Trump, Taxes and Timing

So the “October Surprise” is here, even a few days early. Trump reportedly paid but a pittance in federal income taxes in certain years. Just what do the Democrats/NYT expect to gain from this report?

Trump will respond by noting that he pays, for instance, hundreds of thousands of dollars in property taxes, and a similar amount in sales taxes and so on. He’ll also point out the various financial scandals among the Dems, starting with Nancy Pelosi, whose gains were not only illicit but harmful to American investors etc.

And then what? No one will be surprised that many of the rich don’t pay much income tax. And the more the Democrats try to play up the issue, the less time and money they devote to issues they perceive will help them, such as Covid-19 and climate change.

Impeachment over the tax issue? Ever heard the term “selective prosecution”? Led by Pelosi? Really? The American people would see through that too.

Many will be outraged that someone in the IRS or Trump’s bank etc. illegally released Trump’s returns. That the NYT is proud that it stole this information also will trouble many.

Around this time in 2016, the Hollywood Confidential tapes came out. The Dems really thought that was a “gotcha.” But the tape really backfired on the Dems. It was brought up in the next debate with Hillary, and Trump responded by pointing out that Bill Clinton paid a legal judgment of $800,000 to one of the women he harassed. The camera then moved to Bill Clinton, sitting in the wings, very humiliating for all. Instead of leading Hillary to victory, it just caused a cynical “pox on both your houses” feeling toward both sides.

What so many fail to understand is that people don’t vote for Trump because they like him. But they like enough of his policies so much that they would vote for him no matter what, e.g. pocketbook issues, societal issues, safety issues. Many are more interested in their own tax bills rather than Trump’s.

The Democrats still haven’t learned that lesson. They are still pitching their wares to the large coastal cities plus Chicago, and even then are focusing their pitch on anti-Trump rather than pro-Biden.

I always think of the UK journalist who spent most of 2016 in Iowa. He found watching the national news rather surreal, with the journalists treating events as a kind of “in” joke shared by urban liberals, nothing that Iowans could relate to.

Not to say Biden won’t win. Maybe he will, maybe not. But if he does win, it won’t be about Trump’s taxes.

Major Tech Figures Endorse Biden

A group of 35 “tech pioneers” have issued a public statement endorsing Biden, citing objections to Trump’s immigration policies. Of course, their focus is the H-1B work visa and related programs:

“The most brilliant people in the world want to come here and be grad students, but now they are being discouraged from coming here, and many are going elsewhere,” said one of the scientists who organized the endorsement, David Patterson, a Google distinguished engineer and former professor at the University of California, Berkeley.

The document is way off the mark for a few reasons:

  • According to yesterday’s Wall Street Journal, Biden has indicated that he would retain Trump’s policies on H-1B if elected. No surprise, since both political parties have decried the program ever since its inception. In 2016, Clinton, Sanders, Trump, Cruz, Rubio and so on all made such statements.
  • Contrary to the group’s statement on the need to attract “the best and the brightest” from abroad, no one, including Trump, has ever advocated blocking the immigration of outstanding talents. Trump in particular has stated repeatedly that talented international students at US universities should be given the means to stay here. He tweeted in 2016, for instance,

When foreigners attend our great colleges & want to stay in the U.S., they should not be thrown out of our country…I want talented people to come into this country—to work hard and to become citizens. Silicon Valley needs engineers…”

His recent restrictions on H-1B have excluded foreign students.

  • Only a small fraction of STEM foreign students are of the quality the group cites.

The group’s statement is highly uninformed, if not deliberately biased.

Fact-Checking the Fact Checkers

Now that the presidential election campaigns are shifting into high gear, we can count on the press for partisan, inaccurate and illogical coverage. Time for someone to start calling them out, and I’ll do my part here in this blog in the next couple of months.

To be clear, I’m voting for no one for the office of President this year. (I voted for Sanders as a write-in in 2016,) I find Biden uninspiring, and I view Harris as an opportunistic phony. Though I appreciate Trump’s standing up to Xi Jinping, he’s proven to be just as self-centered, impetuous and immature as I predicted him to be four years ago, and as a progressive it’s unlike the GOP would come up with anyone I’d like very much.

