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The Honolulu Advertiser
Posted on: Friday, July 11, 2008

McCain repudiates top adviser's 'mental recession' remark

By Michael D. Shear and Jonathan Weisman
Washington Post

BELLEVILLE, Mich. — Sen. John McCain ventured to an auto-parts supplier in this hard-hit Detroit suburb to express sympathy for those affected by Michigan's economic malaise and to talk up his ideas for creating jobs in the region.

But a day after a top McCain economic adviser dismissed the nation's struggles as a "mental recession," the presumptive Republican presidential nominee's message landed with a thud, as workers sat in stony silence.

McCain was already running into a stiff headwind because of an ailing economy, and his task only became tougher after former senator Phil Gramm, R-Texas, suggested that the United States has "become a nation of whiners."

Gramm, who has helped shape McCain's presidential campaign and is a close friend of the candidate, expressed no regret yesterday for the comments he made in an interview with the Washington Times, saying: "I'm not going to retract any of it. Every word I said was true." But the McCain campaign shifted into damage-control mode, distancing the candidate from his friend's assessment.

Gramm "does not speak for me. I speak for me. I strongly disagree," McCain said during a press conference here, which took place at the same time Gramm was wrapping up a discussion with the Wall Street Journal editorial board about the candidate's economic program.

"The person here in Michigan who just lost his job isn't suffering from a mental recession," McCain added.

Since saying last winter that economic policy is not his strong suit — a comment that won him a pummeling from his primary-election opponents — McCain has struggled to show voters that he understands their pain as they grapple with six months of steadily declining payrolls, a bear market on Wall Street, soaring energy and food costs, rising home foreclosures and stagnant economic growth. But his missteps on economic policy still threaten to drown out his message.

McCain was criticized in June for saying that the fundamentals of the U.S. economy remain strong. His campaign announced a weeklong focus on jobs and the economy while he was in Mexico talking about free trade. On Monday, the senator from Arizona appeared to call the system that has financed Social Security since its inception "a disgrace." And Gramm's "mental recession" comment hung over him all day yesterday in Michigan.

The backdrop could not have been worse. The unemployment rate in the Detroit-Livonia-Dearborn area is 10.2 percent. The nation's next closest, 7.1 percent, is in the area around Lawrence and Salem, Mass.

Over the past year, Michigan, with an 8.5 percent overall unemployment rate, lost 68,900 jobs.

McCain is hoping to put the state into play, but yesterday, in this Detroit suburb, his efforts ran into a wall.

"America is hurting today. Michigan is hurting today. The automotive industry is hurting," he said at a town hall meeting. "We have to understand the urgency of the situation, and we should remind ourselves time after time."

But the 100 or so in the crowd sat on their hands throughout most of McCain's speech, especially during his remarks about the need for free trade — a policy that is generally reviled in manufacturing areas. The first question McCain received was from a free-trade critic, who told the candidate that "what we need to do is control some of those trade issues going on. What we want is fair trade."

Yesterday, presumptive Democratic nominee Barack Obama seized on Gramm's comments.

"He said we're in a mental recession. I guess what he meant was it's a figment of our imagination, these high gas prices," Obama told a crowd of more than 2,000 at Robinson Secondary School in Fairfax. "It's not just a figment of your imagination, it's not all in your heads, when people are struggling with the rising cost of everything from gas to groceries."

Obama added: "This comes after Senator McCain recently admitted his energy proposal for the gas-tax holiday will have mainly 'psychological benefits.'"

He added: "Now I want all of you to know that America already has one Dr. Phil, we don't need another. When it comes to the economy, we need somebody who can actually solve the economy."

Meanwhile, McCain had the strongest fundraising month of his presidential campaign in June, collecting $22 million and starting July with nearly $27 million in the bank. McCain and the Republican National Committee together had about $95 million cash on hand, campaign manager Rick Davis said yesterday.

Obama has not released his June fundraising figures.

The Associated Press contributed to this report.