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Jewish World Review May 7, 2008 / 2 Iyar 5768 Personal and Economic Recovery By Tony Blankley http://www.JewishWorldReview.com | Note to My Readers: I want to thank the many readers who e-mailed me over the weekend to thoughtfully inquire about my health after my Friday evening television appearance in which I was clearly having physical trouble. Many of you wondered whether I had a stroke. Blessedly, no. But over the weekend, I was diagnosed with a case of Bell's palsy — a temporary weakening of facial muscles on the right side, which is caused by either a bacterial or viral infection of the seventh cranial nerve, usually from contact with a bug or bird. In my case, it may have been one of my peacocks, who scratched and pecked me as I was carrying him back to his aviary after he had escaped. The symptom of Bell's palsy is a drooping of the right side of the face — eyelid and mouth, in particular. As a result, until the recovery is complete (from weeks to months), I will be talking out of one side of my mouth (and the left side, no less) — which in this political season, may be better than talking out of both sides of my mouth. If there is one assumption about this presidential election shared by both Republican and Democratic strategists, it is that the election campaign will be played out in the backdrop of an economy in recession. And that may yet be the case. But during the past week, evidence has begun to mount that suggests that amazingly there may be no recession this year. Of course, as I discussed last week, the long-term prospects for our economy are dubious and will depend on how the next president, Congress and the Federal Reserve deal with the value of the dollar, inflation, international trade and tax, and regulatory and fiscal policies. But in the short term, if happy days are not quite here again, at least the agony of a contracting economy may not be with us, either. The first indicator was the report from the Commerce Department last week that in the first quarter of 2008, just as in the last quarter of 2007, the gross domestic product did not contract as most Americans and economists expected. Rather it grew at an admittedly anemic 0.6 percent. The second revealing statistic was job losses. Only 20,000 jobs were lost last month; most experts expected a drop of more than 70,000. The unemployment rate actually went down 0.1 percent to 5 percent, rather than the expected increase to 5.2 percent. In the first four months of 2008, job losses averaged only 65,000 per month (on a downward path), compared to the average 181,000 jobs lost per month during the 2001 recession. That is also good news. Moreover, with the stimulus tax rebates just beginning to come to taxpayers and the economic stimulus from the Federal Reserve's interest rate reductions to 2 percent during the past few months to take effect with a typical four- to six-month delay, there is a reasonable expectation that these forces will provide some steady, if modest, lift to the economy through the summer and fall. But perhaps the most hopeful sign for the near term is not to be found in statistics, but rather in the judgment of two prominent experts who are well-known political opponents of George W. Bush. In the past few days, both the nation's richest (and arguably shrewdest) businessman, Warren Buffett, and The New York Times' Princeton economist columnist, Paul Krugman, announced their belief that the worst of the financial crisis may (repeat: may) be past. Of course, as Buffett pointed out, there is much agony left for homeowners facing foreclosure and ruin. But if at least the short-term crisis is past, then the financial institutions will be able to get back to their function of providing regular liquidity for sound business activity. In recent months, banks have been afraid to lend money even for solid business plans. So with business able to borrow and invest and with consumers not losing their jobs, economic life may progress at least at a modest pace through the year. If this comes to pass — and the public confidence in the economy stabilizes or improves a little — although high gas and food prices will continue to rankle, the acute bite of economic fear may dissipate and thereby deny the Democrats the full power of their economic argument against John McCain and the Republican candidates. Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here. Tony Blankley is executive vice president of Edelman public relations in Washington. Comment by clicking here. © 2008, Creators Syndicate

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