A Barack Obama-Hillary Clinton ticket is an idea that I have been promoting as a real political possibility—to much skepticism, I admit. But none other than my fellow Greek-American George Stephanopoulos also thinks it could happen: "I mean, first of all, would Senator Obama go for it? Can he get over the bitterness of this campaign? Can he be convinced that it's the strongest ticket? Third, of course, would Senator Clinton take it? I think if it was offered in the right way, yes."

I think a guy like Sen. Jim Webb of Virginia would be a logical pick—downscale appeal, a Vietnam vet, defense background as a Navy secretary under Ronald Reagan, from a swing state. Currently, the Intrade betting market gives "the field" the best odds of getting picked, at 35 percent. That means someone (Claire McCaskill? Ed Rendell? Colin Powell?) other than listed potential candidates Hillary, Webb, John Edwards, Bill Richardson, Al Gore, Wes Clark, Mark Warner, Evan Bayh, Joe Biden, Sam Nunn, Ted Strickland, Tom Daschle, Chris Dodd, Tom Vilsack, and John Kerry. Of that group, Hillary is in first with 18 percent, and Webb second at 11 percent.

Council of Economic Advisers Chairman Edward Lazear on the state of the economy (via the Wall Street Journal): "I would be very surprised if the [National Bureau of Economic Research], looking back at this period, would date this as a recession.... There are even indications that revised first-quarter estimates would be slightly stronger than 0.6%. The optimists seem to have been closer to right on that than the pessimists."

And this economic nugget from today's data, as interpreted by the econ team at JPMorgan Chase:

Initial jobless claims declined to 365,000 in the week ending May 3 from 383,000 the prior week, and the four-week average edged up to 367,000 from 364,500. Jobless claims have been especially volatile in recent months, though looking through the noise claims have remained close to 375,000. While claims are elevated, it is comforting and somewhat surprising that they have only pierced the 400,000 level once this year.

How much will the fiscal stimulus package help the economy? The computer model over at Macroeconomic Advisers gives this answer:

The economic stimulus that we expect from these rebates is a key determinant of the GDP growth profile in our forecast. We assume that households (on average) spend about 40% of the rebates within several months of receiving them. This provides a very important boost to consumption growth through the middle of the year. With that boost, and the other (less important) aspects of the package, we expect the fiscal package to add about 2 percentage points to real GDP growth in both the second and third quarters.

It's an economic experiment I would rather not take part in: seeing how $200-a-barrel oil would affect the U.S. and global economy. "The possibility of $150-$200 per barrel seems increasingly likely over the next six-24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty'' is what Goldman Sachs economist Arjun Murti wrote earlier this week. (Note that Murti blames the weak dollar for a good part of the continuing rise in oil prices.)

Murti is hardly alone in such seemingly spectacular speculation. Analysts at Deutsche Bank and CIBC World Markets, investor Jimmy Rogers, and the current president of OPEC have all made such forecasts.

The latest data show that U.S. worker productivity increased at a 3.2 percent year-over-year rate in the first quarter after rising 2.9 percent in the fourth quarter of 2007 and 2.8 percent in the third quarter. Why is this encouraging? Economist Jim Glassman over at JPMorgan Chase tells us why (bold is mine):

There is a common perception among Americans that something bad is going on that is eroding our living standards. This is pure poppy kapoodle. Productivity is the key to rising living standards... it is a fundamental law of nature. It is how we in the West rose from poverty to the high living standards we enjoy today during the Industrial Revolution and it is why others around the world are trying to do the same. It is through productivity growth, not protectionism, that we in the West can best boost our living standards amid a more competitive global economy.

My take: Every presidential debate should feature multiple questions on what the candidates think needs to be done to increase innovation, productivity, and growth. Every problem America has is harder to deal with if we fail to maximize all those things.

Here's the deal: Barack Obama wants to do a cap-and-auction system on carbon emission allowances, which would bring in $100 billion a year or more to Uncle Sam. Cutting the corporate income tax rate from 35 percent to 25 percent would "cost" $100 a billion a year. John McCain's cap-and-trade proposal—where the allowances are mostly given away—might be scored by the Congressional Budget Office as revenue neutral. If McCain wants a cap-and-auction system, could he not offset his corporate income tax cut with those cap-and-auction revenues?

"It turns out Obama really is the black Kennedy—but he's not Jack, he's Teddy," is how one economic conservative, in a chat with me, riffed on the common description of Barack Obama as the "black JFK."

What did he mean by that crack? This: Despite Obama's impressive oratorical skills and tremendous likability, his actual policy proposals are pretty much what Democrats have been running on for a generation: higher taxes on labor, capital, and corporations. (Recall that JFK pushed for sweeping income tax cuts.) More government involvement in healthcare. More regulation of business. Skepticism about free trade.

Want a bit of good news? Hey, I've got 10 of them for you.

1) "The worst of the crisis in Wall Street is over," Warren Buffett told Bloomberg Television over the weekend. I guess the Oracle of Omaha is in the "recession, not depression" "club.

2) I got an E-mail from one high-profile Wall Street economist who said that first-quarter gross domestic product may have expanded at nearly twice the 0.6 percent rate that the government estimated last week. And his whisper estimate for 2Q is even stronger.

Has there ever been a more timely natural catastrophe than climate change? I mean, here we all are worrying about the future of the American economy—too much debt, jobs and industries moving overseas, new competitors in Asia and India—when what merrily comes along is a perceived civilizational challenge whose solution will not only create a better environment but also—talk about luck!—millions of those high-paying "green-collar" jobs and innovative new industries of the future that Barack Obama and Hillary Clinton have been talking about. As Clinton said in one presidential debate, "This issue of energy and global warming has the promise of creating millions of new jobs in America. It can be a win-win, if we do it right."

