December 30, 2024 • 27 mins
Wayne Resnick fills in for Bill all week. HEY… Where are the ADUs we paid for? LA to use AI to give housing. Credit score hangovers are coming folks. Feds ‘return to office’ mandate might be a big fight.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
You're listening to Bill Handle on demand from KFI AM
six forty.
Speaker 2 (00:05):
It is the Bill Handles Show. He's on holiday vacation.
Some of the stories we're watching for you here at KFI.
Former President Jimmy Carter has passed away at the age
of one hundred, the oldest former president in US history.
After his one term, he went onto a post presidential
life focused on humanitarianism.
Speaker 1 (00:29):
Also an investigations underway.
Speaker 2 (00:31):
A private plane and a commercial airliner almost smacked into
each other at Lax. According to officials, the private Jane
Jet was coming from Spokane, It had the Gonzaga team
on it, and there was a delta flight taking off,
and apparently this private plane was gonna, if it hadn't
(00:52):
have been warned enough, was gonna just come across the
path of the delta and smack into it. But luckily
there was a lot of yelling and maybe waving of
arms by air traffic control that prevented a tragedy. Now,
sometimes you want to add to your home, and one
(01:12):
of the most popular things to add to a home,
especially here in southern California where it is allowed, is
an ADU, an accessory dwelling unit.
Speaker 1 (01:22):
This is instead of adding a room to.
Speaker 2 (01:24):
Your house or a floor to your house, you add
a separate little house on your property, and that's where
the mother in law can live or granddad can live,
or however you want to use it. They're also called
colloquially Granny Flax. Well, there's a big controversy and a
bunch of lawsuits going on against a company called Multitasker
(01:47):
without the E. This company allegedly made agreements with a
bunch of people throughout San Diego County to.
Speaker 1 (01:58):
Build them a to use.
Speaker 2 (02:01):
Took money from them, and or got loans on their behalf.
More on that in a moment, because that's a whole
separate area of weirdness and basically didn't build them. And
this alleged scheme is so obvious that federal agents are
(02:23):
looking at it. State authorities are looking at it not
just as a matter of a lawsuit, but possible criminal charges,
although I will say to be clear, as of this moment,
no criminal charges have been filed. But if the Feds
are looking at it and the state is looking at it,
they at least.
Speaker 1 (02:43):
Think it could be something serious.
Speaker 2 (02:46):
The license, at least the general building license that multitask
or construction held was suspended back in twenty twenty one.
There are at least thirteen complaintsiled with the licensing Board
since October, either saying that they abandoned the work without
(03:08):
a reason, that they exceeded the limits for what they're
supposed to get as a down payment, or that they
asked for more money than the amount of work that
they had done would merit. In addition to those complaints
to the licensing Board, they are being sued by their
own bonding agent, and apparently there's eight other breach of
(03:30):
contract lawsuits. There's a collections complaint, there's a business tort case,
there's a small claims case, and there's two lawsuits of
unemployment nature. So we look, none of this has been resolved.
So can we say with certainty that they did anything wrong. No.
Can we say lots and lots of people believe they
(03:54):
did a lot of things wrong. Yes, because all of
those complaints except for two of them, were filed this year.
And so this, in some sense, it could be any
other kind of project. It doesn't have to be specific
to building an accessory dwelling unit. It could be anything.
(04:17):
It could be new floors, it could be adding a room.
It could be some kind of landscaping thing, and you
hire a contractor and you give them a down payment,
and then if they disappear, they leave you a hold
in the bag. But there also was a weird thing
going on here with the loans. Not everybody can just
write a check to have a thing built on their property.
(04:41):
So Multitasker had customers use in house financing, so lenders
that Multitasker had a relationship with, and then you'd get
a loan to cover the construction loan to cover the
cost of building the ADU. But the people who are
(05:03):
complaining are saying the money was sent directly to Multitasker,
not to the people who.
Speaker 1 (05:10):
Were actually taking out the loan.
Speaker 2 (05:14):
And that's a whole another thing that does not seem
to be entirely kosher. So the broad strokes here are
lots of people paid a company to build.
Speaker 1 (05:23):
Them ADUs, they don't have any ADUs.
Speaker 2 (05:26):
Some of them are on the hook for an entire
construction loan even though they don't have construction. And this
company seems to have gone a little bit a wall
in that they're not responding to requests from the press.
And when you look in the court records for all
of these lawsuits. They don't have a lawyer listed for them,
(05:49):
so I don't know that these people are ever gonna
necessarily get any money back.
Speaker 1 (05:53):
It's too bad.
Speaker 2 (05:54):
You have to be so careful when you hire people
for big projects.
Speaker 1 (05:58):
I know that that is.
