Gaffe Watch
| Mon Sep. 8, 2008 2:39 PM PDT
GAFFE WATCH....Sarah Palin, peeking out from a thicket of pre-scripted talking points in Colorado Springs, goes off message briefly and explains what went wrong in the home mortgage market:
The fact is, Fannie Mae and Freddie Mac, they've gotten too big and too expensive to the taxpayers.
A gaffe! But how does it measure up? On a technical basis, I'd say it's impressive. Until now, Fannie and Freddie haven't cost the taxpayers a dime and their current problems aren't really related to their size either. This leaves only a few conjunctions and proper names as sensible parts of this sentence.
On artistic merit, however, the judges have to score this one for Palin. Nobody cares about the minutiae of how GSEs work, after all, and liberal attacks on this score are almost certain to backfire because (a) we're obviously harrassing her unfairly over trivia because she's a small town mom and (b) we're just trying to show off how smart we are. Besides, as Palin said, John McCain is in favor of "reforming things," so he's obviously the right guy to tackle whatever problem it is that Fannie and Freddie suffer from. For liberal critics, then, there's no there there.
Actually, what's really impressive about this is that even though Palin obviously didn't know what she was talking about, she managed to dig smoothly into the standard movement conservative playbook to say something pleasing to the base anyway. Got a problem? It must be government's fault! Something somewhere got too big and too expensive and conservatives need to rein it in. Nice work.
Anyway, I'm sure more like this will crop up soon. In the meantime, though, I'll be a little quiet for the rest of the afternoon because the U.S. Open is um, I mean, because I have some important research to do for an upcoming article. Yeah. That's what I meant.
Continues Below
Continued From Above
Comments
This could backfire yet, because it raises the issues of government-owned enterprises in Alaska. Palin may have been thinking that Fannie & Freddie are similar to Matanuska Maid, the state-owned dairy that was Alaska's biggest source of locally-produced milk.
Until Mat Maid shut down last December. It had been losing money for months. A state board decided to shut it down last summer. Palin sacked the board and kept the dairy open for a few more money-losing months before the inevitable happened.
Not sure how this would play with the "government is the problem" base, but it sure is interesting.
i doubt that any given manifestation of palin's multiple areas of policy ignorance will be that important, but i think that the totality of palin's mulitple areasw of policy ignorance will be important.
what i would do, were i obama and biden, is every day note "i see governor palin is still studying this issue and she got her facts wrong" or things to that effect....
It's pretty weak sauce for a gaffe, IMO. Yes, I understand that it conveys a fair amount of ignorance on her part, and that technically it's a serious mistake, but the fact of the matter is that it still requires a lot of explanation. It's not going to resonate.
And howard, I think that strategy is a bit dangerous. I'm not sure the fact that she's a VP-in-training is going to resonate with people. It'll backfire if she does well in the debate with Biden. Attacking her lies over the bridge to nowhere BS or earmarks is much more productive.
Submitted by David Zetland (not verified) on Mon Sep. 8, 2008 3:02 PM PDT.
Hey -- she's right. The GSEs were ALWAYS considered to have a government guarantee. Now that they are screwed (rather, they have gotten too greedy), the govt (taxpayers) will have to bail them out.
Submitted by Howard (not verified) on Mon Sep. 8, 2008 3:04 PM PDT.
What was pretty impressive too was that John McCain was standing right next to Palin when she was speaking, and he led the applause following her, "the fact is, Fannie Mae and Freddie Mac, they've gotten too big and too expensive to the taxpayers," gaffe. Didn't seem like he was listening, but was waiting to jump on the applause lines. Like everyone else in the room.
--
The Other Howard
Submitted by Howard (not verified) on Mon Sep. 8, 2008 3:11 PM PDT.
Sorry Jasper, not buying it.
Palin actually talks about past government activities such as "lending agencies that the government supports," then refers, as an example, to Fannie May and Freddie Mac. She actually believes that Fannie & Freddie are examples from our past of government largesse.
Thanks for playing though.
jake, i include things like the lying about the bridge to nowhere in my proposed response; i also do believe that a majority of the american public does not belief the vice president should know nothing about the issues.
jasper, starting with the second point, they haven't gotten too expensive for taxpayers. there's a reasonable basis to believe that this deal will not end up costing taxpayer's anything over time.
as for getting too big, that was a choice by private CEOs and a private board; next time governor palin tells us that "microsoft has gotten too big" or "exxon mobil has gotten too big" or "general electric has gotten too big," i'll care that she simply threw (as kevin rightly noted) typical empty-headed right-wing claptraps cliches at the matter.
as a matter of fact, jasper, there have been zero decades of taxpayer backup.
there has been an ambiguous, now-acted-upon guarantee, which is not the same.
look, this is typical right-wing blather: throw a few words together that sound good. let's not pretend it's an insight....
