Palin 2012? No!

A recent US News podcast focuses on a number of disspirited conservatives whom fear that last month's financial tsunami has essentially written off John McCain and will hand over the election by default to the least qualified nominee in my lifetime, Barack Obama, the Pied Piper of Failed Liberalism, whom will lead mindless Americans over his Bridge to Nowhere. In fact, the fat lady hasn't sung and is still in her dressing room. A lot depends on the McCain strategy, which I may address in a future post; from what I understand, McCain is being outspent in multiples in certain key battleground states (e.g., Florida and North Carolina). Obama is spreading disinformation, seemingly routinely ignored by McCain and Palin, regarding deregulation, health care insurance, and tax plans. Almost nothing about checks and balances, about McCain holding Pelosi and Reid with the veto pen.  What are the flip-flop ads? Where are the messages of conservative optimism, the war hero and conservative values? Still, I loved the way that McCain today included his rousing close to his nomination acceptance speech during his campaign rallies today, something I myself advocated in yesterday's post.

I think there will be plenty of time after November 4 to discuss 2012.  But since some people have raised the issue, let me point out that as far as I'm concerned, unless McCain is elected, Sarah Palin is history in national politics. I do love the Sarah Palin story: the hockey mom going from the PTA to the Wasilla City Council to Wasilla Mayor to the state oil and gas conservation commission to ousting an incumbent Republican governor and defeating a better-financed former Democratic governor. I like her maverick image and her standing up to corrupt politicians in the Alaska Republican Party. I love the fact that she refused a eugenics abortion after discovering youngest child Trig has Down syndrome. I thought her speech at McCain's announcement of her selection in Ohio was inspired and her acceptance speech at the Republican Convention was brilliant.

So what has happened? Basically, it has to do with Sarah Palin's responses to questions and what she's said in her speeches. It's what she's said and not said, but some of it even deals with some things she's done in Alaska, in particular, energy policy, which flatly contradict conservative economic policy.

Selected Examples: The Couric Interviews

-- the convoluted bailout question response

COURIC: Why isn’t it better, Governor Palin, to spend $700 billion helping middle-class families who are struggling with health care, housing, gas and groceries? Allow them to spend more, and put more money into the economy, instead of helping these big financial institutions that played a role in creating this mess?

PALIN: That's why I say I, like every American I'm speaking with, were ill about this position that we have been put in. Where it is the taxpayers looking to bail out. But ultimately, what the bailout does is help those who are concerned about the health care reform that is needed to help shore up our economy. Um, helping, oh, it's got to be about job creation, too. Shoring up our economy, and getting it back on the right track. So health care reform and reducing taxes and reining in spending has got to accompany tax reductions, and tax relief for Americans, and trade -- we have got to see trade as opportunity, not as, uh, competitive, um, scary thing, but one in five jobs created in the trade sector today. We've got to look at that as more opportunity. All of those things under the umbrella of job creation.

[COMMENT: Of course, Couric's question is inherently liberally biased; it assumes a zero-sum game and the financial sector is responsible for the problem. First of all, there was heavy liberal pressure for expanding home ownership to lower-income, riskier households; this pushed the demand for existing housing, causing prices to rise, and the need to price risk into the model allowed for inventive terms resulting in negative equity for borrowers. Still, the banks would not have been able to offer more loans without securitization of these risky mortgages, passing their risks onto the secondary market, especially GSE's, with access to cheap federal money and an implicit government guarantee. The Republicans had been arguing that Fannie Mae and Freddie Mac had grown too big, were competing unfairly (with government money) against the private sector and exposing the government to excessive risk. What Sarah Palin should have told Katie was that the bundled bad risky loans had been bought by individuals, companies, and even countries, and a wholesale dumping of securities with almost no buyers would have been destabilizing. The important issue was to thaw the freezing credit market, which could affect things like being able to transact via credit card to funds available for cutting paychecks. And it could have quickly deteriorated into a vicious circle of layoffs.

But clearly Sarah Palin was trying to work things Couric said the bailout would prevent funding into the discussion, and make some implicit connection between the bailout and economic growth that would enable meeting those objectives. The point is that a question regarding the bailout and McCain's position on it should have been anticipated with due diligence. ]

--the McCain regulator issue 

COURIC: I'm just going to ask you one more time - not to belabor the point. Specific examples in his 26 years of pushing for more regulation [besides Fannie Mae and Freddie Mac.]

PALIN: I'll try to find you some and I'll bring them to you.

