Top McCain Economic Advisor claims you're all just imagining things, you whiners.

[Frozen Sooner]

Home > News
McCain adviser talks of 'mental recession'
Patrice Hill (Contact)
Wednesday, July 9, 2008


GETTY IMAGES Former Sen. Phil Gramm, vice chairman of Swiss bank UBS, is co-chairman of Sen. John McCain's campaign.

With the economy on the top of voters' minds, Republican presidential candidate John McCain's top economic adviser said the Arizona senator will lay down a detailed program to revive dynamic growth with dramatic tax and spending reforms.

In an interview with the Washington Times, Phil Gramm, a former Texas senator who is now vice chairman of UBS, the giant Swiss bank, said he expects Mr. McCain to inherit a sluggish economy if he wins the presidency, weighed down above all by the conviction of many Americans that economic conditions are the worst in two or three decades and that America is in decline.

"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.

Mr. Gramm said the constant drubbing of the media on the economy's problems is one reason people have lost confidence. Various surveys show that consumer confidence has fallen precipitously this year to the lowest levels in two to three decades, with most analysts attributing that to record high gasoline prices over $4 a gallon and big drops in the value of homes, which are consumers' biggest assets.

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

Mr. McCain's economic program will seek to enliven growth by enabling taxpayers to opt into a new, simplified tax system with two low rates of 10 percent and 25 percent and no itemized deductions, he said.

Mr. McCain would tackle intransigent budget deficits by wrestling down burgeoning benefits programs and aggressively attacking wasteful spending whether it's in the Pentagon's procurement and weapons budget or congressional pork-barrel bills, he said.

A proven "instrument" of bipartisan reform and change in many areas, Mr. McCain would seek out Democratic leaders like Senate Majority Leader Harry Reid of Nevada to fashion a bipartisan reform of Social Security.

Mr. Gramm said a bipartisan deal might include raising the retirement age to 70 over 30 years, indexing the benefits of wealthier retirees to inflation rather than the more generous wage rate, and creating a private account program for younger workers.

Mr. McCain, a Republican with a proven record of voting for spending cuts, will renew efforts to balance the budget through spending reforms, he said. "It will be popular with the public but hated in Washington."

Mr. McCain also will pursue immigration reforms that would start with effective border enforcement but include a possible doubling of legal immigration, including no limits on scientific and technical workers and a generous sized guest worker program, he said.

"The American story is a story of immigration," he said. "I would be the last person who would say immigrants are not important to America." Mr. Gramm noted that Albert Einstein was one prominent immigrant who might have been excluded under an anti-immigration regime.

McCain quickly said that his campaign co-chair does not speak for him, for what it's worth. Gramm later claimed that when he called us a "nation of whiners" that he just meant our leaders.

[NormanPride]

It would really suck if we had leaders that had opinions.

[mdklatt]

"[G]rowth 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."

One percent--we haven't gone fractional yet! Screw-top champaign and cod caviar for everyone! U-S-A! U-S-A!

Isn't the growth rate of GDP all by itself meaningless? The per capita GDP is going down because population is certainly rising faster than 1%. The inflation-adjusted GDP is going down. Based on the value of the dollar, the GDP has jumped off of a Wall Street skyscraper along with some hedge fund managers.

[Ike]

:les: IF YOU AREN'T HAPPY WITH THINGS, THE TERRORISTS WIN!!!

[King Crimson]

sounds like good common sense to me.

[SleestakSooner]

someone pass a hunk of that gubment cheese this way please

[47straight]

I thought that Obama supporters would have enjoyed a honest cajoling to get away from "doom and gloom"



I wuz wrong, I guess. It happens.

[Frozen Sooner]

I thought that Obama supporters would have enjoyed a honest cajoling to get away from "doom and gloom"



I wuz wrong, I guess. It happens.

Stop whining!

[mdklatt]

I thought that Obama supporters would have enjoyed a honest cajoling to get away from "doom and gloom"


What Obama supporters and others who are fed up with the Republicans want is an end to the endless lies and obfuscations of the last 8 years. Dissembling about Iraq, dissembling about political scandals, dissembling about the economy, dissembling about science. It goes on and on and on.

Unless you're in pockets of the country being kept afloat by oil revenues and exports--like Phil Gramm's former constituency--I don't think things are all that rosy. Splitting hairs and saying we're not in a recession just because GDP growth is barely positive (and see my earlier post for why that's not even true) doesn't reflect the practical reality of the situation.

