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McCain Adviser: Stop Whining. The Recession Is All in Your Mind |
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Worried about losing your house to foreclosure? Can’t pay bills on time—or at all? Lost a job or can’t find another one that actually pays a wage you and your family can live on?
A top John McCain adviser has some advice for you: What you’re experiencing is just a “mental recession.”
That’s right. The mortgage nightmares, credit card debt, jobs without health care or retirement security, the college education you can’t afford for your kids—it’s all a state of mind.
This from The Washington Times today:
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. [snip]
“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.
In short, says Gramm: “You’ve heard of mental depression; this is a mental recession….We may have a recession; we haven’t had one yet.”
Gramm, former senator from Texas, is known as “Foreclosure Phil” for his role in pushing through a banking deregulation bill in 1999 that
decimated Depression-era firewalls between commercial banks, investment banks, insurance companies, and securities firms—setting off a wave of merger mania.
That bill greased the way to the multibillion-dollar subprime meltdown.
As Christy Hardin Smith points out on Firedoglake, this is the same Gramm who defended Enron and basically told California the state’s energy problems were of their own making. At the time, his wife, Wendy, was a member of Enron’s audit committee and also served on the company’s board of directors. UBS was a consultant for the state of California in 2002 to help fix the state’s energy crisis. The Foundation for Taxpayer and Consumer Rights (FTCR) wanted Gov. Gray Davis to fire UBS, saying the company had a conflict of interest since they represented both the state of California and Enron. After Enron went bankrupt, Gramm took a job with UBS Warburg as a vice president.
Gramm has been mentioned as a possible Treasury secretary should McCain win.
Imagine the fun he could have then playing with our financial security.
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There is some truth to that statement. With all the coverage in the media you get the impression that all the foreclosures are the end of the world as we know it. The last figures I read it was only 4% of the total housing market. Of that 4% how many people refinanced one or more times pulled out the equity from their homes and purchased goods and services with that equity? So basically they spent their equity and ended up in a loan with terms that they agreed to and now can’t afford. Were they forced to sign the loan papers? When we live beyond our financial means there are not to many options, stop spending, get a second job or…….. I know, get the responsible citizens to bail us out. Heaven forbid we should be responsible for our poor judgment.
that’s a ridiculous argument. When the bankers and appraisers come to you and tell you that they will loan you money based on the value of your house at a cheap rate, how is that person making a bad financial decision? They weren’t. The problem was the appraisers were lying about the house value (because the more business they do the more they get paid), the bankers were lying because they securitized the loans and passed them on to Wall Street who didn’t care, or even know, what the real value of the loans were so long as the price of the security kept going up. How was the average homeowner supposed to know that the run up in housing prices was all a sham? That’s why it’s called a bubble, and just like the .com bubble in tech stocks, it’s unsustainable and it burst. That is why we’re seeing a spike in foreclosures. It has little to do with people taking out loans they couldn’t afford. It has everything to do with their house no longer being “worth” what they were told it was. Who’s fault is that? How was a regular homeowner supposed to know that they were essentially being lied to about their property value when everywhere they look, housing prices were continuing to rise. That is the gamble that the wall street folks took and why they kept pushing easier and riskier loans. Wall Street doesn’t care if a commodity is actually worth anything. It only cares that OTHERS think it’s worth something. (did you know that in California during the height of the bubble, 25-40% of the houses were bought by speculators? that artificially drove prices up and as soon as somebody blinked, they bailed, leaving people who actually live in their houses screwed).
Now these owners are upside-down on their house and what is the use in continuing to pay? Throw in the resultant job losses and stagnant wages and guess what, people now can’t afford their overvalued house, or any house for that matter.
Now that all this capital has left the real estate market, guess where it’s gone? Commodities from food to oil and a similar bust is coming. Everyone knows it, but nobody knows when.
So, all you “responsible” homeowners out there, get off your holier than thou high horses and take an effort to understand just how this all happened. It could just as easily have been you being foreclosed on. But I’m sure you’re bootstraps would have been strong enough to keep your head above water, huh?
This snit obviously is talking about Bear Stearns, Lehman Bros., Citigroup, UBS, Countrywide, etc. and the hedge fund geniuses who are lining up to demand taxpayer bailouts. Like the S & Ls during Reagan/Bush two decades ago, the line between financial pin stripes and criminal stripes and bars is too often imperceptible. And by the way, I suspect the Big Boys are monitoring this site to track our thoughts and to coopt our channel to spread their own hypocritical and self-righteous propaganda. The free market predator is always looking for its next chump and victim.
