Construction Bonds Revisited

| Thu Sep. 18, 2008 5:55 PM EDT

CONSTRUCTION BONDS REVISITED....This is not exactly a critical issue, but over at Washington Wire Easha Anand takes a stab at defending Sarah Palin's contention that the AIG bailout was necessary because of its involvement with "construction bonds," concluding that "Palin's answer wasn't as outrageous as some have claimed."

You can read the entire post for yourself, but once you cut through the clutter there's not much there. Like me, Anand believes that Palin was referring to surety bonds on construction projects, but it turns out that (a) only government projects require surety bonds, (b) AIG is the 14th largest provider of surety bonds in the U.S., amounting to a paltry $79 million out of an industry total of $5.3 billion, (c) there are about ten other companies that can underwrite even the biggest surety bonds, and (d) surety bonds are written by AIG's regulated commercial subsidiaries, which were in no danger of default and are guaranteed by state funds anyway. In other words, surety bonds played no part whatsoever in the decision to bail out AIG. Palin just pulled them out of nowhere because she happened to be familiar with them from her tenure as mayor and governor.

Basically, I figure that presidential candidates can toss out three kinds of comments during a crisis like this:

  1. Intelligent comments that actually address the issue at hand (which you may or may not agree with, of course).

  2. Random bromides designed to fill up airtime.

  3. Stupid things.

Comments in category 1 are rare, especially in a crisis like this one that has extremely arcane and technical causes. However, Obama's remarks today about the subprime meltdown, maintaining the flow of credit, ensuring liquidity in capital markets, and helping homeowners in trouble, qualifies. He's at least talking about the right things. John McCain's comments about the "casino culture" on Wall Street fall into category 2, as does Joe Biden's complaint about tax cuts for the wealthy. Both are basically harmless political posturing.

But then we have category three, which includes stuff like McCain saying he wants to fire Chris Cox and Sarah Palin claiming that AIG needed to be bailed out because of "construction bonds." These are just actively dumb comments that do nothing but make life more difficult for the folks trying to work on solutions. If they can't do better than that, they should just keep quiet.

UPDATE: Of course, I guess there's also a category 4: bromides so halting and clueless that they just scare the hell out of everyone. As Ezra says about Palin's disjointed reaction, "Meanwhile, McCain's response made Palin's commentary look like a model of analytical clarity." Scary stuff.

Advertise on

Palin Watched SNL Skit With No Sound - And Thought It Was "Hilarious"

| Thu Sep. 18, 2008 5:05 PM EDT

Given that the McCain campaign condemned SNL's portrayal of Sarah Palin last week as sexist, I was surprised to hear Palin's spokeswoman say that the governor actually found the spoof "quite funny."

Wonder how she would have felt if she'd watched with the sound on?

h/t TPM.

Palin Proposes "Google For Government," Unaware Obama Already Created It

| Thu Sep. 18, 2008 5:02 PM EDT

CNN has a lesson for Sarah Palin:

"We're going to do a few new things also," she said at a rally in Cedar Rapids. "For instance, as Alaska's governor, I put the government's checkbook online so that people can see where their money's going. We'll bring that kind of transparency, that responsibility, and accountability back. We're going to bring that back to D.C."
There's just one problem with proposing to put the federal checkbook online – somebody's already done it. His name is Barack Obama.
In 2006 and 2007, Obama teamed up with Republican Sen. Tom Coburn to pass the Federal Funding Accountability and Transparency Act, also known as "Google for Government." The act created a free, searchable web site — — that discloses to the public all federal grants, contracts, loans and insurance payments.

Mission Creep Dispatch: Steven Metz

| Thu Sep. 18, 2008 4:32 PM EDT

metz.jpgAs part of our special investigation "Mission Creep: US Military Presence Worldwide," we asked a host of military thinkers to contribute their two cents on topics relating to global Pentagon strategy. (You can access the archive here.) The following dispatch comes from Steven K. Metz, a strategic military theorist whose latest book is titled Iraq and the Evolution of American Strategy.

America's Global Military Footprint Is the Lesser Evil

Throughout US history, Americans have periodically reassessed their nation's strategy. We are once again involved in this process, debating tough issues that emerged at the end of the Cold War but remained unresolved. Foremost among these is the militarization of American statecraft. Unfortunately, much of the discussion of the vital topic misleads rather than illuminates. Take the global deployment of US troops:

It's Safe to Say a President Obama Would Improve Relations With Latin America...

| Thu Sep. 18, 2008 3:59 PM EDT

News of the weird: At least six Brazilian politicians have changed their names to "Barack Obama."

McCain Hearts FDR. What's the (New) Deal?

| Thu Sep. 18, 2008 3:48 PM EDT

How the times are changing. At a General Motors assembly plant in Lake Orion, Michigan yesterday, Sen. John McCain gave a shout-out to none other than Franklin Roosevelt, the original big-government guy:

One of our great presidents, Franklin Roosevelt, expressed this optimism even at the height of the Great Depression. He said, and I quote, "Plenty is at our doorstep but a generous use of it languishes in the very sight of the supply." . . .My friends, that's true again today."

