TRIGGERnometry - Will We Have a Rapid Recovery？

00:00:00.000 Hello and welcome to Trigonometry. I'm Francis Foster. I'm Constantin Kissin. And this is a

00:00:10.040 show for you if you want honest conversations with fascinating people. Our brilliant and

00:00:15.340 returning guest this week is Mike Driver. You may remember we did an interview with him some time

00:00:20.400 ago. He's a serial entrepreneur, all-around good guy and someone who has a lot of very

00:00:24.520 counterintuitive ideas. So Mike Driver, welcome back to Trigonometry. I'm delighted to be back.

00:00:28.880 Thanks for having me again. It can't have been too bad the first time.

00:00:31.620 No, it was great. It was great the first time.

00:00:33.500 And it's good to have you back.

00:00:34.860 One of the reasons we wanted to have you back actually is you and I were

00:00:37.600 chatting on the phone the other day and you were just talking about the

00:00:41.260 situation that we're in now with the lockdown,

00:00:44.100 the government's response to it.

00:00:45.780 And you were saying there's lots of things that we could be doing that we're

00:00:49.500 not doing.

00:00:50.040 There's lots of things that we are doing that we ought not to be doing.

00:00:53.200 So what is your kind of outsider take on everything?

00:00:57.580 What stands out for you in the current situation?

00:01:01.440 Well, I mean, I think in terms of good news,

00:01:04.240 some of the stats that are coming through at the moment,

00:01:06.620 things are starting to get better.

00:01:09.060 The rate of infection and the rate of fatality, as horrible as it is,

00:01:13.280 does seem to be starting to decline around the world.

00:01:16.500 So I think it's perhaps less bad than it was.

00:01:21.060 That's a ringing endorsement of the current situation.

00:01:24.100 um but uh so i guess i guess um you know we're in in lockdown and the debate about that

00:01:34.820 is largely irrelevant i think a lot you know we are where we are um i guess uh do you think it was

00:01:41.380 the right decision to go into lockdown oh i mean i i'm glad i didn't have to make it i think uh i

00:01:47.700 I think as the captain on the bridge, it's very easy for commentators to criticise when

00:01:57.280 they don't have the responsibility for the consequences of their actions.

00:02:01.260 I think as the captain on the bridge, all kinds of conflicting information coming through,

00:02:07.140 dynamic moving situation, different statistics, different expert opinions, and really it's

00:02:16.640 very very difficult and you've got to live with the consequences of the

00:02:19.220 decisions and I think very much that's the difference between I think the sort

00:02:25.520 of we had the sort of panic brigade didn't we you know shut down closed

00:02:29.060 borders well I think you know my first point I guess is that is that panic

00:02:35.060 tends to breed chaos and calm breeds calm so I wasn't so keen perhaps on some of

00:02:43.040 the more, you know, sort of those people who came along and sort of screamed, but we didn't

00:02:48.980 really consider the consequences of what we were doing. And I think in some ways, we're

00:02:53.840 still paying for not having thought through the consequences of the lockdown, whether

00:02:59.180 or not you agree with the lockdown, or you don't agree with the lockdown, the consequences

00:03:03.520 seem to be or not to have been thought through as well as they might have been.

00:03:08.520 Yeah, and you've talked about the consequences of the lockdown, and we've just seen, I think

00:03:12.900 it's literally today. Virgin Atlantic Australia have gone into administration. We're talking

00:03:20.800 about Primark looking as if they're in real difficulties. Is this going to precipitate

00:03:26.600 the end of the high street as we know it? Because the high street was already struggling

00:03:30.940 and now this has just been a further body blow to them.

00:03:34.400 Well, I think you have to look at each business on its own previous performance. I mean, if

00:03:41.700 you take Virgin, for example, I mean, it's been in, it's heavily in debt,

00:03:45.300 the latest accounts or the last published accounts,

00:03:47.860 it's heavily in debt in the first place. It leases all its airplanes.

00:03:52.320 It basically survives as a business, you know,

00:03:54.580 it runs its business out of advanced ticket sales.

00:03:58.320 COVID was probably a convenient problem for Mr. Branson.

00:04:03.780 I think he was in trouble anyway. So, so it's,

00:04:07.620 that kind of leads into some of the things I think that we're getting wrong

00:04:14.000 or that we need to really think about what we're doing in terms of the way we

00:04:17.920 are supporting we are supporting businesses because there's a very good

00:04:24.660 argument to say well if that business was in trouble in the first place which

00:04:28.140 you know it was it was hanging on is it is it the obligation of the government

00:04:35.500 prop it up i mean i see he's put his uh his island up as collateral i mean that's a liability that

00:04:43.980 how much does it cost to run it you know it's a tourist destination destination probably cost

00:04:49.100 a couple of million to run it you've got to admire the chutzpah haven't you when he says okay well

00:04:53.980 i'll i'll i'll let you uh take the cost of my island as a as collateral because there won't

00:04:59.580 be any tourists visiting it for a while so so in that respect i think i think there's some businesses

00:05:05.340 that were that that are naturally or were naturally going to fail and the

00:05:10.980 danger of course is is bailing those businesses out without obtaining equity

00:05:17.340 for the taxpayer so what you're really I think saying is we shouldn't be bailing

00:05:22.260 out businesses that were about to fail anyway and COVID's just push them over

00:05:25.680 the edge well I mean I think there's a I don't think necessarily we shouldn't

00:05:29.760 bail them out because there are other considerations to the economy for yeah I

00:05:34.980 I think that leaves one airline in Australia, for instance, or, you know,

00:05:38.820 which is a whole different problem.

00:05:40.020 Yeah, but Australia's great, mate. Who wants to leave? It's brilliant.

00:05:44.340 You're not allowed to go from one state to another anyway, at the moment.

