August 13, 2026 • 36 mins
Hour Three of A&G features...
- Our guest (and our Healthcare Guru), Craig Gottwals talks to Joe about what ails our healthcare system.
- How China's approach to AI is causing headache for lawmakers in DC...
- A teacher breaks down on Day 2 of the school year.
Stupid Should Hurt: https://www.armstrongandgetty.com/
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Speaker 1 (00:02):
Broadcasting live from the Abraham Lincoln Radio Studio the George
Washington Broadcast Center. Jack Armstrong is Joe Getty Armstrong and Getty,
and now he Armstrong and Getty. Thank you for being here.
Speaker 2 (00:26):
A lot of good stuff to squeeze in this hour,
so let's get right to it. Craig gott Wall's longtime
friend of The Armstrong and Getty Show and friend of
mine personally. Craig the Healthcare Guru, is an attorney, law
and benefit consultant for Benefit Revolution and is one of
the most voracious readers and studiers of what's happening in
the world that I've ever met in my life. Hence
(00:48):
a really good guy to talk to you about some
stuff that's pretty complicated and tends to make people's eyes
glaze over because he's really really good at helping us
understand it.
Speaker 1 (00:56):
Craig, how are you my friend?
Speaker 3 (00:58):
I am well, mister Getty, I'm terrific.
Speaker 1 (01:01):
Thank you.
Speaker 2 (01:02):
Can't complain, but some times I still do as the
song said, but looking forward to talking to you about
various healthcare and kind of tangential issues including and I
didn't even ask can you do the second segment this
half hour.
Speaker 1 (01:18):
Sure. Yeah, look, okay, great, because.
Speaker 2 (01:20):
In that second segment, I want to get to solutions
and make sure we set aside time to do that,
because there are some things that particularly employers can do
about the incredible expense of health care and insurance and
that sort of thing. I'm told our connection dropped. Wow,
(01:40):
that's been happening semi regularly lately. As I explained yesterday,
a lot of the software and computer you know, dependent stuff.
It's like super inexpensive and incredibly handy, and you can
connect with people from around the.
Speaker 1 (01:57):
World, but it's like a third is reliable.
Speaker 2 (02:00):
Is the old timey wires connected to stuff, systems of
the past.
Speaker 1 (02:08):
Okay, we've got them, Joe, Yeah, yeah, yeah, no worries.
What are you gonna do?
Speaker 2 (02:13):
So anyway, what's Let's talk about the big problem in
healthcare costs because I know I saw this in your notes,
and please people forgive me. Next year, the healthcare costs
for all of us, the increase will probably be the
worst in a decade and a half.
Speaker 3 (02:33):
Correct, Yeah, the worst in sixteen years. Everybody's reporting.
Speaker 2 (02:38):
Oh good lord, good lord, Okay, give us all a minute.
You've punched us in the stomach. Okay, now we're able
to stand up and listen. Why what's the big problem?
Speaker 3 (02:50):
Well, the number one problem in healthcare. And it's taken
me years to uncover this, Joe and I know it's
it's everybody likes to hate on the insurance companies and
they're a huge problem. But the number one problem, if
you just look at this in a sheer dollars number,
is the hospitals, the hospital lobby, and specifically what hospitals
charge employers for the care they receive, because it's typically
(03:13):
two and a half to three times what a hospital
will charge a patient on Medicare, for example. Now, is
Medicare enough for every hospital? Probably not, but it doesn't
have to be three x. And that's what's going on
in the hospital world. The statistic that I think boggles
most minds on this topic is if you were to
cobble together all of the profits in the hospital industry
in a given year, it's about seventy five billion dollars,
(03:36):
Whereas if you were to cobble together all of the
profits of all of the health insurers in a given year,
it's only about a third of that twenty five billion dollars.
Speaker 1 (03:44):
Wow.
Speaker 3 (03:44):
Wow, that is in the hospital pricing.
Speaker 2 (03:47):
Right, So we're we're dedicated capitalists, you and I.
Speaker 1 (03:51):
I'm pro profit.
Speaker 2 (03:53):
But the problem is, and this is where leftists get
away with what they get away with. They point to
this and say it's the free market. No, it's the
opposite of the free market. It's cronyism. It's lobbyists buying
favors from the government. So basically, if you're on government healthcare,
you are grossly underpaying what you probably would for say
(04:15):
a hospital stay or treatment or whatever. And the hospitals,
because the game is fixed by the government, can then
like double triple charge those of us with private insurance
and the government lets them while the government forces them
to take those underpaying government accounts.
Speaker 1 (04:30):
Is that more or less accurate?
Speaker 3 (04:32):
That is more or less accurate, Joe, Yeah, I mean
I might quibble with some of your ferb phrasing there,
but that's pretty much what's going on. Yeah, Well, it's
the when we say government payment, right, that's a pretty
broad picture because mecaid, what the low income amongst us pay,
which is about twenty five percent of society, is underpaid.
(04:53):
The Medicaid doesn't pay enough. Medicare what we put the
oldsters on it actually does pay enough at about eighty
to ninety percent of facilities. So this marketing ploy that
the Medicare is so horrible and payment is actually really
been kind of a smoke screen created by the hospital
insurance cartel in bed with the government, is what I
(05:14):
would say. It's mark Like you said, the market is
totally broken because the end users have no real exposure
to the actual prices. I mean, how many people understand
if you have your family on a health plan this year,
the premium for that health plan in twenty twenty seven
is going to be thirty thousand dollars. You don't see
it because your employer pays the lion's share of it.
(05:35):
But it's a new car every year just to ensure
your family.
Speaker 1 (05:39):
Wow. Wow. So then, and I'm.
Speaker 3 (05:43):
Here to tell you, Joe, a huge portion of that
is waste, fraud and abuse. So like roughly a third
thirty percent, And that's wasted. And when I say waste,
fraud and abuse, I mean middleman getting rich. I mean
lobbyists getting rich. I mean the hospital lobby and the
insurance lobby shaking hands behind closes doors, pretending that they
fight over prices when in reality, they're just gouging us
(06:04):
all at these prices. But the market's so broken, it's
such an oligopoly. We can't fix it that way. We
can't fix it with free market mechanisms anymore. Wow, so dangerous.
That's what's so dangerous to allow the left to say, ah,
yes we need socialism, right, gosh, it.
Speaker 2 (06:21):
Would be more of this yeah, gosh. So is it
just a political problem? Then we need like new leaders
who won't take the bribes and will design a system
that works. O. Now, is it just so screwed up
that we as individuals and companies have to find workarounds.
Speaker 3 (06:41):
It'll never be fixed at the individual level, and it'll
never be fixed at the political level. It has to be.
The one power we still have in healthcare is that
employers still control about a third to forty percent of
all healthcare. So it's incumbent upon employers, one by one
to exit the system, self, ensure their plan, and remove
as many of these cartel members from their direct health
(07:02):
care plan as they can. It works, it's growing, and
it is. It is the one ray of light we
have in this space where where innovative employers are saying
no more insurance companies, No more hospital cartels. We're going
to negotiate directly with our local hospital. We're going to
find fair pricing, and we're going to put a plan
together on our own that exits all this lobby government
(07:25):
industrial compact flex from our plan.
Speaker 1 (07:28):
Right right.
Speaker 2 (07:29):
You mentioned, Craig that roughly a third of healthcare spending
is private insurance.
Speaker 1 (07:34):
Is that what you said?
Speaker 3 (07:36):
Yeah, there's two ways to cut this sociation.
Speaker 2 (07:39):
This is a little bit because I was working forward
asking you what percentage currently is the government paying for,
you know, around America.
