Kevin Drum

As you know, there are two basic types of Medicare: traditional fee-for-service (FFS) plans, where doctors get paid for services rendered; and Medicare Advantage plans (MA), where doctors are paid a set annual amount for each patient.

In theory, MA plans should be cheaper. In reality, they game the system in two ways. First, they subtly tune their services to attract healthier patients (gym memberships, acupuncture, etc.). Second, they increase their coding intensity.

Wuzzat? Well, the annual payment for each patient is risk-adjusted: the sicker the patient, the bigger the payment. So MA plans benefit by making their patients look sicker than they really are. They do this by coding lots of ailments, even those that don't require treatment. More codes means the appearance of more sickness, which in turn means a higher risk-adjusted payment.

How does this net out? Here's a chart from MedPAC showing how much the government pays MA plans compared to how much they'd pay if the same patients were in traditional FFS plans:

That extra $83 billion for the current year is just shy of 10% of all Medicare spending. It's a lot.

I myself am in a Medicare Advantage plan because it's a great deal. That is, it's a great deal for me personally because my plan can afford to give me extra bennies thanks to the extra money they get from the feds. Needless to say, a great deal for me doesn't mean it's a great deal for the rest of you, whose taxes are paying for this.

So thanks!

The latest AI chips from Nvidia will get the rock star treatment when they're unveiled next week:

Chief Executive Jensen Huang is expected to unveil his company’s latest chips on Monday in a sports arena at an event one analyst dubbed the “AI Woodstock.”

The new chips are expected to be called B100s and be available in September, UBS analysts said in a note. The could be four times faster than H100s and might cost as much as $50,000, they said, about double what analysts have estimated the earlier generation cost.

One thing I still don't quite understand is how Nvidia has managed to corner the market for AI chips. The requirements are widely understood, and there are plenty of engineers who know how to design this stuff. What's their secret sauce?

RANDOM NOTE: Donald Trump could probably post bond in his fraud case if he were able to get his hands on about 20,000 Nvidia H100 chips. Real estate might be iffy, but Nvidia chips? Gold!

Donald Trump says he won't be able to post the $454 million bond required by his loss a few weeks ago in a New York business fraud case:

In a filing to a New York appeals court, Trump said that the judgment, ordered by a state judge last month, was so large that suretors wouldn’t accept real estate as collateral and would require cash to guarantee the bond. A private company like the Trump Organization would need $1 billion in cash to obtain the bond and to continue to operate, an amount the company doesn’t have, the filing said.

....[If] he is unable to obtain a bond, New York Attorney General Letitia James, who sued Trump in 2022, could begin enforcing the judgment at the beginning of next week. James, a Democrat, has said that if Trump can’t come up with the money, she will look to seize his assets.

It's not clear to me why nobody is willing to accept real estate as collateral. Is it because the commercial real estate market is tanking and they're unsure Trump's holdings will maintain their value a year from now? Or that they're unsure they'll be able to seize the collateral if they have to? Or that they just don't trust Trump?

Oh well. It should be fun if Letitia James starts trying to grab Trump's buildings. Like they say, if you can't do the time, don't do the crime.

Last year a Trump judge in Louisiana issued a deranged ruling that said the Biden administration "seems to have assumed a role similar to an Orwellian 'Ministry of Truth'"—and therefore prohibited all communication with social media from a slew of federal agencies. On appeal, even the 5th Circuit couldn't stomach most of it, but they left a few bits of the ruling intact. Today the Supreme Court indicated that it was likely to whack the rest of it:

A majority of the justices appeared convinced that government officials should be able to try to persuade private companies, whether news organizations or tech platforms, not to publish information so long as the requests are not backed by coercive threats.

Justices Brett M. Kavanaugh and Elena Kagan, both former White House lawyers, said interactions between administration officials and news outlets provided a valuable analogy. Efforts by officials to influence coverage were, they said, part of a valuable dialogue that was not prohibited by the First Amendment.