Speaker 2 (06:01):
I'm not exactly breaking ground with advice here by saying
you gotta be careful, but you do because the Better
Business Bureau some time ago had given them an F
rating because of the complaints that they had received. Now
there's a problem with how it's decided which homeless people
(06:25):
get housing, and the City of La thinks that the
answer might be letting artificial intelligence make the call. So
it used to be, oh so many years ago, when
municipalities had some amount of housing available for the homeless
(06:46):
and homeless people, that it would be handed out either
first come, first serve. That would be one way to
do it, and the other way that it was typically
done is some kind of lottery system. And the problem
with both of those approaches is it means that you
can never be sure that of the homeless people who
(07:08):
need housing, that that available housing goes to those who
need it the most.
Speaker 1 (07:15):
The higher risk that.
Speaker 2 (07:18):
You have for illness, for example, is directly related to
how important it is that you get into stable housing.
And a first come, first serve not only has no
way of measuring your risk relative to another homeless person's risk,
but in fact probably favors people who are at lower risk,
(07:40):
because those are the people who who had the wherewithal
to get there first. A lottery system is random. There's
no way it can ensure that the most vulnerable people
get the housing. Now, there have been attempts to change
this over the years. Back in like twelve years ago,
I think it was twenty twelve, the Department of Housing
(08:03):
and Urban Development said, all right, you states, you get money.
Speaker 1 (08:08):
From us to help with the homeless, and you have
your programs and you're doing whatever. You have to.
Speaker 2 (08:14):
Now have some kind of quote coordinated entry system, meaning
a standardized system for how people enter the front door
of the homeless services building figuratively speaking. And so they
came up with a screening survey. I can't pronounce the acronym,
(08:36):
but it's the Vulnerability Index Service Prioritization Decision Assistance Tool,
the vis PADAT. And they rolled this thing out across
the nation. And what this does, there's I don't know,
forty fifty questions. And the idea is you take the
(08:56):
answers to these questions, that you score them, and the
homely person who's seeking services gets a score, a single
number score from zero to seventeen.
Speaker 1 (09:08):
The higher the.
Speaker 2 (09:09):
Number, the more vulnerable the person is to things like
ending up in an emergency room, or having a mental
health crisis, or becoming incarcerated, or even dying on the streets.
And the idea was, we identify the most vulnerable people,
the people most at risk of bad outcomes, and we
prioritize them to get the housing. And guess what they
(09:31):
found out. And I don't think this is going to
be of any surprise. In fact, people of color, who
may be listening right now, you've probably already successfully guessed.
Speaker 1 (09:44):
Guess what. This tool.
Speaker 2 (09:51):
Had an ingrained bias against blacks and Hispanics.
Speaker 1 (10:00):
False negatives, they call it. This is where you do, in.
Speaker 2 (10:04):
Fact have a risk factor, and this questionnaire, when you
did it, didn't capture it. Now, to be sure, even
white homeless people who took it had false positives. They
had risks that weren't properly identified. But the rate of
this happening was much higher amongst people of color. Now,
(10:27):
is is that just somehow prejudice built into a survey
and not really.
Speaker 1 (10:34):
It's more complicated than that.
Speaker 2 (10:37):
You're being asked the same questions and the problem was mostly.
Speaker 1 (10:44):
That people of color were more inclined to not answer honestly.
Speaker 2 (10:51):
Why because a lot of these questions are very invasive,
and I'm not complaining about that, but they are. You're talking,
You're asking people about drug use, you're asking people about
sexual abuse trauma, you're asking people about domestic violence, and
the way that these questions are worded, it could be
(11:13):
perceived as kind of accusatory, and so some people of
all races are like, I don't want to say anything.
But when that happens, then you are underscored, and then
you are underserved. So now comes the current idea, which
is a senior data scientist at the California Policy Lab
(11:37):
named Brian Blackwell has made an AI tool where you
give that same survey justice always has been done, but
then it's put into the computer and the computer with
machine learning will adjust for what is known about the
(11:57):
failures of the survey in order to get a more
accurate result for the people who are applying for the help.
That AI tool is now in the hands of the
Los Angeles Homeless Services Agency. They're going to start training
workers on it, and basically they have been for a
(12:18):
couple of weeks it looks like, and implement it starting
the beginning of next year, and then they'll have to
be some tracking and record keeping to see if the
housing is distributed in a more it's.
Speaker 1 (12:33):
Not really an equable way. This is the thing.
Speaker 2 (12:35):
It's probably easy to figure out a way to distribute
something equitably. Here what you want is that it's not equitable,
in fact, that it's not let's say fair, that is
in fact more effective because you want the person with
more risk to get it, even if they were way
(12:57):
in the back of the line, if they have higher
risk than the people in front of them. The idea is,
if we want our homeless money to be effective, they
get it. They can jump the line because they need
it more. All right, A hangover is coming for a
lot of Americans. It is not from drinking on New
Year's Eve. It is not an alcohol hangover. It's a
(13:21):
credit score hangover. Because here's what happened during the pandemic.