Speaker 3 (07:46):
Yeah, so the government, let's say it this way, tax
payers pay for seventy percent of health care in the
United States. Wow, all right, true statement. Yeah, yeah, but
employers still control about forty five percent of health care
in the United States. And you say, well, how does
that square Well, you got to remember counties, cities, and
governments are still employers. So those are government controlled employers
(08:09):
that where the taxpayer is paying the So you can
overlap and that statistic.
Speaker 2 (08:14):
Right right, yeah, okay, all right, Well we can talk
more about the you know, what companies can do with
self insurance and that sort of thing, because I absolutely
love it. But the long story made short is that
big hospital, big insurance, and big pharma are all in
bed together.
Speaker 3 (08:32):
Yeah, they absolutely are, and Obamacare solidified that for them.
Obamacare brought all of them to the table and said, look,
we're going to Basically what was happening behind the scenes
and Obamacare is they were saying, we're going to tell
everybody we're going to cover more people and bring costs down.
But the reality is it was all a Lincoln and
nod and everybody kind of knew you weren't going to
bring costs down, which of course we haven't. Costs have
(08:53):
gone up even faster since Obamacare. Yes, more people were covered,
but the number of because of population growth in the
United States, the number of uninsured in the country today
is roughly the same as it was when Obamacare passed
in twenty ten. So yes, we have more people covered,
but with the people coming in, we still have the
same problem we had in twenty ten for the most part.
Speaker 1 (09:17):
Wow.
Speaker 2 (09:17):
So Obama in essence thought, reinventing this is going to
be way too difficult and politically unpopular, So I will
use the super giants who are already just at the
trough getting fat and enlist their help. In return for
not calling them on their bs.
Speaker 3 (09:37):
Yeah, and that's exactly what would happen with any Let's
just say we get another super lefty socialist type in
the federal office, right at president's level, the same thing
would happen. They would get in and realize big insurance,
big pharma, and the hospital chains are so powerful. They're
the number one employer, the number one lobby, and the
number one expenditure in the federal government. So they would
(10:00):
just realize, Okay, we have to work with them to
massage it. We'll never be able to break out of
the system entirely. It has to be employers doing it
one by one, and right now, rough roughly five percent
of employers are doing like the full but the full
boat like what I would talk about, like where you
really exit all that stuff from your plan. If we
got to twenty to twenty five percent of employers doing this,
(10:22):
it would radically change the healthcare landscape.
Speaker 2 (10:25):
Okay, I want to talk about that a little bit
more next segment. But first, how do you answer people
who say, Craig, look, it's so screwed up, we need
single payer government healthcare.
Speaker 3 (10:38):
Yeah, well, that's that's an answer I get it like,
I don't. I don't even push back on that anymore.
I say, look, that's what France does, you know, that's
what other countries do, that's what that's what Canada does.
And as screwed up as ours is, with all these
fat taps, with all this crony capitalism going on, and
all these people getting fat and profiting and all this
garbage that's in our stuff, it's still significantly better than
(10:59):
the socialized countries once you start to look at the
amount of waight time, the amount of the lack of
specialties they have in these other countries. And while it
might be better for some people to go fully socialized
on the whole, it won't be better. It'll be Medicaid.
It'll be what we have for the low income, not Medicare.
They like to say Medicare for all, because Medicare still
has a good reputation, But Medicaid is what it'll end
(11:22):
up being. That's the one that could actually be afforded
if we did it, And that's a horrible system that
does underpay and causes these massive weight times and these
doctors that exit the game. So it would be worse,
I have note, I mean you would end up in
a situation like France where you just have smaller homes,
you drive less cars, you just live a more modest
life because socialism has fully crept into the largest part
(11:43):
of your government.
Speaker 1 (11:44):
Then well, I don't.
Speaker 2 (11:46):
Mind smaller cars and houses or whatever nearly as much
as I mind waiting eighteen weeks to begin my cancer
treatment in Great Britain, for instance.
Speaker 3 (11:56):
There you go. I was looking more at the macroeconomic
of everything else, but no, the healthcare. Yeah, and all
the stats that show, you know, results are better in
these other countries, they're also flawed for many reasons that
you guys have pointed out over the years. It's it's
the true tell is when you get people in Canada
that have a real problem. They pay cash to come
here if they can, right, they can't. They wait there
and they often die right correct.
Speaker 2 (12:18):
All right, We need to take a quick break, Craig,
but we'll be back with more a word from our
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(13:21):
We're gonna come with Craig the healthcare Guru.
Speaker 1 (13:22):
In seconds, We're.
Speaker 2 (13:31):
Talking to Craig got Walls, Craig the healthcare Guru about
our screwed up, incredibly expensive healthcare system and how the
big hospital and big pharma and big insurance are all
making wild profits and you're paying for it.
Speaker 1 (13:45):
Craig, I just if I could.
Speaker 2 (13:47):
I wanted to get a quick description again of how
you get around that for companies and then, believe it
or not, I want to go into self checkout laws
anti self checko.
Speaker 1 (14:00):
But so tell us how do you do what you do?
Speaker 3 (14:03):
I love it. So what we've been doing the last
handful of years, Joe, is something called reference based pricing.
What I would tell you is most employees, more than
half of employees on a corporate employer plan, are already
on a self insured plan. It's a great first step. However,
most of those employers still pay one of the big
four insurance companies to administer the plan, and they rent
(14:24):
their networks and still pay those bloated prices on the claims.
The next step, and what about five percent of employers
are now doing nationwide, is to say, hey, we've gone
this far, let's cut the insurance lobby out entirely. Instead
of renting that bloated ppo that pays three hundred percent
at a hospital of what Medicare would pay, let's name
our own price, pay one hundred and fifty percent of
(14:45):
what Medicare would pay, negotiate these deals directly with the
hospitals and our footprint and go from there. It's aggressive,
but it saves overall healthcare costs thirty percent first year alone,
and it works unbelievably. But it's work. It's not for everybody,
but that's the new thing in healthcare. That's what people
are doing to really get all of the pillars of
(15:06):
the cartel out of their health plan.
Speaker 2 (15:08):
Well, if people want to know more about that, or
understand it, or read it a little more slowly, how
do they get a hold of you or read your
substack or whatever.
Speaker 3 (15:16):
Yeah, Gottwals dot substack dot com or you can. You
can just google my name. There's only one Craig gottwaalllds
in the United States, so it makes it really easy.
You can find me on LinkedIn or Twitter or substack.
Speaker 2 (15:27):
Got t w Als. We'll have a link at armstrong
and getty dot com so people can find you. All right,
So I love the sound of that. You drop me
a note about self checkout laws like in kel Unicornia.
They claim it's because they want to limit shoplifting, which
is truly hilarious.
Speaker 3 (15:44):
Yeah, because of what I do, I have a lot
of grocer clients because they have nurowprofit margins and they
want to be aggressive about reigning and healthcare costs. So
I've gotten this glimpse into the grocery industry, and what
I've seen, particularly in the Blue States, is some of
my clients will sit in front of the state legislature
and tell them, look, we have theft present prevention under control.
We're not having a problem at our self checkout lines.
(16:05):
We'll police it ourselves, thank you very much, as the
legislature pats them on the head and says, you're a
good little grocer. Let us limit your self checkout lines
for your own good because we want to prevent theft. So,
first of all, think of how insane that is. Because
we don't enforce criminal law, we don't enforce shoplifting. We
have to tell you can't have self checkout right right,
the first thing. But the real thing is that's not
(16:27):
why they're doing it. Why they're doing it is self
checkout lines are a visual reminder that the policies and
Blue states limit the hiring of individuals. And the number
one supporter in the Blue lobby is unions, and so
union hate self checkout and that's why you really see
all this going on in the Blue States of the
limitations on self checkout lines, which is amazing, Like California
(16:49):
every year tries to limit and ban self checkout laws,
self checkout lines every way they can. They say, you
have to have so many people overseeing it, only you
can only have certain products in there, you have to
have a fifteen item limit, etc.