00:05:49.660 Just stay home, save lives, enjoy the good weather, have a barbie. Come on.

00:05:54.140 But I guess you've got to think about the jobs. So, so it's not necessarily,

00:05:57.460 it's difficult without,

00:05:58.940 without sort of looking in context to decide whether or not, you know,

00:06:02.620 we should say this business or that business but we should certainly

00:06:05.500 be considering what sort of state was the business in before and therefore what

00:06:09.940 kind of a deal can we as the taxpayers get for whatever we decide to do in

00:06:14.920 order to maintain that business trading. And isn't it I mean you would know far

00:06:19.700 more about this obviously Mike because you're an entrepreneur but isn't it the

00:06:22.380 state of a small business that you survive month to month really a lot of

00:06:27.100 businesses depend purely on their cash flow and if that suddenly dries up then

00:06:31.300 And after a couple of weeks, you're in serious problems, aren't you?

00:06:35.620 Well, I think some do.

00:06:37.520 But I actually think, and certainly cash is king.

00:06:41.280 The only thing you really need to worry about in most businesses up to significant turnovers is cash flow.

00:06:49.200 Cash flow will make a great new business.

00:06:51.240 I absolutely agree with that.

00:06:53.300 I don't think that once you get past a certain level that the majority of businesses live hand to mouth.

00:06:59.080 I actually think we've got a slightly different dynamic going on and I think

00:07:03.360 this exposes one of the big issues in the government's response to the crisis

00:07:07.180 with the COVID business interruption loan, have I ever got that right, the COVID business interruption loan scheme,

00:07:15.800 which is delivered in the form of a loan to entrepreneurial businesses and I

00:07:23.660 think that's a that's a major major issue and I think it continues what we've

00:07:28.900 seen which which I would describe as a breaking almost a shattering of the

00:07:32.960 covenant between some citizens and society and I think that started with

00:07:37.900 student debt so so you it's a little bit like I always think the student that's a

00:07:43.040 little bit like the Catholic original sin you know you if you want to go to

00:07:48.800 you know you're not born with sin you but you're born with original debt if

00:07:53.120 you want to educate yourself and similarly if you think about what entrepreneurs do in the economy

00:07:58.880 and the way they actually do work is entrepreneurs will run their businesses with an element of

00:08:07.520 redundancy in it you know they're looking to survive and they will only take debt on for

00:08:13.280 investment in productive equipment or people in order to generate a return and what we're asking

00:08:19.600 entrepreneurs do now is to take debt on for survival now that changes the whole

00:08:24.480 raison d'etre of entrepreneurialism and what it actually has i think quite severe

00:08:29.760 repercussions going into the rest of the economy so i think entrepreneurial people are the shock

00:08:34.560 absorbers for the economy and that's what this this redundancy is um entrepreneur

00:08:40.000 entrepreneurially run businesses um tend not to carry debt uh in most instances they tell

00:08:46.640 or they tend to carry very manual debt and they tend to be able to survive normal shit yeah

00:08:54.020 unfortunately nobody can survive the deluge of shit that we've got now but they tend to be able

00:08:59.400 to survive that normal day to day but what entrepreneurs says i think i said this previously

00:09:03.860 is they is they say i don't know what shit's coming down the road but i know it's coming

00:09:08.520 so i'll i'll have some redundancy in my business i won't be i won't be too leveraged i'll have some

00:09:14.720 cash in the bank and I'll be able to survive those unexpected and yet

00:09:21.480 moderately shit events but what the government is is suggesting is that is

00:09:30.860 the effect of the exchange of that redundancy for debt which which changes

00:09:34.580 the way entrepreneurs behave but it also takes away that shock absorber which

00:09:39.280 protects millions of employees in the country from medium-level shit so when

00:09:47.680 we get the other side of this and I have to say if we ever if if they ever

00:09:53.860 facilitate these loans into the businesses which seems to be another

00:09:58.160 issue for the governments at the moment you know I think I've kind of been

00:10:03.100 through three of those sort of authors that everyone quotes as to which three

00:10:07.600 books or authors if you like of which what mess are we in you know is it brave new world is it

00:10:13.200 covid 1984 but i'm actually starting to think we might be in kafka so we've got this sort of

00:10:19.680 bureaucratic labyrinthine nightmare where where businesses have you know you're basically joseph

00:10:26.960 k trying to work out uh how you can obtain this money and i heard recently i mean this is kafka

00:10:33.200 if there ever was one, that one of the things that's prevented people getting access to

00:10:37.360 the loans was European regulation. I mean, we've left the EU. What is going on? You just

00:10:45.620 end up going round around this labyrinth and then you die and you don't know how it happened.

00:10:50.200 So this is one of those consequences of the lockdown. Businesses did not, government shut

00:10:55.420 the economy down, businesses didn't shut the economy down. So for me, a much better way

00:11:02.200 to support the entrepreneurial world as opposed to the corporate world is helicopter money so it's

00:11:10.360 direct grants um what what loans are going to do is they're going to fragilize a very very important

00:11:18.040 part of the economy for many years to come but also completely change the bargain if you like

00:11:24.840 between society and business owners business owners that uh you know they have to make the

00:11:31.720 payroll they have to do your job plus all the stress of looking after you doing your job making

00:11:36.760 payroll and doing all of the things that that business owners have to do and and now what we

00:11:41.400 do is we add a layer another layer of uncertainty and fragility into their businesses and i think

00:11:47.000 this is the terrible mistake mike and speaking of changing the social contract and the social

00:11:52.040 dynamics and dynamics more generally. Do you think that one of the changes that will happen

00:11:56.820 as a result of everything we're dealing with now is a whole set of transformations, some

