BHS - 7A – Relying on LA’s Wealthy | ‘Tech Tuesday’ with Mike Dobuski

Mayor Bass’ ambitious housing program relies on LA’s wealthy. ABC News Tech reporter joins Bill for ‘Tech Tuesday’ to discuss META’s AI push, Tesla’s runaway Cybertrucks, and a chatty new app. California budget relies on rich taxpayers. We pay the price.

Episode Transcript

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You're listening to bill Handle on demandfrom KFI AM six forty. You are
listening to the bill Handle show kfI AM six forty bill Handle. Here
it is a Tuesday Taco. Tuesday, April twenty third, today's day two

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of the actual trial of Donald Trumpin the hush money case, and a
lawsuit was filed by the City ofBaltimore against the two companies, the owner
and the operator of that cargo shipthat rammed into the Francis Scott key Bridge.
Now Mayor Karen Vass. She waselected, as you know, on

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a platform of dealing with homelessness.That was her big thing is her big
thing Gavin Newsom when he ran lasttime out homelessness, Paul Caruso, who
ran for mayor against Bass homelessness,and so to her credit, she started

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dealing with homelessness from day one.But the crisis just keeps on exploding.
And the big number one issue ishousing prices just turbocharging the finances of homeowners.
And there are people who can't affordrent anymore, who can't afford mortgages.

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I mean, it is so expensive. The thought of having, for
example, you're supposed to have sixmonths in savings in case of an emergency.
So someone loses a job and therent is three thousand dollars a month,
not too many people at eighteen thousanddollars tucked away for an emergency.
A lot of people don't have threehundred dollars tucked away. So what happens?

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They end up homeless. So,in addition to all of the other
programs that Karen Bass has established,and money is pouring into homelessness, I
mean from everybody, the state,the city, the county, insane amounts
of money. It's not enough.Homelessness keeps growing and growing and growing.

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So she has come up with anew idea, and that is calling on
LA's rich people to donate money toaffect the homelessness. Now, rich people
get hit up like you cannot believefor charities, I mean constantly. And

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most wealthy people are very generous.I mean, they appreciate money, they
work probably pretty hard, and mostwealthy people that I know, they really
try and do help with money.But here's another one, and this one's
a little tougher, because this isa problem government should take care of.

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Where homelessness you think of as agovernmental problem, And keep in mind tax
payers, all of us, atall income levels. We have funded billion
of billions of dollars in spending toreduce homelessness or try to reduce homelessness.
And the reason we're not succeeding isnot because money is being spent and homeless

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people are being put into shelters andthen put into medium, medium housing and
long term housing. It's just,however many people are helped, the number
of people who enter the category ofhomelessness keeps on growing more than the other
people are being helped. So it'sa Sissyfuscian task and sissyfuss if you can

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look that one up. Is anancient in Greek mythology, the guy that
Zeus had rolled the rock up upto the very very top. Just as
he hits the top, it rollsback down and he has to start all
over again, and he's chained tothe rock. And this goes on forever

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because gods are immortal. And soit is that tough a task. Doesn't
matter how much you go, therock always rolls down and you have to
start dealing with it again. Andyou know, is there an answer here?
Well there is, and I've toldit many many times, and that
is you take the issue of homelessnessand you basically make it the Manhattan Project,

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where almost unlimited amounts of money gointo the homelessness issue to the extent
that you don't have other money inthe Manhattan Project. During World War II,
to build the atomic bomb, thecountry didn't have the money two billion
dollars, which was insane back then. They had to borrow it. They

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had to print money the federal government, which you can do it prints money.
Well, states and cities can't dothat. Counties can't do that.
So the city is stuck to itsbudget and the budget has to explode or
cops have to stop on the streetsand ambulances will stay parked or whatever other
programs parks won't be able to function. I can't hear you, Neil,

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Neil, what are you talking?Hold on there you go. Do you
really believe that the homeless issue isa money issue? Yes? Yes,
does not seem logical to me atall. The more money we've put into
it, the more the problem hasgrown. Because the number of people has
grown. The problem is not necessarilyjust homeless. You've got housing that is

