Gramm’s Mentality

Top McCain adviser says "What recession?"

John McCain’s top economic adviser Phil Gramm, who’s also a vice chairman of troubled Swiss bank UBS, has some not-so-compassionate conservative comments in The Washington Times today.

Gramm thinks there’s no recession, there’s only “whining” about a recession. It’s all in our heads!

“You’ve heard of mental depression; this is a mental recession,” he said, noting that growth has held up at about 1 percent despite all the publicity over losing jobs to India, China, illegal immigration, housing and credit problems and record oil prices. “We may have a recession; we haven’t had one yet.”

“We have sort of become a nation of whiners,” he said. “You just hear this constant whining, complaining about a loss of competitiveness, America in decline” despite a major export boom that is the primary reason that growth continues in the economy, he said.

“We’ve never been more dominant; we’ve never had more natural advantages than we have today,” he said. “We have benefited greatly” from the globalization of the economy in the last 30 years.

At a minimum that seems politically tone deaf at a time when 70,000 people a month for the last six months have lost their jobs. It’s always problematic for a political adviser to talk about a “nation of whiners.” It’s more so when 53 percent more Americans turned their houses over to the banks last month than did the previous June. And when the price of gas means you can’t afford to fill up your tank. Or when the Wall Street guys, who are supposed to know what they’re doing with money after all, are losing hundreds of billions of dollars with no end in sight.

Of course, Gramm’s complaints wouldn’t be complete without piling on the press.

“Misery sells newspapers,” Mr. Gramm said. “Thank God the economy is not as bad as you read in the newspaper every day.”

It’s probably not so bad for a certain class of international banking executive, ex-senator, adviser to GOP presidential candidate. But how many of those does the average voter know? As a reader asked over at Talking Points Memo, will the press take Gramm to task for being out of touch like it has with certain Obama campaign brouhahas? Perhaps it’s just wishful thinking on his part, since he played a big part in laying the groundwork for the credit crisis that’s caused the present economic downturn, which hasn’t yet been officially been called a recession but isn’t something to gloss over, either.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.