Speaker 1 (17:02):
So you got both sides of the coin going on.
Speaker 2 (17:04):
Number One, you see the working moms and the teenagers
in the semi retired people losing their jobs in favor
of machine. And then b they're desperate for all these
people to be unionized because there's a Democrat. You get
a cut of that, the union dues.
Speaker 1 (17:20):
And they want everybody to be unionized.
Speaker 2 (17:22):
The union dues are mostly spent on lobbying democrats, writing
big checks to Democrats, so of course they want these
laws passed, so they have to have more employees than
they unionize, and then they get.
Speaker 1 (17:35):
A cut of it. It's absolute graft. All right, we're
out of time, Craig. Okay, awesome, Well you end.
Speaker 3 (17:42):
Up with what go ahead, So you end up with
this beautiful, this beautiful situation where you literally have a
grocer sitting in front of a state legislature, and the
legislature saying we know what's better for you, little grocer.
We'll protect your loss prevention numbers. You know.
Speaker 2 (17:57):
Craig got walls. Craig the healthcare guru. U grab them
online if you need to. Greg, It's always fun to talk.
Best of the family and will stay in.
Speaker 3 (18:05):
Touch, right, Thank you, sir.
Speaker 2 (18:08):
Great perspective on AI and the problems it is solving
these days and what it ought to be solving. Really
unique thought coming up next day with us Armstrong and Getty.
I mentioned a little while ago we were going to
talk to Josh Rogan or the Washington Post, and he
writes a substack about how Washington is trying to deal
(18:28):
with the rapid proliferation of open source Chinese AI models
and advanced AI systems in general. But there are a
lot of folks embracing Chinese open source models right now
and if that continues, and I came to understand that
(18:50):
if you're running I don't know, a university lab or
a research company or just somebody who's really into AI,
and you are building on, for instance, a open source
Chinese AI model, because it's available to you, you can
afford it, and that sort of thing, and you build
on top of that.
Speaker 1 (19:10):
Then you build on top of that.
Speaker 2 (19:11):
You've got these really big, complicated, sophisticated systems all built
on that Chinese open source AI model.
Speaker 1 (19:17):
You're in that community.
Speaker 2 (19:19):
It's like getting used to Apple versus you know, a
Google phone, a Samsung phone, something like that, and so
it kind of matters who's doing what in these early days.
But folks, including in DC, are worried that Beijing could
have undue influence over the technical standards, safety rules, even
some of the political assumptions baked into software used by governments, militaries, hospitals,
(19:43):
and banks for decades to come. Nobody's quite sure what
to do about all this, which is scary, and you
should be scared. I'm scared. Let's all be scared. There
was another AI story. Do we have time for it?
I tell you what, Maybe we squeeze it in. But
I wanted to get to the Roland Fryar I've quoted
semi regularly. He is an economist at HAVAD. He is
(20:08):
a young black man and and an original thinker. And
I really like him, even when I disagree with him.
He's one of those guys who he grew up of
quite modest means a young black man in America. He's
just got an unbelievable brain. And because he is smart
(20:28):
and he worked hard and he's brave, he has realized
his dreams in America, as so many people do.
Speaker 1 (20:39):
And he's one of those guys.
Speaker 2 (20:41):
Who when he's told oh, that's not the conventional thinking,
that's not how we talk around here, he says, I
don't care. He's a real independent thinker, which I love
about him. He came to fame with a study about
how he said, Yeah, I've actually crunched the numbers, and
cops aren't hunting down black in America. They're not killed
(21:01):
at disproportionate numbers. That's not true. And oh my god,
Academia just hated that. They didn't know what to say
because there he is a black man. We can't yell
at him that he's a racist. Ah, we don't know
what to do anyway. So rolling friar, that's who Roland is.
And he writes about all sorts of interesting things and
looks at them from the point of view of an economist,
(21:22):
and he writes, I've spent much of the summer talking
with technology executives about aim.
Speaker 1 (21:28):
Hmm.
Speaker 2 (21:28):
The word the only word I hear more often than
AI is abundance. Not far behind is socialism, usually accompanied
by bewilderment Why they wonder are so many Americans, especially
young ones, attracted to an economic system that has failed
so spectacularly elsewhere, And he writes, I'm beginning to think
their enthusiasm for abundance and their bewilderment about socialism are connected.
Speaker 1 (21:50):
And the abundance pitch.
Speaker 2 (21:52):
He writes, this hard to resist will have, you know,
super efficiency and productivity, and so much money will be
generated that everybody will have plenty money. And then Roland
fryar like Jack Armstrong and Joe Getty, And we're among
the very few people asking these questions. He says, then
(22:12):
I ruined the mood by asking abundance for whom who
decides it may be the fastest way to end a conversation,
since I asked the Harvard Economics Department.
Speaker 1 (22:21):
Blah blah blah, it makes a joke about minority hiring.
Speaker 2 (22:24):
Anyway, most people hear the question assume he's heading toward taxes,
universal basic income, or some other scheme for redistributing AI's gains,
which is an incredibly important question. But here's his angle,
which I hadn't really thought about before. He's not asking
how we divide the wealth AI creates. I'm asking, he
(22:44):
writes a prior question, what will we use AI to
create in the first place?
Speaker 1 (22:47):
Before we divide the spoils.
Speaker 2 (22:49):
Entrepreneurs and investors have to decide which problems are worth solving.
Speaker 1 (22:54):
And then he gets into the part that really intrigued me.
Speaker 2 (22:56):
He says, we're in the middle of a gold rush,
and he talks about how these brand new companies raised
billions of dollars, they're valued at billions of dollars more
in their IPOs and whatever, and technology executives he respects say,
he says, have told me some version of the same thing.
(23:17):
There's simply too much money to be made right now
to worry about anything else, like how we're going to
redistributed blah blah. And there's a reasonable defense in all
this that AI investment lumps together very different bets foundational models,
chips and compute, physical infrastructure applications and all right, So
here's the point. If we're waiting to discover the transformative
(23:41):
AI applications that really really change the world. Where do
we look and who looks might matter the most? What
if Silicon Valley has it backward? Not because they have
a moral obligation to save the world, but because some
of the biggest fortunes maybe hiding in the problems they
are ignoring. Medicaid spent more than nine hundred billion dollars
(24:03):
in twenty twenty four. It's a hell of a lot
of money. Gallop estimates that workers who aren't engaged or
actively disengaged account for about one point nine trillion dollars
in lost productivity nationally. Why aren't problems of this scale
a bigger focus in Silicon Valley?
Speaker 1 (24:20):
And here's why.
Speaker 2 (24:22):
And there's a recent paper that was just accepted peer reviewed.
It's supposedly reliable. I've anytime i hear peer reviewed paper
these days that roll my eyes, but this.
Speaker 1 (24:31):
One seems solid.
Speaker 2 (24:33):
Innovators disproportionately create products for people like themselves, their sex,
their income, their age. Even accounting for market size, female
entrepreneurs create products with an eighteen percent higher female customer
share than male entrepreneurs in the same category.
Speaker 1 (24:53):
It's not shocking if you think about it.
Speaker 2 (24:55):
Innovators from high income families are more likely to create
product bought by high income consumers. More strikingly, entrepreneurs exposed
to lower income peers during higher education become more likely
to enter necessity industries. Even having like friends from low
(25:16):
income groups. You start to see, Oh, there are needs
there that you didn't know before.
Speaker 1 (25:23):
You know what you know right.