Indeed it is, but, of course, McCain pointing that out is like Milli Vanilli singing "Girl You Know It's True"--the love just isn't real. Take the Social Security Act, passed under FDR in 1935. McCain (before he reversed himself recently) wanted to replace it with "private savings accounts," which would have caused millions of retirees to lose their shirts this week. As recently as July, he even said that "paying present-day retirees with the taxes paid by young workers in America" is "an absolute disgrace"

A "great president" whose legacy is an "absolute disgrace?" I thought that was supposed to be Bush. Here's what FDR's grandson has to say:

Advertise on

Quien es mas macho?

| Thu Sep. 18, 2008 3:03 PM EDT

¿QUIEN ES MAS MACHO?....John McCain, desperately searching for something manly to say about the current financial crisis, has decided to call for the firing of mild-mannered-but-extremely-conservative SEC chairman Chris Cox:

"The primary regulator of Wall Street, the Securities and Exchange Commission (SEC) kept in place trading rules that let speculators and hedge funds turn our markets into a casino," McCain says."They allowed naked short selling — which simply means that you can sell stock without ever owning it. They eliminated last year the uptick rule that has protected investors for 70 years. Speculators pounded the shares of even good companies into the ground."

Somebody help me out here. This all sounds more plausible than Sarah Palin's nattering about construction bonds yesterday, but does it actually parse any better? I know Jim Cramer has been bellowing about the uptick rule for several months, but it's not pressure on stock prices that's been responsible for the banking crisis, is it? It's the other way around. Do McCain's comments make any sense? Set me straight in comments.

Man United

| Thu Sep. 18, 2008 2:37 PM EDT

MAN UNITED....Now that you, the American taxpayer, more or less own insurance giant AIG, it turns out that you, the American taxpayer, are also the principal sponsor of Manchester United, thanks to a four-year, $100 million sponsorship deal signed in 2006. So this got me curious: how is our soccer football team doing?

Answer: not well. After winning the Premier League and the European Championship last year, they've started slowly this season with a loss to Liverpool, a win over Portsmouth, and a tie with Newcastle. Net result: 14th place. Next up is first place Chelsea on the 21st.

British readers should feel free to fill in details in comments. What do all those columns mean in the league table? What do the dotted lines mean on the BBC version of the table? I mean, if we're sponsoring these blokes, I suppose we ought to know something about them.

No Mas

| Thu Sep. 18, 2008 12:52 PM EDT

NO MAS....Conventional wisdom said it was just a minor gaffe. Or maybe John McCain didn't hear the question right during his radio interview with WSUA 1260 in Miami yesterday. But no: it turns out that, as a matter of policy, McCain refuses to commit to meeting with the prime minister of Spain if he's elected president. (Yes, that Spain. The one in Europe. Liberal democracy. NATO ally. Etc.) McCain foreign policy adviser Randy Sheunemann provided confirmation:

"The questioner asked several times about Senator McCain's willingness to meet Zapatero (and [identified] him in the question so there is no doubt Senator McCain knew exactly to whom the question referred). Senator McCain refused to commit to a White House meeting with President Zapatero in this interview," he said in an e-mail.

Okey dokey. President Bush already has a policy of keeping Zapatero in the deep freeze, and I guess McCain has decided not to deviate from it. Full details on this bizarre incident at the link.

McCain-Spain, Continued

| Thu Sep. 18, 2008 12:21 PM EDT

McCain said in June that Zapatero, the president of Spain, would be welcome at his White House. This bolsters my argument that McCain didn't intend to give Spain the cold shoulder in the Spanish-language radio interview. He simply didn't know what was going on.

Of course, the McCain campaign had to respond to this situation and they couldn't say, "Our candidate misheard the interviewer or misunderstood what was going on, so let's just forget this little senior moment, shall we?" So they claimed that McCain intentionally refused to sit down with Zapatero, who is a socialist:

"The questioner asked several times about Senator McCain's willingness to meet Zapatero (and id'd him in the question so there is no doubt Senator McCain knew exactly to whom the question referred). Senator McCain refused to commit to a White House meeting with President Zapatero in this interview," the Senator's foreign policy adviser Randy Sheunemann told the Washington Post.

Okay, that's insane. Lumping Spain — a member of NATO and thus a country we are bound to defend militarily in the event of crisis — in with Iran, Venezuela, and North Korea is clearly crazy. And it's a position, apparently, John McCain didn't endorse as recently as June. So we know what's going on here, right? The campaign put out a self-serving, cover-your-ass statement and John McCain is old but not so militaristic he wants to sever ties with one of our oldest allies. Everyone clear?