moving out for the first time, you need to have what is it, like six weeks in advance or something like that. I haven't rented in ages so long, but it's something you've got to put down. Pay some some forward rent for it. You've got to buy some furniture. You've got to you've got to equip your, you know, furnish this new rental that you've got. Yeah. And so through covid and stimulus and no spending and whatever, people saved a bit of money. We've talked before about people saving cash. So they're like, this is it. I'm finally because, you know, it's like when we were living at home together, when I was living with you, I couldn't wait to get out. Mm. You know, you know, I just. Yeah but you did it serious as you for me. I wanted to go like early I, I didn't because I was too good that I left it at I think what was I. Twenty. Twenty, probably twenty I think twenty one maybe now I think I was still, I was still twenty when I moved out. Um you went off earlier. You went to uni. Yeah. Which doesn't count because you're still suckling at the family teat. Yeah. [00:31:45][81.2]

THomas Keily: [00:31:45] The best of both worlds. [00:31:45][0.7]

Adam Keily: [00:31:46] Yeah. Yeah. He had free accommodation. Um. But, yeah, I think people for a long time, the trend was staying, staying on longer, staying at home longer, staying in the 30s at home, that was increasing, wasn't it? And so I imagine covid put a lot of people in a financial position to go, oh, I can I can move out. [00:32:09][22.3]

THomas Keily: [00:32:10] Yeah, I think it's I think it's a solid theory. [00:32:12][2.1]

Adam Keily: [00:32:13] And the other has also. [00:32:14][0.4]

THomas Keily: [00:32:19] But yeah. We'll see what let's watch it. So yeah. Rents, rents are booming four point nine percent and accelerating quickly. And look out for that [00:32:26][7.1]

Adam Keily: [00:32:27] because you also said the other day you said that rental rents do not necessarily go up with ads versus house prices and which I found [00:32:39][11.6]

THomas Keily: [00:32:39] surprising. Yeah. Yeah, well, yeah. Rising rents will cause rising house prices. Rising house prices won't cause rising rents. [00:32:46][7.4]

Adam Keily: [00:32:47] Well, that's what you say about house prices are rising and rents are. [00:32:50][2.6]

THomas Keily: [00:32:51] Yeah, well, they can pressure rising. Well, yeah, they can. They can. Well, like, yes. Rising house prices. There's two factors now. So one is that this super cheap interest rates that pushes house prices up. But we also have rising rents. So we've got to see this due to jet boosters below housing prices. At the moment, you're [00:33:08][17.7]

Adam Keily: [00:33:09] just conveniently saying that house prices isn't causing rents. [00:33:12][3.1]

THomas Keily: [00:33:12] Yeah, isn't cause the other way around the causation runs? [00:33:16][3.8]

Adam Keily: [00:33:17] Well, I'm arguing that it's not. I'm arguing that house prices are causing rents to go up. Why? Well, because that's what's happening, [00:33:25][8.0]

THomas Keily: [00:33:25] yeah, that's not a reason. I would say you got you got the causation backwards. Well, I'm saying [00:33:32][6.5]

Adam Keily: [00:33:32] that you got no evidence to prove that it's not [00:33:35][3.2]

THomas Keily: [00:33:38] It's a logical argument. Not even a theoretical or statistical argument. Is this logic when you're talking about. [00:33:44][6.8]

Adam Keily: [00:33:48] OK, so I agree with you that these things come very [00:33:52][4.6]

THomas Keily: [00:33:54] NFT, what happened there. A bit of a bottleneck in the comedian versus economist I.T. department. [00:33:58][4.4]

Adam Keily: [00:33:59] Well, neither the IT department got straight on it, to be honest. So if you haven't listened to our episode on NFT, go back and check it out. I should have researched what episode it was. Um, I maybe I can tell you now. I can't guarantee you'll find it when it got like 30 exercises. Scroll. Tell me you don't know how to scroll. So we did an episode on NFT and one thing that we mentioned during the episode was that we might meet that episode as an not just for the locals just because it had already like nets had already reached peak ridiculousness. So anyway, we did mention that and then we it was radio silence on it. After that, Dylan sent us an email. And I've got to say she has to deal on one of the best e-mails I've seen. It had the most Comprehensive Step-By-Step Guide on minting NFT tokens. [00:34:57][58.2]

THomas Keily: [00:34:58] So we should really meant that as an NFT. [00:35:00][2.5]