00:12:01.640 of which are entirely unpredictable at this point? But up until now, and probably it's

00:12:07.640 got worse now, there was the fact that half of people in America, I think, couldn't absorb

00:12:14.940 an extra cost over $400, right? So half of the country essentially living with no savings

00:12:21.620 whatsoever a lot of the same kind of patterns and businesses where there was

00:12:25.280 very little resilience particularly you know as you make the distinction

00:12:28.400 between corporate and entrepreneurial we've been living very much as if the

00:12:32.180 good times will last forever and winter has come you know so what do you see as

00:12:38.720 going to be the big transformations that happen out of this in the way that we

00:12:42.560 live our lives well I actually I actually think there will be what looks

00:12:49.340 like a fairly rapid recovery but in terms if you think of markets for

00:12:57.380 instance I think I think it'll look because because most of the money most

00:13:03.100 of the stimulus like is being funneled to the corporate sector and I think

00:13:10.640 you're gonna have post the lockdowns and once we start to unwind the lockdowns I

00:13:17.360 think you'll have that initial rush of deferred spending that people haven't

00:13:22.680 done for the last few few weeks or few months I think you're gonna have a

00:13:27.380 little bit of that carpe diem where you know people perhaps have been somewhat

00:13:39.860 restricted and I guess the potential for this ever happening again might

00:13:45.500 might might fuel that but but I think what you what you're gonna have that's

00:13:49.340 gonna make the biggest difference to people's lives is is I mean I you know

00:13:54.380 I'm not an economist I certainly deny all economic background but it's

00:14:01.260 something they is monetized debt spending so that's essentially where

00:14:06.180 governments spend more in the economy than they remove from it in taxation

00:14:12.080 and that spending is funded by either direct funding from a central bank or the central bank

00:14:17.680 buying more government treasuries so so i mean this is the i think we've spoken about it before

00:14:25.300 this is the political victory of modern monetary theory so mmt so this mmt is um permanent

00:14:36.160 government deficit spending up until the point that it that it causes inflation so i think i

00:14:42.940 think that that's like crack to politicians because it basically means a politician can

00:14:48.840 promise anything without they used to promise things and not deliver them now they can promise

00:14:53.780 things and not worry how worry about how much they cost so whether or not whichever side of

00:14:59.380 the argument you might fall economically on MMT.

00:15:03.160 I think the argument's been lost

00:15:06.200 and the politicians have run away with that.

00:15:09.400 So that's got some interesting implications.

00:15:13.040 I think in the short term, pragmatically,

00:15:17.560 we have to embrace it because without it,

00:15:20.380 we would end up in sort of a 1930s style depression.

00:15:25.380 what happens after that I think is is is definitely going to be interesting because my view is that is

00:15:33.720 that when governments have no discipline they get less value for money for their spending that's a

00:15:40.600 really nice way of saying people start to rip them off and what MMT needs is is it doesn't need any

00:15:46.680 wastage in the economy and I think anybody who's ever operated in an economy knows that when there's

00:15:53.140 free money around deception is Darwinian humans will find an incredible amount of

00:15:59.800 ways to so so I think what you then that's essentially in economic terms

00:16:04.780 they call that a debasement of money so so so I think you will see initial and

00:16:13.540 who knows this goes on how long this goes on for but certainly some initial

00:16:16.720 economic growth after all this is over fueled by government deficit spending

00:16:22.380 fuel by this carpe diem and perhaps this deferred spending but I think that once

00:16:34.440 you take that discipline away from government we might have some interesting

00:16:38.640 times. Just before Francis I'm sure he's got a question for you just to put it

00:16:45.000 into simple language for people who may not be economists just to translate what

00:16:49.920 you've said what you're really saying is the government is going to create ie

00:16:54.600 print endless loads of money and then a lot of that is going to be wasted and

00:17:01.620 stolen and we're going to be creating growth by printing money so when you

00:17:07.440 talk about the interesting times I mean that is one of my kind of looming

00:17:11.840 foreboding senses at this point is that I'm having a great time as we've

00:17:16.880 discussed many times before but there will be hell to pay at some point down the line

00:17:22.000 for all of us and i i just don't see how there weren't well i mean there's some interesting

00:17:28.000 dynamics going on at the moment that might protect us for a bit longer so you've got you do have quite

00:17:32.160 a lot of deflation deflationary or disinflation pressure in the economy at the moment so while

00:17:38.000 that's going on currently you you're gonna be able to get away with with with

00:17:44.120 this this this type of spending you know I mean obviously at the moment the the

00:17:50.660 oil price went negative yesterday basically on the basis that a load of

00:17:54.980 people didn't realize if they took delivery they would actually have to

00:17:57.620 store it somewhere that oil is actually a real thing not a thing yeah yeah so so

00:18:03.860 I think when you've got those kind of pressures in the economy and again

00:18:06.740 you'll have people better qualified than me in this particular area at the moment

00:18:12.260 as I said pragmatically we have no choice to avoid a 1930s depression we

00:18:18.320 have to do this I think that in that sense there's the fact that we do have

00:18:24.320 a lot of deflationary pressures at the moment in you know the central banks

00:18:30.960 think they controlled inflation over by using interest rates over the last few

00:18:36.080 It's bullshit.

00:18:37.820 Basically offshoring everything to China

00:18:40.940 and reducing the price of everything

00:18:42.880 or subsidizing the price of your taxi rides by Uber.

00:18:47.300 I long thought that ceasing quantitative easing

00:18:50.940 would lead to inflation

00:18:52.020 because everything would have to be priced normally.

00:18:55.360 But I think, going off subject there,

00:18:58.680 I think that we do have a window

00:19:03.260 to perform these type of operations.

00:19:06.500 Where I think we've got a problem is that it's crack.

