Former Senator and McCain campaign advisor Phil Gramm has obviously spent too much time out of office and in the private sector, because this week he committed the ultimate political crime. He told the truth. In an interview with the Washington Times he is being quoted as having said:
“You’ve heard of mental depression;. this is a mental recession… We may have a recession, we haven’t had one yet… You just hear this constant whining, complaining about a loss of our competitiveness, America in decline. We’ve never been more dominant; we’ve never hard more natural advantages than we have today. We’ve sort of become a nation of whiners.”
Snippets of the video of the interview are being circulated by the most left-wing groups like Talking Points Memo as evidence that McCain’s campaign is out of touch with the deep suffering of the American People, Barrack Obama has made jokes about it, and McCain has had to distance himself from Gramm and make sympathetic noises about helping out the working man in this time of crisis.
What no one is going to dare to say in this campaign season where everyone has to suck up to the voters, is that Phil Gramm is right. Gramm, unlike most politicians and media talking heads, is an actual economist. He was an economics professor at Texas A&M for 12 years. He was an economic business consultant for almost a decade. After leaving the Senate he went into business as a Vice President at UBS. He may be gruff and uncharismatic and look a bit like a turtle, but he knows the economy, knows what he’s talking about, and he’s telling the absolute truth, no matter how politically unpopular that happens to be.
Most of those attempting to use Gramm’s comments against McCain are using the comments out of context, or just selected sentences as shown in the quote above which came from today’s episode of Meet the Press. Even the Washington Times article paraphrases most of Gramm’s lengthy remarks. But most of what is in the article but doesn’t seem to have made it to any other news outlets, especially Gramm’s lengthy and detailed explanation of his remarks. The media wouldn’t want to get bogged down in the facts of the issue, because that would interfere with their efforts to promote the “mental recession” which Gramm talks about.
Here are the facts, many of which Gramm brought up:
• Gramm pointed out that we are in “a major export boom that is the primary reason that growth continues in the economy” and it is a fact that our exports and foreign investment in the United States are at the highest level in decades. In fact, exports to Canada, Japan and Europe were at record levels and the trade deficit has shrunken despite increasing imports of higher priced oil.
• Gramm also noted that the growth of the global economy has enormously benefitted the United States, where the lions share of the profits of globalized business end up. Globally diversified companies outside of the financial industry are expected to return very good profits this quarter.
• He mentions that we are not in a recession, a truth that the left doesn’t like to admit. By all the usual standards for a recession – such as the basic requirement of two quarters of economic decline – we are not in a recession. In fact, despite the mortgage crisis and high gas prices we have still had a 1% growth in the economy for the first half of the year.
• Even unemployment isn’t the grim spectre the media is portraying it at. The overall unemployment rate remains at 5.5% which is historically fairly low, and current weekly unemployment claims remain substantially lower than they were during the Clinton recession in 2001. In context, unemployment in Europe and Canada increased substantially during the first half of this year.
• Gramm’s most basic point is fundamentally correct. A large factor in the economy is consumer confidence and the constant negative drumbeat of the media creates the kind of “mental recession” he’s talking about and works against all of the positive factors in the economy. Gramm hit the nail on the head when he said “Misery sells newspapers. Thank God the economy is not as bad as you read in the newspaper every day.”
In his years away from Washington Gramm apparently forgot that a presidential campaign is all about pandering, not telling the truth. The candidates want to be able to tell people that they’re going to solve all their problems, not that their problems really aren’t as bad as they’re being told and that they should suck it up and stop whining. There’s a reason why everyone remembers Herbert Hoover and Andrew Mellon, and even if Gramm is willing to be the Mellon of our time, McCain certainly doesn’t want to be the Hoover.
In fact, Gramm’s a double disaster, because the only thing worse than telling the truth to the public is pointing out the bias of the media, no matter how truthfully. Every candidate needs the media on his side, and that’s always been one of McCain’s big strengths. He can’t afford to have one of his adviser’s announcing that the Emperor is naked, because the Emperor still holds the power of life and death over his campaign.
So It’s bye-bye Phil Gramm. Telling the truth has made him a political non-person. In a day he’s gone from shoe-in for Treasury Secretary to the exile of the political gulag. That’s where he’ll languish until after November when truth gets rehabilitated and your expertise might actually be needed.