McCain Thinks the Recession is All in Our Heads

Posted by Steve Benen, The Carpetbagger Report at 10:29 AM on July 10, 2008.

Given economic conditions, the housing crisis, the energy market, dispiriting employment numbers, and the value of the dollar, you’d think the McCain campaign would be going to extraordinary lengths to show that John McCain a) recognizes the seriousness of the problem; and b) has a plan to help turn things around.


But that’s not quite the path the McCain campaign has chosen. Instead, the Republican presidential campaign has decided that the economy is really great, but Americans just aren’t smart enough to realize it.

Take former Sen. Phil Gramm (R-Texas), described by some as McCain’s “brain” on economic matters, and the man whose financial deregulation efforts make the market meltdown possible, who thinks we’re the problem.

“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.

Sometimes, the McCain campaign seems anxious to make the Dems’ campaign efforts easier. I wonder what the reaction will be when Dems go to, say, Michigan, Ohio, and Pennsylvania, and tell them, “John McCain’s top economic advisor thinks people who are concerned about the economy are ‘whiners,’ and that the economic downturn is all in our heads.”



For that matter, let’s not forget that it’s not just Phil Gramm. McCain himself has made similar comments.


In January, McCain said the problems with the economy are in our heads.


“A lot of this is psychological. A lot of it’s psychological. Because I agree the fundamentals of our economy is still strong.”

And in April, McCain said most of the nation’s economic problems are “psychological.”

“I think psychologically, a lot of our problems today are psychological — confidence, trust, uncertainty about our economic future, ability to keep our own home,” McCain said. “[A gas-tax holiday] might give ‘em a little psychological boost. Let’s have some straight talk: it’s not a huge amount of money…. A little psychological boost. That’s what I think [a gas-tax holiday] would help.”

And in June, McCain said he’s still focused on the “psychological impact” of various policies.

…McCain admitted that his offshore drilling proposal would probably have mostly “psychological” benefits, NBC/NJ’s Adam Aigner-Treworgy reports. At a town hall in Fresno that primarily focused on energy issues, McCain was asked a question about the price of gas and the viability of various short-term solutions. […]


“In the short term I’d like to give you a little relief for the summer on the gas tax,” McCain began, referring to his controversial proposal to temporarily suspend the federal tax on gasoline. But then he made a surprisingly candid admission: “I don’t see an immediate relief, but I do see that exploitation of existing reserves that may exist — and in view of many experts that do exist off our coasts — is also a way that we need to provide relief. Even though it may take some years, the fact that we are exploiting those reserves would have psychological impact that I think is beneficial.”

I suppose it’s possible for a candidate for national office to be more out of touch, but I don’t see how.



In 1992, when voters were deeply unsatisfied with the economy, Bill Clinton said, “I feel your pain.” Sixteen years later, after another Bush presidency has left the nation with a sense of malaise, John McCain’s campaign says, “Enough with the constant whining.”


It’s like putting the ball on a tee and handing Dems a bat: DNC spokesperson Karen Finney told ABC, “What John McCain, George Bush Phil Gramm just don’t understand is that the American people aren’t whining about the state of the economy, they are suffering under the weight of it — the weight of eight years of Bush-enomics that John McCain and Phil Gramm have vowed to continue. How dare John McCain and his advisers so callously dismiss the challenges the American people face. No wonder voters feel John McCain is out of touch, he and his campaign don’t even understand the everyday issues Americans are dealing with.”



Remember when Barack Obama’s “bitter” remarks were characterized as elitist and condescending? And how the story dominated the political landscape for weeks? McCain’s comments are arguably much worse.


[ED: Update... John McCain is now trying to distance himself from Phil Gramm's comments.]

Tagged as: economy, mccain