My goodness man there is much more causing this recession than just poor judgement on the part of borrowers.You evidently live in the same bubble as Phil Gramm.Yes we all know that some of these people did stupid things when it comes to home loans but many were led down that road and the lender should be held responsible.
Just another example of how far from reality the well-off are. They just don’t get the picture of trying to cope in a world where prices and taxes are going up but wages aren’t and jobs are insecure where corporate profits rule and nothing else matters….
Or is it just those voices in Foreclosure Phil’s head that tell him Enron CEOs were good guys and energy problems are YOUR problems, they have nothing to do with the stupid and short-sighted energy programs from the past 30 years or so…..
Please find this guy a jacket that ties in the back before he can do any more damage!
and one more thing, I wonder how many of the people out there that don’t think we should be helping out homeowners in this crisis (and it IS a crisis) live in a neighborhood where there have been several foreclosures? To use the term Bernanke used to justify the bailout of Bear-Stearns, the “systemic” effects on the neighborhood and the community of multiple foreclosures is devastating. The amount of money a “responsible” homeowner stands to lose in declining property value (not to mention quality of life) would swamp whatever miniscule portion of “your tax dollars” that would go to stemming the tide of this disaster.
Even if you aren’t persuaded by the overwhelming evidence that the business classes brought this financial scheme of ruin upon the rest of us, I’d think one’s economic self-interest would lead most to support reasonable mortgage debt relief for her fellow neighbor.
My neighbors who lost their jobs and homes should be laughing instead of whining. They just can’t seem to take a joke of losing their dreams.
Phil Gramm and others like him, whether it is a career politician or an individual and/or families who’s income make them able to live well above the means of the average citizen, just do not get it as they have lost reality.
Foreclosures is part of yesterday’s news. Today, most middle amercia workers and small business owners are being hit hard by all sides of the economy. Rising oil prices which translates to over $4 per gallon gas and over $5 per gallon diesal. Higher transportation prices for small businesses which translates to higher prices in stores. Higher fuel prices making heating and A/C prices higher for our homes and office buildings. And so on and so on and so on. Phil Gramm, HIliary Clinton, Obama, John McCain and others like them: quit your day jobs, give away your millions and get real jobs like most Americans and see how the real world lives. Then you will see that Americans are not whiners. The real whiners Phil Gramm are people like you, who have money to burn, but complain that they are poor.
Gramm should crawl back under the rock he has been hiding under.
I saw an excerpt of Gramm’s statements on “Olberman”, and I thought “Did he really say that, and (worse yet) does he really believe this?” I realized he did in fact believe every word he said, which leads me to one basic conclusion, which is he is the one with a mental recession. He not only has lost touch with the reality of what is happening in this country, but he has no desire whatsoever to even try to understand why millions of people are deeply offended by his statements. The real point of contention is that he, like McCain, are part of the super wealthy elite, who have no clue as to how most of America lives. Enabling them to be in any way connected to the running of this country is like signing over to them every single thing you own, because they will find a way to do so, either in the way of taxes that we must pay, while their wealthy friends do not, or by saying all the sacrifices we are asking you to make are necessary for “national security.” Our constitutional rights are being eliminated one by one right now, as we speak, under the same pretense.
As for bailing out the homeowners, our taxes should not be used for that purpose, but the profits of the lenders and the corporations that backed them should be used to undo the damage that their reckless loan practices caused. See, this is another way that we, the taxpayers, are told to foot the bill to cover the a—- of those who allowed these practices in the first place and who profited heavily at the expense of those who are less fortunate.
I have often said that a poor and sick society is easy to control and manipulate. Add ‘homeless’, and you have a society that is so limited in its ability to protect and defend itself, that it will cease to fight. This is really something all of us must consider.
I have spent the last 20 years barely hanging on,just getting by.
I thought it was because i did not have a COLLEGE DEGREE.
Too many people in LOW WAGE JOBS for too long,job’s leaving the country,Bad Management, rip off loans and banks NO ONE TO PROTECT THE LITTLE GUY. Health Care ,retirement ,transportation,schools IT IS ALL FALLING APART and it needs STRONG LEADERSHIP to fix it WITH A LITTLE MORE EQUITY for Americans BORN HERE or Here legally.
If my job keeps being outsourced and I can not find better employment I DID NOTHING WRONG and most of the people I have worked with or around our in the same boat–for years I do not think this is in my mind—I have been waiting for the ECONOMY to turn around for me since 1980’s.