[COMMENT: Once again, Couric's question reflects an intrinsic liberal bias. It is true that McCain has portrayed himself as a radical deregulator, but he also prides himself as a reformer and a Teddy Roosevelt-style populist. Media conservatives despise the new rules and regulations of campaign reform, which they regard as usurping free speech rights. He has worked with Lieberman on climate change legislation. He has attempted to ban earmarks and thought the recent Senate ethics and lobbyist act didn't go far enough. As he said, he took on Big Tobacco, expanding FDA regulative authority over the industry. In immigration reform, he wants to track and regulate nonimmigrant temporary workers. We can even talk about things like child safety in automobiles, passenger rights in aircrafts, and certain high-profile sports. But the Democrats have been sounding out this message for some time (that McCain prides himself as a deregulator and the bailout was necessary because of insufficient regulation) and Sarah Palin should have been prepared.]

--the current events question

COURIC: And when it comes to establishing your worldview, I was curious, what newspapers and magazines did you regularly read before you were tapped for this to stay informed and to understand the world? 

PALIN: I've read most of them, again with a great appreciation for the press, for the media. 

COURIC: What, specifically? 

PALIN: Um, all of them, any of them that have been in front of me all these years. 

COURIC: Can you name a few? 

PALIN: I have a vast variety of sources where we get our news, too. Alaska isn't a foreign country, where it's kind of suggested, "Wow, how could you keep in touch with what the rest of Washington, D.C., may be thinking when you live up there in Alaska?" Believe me, Alaska is like a microcosm of America.

[COMMENT: This is just so embarrassing; Palin is inexplicably being evasive, and Couric is repeating her question to the point of condescension, but the net impression is that Palin seems stumped in being able to name a single news source. It's clear that Palin takes the question as a cultural insult directed at Alaskans in general, that she's getting a question that a politician in the bottom 48 wouldn't get.

(As an example, when I worked for a few months on a database project in Brazil in 1995, Brazilians I met seemed obsessed with how Americans viewed them. They worry that we consider them a bunch of Indians chucking spears in the Amazon, instead of having a modern diversified economy.)

I think that Katie Couric is asking a legitimate question; she's trying to get an understanding, for instance, whether Sarah is getting a broad, current view of perspectives. For example, I've subscribed to a magazine called The Week which includes a page of abridged foreign editorials, "How They See Us".  But I think it also probably got triggered because she drew a blank when Charlie Gibson had asked in an earlier televised interview about the Bush doctrine.

Going back to the Gibson interview, a lot of conservatives rushed to Palin's defense, saying that Bush's foreign policy has changed over time. As part of my own conversational style, I would have fashioned a response of the nature, "Here's what I understand by the 'Bush Doctrine:...." If the context was not what Gibson expected, I would expect him to rephrase his question. But my sense of that interview was that she had drawn a blank and asked him to be more specific, and then Gibson made it explicitly a gotcha question by saying "What do you interpret it to mean?"

If I was a national candidate, I would expect the press to explain how my/our foreign policies would differ from the status quo and/or the opposition--things we agree with and will continue, e.g., our commitment to Israel, and where we might differ. In particular, McCain in May outlined a concept he called the "League of Democracies". But I didn't see in the Gibson and Couric interviews where Palin ever mentions and/or fleshes out the concept.

But going back to the Couric response, Palin has the irritating habit of constantly rewording a question and/or its elements (e.g., the bailout response) in an incoherent manner: which newspapers and magazines? Most of "them", any of "them", all of "them". Apparently Palin thinks it's enough to affirm in general she reads newspapers and magazines, that Alaskans have access to the same newspapers and magazines. But I don't know why an experienced politician would ever respond to a question in a way that suggests that he or she is having trouble coming up with the name of ANY newspaper or magazine and/or being unduly sensitive over a conventional background question.

Palin later told Fox News' Carl Cameron that she didn't think that the Couric interviews focused enough on the big campaign issues and said that she regularly reads the New York Times, the Wall Street Journal, and The Economist. This response comes across to me as disingenuous. I did not expect that the Couric interview to focus on the McCain campaign talking points; I do have issues with the tone and some of the substance of the Gibson and Couric interviews, but Palin's interview style is in sharp contrast to McCain's "straight talk" style.]

