Hmm it sounds to me like the dog needs to be socialized more. Did your wife take him out for walks, to the park, to the dog run, etc. When she first got him? Honestly it sounds to me like she babied the dog too much when he was a puppy and now he feels insecure without her, whether that is actually the case I don't know of course, it's just a hunch.
To solve the problem I think that socializing him more and getting him out of his comfort zone will be the way to go. Make sure that you have a method that you use to distract him when he is doing something kooky, it can be a specific noise, a touch, anything like that but hopefully something that you used while you were working with him to listen to your commands. The goal is to try to make him feel secure all of the time, you and your wife are there with him and are taking care of everything, there's nothing for him to be afraid of or to be defensive over.
Basically I would start taking him out more, around other dogs and around other people. Make sure that you and your wife are in control of the situation and help him to feel secure and allow himself to just be a normal dog. I think that would help.
Edit: And agreed. Don't hit the dog or give him "whippings," whatever that entails. You just have to have mental control over the dog. My dog for example, he listens to everything I say and responds to hand movements as well, I can wave him to sit down, put my hand out and halt him to stay. Make sure that you have the dogs full attention when you are teaching him, he'll try his best to obey, dogs really love to please and be good.