Evidence of coercion in the original case was basically nonexistent, so that shouldn't be a problem. It would sure be nice to see a unanimous reversal in this case, but I suppose it's too much to hope that Sam Alito will join in. Anything that's bad for Republicans will never get his vote.

I've long argued that eventually AI will get better than human beings at everything, which in turn means we'll all be out of jobs.¹ During the Industrial Revolution this didn't happen because while machines took over a lot of jobs, they also created a lot of new jobs for humans (like designing and maintaining machines). AI is different. If it can do anything, then by definition any new job you can think of can also be done better and cheaper by AI. It's game over.

But along comes Noah Smith with a clever counterargument. He doesn't deny that AI will improve, or even that it will eventually get better at everything. His case is more subtle.

In a nutshell, he suggests that no matter how good AI gets, it will always be valuable enough to be allocated to the highest value tasks. This means there might still be lots of jobs left for humans. Even if we're comparatively lousy at them, it could make sense to keep at them if it frees up AI for more important work.

Here's an example to make this concrete. Suppose we're invaded by aliens who are intent on killing us all. This is an existential threat, and it would therefore make sense to dedicate 100% of our compute power to fighting the aliens. A robot might still be a better farmer than a human, but we'd all grow our own food if it meant increasing the number of robots defending the planet.

So how likely is this? The most obvious real-world answer is that compute power is likely to grow so much that every human task can be done by a fraction of a percent of the world's total AI—and the more AI grows, the tinier the human fraction gets. Technically this doesn't matter: in the case of the alien invasion, for example, you'd still want to use every last petaflop of compute on fighting back no matter how much you had.

But that sort of existential threat is fanciful. In the real world, there are always lots of frictions and adjustments. It seems unlikely that we'd all keep working just because, technically, that last 0.01% of compute power could be put to better use. It would have to be a helluva better use, no? An improvement of 1% in GDP wouldn't cut it.

So it's a nice argument, but I don't buy it. It seems vanishingly unlikely that, politically, we'd condemn ourselves to lives of drudgery based on an ultra-purist free-market promise that it's for the best. We certainly never have before.

¹Or 99% of everything if you insist on believing that chemical computers will always be able to do a few things better than digital computers. It doesn't matter. It's mass unemployment either way.

What's the right way of covering the endless stream of ugly and apocalyptic language that Donald Trump uses to inspire his MAGA followers? Here's an example from yesterday: many news outlets reported that Trump had threatened a "bloodbath" if he's not elected. But if you listen to his remarks, he's talking about a bloodbath in the US auto industry unless he's elected and places high tariffs on Chinese cars:

George Conway says, sure, Trump was probably talking about cars in this clip, but it doesn't really matter:

What matters is that he consistently uses apocalyptic and violent language in an indiscriminate fashion.... He catastrophizes *everything* to rile up his cultish supporters, and to bind them to him, and to make them willing to do his bidding.... And so it doesn’t matter what he’s specifically referring to at the moment. He could be talking about trans people in public bathrooms or the state of the auto industry or the border—it doesn’t matter.

Conway is right. At the same time, it's just plainly misleading not to make it clear that Trump was talking about US automakers.

The thing is, Trump is so relentless that there's really no conflict here. You can report his remarks accurately, as you should, and still have plenty of material left over to make Trump's overall tone clear. One obvious way is to put his comment in the context of all his other apocalyptic language: immigrants as vermin, Joe Biden as the most corrupt president in history, I am your retribution, death and destruction if he's charged with a crime, demonic forces destroying the country, this is the final battle, etc.

Or, even easier, just report the rest of his speech. For example, there's the very beginning, where, as usual, he ditched the national anthem in favor of a paean to the "hostages" of January 6.

There's just no good reason to exaggerate what Trump says. All it does is give him yet another excuse to call out how unfairly he's treated—with some justice—while accomplishing nothing that the truth doesn't accomplish just as well.

