After 3 weeks of not talking to any reporter other than the two interviews arranged on the Mccain campaign terms, Palin was caught off guard being asked a question by a reporter. She decided to answer the question but screwed up, betraying her lack of knowledge about economic issues facing the nation. More below the fold.
Reporters have been asking for an opportunity to get some face time with Sarah Palin for a few weeks now to no avail. Scott Conroy of CBS got lucky this morning when he approaced Palin in Karl's Restaurant and Bar in Cleveland and asked her about her reaction to the AIG bailout.
Palin responded:
"disappointed that taxpayers are called upon to bail out another one. Certainly AIG though, with the construction bonds that they’re holding and with the insurance that they are holding very, very impactful to Americans so you know the shot that has been called by the feds its understandable but very very disappointing that taxpayers are called upon for another one."
WSJ
Emphasis on construction bonds mine.
We all get that AIG was too big to allowed to fail in a disorderly manner but note that the first reason that Palin cites for the impact of an AIG failure is the "construction bonds" they hold. This is not true and reflects her lack of understanding of the issue and the economy in general.
None of the financial experts or economists have mentioned "construction bonds" being held by AIG as a reason that it should not fail. The actual reason they say is the large number of Credit Default Swap contracts that AIG has insured which are held be several banks across the globe. Another reason cited is simply the scale of AIG which has 70 million customers and 110K+ employees worldwide.
A Google search of AIG "Construction bonds" returns only 2130 results at the moment most of which seem to be references to Palin's statement. I am sure the number of results will increase as blogs publish stories about this quote. But you can easily filter those stories by searching for the term AIG "construction bonds" -"palin" . The -palin keyword removes any stories that have palin in them.
I am not even sure if AIG holds any "Construction bonds" as Palin suggested. Guess how many results a google search for "construction bonds" site:aig.com returns. ZERO!!
So let's ask Sarah Palin what she meant by AIG holding "construction bonds". We may have to try for 3 weeks before she comes out to answer though.
Update: VermontProg notes in a comment that Federal Reserve is called "The Fed" and not feds as Palin says. Feds refers to FBI.