It's Still Shutdown | Ep. 032 Lemonade Stand 🍋

39:13You need to continue to fund them and make them permanent. That's the first stipulation. You looked like you wanted to hop in. No, I have a quick thing. It's these subsidies were not that long ago. They were enacted in 2021 during COVID. And so during that point, Biden and Democrats had Congress and everything. And they said, we need to expand basically the support we're giving to people through the ACA because COVID is causing all these issues. And then they extended it through 2025. It was initially just supposed to be two years. So it was meant to be temporary. Then the next year, they extended it to 2025 and said, we still need lots of support for people.

39:50So it's supposed to end now. In theory, that was started as a COVID era, like help people during this pandemic. And now Democrats are saying this should just be permanent. And that's the context. And then for the second stipulation, they want to reverse the cuts to Medicaid that came in the big, beautiful bill, which we've already talked about on the show before. But Medicaid saw a bunch of cuts through making it more difficult to be eligible or prove your eligibility and saving money that way. and the Democrats want this reversed. And then the third thing is a commitment from the White House or the executive branch to no longer make unilateral decisions on pulling funding from agencies that was approved by Congress in the past.

40:40That's like Trump's favorite thing. It's one of the favorite things right now, right? But their thing with this is, there's a general idea that this level of oversight or changing of funding to agencies made, like I'll say years ago, funding to these agencies decided in a budget bill is decided by Congress. Now, during this administration, the executive branch has made a lot of executive orders or decisions to defund or freeze funding for things related to these agencies. And Congress has a problem with this, even some Republicans, because it's like, these are decisions that we debated and voted on and passed and now you are unilaterally making decisions about how that funding should be allowed to continue when we already did this the correct way through congress before also if you continue to do this any new agreement we come to about budgets means essentially nothing if you can just hand wave anything off as the executive and make a unilateral decision about changing it in the future so there needs to be some sort of change or commitment for that that will no longer be the case.

41:48And these are the three things that Democrats are seeking right now. Do you know why? While that sounds like a good idea, why is that part of the budget? Uh, I think it's not necessarily a part of the budget. It's, this is the only piece of lever. This is the first substantial piece of leverage that Democrats have right now that they can use to push Republicans around. It is a political move. I think there is sort of a public facing argument from Democrats that I've seen that this is very focused on healthcare and they've picked healthcare to stand their ground on because they feel like it's the one issue they really can win on against Republicans right now.

42:28But overall, they're looking for any opportunity for a political win in a climate that has basically the most disgust or dislike of Democrats, even though, you know, even if Trump's approval ratings are low, the Democratic Party's approval ratings are ridiculously low. I think they're even lower than Trump's. And from a Republican perspective, the pushback here or what they're looking for, first, the big thing that they're holding in contention is like, if you do this, we're going to lay a bunch of people off. A bunch of people are going to lose their jobs permanently. And that's the stick they can wave in return and like really blame Democrats because they're making an effort to blame the shutdown on Democrats right now.

43:17Like, yeah. Quick, funny thing about that. Trump has already announced that the officials in charge of layoffs have been deemed essential. They still got their jobs. They're showing up to work. How can you lay the people off if the guy's laying the people off? You need the layoff guys. You got to fund the layoff guys. You need to fund the layoff guys. And then there's even an argument here that Republicans are quietly happy for the shutdown occurring because they want better ground to stand on for these layoffs to happen anyway. Trump, from the executive position, wants to cut more federal jobs in general, but doesn't feel like he has the public confidence or goodwill to continue making these cuts.

44:01But this is a situation that may allow them to do it basically without the same pushback that they would get otherwise. But I think that's up for contention because a lot of Republicans are flat out saying that it's bad that the government is shut down and we didn't want this. And they were fighting back against the Democrats to have it up and running again. uh and then the last point uh or one more point i saw about this were the republicans are pointing out that when they were in the minority under biden they never said no to one of these stopgap bills stopgap funding bills uh during the previous democratic administration they're like even when we hated biden we weren't doing what you're doing right now and this is feels unprecedented or we didn't do this to you guys uh at least in this exact type of budgeting situation and if you look back like the most recent shutdown before this was in 2018 yeah uh and the democratic argument on the other side is these times and the decisions that this executive is making are so unprecedented that this is action is absolutely necessary to take at this time uh and i think if you go further back you can also make the argument that republicans have caused different shutdowns in different scenarios.

45:20So there's, there's an argument to be made there as well. And then the very last thing was another item of, well, these healthcare programs were funding, were being abused by illegal immigrants, which is sort of the headline version of the Republican argument of why these programs are like wasteful or shouldn't have been, shouldn't have existed in these facets in the first place. I've spent some time looking this up. This is complicated, but the headline is very misleading. I, it is, there's a very, very long winded explanation of there's the way money is like given out to States and then used people who are like illegal or like undocumented could be using programs, but the vast majority and what they're really saying is most people who are here through some, through some legal protection, like say you're here through like asylum or some other case that protects your legal status in the country, even though you're not like, maybe you're not on like a visa or a green card or something like that.

46:33You have some legal status in the country, this administration's aggressive policies and views towards those types of people that are often getting deported or no longer have that protection, those were the people who had access to these programs in the past. Because if you're flat out like illegal, quote unquote, or just undocumented, then you weren't supposed to have access to any of these programs in the first place that are the healthcare programs in question. But they're available to people who had legal or protected status through different programs that the Trump administration no longer respects.