C'mon, you're not choosing a financial planner -- just the President and VP! It doesn't matter if they don't know the facts about the economy or how the economy works. It doesn't matter if they lie about these things -- it just matters if they can read a speech written by someone else (but not to prettily!).
And if they eat Moose.
It's really disheartening to read liberal blog after liberal blog ginning up this faux "gaffe" story. Palin made the perfectly reasonable observation that Fannie/Freddie are too big (I agree with her there) and too expensive to taxpayers (I agree with her there, too, as my estimate of what the bailout will cost US taxpayers is a number north of $1 trillion).
No. Palin, knowingly or otherwise, made it sound as if F&F were too big and too expensive as if they were federally funded entities to begin with. This is, of course, not true. As long as F&F or any similar entity had maintained the standards they had prior to the bubble, they would be fine today. The quantity of their holdings had nothing to do with their demises. It was the quality of the holdings that did them in.
Now, some may infer that Palin believes Fannie/Freddie have been funded with direct infusions of taxpayer cash these many years. And she'd be wrong if she believed this to be the case. But it's entirely unclear that she meant this. Posted by: Jasper
This is the only conclusion one can take from the statement as it is in the past tense, again, as if the two had been become bloated on tax revenue.
Please, we need better gaffes.
It wasn't a gaffe, it was, at best, a misrepresentation of F&F's role in the mortgage market and their relationships to the federal government. One designed to further confuse an already dead above the neck electorate.
I was watching the news with my wife last night, and when she said it, our jaws dropped in unison. Of course the talking heads on the ultra right wing KUSA didn't even notice the gaffe.
But the gaffe is important. Palin has applied for the second highest office in the land. And McCain's strategy not withstanding, she needs to prove to everyone - liberal, conservative, Democrat, republican, whig and tory, - that she is up to the job.
You know, I want Obama to win and I think Bush should be impeached for his lies over IRaq.
But, she's right here. Fannie Mae received an implicit Government guarantee, and while they may not have cost any money now, they may costs $100s of billions (still less than Iraq)in the near future. Hopefully not.
Its the same as the S&L fiasco: Public sector guarantees (whether explicit as in the FSLIC case or implicit as in the FNM case) minus government oversight = huge taxpayer burden.
I don't understand the gaffe from the section you (and 167 million other bloggers) chose to quote.
If they aren't too big for taxpayers when they fail, just why do you think we are deprivatizing them?
And as David Zetland points out, what is that government guarantee based on? Isn't it the taxpayers?
I don't get this post at all Kevin, it seems you phoned this one in. Are you being held hostage by the Obamabots?
jasper, if you're going to get into this, you need to get your details right.
in point of fact, the market was not trading as though there was a government guarantee: that's what forced the bush administration's hand, the likelihood that the price fannie and freddie would have to pay in interest to roll over their debt would have overwhelmed their free cash flow.
so no, there has been, as i said, an ambiguous scenario, and the market, when push began to come to shove, didn't believe the ambiguity.
and no, the government is not on the hook to lose $600B. in the near term, the government is loaning money at 10% while taking on a senior preferred status with a capital injection. based on what we know today, that has every chance of working out, although, of course, it may not (william poole thinks it will get more expensive, for example).
but what you're claiming isn't the case: fannie and freddie own or guarantee some $6T in mortgages, but the government isn't "guaranteeing" them or "on the hook" for every mortgage that defaults....
I would argue that government oversight is almost never a match for the ingenuity flowing from human greed.
Except FNMA was created in the 1930's (and FHMLC in the 1960's) and government oversight of lenders worked just fine for decades. The problem didn't occur -- until deregulation. None of the apostles of deregulation thought throw the consequences. Why bother, the magic of the marketplace takes care of everything... right?
What Ezra said.
http://www.prospect.org/csnc/blogs/ezraklein_archive?month=09&year=2008&...
"It's not a gaffe. It's much simpler: Palin didn't know the answer. Amidst a housing crisis, she didn't know how the country's largest lenders operate, and wasn't aware that they weren't taxpayer funded."
It's not an exageration to say that if Fannie & Freddie were to fail, our entire financial system would go down with it. This stuff matters.