00:19:10.240 The politicians will never be able to let it go

00:19:11.880 because politicians want to promise things to voters

00:19:15.120 in order for voters to, I mean, I think,

00:19:18.260 am I going to say this out loud

00:19:19.500 in a somewhere I can never delete?

00:19:21.840 I think it's very possible

00:19:23.100 that Trump will cancel student debt in America.

00:19:27.140 Really?

00:19:28.340 Well, he'll do anything to get the second term

00:19:33.020 the polls aren't where he wants them to be why not we're writing checks for

00:19:39.320 everything else he's writing checks for the oil oil patch today airline

00:19:45.380 industry yesterday why not see who knows but but I think that the the scope it's

00:19:52.580 almost like left or right doesn't matter anymore yeah the scope to curry favor

00:19:59.140 means that we are we are now in a in a MMT world yeah and to quote Top Gun is

00:20:06.900 and I never thought I'd do it on this podcast but I'm going to is Donald Trump

00:20:10.700 that's why you've got the yeah exactly they're not actually doing anything

00:20:15.600 though is it yeah no they're not I just do it because it makes me think I'm a fighter pilot

00:20:19.540 but it's true is therefore what you're saying is that politicians are writing

00:20:23.620 checks their body can't cash basically oh well well no well this actually

00:20:28.840 if you think about it it goes back to the consequences argument Trump's only

00:20:35.920 got a four-year term after this election hmm will he bear the consequences of the

00:20:45.800 you know what whatever the denouement to steal a French phrase it's probably the

00:20:51.700 only French word I know don't ask me what it means but it sounds good of it

00:20:56.260 is he's probably not going to be around he's certainly not going to be unlikely

00:21:01.900 to be president when it happens so so I think I think that's actually that's

00:21:07.360 actually one of the big issues here is the consequences of this won't be borne

00:21:10.840 by the people who make you make the decision so you're saying that

00:21:15.100 essentially it's a short-termism that we're sort of breeding now well we're

00:21:20.860 we're giving people whose raison d'etre to be alive is power a lever to get

00:21:29.420 themselves power I don't think they think past that I don't think it's

00:21:33.100 whether they're short-term long-term or medium-term they just want the power

00:21:36.540 the means justify the ends I think you're being very unfair

00:21:40.480 Jeremy Corbyn is a saint and would have done wonders but anyway since we are in

00:21:46.820 the political realm now you and I were chatting about the fact that you know

00:21:52.340 the journalists haven't covered themselves in glory during this time and

00:21:56.780 you you were saying you felt like you know Dominic Cummings and the team

00:22:00.920 behind number 10 had played it very cleverly to the point even where you

00:22:05.600 know young members of your family were starting to feel sorry for Boris Johnson

00:22:10.760 well don't you think it's the most amazing thing that most people are sat

00:22:15.140 at home and they're looking at the TV and every night at 4.30 or whenever the update

00:22:22.440 show is and they're turning to each other on their sofas and they're saying, why are

00:22:26.840 these nasty journalists being horrible to these nice politicians? How, how, how, how

00:22:34.460 has this happened? And I mean, I presume it's Cummings, it could be, it could be anybody

00:22:40.900 I guess but but they set the trap didn't they they've been they've been like ultra considerate

00:22:47.060 plight uh and at the same time and I think this goes back to what I was saying before about how

00:22:53.700 how easy it is to be critical when you're not responsible for uh the consequences of action

00:23:02.420 and I think that that that's really the thing that people have sat in the sofas and and anybody who

00:23:07.700 who has to make decisions,

00:23:09.280 and everybody has to make key decisions in their lives

00:23:13.600 where they balance pros and cons,

00:23:15.480 where there are conflicting interests, compromises,

00:23:20.620 where they make sacrifices,

00:23:22.660 and they know that nothing is black and white,

00:23:25.260 and yet we seem to have the press

00:23:30.140 who everything is a gotcha,

00:23:32.200 or everything is seen in black and white terms,

00:23:35.020 And I think people just have found that very difficult.

00:23:39.520 And yet, I mean, when my 17-year-old daughter says

00:23:42.680 Boris Johnson is cute,

00:23:44.540 you know the press are getting it wrong, don't you?

00:23:46.980 Wow.

00:23:47.980 And Mike, we're talking about public perception here

00:23:50.600 and public perception of Boris Johnson.

00:23:52.020 I want to move a little bit towards China.

00:23:54.600 Has this fundamentally changed the way we perceive China,

00:23:58.860 the way we perceive cheap goods that they're producing?

00:24:01.360 Or do you think once we get back to normality,

00:24:05.480 it'll be business as normal?

00:24:08.400 Well, I mean, globalization has been, I'd say,

00:24:13.400 probably the most important force in our lives.

00:24:19.840 And I mean, there's the arguments at the moment,

00:24:23.200 certainly around medical, around protective equipment

00:24:25.840 and so on and so forth, and should we,

00:24:28.400 could we see some of this on-shoring back into the UK

00:24:34.120 or the Western countries?

00:24:35.900 My gut feeling is not that we have

00:24:39.840 tremendously short memories of money talks.

00:24:44.380 It's a big subject when you think about

00:24:47.420 what we actually lost, because we lost a lot more

00:24:51.840 than the ability to produce medicines,

00:24:53.880 and we lost a lot more than the ability

00:24:55.780 to produce protective equipment, just to take those two examples.

00:25:00.500 Those two jobs were jobs that people had a tremendous amount of pride in.

00:25:05.760 So while economically you may say, well, you earn the same money in a call centre

00:25:10.920 as you weren't producing antibiotics.

00:25:15.740 Well, actually, you know, when I went to my factory and produced antibiotics

00:25:19.220 and I came home in the evening, I felt good about what I contributed to society.