Certain things happened that raised some people's credit scores a
lot of people.
Speaker 1 (13:37):
We're talking about millions of people.
Speaker 2 (13:40):
For example, there were stimulus checks that allowed people to
pay their bills, and there was forbearance on mortgages. In
some cases people didn't have to pay their mortgage or
didn't get hit with any late fees or a reporting
of a late payment to the credit agencies on their mortgage,
(14:01):
and several other programs that weren't really designed to.
Speaker 1 (14:05):
Raise people's credit score.
Speaker 2 (14:06):
They were designed to help people make it through the pandemic,
but they had the secondary effect of raising people's credit scores.
And as you might imagine, the effect is going to
be more pronounced with people who have more headroom to
have their credit score go up. So the people who
(14:27):
benefit in terms of their credit score going up were
people who maybe didn't have the best credit scores to
start with, they had more room to improve. Well, that
stuff's all over all, the pandemic era aid to people
is basically over. So what's happening now is people had
higher credit scores and some of them took on debts,
(14:49):
some of them bought homes for example. Now the same people,
the most vulnerable in this regard, are seeing their credit
scores go down. That makes borrowing costs higher. In some cases,
their credit scores are now lower than they were before
(15:11):
the pandemic started. And that's the hangover that we're talking about.
You know, you had you had a you went on
a binge. Let's say you went on a bender, and
now it's time to pay the piper. But you may
not be able to pay the piper. The piper may
report you as having a late payment. You know. The
(15:31):
thing with credit scores is a number one. They are
pretty much.
Speaker 1 (15:36):
The most probably because it's number.
Speaker 2 (15:53):
Pipe the fifty by this corporation called the Fair Isaac Corporation.
That's how you get fiight. Oh, and it's assigned to you.
You didn't ask for it, you didn't volunteer to have
it assigned to you. And some people don't even realize
(16:15):
it's being assigned to them, but it is, and it's
what everybody looks at. So the problem is if it's
being affected by circumstances not directly related to your true
ability to pay your debts, which is really all it's
supposed to represent. It's only supposed to represent the relative
(16:40):
likelihood that you can repay alone, or that if you
get a credit card that you can pay it, but
it seems to have become people. It's viewed as your
entire financial identity, which is probably not fair.
Speaker 1 (17:01):
So it's affecting some people and not others.
Speaker 2 (17:04):
Total delinquencies right now are low if you look historically
right now, it's a low rate of delinquencies over all.
But the people at the lower end of the credit
spectrum are now disproportionately in trouble because what you had
(17:25):
was in essence fico inflation. Because the credit score, when
you calculate a credit score.
Speaker 1 (17:33):
It's looking at you. It's not looking at the world.
Speaker 2 (17:38):
The credit score doesn't know what's going on in the world.
It just knows your income and your debts, and so
it's it's sterile. It's isolated from reality in a lot
of cases. And anybody and we all understand there are
circumstances that can be beyond your control or your anticipation
(18:00):
that don't have anything to do with your income or
the amount of debt that you already have, or your
history of paying things on time that can come into
play and affect your ability to pay your bills on time,
and the credit score can't reflect that until of course,
the outside thing happens to you. Now you've missed some
(18:24):
payments because of this outside thing in the world, and
then it starts to reflect it because now you have
late payments, and that's when your credit score goes down
through in essence, no fault of your own. What's going
to happen moving forward. There's optimism and there's pessimism. Bank
(18:46):
stocks went up this year and bonds that are linked
to auto loans were bought up by investors in a
big way. That suggests that at least if you ask
Wall Street what's going on, they will say, we think
most Americans will keep paying their bills. That's the optimism.
But back in October, what happened. You know, people who
(19:12):
had federal student loans and missed payments, they were getting
protection from having that reported to the credit bureaus and
dinging their credit scores for four years. If you missed
a student loan payment, it didn't ding your credit score.
Speaker 1 (19:27):
That's over.
Speaker 2 (19:29):
So what's going to start happening is missed payments will
start showing up as delinquencies in January next month. That's
going to change things for a lot of people. That's
the pessimism. There's another thing going on that affects even
more people, and that has been brewing for quite some time,
(19:50):
and that is going to be very salient to anybody
who used to work in an office and doesn't have
to go to their office as much anymore, because President
elect Donald Trump issued a warning to federal employees last
week that they are going to go back to the
office or else they're going to be canned.
Speaker 1 (20:12):
You fired. Now.