I put in this disclaimer because my calling out the press will often concern something they’ve said that’s biased against Trump. But that’s because this is indeed where their bias typically exists. If I see incorrect or illogical statements made about Biden, I’ll call them out too.

So now NPR “fact checkers” say that the Trump/Pence claim that Biden called for defunding the police is incorrect. Biden just said that funds could be “redirected” from the police, they say. But that’s exactly what is meant by proponents of defunding the police; very few mean that to be shutting down the police, removing their funding entirely.

I tune in to NPR when I’m driving, and today I listened to part of their coverage of the GOP convention. One commentator addressed the topic of insurance coverage for those with pre-existing conditions. The reporter noted that Trump has promised an executive order to require that, which she said “contradicts” the Trump administration’s lawsuit against Obamacare, which already has such a requirement. That’s just plain illogical. If Trump believes people with pre-existing conditions should be protected, which he has said, then it would be perfectly consistent for the Trump people to formulate an executive order to implement such protection, in place of the Obama policy they want to discontinue. (Note: I personally support Obamacare; see above disclaimer.)

In its convention coverage this evening, NPR also stated that comments by Trump and one of the speakers promising to “protect the suburbs” are anti-African American “dog whistles,” preying on suburbanites’ fears of the riots in Portland and other big cities. But the rioters are almost all white. The NPR reporter also said that the Trump campaign has miscalculated, as the suburbs now have many non-whites. This makes the absurd assumption that a nonwhite suburbanite doesn’t mind rioters as long as they are of the same color as him/her.

 

Covid-19: Where Do We Go from Here?

I’m not a physician, and though I understand epidemiology models, I’m not really qualified to develop them. But I’ve got some things to say, the first of which I think is original and, I claim, would be effective. I believe the other points should be kept in mind as well.

  1. We keep hearing, accurately I believe, that Covid-19 is hitting the LatinX and black communities especially hard. We should act accordingly! I believe that highly intensive measures should be taken in those communities, while substantially loosening the general societal lockdown. We should be sending “testmobiles” into those communities, going door to door if need be, administering tests, distributing masks, taking temperatures and so on. We should make available government-subsidized sick leave to anyone living or working in high-risk ZIP codes.
  2. Impose draconian penalties for gatherings that do not enforce wearing masks. Set it up just like the laws under which a party host is liable if a guest is drunk and drives etc.
  3. Open the schools! With precautions for both kids and teachers, of course, but it can be done. Taiwan set a good example. And stop politicizing this dire situation! Seems like opinions on the schools situation are highly correlated with politics. I recently heard a radio program on the schools issue, with a number of people cited, mainly politicians and school officials. All but one said “Keep the schools closed.” The one exception? Head of the CA Pediatrics Association, the only real expert. She said we should open the schools, and made a good case for it, I believe. All those Democrats have constantly said during this crisis, “Listen to the science!” Well, do so!
  4. The controversy over Dr. John Ioannidis, a Stanford physician and statistician, is depressing. A few months ago he led a study that seemed to show that the number of Covid-19 cases was far greater than previously thought. This was a Politically Incorrect view, because, by increasing the denominator, it caused the estimated death rate to be much lower, hence less need for strict lockdowns. It quickly became apparent that the study had a number of serious flaws, largely methodological but even with hints that there had been ethical problems with the study’s funding. Good for Buzzfeed for their dogged refusal to take this study at full face value (see above link). But to my knowledge, the consensus in the field is now that the thrust of the study was indeed correct, and I think the “piling on” of Ioannidis is unfair. I am particularly disturbed by signs I’ve seen that Ioannidis’ Stanfor colleagues are treating him as a pariah. The latest report (again, see above link) is that Ioannidis and others tried to see Pres. Trump to urge him NOT to put the nation in lockdown; people cited in the report made it seem like this was an unprecedented breach of scientific protocol. They ought to check their history books; a group of scientists dispatched Einstein to meet with Pres. Roosevelt in WWII regarding atomic weapons.

If the country has not handled the pandemic well, it has been due to a number of unforced errors.  Still not too late to rethink strategy.

Biden on H-1B

Imagine the government saying, “Women, are you worried about the tight labor market,  compounded by a gender Glass Ceiling? Don’t worry, we’re going to add more workers, mostly men.” Or, “Black and Latino owners of small businesses, are you getting hammered by Covid-19? Don’t worry, we’re bringing more small entrepreneurs from the outside, so that they can undercut your prices and dilute your market share.”