--some general comments regarding the Gibson and Couric interviews

I thought the interviews were biased and unfair to Sarah Palin. For example, Charlie Gibson asked Sarah Palin whether it was hubris for Sarah Palin to believe she's qualified to be Vice President. [I don't recall a major interviewer asking about Barack Obama's hubris in running for President based on even less administrative experience than Palin.] The interviews also pointed out Sarah's thin resume on foreign policy. Charlie Gibson asked uncharacteristic questions about God, and Katie Couric did the typical liberal assault on pro-life candidates, trying to probe on exceptions to restrictions (e.g., rape and incest)

On the qualification question, I don't think Sarah Palin's use of Alaska as between Russia and Canada are compelling foreign policy credentials any more than Governor George Bush's Texas being contiguous with Mexico. I don't think that's the critical issue. The President heads the Cabinet; for example, we have a Secretary of State whom is responsible for our diplomatic efforts. I don't expect a candidate to list, say, the 5 top exports of Uganda or its current leader. I expect a candidate to understand our strategic alliances, international threats to our trade and homeland security,  international trade priorities, and what that candidate would look for in hiring and evaluating a secretary of state. Now, a governor like Sarah Palin does not necessarily make the same type decisions, but she has to deal with multiple threads of issues, personnel decisions, deal with budget constraints, and of course is in charge of the Alaskan National Guard. Gibson and Couric, in my judgment, were basically pushing on a string as per Tina Fey's SNL satirical portrayal of Palin: "I can see Russia from my house!"

Excerpts from the Vice Presidential Debate

Whereas I had misgivings before the debate and pleaded with John McCain to replace her, some of the biggest concerns were fleshed out during the debate:

BIDEN:... John on 20 different occasions in the previous year and a half called for more deregulation. As a matter of fact, John recently wrote an article in a major magazine saying that he wants to do for the health care industry deregulate it and let the free market move like he did for the banking industry.

IFILL: Governor, please if you want to respond to what he said about Senator McCain's comments about health care?

PALIN: I would like to respond about the tax increases...

BIDEN:... if you notice, Gwen, the governor did not answer the question about deregulation, did not answer the question of defending John McCain about not going along with the deregulation, letting Wall Street run wild. He did support deregulation almost across the board. That's why we got into so much trouble.

IFILL: Would you like to have an opportunity to answer that before we move on?

PALIN: I'm still on the tax thing because I want to correct you on that again... And I may not answer the questions the way that either the moderator or you want to hear,but I'm going to talk straight to the American people...

Let me get this straight: Sarah Palin apparently thinks it's more important to address an arcane argument over various tax increase votes, while ignoring the elephant in the room--Biden's false allegation that John McCain "caused" the $700B bailout crisis by "deregulation".  She totally ignores moderator Gwen Ifill's multiple attempts to respond and even makes clear in the last statement, she doesn't care what the moderator is asking. I don't think I've seen this, at least to this extreme, in a debate before.

First thing, Sarah: About taxes. The fact is that McCain has consistently voted against the Clinton 1993 tax increase, which was due to resume as the Bush cuts are due to expire after 2010.  McCain voted to make the Bush income tax cuts permanent (Graham amendment 4170 to S. Con Res 70 on March 13); the Democratic ticket voted against it, a de facto tax increase. Second, Obama's version of a tax cut is de facto income distribution where the 40% of Americans whom don't pay income taxes will get a check from the government.

Second: The elephant in the room: deregulation. Biden is suggesting the 1999 repeal Glass-Steagall is the source of all evil. But Gramm-Leach-Bliley had nothing to do with mortgage or mortgage securitization. It had to do with letting banks, insurance companies and securities companies compete in each others markets and/or merge. If we go back to the aftermath of 9/11, the Fed pushed a trend of interest rate cuts to near zero. The inevitable result was more affordable mortgage rates, which enabled buyers to bid prices higher. Democrats pushed lenders to support home ownership of lower-income people, inherently riskier choices. Enter the REAL problem--option ARM's. (See my earlier post on mortgages.) According to Peter G. Miller, the Fed Reserve has--and has had since 1994--under section 129(1) under the Home Ownership and Equity Protection Act--to consider such loans "unfair". He also noted about half of related mortgages were accompanied by stated income statements (borrower estimated income, not necessarily verified by the lender). Why did lenders do them? Bigger loans, bigger volumes of loans, plus negative amortization features all inflated mortgage lender income. He points out not only are the terms typically recast after a finite number of years (say, 5) (when your mortgage payment might go up, for example, 40%) and quite often will reset once negative amortization adds, say, 10% to the original loan amount. There are a LOT of these mortgage loans on the market, which can be lose-lose situations for both the borrower and lender when the housing market is declining. I do not believe that McCain or the GOP stripped the Fed Reserve of their ability to ban certain types of loans, and I don't have an explanation for their inaction if they had this authority and didn't use it. These types of mortgages put lower-income people into homes, an explicit Democratic Party objective.

Third: Health insurance. What McCain means by "deregulation" here is allowing health insurers to sell plans across states, just like you can now have banks operating across states. 