Jebus Kevin, for months, many of us ignorant peons have wanted these suckers to fail, but we've been told by the real economists, PK and DeLong they were too big to be allowed to fail, that the government does back their actions, that they never should have been privatized, and so the taxpayer need to take them over now, not later.
How is the quote you posted (from the top of today's talking points) incongruous with either of those two viewpoints.
From the waki waki wiki, for all the crap that's worth, as of 1996, government subsidized our government sponsored entities to the tune of $6.5B annually.
It's in the waki, so it most be right and must be neutral point of view.
No actual guarantees
Fannie Mae receives no direct government funding or backing; Fannie Mae securities carry no government guarantee of being repaid. This is explicitly stated in the law that authorizes GSEs, on the securities themselves, and in many public communications issued by Fannie Mae.
Neither the certificates nor payments of principal and interest on the certificates are guaranteed by the United States government. The certificates do not constitute a debt or obligation of the United States or any of its agencies or instrumentalities other than Fannie Mae.
[edit] Assumed guarantees
There is a wide belief that FNMA securities are backed by some sort of implied federal guarantee, and a majority of investors believe that the government would prevent a disastrous default. Vernon L. Smith, 2002 Nobel Laureate in economics, has called FHLMC and FNMA "implicitly taxpayer-backed agencies."[11] The Economist has referred to "[t]he implicit government guarantee"[12] of FHLMC and FNMA. In testimony before the House and Senate Banking Committee in 2004, Alan Greenspan expressed the belief that Fannie Mae's (weak) financial position was the result of markets believing that the U.S. Government would never allow Fannie Mae (or Freddie Mac) to fail.[13]
[edit] Federal subsidies
The FNMA receives no direct federal government aid. However, the corporation and the securities it issues are widely believed to be implicitly backed by the U.S. government. In 1996, the Congressional Budget Office wrote "there have been no federal appropriations for cash payments or guarantee subsidies. But in the place of federal funds the government provides considerable unpriced benefits to the enterprises... Government-sponsored enterprises are costly to the government and taxpayers... the benefit is currently worth $6.5 billion annually."[14]. Fannie Mae and Freddie Mac are required to hold less capital than normal financial institutions: e.g., it is allowed to sell mortgage-backed securities with only half as much capital backing them up as would be required of other financial institutions. Specifically, regulations exist through the FDIC Bank Holding Company Act that govern the solvency of financial institutions. The regulations require normal financial institutions to maintain a capital/asset ratio greater than or equal to 3%.[15] The GSEs, Fannie Mae and Freddie Mac, are exempt from this capital/asset ratio requirement and can, and often do, maintain a capital/asset ratio less than 3%. The additional leverage allows for greater returns in good times, but put the companies at greater risk in bad times, such as during the current subprime mortgage crisis. FNMA is also exempt from state and local taxes. In addition, FNMA and FHLMC are exempt from SEC filing requirements; however, both GSEs voluntarily file their SEC 10-K and 10-Q.
Maybe what she, and McCain and all the other Republicans, was that they see any large entity as too big for the U.S. government to support/guarantee/back and so they plan to take over ALL the U.S. corporations, and in deed all of America, so they can cash it in.
Extremism in the pursuit of profit & power IS a vice.
Submitted by stefan (not verified) on Mon Sep. 8, 2008 5:00 PM PDT.
Seriously guys, Drum is being much more ignorant than Palin here. The two GSEs are a) too big to fail and b) have expensive implicit credit guarantees. It is crazy option accounting if giving away put options -- what the government has been doing here -- doesn't count as an expense.
See for instance, The GSE Implicit Subsidy and the Value
of Government Ambiguity (2005), Wayne Passmore, who finds that, as of a few years ago "Fannie Mae's and Freddie Mac's ambiguous relationship to the government
imparts an implicit subsidy to GSE shareholders and homeowners. In dollar
terms, the gross value of this subsidy is estimated to be between $122 billion and
$182 billion, of which the shareholders retain between $53 billion and $106
billion."
http://www.federalreserve.gov/pubs/feds/2005/200505/200505pap.pdf
Shill harder, Jerry, shill harder !!!!!!
So, an honest question, even though you're a dishonest hack:
What do you think Palin is proposing with her statement ? Is she proposing that FM&FM be allowed to fail and disappear, along with a good chunk of our economy ? Or is she simply throwing out a statement whose meaning is lost on her completely ? I'm opting for the latter.
