Irwin Stelzer of the Hudson Institute and the Weekly Standard expressed concerns on Tuesday but is ultimately "cautiously optimistic" as well:

The president's decision to exclude from tomorrow's White House conclave on economic policy anyone who might raise a dissenting voice, suggests that the meeting is intended more to provide Bush with photo ops than with new ideas on how to cope with the trade and budget deficits, the consequences of the falling dollar and rising interest rates, or continued dangerous reliance on imported oil.

Unfortunately, the administration appears to think that Karl Rove, the political genius whose knowledge of every district in Ohio contributed mightily to the president's reelection, can also craft a sensible economic program. The decision to run economic policy "out of Karl Rove's hip pocket," says the Wall Street Journal, "sufficed in the first term when tax cutting was the main policy focus, but it isn't likely to work for another four years . . . . Mr. Rove knows a lot, but we doubt he knows how to work out the next Long Term Capital Management failure, much less handle a dollar crisis."

But look on the bright side. Bush enters his second term with an economy that is growing at an annual rate of around 4 percent. Inflation is tame, and the dollar's downward movement has so far been more of a drift than a plunge. If past experience is any guide, a cheaper dollar might, just might, bring the trade deficit down to manageable levels.

The budget deficit also might be headed in the right direction. In the fiscal year that ended on September 30 the deficit came to $412 billion, the same percentage of GDP (news - web sites)--3.5 percent--as last year. That compares with forecasts that centered around $500 billion, or a 4.25 percent of GDP. Better still, reliable sources in the government assure me that on current trends the deficit will shrink to about half the current level as the economy grows. Assuming, of course, that Congress and the president finally meet a new expenditure they can do without.