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so expensive. Can you fix housing? Sure, you subsidize everybody you can't
afford rent, you know, it'sthat's just money. Can't afford Beverly Hills.
So I don't live there. Butyou are not living on the street.
You're not. You know, thereare places that are cheaper than California
to live. That's right. Youhave to leave and you have the vast

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majority. You have to leave thestate. You have to leave the state
and mental issues. But it's whereyou're gonna go. Where you're gonna go.
LA in southern California is the bestplace to live. Have you talked
to someone who is considering moving toanother state? For example, I suggest

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I've talked to homeless people and I'vesuggested, go, why don't you go
to Florida where the cost of livingis so much less? And I get,
hey, you know the humidity there. I can't live in that kind
of humid weather. A lot ofJewish people on the streets here and not
too many not too many, sorich people, hey help out, And

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there's I mean, there's a limitto what people are going to donate.
Now. Usually we have Rich Tomorrowwith us on tech Tuesday, and when
Rich isn't here, we have someonewho is terrific that and found and that's
Mike debos Dubouski. God, I'mhorrible with that name. He's the ABC

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News technology reporter. And Mike,thanks for taking the time to join us.
Yeah, no problem. My lastname is tough, So don't feel
bad. You're not the only oneto get it wrong. And you hope
the last I'm sure, and Iwant to welcome you. You're no rich,
but you know, it's it's apleasant to have pleasure having you here.
This is why people have a veryhard time coming. We usually get

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them once and thank you for returning. Now. Oh it's fantastic, all
right, I'll bet you they treatyou very well at ABC. Maya Meta
has something going on on and itis what the latest large language model.

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Explain that because I love language models. So let's explain, or let's have
you explained what we're talking about here. Yeah, So a large language model
is essentially an engine for artificial intelligence. So open AI, which is one
of the big companies in this space, they make a thing called GPT four
that is their large language model.That's their engine that underpins products that consumers

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use, things like chat GPT.So that's kind of the way to structure
this in your mind. So LAMAIII is Meta's new large language model.
It's their new artificial intelligence engine.Now they say that this is faster and
trained on more information than previous iterationsof this technology. They say they've specifically
done work to reduce fake refusals,which is when a chatbot or an artificial

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intelligence refuses to answer a question forfear that it will get itself in trouble
or get something wrong. Mark Zuckerberg, the Sea of Meta says they've actually
gone some way to reducing that instancehappening. So they say this is a
pretty robust model and it's going tostart showing up in products that everyday people
use billions of them. In fact, use Facebook or Instagram or WhatsApp.

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That's where this model is going tostart showing up. They showed off a
sample last week when this was announced, where you're scrolling through your Facebook feed,
for instance, and you stumble upona video of a man playing guitar.
Under that video, this model willsuggest, hey, do you want
to learn more about how to playjazz chords on guitar? And it will
show you some answers to that question. So that's how they see it working

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sort of like an AI assistant foryour social media. But of course the
caveat with all this technology is thatit occasionally gets things wrong. It hallucinates,
so it's best to double check beforetrusting anything an artificial intelligence tells you.
Yeah, Now you bring up thatsometimes these programs are afraid, and
I guess that's the way say,of giving you answers that may get them

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in try rubble. And I rememberwhen Siri first came out as that this
was one of those that everybody thatI knew used, Hey, Siri,
where's the best place to put adead body? Uh? And now comes
a list of landfills that are withinthree miles of you? And that doesn't
work anymore. It won't do that. So obviously artificial intelligence is there.