After all, you're suggesting that she is taking the position that one of the biggest contributors to increased home ownership in this country should be done away with because it costs too much money (6.5 billion, by your count). Doesn't that seem like an idiotic position to take, considering that increased home ownership, on the balance, is a good thing ?
Stefan,
"In dollar terms, the gross value of this subsidy is estimated to be between $122 billion and $182 billion, of which the shareholders retain between $53 billion and $106
billion."
According to what I've read, the deal currently in place ensures that shareholders will lose a good portion of their investments. This runs counter to your claims, doesn't it ?
Something somewhere got too big and too expensive and conservatives need to rein it in.
Sigh! Conservatives to the rescue. Always.
Actually, it always amazes me that small gov't conservatives genuflect before socialized petrol-state kleptocracies like Alaska. Seems a place where the gov't gives every citizen a welfare check yearly would not be a Randian paradise.
Submitted by stefan (not verified) on Mon Sep. 8, 2008 6:07 PM PDT.
OhNoNotAgain,
those figures are for a few years ago. The issues here is two fold: a) what the put option for the GSE liabilities worth and b) who appropriates the value of this put option. What appears to have happened in the last few years is that the put option has become much more valuable as the put has come into the money (and vol has gone up), and that shareholders are getting less of this value and other entities (mortgage borrowers and especially GSE bond holders) more.
I'm a shill? For pointing out that her statement is at odds with Kevin's claims? For asking Kevin to think before posting the current day's meme?
For saying that wrongly flogging this dead horse doesn't get us to defeating McCain?
What did she mean by it? I certainly don't know. As I said, from the clip Kevin (and everyone else) chose to play up, it's quite conceivable she meant the damn things are too large too fail.
Do I think she's an economic wiz? No. Do I think it's quite likely in her role as homeowner and then to governor she has some familiarity the F&F? Yes. Do I think that means she knows it's a GSE? I have no idea what she knows.
All I said was Kevin's quote doesn't live up to his claim.
And that makes me a shill.
Well, Mr. So Scared to Talk Politics that you're too afraid to even use a first name, you might consider why it is that many people consider us Democrats to be assholes and hypocrites. And why they might find "average Sarah" appealing, or god forbid, even "average George".
It might be because of douchebags such as yourself, who hate it when Bush says, "you're with us or against us" and then display the same sort of idiocy and thought and speech policing in web forums.
"Jerry doesn't agree with Kevin, ergo, I shall call him out as a shill."
Keep playing divide and conquer with identity politics, jingoism, and web bullying, and watch us go down to defeat. Again.
In the meantime, brave little tyke, I would like to know OhNoNotAgain, why we aren't wiping out preferred stockholders and all holders of debt.
Complete gaffe (mistake), but she will get away with it because she said it during a government bailout. She got lucky and will be able to easily explain it away.
So far, I think the bridge to nowhere flip flop is the best argument against her.
"Hey -- she's right. The GSEs were ALWAYS considered to have a government guarantee. Now that they are screwed (rather, they have gotten too greedy), the govt (taxpayers) will have to bail them out.
I understand you're an economist, David Zetland. But it looks as if she was speaking about the period from the inception of Fannie Mae and Freddie Mac or some time in the decades leading up to the current one--in other words, the past. I've seen numerous people say that the companies have never required taxpayer money and instead have only have the government guarantee working for them, which is only now being called upon. Is that not accurate? If that's the case, why isn't it accurate?
Also, let's just say that these GSEs had required taxpayer money in the past. I've seen claims that they've saved homeowners billions over the years. If that's the case, and the money we are doling out now is less than we've allegedly paid in, isn't it still a good deal?
Submitted by Jassalasca Jape (not verified) on Mon Sep. 8, 2008 6:56 PM PDT.
Hey, what jerry said.
Palin's statement suggests that she doesn't have a sophisticated understanding of the mortgage finance market, and that would be damning for an appointment to the FRB.
Submitted by stefan (not verified) on Mon Sep. 8, 2008 7:05 PM PDT.
it looks as if she was speaking about the period from the inception of Fannie Mae and Freddie Mac or some time in the decades leading "up to the current one--in other words, the past. I've seen numerous people say that the companies have never required taxpayer money and instead have only have the government guarantee working for them, which is only now being called upon. Is that not accurate? If that's the case, why isn't it accurate?"
It is accurate but beside the point. Say a CEO is paid in out of the money call options on his firm's stock. A the time the CEO is paid no cash flows from the firm or the firm's stockholders to the CEO, and the CEO could not exercise his options for cash. Nevertheless, these options have value and are not 'free' to the firm and represent a real claim on future cash flows of the firm (in certain states of the world) and hence have value.
