So, um, we had a rough day in the commodity markets:

A surging dollar and a collapse in oil prices roiled commodity markets, as fears grow that high costs for energy and raw materials are undermining the global economic recovery….That lack of confidence was pivotal in spurring a hectic retreat by investors who had bought commodities—particularly silver and oil—as a hedge against a steadily weakening dollar.

The New York Times elaborates:

 “Pop goes the bubble,” said Michael Lynch, president of Strategic Energy and Economic Research, a consulting firm. “It seems unlikely you will see any tightening in the market in the coming months. The worst of the political threats have passed us.”

….For the day, crude oil for June delivery tumbled $9.44 a barrel, or 8.6 percent, to settle at $99.80 in New York trading. Almost all commodities prices took a tumble on Thursday. Gold for June delivery dropped 2.2 percent, or $33.90, to $1,481.40 an ounce, while silver lost 8 percent or $3.148, to $36.24 an ounce. Other metals — including nickel, copper, palladium and platinum — all fell sharply. Coffee, corn, cotton, wheal and soybeans also dropped.

There’s a sense in which this is almost good news. If the oil/commodity bubble pops now, it will cause some damage but it will probably be manageable. But if it had gone on for another six months or a year, the damage to the global economy could have been much greater.

This is only a few days worth of data, so take it with a grain of salt. Still, it does make you wonder if we really do have a global economy these days that’s inherently built on bubbles of one kind or another. Our financial rocket scientists seem almost incapable of making money in a normal economy — making enough money to satisfy themselves, anyway — so instead they spend their time seeking out smallish bubbles and then working overtime to supercharge them enough to spin out some temporary wealth before everything crashes back down to earth. One of these days we might actually get serious about regulating leverage enough to slow this down, but it hasn’t happened yet. Maybe another half dozen bubbles will finally do the trick.

Matt Yglesias on the possibility of retaliatory attacks from al-Qaeda in the aftermath of Osama bin Laden’s death:

To me, the main thing we’ve learned about terrorism since 9/11 is that almost nobody living in the United States of America or any country from which you can travel to the USA without a visa (Canada, Western Europe, etc) actually wants to mount a terrorist attack. We’ve done a lot of homeland security since 9/11, but it’s obviously imperfect. You never see a terrorist detonate a bomb in an airport security line, you don’t see terrorists shooting up shopping malls, rogue drivers don’t plow their cars into crowds of pedestrians, etc. There are clearly lots of people eager to fight the United States in Afghanistan and other places, but those people either don’t want to come here or else they can’t. The idea that there’s some sleeper cell waiting for the right moment to strike was very plausible in September 2001, less so in October 2001, even less so in October 2002, and less and less and less and less plausible with every passing year.

Roger that. I think it’s worth pointing out that strengthened security measures are probably partly responsible for this, since they make it a lot harder to pull off attacks of any significance. If you want to set off a bomb in an airplane, you either need to hide it in a toner cartridge or in your underwear or whatnot, and that’s just inherently unreliable. Even car bombs are harder to make than you think, since the precursor elements are carefully tracked.

Still, the point stands. Obviously terrorists are always trying to think of new ways of creating havoc, and we have to respond to that. Broadly speaking, though, we have responded, and that response has been pretty effective. The United States doesn’t have a lot of homegrown suicide bombers, and it’s really, really hard for Afghan/Yemeni/Somali/etc. suicide bombers to get over here and do anything spectacular. We’re almost certain to be attacked again, but it’s equally certain that attacks will be infrequent and far less damaging than 9/11. We shouldn’t orient our entire worldview around increased security, and we shouldn’t scare ourselves into spending vast amounts of money on it.

At least, that’s true for now. In the future, who knows? There might come a time when biological weapons become easy enough to make that our security calculus needs to change. But not right now.