Speaker 2 (25:25):
The same pattern appears in biomedical innovation. Female inventors are
disproportionately likely to produce inventions related to women's health, which
again is not surprising. Roland writes in Venture Capital we
have a name for this founder market fit. A founder
who has lived a problem knows things outsiders don't. I
(25:46):
should have emphasized the word lived. A founder who has
lived a problem knows things outsiders don't, what actually hurts,
what customers will pay for, which workarounds they already use,
and which elegant solution will die on contact with reality.
And that age old venture principle has an uncomfortable corollary.
If certain Americans rarely become venture backed founders, the problems
(26:11):
they understand intimately are less likely to become startup ideas,
and venture capitalists know how to exploit a founder market
fit When they recognize the market, and he gives several examples,
and they've been incredibly lucrative, And then he talks about well.
He teaches a class called using Markets to Solve Social
(26:33):
Problems and for their major project that the grade.
Speaker 1 (26:38):
Is based on. Its probably an A.
Speaker 2 (26:41):
Students identify an important social problem, build a company to
solve it.
Speaker 1 (26:44):
Their choices are revealing.
Speaker 2 (26:46):
Last semester, one team, led by a cancer survivor, proposed
an AI native care coordinator for cancer patients. Another team
was deeply concerned that Harvard lacked hot cookie delivery at
three am. It's solution cookies AI. The project was dependent
(27:07):
on the founders and their knowledge and their passions. And
so then he gets into this venture fund he started
that is trying to solve this problem. But he writes,
in nearly a decade, I've never had a student say,
you know what really sucks getting government benefits? You know,
it really sucks coming from home from prison and trying
(27:29):
to find a job, or running a police department with
antiquated software. I actually have a couple of friends in
that business. My students aren't selfish. Many have simply never
encountered these systems. And you can't have founder market fit
in a market you've never run into in your life,
and where it gets really interesting. And Tim Sanderfer would
(27:50):
happily weigh in at this point. Is I mean, for instance,
he mentions medicaid and until recently some of it'd spent
twenty years running medicaid programs, might understand the customer better
than almost anyone alive, but had little chance of starting
a software company. There's just not overlap there. Giant, expensive
(28:17):
government programs that are desperate, desperate, desperate for this sort
of technological leap forward are not run by this sort
of people who can generate the interest in capital, or
are the sort.
Speaker 1 (28:30):
Of people who.
Speaker 2 (28:33):
Would have an enthusiasm for it anyway, because government doesn't
reward success. In fact, government rewards failure. If you're bad
in your department doesn't accomplish its goal, you get more
money and more turf and more people to try to
quote unquote solve the problem. And then the iron law
of bureaucracy steps in and that dictates that bureaucracy just
(28:54):
becomes about protecting the bureaucracy, and it loses interest in
solving its problem. It's just it's all self protection and
turf and budget at that point. So his solution, because
remember the name of his class is solving using markets
to solve social problems. What he's trying to pitch, and
(29:17):
I sure wish him luck is and I'll just go
ahead and quote him. I'm not asking Silicon Valley to
be less greedy, don't choose medicaid over missiles.
Speaker 1 (29:28):
Be greedier.
Speaker 2 (29:29):
There is serious money to be made in both. So
he's trying to find a way to connect the needs
of we the people and the mind boggling amount of
money that's being spent and made in that with the
tech innovators, which I think is great. And at this
(29:50):
point we're probably well beyond my expertise and or ability
to comprehend what he's proposing.
Speaker 1 (29:56):
But he's absolutely right, he's absolutely.
Speaker 2 (30:01):
You may have heard us in the last couple of days,
Katie and I discussing this, and that's right when Jack
jumped on last hour. I was telling them about it.
We're now going to semi regularly when we talk about
government at whatever level. Government spent thirty million dollars to
reduce homelessness on the streets of la Oh, there's another
(30:23):
great story about that coming up. I think we'll try.
Speaker 1 (30:26):
To squeeze that.
Speaker 2 (30:26):
But instead of saying government spent, we've started to say
somebody got twenty million dollars to solve the homeless problem
in LA. And not to pat myself on the back,
but I love that juxtaposition. Somebody got it? Who what
(30:48):
did they do? Did we get our money's worth? If
money spent? Somebody got it? Can we get the somebody
got it to go from bureaucrats who couldn't give a
crap about you and your tax money and don't give
a crap about solving the problem or even administering Medicaid
(31:09):
or Medicare. They don't care. They just want to stay
out of trouble. Can we get the market and innovators
involved in that process? If you know how, please run
for president or Congress or something. I'll vote for you.
I will give you money more tocom stay with us. So,
(31:36):
speaking of a government not actually giving your crap and
solving the problems it's supposed to solve, this is good stuff.
This is actually the HUT Secretary Scott Turner in federal
uh you know, department cabinet secretary in LA talking about
what he's seen the city and County government's doing twenty
seven Michael.
Speaker 4 (31:56):
Bad I learned that they're given our homeless neighbors with
American taxpayer dollars and in this bag when you go
in here. Now we're talking about having the most vulnerable
people in our country a continuum of care. This is
not a continuum of care that I'm looking for. These
are This is drug paraphernality. This brown bag that's handed
(32:19):
to people, homeless, people that are addicted to drugs, that
have mental illness, hard working people's money. People are putting
these together with their hands to give to people that
are already addicted. That has to be over. That's done.
Speaker 1 (32:37):
Wow, I love that.
Speaker 2 (32:39):
And mentally ill people, Let's give them powerful drugs to
use that will help.
Speaker 1 (32:43):
Good God.
Speaker 5 (32:43):
Next clip, we are exposing and weeding out waste across
the country. OIG's audits have exposed unbelievable examples money that
should have should have supported the most vulnerable homeless Americans
in Los Angeles said allegedly supported the purchase.
Speaker 1 (33:02):
Of one hundred and twenty.
Speaker 4 (33:03):
Five thousand dollars Range Rover, private jet travel, and a
vacation home in Greece that costs almost half a million dollars.
Speaker 1 (33:12):
This is hut funded.
Speaker 2 (33:15):
We've got to be so much more harsh in our
scrutiny of all these programs. Somebody's getting that money and
they're stealing it. Speaking of which, American government education has
become a union scam masquerading is an education system. It's
cash grab. This is powerful, Michael. We're gonna go with
twenty nine. This is a teacher by the name of
(33:36):
Darius Cooks. He's a teacher in Texas. He was addressing
social media when he lost it emotionally.
Speaker 6 (33:44):
I literally broke down in the middle of class because
I'm teaching seniors. These kids are leaving high school and
going to college hopefully. After they finished, we had two
(34:06):
paragraphs to read, one sentence complete to write. I gave
them the sentence stamps. I basically completed the sentence for
them in the model.
Speaker 1 (34:28):
Here was a seventeen.
Speaker 6 (34:32):
An eighteen year old kids, and they couldn't fill in
four words four words. I gave them the scenario we
annotated together. I gave them the answers before we even
(34:56):
had the problem, and he couldn't do it.
Speaker 1 (35:04):
I don't know.
Speaker 6 (35:06):
I simply don't know where the problem is.
Speaker 1 (35:13):
We need to take a break.
Speaker 2 (35:14):
We will be back with more of Darius Cooks and
what he says about the reality at government schools. If
you don't get Next Hour, grab it via podcast later
on Armstrong he Yeddy on demand. You ought to subscribe
it auto downloads and you can just pick up the
conversation right where it left off. Got a major gender
bending madness update coming up next hour not to be missed,
(35:37):
and gosh, all sorts of good stuff as well. Oh
old Abdul l Saeed. Did you know he proclaimed his
obligation to follow Sharia law every day of his life
until he dies. Yeah, now he denies it.
Speaker 1 (35:55):
But it's there.
Speaker 2 (35:56):
The Internet never forgets, so we'll talk about him and
is as long as to disease as well. So again
I hope you can stay tuned a lot of good
stuff to get to and once again, if you can't,
just subscribe to Armstrong and Geddy on demand.
