From NBC's Domenico Montanaro
Did Phil Gramm just lose his surrogate privileges?
In an interview with the Washington Times, the McCain economic adviser downplayed the economy -- despite it having been the top issue of concern to voters in public polling for months. Gramm goes so far as to call the economy a "mental recession," says that "We have sort of become a nation of whiners" and blames much of the hand-wringing on the perpetual scapegoat -- the media.
The technical definition of a recession is two consecutive quarters of negative growth. That has not happened yet, but with the housing foreclosure crisis, a slowed housing market, decreased retail spending, rising gas and food prices and a declining stock market, Americans in many parts of the country have hit a tipping point and in most other parts are close to one.
Both Obama and McCain have fought to "connect" with voters on the economy, offering a variety of proposals and devoting significant chunks of time, focusing on the topic at speeches and town halls. McCain devoted this week to the economy but in a speech this week called it "slowing," instead of "slowed," has used the word "psychological" to describe the country's "problems" and has shied away from using the "R" word.
The Democratic National Committee jumped all over the quotes and sent out this response: "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," DNC spokeswoman Karen Finney said. "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."
GRAMM'S QUOTES FROM THE WASHINGTON TIMES: " 'You've heard of mental depression; this is a mental recession,' [Gramm] 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.'"
*** UPDATE *** A McCain official tells First Read: "Phil Gramm's comments are not representative of John McCain's views. John McCain travels the country every day talking to Americans who are hurting, feeling pain at the pump and worrying about how they'll pay their mortgage. That's why he has a realistic plan to deliver immediate relief at the gas pump, grow our economy and put Americans back to work."
*** UPDATE 2 *** The Obama campaign is pushing the issue now: "One of Senator McCain's top economic advisors may think that when people are struggling with lost jobs, stagnant wages, and the rising costs of everything from gas to groceries, it's merely a 'mental recession'. And Senator McCain may think it's sufficient to offer energy proposals that he admits will have mainly 'psychological' benefits. But the American people know that our economic problems aren't just in their heads. They don't need psychological relief -- they need real relief -- and that's what Barack Obama will provide as President," Obama spokesman Bill Burton writes.