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Well, maybe now it's telling therewhat's going on? Hey, how do
they you talk about the engine ofwhich Facebook, Instagram, WhatsApp accounts are
using? Uh? And how dohow does this company monetize itself? I
know Facebook sells its users information,it's data. How do how does Zuckerberg

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make money on this? It's agreat question, right, and a question
that has been facing artificial intelligence companiesacross the tech world is exactly how do
we monetize this right? Some haveexperience experimented with adding advertisements into responses to
questions that people pose to AI models. That does not seem to be the

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direction that Meta is going in.I think that you hit on kind of
the key point here, which isdata collection right in some capacity or another.
Pretty much every tech company out therecollects data on its users in order
to function right, and a lotof this data can be relatively innocuous things
like you know your email address oryour phone number, or you know GPS

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location data. They use that tosell to advertisers who are use that data
to target you with specific ads,with ads that they think that you would
like or be interested in. Sogiving information over to an artificial intelligence model
possibly could be used for something likethat. Right asking a question about guitars,
well, Meta might take that informationsell it to Guitar Center, who

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will then use that to show youa targeted ad selling you guitars. But
there's another component to this, whichis what are these models trained on.
Part of the way that these modelsare able to give you human like responses
is because they are trained on humanrighting, and some of that training happens
through the prompting process. By askingthis thing a question, it can intake

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that data that question and use thatto learn more about how humans speak.
So that's another part of this aswell. Again, how do you monetize
that, Well, it's still abit of an open question and is making
plenty of money from other things,so you know, this is kind of
still in the experimental phase. SoI don't think it's going to be a
major revenue stream for them, atleast I can't imagine it would be because

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you have Facebook and YouTube already sellingthe data, and if you now have
Lama three also selling the data,aren't they competing with each other? They
certainly are, and that is abig part of the Internet age, right.
Google has an incredibly robust ads business, as does Meta, in part

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because we spend so much time ontheir products, whether it be Google Search
or Gmail or in metas case,things like Facebook and Instagram. That's where
all the eyes are, that's wherepeople spend a good chunk of their day,
and that is of course valuable realestate for advertisers. It's a hugely
competitive market. All other players inthis space include people like Amazon and other

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social media companies like x which ofcourse is formerly Twitter. This is really
where the tech world makes its money. It's not through selling products anymore.
It's through selling data to advertisers.I have a question to ask you.
When I get a phone call andthe Apple says scam likely or whatever,
I sometimes will still take it.And this happens twenty thirty times a day.

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If I send it to voicemail thenand I play it back, it's
hello, Hello, and that's allI get in a hang up when I
answer it, it's a hang up. Why do they bother? Well,
it's a good question, right.The inner workings of a scam operation,

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you know, can vary by youknow, whoever is conducting that operation.
But you know, sometimes they willyou know, set up a system that
can robo call people and in somecases that will get you to, you
know, give over your information.But a lot of the times it doesn't
work. So that's sometimes why you'llhear like a you know, a random
clicking noise or yeah, just astraight hang up. Every time I answer,

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it's a hang up, very unusual. Yeah, yeah, but again,
I mean there's a lot that wedon't know about these sort of operations.
So you know, they might bemaking money, but it might you
know, it's kind of you know, yeah, I mean it's just so
weird. I mean, I haveno kind of call yesterday from a guy
named Bob. Of course, hewas in India and tried me to sell
me prepaid of mortuary services cemetery services. And you know, I love talking

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to these people. And I said, I already have one of those,
but if I die twice, Ihave no problem talking to you, and
boom, the hang up happens.Let's a new a new app, a
chatty new app. Let's explore thatone for a minute. Yeah. Sure.
So the new app that's gotten atleast a lot of people in Silicon
Valley talking is called air Chat.So this is the latest in a series

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of apps that are designed to challengex formerly Twitter. So we've seen a
couple of these crop up in thelast year, Threads from Meta also things
like blue Sky and Mastadon. Thisis the latest one. It comes from
two guys, naval Rava Kant andBrian Norgard, the latter of whom is
a Tinder executive. And this applooks a lot like Twitter. You scroll

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through it, there's a bunch oftext posts. You can put pictures in
there if you want, but theidea is that you don't read it,
you listen to it. This isan audio social media experience where you record
your voice, air Chat transcribes itand then posts your voice recording and a
transcription to a feed that people caninteract with. So the creators say this

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will go some way to humanizing ouronline socialization, that if you hear someone's
voice, you might behave differently online. That's their idea. At the very
least, it is invite only fornow, which means that most of these
conversations are being had by tech andmedia people. So the app has yet
to really stake out an identity foritself, and that is the crucial question

