Should-Read: Where is the advantage—if any—of Medicare Advantage as opposed to Traditional Medicare coming from? Could it be that some aspects of the promise of HMOs are finally being realized—that there is somebody monitoring and tracking and thus disposed to deal with the health problems of beneficiaries, as evidence by their having HCC codes?: Joseph P. Newhouse, Mary Beth Landrum, Mary Price, J. Michael McWilliams, John Hsu, and Thomas McGuire: The Comparative Advantage of Medicare Advantage: “We find differences in the distribution of beneficiaries across H[ierarchal ]C[ondition ]C[ategories]’s between TM and MA, principally in the smaller share of MA enrollees with no coded HCC, consistent with greater coding intensity in MA…

…Among those with an HCC code, absolute differences between MA and TM shares of beneficiaries are small, consistent with little service-level selection. Variation in HCC margins does not predict differences between an HCC’s share of MA and TM enrollees, although one cannot a priori sign a relationship between margin and service-level selection. Margins are negatively associated with the importance of post-acute care in the HCC. Margins among common chronic disease classes amenable to medical management and typically managed by primary care physicians are larger than among diseases typically managed by specialists. These margin differences by disease are robust against a test for coding effects and suggest that the average technical efficiency of MA relative to TM may vary by diagnosis. If so, service-level selection on the basis of relative technical efficiency could be welfare enhancing…

Should-Read: The very sharp John Lukacs on what I call “fascism”—proletarian ethnoi that need to fight enemies foreign and domestic with economic cleavages within the ethnoi papered over, rather than proletarian classes that need the economic system unrigged. For some reason he calls it “nationalism”, which I think is properly something different: there may well be elective affinity between belief in the nation-state as a political and sociological community and fascism, but it is certainly not an identity: John Lukacs: The Duel: The Eighty Day Struggle Between Churchill and Hitler: “The principal force of the twentieth century is nationalism…

…It has been the fatal, or near fatal, error of Communism as well as Democracy to ignore that until it is—almost—too late. The greatest and most powerful apostle of modern nationalism was Adolf Hitler… a superlative—I am employing this word not in its commendatory sense—incarnation of a historical movement that, at least for twenty or twenty-five years, in novel forms seemed to overrun the world. From about 1920 to 1945, the quarter century that corresponds to the span of the political career of Hitler (though not of Churchill), the history of the world (and not only of Europe) was marked by a triangular struggle… Communism… Democracy… and… a new historical force, inadequately called “Fascism”…. This is why it is not only historically wrong but dangerous to see Hitler and Hitlerism as no more than a strange parenthesis in the history of the twentieth century, the transitory rise and fall of a madman.

In spite of its international pretensions and propaganda Communism did not go very far outside the Soviet Union…. Alone among the great revolutions of the world—consider only how the American and French revolutions had soon been emulated by a host of other peoples, in Latin America and in Western Europe, often without the support of American or French armies—Communism was unable to achieve power anywhere outside the Soviet Union until after the Second World War….

During the twenty years before 1940 liberal parliamentary democracy failed and was abandoned by the peoples of Italy, Turkey, Portugal, Spain, Bulgaria, Greece, Rumania, Yugoslavia, Hungary, Albania, Poland, Estonia, Latvia, Lithuania, Austria, Germany — not to speak of Japan, China and many Central and South American countries. These changes were not the results of external pressure. They were the results of spontaneous developments…. The character of these dictatorships varied from country to country. Most of them were not “totalitarian,” in the later accepted sense of that term. Some of these national dictatorships resisted Hitler. But, by and large, Democracy was in retreat. It gave the impression of institutions and ideas that were tired and outworn. The very political map of Europe reflected this….

Within every nation, including the Western democracies, there were people who not only opposed the war—this war, against the German Third Reich—but whose opposition was inseparable from (indeed, often it was motivated by) their contempt for the democratic politics and government of their own nation, and from their consequent respect for what Hitler and his order seemed to represent…. Within France convinced Nazi sympathizers were few; but there were many men and women whose contempt for their seemingly corrupt and ineffectual governmental and social system debouched naturally into their dislike for France’s waging war in alliance with Britain. Even in the United States, where “isolationism” was widespread and politically strong, consistent isolationists were few and far between. Most isolationists, bitter opponents of Roosevelt and his administration, were not opposed to armaments and the military. What they opposed was this war, the war waged by the aged and corrupt British and French empires against Germany, and the inclinations of Roosevelt and others to side with the former…

