Today Karl Smith provides several reasons to be optimistic about the trajectory of future growth. There is, he says, still "a huge employment problem that should not be ignored," but even on that front he thinks the recovery of the past year doesn't look too bad. Since I tend to be pretty pessimistic about this stuff, I figure this is worth passing along.

Does Torture Work?

Tyler Cowen on the news that the intelligence that eventually led to the raid on Osama bin Laden's hideout may have been the result of torturing detainees at Guantanamo:

I have never been pro-Guantánamo, or for that matter pro-torture [], but I am willing to report results which may run counter to my views. The moral and the practical do not always coincide, and perhaps we should be celebrating just a bit less. It is possible this is not a totally “clean” victory on our part.

This is one of the reasons that I think it's important not to put too much emphasis on practical arguments against torture. After all, if the reason you oppose torture is because torture doesn't work, then you'd better be prepared to change your mind if it turns out that torture does work. I'm not willing to do that.

The obvious counterfactual here is that although torture might have produced actionable information that eventually helped locate bin Laden, perhaps we could have gotten the same information another way. And maybe so. But I doubt that this kind of abstract argument has much impact on most people. The fact is that torture probably does work in some cases, and if you oppose it, you need to oppose it even so.

Paul Krugman:

If you’re a serious Keynesian, you’re for maintaining and even increasing spending when the economy is depressed, even though revenue has plunged; but you’re for fiscal restraint when the economy is booming, even though revenue has increased.

In other words, you want to (roughly) balance the budget over the course of an economic cycle, running a surplus during the expansionary phase and a deficit during the recessionary phase.

Obviously there are technical disputes about whether this is the right way to manage the macroeconomy. But in a way, it hardly matters. In the same way that real Christianity is simply too hard for mere mortals to practice (thus the need for a merciful God), so is hard Keynesianism. In the real world, you're just never going to be able to persuade people to demonstrate the fiscal restraint that Keynesianism requires during boom times. And if, in the real world, Keynesianism is too difficult for human beings to practice during the 80% of the economic cycle taken up by expansion, then it's not much good. Economics, after all, doesn't feature a notably merciful God.

I don't know if anyone has ever proposed a feasible way to overcome this problem.

Election Speculation

So does the killing of Osama bin Laden help Barack Obama's reelection chances? I doubt it. I'm not an economic fundamentalist when it comes to presidential elections — too many people read those economic models and forget the part where the authors explain that their model only explains about two-thirds of the variance — but it's still the case that economic conditions account for most of a president's chances of reelection. What's more, the election is still 18 months away. Even if bin Laden's death could play a role, there's no way it would continue to have much impact a year and a half from now.

But there are at least two ways in which bin Laden's death could still make a difference. First, the quality of opposition matters, and GOP contenders are making their campaign decisions now, not 18 months from now. It's possible that yesterday's news will tip a few high-quality candidates against running in 2012, and this would obviously make Obama's job easier.

The other way it could matter is a bit more subtle: bin Laden's death could, conceivably, lead to changes in U.S. foreign policy that make Obama's reelection more likely. Perhaps we'll now feel free to take a harder line with Pakistan. Perhaps Obama will be more aggressive about drawing down troops in Afghanistan. Perhaps al-Qaeda really will disintegrate somewhat after bin Laden's death and this will lead to further U.S. victories closer to the election.

Obviously this is all very speculative. But I guess that's what blogs are for. So feel free to speculate away in comments.

Steve Coll on Pakistan's role in keeping Osama bin Laden safe in a suburban mansion for half a decade:

It stretches credulity to think that a mansion of that scale could have been built and occupied by bin Laden for six years without it coming to the attention of anyone in Pakistan’s Army.

The initial circumstantial evidence suggests the opposite is more likely—that bin Laden was effectively being housed under Pakistani state control. Pakistan will deny this, it seems safe to predict, and perhaps no convincing evidence will ever surface to prove the case. If I were a prosecutor at the United States Department of Justice, however, I would be tempted to call a grand jury. 

....Outside of the Justice Department, other sections of the United States government will probably underplay any evidence about culpability by the Pakistani state or sections of the state, such as its intelligence service, I.S.I., in sheltering bin Laden. As ever, there are many other fish to fry in Islamabad and at the Army headquarters in nearby Rawalpindi: An exit strategy from Afghanistan, which requires the greatest possible degree of cooperation from Pakistan that can be attained at a reasonable price; nuclear stability, and so on.