The related stress from the workplace of today is called PTSD.
This is a work injury McCain should be familiar with this
and it is to much fight or flight stress hormone from living in America formerly MIDDLE CLASS
Please know that you are not alone. I have family members and several friends who have college degrees and many of them are currently looking for a job. My wonderful sister was “let go” three times this year because of downsizing, and is currently looking for work. She is an intelligent, college educated person with management skills and experience. Her unemployment ONLY pays for her mortgage. She uses a credit card for food, utilities and gas. She has NO health insurance. That’s pathetic. And she knows without a job, she will lose her house. It was a blessing at least that her unemployment benefits were extended, yet there are people in our government who fought this extension saying that ‘these people don’t want to work.’ Walk a mile in their shoes!
So, yes, ‘pnava’, I understand, and hang in there.
Bottom line is : McSame, Gramm and the others are Republicans.
How long is America going to tolerate Republicans?
What gets me is hard working class people believe the rhetoric these right wingers offer, especially election year. After suckering their vote, Republicans offer nothing to working people.
pnava: get your self, your family members, your neighbors registered to vote, and then get out and vote!
Change is coming…slowly..but it is coming. Phil Gramm, Karl Rove and the rest of the conservative animals that screwed innocent people, should face their crimes!
TrueDemocrat,your as bad as the all the republicans that vote only Republican.I’ll tell you what the Democrats have done for us lately Nada,Zilch,Nothing,these two political parties are so far out of touch with America it’s not funny.All they can do is bicker amongest themselves.If you believe what they are spouting this time you deserve them.Do what nearly one thrid of the country has done join the Independent Party and let them know we have had enough, force them to come and deal with us for our votes and do what the majority of America wants.
Democrats are not the savior party, I admit, DR but! these weasels and parasitic republicans have done nothing but destroy our country. Democrats have tried to pass good legislation only to have it blocked by the other party. If it does pass to the WH, then lame duck vetoes it, so much for working bi-partisan.
by the way, I do not appreciate being put in the same side of the fence as the republicans!
If indeed there was a decent third (not thrid) party that shows promise and a future, then yes, I’m in!
We get suckered by voting these clowns in Congress, there are exceptions in the Demo party, Kucinich, Conyers and a few more, nut the rest cave in to the lame duck’s demands, keep funding the “war”, but won’t even consider impeaching his lame a– for all the wrongs he has done.
TD,I’ll agree that some try to do the job but most only give us lip service,it’s time to vote them all out and start over.No party will ever be able to represent us if we keep doing what most of us have been doing for the last forty years.Do what i did get out of whatever party you belong to and do what you can to make a new party strong and represent your wishes.If you stay with the Democrats or the Republicans nothing is going to change.Neither of them give a damn about working people all they give a damn about is getting re-elected and we have all heard all these same promise’s before.No matter which one of these guys wins the WH in four years we will be right where we are today listening to more BS from another US senator that helped put the country where it’s at.It’ all talk,talk talk and nothing more.All I can see that might happen is we’ll have 20 million new citizens and our kids will be speaking Spanish or we’ll have some more free trade and ther will be no jobs at all.
screw you with the racist comments!!
What racist comment is that????????????? Obama said we should teach our children Spanish I didn’t.That’s a Democrat for you.
We should teach our children Spanish…and French, Latin, Italian, German, Russian, Chinese…as much as our children can assimilate, for learning other languages and about other cultures makes more well-rounded citizens who will have a better understanding of the world, a better tolerance for others and will be better able to help this nation. Being able to communicate with others is a very good first step toward peace. After all, I truly believe that most people throughout the world basically want the SAME THINGS.
I agree with TrueDemocrat in that there are many Democrats out there who are innovative, progressive and realize this country NEEDS to go in another direction. The Bush Republican White House has vetoed EVERY single thing the Democrats have proposed, as if they are more concerned about NOT allowing the Democrats to make any kind of progress at all, instead of realizing that what is good for Americans is good for America.
There are and have been many good Democratic leaders - Kucinich, Richardson, Gore, the Kennedys, and yes, Obama, and others, but I do not recall one single Republican whom I have admired or believed had the best interests of this country. Who’s to say that a third party will not also get caught up in political rhetoric and game playing that becomes easy to do once power has been achieved. Human nature clearly points out that there will be good people and bad people from every arena.
So UnionFriend, we should stay with what we know is badly broken, instead of trying to develope a new party, that may or may not become broken someday?