Arif Hasan and Ben Natan talk about the most recent Jared Kushner revelations with attempting to establish a backchannel with Russia and then delve into the largely successful H-1B visa program that is now under fire. After that, they briefly discuss the budget once more and talk about why the budget proposed by Donald Trump is both politically and structurally untenable.

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Episode Notes (Jared Kushner):

This is the tool that the Washington Post developed to keep track of the complex web of interactions between the Trump administration and Russian affiliates. The web they engineered is screenshotted below (but doesn’t have their scroll-over effects, unfortunately):

The Business Insider article expanding on Washington Post’s initial revelations about Kushner’s attempted backchannel with Russia is explosive.

“First, he is not seeking a back-channel for a low-level staff exchange,” Olson said. “He wants high-level direct-contact communication. This is extremely dangerous because it results in verbal (and therefore undocumented and unwitnessed) agreements, which are binding on governments. Free governments do not work this way. They can’t. If they do, they are no longer free.”

He continued:

“Second, he asked to use a foreign government’s communication facilities. This is way beyond a private server. This is doing US government diplomatic business over a foreign government’s communication system. It’s not an off-the-record conversation. It’s a conversation recorded by the opposing party. This shows a staggering lack of understanding of the US and its place in the world. Actually, it shows a staggering lack of common sense. When he negotiates a business deal does he use the other guy’s notes?”

. . .

“If you are in a position of public trust, and you talk to, meet, or collude with a foreign power” while trying to subvert normal state channels, “you are, in the eyes of the FBI and CIA, a traitor,” said Glenn Carle, a former top counterterrorism official at the CIA for more than two decades.

We should no longer think of Kushner, or anyone else, as potentially providing ameliorating pressure on the Trump administration.

It’s also well-worth watching John Oliver’s video on why Kushner and Ivanka Trump never made sense as purported moderating influences.

Oh, and Kushner is embroiled in a separate conflict-of-interest scandal.

Episode Notes (H-1B Visas):

We mentioned Trump’s unusual wording for his executive order, which was mentioned in this CNN article.

A study using a controlled regression model by the National Foundation for American Policy found that for every H-1B requested by a company increased employment by five percent in that company independent of same-sector competitors who didn’t, this meant, “for technology firms with fewer than 5,000 employees, each H-1B position requested in labor condition applications was associated with an increase of employment of 7.5 workers.” Without those qualifiers (technology firms with fewer than 5,000 employees), the ratio is 5-to-1.

Even employers facing layoffs and employment reductions saw a benefit to requesting H-1B visa applicants, with the effect for those companies carrying a multiplier of two.

The research also shows that there’s little evidence that H-1B visa applicants are used to cut costs. When surveying companies, they also found that a slight majority of companies felt that the ability to hire H-1B visa applicants led to complementary labor gains.

This is the study cited in the podcast for the offshoring survey—that companies responded to the possibility of losing H-1B applications by hiring workers or firms in other countries instead of locally.

The Brookings Institution put out a study that confirmed those findings, and that’s where I found the statistic regarding concurrent increases in immigration and employment.

These ties have measurable economic benefits. For every 1 percent increase in the number of first-generation immigrants from a given country, for example, California’s exports to that country go up nearly 0.5 percent. The effect is especially pronounced in the Asia-Pacific where, all other things being equal, California exports nearly four times more than it exports to comparable countries elsewhere in the world.

I mentioned a law review that went over the evidence regarding H-1B visa caps and restrictions. That was written by Courtney Cromwell and you can find it here.

Instead, however, the H-1B cap may be the cause of body shopping in the United States, and if the cap is abolished, the practice of body shopping will likely decline or disappear altogether. In 2003, once the cap reverted to 65,000 from 195,000, employment placement agencies and consulting firms such as MindTree and Wipro, two of the largest body shoppers, began “scrambling to build teams of visa-ready people.” They were forced to anticipate what skills their clients would need in the next few years and thus make efforts to mobilize enough H-1B visas to “manage a supply imbalance that was expected to emerge . . . .” Thus, the 65,000 cap created a high demand for H-1B visas, which led employment and recruiting agencies to obtain as many H-1B workers as possible for themselves and their clients. In turn, as a result of these agencies hoarding H-1B visas, it is likely that the abusive body shopping practices developed because the agencies could not afford to pay H-1B workers who were not assigned to jobs. Therefore, raising or abolishing the cap will reduce the pressure to mobilize a supply of H-1B visas, thus eliminating the practice of body shopping altogether.

That article also makes the argument that there are reasons beyond those above, like how investing resources in foreign students should be actualized in H-1B visas to keep the products of that intellectual capital here, as well as keeping those patents.

Here’s the Wired article on H-1B visas that Ben and I talked about, where intellectual capital gets sucked away from universities.

There’s another law review by Jung Hahm on why the H-1B visa program should be expanded, not contracted. It’s worth a read, though it is 17 years old. This piece in 2010 makes excellent points about the relationship fostered between transnational companies and government-to-government relations, but it is behind a paywall.

The Harvard Business Review goes over a myriad of reasons as to why immigrants are twice as likely to start a business over native-born Americans. Some of them are internal (those leaving their country are more likely to be risk-takers) and some are external (discrimination in the business world may encourage them to seek self-employment). Some are a combination of those factors (coming from a different culture gives them different eyes to see what the market offers and what it may be lacking).

Episode Notes (Budget):

Here’s a piece that demonstrates the “magic asterisk” in Trump’s budget.

Politico has a piece detailing how the budget proposal leaves Trump core base high and dry.

You can check out the budget proposal yourself at the White House website.

There are some nice visualizations at the New York Times, too.

For a more comprehensive take on what we think of the budget proposal, check out episode four, where we tackled a previous version of a budget proposal this year.