Speaker 2 (20:16):
Trump and Republicans in Congress have been trying to end
this working from home culture that really became popular during
the pandemic, and it was popular in the private sector,
and it was popular in the government. There's two point
(20:40):
three million workers in the federal Civil Service and President
elect Trump wants y'all to get your ass back into
the office.
Speaker 1 (20:53):
Now. Will it be simple?
Speaker 2 (20:56):
Can he simply wave a magic wand and you all
have to go back to the office. No, Because here's
the thing. Over half over half of the federal Civil
Service employees are covered by union contracts, and a lot
of those contracts specifically provide for telework. In fact, ten
(21:22):
percent now of federal jobs are designated as fully remote,
meaning your official workplace is your house or it might
be a rented space far away from the headquarters or
the regional office. So, first of all, the problem is
(21:43):
going to be forcing people back to work. Is any
of these federal employees who have collective bargaining contracts are
going to be able correctly to say, if you force
me to come back to the office, it's a violation
of labor law. Now, the administrator will all be Trump appointees,
and so maybe they will literally, and I'm not trying
(22:04):
to be funny here, maybe the attitude will be, we
don't care.
Speaker 1 (22:08):
If it's illegal, We're going to do it anyway, and
you can.
Speaker 2 (22:12):
Go to court and maybe you'll get a judge that
wasn't appointed by me, and maybe something bad will happen
to us, but maybe not. There's another problem, though, that
has nothing to do with the union protections of teleworking money.
It's actually gonna cost a lot of money to bring
(22:34):
everybody back into the office all the time, and spending
a lot of money is not a simpatico with the
we have to cut the budget approach that we are
expecting from the incoming administration.
Speaker 1 (22:51):
Now, why is it going to be so expensive? Well,
because for.
Speaker 2 (22:56):
The last several years the government has been getting rid
of office space.
Speaker 1 (23:06):
There's not It depends.
Speaker 2 (23:19):
To come back to the office up more office space.
So a lot of leases that were canceled may have
to be reinstated, but it's not really reinstating it. You
have to go find another office, private office space, somewhere
(23:39):
private sector office space, and enter into a lease agreement
and start spending more money on office space again.
Speaker 1 (23:51):
And that's there's.
Speaker 2 (23:52):
Going to be people in the publican party who aren't
going to like that. They're not going to like the
spending of the money. It's a real dilemma when you
are for smaller government and less spending and you want
to cut spending, but you also hate it when people
work from home because you can't solve one without ruining
(24:15):
the other.
Speaker 1 (24:19):
So there's at least two big roadblocks.
Speaker 2 (24:23):
Then the other roadblock is the people who aren't covered
by a union. It doesn't mean they're going to stay
in their job. People now the number one job requirement
cited by potential employees and people who have jobs, the
number one now is flexibility. You know a lot of
(24:43):
people in the federal government right now, they were hired
right before or during the pandemic. They don't even know,
a get up and commute to the office five days
a week life.
Speaker 1 (25:00):
They don't know it. They are not gonna like it.
I mean, nobody likes it.
Speaker 2 (25:04):
They are really not gonna like it because they never
had to endure it before.
Speaker 1 (25:08):
It would be brand new pain for them.
Speaker 2 (25:11):
And lots of people are, you know, because the writing's
on the wall that the Trump administration is going to
try to do at least some of this, and a
lot of people in the federal government are trying to
decide can I adjust my childcare thing and my commuting
and all of that, or am I just gonna quit
and try to find a job where I don't have to.
Speaker 1 (25:33):
Here's the other thing, though, that might.
Speaker 2 (25:35):
Just suit the new administration fine, because there's the Department
of Government Efficiency that's going to be created.
Speaker 1 (25:43):
Elon musk vivik Ramaswami.
Speaker 2 (25:46):
If they can get a lot of people to quit
because of a back to the office mandate, then they
don't have to lay off as many people. They may
be able to shrink the size of the government employee
force without without getting rid of anybody directly. They may
just implement policies like return to the Office and let
(26:10):
the attrition happen as the choice of the employee. So
we will see how far it can go, whether there
will be lawsuits, whether a new administration will say we're
just going to go ahead and violate labor law, and
you guys can cry about it and see if you
can get anybody to stop us.
Speaker 1 (26:27):
But I want to just leave you with one thing.
Speaker 2 (26:30):
The first government agency to adopt a remote work policy
was the Patent and Trademark Office for its patent examiners,
and this was in nineteen ninety seven. In order to
get the best people from all over the country, they
decided that patent examiners could work from wherever they are.
(26:55):
So the idea is not that new KFI AM six
forty live everywhere on the iHeartRadio app.
Speaker 1 (27:03):
You've been listening to the Bill Handle Show.