Or even better, “You Asian-American engineers and programmers out there, we know that hiring in the tech industry has slowed down, and that you already faced rampant age discrimination in the industry. But don’t worry, we’re going to reverse Trump’s order to temporarily restrict H-1B, so we can continue to have people compete with you for jobs at low wages.” No kidding on this one, because that is basically what Joe Biden said, in a June 27 digital town hall meeting focusing on Asian American issues.

Nationwide, about 25% of computer-related Bachelor’s degrees are awarded to Asian-American students (note: NOT Asian foreign students). In states with large Asian-American populations, it’s even higher, over 70% at my university.

I’m sure the image of American techies on the Hill is of “undeserving whites,” but the fact is that the field has always attracted a lot of Asian-American students, who tend to gravitate to “practical” majors. I wonder whether Biden watched the major 60 Minutes piece in 2017 about the protests by American IT people replaced at UCSF by H-1Bs. There were a number of Asian-Americans (and some blacks) among the protestors.

Biden’s a smart, astute guy, and he’s not the first to say “Choose your poison” to Asian-Americans regarding H-1B. (I recall that Sen. Patty Murray did too.) But for a major presidential candidate to be that tone deaf is amazing.

Why H-1B Will Never Be Truly Reformed

Some of you may be a little startled to know I’ve been writing about the H-1B work visa and related EB green card series for…are you ready?…27 years! Yes, since 1993. My activities during that time have included writing research papers, testifying to Congress, and so on.

The only real “reforms” made over the years have been in the direction of making things even worse, accompanied of course by “feel good” changes that look pro-worker but in reality always end up with business as usual.

So I do have some perspective on the issue, and to me, a June 24 piece in The New Republic (TNR) shows vividly how H-1B/EB will never be reformed in any meaningful way. The conversation will always be sidestracked by a distracting, unwarranted and unproductive scapegoating of the Indian outsourcing firms, which I refer to as the “Infosyses,” typified by a large firm of that name. By contrast, the “Intels,” meaning any firm, large or small, that hires most of its H-1Bs from the international student populations at US universities, are presented as using the H-1B/EB programs responsibly. Many of you know that I refer to this portrayal as “Intels Good, Infosyses Bad” (IGIB).

As I’ve explained numerous times, e.g. in my HuffPo op-ed, the Intels are just as culpable as the Infosyses, arguably actually more so.  But the Intels, armed with the best PR people and lobbyists, have found that IGIB scapegoating is highly effective. And by the way, I’ve gotten the sense many times that this scapegoating is meant to be taken as a racial “dog whistle.”

The TNR article uses the IGIB argument, and unwittingly shows the argument to be empty. Here are the two main points made:

  • The Infosyses hire H-1Bs and “rent” them out to mainstream US firms, unlike the Intels, who tend to hire H-1Bs whom they themselves will employ.
  • The Infosyses usually don’t sponsor their H-1Bs for green cards, while the Intels do.

Both claims are correct — and yet neither claim justifies scapegoating the Infosyses and glorifying the Intels.

Yes, the Infosyses rent their H-1Bs to other firms. SO WHAT? Nothing terrible about that. The ostensible reason the H-1B program was enacted was to remedy temporary labor shortages. The fact that some US firms (banks, insurance companies, HMOs) find it easier to get temporary H-1B workers through an Infosys does not counter the purpose of H-1B at all.

And what about the Infosyses not engaging in green card sponsorship? Again, SO WHAT? Again, the intended purpose of H-1B is to remedy temporary labor shortages, not as a path to permanent residence. Yes, the Intels use such a path, but the notion that the Infosyses are somehow Evil because they don’t do so is absurd.

On the contrary: Green card sponsorship enables the Intels to actually be bigger abusers of foreign tech workers than the Infosyses. It renders the workers de facto indentured servants, technically able to move around freely in the labor market but in reality trapped with the sponsoring employer. This point has been made by numerous key players, e.g. the green card sponsoree advocacy group Immigration Voice and the congressionally commissioned NRC report. Yet, in an Orwellian twist, promoters of IGIB present the Intels’ green card sponsorship as actually making them better than the Infosyses. As I explained in my HuffPo piece, for the Intels, this indentured servitude is even more important than the salary savings accrued by hiring foreign workers.