47:08So this is a very large distortion of the abuse of these systems that Republicans are claiming exists. That's what I could find. Sure. I can't, you know, I read something much more long-winded than that, and I'd encourage you to read more about it. But to me, this headline is a very dishonest read of the way these programs are being used. And I think to end this, these programs saved money, like the Medicaid cuts saved money primarily by making it difficult for eligible people to access the program. They were like, you're just making it hard for people that would get on, who have a legal right to be on it, and you're just giving more friction to those people having access to it.

48:00So that's the political game that's unfolding. Yeah, you know, I think what's interesting here is not so much the specific programs they're fighting about, but that they both no longer feel that there is any incentive to cooperate. I think they both have a political I mean, they're both already polling Congress as a whole is polling so poorly Both parties And they can't even go much This is one argument that I saw They can't even go much lower And Democrats have no power outside of this They don't have anything in the House or the Senate Or the Judiciary or the Presidency They have nothing So this is kind of their last lever And so for them I think the party split 50-50 on whether or not they should negotiate, but like it's a way higher percent than it's ever been.

48:57And they risk so much by looking weak than they would by not negotiating here. I mean, I think they're trying to negotiate in some way. And the Republican side, there's no advantage for them to give in either. They can get some things they may want about cutting. And also, it gives them kind of a scapegoat, which is as the government is being more, the pulling of government is going down. People are getting more and more upset. This gives you a sort of a little bit of an out. You can be like, hey, like we're trying to do stuff. This is like slowing us down. It's getting it off our mission. That was going to go great.

49:28So I just don't see either side having a real incentive to switch, which makes me think, you know, knock on wood, this could change by tomorrow. But it seems like this is going to be a longer shutdown than we've seen normally, longer than the average one. I don't know if it'll make it to 30 days. I don't, maybe not, but I don't see what the breaking point is because people are upset, but they're not any more or less upset at the other party or this part than they were before. People are just generally rising in anger. I don't know. That's the vibe I get. I wonder if you have a different thought on it or if there's...

49:58I think so. I mean, one of the big things, so again, Democrats are using this as what you said, is basically the final lever. They're not in control of Congress at all. They don't have Supreme Court. They don't have the presidency, and they're just being outmaneuvered constantly. And then the big, beautiful bill, which you talked about earlier this year they did a reconciliation bill which basically allowed that to be passed without 60 of the senate so they got in these like massive cuts and so the republicans have just done what they wanted asterisk for this whole time and it feels to me like if the democratic party doesn't hold here and they give in they're like all right fine you can cut all the medicaid we're not going to stand up for this like they're real fucked like that's that's the last bastion of like we have some kind of influence and given that they're polling and everything is so low already it feels like they are not going to give in here because it's going to be like somewhat existential to their party i think there's a there's a very very pervasive idea and i would say fairly so that the democrats are basically a bunch of soy cucks with no backbone like to say it politely yeah and and i think the party has come around and recognized the fact that people view them in this sort of like sad, you never fight back and do anything sort of way.

51:09And they need to do something substantial in order to come across. And this is their gamble, right? It might not pay off. I don't know if people come out of this 30 days from now applauding the Democratic Party. Maybe they will, maybe they won't. But I think part of the reason why the approval rating is so low is, well, Republicans, they don't like the Democrats, obviously yeah but i feel like most democrats or most left-leaning people in general do not like the democrats like the have you seen the uh the chuck schumer quote during this thing about uh about the letter have you seen this no it's like him talking to the news and they're asking about the shutdown and he goes like yeah so i sent trump a strongly worded letter and then he realizes what he's saying sounds so fucking ineffectual so in the middle of his sentence he's like well I mean, not a letter.

51:58I demand it. You can see him recognize the talking points. You can see that people who, for their entire career in politics, their 70-year career in politics, have been this very kind of sterile, like both sides, are now trying to be a Trump-esque figure and just failing badly. Chuck Schumer trying to be like, hello, fellow kids. It's so bad. Yeah, it's just like they've got to do something. My outlook is similar to yours. I came in this one kind of feeling, oh, this might be the longest one we ever have. And we did this whole exercise of, you know, which ones would we save? And, you know, within the realm of let's keep this four weeks or under within the expectation of past shutdowns.

52:39But I think this one feels like it can go longer. And then the pain I imagine that is felt when you extend this to maybe more than a month, two months, three months, I don't know how long it could be. Just having this many people who are on federal payroll, not having access to a paycheck for that long, people will be upset. They will demand attention to this in some facet that people have to be held accountable to, to some degree. If you start fucking with enough people's paychecks in the, in that you just take them away, there's no, that that's when people will be the most upset. So that's what I read.

53:18I read that around the 30 day mark specifically is when it becomes a real big fucking deal. because that's when paychecks would normally, I think your monthly paycheck would normally arrive. And when that doesn't get there, shit starts becoming unable to get paid. So there was an interesting thing that happened during the last one because it was the first one that surpassed 30 days. A theory or a feeling that one of the reasons they finally had to cave and make a decision was the air traffic controllers. Because although they were supposed to be coming into work, and I think this has already happened at Burbank Airport, people just started taking their sick leave and they're like i'm not going into work like i i for anybody who doesn't know air traffic controller is a famously stressful job you work extremely hours extremely stressful job and people and if you're not getting paid for such a long period of time people just start calling in their sick days or not showing up and saying basically you know you see a spike in six days they're soft quitting and uh enough air traffic controllers choosing not to show up during the last shutdown was like one of the last big things that happened before they finally caved and like made a decision together to get the budget through.