00:25:25.780 And perhaps there was much more for me as the employee in what I did than the actual pay.

00:25:33.180 And maybe I'd go to a factory making antibiotics and be happy to earn less than I would in the new economy, whatever that is.

00:25:42.860 So I think we lost a lot more and it would be great if we did see some of those activities coming back.

00:25:51.400 It would potentially be inflationary, I guess.

00:25:55.080 So to go with the monetized spending,

00:25:59.900 debt expenditure that the governments were doing,

00:26:01.860 we'd have another inflationary contributor to the economy.

00:26:06.140 My suspicion is I'm not sure.

00:26:09.980 I think we'll see how much they want to get into it with China on this.

00:26:16.380 Because surely the US, in particular Trump,

00:26:19.400 who's notoriously sceptical about China, won't he see this as an opportunity to actually really

00:26:25.000 attack them and try and make some wholesale changes to the trade deal that they have?

00:26:35.880 I think he will want to look like he is. But that's different to actually changing

00:26:43.080 the terms of trade, if you like. And I think that the corporates, the corporates that we're

00:26:51.820 talking about before, the corporates that I think are going to do very well from this

00:26:57.840 recovery, I think they will resist that. I mean, Apple's supply chain is a good case

00:27:04.080 point, isn't it? How do you, I don't know, reshore Foxconn into the US? How do you tell

00:27:14.300 people that their iPhone that costs $1,100 now costs $2,000? I think these are very,

00:27:20.700 very difficult things to imagine happening in any more than a superficial way. Maybe for some

00:27:27.300 things around sort of critical supplies I think that it's possible but I don't

00:27:35.040 see it happening on a large scale. I think it also depends a lot on what

00:27:38.460 happens and what we find out about how the virus started and how it was spread

00:27:42.520 so if it you know there's a lot of talk now that this may have escaped from a

00:27:47.280 lab in Wuhan and there's a lot of talk about China suppressing information from

00:27:52.620 getting out in order to hoard ventilators and PPE right they were not allowing American companies

00:28:00.420 that make PPE to export that PPE in January and February before we were all aware of it so how how

00:28:08.460 we respond to China I think will depend to a large extent on what the public perception is about you

00:28:14.400 know is China a good-faith actor or not and I think increasingly we're starting to see that they're

00:28:19.380 not and you know when we talk about antibiotics and stuff i mean that is an issue of national

00:28:24.180 security really at its core right if if one country can switch off your supplies of antibiotics and

00:28:30.820 ppe and whatever else um that you know that's a problem that's a problem

00:28:36.740 is but i wonder i wonder how significant it is even if that did come back in some shape or form

00:28:42.660 how significant it would be and i guess going back to the you've heard the starter of your

00:28:46.740 point there, Constantine, is there is an implicit assumption in there that we ever know what

00:28:51.480 the truth is, that we ever get to the truth. I mean, that seems to be one of the characteristics

00:28:58.020 of the world we live in at the moment, is there's just too much information. And so

00:29:05.220 how do you ever know which the true or what the true information is? I agree that it should

00:29:12.880 happen I just doubt it will. And I was talking to a friend of mine who's actually an entrepreneur

00:29:18.520 and he was saying to me that he thinks that what we're going to see is very much like the AIDS

00:29:22.920 pandemic. There was a world before the AIDS pandemic and then there's a world post-AIDS

00:29:27.520 pandemic. Do you sort of buy into that worldview Mike that we're going to have a world which is

00:29:32.200 pre-COVID and now post-COVID where everything has been changed as a result of the experience

00:29:38.320 that we've gone through or is it too early to say do you think i i i mean i i from our last podcast

00:29:46.160 when i say that i think i said in the last podcast that the the problem with predicting the future

00:29:52.120 isn't that we don't have enough information today is it's that the future is unimaginable

00:29:57.080 and if you you know i think we we last spoke uh a year or so back uh and in in some ways that that

00:30:05.520 statement is yeah all right Mike you get the credit all right fine well done you

00:30:11.340 were right well done example if you know shit's coming but you don't know what

00:30:14.640 color is isn't it right and again it's it's it applies again here my instinct

00:30:21.060 is things aren't well properly possibly changes as much as as people think you

00:30:27.520 have that kind of immediacy that bias don't you that the things that happen to

00:30:31.520 day today become far more significant in and you you you imbue them with far more significance

00:30:39.200 i certainly think you would have got long odds on the thing that every single person in the world's

00:30:43.920 talking about being a virus it's a bit disappointing i would if you'd have said to me

00:30:48.400 what is the one event that could stop the world and get every talking i would have said a visiting

00:30:52.000 alien which would have been much more fun as well as long as they were friendly aliens

00:30:56.960 So that's a good point, actually, you know, the fact that we can't imagine what is going

00:31:03.680 to happen.

00:31:04.680 But let's say you have a business, how would you deal with this particular situation?

00:31:10.320 If you could give advice to the entrepreneurs out there, what would you do in order to limit

00:31:15.140 the damage of this kind of event?

00:31:17.020 Or is there anything that you can do?

