A State of Mind
A great deal is being made of Phil Gramm's recent comments about America being a nation of whiners entrapped in a mental recession. And after spending most of his preliminary campaigning touting his close trust of Gramm as economic adviser, Senator John McCain has been forced to distance himself from Gramm's assessment.
The keyword here is psychology. Gramm believes America is in a mental recession and McCain has often stated that a part of our economic problems are psychological.
Now, I'm not sure if some talking points were recently released by White House advisers, but even the president is now engaging in the same rhetoric. When Bush said that he wouldn't demand the American people conserve--trusting them to make the right choices--he later retorted concerning rising gasoline prices, and the need for more domestic drilling: "I readily concede it won't produce a barrel of oil tomorrow, but it will reverse the psychology."
As of today, the president has also called on Congress to lift the ban on domestic drilling while admitting that the “psychology” of the oil markets must be considered in carrying out an effective energy policy. It seems Washington believes that a great deal of America's potential for a flat-out recession lies in their psychology.
So, how much does psychology have to do with it? A great deal, I'm afraid. Anyone in communications understands that, and I'm sure economists perceive the same reality. But the issue is really whether or not the psychology of receding ("recession") is based upon fact.
McCain is correct. It is psychological. But in saying so, he's said nothing at all. It's all psychological, Sherlock! Always has been. If people are paying over $4 for a gallon of gas while the weekly grocery bills skyrocket, you can bet your bottom devalued dollar that this will have an adjustment in their thinking. What you're really concerned about, Mr. McCain, is whether or not they blame your ilk.
Recession is unavoidable, in my opinion, and though the pain be difficult, it is a necessary evil if there is to be any semblance of preserving this economy. I'm not convinced Republicans care one iota about the economy, unless it's tied to their maintaining their political seats. You can expect that the Democrats will exploit the issue in order to obtain political seats. Either way, nothing will likely be fixed.
The economic controllers and speculators were reckless with a fiat monetary system already headed towards more inflation. The sub-prime mortgage fiasco was immoral to begin with. The rampant availability of credit was immoral to begin with. In this sense, Americans deserve a dripping spoonful of economic castor oil. If they were Biblically informed, then laws concerning sound money, debt, and slavery would have imposed a moral restraint. Instead, their parallel recklessness empowered and emboldened the organized criminality of Wall Street. I hold myself equally responsible. My hands are certainly not clean in this.
The Federal Reserve will fight to stabilize the American psyche, but it's difficult to tell how long they can maintain the facade. Just take a look at any recent photo of Fed Chairman Ben Bernake. In a few short months, he's almost gone completely gray. Nobody is getting any sleep at America's central bank.
The keyword here is psychology. Gramm believes America is in a mental recession and McCain has often stated that a part of our economic problems are psychological.
Now, I'm not sure if some talking points were recently released by White House advisers, but even the president is now engaging in the same rhetoric. When Bush said that he wouldn't demand the American people conserve--trusting them to make the right choices--he later retorted concerning rising gasoline prices, and the need for more domestic drilling: "I readily concede it won't produce a barrel of oil tomorrow, but it will reverse the psychology."
As of today, the president has also called on Congress to lift the ban on domestic drilling while admitting that the “psychology” of the oil markets must be considered in carrying out an effective energy policy. It seems Washington believes that a great deal of America's potential for a flat-out recession lies in their psychology.
So, how much does psychology have to do with it? A great deal, I'm afraid. Anyone in communications understands that, and I'm sure economists perceive the same reality. But the issue is really whether or not the psychology of receding ("recession") is based upon fact.
McCain is correct. It is psychological. But in saying so, he's said nothing at all. It's all psychological, Sherlock! Always has been. If people are paying over $4 for a gallon of gas while the weekly grocery bills skyrocket, you can bet your bottom devalued dollar that this will have an adjustment in their thinking. What you're really concerned about, Mr. McCain, is whether or not they blame your ilk.
Recession is unavoidable, in my opinion, and though the pain be difficult, it is a necessary evil if there is to be any semblance of preserving this economy. I'm not convinced Republicans care one iota about the economy, unless it's tied to their maintaining their political seats. You can expect that the Democrats will exploit the issue in order to obtain political seats. Either way, nothing will likely be fixed.
The economic controllers and speculators were reckless with a fiat monetary system already headed towards more inflation. The sub-prime mortgage fiasco was immoral to begin with. The rampant availability of credit was immoral to begin with. In this sense, Americans deserve a dripping spoonful of economic castor oil. If they were Biblically informed, then laws concerning sound money, debt, and slavery would have imposed a moral restraint. Instead, their parallel recklessness empowered and emboldened the organized criminality of Wall Street. I hold myself equally responsible. My hands are certainly not clean in this.
The Federal Reserve will fight to stabilize the American psyche, but it's difficult to tell how long they can maintain the facade. Just take a look at any recent photo of Fed Chairman Ben Bernake. In a few short months, he's almost gone completely gray. Nobody is getting any sleep at America's central bank.