Speaker 1 (36:14):
Armstrong and Getty
Broadcasting live from the Abraham Lincoln Radio Studio the George
Washington Broadcast Center. Jack Armstrong is Joe Getty Armstrong and Getty,
and now he Armstrong and Getty. Thank you for being here.
Speaker 2 (00:26):
A lot of good stuff to squeeze in this hour,
so let's get right to it. Craig gott Wall's longtime
friend of The Armstrong and Getty Show and friend of
mine personally. Craig the Healthcare Guru, is an attorney, law
and benefit consultant for Benefit Revolution and is one of
the most voracious readers and studiers of what's happening in
the world that I've ever met in my life. Hence
(00:48):
a really good guy to talk to you about some
stuff that's pretty complicated and tends to make people's eyes
glaze over because he's really really good at helping us
understand it.
Speaker 1 (00:56):
Craig, how are you my friend?
Speaker 3 (00:58):
I am well, mister Getty, I'm terrific.
Speaker 1 (01:01):
Thank you.
Speaker 2 (01:02):
Can't complain, but some times I still do as the
song said, but looking forward to talking to you about
various healthcare and kind of tangential issues including and I
didn't even ask can you do the second segment this
half hour.
Speaker 1 (01:18):
Sure. Yeah, look, okay, great, because.
Speaker 2 (01:20):
In that second segment, I want to get to solutions
and make sure we set aside time to do that,
because there are some things that particularly employers can do
about the incredible expense of health care and insurance and
that sort of thing. I'm told our connection dropped. Wow,
(01:40):
that's been happening semi regularly lately. As I explained yesterday,
a lot of the software and computer you know, dependent stuff.
It's like super inexpensive and incredibly handy, and you can
connect with people from around the.
Speaker 1 (01:57):
World, but it's like a third is reliable.
Speaker 2 (02:00):
Is the old timey wires connected to stuff, systems of
the past.
Speaker 1 (02:08):
Okay, we've got them, Joe, Yeah, yeah, yeah, no worries.
What are you gonna do?
Speaker 2 (02:13):
So anyway, what's Let's talk about the big problem in
healthcare costs because I know I saw this in your notes,
and please people forgive me. Next year, the healthcare costs
for all of us, the increase will probably be the
worst in a decade and a half.
Speaker 3 (02:33):
Correct, Yeah, the worst in sixteen years. Everybody's reporting.
Speaker 2 (02:38):
Oh good lord, good lord, Okay, give us all a minute.
You've punched us in the stomach. Okay, now we're able
to stand up and listen. Why what's the big problem?
Speaker 3 (02:50):
Well, the number one problem in healthcare. And it's taken
me years to uncover this, Joe and I know it's
it's everybody likes to hate on the insurance companies and
they're a huge problem. But the number one problem, if
you just look at this in a sheer dollars number,
is the hospitals, the hospital lobby, and specifically what hospitals
charge employers for the care they receive, because it's typically
(03:13):
two and a half to three times what a hospital
will charge a patient on Medicare, for example. Now, is
Medicare enough for every hospital? Probably not, but it doesn't
have to be three x. And that's what's going on
in the hospital world. The statistic that I think boggles
most minds on this topic is if you were to
cobble together all of the profits in the hospital industry
in a given year, it's about seventy five billion dollars,
(03:36):
Whereas if you were to cobble together all of the
profits of all of the health insurers in a given year,
it's only about a third of that twenty five billion dollars.
Speaker 1 (03:44):
Wow.
Speaker 3 (03:44):
Wow, that is in the hospital pricing.
Speaker 2 (03:47):
Right, So we're we're dedicated capitalists, you and I.
Speaker 1 (03:51):
I'm pro profit.
Speaker 2 (03:53):
But the problem is, and this is where leftists get
away with what they get away with. They point to
this and say it's the free market. No, it's the
opposite of the free market. It's cronyism. It's lobbyists buying
favors from the government. So basically, if you're on government healthcare,
you are grossly underpaying what you probably would for say
(04:15):
a hospital stay or treatment or whatever. And the hospitals,
because the game is fixed by the government, can then
like double triple charge those of us with private insurance
and the government lets them while the government forces them
to take those underpaying government accounts.
Speaker 1 (04:30):
Is that more or less accurate?
Speaker 3 (04:32):
That is more or less accurate, Joe, Yeah, I mean
I might quibble with some of your ferb phrasing there,
but that's pretty much what's going on. Yeah, Well, it's
the when we say government payment, right, that's a pretty
broad picture because mecaid, what the low income amongst us pay,
which is about twenty five percent of society, is underpaid.
(04:53):
The Medicaid doesn't pay enough. Medicare what we put the
oldsters on it actually does pay enough at about eighty
to ninety percent of facilities. So this marketing ploy that
the Medicare is so horrible and payment is actually really
been kind of a smoke screen created by the hospital
insurance cartel in bed with the government, is what I
(05:14):
would say. It's mark Like you said, the market is
totally broken because the end users have no real exposure
to the actual prices. I mean, how many people understand
if you have your family on a health plan this year,
the premium for that health plan in twenty twenty seven
is going to be thirty thousand dollars. You don't see
it because your employer pays the lion's share of it.
(05:35):
But it's a new car every year just to ensure
your family.
Speaker 1 (05:39):
Wow. Wow. So then, and I'm.
Speaker 3 (05:43):
Here to tell you, Joe, a huge portion of that
is waste, fraud and abuse. So like roughly a third
thirty percent, And that's wasted. And when I say waste,
fraud and abuse, I mean middleman getting rich. I mean
lobbyists getting rich. I mean the hospital lobby and the
insurance lobby shaking hands behind closes doors, pretending that they
fight over prices when in reality, they're just gouging us
(06:04):
all at these prices. But the market's so broken, it's
such an oligopoly. We can't fix it that way. We
can't fix it with free market mechanisms anymore. Wow, so dangerous.
That's what's so dangerous to allow the left to say, ah,
yes we need socialism, right, gosh, it.
Speaker 2 (06:21):
Would be more of this yeah, gosh. So is it
just a political problem? Then we need like new leaders
who won't take the bribes and will design a system
that works. O. Now, is it just so screwed up
that we as individuals and companies have to find workarounds.
Speaker 3 (06:41):
It'll never be fixed at the individual level, and it'll
never be fixed at the political level. It has to be.
The one power we still have in healthcare is that
employers still control about a third to forty percent of
all healthcare. So it's incumbent upon employers, one by one
to exit the system, self, ensure their plan, and remove
as many of these cartel members from their direct health
(07:02):
care plan as they can. It works, it's growing, and
it is. It is the one ray of light we
have in this space where where innovative employers are saying
no more insurance companies, No more hospital cartels. We're going
to negotiate directly with our local hospital. We're going to
find fair pricing, and we're going to put a plan
together on our own that exits all this lobby government
(07:25):
industrial compact flex from our plan.
Speaker 1 (07:28):
Right right.
Speaker 2 (07:29):
You mentioned, Craig that roughly a third of healthcare spending
is private insurance.
Speaker 1 (07:34):
Is that what you said?
Speaker 3 (07:36):
Yeah, there's two ways to cut this sociation.
Speaker 2 (07:39):
This is a little bit because I was working forward
asking you what percentage currently is the government paying for,
you know, around America.
Speaker 3 (07:46):
Yeah, so the government, let's say it this way, tax
payers pay for seventy percent of health care in the
United States. Wow, all right, true statement. Yeah, yeah, but
employers still control about forty five percent of health care
in the United States. And you say, well, how does
that square Well, you got to remember counties, cities, and
governments are still employers. So those are government controlled employers
(08:09):
that where the taxpayer is paying the So you can
overlap and that statistic.
