Are We Really “A Nation of Whiners?”

In an interview with the Washington Times, Phil Gramm, a former Texas senator who is now vice chairman of the giant Swiss Bank, UBS and John McCain’s top economic advisor, made the following comments:

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

"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.”

Let me try to understand these comments. Phil Gramm after all, has a Ph.D in Economics and was a professor of economics for 12 years so he is an expert. As you know, I keep asking if things are really as bad as they seem since I can’t get a good read on the economic and financial reports that are regularly published by the government and the think tanks. I can’t get a good read from the stock market because it is making such huge swings these days I have whiplash. I can’t get a good read because I can’t find enough published dialogue among the middle class on Long Island that gives me a good measure of how people are managing financially. I can’t get a good read since I really do not know that many people and have no relatives here so I don’t have enough first-hand knowledge besides the few grumblings here and there.

It is true the numbers don’t point exactly to recession but we do not know the integrity of those numbers though they do indicate that the economy is scraping bottom. It is also true that recessions cannot be defined until the economy is already in one. It is also true that foreign exports have been our saving grace though no one states overtly that the declining dollar makes American goods a bargain overseas. it is also true that my town is now behind on completing its final tax rolls ordinarily due July 1^st and that they are “nowhere near done” per a representative from the Assessors office because so many residents have petitioned to reduce their property taxes, myself included as you know.

Perhaps Dr. Gramm having been a Senator for 17 years and serving on the Senate Banking Committee and having left office in 2002 and now vice chairman of a Swiss Bank may not realize that he makes a ton of money not working for an American company. That money and his connections make it difficult for him to feel any financial pain in this economy. After all, there is another truth the numbers show, the rich got richer, the middle class got squeezed and the poor got poorer.

Rumor on the street has it that taxpayers may have to come to the rescue of Freddie Mac and Fannie Mae, the quasi-government mortgage finance companies, because their billions in losses may affect their ability to continue to purchase mortgages in the secondary market (from commercial lenders). Together they finance trillions in domestic mortgages by selling mortgage-backed bonds to investors, mostly foreign institutions and governments. Since the American government and the taxpayers are already trillions in debt, the money to bail out Freddie and Fannie will have to come from the sale of even more treasury bonds also sold to investors, mostly foreign institutions and governments. I suppose we should ask Dr. Gramm, the economics professor, what he thinks about that.