Gramm is Largely Correct

Former Senator Phil Gramm, who had an excellent career in the US Senate fighting for the prosperity of Americans, recently spoke his mind about the economy with candor and intelligence. Sen. Gramm is not only a former member of the House and the Senate with over two decades experience, but also has a PhD in economics from the University of Georgia. He may very well be the "Dr. Phil" of economics.

In an interview with the Washington Times, Gramm stated:

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.

"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.

He goes on to point out that "Misery sells newspapers. Thank God the economy is not as bad as you read in the newspaper every day."

These themes have been a part of my mantra, with titles such as Economist on the Media and Recession, Bad News Means Big Business for CNBC, and others with similar titles for the last two years, the criticism against Gramm seems to me to be unfair.

But criticized he has been and practically thrown under the bus by Sen. John McCain for whom he has served as an economic advisor. Threatening to send Gramm to Eastern Europe as an ambassador if elected and if they would have him, McCain is using the harshness he has become famous for in his ability to turn on a friend.

It is true, there are people in this country who are suffering at this time. However, most of those are the same people when are economy was incredibly hot a few years ago. Gramm's statements are largely true but probably too honest in an election cycle. The media lives off of bad news and the people are beginning to buy the headlines.

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Kevin Price is Host of the Houston Business Show (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at HoustonBusinessShow.com. Visit the archive of past shows here.

See How They Run: How Important is Money in a Presidential Campaign?

Clearly money is important, but could it be over rated? Forbes.com seems to think so in a recent article at its website. The article, entitled "Money Doesn't Win Presidential Elections," is built on several assumptions:

1) A truly wide open field. With so many candidates starting this early, there is plenty of opportunity for other players to come onto the scene and change the landscape.

2) The role of the Internet changes everything. The web has become a great tool for raising money and its role should expand in the future. Many who become major fundraisers on the web will not attract people or money in the "real world," however, having an affect on the actual election.

3) Early primaries are forcing candidates to raise money at record levels, especially California's move to February 5th. This state will require big money in order to reach this large population.

4) Faltering front-runners. Candidates that are bringing in the cash and showing strong numbers today could be an after thought before 2007 comes to a close. As candidates start campaigning earlier, more money will come in quicker, having an impact on the previous records. Never have so many people been running for office so early, in the history of the Republic. This cannot help but impact the flow of dollars. The timing of the arrival of those dollars, in particular.

When I think of the power of money, I think of Phil Gramm's failed Presidential campaign of 1996 which brought in a great deal of money and early buzz, but found itself a mere after thought in the end. Money is important, just ask both the candidates with it and those who wish they had it. But money alone doesn't mean instant success in the turbulent world of politics.