Donald Lambro

The United States is using the time-honored carrot-and-stick approach. Turn away from your nuclear program and there will be benefits. Persist and there will be serious economic sanctions.

The first signals out of Iran suggest they are standing their ground, but it is early yet in the dance of negotiations that will follow. For now, Iranian President Mahmoud Ahmadinejad's offer to talk offers hope in what had looked like a hopeless situation.

Meanwhile, the U.S. economy continues to defy all those critics who have been predicting its demise, as well as the Federal Reserve's misguided efforts to slow its solid growth.

Just about all of the data so far on jobs, retail sales, construction, factory orders and home sales continue to show a national economy operating on all cylinders. Americans, however, are not convinced. They see news stories of plant closings in certain sectors like autos and a slight slowdown in housing sales from an unsustainable pace -- as the economy continues to undergo a sweeping transformation to keep it lean and competitive in the global marketplace.

But we finished the first quarter with a surprisingly healthy growth rate, incomes in the aggregate are up, corporate earnings are strong, the small-business sector remains the hottest part of the investment market -- a bullish sign of the economy's future vitality.

Gas prices are eating into discretionary consumer spending, but so far there is no evidence that this is sandbagging the economy, though it no doubt will have some impact if oil prices do not come down before then.

As for nothing getting done in Washington: Congress has extended some of Bush's most important tax cuts on dividends and capital gains. The Senate has passed a comprehensive immigration-reform bill that now goes into conference with the House. The House has approved a budget that no doubt spends too much, but that will have to be reconciled with the two chambers.

The Senate has swiftly confirmed and the administration installed a new director of the Central Intelligence Agency to reform an agency that is on the frontline of the war against terrorism. A new secretary of the Treasury is about to sail through confirmation, too. This is not a Congress sitting on its laurels.

And this is not a country worthy of the kind of pessimism and doubt that the pollsters are hearing from the voters. Maybe they are asking the wrong questions.

Donald Lambro

Donald Lambro is chief political correspondent for The Washington Times.