In the third quarter, GDP increased 2.8 percent from last year. Federal government cutbacks reduced growth by 0.13 percent, which means that without the sequester and other fiscal headwinds the economy probably would have grown more than 3 percent last quarter.

Once again, the best word for this is meh. Business and consumer spending slowed, and much of the Q3 growth was driven by increased inventory stockpiling, which isn't sustainable. Overall, this report was an improvement from earlier in the year, but basically about average for the past three years. It could be worse, but we're still nowhere near a truly robust recovery.

Here's the latest on the NSA surveillance front:

National Security Council officials are scheduled to meet soon to discuss the issue of separating the leadership of the National Security Agency and Cyber Command....The administration is also discussing whether the NSA should be led by a civilian.

Officials said privately that the changes could help tamp the current furor over the NSA’s sweeping powers by narrowing the authorities assigned to its director. Because of heightened political sensitivities, what might ordinarily be an internal Defense Department policy matter is now being coordinated by the White House, said officials who spoke on the condition of anonymity to discuss internal deliberations. Seriously. Just no. This won't tamp down anything. It might be a good idea, but it's not going to fool anyone into believing that the actual substance of NSA policy is changing. I'm afraid that will require changing the actual substance of NSA policy.

Here's the latest on the Virginia gubernatorial race:

Attorney General Ken Cuccinelli (R) had not called Democrat Terry McAuliffe after losing the Virginia gubernatorial race and had no plans to do so as of late Wednesday morning, according to a report in The Washington Post.

....At a press conference later on Wednesday McAuliffe said he had still not heard from Cuccinelli. "I have not had the opportunity yet to speak to the attorney general," McAuliffe said.

Let's see a show of hands on this. How many people think we should do away with the whole tradition of a congratulatory phone call from the loser of a political campaign? Is it an insincere gesture that's nonetheless useful as a public way of bearing witness to the peaceful transfer of legitimate power in a democracy and keeping up a facade of civility? Or is it just a pointless and humiliating ritual that's long since worn out its welcome? What say you?

The New York Times reports today that the Postal Service's financial crisis continues to drag on:

Last year, the Postal Service’s operating revenue was $65 billion, but its operating expenses were $81 billion. To put that in context, $65 billion is about the amount the Pentagon has spent so far on the F-35 fighter jet program.

I'm curious: is it just me, or does this kind of comparison do nothing to put this into context for anyone else either? Speaking personally, it actually makes things less clear, since the cumulative budget of the F-35 fighter jet means nothing to me. Comments?

Jon Hilsenrath reports on a new Fed study suggesting that monetary policy ought to remain loose for a very long time:

The Federal Reserve could help drive down unemployment faster if it promised to keep short-term interest rates near zero for longer than currently envisioned by officials or investors, according to a new research paper by a top central-bank staff member

....The research paper—written by William English, the head of the Fed's monetary-affairs division and two other authors—argues the Fed's unemployment threshold for rate increases would be more effective if it were lower than 6.5%, possibly as low as 5.5%. In effect that would mean waiting until the job market got much better before raising rates.

....As part of the exercise, Mr. English relied heavily on computer forecasting models known as "optimal control" programs. That's notable because these programs have also been cited by Janet Yellen, the president's nominee to lead the Fed after Mr. Bernanke's term expires, in speeches to defend the central bank's easy-money policies.

I guess this falls into the category of tea-leaf reading, trying to figure out what kind of policies Yellen will push if she's confirmed as the next Fed chairman. Take it for what it's worth.

The Economist warns New York's mayor-elect Bill de Blasio not to screw things up:

New York has been well run for 20 years. It used to be one of America’s most dangerous big cities; now it is one of the safest. Crime has fallen faster in the Big Apple than elsewhere, thanks to police reforms begun by Rudy Giuliani (the mayor from 1994 to 2002) and continued by Mike Bloomberg, his successor.

Can we please, please, please stop this? I almost don't care anymore if you accept the hypothesis that reductions in childhood lead exposure are primarily responsible for America's dramatic decline in violent crime over the past two decades. But can we at least get our facts straight? Lots of big cities have seen drops in their violent crime rate. At least three others—Chicago, Dallas and Los Angeles—have seen declines as big as New York's. Others, like Phoenix and San Diego, now match New York's crime rate. They did this without Giuliani and Bloomberg. They did it without CompStat. They did it without broken windows. Hell, even New York did it for four years without these things: Its crime rate started plummeting in 1991, long before these reforms showed up.

There's a considerable controversy around all of these policing reforms, and my semi-informed belief is that they probably played a role in reducing crime. But honestly, the data simply doesn't support the notion that they played a primary role. Neither the time frame nor the evidence from other cities fits. Rather, they rode the tailwind of something else—probably reduced childhood exposure to lead—and helped things along. Unless Bill de Blasio starts up a city program to seed the clouds with lead dust, he doesn't really have anything to screw up.

I don't know enough about Virginia (or New Jersey or New York City) to have much to say about their elections yesterday. So I was hoping that one of my Virginia friends would come through with a long, thoughtful email about the McAuliffe-Cuccinelli race, which I considered by far the most interesting of last night's races.