Here's yet another reason not to panic over TikTok:

For the first time in TikTok’s history, its user growth is stagnating, according to people familiar with the matter.... U.S. average monthly users ages 18 to 24 declined by nearly 9% from 2022 to 2023, according to the mobile analytics firm Data.ai. Some users in their 20s say they have gotten off the app entirely to focus more on life and work.

Teens are notoriously faddish, and their favorite social media networks change rapidly. TikTok is big enough and has enough inertia that it will stay popular for a long time, but it won't be the "it" network forever. As with all things teen, what goes up must eventually come down.

There's a reason that I've been willing to defend Joe Biden almost immediately against the various mopery and dopery he's been accused of over the years. It's because he's been in the public eye for half a century and we all have a pretty good idea of who he is.

When Tara Reade accused him of harassment, I was skeptical from the start. People who do that stuff get a reputation and Biden doesn't have one.

Bribes and corruption? Biden has never been wealthy or flaunted his belongings. I've never been even slightly concerned that anyone would someday dig something up on him.

Deliberately stealing classified documents when he left office in 2017? The guy's a Boy Scout and always has been.

Regardless of what you think of Biden policywise—and feel free to hate him for raising taxes on the rich or canceling student debt if you want—everyone in Washington DC knows what he's like as a person. He's gregarious, decent, honest, a little goofy, and a family man. His worst fault is regaling audiences with stories of his life that are maybe a little less than 100% accurate.

That's it. That's the guy. Trying to pretend he's something else is just never going to work.

Bob Somerby quoted Sen. Katie Britt today saying that human trafficking across the Mexican border has grown from $500 million in 2018 to $13 billion today—meaning 2021. Is this really true?

Nope. It's a widely cited statistic, but as near as I can tell every single repetition can be sourced back to a New York Times piece from 2022 that says:

The sheer number of people seeking to cross made migrant smuggling an irresistible moneymaker for some cartels, [Patrick Lechleitner] said.

The enterprises have teams specializing in logistics, transportation, surveillance, stash houses and accounting — all supporting an industry whose revenues have soared to an estimated $13 billion today from $500 million in 2018, according to Homeland Security Investigations, the federal agency that investigates such cases.

This has nothing to do with human trafficking, which is (mostly) a matter of kidnapping young girls and forcing them into prostitution. The $500 million figure comes from a passing remark in testimony by Homeland Security Secretary Kirstjen Nielsen, and it's an estimate of the amount that coyotes make from smuggling people into the US.

As for the $13 billion figure, who knows? There's no source given except HSI, and I was unable to find an HSI estimate anywhere for anything. But it's probably also a smuggling number, since that's the subject of the Times story.

However, even as a smuggling number it should be treated with extreme skepticism. What are the odds that human smuggling increased 2600% in three years? Come on.

So how much has trafficking across the southwest border increased? The best evidence I can come up with is the number of people tried in court:

Prosecutions are up since 2018, but referrals and convictions haven't changed at all. They're both up about 5% since 2018.

Unless HSI has become wildly less competent at busting human trafficking operations, a 5% increase in referrals probably means about a 5% increase in trafficking.

Not 2600%. Not even close.

The first test of delivering food aid to Gaza via the sea is a success:

I've been shocked by the hardliners who are actively contemptuous of these efforts. It's one thing to say that the only real solution is a ceasefire, but it's quite another to oppose humanitarian efforts like food drops and seaborne deliveries just because the war hasn't stopped.

In other news, a large shipment of food from Turkey was finally released from the port of Ashdod a few days ago and has now reached Gaza. Israel has also opened a new road crossing from the village of Beeri in northern Gaza, allowing more aid to get directly to Gaza City, which still has about 300,000 residents even after the evacuations early in the war.

In a few weeks the larger US seaborne efforts will start up, even as airdrops directly into Gaza continue.

This is all heartbreakingly too little and too late. But the combination of political pressure and facts on the ground have finally gotten things moving. In the end, even Bibi Netanyahu recoiled at the prospect of tens of thousands of Gazan children dying of starvation in refugee camps. This was most likely for cynical reasons of optics, but who cares? All that matters is that we're finally getting food in, one way or another.