Speaker 2 (27:05):
Catch My Show Monday through Friday six am to nine am,
and anytime on demand on the iHeartRadio app
You're listening to Bill Handle on demand from KFI AM
six forty.
Speaker 2 (00:05):
It is the Bill Handles Show. He's on holiday vacation.
Some of the stories we're watching for you here at KFI.
Former President Jimmy Carter has passed away at the age
of one hundred, the oldest former president in US history.
After his one term, he went onto a post presidential
life focused on humanitarianism.
Speaker 1 (00:29):
Also an investigations underway.
Speaker 2 (00:31):
A private plane and a commercial airliner almost smacked into
each other at Lax. According to officials, the private Jane
Jet was coming from Spokane, It had the Gonzaga team
on it, and there was a delta flight taking off,
and apparently this private plane was gonna, if it hadn't
(00:52):
have been warned enough, was gonna just come across the
path of the delta and smack into it. But luckily
there was a lot of yelling and maybe waving of
arms by air traffic control that prevented a tragedy. Now,
sometimes you want to add to your home, and one
(01:12):
of the most popular things to add to a home,
especially here in southern California where it is allowed, is
an ADU, an accessory dwelling unit.
Speaker 1 (01:22):
This is instead of adding a room to.
Speaker 2 (01:24):
Your house or a floor to your house, you add
a separate little house on your property, and that's where
the mother in law can live or granddad can live,
or however you want to use it. They're also called
colloquially Granny Flax. Well, there's a big controversy and a
bunch of lawsuits going on against a company called Multitasker
(01:47):
without the E. This company allegedly made agreements with a
bunch of people throughout San Diego County to.
Speaker 1 (01:58):
Build them a to use.
Speaker 2 (02:01):
Took money from them, and or got loans on their behalf.
More on that in a moment, because that's a whole
separate area of weirdness and basically didn't build them. And
this alleged scheme is so obvious that federal agents are
(02:23):
looking at it. State authorities are looking at it not
just as a matter of a lawsuit, but possible criminal charges,
although I will say to be clear, as of this moment,
no criminal charges have been filed. But if the Feds
are looking at it and the state is looking at it,
they at least.
Speaker 1 (02:43):
Think it could be something serious.
Speaker 2 (02:46):
The license, at least the general building license that multitask
or construction held was suspended back in twenty twenty one.
There are at least thirteen complaintsiled with the licensing Board
since October, either saying that they abandoned the work without
(03:08):
a reason, that they exceeded the limits for what they're
supposed to get as a down payment, or that they
asked for more money than the amount of work that
they had done would merit. In addition to those complaints
to the licensing Board, they are being sued by their
own bonding agent, and apparently there's eight other breach of
(03:30):
contract lawsuits. There's a collections complaint, there's a business tort case,
there's a small claims case, and there's two lawsuits of
unemployment nature. So we look, none of this has been resolved.
So can we say with certainty that they did anything wrong. No.
Can we say lots and lots of people believe they
(03:54):
did a lot of things wrong. Yes, because all of
those complaints except for two of them, were filed this year.
And so this, in some sense, it could be any
other kind of project. It doesn't have to be specific
to building an accessory dwelling unit. It could be anything.
(04:17):
It could be new floors, it could be adding a room.
It could be some kind of landscaping thing, and you
hire a contractor and you give them a down payment,
and then if they disappear, they leave you a hold
in the bag. But there also was a weird thing
going on here with the loans. Not everybody can just
write a check to have a thing built on their property.
(04:41):
So Multitasker had customers use in house financing, so lenders
that Multitasker had a relationship with, and then you'd get
a loan to cover the construction loan to cover the
cost of building the ADU. But the people who are
(05:03):
complaining are saying the money was sent directly to Multitasker,
not to the people who.
Speaker 1 (05:10):
Were actually taking out the loan.
Speaker 2 (05:14):
And that's a whole another thing that does not seem
to be entirely kosher. So the broad strokes here are
lots of people paid a company to build.
Speaker 1 (05:23):
Them ADUs, they don't have any ADUs.
Speaker 2 (05:26):
Some of them are on the hook for an entire
construction loan even though they don't have construction. And this
company seems to have gone a little bit a wall
in that they're not responding to requests from the press.
And when you look in the court records for all
of these lawsuits. They don't have a lawyer listed for them,
(05:49):
so I don't know that these people are ever gonna
necessarily get any money back.
Speaker 1 (05:53):
It's too bad.
Speaker 2 (05:54):
You have to be so careful when you hire people
for big projects.
Speaker 1 (05:58):
I know that that is.