Heck, if climate change was a sham, it almost seems that it would be worthwhile to fabricate it, given all the apparent economic benefits. Then again, maybe not. Here is what William Pizer, an economist at Resources for the Future and a lead author on the most recent report from the U.N.'s Intergovernmental Panel on Climate Change, said at a symposium earlier this week here in Washington: "As an economist, I am skeptical that [dealing with climate change] is going to make money. You'll have new industries, but they'll be doing what old industries did but a higher net cost.... You'll be depleting other industries."

To quote bloody-and-beaten-but-still-standing boxer Jake LaMotta (portrayed by Robert De Niro) from the 1980 film Raging Bull, "Is that all you got!" The U.S. economy, supposedly sinking into the worst economic slump in a generation, lost a skimpy 20,000 jobs last month even though some analysts were looking for losses closer to 100,000. As economist Robert Brusca put it this morning: "Job losses are way below the recession norm for this point of business cycle (if this is recession). Many things do not really add up...for the recession forecasters.... Is it still a recession? Was it ever?"

And the unemployment rate actually dipped to 5.0 percent from 5.1 percent in March. So far, the economy has lost jobs for four straight months: down 76,000, 83,000, 81,000 and now 20,000. Back in 2001, the economy lost 30,000, 281,000, 44,000, and 128,000 as the economy weakened. And in 1990, the economy lost 42,000, 280,000, 82,000, and 161,000 as the economy tanked. Way back in 1981, jobs losses were 36,000, 87,000, 100,000, and 209,000.

Now keep in mind that once the unemployment rate looks to have peaked, the Fed will probably move to raise rates. So see how this virtuous circle works for you: Stocks, already up 10 percent since early March, continue to rise and replace the household wealth lost to the housing bust. The dollar continues to strengthen, helping bring down food and energy inflation. That bolsters real incomes and consumer spending. Americans, feeling richer and more confident, finally begin to move back into the housing market. The 25-year boom continues.

"Cactus" over at the Angry Bear blog, which is one of my favorites even though the writers don't much care for me, takes issue with my radical declaration that the economy was not in recession during the first quarter based on government data that said the economy was not in recession during the first quarter:

Nevermind that these figures are likely to be revised (based on this administration's recent history with data, anyone care to guess which way they'll be revised?), or that they use 2.6% deflator.... I would also note that GDP did not shrink for a single quarter during the 1970s. Not one. In fact, the smallest quarterly percentage increase in GDP during the entire decade was more than 3 times faster than the 0.6% of GDP James P is so excited about.

Hillary Clinton was on Fox News's The O'Reilly Factor last night and said what she would do about high gas prices:

In the short term, I do want a gas tax holiday but to pay for it by putting a windfall profits tax on the oil companies.... The oil companies have made out like bandits, and there is no basis for them to have these huge profits. They're not inventing anything new.... You set a baseline and, above that baseline, you begin to tax their profits.

Look, I know the economy is weak. But if it never has a down quarter, then it never went into a recession. Here is what Robert Hall, who heads the recession-dating committee at the National Bureau of Economic Research, said yesterday: "It seems unlikely that we would ever declare a peak date when real GDP continued to rise."

You have to admit that given $120-a-barrel oil, a severe housing recession, and a nasty credit crunch, it is quite amazing that America's growth machine is running at all right now. And it is just as amazing that damage from the housing and credit crunch has been relatively confined to those sectors, as important as they are. As market strategist Ed Yardeni notes this morning (boldface mine):

There is no doubt that S&P 500 operating earnings are in a recession given that they plunged 9.3% and 30.8% y/y during the third and fourth quarters of last year. The latest reports and consensus estimates suggest that profits fell 14.4% during the first quarter of this year. Actually, this profits recession is very much limited to the Financials sector and the Homebuilding industry in the S&P 500. Removing these two reveals that profits rose 15.9% in Q4 and around 12.0% during Q1. The resilience of "core" profits and of the economy in the face of the worst credit crisis since the 1930s is impressive indeed. One of the main reasons, of course, is that the US economy and corporate profits have become increasingly coupled with the global economy, which continues to grow at a solid pace. This has been an especially positive development for profits of nonfinancial corporations with growing sales overseas and rising exports to foreign customers. These companies are increasingly decoupling from the US economy.

Out: Recession. In: Expansion. That's my quick take on today's first-quarter gross domestic product number, which showed that the economy grew 0.6 percent in the first quarter. Now that's not a robust number by any means, but it's not so bad given all the worry out there that the economy is headed off a cliff. Before you declare a recession, as many economic pundits have, shouldn't the economy, well, actually recess a bit—if only for a quarter?

Remember, the shorthand rule for declaring a recession is back-to-back quarters of negative growth. The semiofficial recession judge, the National Bureau of Economic Research, has a more complex formula, but I am not sure it has ever declared a recession when the economy never actually shrank. And consider this: The Intrade online betting market now says there is a meager 25 percent chance of a recession—using the negative-back-to-back-quarters definition—in 2008.

Uncle Sam has plenty of dough. That's the core belief at the center of McCainomics. Or maybe we should call it "maverick economics," since John McCain's approach toward taxes and government spending has the potential to change the rules of the Washington budget game. Actually, it has the potential to change the game itself and perhaps create a long-term solution to America's fiscal problem—with trillions left over. See, that's what the Wall Street Journal didn't seem to understand when one of its reporters wrote the following last week:

Sen. John McCain is proposing tax cuts that would either cause the federal deficit to explode or would require unprecedented spending cuts equal to one-third of federal spending on domestic programs.