Speaker 2 (08:14):
Right right, yeah, okay, all right, Well we can talk
more about the you know, what companies can do with
self insurance and that sort of thing, because I absolutely
love it. But the long story made short is that
big hospital, big insurance, and big pharma are all in
bed together.
Speaker 3 (08:32):
Yeah, they absolutely are, and Obamacare solidified that for them.
Obamacare brought all of them to the table and said, look,
we're going to Basically what was happening behind the scenes
and Obamacare is they were saying, we're going to tell
everybody we're going to cover more people and bring costs down.
But the reality is it was all a Lincoln and
nod and everybody kind of knew you weren't going to
bring costs down, which of course we haven't. Costs have
(08:53):
gone up even faster since Obamacare. Yes, more people were covered,
but the number of because of population growth in the
United States, the number of uninsured in the country today
is roughly the same as it was when Obamacare passed
in twenty ten. So yes, we have more people covered,
but with the people coming in, we still have the
same problem we had in twenty ten for the most part.
Speaker 1 (09:17):
Wow.
Speaker 2 (09:17):
So Obama in essence thought, reinventing this is going to
be way too difficult and politically unpopular, So I will
use the super giants who are already just at the
trough getting fat and enlist their help. In return for
not calling them on their bs.
Speaker 3 (09:37):
Yeah, and that's exactly what would happen with any Let's
just say we get another super lefty socialist type in
the federal office, right at president's level, the same thing
would happen. They would get in and realize big insurance,
big pharma, and the hospital chains are so powerful. They're
the number one employer, the number one lobby, and the
number one expenditure in the federal government. So they would
(10:00):
just realize, Okay, we have to work with them to
massage it. We'll never be able to break out of
the system entirely. It has to be employers doing it
one by one, and right now, rough roughly five percent
of employers are doing like the full but the full
boat like what I would talk about, like where you
really exit all that stuff from your plan. If we
got to twenty to twenty five percent of employers doing this,
(10:22):
it would radically change the healthcare landscape.
Speaker 2 (10:25):
Okay, I want to talk about that a little bit
more next segment. But first, how do you answer people
who say, Craig, look, it's so screwed up, we need
single payer government healthcare.
Speaker 3 (10:38):
Yeah, well, that's that's an answer I get it like,
I don't. I don't even push back on that anymore.
I say, look, that's what France does, you know, that's
what other countries do, that's what that's what Canada does.
And as screwed up as ours is, with all these
fat taps, with all this crony capitalism going on, and
all these people getting fat and profiting and all this
garbage that's in our stuff, it's still significantly better than
(10:59):
the socialized countries once you start to look at the
amount of waight time, the amount of the lack of
specialties they have in these other countries. And while it
might be better for some people to go fully socialized
on the whole, it won't be better. It'll be Medicaid.
It'll be what we have for the low income, not Medicare.
They like to say Medicare for all, because Medicare still
has a good reputation, But Medicaid is what it'll end
(11:22):
up being. That's the one that could actually be afforded
if we did it, And that's a horrible system that
does underpay and causes these massive weight times and these
doctors that exit the game. So it would be worse,
I have note, I mean you would end up in
a situation like France where you just have smaller homes,
you drive less cars, you just live a more modest
life because socialism has fully crept into the largest part
(11:43):
of your government.
Speaker 1 (11:44):
Then well, I don't.
Speaker 2 (11:46):
Mind smaller cars and houses or whatever nearly as much
as I mind waiting eighteen weeks to begin my cancer
treatment in Great Britain, for instance.
Speaker 3 (11:56):
There you go. I was looking more at the macroeconomic
of everything else, but no, the healthcare. Yeah, and all
the stats that show, you know, results are better in
these other countries, they're also flawed for many reasons that
you guys have pointed out over the years. It's it's
the true tell is when you get people in Canada
that have a real problem. They pay cash to come
here if they can, right, they can't. They wait there
and they often die right correct.
Speaker 2 (12:18):
All right, We need to take a quick break, Craig,
but we'll be back with more a word from our
friends and sponsors at Blue Collar Dollar. You Craig, me Jack,
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(13:21):
We're gonna come with Craig the healthcare Guru.
Speaker 1 (13:22):
In seconds, We're.
Speaker 2 (13:31):
Talking to Craig got Walls, Craig the healthcare Guru about
our screwed up, incredibly expensive healthcare system and how the
big hospital and big pharma and big insurance are all
making wild profits and you're paying for it.
Speaker 1 (13:45):
Craig, I just if I could.
Speaker 2 (13:47):
I wanted to get a quick description again of how
you get around that for companies and then, believe it
or not, I want to go into self checkout laws
anti self checko.
Speaker 1 (14:00):
But so tell us how do you do what you do?
Speaker 3 (14:03):
I love it. So what we've been doing the last
handful of years, Joe, is something called reference based pricing.
What I would tell you is most employees, more than
half of employees on a corporate employer plan, are already
on a self insured plan. It's a great first step. However,
most of those employers still pay one of the big
four insurance companies to administer the plan, and they rent
(14:24):
their networks and still pay those bloated prices on the claims.
The next step, and what about five percent of employers
are now doing nationwide, is to say, hey, we've gone
this far, let's cut the insurance lobby out entirely. Instead
of renting that bloated ppo that pays three hundred percent
at a hospital of what Medicare would pay, let's name
our own price, pay one hundred and fifty percent of
(14:45):
what Medicare would pay, negotiate these deals directly with the
hospitals and our footprint and go from there. It's aggressive,
but it saves overall healthcare costs thirty percent first year alone,
and it works unbelievably. But it's work. It's not for everybody,
but that's the new thing in healthcare. That's what people
are doing to really get all of the pillars of
(15:06):
the cartel out of their health plan.
Speaker 2 (15:08):
Well, if people want to know more about that, or
understand it, or read it a little more slowly, how
do they get a hold of you or read your
substack or whatever.
Speaker 3 (15:16):
Yeah, Gottwals dot substack dot com or you can. You
can just google my name. There's only one Craig gottwaalllds
in the United States, so it makes it really easy.
You can find me on LinkedIn or Twitter or substack.
Speaker 2 (15:27):
Got t w Als. We'll have a link at armstrong
and getty dot com so people can find you. All right,
So I love the sound of that. You drop me
a note about self checkout laws like in kel Unicornia.
They claim it's because they want to limit shoplifting, which
is truly hilarious.
Speaker 3 (15:44):
Yeah, because of what I do, I have a lot
of grocer clients because they have nurowprofit margins and they
want to be aggressive about reigning and healthcare costs. So
I've gotten this glimpse into the grocery industry, and what
I've seen, particularly in the Blue States, is some of
my clients will sit in front of the state legislature
and tell them, look, we have theft present prevention under control.
We're not having a problem at our self checkout lines.
(16:05):
We'll police it ourselves, thank you very much, as the
legislature pats them on the head and says, you're a
good little grocer. Let us limit your self checkout lines
for your own good because we want to prevent theft. So,
first of all, think of how insane that is. Because
we don't enforce criminal law, we don't enforce shoplifting. We
have to tell you can't have self checkout right right,
the first thing. But the real thing is that's not
(16:27):
why they're doing it. Why they're doing it is self
checkout lines are a visual reminder that the policies and
Blue states limit the hiring of individuals. And the number
one supporter in the Blue lobby is unions, and so
union hate self checkout and that's why you really see
all this going on in the Blue States of the
limitations on self checkout lines, which is amazing, Like California
(16:49):
every year tries to limit and ban self checkout laws,
self checkout lines every way they can. They say, you
have to have so many people overseeing it, only you
can only have certain products in there, you have to
have a fifteen item limit, etc.