Speaker 2 (06:01):
I'm not exactly breaking ground with advice here by saying
you gotta be careful, but you do because the Better
Business Bureau some time ago had given them an F
rating because of the complaints that they had received. Now
there's a problem with how it's decided which homeless people
(06:25):
get housing, and the City of La thinks that the
answer might be letting artificial intelligence make the call. So
it used to be, oh so many years ago, when
municipalities had some amount of housing available for the homeless
(06:46):
and homeless people, that it would be handed out either
first come, first serve. That would be one way to
do it, and the other way that it was typically
done is some kind of lottery system. And the problem
with both of those approaches is it means that you
can never be sure that of the homeless people who
(07:08):
need housing, that that available housing goes to those who
need it the most.
Speaker 1 (07:15):
The higher risk that.
Speaker 2 (07:18):
You have for illness, for example, is directly related to
how important it is that you get into stable housing.
And a first come, first serve not only has no
way of measuring your risk relative to another homeless person's risk,
but in fact probably favors people who are at lower risk,
(07:40):
because those are the people who who had the wherewithal
to get there first. A lottery system is random. There's
no way it can ensure that the most vulnerable people
get the housing. Now, there have been attempts to change
this over the years. Back in like twelve years ago,
I think it was twenty twelve, the Department of Housing
(08:03):
and Urban Development said, all right, you states, you get money.
Speaker 1 (08:08):
From us to help with the homeless, and you have
your programs and you're doing whatever. You have to.
Speaker 2 (08:14):
Now have some kind of quote coordinated entry system, meaning
a standardized system for how people enter the front door
of the homeless services building figuratively speaking. And so they
came up with a screening survey. I can't pronounce the acronym,
(08:36):
but it's the Vulnerability Index Service Prioritization Decision Assistance Tool,
the vis PADAT. And they rolled this thing out across
the nation. And what this does, there's I don't know,
forty fifty questions. And the idea is you take the
(08:56):
answers to these questions, that you score them, and the
homely person who's seeking services gets a score, a single
number score from zero to seventeen.
Speaker 1 (09:08):
The higher the.
Speaker 2 (09:09):
Number, the more vulnerable the person is to things like
ending up in an emergency room, or having a mental
health crisis, or becoming incarcerated, or even dying on the streets.
And the idea was, we identify the most vulnerable people,
the people most at risk of bad outcomes, and we
prioritize them to get the housing. And guess what they
(09:31):
found out. And I don't think this is going to
be of any surprise. In fact, people of color, who
may be listening right now, you've probably already successfully guessed.
Speaker 1 (09:44):
Guess what. This tool.
Speaker 2 (09:51):
Had an ingrained bias against blacks and Hispanics.
Speaker 1 (10:00):
False negatives, they call it. This is where you do, in.
Speaker 2 (10:04):
Fact have a risk factor, and this questionnaire, when you
did it, didn't capture it. Now, to be sure, even
white homeless people who took it had false positives. They
had risks that weren't properly identified. But the rate of
this happening was much higher amongst people of color. Now,
(10:27):
is is that just somehow prejudice built into a survey
and not really.
Speaker 1 (10:34):
It's more complicated than that.
Speaker 2 (10:37):
You're being asked the same questions and the problem was mostly.
Speaker 1 (10:44):
That people of color were more inclined to not answer honestly.
Speaker 2 (10:51):
Why because a lot of these questions are very invasive,
and I'm not complaining about that, but they are. You're talking,
You're asking people about drug use, you're asking people about
sexual abuse trauma, you're asking people about domestic violence, and
the way that these questions are worded, it could be
(11:13):
perceived as kind of accusatory, and so some people of
all races are like, I don't want to say anything.
But when that happens, then you are underscored, and then
you are underserved. So now comes the current idea, which
is a senior data scientist at the California Policy Lab
(11:37):
named Brian Blackwell has made an AI tool where you
give that same survey justice always has been done, but
then it's put into the computer and the computer with
machine learning will adjust for what is known about the
(11:57):
failures of the survey in order to get a more
accurate result for the people who are applying for the help.
That AI tool is now in the hands of the
Los Angeles Homeless Services Agency. They're going to start training
workers on it, and basically they have been for a
(12:18):
couple of weeks it looks like, and implement it starting
the beginning of next year, and then they'll have to
be some tracking and record keeping to see if the
housing is distributed in a more it's.
Speaker 1 (12:33):
Not really an equable way. This is the thing.
Speaker 2 (12:35):
It's probably easy to figure out a way to distribute
something equitably. Here what you want is that it's not equitable,
in fact, that it's not let's say fair, that is
in fact more effective because you want the person with
more risk to get it, even if they were way
(12:57):
in the back of the line, if they have higher
risk than the people in front of them. The idea is,
if we want our homeless money to be effective, they
get it. They can jump the line because they need
it more. All right, A hangover is coming for a
lot of Americans. It is not from drinking on New
Year's Eve. It is not an alcohol hangover. It's a
(13:21):
credit score hangover. Because here's what happened during the pandemic.