The TNR article refers to some famous cases in which a US firm used an Infosys to replace an American worker in the firm. True, but the Intels do the same thing, just less directly. They wait for a layoff, then lay off mostly older US workers, then later hire younger foreign workers. The promoters of IGIB seem to have never wondered how the average age at the Intels is kept so low. Had they read the book Inside Intel, or merely put 2 and 2 together, it would have been clear that the Intels aren’t so different after all.

IGIB goes back at least to 1998, when the tech industry convinced Congress to (temporarily) double the H-1B cap, while placing some recruitment restrictions on the Infosyses. The message from the Intels was, “Yes, H-1B is widely abused, but by the Infosyses, not us.”

It wasn’t until around 2010, though, that the non-industry critics of H-1B — sympathetic researchers, immigration reform groups and so on — embraced IGIB, actually becoming the concept’s most strident supporter. They present exactly the same arguments made in the TNR piece, excoriating the Infosyses for being agents to third-party employers and for not sponsoring their H-1Bs for green cards. The fact that IGIB is so entrenched in Beltway thinking today stems in large part from promotion by the H-1B critics themselves. The TNR piece epitomizes the result of this heavy promotion. True, the H-1B critics do occasionally mention that yes, the Intels are a problem too, but for the most part, their  statements on H-1B/EB are IGIB, no different from the industry.

(Here I must insert my usual disclaimer: I very strongly support legislation that enables “the best and brightest” to obtain fast-track green cards. But most foreign workers hired by the Intels are ordinary people, during ordinary work.)

As noted, in the nearly 30 years of H-1B’s existence, employers have always found ways to circumvent restrictions; indeed, they’ve gotten those loopholes inserted into legislation in the first place. Last week’s presidential executive order, which was focused on the Infosyses, will do very little for US citizens and permanent residents in tech, but it looks good — exactly the goal of IGIB ever since 1998.

 

 

 

Big Win for Tech CEOs, Update

In my last post, I explained why the president’s new order banning issuance of H-1B and other non-immigrant visas is a big win for the tech industry. The ban exempts foreign students, which is the main source the “Intels” use to hire H-1B engineers, whereas the “Infosyses” import workers directly from abroad. This will free up visas that would have been taken by the Infosyses, a windfall for the Intels since each year there are more applications for H-1B visas than the 85,000 cap.

I did go out on a limb a bit in pointing out that most of the pushback on the order had come from sources like the American Immigration Lawyers Association, rather than from Silicon Valley firms. At I wrote that, there was only a tweet from Google’s CEO, Sundar Pichai.

Since then, a number of major tech firms have chimed in. But it’s just posturing; they know the impact of the Trump order on the Infosyses, and the benefit that will bring to the Intels. In fact, they have argued to Congress precisely along those lines, saying in effect, “The Infosyses abuse the system. Give the visas to us instead of them.”

I’ve been told by the insiders that the Trump people are still considering prioritizing the issuance of H-1B visas by offered salary. Of course, again a windfall for the Intels, who pay more than the Infosyses. (Not because the Intel’s don’t underpay their H-1Bs, which they do, but because they hire a higher quality of worker than do the Infosyses.) This would replace the current system, which awards the visa by a lottery.

One aspect I now realize I overlooked, though, is the L-1 visa, specifically L-1B, Intracompany Transfers. In the past, this was used by the Infosyses to circumvent restrictions Congress placed on them in using H-1B. But in recent years, it has also become popular with the big Silicon Valley firms; if the firm failed to win the H-1B lottery, it would “park” the person in one of the firm’s foreign offices, then bring them back to the US after a year under an L-1 visa, which has no caps. Now they won’t be able to do that, at least not without applying for an exemption.

“Can’t tell the players without a scorecard.”