[47straight]

Stop whining!


But I likes to...

[Frozen Sooner]

Heh. I can just picture Gramm yelling at a bunch of people "STOP WHINING! I'LL GIVE YOU SOMETHING TO WHINE ABOUT!!!!

:D

[jkjsooner]

I just love the "blame the media" folks.

Yep, it's all the media's fault. Without it we'd be paying $1.50 a gallon for gas, our house would now be worth over a million, and we would have no credit card debt.

Darn that media for killing my pets.com stock....

Seriously, a lack of regulation has taken our economy to the brink of shambles. We were only propped up by million dollar loans given to migrant farm workers. Seriously, nobody still believes that that was sustainable, right? At some point those 1% introductory rates were going to rise and the principal had to be paid back....

As far as the housing problems go, most newspapers make their money on real estate ads and they had a strong financial incentive to ignore the problem as long as they could - and they did.

[mdklatt]

We were only propped up by million dollar loans given to migrant farm workers. Seriously, nobody still believes that that was sustainable, right?

No, no, no, you don't understand! They way to make risky loans less risky is securitize them! The word "secure" is right there--what could possibly go wrong?

Actually, that strategy probably worked pretty well for the people packaging the loans, but not so much for the suckers who bought them.

[tommieharris91]

No, no, no, you don't understand! They way to make risky loans less risky is securitize them! The word "secure" is right there--what could possibly go wrong?

Actually, that strategy probably worked pretty well for the people packaging the loans, but not so much for the suckers who bought them.

That sure didn't work for Fannie and Freddy.

[Sooner_Havok]

That sure didn't work for Fannie and Freddy.

Don't worry, I bet the kind hearted Chinese will come in and bail them out...

[Frozen Sooner]

This seems like a great time to throw out the word "tranch."

Mainly because I just like the way it sounds.

[mdklatt]

Don't worry, I bet the kind hearted Chinese will come in and bail them out...

I ate a fortune cookie the other day, and the fortune said "All your base are belong to us." :eek:

[Sooner_Havok]

I ate a fortune cookie the other day, and the fortune said "All your base are belong to us." :eek:

:les: You have no chance to survive make your time [hairGel]

[Jerk]

If the definition of the word 'recession' is two negative quarters of economic growth, then anything else, by definition, is not a 'recession.'

"Oh! Well, you see, the economy didn't grow very much! Only a fraction!" It's.....still.....not.....technically...a....rece ssion....

Please don't f*** up the legitimate definition of a word just to make a political point.

"Obama!!! Saviour of the world!" You guys crack me up.

It's a f***ing cult!

[MR2-Sooner86]

If the definition of the word 'recession' is two negative quarters of economic growth, then anything else, by definition, is not a 'recession.'

Here is the defintion.

Recession - everybody around you is losing their job
Depression - you lose your job

[Harry Beanbag]

Heh. People whining about being called whiners. That's awesome.

[Curly Bill]

Ah come on Jerk, Obama talks real pretty and he's gonna give us CHANGE.


What more could we want? :rolleyes:

[BigRedJed]

While obviously the national economy could be/has been better, there is something to be said for reporting driving the news. And I'm not getting into the "liberal media" discussion; just saying that I believe media reports can hasten public opinion in matters, both postively and negatively. Also, I think reporters these days are often (not always) lazy and sensationalistic. Add that to the fact that the public often believes whatever the guy on the shiny picher box says that day, and public opinion is VERY easy to influence intentionally or otherwise.

Therefore, if public opinion (negative or positive) is reported, it heightens said public opinion. This politician is suffering in opinion polls? Release the poll and he drops even more. Report that drop and he keeps dropping. Much of it is self-perpetuating. If people hear there is a run on their bank, they all go running. People, for the most part, are lemmings.

[Jerk]

While obviously the national economy could be/has been better, there is something to be said for reporting driving the news. And I'm not getting into the "liberal media" discussion; just saying that I believe media reports can hasten public opinion in matters, both postively and negatively. Also, I think reporters these days are often (not always) lazy and sensationalistic. Add that to the fact that the public often believes whatever the guy on the shiny picher box says that day, and public opinion is VERY easy to influence intentionally or otherwise.