54:33And I think, yeah, again, because air traffic controllers have mortgages to pay too. Like if their paycheck doesn't arrive, their life starts to get spiraling unwind. So that's where I think this gets, I mean, listen, I think both sides are getting more negative polling from this. It is not positive from any American, I think, on the ineffectiveness of government, but it's going to come down to who feels like they're getting the worst PR deal that is going to have to cave. I did have this thought when I was going over it of I think I agree with the Democrats taking this stand and making this decision.

55:12From a political strategy perspective, I do think it is better for them to do this than nothing. But then I thought about how, dude, if I'm not a person who like reads the news and listens to the news every day, and I'm not in tune like with what's going on to some degree. And also I'm in the privileged position of having like a financial position that isn't affected by this at all. Like if I was just a normal person who wasn't tapped in, then I would be, I would not be applauding the Democrats here either. I would just be like, the government shut down, fucking figure it out. Like, I would just be that.

55:49I think that's what most people are saying, even if they have a sign. I think, you know, I understand the fight for the ACA subsidies. I get it. And I think this is a fine spot to take a stand. I get the strategy. But I overall feel like, fuck! I feel like I get so frustrated. Well, I think the fear of the, this is a big thing. The ACA subsidies are probably the most substantial thing that people could see change in their daily financial life, right? So if I'm one of these people that sees a giant increase in my premiums for my healthcare, right? These subsidies don't expire until later this year still.

56:25You have yet to feel the effect of those expirations happening. So you, from a democratic strategy perspective, you're like gambling on these people's understanding that their healthcare premiums would have gone up in the future, but never actually did, you need to like, you need, that needs to be so valuable to people. And some people, that's what I mean by tap in though, right? Like if you're not paying attention, if you're just not paying attention to this at all and you just pay your healthcare every month and the subsidy is part of what keeps it low, but you don't give a shit about politics and it never actually goes up because this whole situation plays out, what part of it makes you reward the Democrats for that?

57:09No, but if you don't give a shit about politics, you probably haven't even felt the effects of this yet. You probably, the shutdown hasn't trickled into your life. No, but that's what I mean, is like just statically, your opinion of the Democrats is pretty low. And because none of this is affecting you yet, including the subsidies going away, if it all ends and the subsidies continue, nothing about your opinion of the Democrats has really changed if you're that person. Do you see what I'm saying? So let me rephrase that. They need to wait for those people to feel the pain and the Democrats come in to rescue them and reinstate their benefits.

57:42Yeah. But if that doesn't, if there's never a period where it's actually lost, everybody will keep living their lives and go, why the fuck was it shut down? Exactly. Exactly. There's a world where the stronger strategy for Democrats is actually wait till the end of the year. People lose their healthcare coverage or subsidies. And then Democrats are like, we're arguing to, and you could actually do that because you can do a continuing resolution, which means the government is funded at previous levels for, let's say three months. You get through the year and then you'd be like, then the democrats can go hey all of you people on these subsidies if you don't help us and we don't get this through you are screwed you will feel it right now and i don't know if that's you know ethically the correct choice or even strategically the correct choice it was just one thing i saw is like this feels like a hole where the value you say you're bringing here most people might not even recognize the average person is not gonna i think the people with 22 million that are on this are aware of this uh i think marjorie taylor green even is flipping She's flipping her vote.

58:37She's flipping to be on the Democratic side for this because of these subjects. She has two kids, she says, that are on this health insurance that are going to have their premiums triple. And she's like deep. I think people are aware of this. I don't think it's completely unknowledgeable. And I also think if you're someone who doesn't pay attention to any of this and not affected by health care, once this catches up with you, once some kind of guard, you can't go to a national park or the lines of the airport are too long or whatever this catches up to you, you generally overall are going to i mean if you listen to the messaging you're like maybe i blame the democrats maybe like the republicans but at the end of the day you also go i am tired of the chaos you end up blaming the administration overall just because i don't care whose fault it is like it's you have the power and we're not yeah which is a larger i think this is a i think they're being hurt just as much highly edited anecdote here but a cut of like street interviewer in the city asking people who they blamed on the shutdown.

59:31I don't know what city it is. That shapes the opinion, of course. But I do think there's a general opinion here of people know that the Republicans have control of everything on paper. You're the guy in the office, you have the Supreme Court, and you have control in Congress, and the government shut down. Fucking figure it out, Republicans. I do think there's a feeling of that, for sure. And so that's what I'm saying. I think this is still politically somewhat strong for the like that yeah they both can play it and that's why it's that's why i think it's so long i bet you guys five dollars that it ends when the republicans agree to the medicare things but with a bunch of stipulations that describe how illegal immigrants absolutely cannot qualify even though that has no real impact that's not what's going on but that allows them to claim the handshake we have solved the problem and we made sure the democrats wouldn't give it to the legal that's a great prediction that is like because they've that's the sides get some kind of w which is funny because to be clear democrats would be getting the entire w but republicans would get the the like visual w like you know all those illegal immigrants who are on health care they're gone now and it's like yeah they are they are yeah sure that's a that's a lot of money to bet that's last month's tear for a minute quick quick final thing number of days before the shutdown ends go prediction oh this is good fun fact uh when we recorded a second test episode, Doug and a track both thought the Ukraine war would be over by now.