00:31:19.020 Well, that's what I have been doing over the last few weeks, and it's very

00:31:26.840 case-specific and and and the government you know I think it's interesting you

00:31:35.720 know when mr. Sunak turned up in his skinny tie and his nice suit he really

00:31:42.680 looked like he was he was going to deliver didn't he and and then when you

00:31:48.000 sort of scratch the surface of what he said it got it got more and more

00:31:52.340 complicated and I think it's interesting and I would like to take that question

00:31:59.000 in a slightly different direction so I have been advising businesses

00:32:03.580 specifically we moved a business that has a hundred and thirty odd stores in

00:32:11.100 the UK we managed to move a significant proportion of their sales online at a

00:32:17.000 higher margin which which we think ultimately will will save the business

00:32:22.280 and will save somewhere in the region of 700 jobs so it's a very specific piece

00:32:29.300 of advice for that business and that that that will be repeated you know what

00:32:34.700 can we do how can we think differently how can we think the box and that'll be

00:32:37.700 very very case specific you know well I think the problem we've got at a macro

00:32:43.840 level is what I would call the Goldman Sachs problem. So everybody who's involved in the

00:32:52.420 delivery of this from the government is Goldman Sachs hedge fund. And they might as well be

00:33:01.620 from another planet when it comes to entrepreneurially run businesses. When you get the train from

00:33:10.480 houston to manchester for the conservative conference uh and you've worked at goldman

00:33:15.980 or you've worked at a hedge fund and you're now uh a newly minted mp or a newly minted advisor

00:33:21.900 those um industrial estates you go past on the way up they're in another galaxy they're on the

00:33:28.740 outer rim you know you've no experience of of the stresses and strains so why this is again

00:33:36.260 another question why have we not got somebody from the small and medium-sized

00:33:40.980 business arena involved in the delivery of help because while those of us who

00:33:47.600 do give advice to businesses are able to look in the micro there doesn't seem to

00:33:52.640 be anybody with experience in this in this area advising the government on the

00:33:57.560 macro and this goes back to where we need to how we need to deliver the money

00:34:02.060 in the way we can deliver the money and I think that what they should have done

00:34:05.960 and if anyone listens to this with any influence is they really easy and quick

00:34:11.160 way and relatively fair way to help businesses now would have been a would

00:34:16.600 have been to reverse last year's PAYE and NI contributions in business up to

00:34:23.060 a certain size so that would have been immediate cash injection into into every

00:34:28.880 company in the UK and it would have had elements of fairness about it because it

00:34:32.500 would be prorata, it would be on a per head basis. PAYE and NIP businesses

00:34:37.920 that employ more people would have received more support and that would

00:34:42.380 have been a really quick easy way to helicopter money into businesses that

00:34:46.680 most need it without changing their debt profile, without changing their risk

00:34:52.040 profile, without changing the way that they do business and then to give them

00:34:55.860 the cushion so then think about how can we can we deliver our service during this

00:35:03.300 period and how do we come out of this period at the moment we we've got a as I

00:35:08.580 mentioned this this Kafkaesque labyrinthine trying to deliver a loan

00:35:16.460 scheme through the banks banks asking for personal guarantees you know above

00:35:21.500 250,000 pounds they want a personal guarantee all these things are

00:35:25.800 changing that covenant between entrepreneurs

00:35:29.820 and the wider society.

00:35:33.340 Is it because they don't understand

00:35:35.800 the difference between the corporate world

00:35:38.440 and the entrepreneurial world?

00:35:40.000 So the corporate world,

00:35:41.600 corporates are much more able to access aid,

00:35:48.040 much more adapted to trading with a heavy leverage,

00:35:53.040 um leverage heavy debt whereas entrepreneurial people don't that's not the way that's not the

00:35:59.680 way they do business and yet we've got people who are from that corporate world that goldman

00:36:04.480 sachs world i wonder if they just don't understand the dynamic or the difference in the dynamic

00:36:10.160 between the two sectors that that is what it would appear uh unless you of course you considered this

00:36:17.040 is something that i think i i don't really tweet very often these days but i think i tweeted right

00:36:21.440 right at the beginning of this,

00:36:22.440 that the measures that the Chancellor has enacted

00:36:25.360 will represent the biggest transfer of business

00:36:27.860 from small and mid-sized companies to corporates in history.

00:36:31.700 And I still stand by that now,

00:36:34.000 unless they change the way they're gonna deliver this aid,

00:36:37.560 we will end up with,

00:36:39.760 and then this goes to what sort of world we were living,

00:36:41.760 we will live in a world with less companies.

00:36:44.560 And do you think that is a fundamental failure

00:36:46.620 of the Conservative Party?

00:36:48.640 The way they've done it?

00:36:49.480 I wonder if it's a bug or a feature yeah all puns intended yeah absolutely that

00:37:00.320 that makes a lot of sense Mike one of the questions that somebody asked us

00:37:04.460 when we were doing our last livestream which is actually the question if you

00:37:08.720 remember that we always ask at the end of our interviews was what's the one

00:37:12.400 thing that we're not talking about that we ought to be talking about and my

00:37:15.520 instinctive response was some of the winners and the positives out of this

00:37:20.740 now obviously it sounds like one of the winners in your opinion will be the

00:37:24.040 you know the transnational corporations which I would say is a negative outcome

00:37:28.720 but what do you see who are going to be some of the other people that do well

00:37:32.920 out of this and some of the positives that come out of this because no matter

00:37:36.940 how bad a situation there will always be people who do well out of it and there

00:37:40.320 will always be you know new industries new creativity new technology that comes

00:37:45.520 out of it new ways of doing things you know are we going to commute less are

00:37:49.060 we going to pollute less are we you know what are going to be some of the

00:37:52.060 positives that you see coming out of this well I think we were we were headed

00:37:58.120 in very quickly in the wrong direction as a species I think I think Darwin said

00:38:09.820 that the you know that we we need it's the checks on our expansion that stop

00:38:16.540 us using up all of our resources and and becoming extinct and I think in a way

00:38:24.440 we had become too adapted or over adapted to to our environment which

00:38:31.240 means that we were basically gonna deplete all the resources until we were

00:38:35.900 gone I mean in terms of micro and macro and in the macro I don't think we were

00:38:49.160 going in a very good direction so so you could almost say that anything any

00:38:54.440 change anything that causes us to pause in in the direction that we're headed