Speaker 1 (17:02):
So you got both sides of the coin going on.
Speaker 2 (17:04):
Number One, you see the working moms and the teenagers
in the semi retired people losing their jobs in favor
of machine. And then b they're desperate for all these
people to be unionized because there's a Democrat. You get
a cut of that, the union dues.
Speaker 1 (17:20):
And they want everybody to be unionized.
Speaker 2 (17:22):
The union dues are mostly spent on lobbying democrats, writing
big checks to Democrats, so of course they want these
laws passed, so they have to have more employees than
they unionize, and then they get.
Speaker 1 (17:35):
A cut of it. It's absolute graft. All right, we're
out of time, Craig. Okay, awesome, Well you end.
Speaker 3 (17:42):
Up with what go ahead, So you end up with
this beautiful, this beautiful situation where you literally have a
grocer sitting in front of a state legislature, and the
legislature saying we know what's better for you, little grocer.
We'll protect your loss prevention numbers. You know.
Speaker 2 (17:57):
Craig got walls. Craig the healthcare guru. U grab them
online if you need to. Greg, It's always fun to talk.
Best of the family and will stay in.
Speaker 3 (18:05):
Touch, right, Thank you, sir.
Speaker 2 (18:08):
Great perspective on AI and the problems it is solving
these days and what it ought to be solving. Really
unique thought coming up next day with us Armstrong and Getty.
I mentioned a little while ago we were going to
talk to Josh Rogan or the Washington Post, and he
writes a substack about how Washington is trying to deal
(18:28):
with the rapid proliferation of open source Chinese AI models
and advanced AI systems in general. But there are a
lot of folks embracing Chinese open source models right now
and if that continues, and I came to understand that
(18:50):
if you're running I don't know, a university lab or
a research company or just somebody who's really into AI,
and you are building on, for instance, a open source
Chinese AI model, because it's available to you, you can
afford it, and that sort of thing, and you build
on top of that.
Speaker 1 (19:10):
Then you build on top of that.
Speaker 2 (19:11):
You've got these really big, complicated, sophisticated systems all built
on that Chinese open source AI model.
Speaker 1 (19:17):
You're in that community.
Speaker 2 (19:19):
It's like getting used to Apple versus you know, a
Google phone, a Samsung phone, something like that, and so
it kind of matters who's doing what in these early days.
But folks, including in DC, are worried that Beijing could
have undue influence over the technical standards, safety rules, even
some of the political assumptions baked into software used by governments, militaries, hospitals,
(19:43):
and banks for decades to come. Nobody's quite sure what
to do about all this, which is scary, and you
should be scared. I'm scared. Let's all be scared. There
was another AI story. Do we have time for it?
I tell you what, Maybe we squeeze it in. But
I wanted to get to the Roland Fryar I've quoted
semi regularly. He is an economist at HAVAD. He is
(20:08):
a young black man and and an original thinker. And
I really like him, even when I disagree with him.
He's one of those guys who he grew up of
quite modest means a young black man in America. He's
just got an unbelievable brain. And because he is smart
(20:28):
and he worked hard and he's brave, he has realized
his dreams in America, as so many people do.
Speaker 1 (20:39):
And he's one of those guys.
Speaker 2 (20:41):
Who when he's told oh, that's not the conventional thinking,
that's not how we talk around here, he says, I
don't care. He's a real independent thinker, which I love
about him. He came to fame with a study about
how he said, Yeah, I've actually crunched the numbers, and
cops aren't hunting down black in America. They're not killed
(21:01):
at disproportionate numbers. That's not true. And oh my god,
Academia just hated that. They didn't know what to say
because there he is a black man. We can't yell
at him that he's a racist. Ah, we don't know
what to do anyway. So rolling friar, that's who Roland is.
And he writes about all sorts of interesting things and
looks at them from the point of view of an economist,
(21:22):
and he writes, I've spent much of the summer talking
with technology executives about aim.
Speaker 1 (21:28):
Hmm.
Speaker 2 (21:28):
The word the only word I hear more often than
AI is abundance. Not far behind is socialism, usually accompanied
by bewilderment Why they wonder are so many Americans, especially
young ones, attracted to an economic system that has failed
so spectacularly elsewhere, And he writes, I'm beginning to think
their enthusiasm for abundance and their bewilderment about socialism are connected.
Speaker 1 (21:50):
And the abundance pitch.
Speaker 2 (21:52):
He writes, this hard to resist will have, you know,
super efficiency and productivity, and so much money will be
generated that everybody will have plenty money. And then Roland
fryar like Jack Armstrong and Joe Getty, And we're among
the very few people asking these questions. He says, then
(22:12):
I ruined the mood by asking abundance for whom who
decides it may be the fastest way to end a conversation,
since I asked the Harvard Economics Department.
Speaker 1 (22:21):
Blah blah blah, it makes a joke about minority hiring.
Speaker 2 (22:24):
Anyway, most people hear the question assume he's heading toward taxes,
universal basic income, or some other scheme for redistributing AI's gains,
which is an incredibly important question. But here's his angle,
which I hadn't really thought about before. He's not asking
how we divide the wealth AI creates. I'm asking, he
(22:44):
writes a prior question, what will we use AI to
create in the first place?
Speaker 1 (22:47):
Before we divide the spoils.
Speaker 2 (22:49):
Entrepreneurs and investors have to decide which problems are worth solving.
Speaker 1 (22:54):
And then he gets into the part that really intrigued me.
Speaker 2 (22:56):
He says, we're in the middle of a gold rush,
and he talks about how these brand new companies raised
billions of dollars, they're valued at billions of dollars more
in their IPOs and whatever, and technology executives he respects say,
he says, have told me some version of the same thing.
(23:17):
There's simply too much money to be made right now
to worry about anything else, like how we're going to
redistributed blah blah. And there's a reasonable defense in all
this that AI investment lumps together very different bets foundational models,
chips and compute, physical infrastructure applications and all right, So
here's the point. If we're waiting to discover the transformative
(23:41):
AI applications that really really change the world. Where do
we look and who looks might matter the most? What
if Silicon Valley has it backward? Not because they have
a moral obligation to save the world, but because some
of the biggest fortunes maybe hiding in the problems they
are ignoring. Medicaid spent more than nine hundred billion dollars
(24:03):
in twenty twenty four. It's a hell of a lot
of money. Gallop estimates that workers who aren't engaged or
actively disengaged account for about one point nine trillion dollars
in lost productivity nationally. Why aren't problems of this scale
a bigger focus in Silicon Valley?
Speaker 1 (24:20):
And here's why.
Speaker 2 (24:22):
And there's a recent paper that was just accepted peer reviewed.
It's supposedly reliable. I've anytime i hear peer reviewed paper
these days that roll my eyes, but this.
Speaker 1 (24:31):
One seems solid.
Speaker 2 (24:33):
Innovators disproportionately create products for people like themselves, their sex,
their income, their age. Even accounting for market size, female
entrepreneurs create products with an eighteen percent higher female customer
share than male entrepreneurs in the same category.
Speaker 1 (24:53):
It's not shocking if you think about it.
Speaker 2 (24:55):
Innovators from high income families are more likely to create
product bought by high income consumers. More strikingly, entrepreneurs exposed
to lower income peers during higher education become more likely
to enter necessity industries. Even having like friends from low
(25:16):
income groups. You start to see, Oh, there are needs
there that you didn't know before.
Speaker 1 (25:23):
You know what you know right.
Speaker 2 (25:25):
The same pattern appears in biomedical innovation. Female inventors are
disproportionately likely to produce inventions related to women's health, which
again is not surprising. Roland writes in Venture Capital we
have a name for this founder market fit. A founder
who has lived a problem knows things outsiders don't. I
(25:46):
should have emphasized the word lived. A founder who has
lived a problem knows things outsiders don't, what actually hurts,
what customers will pay for, which workarounds they already use,
and which elegant solution will die on contact with reality.