 

H-1B Suspension: Such a Deal for Tech CEOs

Pres. Trump issued an executive order today suspending entry into the US for several visa categories, including H-1B, until January. Contrary to what some of you may have thought, this is a big win for the tech industry CEOs:

  • Note the language: suspension of entry into the US under the various visas. Those already in the US are exempt from the order. This means international students, who by definition are already here, are not affected. (And even future foreign students won’t be affected, should the ban be extended, as they too will be in the US when they apply for an H-1B visa.)
  • The employers who are affected are the “Infosyses,” the rent-a-programmer firms that import foreign workers from abroad, typically to work in business applications. By refusing them visas, this frees a large number of visas for the tech firms (the “Intels”).

The carve-out for the foreign students was no surprise to me. As I’ve pointed out in this blog many times, Trump has consistently stated since back in 2015 that he considers the H-1Bs recruited from US university campuses to be the “good” H-1Bs. Indeed, he has indicated that he supports special green cards for this group.

Also note that there is a little-known precedent: After the 2008 financial crash and the government bailout, Sens. Sanders and Grassley introduced a bill barring TARP recipients from hiring H-1Bs — with the exception of people already in the country under a different visa, read foreign students. At the time I assumed that the senators had been duped by the industry lobbyists; now I suspect otherwise.

As noted, the ban is temporary, through December. Not clear what will happen then, post-election, but let’s consider the impact both in the short term and longer term were the suspension to be extended.

  • The Infosyses will still hire low-cost foreign labor, as I have explained before. OPT is one route, for instance. They won’t hire computer science majors from MIT, but they’ll find lots of students from business and other majors that offer computer-related tracks.
  • With the (in effect) expansion of the H-1B program, the current oversubscription of the EB-1, EB-2 and EB-3 employer-sponsored green card problems will get even worse. Pressure will increase on Congress to enact a “Staple a Green Card” law (automatic green cards to foreign students in STEM). If the current logjam in DC is resolved — Congress and the White House all Democrat or all Republican — look for such a bill to come up again, and be enacted and signed into law. Depending on the details (e.g. requiring a PhD vs. a Master’s), the impact on US tech workers could be huge.

(Note by the way that I have always supported fast-track green cards for the “best and brightest” foreign students, e.g. those with degrees from top academic programs.)

Those who’ve followed this blog over the years know that I’ve been stating all along that an eventual “resolution” of the H-1B and green card problems would come in the form of a restriction on the Infosyses but a reward for the Intels, just as we are seeing here now. Unfortunately, we’ve already seen the first praise of the policy by immigration reform organizations (CIS and FAIR). This is highly misguided, in my opinion.

The first shoe has dropped. Waiting for the other.

 

The Real Issue behind the George Floyd Tragedy

Sane voices are rightly asking us to ignore the antifa and looters terrorizing our cities in the last few days, and urging us to focus instead on the circumstances of George Floyd’s death. It is not completely clear yet what happened, but the details behind the horrific image will have very troubling truths. Are there that many rogue police officers out there? Do they have unacceptable attitudes concerning race? Are the police unions overly powerful, keeping bad cops from being fired?

But to me, there is a much deeper, fundamental question people are overlooking. On the one hand, our nation has made amazing strides. I believe the vast majority of US police officers are appalled by Officer Chauvin’s actions. The socioeconomic status of African-Americans is hugely better than in the 50s and 60s. We elected a black president, absolutely unthinkable when I was a kid. My own boss, the head of a major university, is African-American, in a way also unthinkable years ago.

And yet…the status of the black underclass is as dire as ever. How can it be, in the year 2020, more than 50 years after Martin Luther King , that we still have a substantial number of George Floyds, poor, poorly educated, poorly housed, in trouble with the police, often the victims of same?

Indeed, we stopped making progress on this segment of our society in the 70s or 80s. Politicians, including the Democrats, no longer truly care about the black underclass. What changed? African-Americans are no longer THE minority. They must compete for attention with two minorities who’ve had huge growth since the 70s — Latinos and Asians. And as I wrote in a rather long Public Interest article back in the 90s, those “new” minorities have needs different from, and to some degree in conflict with, blacks, in addition to diluting the attention the latter used to get.

Though the various pro- and con-immigration economists can debate on the numbers, even the most ardent of the pro- side concede that high levels of immigration have hurt low-skilled African-Americans, not only in the direct form of immigration but also in the importation of temporary workers. Incidents like the one after Hurricane Katrina, in which African-Americans employed for the rebuilding were suddenly told they were being replaced by “Mexicans” (not clear whether they were Americans, undocumented or on visa), are very troubling.