Back in 1985, a group of researchers decided to test the “hot hands” theory of basketball playing. That is, do players sometimes get hot, making shot after shot because they’re hot, or do players have hot streaks just because statistically you’re going to make a bunch of shots in a row sometimes? Their conclusion was clear: there’s no such thing as hot hands. But athletes themselves, even really smart, analytical ones, have never been able to accept this. They know the feeling of being hot, and no pointy-eared academics can tell them otherwise. I once had a (really smart) boss who felt that way, for example, and Paul Waldman agrees:

After spending a few hundred hours in pick-up games, I’d say that real hot and cold streaks happened around one out of every eight or 10 games I played. Some games were better and some worse, but every once in a while, I’d have a game where I just couldn’t find the basket, and every once in a while, I’d have a game when I couldn’t miss.

Ball players know that feeling — the days when every time you go up for a shot, even before it leaves your hand you just know it’s in the bucket….But if those good and bad days happen infrequently enough, from a statistical point of view, they look exactly like random noise. If you flip a coin a thousand times there will be runs where you’ll get 10 tails in a row, and if you play a hundred games there will be some where you’ll hit 10 shots in a row. They may look the same statistically, but that’s only because the magical games are infrequent. But that doesn’t mean that the player isn’t playing differently during that game, in ways that are so subtle they’re probably impossible to detect.

Hoo boy. First off, once every eight or ten games isn’t infrequent at all. In fact, it’s really, really frequent. And second, unless we’re invoking some kind of quantum mechanical effect on our neurons, nothing in basketball is too subtle to detect. There’s nothing that’s even close to being too subtle to detect.

I’m not really picking on Paul here. (OK, maybe I am a little.) I just think it’s interesting how unwilling most athletes are to accept the results of this study. The feeling of streakiness is so strong that we feel it just has to be true. In reality, though, most streakiness is just a combination of chance and chance. Chance #1 is the raw probability of hitting a bunch of shots in a row every once in a while. Chance #2 is what our opponents are doing. If, by chance, they make a bunch of bad plays, or happen to be guarding you badly, your shots are going to feel good. You’ll have slightly better positions, slightly longer looks, and you’ll make more shots. Adrenaline will do the rest.

But why did I say “most streakiness” can be explained this way? Why not “all streakiness”? Because there’s always Joe DiMaggio. That 56-game hitting streak of his really was out of this world. Statistics can’t explain that.

BY THE WAY: It’s possible, of course, that the hot hands study has some methodological defect. I wouldn’t bet on it since Amos Tversky was one of the co-authors, but you never know. On the other hand, it’s also worth noting that they did four separate tests of streakiness and then added both a study of free-throw shooting and a controlled experiment with the Cornell basketball team. Result: nothing, nothing, nothing, nothing, nothing, and nothing. There’s just no there there.

AND THIS: I believe the hot hands study is correct. Really. And yet….even I have to admit that it’s hard to accept that players don’t have good and bad games quite aside from their statistical chance of randomly doing well once in a while. It’s just….hard.

From the Wall Street Journal: “New claims for jobless benefits unexpectedly surged last week to their highest level since last summer, according to data giving another sign of the economy’s struggle in creating jobs. Separately, U.S. productivity slowed in the first quarter as the economic recovery stumbled and labor costs started to rise again.”

Not good news. Chart below, modified from this.

Jon Cohn turns his attention to Detroit:

Will the voters will ever give President Obama credit for rescuing the American auto industry? I have no idea. But it looks more and more like they should. On Thursday General Motors announced that, for the fifth consecutive quarter, it had made a profit. And not just a measly one, either. The $3.2 billion was higher than experts had predicted and more than three times the profit of the same quarter in 2010, when the company was still struggling to emerge from its bankruptcy.

….”Reducing excess capacity” is a Wall Street euphemism for eliminating jobs. A lot of people suffered, and still are suffering, because they lost their livelihoods. Still, if not for the Obama Administration’s intervention, the entire American auto industry might very well have collapsed and taken the Midwest with it. Instead, the industry is on the rebound, at least for now.