1:01:03No, not just by now, by March, by fucking February. I thought day one, he promised me. Well, I don't get it. He did say day one. Why doesn't he furlough Putin? I'm saying 33 days. Unironically, I think 33 days. I guess right rules 34. Okay. I think Trump's gonna make a big deal about how it's not the longest shutdown ever. And he's gonna say we need to end it before that. It's all optics. I'll go now see I kind of want to go in that pocket too but now I'll go high I'll be the high guy I bet it will be a historic 45 days damn I got a nice window here close without going over I think I have the best window to be clear I was going to go like 31 but then you said 33 speaking of illegal immigrants don't look at me braider

1:01:55uh yeah wait wait we were talking about H1Bs there's another big oh yeah i wanted to talk about h1b visas no i was an obvious softball to you no that was a really good softball and i'm just i'm just i'm tired well also it doesn't make sense they're not illegal they're also there are nothing illegal about it i wanted to talk about h1b visas uh which is something that people might know changed recently i've been wanting to talk about this for a while i've heard that illegal aliens are getting h1b's they're signing up for them in droves. That's what I've heard. This actually makes them legal. This is a way that illegal.

1:02:31No, no, that's the illegal H1B visas. That's what it's all about here. I heard Mogul Moves been firing hardworking American workers. You keep talking about what we do at Mogul Moves and replacing them with H1Bs. It's like I tell you these things in confidence and then you come on the podcast. I need content, so I like to tell your secrets to the world. Can you bleep out what you said earlier? Just put some of the words randomly. Okay, for people who don't know what H-1Bs are, these are visas for, quote, specialty occupations. Basically, jobs that require a bachelor's degree or higher in a specific specialty.

1:03:10Like, your degree has to be attached to what you do. Easy example, you get a job as a software engineer at a big tech company, and you have a bachelor's in computer science. and this is the type of visa that you would need to move and work in uh the u.s from another country um and you know other common jobs that might use this it could be an accountant it could be a doctor uh unlike it wouldn't be somebody who is like a cab driver or like cleaning staff or or someone like that uh there was a big change trump recently announced that they raised the application fee for this visa from a peak of$5 ,000 to$100 ,000.

1:03:54100 racks, baby. Insane. Yeah, big deal. I mean, there's a lot of turmoil around H-1Bs. People, I think rightly in some cases, have felt that they are being undercut on their wages by H-1B workers. And then H-1B workers have often felt the system keeps them tied to a single employer, trapped in that job and unable to negotiate for better wages. So it's like a weird double bad situation. Yeah. The way this works is you enter basically a lottery for the chance of actually applying for the H-1B. And there is a limit on how many of these visas can be issued per year. I think it's like 65 ,000 a year to people with bachelor's degrees and then another 20 ,000-ish set aside for master's degrees and higher specifically.

1:04:53And the main... What's crazy is there's a lot of gaming of that system. I don't know if you know. I looked into H1Bs a while back. So let's say Google, you want to hire a software engineer from India or something. I'm not missing China. So what you'll do is you will, first of all, submit as many possible entries in the lottery as you can. So even if you, you know, submit more than you need so that whenever you get, you can apply, but then also you will hire like a staffing firm that is also basically their main job is to constantly submit thousands of entries into this lottery. Yes. And then once they get their share of like 50 or 60 or whatever, then you can hire through that staffing firm.

1:05:33So it's like, it's like a numbers game and a money game where the biggest companies can overwhelmingly use loopholes to get as much of the lottery H1Bs as they can. And historically, the intention behind this is to take some specialty area in America, and that's underserved by America's labor market and get people to fill those roles. And that's the good intention behind it is like, oh, we don't have enough people that specialize in this type of work. Please let's get them here so that our companies can grow and get talent that they need to be successful. H-1B is like underpin most software, big tech companies.

1:06:11Like there are so many H-1B visas and often the smartest people in the given room are H-1B visa holders. So the change to 100K aside, up until now, the issues with these that I see is if you're on this visa, right, you can only work for the company or the job that sponsored your application. So if I get a job at Google with my H1B, I can't just freely go seek a job elsewhere. I also need Google or whoever my employer is to sponsor my green card, which is my permanent residency in the United States. If I want to seek that out after a few years of living here, I think it's five. And your H1B is good for three years, but you need to keep that job with that company.

1:06:56The issue is that you as the employee, you don't have a lot of flexibility to go freely negotiate and seek out other offers, right? And relative to the field of jobs you could be getting elsewhere in the US, you might be underpaid because the friction to freely go seek other work is so high. And the company also doesn't have a ton of incentive to sponsor your green card because as soon as you're issued the green card or permanent residency, you can leave freely and not worry about them being the holder of your H-1B anymore. So that's on the worker side, one of the perspective issues of these visas to begin with.