It's a self-fulfilling prophecy. Say it, and give it enough time, and it will happen. When is the last time in 8 years have you heard them say that the economy is good? Was it always bad? Then, is it REALLY bad now? I predict an upturn in the future. It will happen someday. Book it!

[bluedogok]

That sure didn't work for Fannie and Freddy.
...nor IndyMac...


Yahoo News - Office of Thrift Supervision shuts down IndyMac (http://news.yahoo.com/s/ap/20080712/ap_on_bi_ge/indymac_13)


By ALEX VEIGA, AP Business Writer 1 hour, 5 minutes ago

LOS ANGELES - IndyMac Bank's assets were seized by federal regulators on Friday after succumbing to the pressures of tighter credit, tumbling home prices and rising foreclosures.
ADVERTISEMENT

The Office of Thrift Supervision said it transferred IndyMac's operations to the Federal Deposit Insurance Corporation because it did not think the lender could meet its depositors' demands.

IndyMac customers with funds in the bank were limited to taking out money via automated teller machines over the weekend, debit card transactions or checks, regulators said.

Other bank services, such as online banking and phone banking were scheduled to be made available on Monday.

The bank is the largest regulated thrift to fail and the second largest financial institution to close in U.S. history, regulators said.

"This institution failed today due to a liquidity crisis," OTS Director John Reich said.

IndyMac had $32.01 billion in assets as of March 31.

Pasadena, Calif.-based IndyMac Bancorp Inc., the holding company for IndyMac Bank, has been struggling to raise capital as the housing slump deepens.

A spokesman for the lender did not immediately return an e-mail request for comment.

The banking regulator said it closed IndyMac after customers began a run on the lender following the June 26 release of a letter by Sen. Charles Schumer, D-N.Y., urging several bank regulatory agencies that they take steps to prevent IndyMac's collapse.

In the 11 days that followed the letter's release, depositors took out more than $1.3 billion, regulators said.

The FDIC planned to reopen the bank on Monday as IndyMac Federal Bank, FSB.

I think the investment "anal-ysts" are a big part of the confidence problem, for years even when companies had "good" profits, it was never enough, they always hammered them unless they blew their projections away. They are about the most worthless matter on the face of the planet, I have no idea why anyone would listen to them. More than likely, they are hammering them so they can buy some in a momentary drop and sell when it gets back to normal. I am sure most of them are doing market manipulation for their own gain.

[OklaPony]

What Obama supporters and others who are fed up with the Republicans want is an end to the endless lies and obfuscations of the last 8 years...

I almost hate to stick my nose in this, however if you're going to pin this descriptor "endless lies and obfuscation" on the Bush II reign, what do you consider the Clinton years, transparent? Between Hubbell, Foster, the McDougals, "I'm sorry Senator, I can't recall", "I did not have sexual relations with that woman", and "it depends on what your definition of "is" is", the Clinton administration was a study in "endless lies and obfuscation". That being said the afore-mentioned Obama supporters and others should be fed up with 16 years... blah, blah, blah.

One of the few things about the current political climate that makes me smile is the knowledge that the Clinton's have now been reduced to panhandling in an attempt to pay off a monstrous debt from a failed Presidential campaign. That is just too sweet.

[Curly Bill]

I almost hate to stick my nose in this, however if you're going to pin this descriptor "endless lies and obfuscation" on the Bush II reign, what do you consider the Clinton years, transparent? Between Hubbell, Foster, the McDougals, "I'm sorry Senator, I can't recall", "I did not have sexual relations with that woman", and "it depends on what your definition of "is" is", the Clinton administration was a study in "endless lies and obfuscation". That being said the afore-mentioned Obama supporters and others should be fed up with 16 years... blah, blah, blah.


:D

[Chuck Bao]

...nor IndyMac...

I think the investment "anal-ysts" are a big part of the confidence problem, for years even when companies had "good" profits, it was never enough, they always hammered them unless they blew their projections away. They are about the most worthless matter on the face of the planet, I have no idea why anyone would listen to them. More than likely, they are hammering them so they can buy some in a momentary drop and sell when it gets back to normal. I am sure most of them are doing market manipulation for their own gain.

I’m sorry that you feel that way, bluedogok. In my experience, it is the opposite. Stock market analysts tend to be overly optimistic with fair value estimates based on pie-in-the-sky medium and long-term projections. Of course, there are also investment banking relations and analysts who fear getting the dead zone from the companies they cover.