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that it's going to need to answers, As is the question that all of
these apps have to answer. Whyam I having the conversation here? Why
am I posting here as opposed tothe millions of other alternatives that I have?
And Airtat just hasn't answered that yet. Yeah, because posting to me,
when I post something or I textsomething, you know there is I'm

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reading it. They can pick itup whenever and if they don't recognize the
voice boom that's gone. You can'tunderstand the voice boom that's gone. It's
yeah, I don't understand it.But you're right, you know, Okay,
let's figure this out. How manyof these apps come out and the
big players like the one you're justtalking about, come out, and how
much money is spent and what Iassume the failure rate has to be astronomical.

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Absolutely. In fact, we justsaw a recent Twitter competitor post which
was sort of aimed at journalists andlonger form posting that went under very recently.
And you know, it's hard outthere for these apps. You know,
it's just kind of a very competitivemarket. Ever since Elon Musk took
over Twitter, we've seen a numberof users of that platform sort of in

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an exodus mode, right. They'retrying to search out other apps and other
social media experiences that replicate the Twitterexperience, but maybe don't come with the
chaos and bots and spam of thatplatform. So that's why you see the
emergence of threads, That's why yousee the emergence of blue Sky and mastadon
those platforms actually seem to be doingcomparatively well. I mean, obviously Threads

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has the backing of Meta behind it, so they can afford to lose money
if they are indeed losing money onthat platform. Others like Post, others
like T two or mastadon, they'remuch smaller companies. Airchat is among them,
and it's tougher out there now.A lot of this is also backed
by venture capital money, so theycan afford to maybe keep going for a
little while. We've also seen othersocial media apps try out audio as an

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alternative to the simple scrolling experience.Clubhouse was kind of the big one during
the pandemic that really exploded in popularityin twenty twenty and twenty twenty one,
but pretty quickly thereafter collapsed as peoplewent back outside and started to talk to
people in person. So, youknow, we're which, we could go
on. We're out of time.I mean, we could go on for

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an hour on this. Thanks forjoining us. ABC News Technology reporter Mike
Debuski. You have a good day. Take you too. Take it all
right, doc. Where California getsits money and it is the rich.
Now that's not to say that therich don't pay more taxes in other states.
It's California's reliance on the rich,which is I would say ridiculous.

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Is that fair? Well, here'san example. Wall Street is doing really
well this year. Growth is healthy, but Sacramento, well, it is
in trouble. We're looking at eithera forty billion dollar deficit if you accept

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Newsom figures, or if you lookat the Legislative Analysts Office nonpartisan, the
gap could be as big as seventythree billion dollars. WHOA. So this
is what happens when the state becomesway too dependent on rich people for taxes.
The rich played the stock market,and when it pays off, Sacramento

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gets a really healthy chunk, likeit did a couple of years ago when
it had one hundred billion dollar deficit. Now, when the market bus,
which did two years ago, thestate budget busts. Because capital gains,
those earnings drop, so the markettumbles in twenty twenty two. The stock
players have less income to report intwenty twenty three. Therefore there is a

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whole lot less in taxes to pay. Former state Senator Bob Hertzberg, who
was also an Assembly speaker say says, judgment day is coming, baby,
and he is right. So basedon the twenty twenty one tax year,
the top one percent of California's earnerspaid half of the personal income tax.

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In this state, top one percentpaid fifty percent of the income tax.
And when the tax when the stocksfell in twenty twenty two, the top
one percent, all of a sudden, it drops to thirty eight percent and
the rest of the people don't kickin. There's the deficit. The state,

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all of a sudden has a wholelot less money. That is the
real problem here, A dramatic drop. Either way, it doesn't matter as
far as the budget deficit. It'sthis huge hole in the proposed two hundred
ninety two billion dollar budget that Newsomsends to the legislature in every January.