1:07:35And then on the other side, while the intention is to fill, you know, underserved markets within the U.S. labor market, as these jobs or markets like kind of ebb and flow in certain spaces, right? So in a sector like tech right now, tech in the last few years has been downsizing. We're out of the period where people are hiring a ridiculous amount of people into tech workplaces, right? So there's an incentive to lay off a higher cost or higher salary local American salaries at the expense of maintaining or continuing to hire H-1Bs at lower salaries. And in general, from what I could see, H-1Bs have historically been used correctly.

1:08:25correctly. They seem, they seem appropriately used and have like, like studied, not outcompeted like local labor markets in the U S but I think I would disagree. I like, I did some research on and I found a lot, I mean, I guess I don't know the stats, maybe I don't know the hard stat, but I saw a lot of examples of, especially like an accounting Disney fired their entire accounting department, replaced it with H1Bs. Like there's, I've seen multiple big companies lay off a lot of people to replace it and the only point is the lower labor cost it's not like so the the loose idea that i got here is that this system has been potentially increasingly abused as time has passed yes the meta gets figured out yeah and especially as uh so if we were to use tech as an example right when tech started exploding in the u.s the number of available positions or like the talent demanded greatly exceeded the amount of people in the U.S.

1:09:24that were even educated to do those jobs, right? But then we have this whole reaction internally to pushing software engineering, computer science degrees, coding boot camps. There's a whole industrial reaction within the U.S. to educate and push people towards this exploding field, right? But then over time, the explosion in that field levels out or maybe even turns in the opposite direction. and now all of a sudden you do have all this american labor that is educated and able to do those jobs but can still be laid off at the expense of hiring those h1b employees right yeah so it depends at like what stage and like the cycle or like what level your your business is at or how many of these like lottery spots you're able to get or gain does that make sense yeah all villain charity i don't hate immigrants actually so i think they i just i was just about to say i should say i'm strongly pro-immigration i just think the h1b system specifically is like rife with abuse it is it is a it is just a way to have undue leverage over a worker from a different region who you can then pay less than the local going rate in america no i think the core problem with this is that everybody loses basically right like if i think the company's benefit to be clear.

1:10:42The companies are extremely, all the normal people, talented people, right. You get talented people for less money and they can't leave and they have no negotiating leverage. It's great for, if you're Microsoft, this is great. Yeah. I think a good change to this would be if H1B, if H1B holders could basically freely seek other employment or freely seek other related employment while they were. Yeah. There's like two things, right? There's the O1 visa, which is like a super talented person who's really good at their job. they can get an O-1 visa which has more flexibility that's the streamer reason and I'll that's what some of the that's what Linkus has yeah a couple people and that's become more and more uh chosen as the route to go people have gotten way better there's like systems now where you can fill out the right thing and figure it out and where we'll help you get no one visa that that's been happening for top tier tech talent who don't want to be locked into the H-1B system so that's happening and I think an expansion of that and a better funding of that and a better understanding that to get more people.

1:11:37If people really are talented and want to come to America, it should be our number one priority to get them to be able to work here. So I agree with that. And the second thing is this idea somewhat on its face makes sense, which is the idea that if there's 100 ,000 fee, then you're only going to get truly talented people for your H1B. You're not going to get someone who you can just underpay. You're not going to get an accountant. You can pay 45K instead of 60K from a different country. That's the plan. That's the idea. I get the idea in theory. However, in practice, this law has a carve out, which is the White House can waive your application fee at any time.

1:12:10So in practice, what it means is everyone has to go through Trump. Every big company now has to go through Trump to get their H-1Bs at a discounted rate and not to pay a hundred K per. And you know, what happened when this rolled out is they said it was a hundred K retroactively. So every company was freaking the fuck out. And, um, they were saying to all their H1B employees, do not fly in, like, stay over there. We'll figure this out. So there's a lot of chaos and panic. And then Caroline Levitt came out and said, no, no, we didn't mean retroactive. We meant like starting now for the future, which was a backpedal.

1:12:42And now, but they're saying with a carve out through the White House. So like most things that this administration does, even if there's a kernel of something that they're attacking, the execution is either grifty or chaotic. And in this case, both. So there's the chaos and then into the part where it's like requires you to go through him. Well, it seems like the big pain points I can see from this is with that being said, right? If you're Amazon or Google, you're one of these companies that was kind of seen kissing the ring in the buildup to the election anyway. You might have the relationships with the White House to go forward and negotiate that fee down for your company, right?

1:13:20But places that'll be hit in different ways like a huge source of healthcare labor is H1Bs, like for nurses or doctors. And this is areas where we're like famously understaffed, where we're still hiring in a job market that's terrible, right? The one sector of the economy that's still hiring and looking for people. And if you work at like a smaller healthcare institution, like a smaller like local hospital or a smaller network within healthcare, you might not have the leverage or the connections to negotiate those application fees down or even talk about those application fees being lower. Yeah, absolutely.

1:14:03Yeah. Yeah. I think that's the problem is it's a, it's a two tier system where those with connections and those that kiss the ring and those that have something to offer the white house can get better deals on labor now, which is again, crazy. I want to add one more crazy thing that I didn't know. I didn't hear at all about this until I read more. And so about 70 % of H1Bs issued are to people from India. And when this announcement was made, there was no significant change in the American stock market, but there was a big shift in the Indian stock market in reaction to this message, which was wild.