A different thread actually surfaces elsewhere, on energy and business taxes. McCain has talked about business tax cuts to make us more globally competitive. But the Obama ticket keeps referring it as a giveaway to Big Oil. Sarah Palin failed to return serve. The Democrats are being disingenuous because it is unfair to apply different tax rates to businesses in different industries. For example, Big Oil pays 35%, and Big Pharma pays 35%. But the point is, taxes are intrinsically business costs. This makes more money for investing in business growth and employee headcount. Granted, when oil hit almost $150/barrel, oil companies made money. But they also paid lots of tax. What liberals fail to note is these profits are not sustainable in the sense Big Oil's reserves are dropping and the big money is with the oil-exporting nations. What Democrats also fail to notice is that high prices also make alternative energy more feasible. I happen to share a point of view that we should set a floor price for oil, say $100/barrel. This would provide a market incentive for automakers and alternative energy suppliers. 

However, it's Sarah's own position in Alaska which allows Biden to highlight differences between McCain and Palin. For example, it is true that Sarah effectively signed a windfall profits law in Alaska, something John McCain refuses to do the same on the national level of principle because it discourages local investment. Similarly, Sarah has done the resorts of funding of alternative energy funding that McCain doesn't really support, e.g., corn ethanol subsidies, which have resulted in side effects like food inflation and fertilizer-related pollution of the Mississippi, not to mention other protectionist actions like maintaining the Brazilian ethanol tariff. And Palin missed an opportunity for noting how unrealistic Obama is in assuming that federal money or government can revolutionize the auto fuel market in a short period of time like 10 years.

Conclusion

I don't mean to underestimate Sarah Palin's appeal to a certain voter base. She has a certain charm and Reaganesque connection to conservatives. But she has hurt McCain in a critical election, with interviews and a debate performance which have actually hurt McCain's credibility with moderates and independents. It is true that her presence will motivate the base to turn out for the election, but given a change year election, an incumbent President of almost unprecedented unpopularity, and a financial tsunami hitting the electorate, McCain has lost his convention bounce, with a CBS News poll out showing Obama with a 15% lead. One can never say never; for example, an international crisis could occur over the next 2 weeks. But Tina Fey's parodies of Sarah Palin, the Troopergate report release, the attacks on Obama and Sarah's interview disasters have dropped people whom think she is qualified to be Vice President by about 10%. And there is no doubt that vicious personal attacks on Palin actually backfired on the Democrats at first. 

I don't think if McCain loses, it will be because of Sarah Palin, although to some extent it has led some to question his judgment and it largely took away the "experience" argument on hindsight simply wasn't worth what she brought to the ticket.  The eye winks, the "you betcha's", "Joe SixPack" and other behaviors are unexpected. Although I respect the nobility of his intent, I thought he completely misplayed the financial crisis , using a tennis analogy, rushing to the net, only for Obama to hit an easy passing shot. Obama has everything going for him; he's got a highly motivated voting base, he is clearly benefiting from a crisis despite having of value to contribute, and McCain and Palin are running a puzzling campaign. My last post explained how I would be handling the debates and the ads. I simply don't understand how they haven't given good responses--and even topical discussions--of health insurance, alternate energy, the deregulation accusation, etc. McCain didn't really distance himself from Obama's position during the bailout, with both parties blaming "greed". Why McCain hasn't been hitting Obama every day since Fannie Mae and Freddie Mac were absorbed, why he hasn't been blaming the Democrats for pushing risky mortgage loans for political reasons, etc., I don't know. 

A lot depends on McCain's third and final debate performance Wednesday night. But with Obama sure to play prevent defense, I think McCain has to start off the debate by pulling out something unexpected early in the debate--some attack that hasn't been presented to date which Obama is prepared for (and I'm sure he's expecting Ayers).  But if McCain is going to play out the same approach he did in the first two debates, he won't get a bounce. We saw in 1980 Reagan gained 8 points in the poll over his late debate with Carter. But if he simply allows Obama to do what Obama did in the first two, which wasn't great but avoiding a major mistake, it's going to be tough. I expect that the race will tighten up in the days leading up to the election, and I think polls are somewhat inflated in favor of Obama because of social desirability effects (i.e., people who say they will vote for Obama, but will actually vote for McCain in the voting booth). I don't think know if McCain can undo his financial bailout misplaying--I mean, if you're going to sympathize with the House Republicans, you do it openly where you get credit for looking out to the taxpayer. Or you start talking about busting mortgage lenders whom put people into houses they couldn't afford. I'm not ready to call it over for McCain, but I think if McCain has a chance to win, he's got to have the momentum from a strong final debate or hope for an act of God or major international incident.