And that age old venture principle has an uncomfortable corollary.
If certain Americans rarely become venture backed founders, the problems
(26:11):
they understand intimately are less likely to become startup ideas,
and venture capitalists know how to exploit a founder market
fit When they recognize the market, and he gives several examples,
and they've been incredibly lucrative, And then he talks about well.
He teaches a class called using Markets to Solve Social
(26:33):
Problems and for their major project that the grade.
Speaker 1 (26:38):
Is based on. Its probably an A.
Speaker 2 (26:41):
Students identify an important social problem, build a company to
solve it.
Speaker 1 (26:44):
Their choices are revealing.
Speaker 2 (26:46):
Last semester, one team, led by a cancer survivor, proposed
an AI native care coordinator for cancer patients. Another team
was deeply concerned that Harvard lacked hot cookie delivery at
three am. It's solution cookies AI. The project was dependent
(27:07):
on the founders and their knowledge and their passions. And
so then he gets into this venture fund he started
that is trying to solve this problem. But he writes,
in nearly a decade, I've never had a student say,
you know what really sucks getting government benefits? You know,
it really sucks coming from home from prison and trying
(27:29):
to find a job, or running a police department with
antiquated software. I actually have a couple of friends in
that business. My students aren't selfish. Many have simply never
encountered these systems. And you can't have founder market fit
in a market you've never run into in your life,
and where it gets really interesting. And Tim Sanderfer would
(27:50):
happily weigh in at this point. Is I mean, for instance,
he mentions medicaid and until recently some of it'd spent
twenty years running medicaid programs, might understand the customer better
than almost anyone alive, but had little chance of starting
a software company. There's just not overlap there. Giant, expensive
(28:17):
government programs that are desperate, desperate, desperate for this sort
of technological leap forward are not run by this sort
of people who can generate the interest in capital, or
are the sort.
Speaker 1 (28:30):
Of people who.
Speaker 2 (28:33):
Would have an enthusiasm for it anyway, because government doesn't
reward success. In fact, government rewards failure. If you're bad
in your department doesn't accomplish its goal, you get more
money and more turf and more people to try to
quote unquote solve the problem. And then the iron law
of bureaucracy steps in and that dictates that bureaucracy just
(28:54):
becomes about protecting the bureaucracy, and it loses interest in
solving its problem. It's just it's all self protection and
turf and budget at that point. So his solution, because
remember the name of his class is solving using markets
to solve social problems. What he's trying to pitch, and
(29:17):
I sure wish him luck is and I'll just go
ahead and quote him. I'm not asking Silicon Valley to
be less greedy, don't choose medicaid over missiles.
Speaker 1 (29:28):
Be greedier.
Speaker 2 (29:29):
There is serious money to be made in both. So
he's trying to find a way to connect the needs
of we the people and the mind boggling amount of
money that's being spent and made in that with the
tech innovators, which I think is great. And at this
(29:50):
point we're probably well beyond my expertise and or ability
to comprehend what he's proposing.
Speaker 1 (29:56):
But he's absolutely right, he's absolutely.
Speaker 2 (30:01):
You may have heard us in the last couple of days,
Katie and I discussing this, and that's right when Jack
jumped on last hour. I was telling them about it.
We're now going to semi regularly when we talk about
government at whatever level. Government spent thirty million dollars to
reduce homelessness on the streets of la Oh, there's another
(30:23):
great story about that coming up. I think we'll try.
Speaker 1 (30:26):
To squeeze that.
Speaker 2 (30:26):
But instead of saying government spent, we've started to say
somebody got twenty million dollars to solve the homeless problem
in LA. And not to pat myself on the back,
but I love that juxtaposition. Somebody got it? Who what
(30:48):
did they do? Did we get our money's worth? If
money spent? Somebody got it? Can we get the somebody
got it to go from bureaucrats who couldn't give a
crap about you and your tax money and don't give
a crap about solving the problem or even administering Medicaid
(31:09):
or Medicare. They don't care. They just want to stay
out of trouble. Can we get the market and innovators
involved in that process? If you know how, please run
for president or Congress or something. I'll vote for you.
I will give you money more tocom stay with us. So,
(31:36):
speaking of a government not actually giving your crap and
solving the problems it's supposed to solve, this is good stuff.
This is actually the HUT Secretary Scott Turner in federal
uh you know, department cabinet secretary in LA talking about
what he's seen the city and County government's doing twenty
seven Michael.
Speaker 4 (31:56):
Bad I learned that they're given our homeless neighbors with
American taxpayer dollars and in this bag when you go
in here. Now we're talking about having the most vulnerable
people in our country a continuum of care. This is
not a continuum of care that I'm looking for. These
are This is drug paraphernality. This brown bag that's handed
(32:19):
to people, homeless, people that are addicted to drugs, that
have mental illness, hard working people's money. People are putting
these together with their hands to give to people that
are already addicted. That has to be over. That's done.
Speaker 1 (32:37):
Wow, I love that.
Speaker 2 (32:39):
And mentally ill people, Let's give them powerful drugs to
use that will help.
Speaker 1 (32:43):
Good God.
Speaker 5 (32:43):
Next clip, we are exposing and weeding out waste across
the country. OIG's audits have exposed unbelievable examples money that
should have should have supported the most vulnerable homeless Americans
in Los Angeles said allegedly supported the purchase.
Speaker 1 (33:02):
Of one hundred and twenty.
Speaker 4 (33:03):
Five thousand dollars Range Rover, private jet travel, and a
vacation home in Greece that costs almost half a million dollars.
Speaker 1 (33:12):
This is hut funded.
Speaker 2 (33:15):
We've got to be so much more harsh in our
scrutiny of all these programs. Somebody's getting that money and
they're stealing it. Speaking of which, American government education has
become a union scam masquerading is an education system. It's
cash grab. This is powerful, Michael. We're gonna go with
twenty nine. This is a teacher by the name of
(33:36):
Darius Cooks. He's a teacher in Texas. He was addressing
social media when he lost it emotionally.
Speaker 6 (33:44):
I literally broke down in the middle of class because
I'm teaching seniors. These kids are leaving high school and
going to college hopefully. After they finished, we had two
(34:06):
paragraphs to read, one sentence complete to write. I gave
them the sentence stamps. I basically completed the sentence for
them in the model.
Speaker 1 (34:28):
Here was a seventeen.
Speaker 6 (34:32):
An eighteen year old kids, and they couldn't fill in
four words four words. I gave them the scenario we
annotated together. I gave them the answers before we even
(34:56):
had the problem, and he couldn't do it.
Speaker 1 (35:04):
I don't know.
Speaker 6 (35:06):
I simply don't know where the problem is.
Speaker 1 (35:13):
We need to take a break.
Speaker 2 (35:14):
We will be back with more of Darius Cooks and
what he says about the reality at government schools. If
you don't get Next Hour, grab it via podcast later
on Armstrong he Yeddy on demand. You ought to subscribe
it auto downloads and you can just pick up the
conversation right where it left off. Got a major gender
bending madness update coming up next hour not to be missed,
(35:37):
and gosh, all sorts of good stuff as well. Oh
old Abdul l Saeed. Did you know he proclaimed his
obligation to follow Sharia law every day of his life
until he dies. Yeah, now he denies it.
Speaker 1 (35:55):
But it's there.
Speaker 2 (35:56):
The Internet never forgets, so we'll talk about him and
is as long as to disease as well. So again
I hope you can stay tuned a lot of good
stuff to get to and once again, if you can't,
just subscribe to Armstrong and Geddy on demand.
Speaker 1 (36:14):
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