Should-Read: This seems to me like fuzzy thinking from the sharp Dani Rodrik. It is, I believe, the result of a failure to call things by their right names. There is “populism”: rallying broad political majorities behind their economic interest in a less unequal distribution of income and wealth in pursuit of a policy agenda—mixed wise and unwise—that boosts rewards at the bottom and the middle and increases opportunity. There is “fascism”: rallying ethno-cultural groups against cultural and ethnic enemies foreign and domestic, with economic cleavages within the ethnos elided and covered over as unimportant: proletarian peoples oppressed by others, not proletarian classes oppressed by the rich and by an unfair system. That it is considered impolite to use the F-word does not mean that one should confuse oneself by calling “populist” movements that are not so. And why the claim that it is “globalization” that is driving the extraordinary American income and wealth polarization? Yes, there are fewer manufacturing workers because of the trade deficit. But the trade deficit is largely a home-brewed consequence of government budget deficits and finance-friendly political economy, not of increasing volumes of global trade. And the overwhelming bulk of the manufacturing employment decline has nothing to do with the trade deficit. And the bulk of income stagnation below the top has little to do with the manufacturing employment decline. And a lack of national policy autonomy is not the problem with America—or the problem with the European Union as a whole. Both of those entities have all the national policy autonomy they could possibly wish for, and more: Dani Rodrik: What Does a True Populism Look Like? It Looks Like the New Deal: “When populism succeeds, it does so not by cosmetic gimmicks but by going after the roots of economic injustice directly…

…Populism in the 21st century is as much a reaction to globalization as its late-19th-century version…. Large segments of the workers in these advanced economies—older, less-skilled manufacturing employees and the communities they live in—have seen their earnings decline or stagnate and their relative social status take a big hit. These groups see governments as increasingly in the pocket of financial and business elites, the big winners of globalization. The discontent in turn fuels populist leaders who promise to wrest control from faceless global market forces and re-empower the nation-state…. Yes, globalization expands economic opportunities: There are gains from trade. But globalization also entails stark distributional consequences, with some groups almost always left worse off. Factory closings, job displacement and offshoring are the flip side of the gains from trade….

In principle, an active government can take the edge off the resentment produced by redistribution…. But often the response of the government has been to plead incapacity in the face of inexorable global economic realities: “We cannot tax the winners—the wealthy investors, financiers and skilled professionals—because they are footloose and they would move to other countries.” This reinforces populists’ yearning to reassert national economic control….

President Trump and his European counterparts have capitalized on the economic difficulties of the middle and lower-middle classes by wrapping them in narratives that exploit prevailing ethno-nationalist prejudices. In the United States, they attribute declining wages and job prospects to Mexican immigrants, Chinese exporters and the federal government’s preoccupation with minority groups at the expense of the white middle class. In Europe, they lay the blame for the erosion of the welfare state and public services on competition from immigrants and refugees. But none of this really helps the middle and lower-middle classes. Worse, the illiberal politics of the strategy undermines democracy….

If governments feel themselves powerless to institute the tax policies and regulations needed to address the dislocations caused by economic and technological shocks, the solution is not just to seek more national autonomy but also to deploy it toward such reforms…

Should-Read: Our social insurance state still (largely) presumes the stable two-parent family. In lots of ways it does not fit today’s American society, in which men in divorce threaten to seek custody on the basis of their higher incomes and so get women to accept impoverishing negotiated settlements: Susan Pedersen: Reviews ‘Bread for All’: “The welfare state emerges in this account as the culmination of a series of individual, sometimes problematic and sometimes heroic, engagements and commitments…

…Edwin Chadwick struggling with drains and contagion, Francis Galton puzzling over ‘defect’ and degeneracy, Octavia Hill setting up model housing and disciplining her unruly tenants, Charles Booth sending his army of volunteers out to categorise and analyse London’s working class. Some of the sons and daughters of those evangelical shipping magnates and manufacturers who racked up fortunes during Britain’s free-trading heyday, it seems, felt guilty, not complacent, about their privilege…. A school of thought born to open up a society riddled with rank and patronage to merit and markets ended up documenting the inability of individualised freedom alone to deliver prosperity and justice. At a moment when the public reputation of ‘experts’ is lower than that of, say, vivisectionists, it’s nice to read a book that insists so strenuously that social scientists, armed with knowledge and numbers and driven by ambition and empathy, teamed up with politicians (another unloved group) to improve the world decisively and lastingly….