Pakistan’s military and intelligence service takes risks that others would not dare take because Pakistan’s generals believe their nuclear deterrent keeps them safe from regime change of the sort underway in Libya, and because they have discovered over the years that the rest of the world sees them as too big to fail. Unfortunately, they probably are correct in their analysis; some countries, like some investment banks, do pose systemic risks so great that they are too big to fail, and Pakistan is currently the A.I.G. of nation-states. But that should not stop American prosecutors from following the law here as they would whenever any mass killer’s hideout is discovered.

More at the link.

So the operation against bin Laden was apparently carried out solely by U.S. forces. Obama called President Zardari after the operation was over. And the best joint statement they could agree on afterward was that this was a "good and historic" day. Is it just me, or does it sound like maybe Pakistan wasn't exactly as thrilled about all this as one might hope?

UPDATE: Steve Clemons provides a different picture that suggests Pakistan was deeply involved in the operation. We'll see.

UPDATE 2: CNN emphasizing that operation was carried out "with the cooperation" of Pakistani government.

FEMA's Ups and Downs

The New York Times on FEMA's response to the tornadoes that ripped through the South last week:

It has been the deadliest natural disaster on American soil since Hurricane Katrina. But the government response to the tornadoes that devastated the South last week has, at least in the first few days, drawn little of the searing criticism aimed at federal agencies back in 2005.

....FEMA officials contacted the White House about the need for a federal emergency declaration even before Alabama had submitted a formal request that evening, said Art Faulkner, the state’s emergency management director. It was quickly granted....In Alabama, as in other affected states, the Democratic White House was winning early praise from state, local and Congressional leaders of both parties.

Shall we roll the tape? Under Bush Sr., FEMA sucked. Under Clinton, FEMA was rehabilitated and turned into a superstar agency. Under Bush Jr., FEMA sucked again. Under Obama, FEMA's doing great and responding quickly.

I know, I know, we're not supposed to politicize natural disasters. Not when that politicization makes Republicans look bad, anyway. So I'll just let you draw your own conclusions from these four data points. I report, you decide.

The Zero Profit World

Matt Yglesias:

In a fully competitive market, products should be sold for the marginal cost of producing a unit. And in the software world, the marginal cost of producing a unit is zero. Therefore, in the long run software should be free and nobody should make a profit.

This is an odd use of the word "should," I think. And rather than being an argument for free software1, it's really more of an argument that either (a) economic "efficiency" is overrated or (b) fully competitive markets are overrated. If nobody ever got to make a profit, after all, the world would be a pretty dreary and backward place.

But then, I suppose I'm biased. The marginal cost of producing blog posts is indistinguishable from zero, and I'd just as soon make more than zero dollars producing them. So I'm not really a fan of long run profits trending to zero, even in the nonprofit world.

1For reasons that escape me, this argument is almost always employed as a criticism of industries like software and music that have very low marginal costs. I suspect ulterior motives.

So you think the royal wedding has been overexposed? Don't be silly. The overexposure has only barely begun! And today, the cats and I do our part to keep the royal media extravaganza going, with a tsotchke assist from my sister.

On the left, Inkblot is celebrating the great day — and demonstrating his serene confidence in his own masculinity — by wearing a lovely royal tiara. Majestic looking, isn't he? And aside from being made out of plastic, it's just like Kate's! Except for all the parts that aren't. On the right, Domino is royalty percatified, surrounded by my sister's treasures. Unlike Inkblot, who's generally willing to plonk down wherever you put him (for a while, anyway), Domino doesn't really like being told what to do. This meant that her picture took a little while longer to set up. Basically, I had to wait for her to go to sleep somewhere and then start piling stuff up around her. That only worked for a few minutes, but a few minutes was all I needed.

So anyway, happy royal wedding day! It's a bank holiday in Britain, and I declare the rest of the day a cat holiday in America. Go pet a cat!

After reviewing a few of the latest follies on Capitol Hill, Jon Chait concludes that the Beltway chattering classes have become obsessed with the federal deficit because, as far as they're concerned, the economy is fine and we don't really have to worry about it anymore:

The view that the deficit represents a uniquely high priority, and that we should prioritize it over economic growth even during the greatest economic crisis since the Depression, has been deeply embraced by economic and political elites in both parties. And it's hard to disconnect this from the fact that, for those elites, the economic crisis is over.

Moments later, Catherine Rampell posts this result from a recent Gallup Poll:

Sure enough, where you stand depends on where you sit. If you have a job and you're earning good money, the economy doesn't look great, but it doesn't look that bad either. If you don't have a job and/or you're not earning much, the economy continues to look pretty sucky.

And the Beltway folks? They all have jobs and they all earn considerably more than $75,000. To them, the economy probably looks almost peachy. It's no wonder they can afford to focus all their attention on what the federal deficit is going to look like in the year 2030.1

1Plus, this focus is politically useful for Republicans. That always helps with the chattering classes too.