Back in 2009, when the rescue of GM and Chrysler was up in the air, I remember that my main thought was, “I’m sure glad I don’t have to make this decision.” Philosophically, after all, a bankrupt company ought to be allowed to die. The government just shouldn’t be in the business of rescuing badly run industrial behemoths, especially in an industry with the kind of massive global excess capacity that the auto industry has.

At the same time, would you want to be the guy who lets GM shut down at the height of the biggest recession in 50 years, potentially losing a million jobs and sending the economy into an even bigger tailspin? Not really. It was just a classic rock and a hard place.

In the end, though, Obama almost certainly made the right call. We don’t know for sure what the impact of letting GM and Chrysler fail would have been, but it quite likely would have been grim. And in the end, despite the endless yowling about “Government Motors” and Obama’s “secret socialist agenda,” the fact is that his team rammed through a pretty good deal, GM has recovered, Obama was fastidious about letting GM’s managers run the company,¹ and taxpayers will likely take only a modest loss. It’s not something anyone wants to repeat — and GM’s board better understand that it’s unlikely it ever will be — but under the circumstances it was the best we could do. And Jon is right: voters ought to give Obama more credit for it than they have.

¹Why? Because Barack Obama is actually a boring, gray-flannel-suit, garden variety American capitalist pig. Like just about everyone else in the country, he has no interest in controlling the means of production and wants only to regulate capitalism’s excesses, not replace it with socialism. But you knew that already.

Is Congress really more gridlocked than it used to be? Or is it just our imaginations? Don Taylor points us to a new paper by Craig Volden and Alan Wiseman that, among other things, codes every single one of the 119,040 bills introduced into the U.S. House of Representatives from 1973-2002 by type of bill. This is an impressive demonstration of either (a) massive OCD or (b) massive maltreatment of grad students. I’m not sure which. But code them they have, and when they strip out all the trivial/symbolic/post office naming kinds of bills, they come to two conclusions:

• There really has been a secular decline in the number of bills passed over the past couple of decades.
• Health bills have always had a harder time passing than other kinds of bills, so it’s hardly surprising that Obamacare was such a close run thing.

Taking a look at all bill types, it turns out that health bills were among the hardest to pass. What else is hard to pass? Social welfare, housing, labor, and civil liberties legislation. Liberals just have a tough time all around. More details at the link.

Paul Ryan’s proposal to gut Medicare sure didn’t last long:

Senior Republicans conceded Wednesday that a deal is unlikely on a contentious plan to overhaul Medicare and offered to open budget talks with the White House by focusing on areas where both parties can agree, such as cutting farm subsidies.

On the eve of debt-reduction talks led by Vice President Biden, House Majority Leader Eric Cantor (Va.) said Republicans remain convinced that reining in federal retirement programs is the key to stabilizing the nation’s finances over the long term. But he said Republicans recognize they may need to look elsewhere to achieve consensus after President Obama “excoriated us” for a proposal to privatize Medicare.

Um, yeah, it was Obama’s fire breathing stemwinders that turned the tide. It had nothing to do with the fact that constituents hated the idea and Republicans would have lost 50 seats in the next election if they’d stuck with it. Nothing at all.

I’m going to double down on my belief that photos of Osama bin Laden’s body should be released now that I’ve read President Obama’s justification for holding them back:

President Obama decided Wednesday not to release photos of Osama bin Laden’s body, saying such images could incite violence and be interpreted as displaying “trophies” of his death, the White House said. “It’s important for us to make sure that very graphic photos of somebody who was shot in the head are not floating around as an incitement to additional violence or as a propaganda tool,” Obama said in an interview with CBS’s “60 Minutes” program.

Sorry. That’s not good enough. There are specific reasons for keeping things classified, and the fact that something “could” incite violence or might be used in a way that makes life more difficult for the White House isn’t one of them. That’s little more than an all-purpose excuse that can be used for keeping anything classified.