The book does provide a good and readable account of the making of the Beveridgean welfare state. But without a sharper analytical focus, and especially some attention to Beveridge’s ideas about how to provide income security without disordering family life, the book not only ignores the welfare state’s disciplinary function but also rather overlooks how poorly it served disadvantaged groups–notably mothers–when the social relations Beveridge thought so stable came apart…

Should-Read: Claudia Goldin: Harvard economist Claudia Goldin studies why women earn less than men: “If there’s one thing men can do to improve women’s life at work, it would be…

…Want what women want. If men wanted to take more responsibility at home (real responsibility), then workplaces would be structured differently, and men and women would be treated and paid more equally in the labor market. It’s that simple. BONUS QUESTIONS: The mountain I’m willing to die on… is freedom. Everyone should own… a dog (but dogs own us)…

Should-Read: Helge Berger, Giovanni Dell’Ariccia, and Maurice Obstfeld: The Euro Area Needs a Fiscal Union: “Without more tangible elements of a fiscal union, the euro area will remain fundamentally vulnerable to shocks…

…The architecture supporting Europe’s currency union remains incomplete and leaves the region vulnerable to future financial crises…. The euro area needs to build elements of a common fiscal policy, including more fiscal risk sharing, to preserve financial and economic integration and stability. Without some degree of fiscal union, the region will continue to face existential risks that policymakers should not ignore. While this is not a new topic, the current favorable economic climate might be the moment to advance the discussion—and the chance to strengthen the euro area. If Europe’s Economic and Monetary Union (EMU) were like any other large currency area, such as the United States, member states would tackle economic or financial shocks together. They would have empowered a central government or jointly run institutions to deal with stressed financial entities, secure bank deposits, and provide fiscal relief to member states in a particularly deep recession…

Should-Read: Center for American Progress: Medicare Extra for All: “‘Medicare Extra for All’…

…would include important enhancements to the current Medicare program: an out-of-pocket limit, coverage of dental care and hearing aids, and integrated drug benefits. Medicare Extra would be available to all Americans, regardless of income, health status, age, or insurance status. Employers would have the option to sponsor Medicare Extra and employees would have the option to choose Medicare Extra over their employer coverage. Medicare Extra would strengthen, streamline, and integrate Medicaid coverage with guaranteed quality into a national program. The cost of coverage would be offset significantly by reducing health care costs. The payment rates for medical providers would reference current Medicare rates—and importantly, employer plans would be able to take advantage of these savings. Medicare Extra would negotiate prescription drug prices by giving preference to drugs whose prices reflect value and innovation…

Should-Read: The fear that decreasing competition is hobbling American economic growth is a growing concern. And back when I learned antitrust economics and law, the idea that raising rivals’ costs could be thought of as pro-competition and pro-consumer would have struck my teachers dumb with amazement. Yet here we are: Michael Kades: Credit card competition case before U.S. Supreme Court leaves consumers and competition in the balance: “The Supreme Court next week will hear oral arguments in an antitrust case about competition and credit card merchants’ fees…

…The U.S. Department of Justice and a group of state attorneys general alleged that American Express Co. has effectively eliminated competition between credit card companies that could lower merchant fees. As a result, merchants are paying higher fees and passing those costs on to all consumers. The case exemplifies the challenges of modern antitrust law. The court of appeals, in ruling for American Express, adopted a complex doctrinal analysis that confused what should have been a straightforward antitrust analysis. In practical terms, the decision sanctions a likely transfer from generally less wealthy consumers to more wealthy companies and, in this case, from less wealthy consumers to more wealthy ones….

Credit cards serve two sets of customers: the consumers who use the cards and the merchants who accept them. The demand between the two groups is interdependent. The more people who carry a credit card, the more likely a merchant is to accept the card, and the more merchants who accept a credit card, the more likely a consumer is to carry that card. That relationship affects how credit card companies compete. American Express, for example, charges merchants a relatively high fee to process transactions, but it provides substantial benefits to consumers through its rewards program…. Alternatively, a credit card company might charge merchants a low fee, hoping the merchant will induce customers to use the cheaper card…. Right now, customers can’t make that choice because of nondiscrimination clauses in agreements signed by merchants who agree to use American Express cards…. That clause has a marketwide impact….

The original trial court found that such clauses eliminated competition and increased merchant fees…. Distilled to its essence, American Express is saying that, given a choice with full information and competition, consumers will stop using its cards. That is competition. And the trial court rejected the company’s justification. The court of appeals reversed that decision, finding no antitrust violation…. The court of appeals decided that the government had to prove that increased fees were greater than any increased consumer benefits as a threshold issue. The issue in the case, however, is not that American Express was shifting costs between two sets of customers; the issue is whether the company can prevent its competitors (Visa, MasterCard, and Discover) from competing by incentivizing merchants to prefer one card over another…. The Supreme Court hearing next week and its final decision, announced sometime before the end of June, will go a long way toward determining whether U.S. antitrust law can rise to the challenge of protecting consumers and competition or whether its force will be unduly circumscribed…