1:14:49And I think because so many people, like Indian diaspora that are in the US, like if you get one of these jobs, right? And you have this visa, it's, you know, part of the reason why you are getting this job is even relative to the American market if your salary's low, right? It's probably much higher than what you were earning back home. And you send money back home to your family and that helps, you know, stimulate local economy your local business in like wherever your family lives in India, inadvertently, you know, being attached to like Indian, Indian companies. And there was a reaction in the Indian stock market to this change being announced.

1:15:27And I thought that was, that was pretty wild. There's huge companies that have made a business. I forget the names, but these IT companies where their whole thing is this. And yeah, I know that it's an H1B fight. It's so perverse onto how this whole idea is supposed to be, which is they're basically just, they apply for as many H1Bs as possible. they just try to get as many as they can it's almost entirely indian workers and then they are then just offload that to major tech companies for a fee it's it's a fucking racket it's terrible so you know again i'm super super pro you know positive skilled fair immigration but i i do agree to h1 i mean and you know and the big counter argument is is what you already addressed which is like we need super talented people to keep winning as a country that's like the that's the foundation of america right is getting the best and brightest people to come to america and build it and then particularly with all the fervor around robotics ai etc it's like ai is shockingly high leverage if you're a really brilliant person right if you're like one of the smartest people it's like that person can have such an outsized impact so you want them here really bad 74 india 11 % China, and then 1 % Canada.

1:16:35So it's crazy. Isn't it crazy? It's just basically India and then a little bit China. Yeah. Yeah. And again, the percentage of these visas every, these H1B visas every year that go to the largest tech companies plus two gigantic Indian staffing firms is like, I want to say it's like 80. It's like, I saw the stat and it was, it was, it was shocking. Oh, you can see here. Amazon, Tata Consultancy, Microsoft, Meta, Apple, Google, Cognizant, J.B. Morgan, Walmart, and Deloitte. And like these combined are like all of the H-1Bs. They're pulling almost all of them. And then Tata Consultancy gets a massive number of the H-1Bs and then they sell subsidiary like accounting services to like all these different companies in America that can then just sell, lay off their entire accounting departments.

1:17:22So it's just the way it's being used is like systematically just undercutting wage pressure in america it it you know it yeah there's no benefit except for the companies can i can i talk about i want to that one kind of tangential immigration thing uh related to this is you know so a bunch of people obviously do get green cards eventually right like eventually not not everybody does but uh and once you have your green card you could apply for citizenship. But when you have your green card, there's a quota system on how many people from different countries can become citizens off of their green card.

1:18:03And these quotas don't scale with rates of immigration or population of countries. So obviously, like if you're from Denmark, like you'll be on your green card, I think it's five years or maybe you need five years to get your green card and then I think you can apply for your citizenship like right after that or something but if you're from Denmark we don't have enough Danish immigrants coming to the U.S. to get anywhere near the quota so you can just apply and then become a citizen it's relatively quick as far as U.S. immigration stuff goes right but as you can imagine based on this number people are on their green card from India for like 15 to 20 years right now because the because of where they are in the queue within that ladder.

1:18:50Because we don't scale or change it at all, which seems absolutely ridiculous to me. No, it just feels like a really broken, underfunded, corrupt system that has so many abuses and loopholes for the biggest corporations and not benefiting average Americans on immigration. Life is hard for the immigrants coming in. I mean, maybe they're making more money than they would make, but they're in a disadvantageous position at every step. They're like, yeah. I think you just have so little negotiating power once you're at that company that employs you, right? You can, you know, you're put in a spot where you probably feel obligated to work longer hours, do more to keep your job.

1:19:29If you get fired, you lose where you live. Exactly. Yeah, I mean, I have friends who have an H-1B. And what I would say is, dude, one of the pure proofs that this is not being used in the way it's intended is that part of the law is that everyone who hires somebody for an H-1B is required to have made a job posting and try to find, they can't find, they have to prove they could not find a qualified American candidate for the role. That's like part of the law on H-1B. Yeah. And so the way they get around this is so obviously fraudulent. Like they have so many ways of like, they'll only post it in the newspaper.

1:20:05Yeah. Like you have to require to mail in a letter with your resume. Like it's like the ways they get around like contest law. Like there's so many ways they do that so they can make sure that like no one can actually apply except for the candidate they want to underpay this is another thing with like time passing in the system being abused more yeah it's like early on a lot of these cat like catch all is the way you're supposed to prove that you couldn't have hired an american in this person's place yeah it's like these things started off more honest and effective at the beginning of this program yeah but as time passes it becomes more and more distorted i feel like that about so many things in government in general it's like it's like a video game meta it just gets people figure out how to how whatever the law gets made it's like a countdown till somebody figures how to abuse it and that's why you need wise leadership that updates and then fucking trump dropped a balance patch except there's microtransactions to go to the old version dude true it's pay to win it's pay to win it's pay to win and there's already a lottery system involved so it's like You're already cracking.

1:21:07You're already cracking packs, dude. You're trying to get a five-star accountant.

1:21:15Fucking Infosys gets approval to keep doing this without the 100 ,000. I mean... Yeah, it's crazy. Well, yeah. I mean, do you have a... Do you guys have any more thoughts? I think I said what I said. Yeah, I stand by it. I don't have anything else. I wanted to move on to... Do you want to talk about... We have two AI topics we can end on. AMD, OpenAI, I think, that just happened that you wanted to talk about or generative AI news that has also come out recently. I would love to hear what Doug says, because I'm going to form a clip on the other thing anyway tonight. Oh, there you go. All right.

