Economic Mind Games

Ben, Ben. Lighten up, man. It's all in your head.

That could be the advice to Ben Bernanke, Federal Reserve chairman, from Phil Gramm, former senator from Texas and an adviser to John McCain.

Gramm was recently mocked over his comments that the United States is only in a "mental recession."

The problem, he told the Washington Times, is that "we have sort of become a nation of whiners."

The role of Gramm, who has PhD in economics, in the McCain campaign was subsequently reduced, if not largely eliminated.

Psychology, of course, is an important economic force, affecting consumer spending and investors decisions. Stocks have slumped on fears over banks, and consumer confidence is at nearly three-decade lows.

Yet these worries are based on all too real problems.

Bernanke outlined today the "numerous difficulties' the economy faces. Noting the decline in wealth, the weak job market, the rise in foreclosures, and higher food and energy prices, he said he recognized that "people are very worried."

And who are these whiners, anyway?

They are not just the uninformed masses. A survey last month by Chief Executive magazine found that "C.E.O.'s are clearly negative on the economy."

In years past, the whiners have included Gramm himself when he was senator and was trying to push through legislation.

"I think the economy is very fragile," Gramm said in 1988.

"We've yet to see Congress respond to the perilous economic circumstances we face," he said. "I think we're risking recession and I don't think we ought to do that."