00:39:01.460 has the potential to be good and I think I don't know it's difficult because for

00:39:09.080 most people now they'll be very very worried about you know their jobs about

00:39:16.280 money and all of the things and their families and the opportunities going

00:39:21.840 forward so so I don't want to exaggerate the possibility for personal development

00:39:27.740 from this but I suspect that that hopefully there's enough people and I

00:39:32.060 think has the potential maybe for what you're looking for is that people have

00:39:36.740 have had time to to pause and think about think about what's important that

00:39:43.460 may be a full-on hope for the human species but that that that I guess

00:39:49.340 that's the hope and Mike can you see a time where actually because we're going

00:39:57.620 through this experience now and it's making us re-evaluate a lot of our lives like things that

00:40:02.640 you never questioned we suddenly re-evaluate like commuting going 40 minutes to a place and coming

00:40:09.020 and then going to an office and 40 minutes back running your own business surely there's going to

00:40:15.260 be a lot of people who are going to look and think to themselves hang on why am i paying for office

00:40:19.060 space this is a complete waste of money when actually the vast majority of people can work

00:40:24.540 remotely they will be more effective they'll be happier and that means that

00:40:29.100 I will save a whole ton of money well I think again I think maybe it's a little

00:40:35.520 bit even deeper than that so I agree with you that people don't want to

00:40:39.460 commute and I think 40 minutes is a generous estimation of most people's

00:40:43.720 career in and out of London people are doing two three four hour our commutes

00:40:48.540 and and I think that's that's you know fundamentally destructive in so many

00:40:53.700 ways but I don't think people want to work at home either I mean I don't

00:40:56.820 about anybody else but you know I'm surviving here we all feel for you Mike

00:41:03.120 your life must be terrible but I think I think people would like to live in

00:41:09.720 environments where where they worked and where they lived where within walking

00:41:15.660 distance you know I think you sort of get under the skin of how we've designed

00:41:19.380 designed our cities and designed our lives and the basic architecture of the

00:41:25.600 way we conduct conduct ourselves and and that I think what this pose is that

00:41:30.720 isn't working so it would be great wouldn't it is if you could you know

00:41:35.760 walk 15 or 20 minutes to to your place of work go home at lunchtime leave work

00:41:41.620 when you needed to do something urgent go back to work and that kind of dynamic

00:41:46.080 somewhere in the middle if you like of your uh the the the commute but but perhaps not you know

00:41:51.920 it's good it's good to get i don't think there's going to be something positive gained i mean

00:41:56.640 somebody said to me somebody asked me the other day what what do you think the future looked like

00:42:01.280 and i was i was bastardizing the the orwell quote from 1984 and and i said it's uh it's a laptop

00:42:08.960 screen smashing you set you in the face forever

00:42:14.000 i'm not sure that that sitting in our offices glued to this

00:42:19.840 screen is is necessarily that healthy either so

00:42:23.600 so somewhere in the middle but i'm not quite sure how we get there

00:42:27.600 no because i'm sorry constantly no go ahead mate

00:42:30.800 because it just seems to me that this way that we're living

00:42:36.160 It doesn't seem sustainable if you go back to, you know, the nine to five.

00:42:41.260 And it didn't seem, looking back on it, that it was particularly effective either.

00:42:45.520 But, you know, people had done it for generations, therefore we carried on.

00:42:49.300 Surely the next generation of innovators and people coming out of it are going,

00:42:53.860 well, we've actually managed to break that now.

00:42:56.080 We've seen that it doesn't work.

00:42:57.960 Therefore, let's try this new way.

00:43:00.200 Well, I think we'll definitely have, I think, one of the economic effects of this pandemic

00:43:06.160 situation will be the relative growth of the virtual over the real, if you like, so the

00:43:12.540 virtual economy over the real economy. So you'll see more cloud-based activity, more

00:43:20.320 remote activity. And certainly if you think about contingency planning for businesses

00:43:25.700 now where they used to have warehouses full of desks that everyone could go to, that's

00:43:30.160 gone now, hasn't it? So there's going to be a whole different way of thinking about how

00:43:35.160 you how you plan uh for this kind of emergency or this kind of this kind of interruption business

00:43:41.040 interruption going forward so i think that i think there will be changes um and people will work from

00:43:47.120 home well i'm just not sure we'll get to that fundamental change that that that is necessary

00:43:53.120 which is is more holistic it's it's it's the context of our lives uh you know it is is the

00:44:02.160 big thing that i i think this is even underlined even more is is that technology is not saving you

00:44:10.120 any time it's not making you any happier you are constantly available i mean the whole world's on

00:44:18.820 shutdown and yet everybody's cooped up in a room somewhere you know talking into a team's call

00:44:25.200 um it's not improving our lives it hasn't made it hasn't given us any more free time so

00:44:33.220 so is it do we need a a much more fundamental reset i don't know something more for another

00:44:43.340 more fundamental virus to shut us down even more that's what we need is what is what mike is

00:44:48.000 exactly what he's saying but uh mike uh what is it that we're not seeing what is it that we're not

00:44:54.000 talking about what do you with a kind of totally different mindset to most people

00:44:58.660 that I know what what is out of our field of vision that's coming well I

00:45:05.520 think one of the consequences I mean I think people are talking about this but

00:45:09.300 that my my biggest fear and it's not my biggest fear for the economy or the

00:45:14.740 country maybe the biggest fear of the country is the civil liberties

00:45:19.620 implication of of what will come after this um rushing a vaccine through that's a frightening

00:45:28.300 prospect um in many ways vaccinate vaccinating many young people who who don't necessarily need

00:45:36.000 a vaccine is is concerning um thinking about how you're going to be monitored how you're going to

00:45:43.100 be tagged how how your movements are going to be big brothered I think all of these things