1:21:45So you linked me an article by the FT that I read, which is about the AI music companies working on licensing with some of the big music publishers. And this was very light on technical details, which I found concerning, but it was very much like the music companies are saying, okay, during the internet era with Napster and LimeWire, all this pirating it was this huge thing the amount of share the music industry had in totality like dropped like 60 70 percent as a result like they just got cratered right they got wiped out by the internet never fully recovered uh and so they're like we understand that ai is a similar existential threat we got to get ahead of it so we are talking with licensing deals and the thing i saw one of the quotes is like we want it to be something like spotify where every time an ai song is played if it utilizes our music then we would get a cut i mean that makes sense right it's or similar to sampling music, right?

1:22:34If you use a sample and the AI companies, at least in that article, didn't comment on it in any way. They're just apparently in communications. So for this specifically, it's interesting because the generative AI in general, it's not, some people seem to think it's like you're sampling music. If you, if you make an AI song, it's not like it picks five songs and combines them together. It has been trained off of millions or in the case of images, billions of pieces of data that it slowly trains on. And so when you ask it, go make me a cool EDM song, it's not going and saying, I'm going to get Justice's song and sample it, and I'm going to get Skrillex's song and sample it.

1:23:13It's similar to if you said, hey, The Weeknd, The Artist, you just released a new album. Everybody you've ever taken inspiration from and any music you've ever listened to in your life, you need to give them a cut of the money because that technically influenced how you made your new thing. It's like, how on earth would you enforce that? So it is interesting that the AI and audio industries are talking about this because to me, this doesn't feel tenable at all. And at the other side, I definitely want us to move to a world where if you create content and that is used by an AI company to train their model who then goes and makes things, I think you should be compensated for that.

1:23:52And that's the world we seem to be moving towards with like the New York Times licensing, reddit licensing various other companies are saying hey ai companies you can use our stuff if you pay us but at the same time the idea that the music industry is like yeah we should get a little credit every time somebody makes a song it's like that doesn't that doesn't make sense because on the technical level that's not how it's working a a model is being trained off of millions and millions and millions of songs which turn into a math equation that can sort of reverse engineer what a song is true but i mean it's being trained off of the songs they own right Like those songs are being ripped without permission and being trained on them.

1:24:28You know, it's, I mean, it's a, it's a complex thing. And this, this article made me think like music industry, you don't understand how AI works. They don't understand the internet either. Right. They're probably going to get screwed on this. And they're confidently saying, we're not going to be left behind on this one. We know it's a big deal. And it's like, you don't sound like one of the quotes is literally like, if a song is played that uses our music, we should get credit. That's literally every song. Again, to train an AI model, you train it on all of the music that slowly tweaks a formula.

1:24:55That would mean every single song in existence that it's been trained off of is used every time technically. So it doesn't make sense. I do agree. It's a weird intractable problem that applies to all of generative AI and I don't see an easy solution to it. And we're seeing this problem on a bigger scale. We talked about the AI slot fee. Sora launched and they had an opt-out copyright law program, which basically said, if you don't want us to steal your stuff and make Rick and Morty or whatever, then you come and opt out, but we're going to do it otherwise, which is not how copyright law works.

1:25:26Can you do that with crime? Like you can rob a bank, but they have to let you know. All the banks in the area have to opt out for me robbing them. Dude, you're covered. So they did that for one day, literally one day, until they got 10 billion legal calls. I mean, I think the WWE was the one that led the most because they were getting their stuff pirated or whatever. Yeah. And so Sam Altman backtracked. And now everyone on, on the Sora Reddit or whatever is complaining. Cause they're getting so many more. We can't make this because like you're trying to make anyway, so that that's happening. But you know, I mean, I get what you're saying, Doug, in that it's training on everything, but I've been scrolling sword and tested out.

1:26:01Like they're creating South park episodes that have the voices and the drawings and the, and then I heard like it was outputting the actual unchanged stranger things soundtrack. Like as it was, so like, there's clearly some, Yeah, no, it can do. And that's what makes this so complex and weird. It's like, so let's say that you want to say, if your AI uses our copyrighted content explicitly, like it, and when I say use, it would recreate it, but let's say it recreates SpongeBob or the Stranger Things soundtrack. In that case, if it's clearly recognizable, let's say your company has to try to identify it in some way, we get credit.

1:26:38And maybe you do that. But then the question is, again, if I say, make a song that is inspired by The Weeknd, that's not going to, it's not going to be the actual sample i think that's a much time and then again this is how real human creatives work i'm inspired by people all the time i don't have to give them my youtube revenue because i was inspired by a cool hitman video you did or something which is a real case like i like you know so it's uh it's a real case you're gonna have to pay me yeah well jokes on you it didn't work very well all right people didn't think it was that funny for gta5 it's so it's it's so it's so challenging so that that would be an easy one where you say hey if you if the ai recreates a a recognizable piece of copyrighted content you have to pay that's easy the much harder version is where it's spongebob instead of spongebob and it looks similar and it's a clearly inspired show and at that point what you know what is the difference between inspiration and ripoff that's so hard to find i think this is going to be such a such a battle in the next year like this is But everyone is gearing up.

