Ok, after getting Rescued tonight, I thought I'd try to gin up a little traffic with a grabber title, but I'm not completely making this up. I just watched Gov. Palin's interview with Sean Hannity, and there's at least one segment that would make a great commercial for the Democratic team. Join me below the fold for more on this, and also a serious question about what the actual Republican plan is for oversight and reform of Wall Street in the wake of the current financial crises--her answer on this point may surprise you . . .
I highly recommend watching the interview in full. There's a lot to digest, and there are some interesting aspects to her answers that require contemplation, like her answer in segment three about her role in the McCain adminstration (it appears she's going to be responsible for "energy independence and reform overall of Washington and tax cuts for Americans and reining in spending . . . and helping families with special needs children and being able to strengthen our National Institute of Health also and find cures for presently incurable diseases.") You can see the three segments in their entirety at the Fox News website:http://www.foxnews.com/video/index.html
But I teased you here with the promise that Governor Palin supports Obama. What evidence of that can I present? Here's her quote, in response to a sincere question from Sean Hannity (this is in segment three):
Hannity: Have Republicans in Washington lost their way in recent years?
Palin: I believe that Republicans in Washington have got to understand that the people of America are not solely satisfied with all the — all the dealings within the party. The same — applies for the other party, also. Americans are just getting sick and tired of the old politics as usual, that embracing of the status quo, going with the flow and just assuming that the people of America are not noticing that we have opportunity for good change. We have opportunity for a healthier, safer, more prosperous and energy-independent nation at this time. People are getting tired of a process that’s not allowing that process — that progress to be ushered in.
Apparently, Governor Palin has been brainwashed by the Obama campaign to parrot the Democratic talking points (I'd sure like to know how they managed that). I think the Obama campaign should just take the video of the bolded section and run it in an ad that says, "We agree--you can have four more years of the status quo, or join us and take advantage of the opportunity for good change, for a healthier, safer, more prosperous and energy-independent nation. I'm Barack Obama, and I approve Sarah Palin's message." :)
But now, on to the serious point. In my diary yesterday, I described how the absence of regulation is at the heart of the problems we're seeing in the financial markets. Apparently, Governor Palin has a different view on who's to blame (from Segment 1):
Hannity: Who's responsible for these failing institutions in your view?
Palin: I think the corruption on Wall Street, that is to blame. And that violation of the public trust, and that contract that should be inherent in corporations who are spending, investing other people's money, the abuse of that is what's got to stop. And it's a matter too of some of these CEOs and top management people, and shareholders too, not holding that management accountable, being addicted to, we call it Opium, OPM, Other People's Money, spending that, investing that, not using the prudence that we expect of them. But here again government has got to play an appropriate role in the stringent oversight making sure those abuses stop.
I'll pass on the snarky point that her answer is somewhat rambling, and leave it to others to pick apart the specifics of her syntax. I'm more concerned with what this answer seems to convey about the McCain/Palin approach to solving the problem.
She lays the blame for the problem at the feet of Wall Street "corruption". Assuming for a moment that she's not referring to literal corruption (I haven't heard of any specific allegations along those lines in the last few financial collapses), but rather the idea of breaking a "moral contract" with investors by abusing Other People's Money, my question is, what is the true McCain/Palin position on the "appropriate role [of government] in the stringent oversight making sure those abuses stop"?
How exactly does one legislate "prudence"? Is she suggesting that the Republican Party is going to begin mandating specific compensation packages for executive management? Are they going to require full disclosure of all corporate perqs and fringe benefits, so that shareholders can hold the management accountable for wasteful spending of OPM? What is the appropriate measure of a prudent decision, and what would be the consequence of making an imprudent one? I'd think there are a lot of people in downtown Manhattan who would be uncomfortable with the idea of that level of government intrusion (even the Democrats aren't proposing that degree of oversight). Anyone giving serious consideration to her response will be quite keen to hear how the campaign expands on this point over the coming days. I'm actually a bit surprised Hannity didn't follow up with her, if only to ease potential Wall Streeters's concerns about what her answer might actually mean (is there really a new sheriff in town?).
But the deeper problem with Governor Palin's answer is that it misses the real point, which is that the fundamental blame lies not with the corruption of individuals within the system, but with the system as a whole. It's not possible to create an oversight scheme that will guarantee that corporations and CEOs act 'prudently' on case-by-case basis. It's simply not the nature of the beast, and it seems frankly antithetical to the basic idea that risk-taking and innovation is what drives success (I thought that was a Republican talking point?). What's needed is a systemic overhaul of the overall regulatory scheme to ensure that corporations and business sectors are not exposing their investors (and the broader markets who rely on them) to unnecessary risk.
Don't let speculators run unchecked through the world's commodities markets. Don't let retail banks own investment firms--keep them separate to create additional levels of scrutiny when a bank wants an investment house to buy or sell its loans. Don't let mortgage lenders make substantial no-money-down loans without proof of income and assets. Don't let insurance companies leverage a giant percentage of their portfolio in unregulated exotic financial instruments that are so new and so little understood. You can ask these companies to be "prudent", but it's a lot more effective to simply say, "You can't play in these particular games of chance, because we can't afford the cost of you screwing up your bets".
The Republicans want to be the reformers who are going to sweep out the mess with their brooms of morality and righteousness, but they don't want to acknowledge (and be forced to take responsiblity for) the lack of oversight that is the true underlying source of the mess. By making this a problem of individual greed and corruption, they hope to avoid scrutiny of the role that the Republican Party's "no regulation is good regulation" philosophy has played in creating this catastrophe. The real danger is that by treating this as a problem caused by individuals, they will fail to make the fundamental changes necessary to really fix what's broken. Given the size of the disaster we're already dealing with, and the magnitude of the consequences of continuing down this path, we cannot afford superficial solutions. We don't just need a new sheriff, we need a new set of laws.
Here's hoping the debates clarify the differences between the two parties on this subject, so that the public can grasp what's really at stake in this election.