Sen. Phil Gramm was right, sort of, when he said recently that America was experiencing "a mental recession," but the qualifier leads us to some places where John McCain's chief economic adviser is certainly wrong.
There's absolutely a disconnect between the public's perception of the U.S. economy and overall economic performance as a whole. While things have obviously slipped, things are nowhere near what they've been in the past. I've been through several recessions and slowdowns, and what we're going through right now is pretty typical. Unemployment, for example, is just a tenth of a percent above the average since 1990.
However, consumer confidence is at it's lowest point since 1980 -- right before President Carter lost his re-election bid thanks to high rates of interest, inflation and unemployment. Yet, in macro-economic terms, we're nowhere near there.
Republicans such as ex-Sen. Gramm have failed for years to view economics from less than macro-economic terms, however. It's one reason why the GOP no longer controls Congress. At the family level, there's major issues no matter how well the national economy is faring. It's been going on for several years, too.
Very simple. EVERYBODY is stuck with higher food prices and higher gas prices. The half (I think) of us who invest our savings have been hit with lower stock values. Homeowners have seen the value of their property decrease. Some have suffered foreclosure. Rental costs are skyrocketing because of sudden demand. Some employees have lost their jobs and been forced out into a contracting job market.
So Gramm is idiotic to suggest that this is a "mental recession" because people are, at best, inconvenienced, and at worst, hurt severely. This is a sector-driven slowdown we're in, with financials and petroleum-based industries being hurt the worst. So we're not all here being wiped out. Those with the foresight to get their investments out of financials and into commodities a year or so ago are doing quite well. But those who are hurting were struck hard.
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Who do you want to run our economy, Republicans or Democrats?
It turns out that despite the prodigious fundraising by Barack Obama, the Democratic National Committee has less money on hand than its GOP counterpart because they've been spending like crazy. Sounds like Congress. The DNC and Obama combined have about $92 million in the bank, McCain and the RNC $95 million.
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The Jesse Jackson controversy lately has been funny. Reaction ran from "he said what?" to "he's still around?"
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Republicans have a huge opportunity on the energy policy. If gas is still over $4 most places in November, it could cause a political version of an earthquake. But only if the GOP is smart enough.
Drill, drill, drill isn't going to cut it with the public. You can only take new drilling for oil so far. If Republicans smartly couple it with the promotion of development of fuel cell technology and credits for wind and solar energy projects -- which work on individual projects -- then they might have a shot at reclaiming some lost seats.
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The New Yorker magazine cover with Barack and Michelle Obama was right on point, once it was explained to everybody. If you have to explain your magazine cover, it didn't work.