1:27:37And like you said, I think what I've read too is they have fresh pain from the internet. They remember how they got screwed. Right. And so they're throwing every dollar, like all the movie industries. They're lawyering up. And then the AI companies have even more money, substantially more money. They have billions. Yeah, they just make money appear by just saying the word AI. By saying the word AI. And so that's infinite money well. And so they're both just about to go crazy. I mean, I don't know how it's going to play out. I'm definitely going to keep trying to follow it pretty closely. and currently I see no good solution.

1:28:09The most obvious thing is going to be the AI companies pay a license to be able to train their models off of the library and that is already happening with a number of companies. But there's, you know, as we've talked about it before in the past, there's huge lawsuits right now that are going to be determining this about whether a company can say, I shouldn't have to pay you in the first place because it is transformative. Also because right now all the AI models, the really good ones that everyone's using are through a few, you know, mostly big, mostly American companies that they can still negotiate with.

1:28:38But once the tech gets more, everyone can run shit locally on a deep seek, like, you know, a open source model. China can and will make a model that does this exact same thing and you will not be able to stop it. And you can run it locally and then make as much copyright as you want and then put it on TikTok. It's going to be such a problem. I don't really understand how to... I don't... Yeah, it's a wave coming for all these companies and I don't understand how to... It kind of feels like there's no winning for those companies. This is Sam Altman's blog, by the way. It's tough. It's very funny.

1:29:11It's worth a read. It is him after one day of Sora recognizing how this is not working, how he planned that. It's first him saying, hey, rights holders, we're not going to do that opt-out thing. That was mostly a goof, and we're going to have a thing where we can share the revenue with you, and we're going to figure that out. We're working on it. So that's him realizing there's legal pressure coming immediately. The second thing is him saying like, hey, we really do have to make money on this though. People are making way more of these than we thought. And most of them are not getting as many views as we thought.

1:29:40Which is very funny because it's very expensive to make. Like the GPU time to make a video. And we thought about this from our first inspection. Also funny because he said this exact same thing several times. Yeah, like on every product launch. Which leads me to believe that, and other people as well, that this is not an accident. That it wasn't like, oh God, no, no, copyrighted content. It's a very deliberate strategy to put it out there. get a ton of attention so everybody's like holy shit what's going on and then you get to pull it back and go i'm sorry i'm sorry but i do think i mean i don't know if they expected how much of the traffic would come from people just yoinking this stuff off sora and putting it somewhere else where they can't monetize like how does open ai make the money well it's off of compute time that is their current plan so it's the creation of it yeah but you know i was saying this on stream but But, you know, have you ever been to like meme generator dot com or whatever where you can like that is not a profit.

1:30:33That's a small business. It's a very small business. If they become the GPU meme generator, is that really enough to pay for the I mean, potentially a trillion dollars they need for the not that much. But, you know, counterpoint Adobe, right? Adobe is a set of tools to be able to make things. And if this is a different tool where you can go and say, this is the type of video I want to create. You don't have to pay 50 bucks a month for Adobe. Maybe. me i mean you're just gambling on enough people paying for the tool because it's a creation the social media is the vehicle to advertise the tool basically yeah it's like if i keep seeing if i it's the same thing with like the uh the ghibli the ghibli profile pictures yeah it's like those things spread everywhere and everybody's like how do i make mine then they go seek out they're trying they're not trying to be youtube and that's a really important distinction they're trying to say hey do you want to make things like this come to our website and pay us i'm just like adobe's money comes almost entirely through big long form corporate contracts like the most people regularly pirate it they or they find some way of using it like it's not you and me paying for photoshop is how they make their money they make their money because they sign a deal with microsoft or whatever for a big corporate you actually sound like me you sound like me explaining to my parents when i was 15 why i was okay that i stole photoshop and it wasn't coming for me adobe knows you steal it and they want you to use it so that when you grow up and get a job in the industry you require your corporation to buy this license so maybe this will work maybe enough corporate people need to use ai to make spongebob how is a company gonna function if you can't by the way some of the best ones mario'd in a cop chase going down the side cop chases a lot of cop has been arrested every person dude michael jackson stealing my fried chicken incredible i mean there are amazing videos out of this there's a really good one of sam altman breaking into studio ghibli's headquarters grabbing all the papers off of miyazaki's desk and running away while he's chased by miyazaki that was there's a huge trend around sam altman the creator committed crimes which is so funny so funny internet's undefeated uh guys that's our stand uh i i do look forward to seeing how this plays i agree with you that it's going to be an epic legal battle for generations i don't know how it's going to play out i want to see nintendo get involved so bad they're the swat team yeah when a certain line gets crossed it's going to be in the crosshairs of mario's delta force it's been on the opposite side of the nintendo one so many times that i just want to see it play out i want to see it play out the other way i've seen mario smoking weed and i've seen all this stuff here's the thing this is all it's all good it's gonna be really interesting fun little battle until deep seek launches deep seek video yeah and then all hell breaks loose because there's no ability to enforce it at all.

1:33:19I'm safe. I'm safe, actually. Why are you safe with this? It's because it's going to come pre-installed. Never mind. I'm actually more compromised. And that's why this shirt wraps up our episode. Aiden is a traitor. From me, Brendan and the traitor. Thanks for watching Lemonade Stand. We'll see you next week. Bye-bye. Bye. Bye, guys.