He was the one this most recent summer who called the current mess a "mental recession" and said that Americans are a "nation of whiners." He was a big part of Candidate McCain's economic team. Then he said those things and was seemingly banished. Well, here he is writing an op-ed for the WSJ. I found this interesting:
The debate about the cause of the current crisis in our financial markets is important because the reforms implemented by Congress will be profoundly affected by what people believe caused the crisis.
I point out this passage because there is a real consistency of worldview between it and his 'mental recession' comments. The consistency lies in Gramm's emphasis on psychology as a driving force of economic outcomes. A 'mental recession' is nothing other than an event that plays out in peoples' heads (in a socialized way). And now he contends that,
the reforms implemented by Congress will be profoundly affected by what people believe . . .
Three responses. (1) Say what you want about Mr. Gramm, he is trying to use cutting-edge economic theory that questions rather than assumes the nature of human behavior. (2) It strikes me as odd that a man as aware as he of the psychological underpinnings of economic processes would be so blind to how others would think about being called 'whiners.' And (3), Gramm's virulently political strand included, like it or not economic theory is changing to meet new realities. Even free-marketeer Phil Gramm is a sociologist.