Certain things happened that raised some people's credit scores a
lot of people.
Speaker 1 (13:37):
We're talking about millions of people.
Speaker 2 (13:40):
For example, there were stimulus checks that allowed people to
pay their bills, and there was forbearance on mortgages. In
some cases people didn't have to pay their mortgage or
didn't get hit with any late fees or a reporting
of a late payment to the credit agencies on their mortgage,
(14:01):
and several other programs that weren't really designed to.
Speaker 1 (14:05):
Raise people's credit score.
Speaker 2 (14:06):
They were designed to help people make it through the pandemic,
but they had the secondary effect of raising people's credit scores.
And as you might imagine, the effect is going to
be more pronounced with people who have more headroom to
have their credit score go up. So the people who
(14:27):
benefit in terms of their credit score going up were
people who maybe didn't have the best credit scores to
start with, they had more room to improve. Well, that
stuff's all over all, the pandemic era aid to people
is basically over. So what's happening now is people had
higher credit scores and some of them took on debts,
(14:49):
some of them bought homes for example. Now the same people,
the most vulnerable in this regard, are seeing their credit
scores go down. That makes borrowing costs higher. In some cases,
their credit scores are now lower than they were before
(15:11):
the pandemic started. And that's the hangover that we're talking about.
You know, you had you had a you went on
a binge. Let's say you went on a bender, and
now it's time to pay the piper. But you may
not be able to pay the piper. The piper may
report you as having a late payment. You know. The
(15:31):
thing with credit scores is a number one. They are
pretty much.
Speaker 1 (15:36):
The most probably because it's number.
Speaker 2 (15:53):
Pipe the fifty by this corporation called the Fair Isaac Corporation.
That's how you get fiight. Oh, and it's assigned to you.
You didn't ask for it, you didn't volunteer to have
it assigned to you. And some people don't even realize
(16:15):
it's being assigned to them, but it is, and it's
what everybody looks at. So the problem is if it's
being affected by circumstances not directly related to your true
ability to pay your debts, which is really all it's
supposed to represent. It's only supposed to represent the relative
(16:40):
likelihood that you can repay alone, or that if you
get a credit card that you can pay it, but
it seems to have become people. It's viewed as your
entire financial identity, which is probably not fair.
Speaker 1 (17:01):
So it's affecting some people and not others.
Speaker 2 (17:04):
Total delinquencies right now are low if you look historically
right now, it's a low rate of delinquencies over all.
But the people at the lower end of the credit
spectrum are now disproportionately in trouble because what you had
(17:25):
was in essence fico inflation. Because the credit score, when
you calculate a credit score.
Speaker 1 (17:33):
It's looking at you. It's not looking at the world.
Speaker 2 (17:38):
The credit score doesn't know what's going on in the world.
It just knows your income and your debts, and so
it's it's sterile. It's isolated from reality in a lot
of cases. And anybody and we all understand there are
circumstances that can be beyond your control or your anticipation
(18:00):
that don't have anything to do with your income or
the amount of debt that you already have, or your
history of paying things on time that can come into
play and affect your ability to pay your bills on time,
and the credit score can't reflect that until of course,
the outside thing happens to you. Now you've missed some
(18:24):
payments because of this outside thing in the world, and
then it starts to reflect it because now you have
late payments, and that's when your credit score goes down
through in essence, no fault of your own. What's going
to happen moving forward. There's optimism and there's pessimism. Bank
(18:46):
stocks went up this year and bonds that are linked
to auto loans were bought up by investors in a
big way. That suggests that at least if you ask
Wall Street what's going on, they will say, we think
most Americans will keep paying their bills. That's the optimism.
But back in October, what happened. You know, people who
(19:12):
had federal student loans and missed payments, they were getting
protection from having that reported to the credit bureaus and
dinging their credit scores for four years. If you missed
a student loan payment, it didn't ding your credit score.
Speaker 1 (19:27):
That's over.
Speaker 2 (19:29):
So what's going to start happening is missed payments will
start showing up as delinquencies in January next month. That's
going to change things for a lot of people. That's
the pessimism. There's another thing going on that affects even
more people, and that has been brewing for quite some time,
(19:50):
and that is going to be very salient to anybody
who used to work in an office and doesn't have
to go to their office as much anymore, because President
elect Donald Trump issued a warning to federal employees last
week that they are going to go back to the
office or else they're going to be canned.
Speaker 1 (20:12):
You fired. Now.