00:45:51.440 I think is it Jeremy Bentham and the concept of the people's behavior changed the panopticon if

00:45:59.240 they're watched all the time their behavior changes and I think that's quite dynamic amongst

00:46:04.380 populations as well I think for some people for many people and it kind of goes back to the

00:46:09.380 the Huxley and the Brave New World view of where we are is they is they may

00:46:14.360 embrace that they may embrace that that that that sort of monitoring that

00:46:21.440 herding to use a the phrase in a different way well there's many many

00:46:25.700 other people and they're the people that affect change who are going to find that

00:46:29.780 intolerable so it took breaking the law to change many of the things that we now

00:46:36.820 take for granted be it's the suffragettes or homosexuality or many of those things it took

00:46:43.840 people who are prepared to step outside the boundaries and similarly the way the way most

00:46:51.700 entrepreneurial people think is to be is to be outside of the mainstream and I think if we limit

00:46:59.560 that and I think that is that is perhaps the thing that worries me most things we will limit the

00:47:05.740 ability of those people who affect change to do so and so where where will

00:47:10.360 that where will that leave us in a very homogenous world that's not a world I

00:47:15.820 particularly want to live in Mike well let me push back on that a little bit

00:47:18.700 because as you know I you know if there was anyone who was concerned about the

00:47:22.420 erosion of our civil liberties restrictions of free speech that's me

00:47:25.940 I've been pretty outspoken about this for a long time but I've got to be

00:47:29.620 honest with you I don't I look around I mean yes in Australia they're talking

00:47:33.420 about some kind of app to track your immunity status.

00:47:37.060 And that would be a hill that I'm prepared to die on.

00:47:39.960 I'm not signing up to any fucking app

00:47:41.420 that tracks me around the country, no way.

00:47:44.100 But if you can't travel, would you?

00:47:46.880 Right, but this is, yeah, I mean, yeah, it's a good point.

00:47:50.600 This is exactly my point, if someone said to you,

00:47:54.120 your passport is dependent on you

00:47:56.000 carrying your contact tracing app,

00:47:58.340 then most of us would, and it erodes, doesn't it?

00:48:01.960 So it starts with a contract tracing app.

00:48:05.500 Where does it go after that?

00:48:06.560 Right, but my broader point,

00:48:08.360 I mean, I take your point on that,

00:48:09.640 and that is a step way too far in my opinion,

00:48:12.480 but more broadly speaking, I do see the, you know,

00:48:15.720 a lot of the people we've had on the show

00:48:17.280 who we like and respect kind of, in my opinion,

00:48:20.340 going way off the deep end on this stuff

00:48:22.480 and talking about how we're all under house arrest

00:48:24.860 and all this, which I think is a massive exaggeration.

00:48:28.020 I think a temporary and necessary lockdown

00:48:31.100 is not the same as house arrest.

00:48:32.860 I personally don't feel like Western governments

00:48:35.680 have been overly restrictive about this

00:48:38.880 in proportion to the threat that we're facing.

00:48:41.460 You know, it is a war-like time.

00:48:43.840 You accept a little bit more imposition

00:48:46.660 on your freedoms during that time,

00:48:48.340 provided their time limited, provided their specific,

00:48:50.980 provided we can go back to, you know,

00:48:53.820 having a free society afterwards.

00:48:56.860 Do you see signs that that's not gonna happen?

00:48:59.480 what what's the reason for your concern I never trust people in power to give

00:49:05.060 the keys back once once once once they get similar to the the MMT conversation

00:49:15.300 that we had earlier once you give people in power power and consider that they're

00:49:23.440 their reasons for living or to obtain power they really don't like giving it

00:49:30.440 back so I might not be at the the further end of the spectrum of the

00:49:40.560 previous guests you've had we as a country as a species have fought and

00:49:50.220 lost millions of lives to maintain freedoms and I don't think that should

00:49:56.120 be lost there are consequences there's serious consequences to giving up giving

00:50:02.880 up the things that that enable us to change and I think that's that that's

00:50:07.860 what scares me most is when you have a contact tracing app that you need to

00:50:16.160 have you have you've given um the political order a lever in with which to dictate or with which to

00:50:26.820 demand your your obedience and anything that does that anything that does that more i think that's

00:50:33.000 that would be very very worrying and you say you die on a hill for it but the reality is most people

00:50:38.200 won't and then when most people won't you'll be you'll be in the minority and then your wife will

00:50:44.760 want to take a nice holiday somewhere and and your kids will be saying dad's

00:50:48.660 an idiot what difference does it make and and compliance will become the norm

00:50:52.560 and that that worries me I like the fact that we're talking about this but for

00:50:57.960 China it's just business as normal isn't it I mean that's basically what they do

00:51:04.140 over there so you know mate that just don't don't say stuff like that in your

00:51:08.280 accent please it's just what they do over there mate fucking hell we're gonna be

00:51:13.860 banned off youtube forever now uh mike listen thank you so much for your time we really appreciate

00:51:19.520 it and your kind of counterintuitive ideas and a slightly different look at things is always

00:51:24.600 is always brilliant so we really appreciate you coming on i would tell people to follow you on

00:51:28.720 twitter but you don't tweet very much anymore they can still follow all right so remind everybody

00:51:36.000 your twitter handle before we let you go uh okay i haven't been on for so long i've completely

00:51:41.500 forgotten it. What is my Twitter? At mdvex. Yeah, at mdvex. So we'll make sure we get that right

00:51:48.280 in the video description. Thanks for coming on, Mike. It's a pleasure as always. And we'll see

00:51:52.820 the rest of you with another live stream tomorrow.

00:52:11.500 You

TRIGGERnometry - April 22, 2020

Will We Have a Rapid Recovery？

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