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And by the way, California hasto balance its budget. Its constitution has
to be by the constitution, thebudget has to be balanced every year.
So wait a minute, how isthat possible with this kind of budget.
Well, let me tell you thingsthat the state can do and will do.
One of the things they can dois cut spending. Of course,
pilot programs are going to be cut. New ways to support struggling foster kids,

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done oil workers, transitioning to cleanerindustry. That's not going to survive
preventing more people from becoming homeless.Well, those programs are going to go
south, and that's a real problem. As you can imagine, low income
housing is not going to be fundedthe way it is. There'll be lots
of cutting before the budget has tobe voted in by June fifteenth. Have

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to have a balanced budget. Sowhat do you do when you have this
much deficit and the state can't printmoney and really can't borrow any more money.
Mean, by the time a bondgoes out, you know it's not
going to happen for June fifteenth.Well, let me give you. One
of the things the state can dois move the state payroll date forward by

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one day. And what does thatmean. Well, that means that the
amount of money owed to state workers, which of course is just enormous.
It's the biggest budget item, getskicked into the next fiscal year and all
of a sudden, Wow, you'renot paying that check or the state isn't

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paying that check for that month becauseit into the next month or next year.
Well, there's your twelve percent helpright there. That reduces the state's
budget. The amount of money hasto pay by twelve percent. And so
let me give you another example ofthe rich people paying taxes. Twenty twenty

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one tax year, the top tenth, the top one tenth of one percent,
that's point zero one, that's abouteighteen thousand taxpayers. They supplied thirty
percent of the income tax and thenext year it was nineteen percent. And

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the other people aren't paying in it'snot as if the middle class people the
money goes, the taxes go tothem. And why not, Well,
because they vote, and these areelected officials that create the budget and vote
the budget in. And rich peopleare easy to Well, why because you

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have seventeen nine hundred people that arein that top figure and there's your constituency,
seventeen thy nine hundred people. Howmany people are in the middle class,
how many millions, tens of millionsare considered million class, in middle
class? They all vote? Andso what do the politicians do? Keep
on nailing and nailing and nailing thewealthy. And the problem is because of

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the income tax structure. You know, when the wealthy aren't making that much
money, the tax revenue collapses.So what is the answer. Well,
let's do this one a couple ofyears ago. Let's just raise the rate
that wealthy people pay up to thirteenpoint three percent for those making over million

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dollars that's considered wealthy. And keepin mind not that a million dollars isn't
a lot of money, but thosemaking over million dollars are basically paying the
taxes and when they're not making thatkind of money, even with a high
income tax rate, they're not makingthat kind of money. So something's got

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to give. And here is theway California works, and it's just way,
way too dependent on the income taxby the wealthy. No other state
does this. Not even close?Are their answers? Yeah, you can
raise a sales tax, or we'vedone that to the maximum. Here's one

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that other states do is tax services. You know, add a ten percent
to your legal bill, your plumber'sbill. Plumber comes in and just give
me an example. He comes inand changes out of faucet. I just
changed my faucet out and the billwas two thousand dollars for half an hour
of work, because that's what plumbersdo. I'm just kidding you. Neil

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was giving me the look it wasn'talthough I'll tell you it was a couple
hundred half an hour of work.You know, it's not a bad buck,
although they drive out, et cetera. Yeah, but it's it's not
just half an hour of work,it's decades of experience. Yeah, you
get that. You know, there'sthe old story about the plumber coming in
to a cardio cardiovascular surgeon and saying, oh my, you know, the

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guy fixes fixes a plumbing issue,and at the cardiovascular surgeon it looks at
the bill and goes, oh mygod, you know this is crazy.
You know, I'm a cardiovascular surgeon. I don't make this kind of money.
And the plumber says, yeah,so when I was a CARDIOVA vascular
surgeon, I didn't make that muchmoney either. California, Texas welcome aboard

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very volatile state. Very and that's, by the way, a lot of
really wealthy people are just bailing.They're just leaving. I mean they're just
getting the hell out and going toFlorida, going to Texas. KFI AM
six forty live everywhere on the iHeartRadioapp. You've been listening to the Bill
Handle Show. Catch My Show MondayFriday six am to nine am, and

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