Speaker 2 (20:16):
Trump and Republicans in Congress have been trying to end
this working from home culture that really became popular during
the pandemic, and it was popular in the private sector,
and it was popular in the government. There's two point
(20:40):
three million workers in the federal Civil Service and President
elect Trump wants y'all to get your ass back into
the office.
Speaker 1 (20:53):
Now. Will it be simple?
Speaker 2 (20:56):
Can he simply wave a magic wand and you all
have to go back to the office. No, Because here's
the thing. Over half over half of the federal Civil
Service employees are covered by union contracts, and a lot
of those contracts specifically provide for telework. In fact, ten
(21:22):
percent now of federal jobs are designated as fully remote,
meaning your official workplace is your house or it might
be a rented space far away from the headquarters or
the regional office. So, first of all, the problem is
(21:43):
going to be forcing people back to work. Is any
of these federal employees who have collective bargaining contracts are
going to be able correctly to say, if you force
me to come back to the office, it's a violation
of labor law. Now, the administrator will all be Trump appointees,
and so maybe they will literally, and I'm not trying
(22:04):
to be funny here, maybe the attitude will be, we
don't care.
Speaker 1 (22:08):
If it's illegal, We're going to do it anyway, and
you can.
Speaker 2 (22:12):
Go to court and maybe you'll get a judge that
wasn't appointed by me, and maybe something bad will happen
to us, but maybe not. There's another problem, though, that
has nothing to do with the union protections of teleworking money.
It's actually gonna cost a lot of money to bring
(22:34):
everybody back into the office all the time, and spending
a lot of money is not a simpatico with the
we have to cut the budget approach that we are
expecting from the incoming administration.
Speaker 1 (22:51):
Now, why is it going to be so expensive? Well,
because for.
Speaker 2 (22:56):
The last several years the government has been getting rid
of office space.
Speaker 1 (23:06):
There's not It depends.
Speaker 2 (23:19):
To come back to the office up more office space.
So a lot of leases that were canceled may have
to be reinstated, but it's not really reinstating it. You
have to go find another office, private office space, somewhere
(23:39):
private sector office space, and enter into a lease agreement
and start spending more money on office space again.
Speaker 1 (23:51):
And that's there's.
Speaker 2 (23:52):
Going to be people in the publican party who aren't
going to like that. They're not going to like the
spending of the money. It's a real dilemma when you
are for smaller government and less spending and you want
to cut spending, but you also hate it when people
work from home because you can't solve one without ruining
(24:15):
the other.
Speaker 1 (24:19):
So there's at least two big roadblocks.
Speaker 2 (24:23):
Then the other roadblock is the people who aren't covered
by a union. It doesn't mean they're going to stay
in their job. People now the number one job requirement
cited by potential employees and people who have jobs, the
number one now is flexibility. You know a lot of
(24:43):
people in the federal government right now, they were hired
right before or during the pandemic. They don't even know,
a get up and commute to the office five days
a week life.
Speaker 1 (25:00):
They don't know it. They are not gonna like it.
I mean, nobody likes it.
Speaker 2 (25:04):
They are really not gonna like it because they never
had to endure it before.
Speaker 1 (25:08):
It would be brand new pain for them.
Speaker 2 (25:11):
And lots of people are, you know, because the writing's
on the wall that the Trump administration is going to
try to do at least some of this, and a
lot of people in the federal government are trying to
decide can I adjust my childcare thing and my commuting
and all of that, or am I just gonna quit
and try to find a job where I don't have to.
Speaker 1 (25:33):
Here's the other thing, though, that might.
Speaker 2 (25:35):
Just suit the new administration fine, because there's the Department
of Government Efficiency that's going to be created.
Speaker 1 (25:43):
Elon musk vivik Ramaswami.
Speaker 2 (25:46):
If they can get a lot of people to quit
because of a back to the office mandate, then they
don't have to lay off as many people. They may
be able to shrink the size of the government employee
force without without getting rid of anybody directly. They may
just implement policies like return to the Office and let
(26:10):
the attrition happen as the choice of the employee. So
we will see how far it can go, whether there
will be lawsuits, whether a new administration will say we're
just going to go ahead and violate labor law, and
you guys can cry about it and see if you
can get anybody to stop us.
Speaker 1 (26:27):
But I want to just leave you with one thing.
Speaker 2 (26:30):
The first government agency to adopt a remote work policy
was the Patent and Trademark Office for its patent examiners,
and this was in nineteen ninety seven. In order to
get the best people from all over the country, they
decided that patent examiners could work from wherever they are.
(26:55):
So the idea is not that new KFI AM six
forty live everywhere on the iHeartRadio app.
Speaker 1 (27:03):
You've been listening to the Bill Handle Show.
Speaker 2 (27:05):
Catch My Show Monday through Friday six am to nine am,
and anytime on demand on the iHeartRadio app
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