A few days ago I saw some very startling data, concerning rates of high school graduation. Which states have the best and worst records regarding high school graduation for African-Americans, and for the black-white gaps in those numbers? Amazingly, several states doing well in that respect are in the Deep South, and some of the worst are “progressive” states such as California, New York, Wisconsin, Illinois — and Minnesota. How could this be possible?

All those those latter states have large numbers of immigrants. Cause and effect? In general I am skeptical of state-by-state comparisons, but the pattern is disturbing.Note too my taking the 70s and 80s to be the time in which our government lost interest in the black underclass — and is also the time when immigration rose sharply.

To be sure, we could have high levels of immigration AND improve conditions for the black underclass, but in these days of “compassion fatigue,” that would be a tall order, especially since the various minorities sometimes have conflicting demands.

For example, I believe strongly in the use of Affirmative Action programs to provide role models for blacks and Latinos. But some very militant Chinese immigrants are demanding that Affirmative Action programs be disbanded.

My father was an immigrant, and my mother the child of immigrants. My wife is an immigrant. The fact is that I’ve been living in immigrant households my entire life, with different languages, strange foods and colorful holidays. Frankly, it’s where I feel comfortable.

Yet the plight of the black underclass has also been a major lifetime concern of mine. And I do believe these two passions of mine are in some conflict.

Whatever the cause, in this modern year of 2020, we should not still have a black underclass. This problem COULD be solved, and should have been solved long ago. I hope the “silver lining” of the Floyd tragedy might be a resumption of the quest of the 60s to wipe out poverty.

 

The New H-1B “Reform” Bill: Part III

As I stated in Part II, the ONLY possible criterion for the value of any H-1B reform bill must be, Would it result in substantially more Americans being hired in jobs currently done by holders of the H-1B or similar visa? To say that the current bill “at least is an improvement in terms of required wage floor” is simply wrong if it doesn’t get US citizens and permanent residents hired.

Again, the bill was crafted to benefit the “Intels” (mainstream US firms who hire H-1Bs from pools of foreign students at US universities) and punish the “Infosyses” (mainly Indian rent-a-programmer firms who US firms such as banks and insurance companies contract with for outsourcing IT work).

From the Infosyses’ point of view, their only worry regarding the current bill would be that wage floor issue. The Infosyses generally hire at Level 1 in wage scale, while for the Intels it’s usually Level 2. (The Intels do pay more, since they hire higher-quality workers, but they are still getting a bargain for the given level of quality.) But does that mean that those banks and insurance companies would now start hiring Americans? No!

Come on, don’t be naive. Does anyone truly believe that, if this bill were enacted, the yearly cap of 85,000 for new H-1Bs would not fill within days of its April 15 opening every year, like it does now? Of course it would fill up quickly. And does anyone believe that the employers’ passion for hiring cheap labor would subside? Of course it wouldn’t.

The outsourcing firms would have to raise their prices to the US firms a bit, and absorb some reduction in profits. They would turn more to hiring OPTs, typically with US Business degrees rather than Indian Computer Science, and enjoy the fact that OPT workers are not subject to payroll tax. And some US firms would calculate that it’s more favorable for them to insource, again with OPTs as a very attractive option.

Moreover, keep in mind that H-1B and green card sponsorship, especially the latter, gives employers a huge nonmonetary benefit — worker “loyalty.” I describe it in my Huffington Post op-ed:

…most Silicon Valley firms sponsor their H-1B workers, who hold a temporary visa, for U.S. permanent residency (green card) under the employment-based program in immigration law. EB [green card] sponsorship renders the workers de facto indentured servants; though they have the right to move to another employer, they do not dare do so, as it would mean starting the lengthy green card process all over again.

This immobility is of huge value to many employers, as it means that a foreign worker can’t leave them in the lurch in the midst of an urgent project. In a 2012 meeting between Google and several researchers, including myself, the firm explained the advantage of hiring foreign workers: the company can’t prevent the departure of Americans, but the foreign workers are stuck. David Swaim, an immigration lawyer who designed Texas Instruments’ immigration policy and is now in private practice, overtly urges employers to hire foreign students instead of Americans.

Water finds the lowest level. And so do employers in their hiring practices.