In that race, Terry McAuliffe won a close victory even though the polls had him well ahead.1 Does this bode ill for Democrats? Sure, maybe. On the other hand, McAuliffe was an unusually unsympathetic candidate, and Republicans still couldn't beat him in a state that looks increasingly like the country at large. On balance, then, this really seems like bad news for Republicans no matter how they try to spin things.

However, one of my liberal Virginia pals had an interesting take on why Cuccinelli lost:

I agree with Erickson and First Read regarding a lot of the race-specific reasons for Cuccinelli's loss. But, to me, the biggest mistake that Cuccinelli made was his initial tentative step toward making this a Tea Party campaign that downplayed economic messages in favor of his hot buttons — which, by the way, far and away most animated him on the stump (reminiscent of Santorum, almost).

This just doesn't fly with the NoVa business interests. They'll support any right wing crank as long as there is no daylight between them on business interests, taxes, etc. But Cuccinelli had the unnerving tendency to go headlong and unapologetically into his crusades at the expense of all else (e.g., massive and expensive witch hunt against UVA professor for climate change views, unqualified support for anti-abortion and contraception laws, and, of course, leading the doomed Obamacare challenges). In none of his crusades would business benefit in any significant way if he were successful. At the end of the day, he was spending significant resources to prove ideological points. Further, his attempted course corrections at trying to put his economic message front and center just lacked authenticity — more pro forma than passion. The business lobby wants the Governor out there selling Virginia, attracting business and jobs. Cuccinelli just seemed to be the worst salesman for this.

This speaks to all the recent chatter about whether the business wing of the GOP is finally fed up with the tea party and willing to do something about it. The message here isn't that Cuccinelli was anti-business, but simply that he was so plainly animated by crusades on social issues that the business community didn't trust him. They were afraid that at worst he might actively scare away business, and at best he'd never put any real energy into attracting it. McAuliffe, by contrast, is all about attracting business to Virginia. So the usual business-tea party partnership broke down.

I just thought I'd share this. Cuccinelli might be a bit of a unique character, but he's not that unique. The business community might have fired a shot across the tea party bow last night.

1Will this be a boon for the folks who are convinced that mainstream polls are all skewed against conservatives? Maybe!

Former California chief justice Ronald George released an oral history of his time on the bench today, and a couple of his recollections about dealing with the state legislature are worth sharing:

"I remember dealing with one state senator who found it impossible ... not to bring up his own divorce proceedings and how he thought he'd gotten a raw deal at the hands of his wife and her attorneys and didn't feel the court system dealt with him fairly," George said, not naming the elected official.

....One legislator refused to support a revenue bond for court construction because his wife had received what he viewed as an excessive fine for making a rolling stop, George recalled. The bond depended on raising fines.

There you have it. Your state legislature at work.1

1OK, it's actually my state legislature at work. But I'll bet yours isn't much different.

Way back in 2012, when he was running for president, Ron Paul seemed to some people like a breath of fresh air. Sure, maybe he was a bit of a crank, but at least he didn't sanitize his beliefs in order to avoid offending people. He said what he meant, and he meant what he said.

But, um, maybe not. At least, not based on this look into Paul's libertarian id, delivered last night at a campaign rally in Virginia for Ken Cuccinelli:

"Jefferson obviously was a clear leader on the principle of nullification," the former Texas congressman said of the third president. "I’ve been working on the assumption that nullification is going to come. It’s going to be a de facto nullification. It’s ugly, but pretty soon things are going to get so bad that we’re just going to ignore the feds and live our own lives in our own states."

....He tore into the Constitution’s 17th Amendment. Ratified in 1913, it’s the one that allows for the direct election of U.S. senators by popular vote. "That undermined the principle importance of the states," said Paul.

He criticized the 16th Amendment, which allowed the federal income tax. After the crowd chanted "End the Fed," Paul decried the printing of more money by the Federal Reserve. "We need someone to stand up to the authoritarians," he said. "They’re dictators."

....He stressed that the constitutional "right to keep and bear arms" was not for hunting, but to allow rebellion against tyrannical governments. "The Second Amendment was not there so you could shoot rabbits," he said. "Right now today, we have a great threat to our liberties internally."

Huh. I don't remember him being willing to deliver harangues quite like this during last year's debates. I guess he was holding back after all, just another mealy-mouthed politician unwilling to buck the polls and tell the people the raw truth.

This comes via Ed Kilgore, who asks, "Can you imagine a statewide Democratic candidate anywhere, much less in a 'purple state,' associating himself or herself so conspicuously with such ravings? No, you can't." This is what I was talking about yesterday: liberals don't have the equivalent of a tea party because there just aren't very many liberals who hold views this extreme—and the ones who do are pretty marginalized. In the Republican Party, however, this kind of thing barely even lifts any eyebrows.

And the most remarkable part of all this is that the rest of us—centrists, liberals, non-insane Republicans, the press, etc.—are expected to shrug off this kind of thing as nothing more than a sort of boys-will-be-boys stemwinder, not to be taken seriously. Remarkable indeed.

From Toronto mayor Rob Ford, finally admitting that he's smoked crack cocaine:

Have I tried it? Probably in one of my drunken stupors, probably approximately about a year ago.

Well, OK then! That explains everything. "Drunken stupor" will surely now join "wide stance" and "when the president does it, that means that it is not illegal" in the pantheon of memorable excuses for bad behavior among politicians.