Adam Keily: [00:35:03] maybe we could mean that. You can, of course, email a cve@equitymates.com or equitymates.com/cve on the website if you do want to send us an email. So yeah, Dylan sent us this email. Much appreciated. I had actually already done some of the things in the email, so he talked through getting some Ethereum coins money. I get to load up AmeriMark wallet and with that I could go to I went to open C, which is one of the there's a few kind of clearinghouses or what you call them, like a marketplace for NFT, non fungible tokens for anyone who might be hearing about NFT for the first time. That's the thing. Set up an account on there. I had the I had I had the comedian versus economist like shopfront up and running and we're already to meet the first NFT. And then we kind of just paused for a second and we're like, what are we selling here? So what are we actually selling? If we sell the episode, what does that mean for us in terms of what can we do with that episode going forward? And so, you know, we have we're not a big podcast by any stretch, but we do have some obligations in place, some sort of contractual stuff of which we're not probably that across even, but we get great support from from the guys, the equity markets, media, and we didn't want to create a problem for them. And so we weren't sure what would happen if we kind of minted an NFT and then sold it. Would we have to pay to license it back if we wanted to keep distributing it through iTunes and Spotify and wherever else? If we made it slightly different, could we sort of trimmed off some of the styles in the end to make it different. But it just started to get pretty muddy and murky in terms of the rights to the episode and who owned what. And so we kind of did have it there for a split second or two and then thought better of it. And then we did toss around some ideas. Thomas, if you remember around what else we could sell, [00:37:21][138.5]

Adam Keily: [00:37:26] there was some pretty ordinary ideas, to be honest. I think there was maybe like a I and I just various jpeg of some artwork that that we'd done. But it just I don't know. I think then the morals start kicking in a little bit as well, and you just start going, what are we doing? We're just trying to create something where there's nothing in the hope of of catching a buzz on the on the next train and hoping that someone would jump on and buy this thing. That was kind of nothing just because it was something. And so that's where we landed. So we didn't do anything with it. So if you've got ideas on what you would if there's something you would like us to produce, Dylan mentioned we could have our own token or our own coin, like we could have a KVI token as an NFTE that could then potentially, you know, as, over the years, listenership just explodes is. Yeah, I wouldn't want to pay too much up front, Dylan, to be honest, but yeah, I don't know. I'm not sure. I don't want to I don't want to ever be thought of as trying to, you know, just exploit. Something like this for for personal gain, but that's where we landed. You got any ideas? [00:38:52][86.5]

THomas Keily: [00:38:53] No, no. I mean, I think that kind of thinking is going to hold you back in life, though, like it's all about getting nothing, getting something for nothing. Oh, cryptanalysis based on that idea, isn't it? [00:39:04][10.8]

Adam Keily: [00:39:06] Oh, yeah. [00:39:06][0.4]

Adam Keily: [00:39:06] Well, I'm not against like CV coin, you know, like if we just create our own cryptocurrency, well, that would be OK because it's a store of value. Now, I don't I don't I don't even know what that would be. Yeah, no, I'd be happy to. And I guess it comes back to, you know, something's worth whatever someone else is prepared to pay for it. So if someone's prepared to pay for something that we might then show. Um, but yeah, that's kind of. So for anyone who was wondering, I guess, where we got to with NFT, we kind of we ended a bit of a, um, I don't know, a bit of a quagmire of of rights and and copyright and ownership and all that sort of stuff that we just sort of thought, you know what, why don't we just leave what we don't understand well enough alone. So hopefully that clears it up and thanks, Dylan, for your much, appreciate it is Dylan. [00:40:07][60.3]

THomas Keily: [00:40:07] That was awesome. [00:40:07][0.2]

Adam Keily: [00:40:09] So that brings us to the end of the show. Thomas, unless you had anything else to add. [00:40:12][3.5]

THomas Keily: [00:40:12] No, I'm good. I'm good. All right. [00:40:14][1.7]

Adam Keily: [00:40:15] Excellent. Don't forget, you can check out all the other great podcasts from equity mates media like Get Started Investing, Equity mates Investing podcast. You're in good company, meet, pay love and Thomas, I love having you on the show every week. [00:40:29][14.6]

THomas Keily: [00:40:29] Oh, go on. Thanks very much. [00:40:32][2.5]

Adam Keily: [00:40:35] All right. Thanks for tuning in. We'll talk to you again next week. [00:40:35][0.0]

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