I occasionally get emails from clients similar to your post. 100% of the time, it is from clients that hold stocks that we have just downgraded. I always answer them, by asking if they would prefer to read about the bad news from us now or wait later for the bad news to be announced and the share price to have already fallen.

Regarding your concern about insider trading, my team closely follows very strict regulations on a company wide ban on trading shares when research is coming out. It is one of my responsibilities to oversee “watch” and “restricted trading” lists. I assume major US brokers have as stringent rules.

It is my philosophy that all investors – both big and small – deserve the same access to timely research, although it may be counter-commercial for my company. Once I approve of a research report, it is posted on the internet and automatically emailed to all clients for everyone to read. You may not get similar service, but you have to remember that you pay for what you get.

I’m not agreeing with a lot of the posts in this thread. I think we have too many sunshine pumpers in the media and the stock market and not enough critical thinking.

I’m not talking about all the bad news in the media about corruption and murder and war. Business media tends to be too light-weight and this should be pretty obvious to everyone over the last year.

It should be expected that there are many – government, market participants, investors – who will continually try to promote confidence. You can’t fault them unless the confidence that they are trying to promote is an attempt to misguide and mislead, which I think is the case now. I wonder how much of the current mortgage crisis could have been averted if home buyers were told two-three years ago that the real estate bubble would soon burst due to too aggressive lending practices and pass-on-the-risk sales of securitized packaged mortgages.

Count on the sunshine pumpers being out in the media everyday. It is a good idea to think critically for yourself – particularly who is talking and why are they talking? I’ve mentioned here before that this financial crisis in the US has several more legs. I am completely overwhelmed by the Fannie and Freddie debacle in the stock market yesterday and the amount of clear misinformation pumped out in the media.

Now that greed is no longer in the driver seat, let’s just blame all the bad stuff on the whiners and naysayers. Are you okay with that?

[bluedogok]

Maybe I should have stated more along the lines of the "media-based" analysts, the ones who try to "create" the news and take advantage of what they can. I agree, there are also many "fanboys" out there pumping sunshine, what I can't stand are the one who pump then smack a company down for making more profit, even more than the previous quarter but not "enough" profit. I think many have created unrealistic expectations of stock performance based off the perspective of the early 90's bull markets and expect it to be that way every quarter. I just think too many of them could care less if a company is healthy and has a long term viability, all they care about is the quarterly earnings and do not seem to care if they are sacrificing the future health of the company to satisfy some short term outlook. I think that short sightedness and ridiculous expectations have had a large part in the "mess" the financial have become. I have seen something like this coming for many years, too much of the banking behavior is pretty much the same thing we saw in the early 80's around Oklahoma. All the indicators were there, if you only looked around. I am afraid this is just the beginning.

I was a finance major for awhile before going back to architecture, let's just say that I felt like most of my fellow students made used car salesmen look like straight shooters. It kind of turned me off of the whole industry because those students and later people in the business that I knew just reinforced that image in my mind. I met quite a few more that I wouldn't trust with a dime than I would trust with my money.

[47straight]

Good posts, BRJ and C-Bao.

The media needed to be critical in the run-up of this mess.



I think I must have grown up poorer than a lot of people. Times still seem way, way better than oil-bust Oklahoma. The truth is that you really don't need a ton of money to live well. There are some folks out there really struggling, and I hope that whoever is in charge can keep opportunities coming. But really, if upper-middle-class America can't take a real fancy vacation this summer, that's really not a life-breaker. If $500,000 houses are "now" worth $350k, I'm sure we'll live on.

Americans need to live within their means for a while. I don't want to live in a consumption-driven economy anymore. It's spiritually bankrupt and it won't end well.

[Chuck Bao]

Truthfully, I don't know, bluedogok. In my opinion, global stock markets are more about knee-jerk reactions and momentum investors than the old school value investors. I can't fault investors for adopting this strategy because it is what works for them at the moment. I posted earlier that speculation on oil price rise is a no-brainer for institutional investors. I still think this is the case.

You mentioned about good results, but the share falls as it was lower than expectations. Major US listed companies put out guidance to the analysts. You can critize the analysts or you can critize the company for lack of transparency or not updating their guidance numbers frequently enough.

You may only see the media part of it and that may be just looking at the top of an iceburg. I would hope that the analysts appearing in the media have supporting information.