Bottom line: distasteful or not, there’s a clear and obvious public interest in the killing of the mastermind of 9/11. Unless releasing the photos would compromise operational details of the raid, the American public has as much right to see them as Obama does.

UPDATE: I’d add that although photos obviously wouldn’t change the minds of all the conspiracy theorists who think the whole thing was faked, it would change some of them. That’s pretty worthwhile.

Rajiv Chandrasekaran reports that the White House believes the killing of Osama bin Laden will help us on two fronts:

The Obama administration is seeking to use the killing of Osama bin Laden to accelerate a negotiated settlement with the Taliban and hasten the end of the Afghanistan war, according to U.S. officials involved in war policy.

“Bin Laden’s death is the beginning of the endgame in Afghanistan,” said a senior administration official who, like others interviewed for this article, spoke on the condition of anonymity to discuss internal policy deliberations. “It changes everything.” Another senior official involved in Afghanistan policy said the killing “presents an opportunity for reconciliation that didn’t exist before.” Those officials and others have engaged in urgent discussions and strategy sessions over the past two days about how to leverage the death into a spark that ignites peace talks.

….U.S. officials expressed hope on Tuesday that Pakistan’s failure to find bin Laden — or its possible complicity in sheltering him — could lead Islamabad to adopt a softer position on Afghan reconciliation. They think that Pakistani officials, who have interfered with peace efforts in the past, have an opportunity to play a more constructive role. “Our hope is that they are so embarrassed by this that they try to save face by trying to help their neighbor,” one U.S. official said.

It’s hard to tell if this is wishful thinking or not. If you’d asked me point blank, I would have guessed that in the short term bin Laden’s death would motivate the Taliban to fight even more furiously and motivate the Pakistanis to redouble their support and pull away from the United States. Embarrassment doesn’t usually cause people to back down, and in any case, Pakistan’s primary goal of keeping Afghanistan out of the orbit of India hasn’t changed a whit. If anything, it might seem even more urgent now.

But this is just a wild guess. Hopefully Obama’s foreign policy boffins have a better read on this than I do.

Back in 2009, Congress provided additional Medicaid funding to states on the condition that they keep eligibility requirements steady. This is called Maintenance of Effort, and as Suzy Khimm reports, Republicans want to do away with it:

The State Flexibility Act would not go as far as the Ryan plan, which proposes a massive overhaul of the Medicaid funding structure. But it would allow states to take a knife, if not a hatchet, to the program….Having already made steep cuts to provider payments and benefits, “some states will certainly make eligibility cuts,” says Edwin Park, VP for health policy at the Center for Budget and Policy Priorities.

Moreover, by introducing new procedural hurdles—Mississippi, for instance, has made it harder for people to renew coverage—states could deter more-vulnerable residents from signing up, says Park. Similar proposals put forward in California would have reduced enrollment by 500,000, he adds.

This is, obviously, one way to cut healthcare expenditures: just provide healthcare to fewer people. Preferably the poorest and sickest, since they don’t contribute to political campaigns and aren’t very reliable voters.

On a less cynical policy level, it’s also worth noting that although there are lots of programs that are best handled at the state and local level because local officials understand local conditions better, healthcare really isn’t one of them. Sick is sick, and treatment for chronic diabetes doesn’t change much from California to Mississippi. What’s more, Medicaid expenses always rise during recessions (more poor people = more Medicaid), which is also when state revenues crater and cutbacks are inevitable. This not only hurts sick people with low incomes, it makes economic turndowns even worse than they have to be.

So let’s just federalize Medicaid. Medicare works fine on a national level, after all, and during a recession the federal government can fund higher Medicaid expenses automatically by running a bigger deficit. It’s a nice automatic stabilizer that not only helps the poor and the sick but helps the economy too. What’s not to like?