We went through all this 'granting options isn't an expense' crap back in the 2nd half of the 1990s and this is just the same thing in another setting. Joe Lieberman was wrong about options accounting then and Kevin Drum is wrong about GSE accounting now, pretty much for the same technical reasons.
"A the time the CEO is paid no cash flows from the firm or the firm's stockholders to the CEO, and the CEO could not exercise his options for cash. Nevertheless, these options have value and are not 'free' to the firm and represent a real claim on future cash flows of the firm (in certain states of the world) and hence have value."
Okay, but in what ways have the current structures of Fannie and Freddie cost the government?
Every real estate agent, mortgage broker, and title company officer in the country knows more about Fannie and Freddie than Gov. Palin. These lending giants are at the heart of the residential real estate market. They aren't anonymous GSEs to people who make a living based on whether or not regular, middle-class Americans qualify for a home loan. You don't have to be a wonk to know that Fannie and Freddie are useful, important, and at the moment of her speech, free of tax payer subsidy. As a matter of fact, Wasilla since Sarah became mayor has been a bigger burden on American taxpayers than Fannie and Freddy in their entire history.
Submitted by stefan (not verified) on Mon Sep. 8, 2008 7:41 PM PDT.
Okay, but in what ways have the current structures of Fannie and Freddie cost the government?
Same as my CEO paid in stock options example:
"A the time the CEO is paid no cash flows from the firm or the firm's stockholders to the CEO, and the CEO could not exercise his options for cash. Nevertheless, these options have value and are not 'free' to the firm and represent a real claim on future cash flows of the firm (in certain states of the world) and hence have value."
CEO = GSEs
stock option grants = implicit guarantee of GSE liabilities
The only difference is that the CEO option is a call option, the GSE option is a put option, i.e. the call option is more valuable when the underlying asset price goes up, while the put option is more valuable when the underlying asset price goes down. Just work it through and figure it out.
re Fannie and Freddie Mae:
If the US was at all interested in having intelligent people with a plan for their presidents we wouldn't have gone through the travesty of the last 8 years; certainly not the last 4.
To have a VP that not only doesn't understand, but does not have the ability to understand what is going on economically right now, let alone the two biggest participants in the catastrophe, beggars belief.
How low can the bar go here? We're just completing 8 years with an socio/pathological idiot-savant in charge and we've learned nothing.
I know they say we get the government we deserve, but I'm not!!
Re Stefan's comments:
Depending on the profits of the company and the shares, options, and bonuses issued to management and staff, all issues constitute a dilution of profit, and possible distribution to shareholders or investment in the corporation for future growth.
The extraordinary growth in these disbursements and bias to the higher payed has definitely skewed from the prior 40 years (1940-80) of income and wealth growth across society ("lifting all boats" was a Reagan phrase) and pay to workers, leading to the highest disparity in income and wealth since Teddy Roosevelts diatribe against the industrialists 100 years ago.
None of this is helping the country.
Brian J, I suggest you make some attempt to educate yourself rather than relying on others.
That's what the Repubs are all about, I thought.
Submitted by Bonnie (not verified) on Mon Sep. 8, 2008 9:17 PM PDT.
Sheesh! We're afraid to do anything the right wing says we will do. When did we become such cowards?
Too many of you, even Ft. Lee Stefan, are wasting energy over what F&F are or are not.
The point of this thread is that Palin made a purposeful, red meat misstatement to the faithful who are, if possible, even stupider than her, suggesting, though not stating explicitly, that F&F have always been a tax payer burden. The fact of the matter is that their existence, along with FHA and VA, helped house about half of America since the end of WWII.
F&F have never taken a penny of tax money and did not implode because they are some socialist pork project that finally met its bloated and deserved end. Oversight was diminished over F&F and they, like everyone else in mortgage banking, was hoping no one was noticing that all the Moody's rated AAA bonds were composed mostly of gossamer and dog turds, and they were all hoping that the RE market would continue to inflate to cover these shitty loans as equity increased. The mortgage companies couldn't have cared less as they are always and only interested in initiation fees and sell all their paper to banks and entities like F&F.
Bottom line, as I've written here and elsewhere many times, is that this house of cards was built on the whole industry turning a blind eye to the millions of non-conforming loans that were made to millions of unqualified borrowers over the last six years or so. This and this alone is why F&F and some many other financial institutions have folded or are in trouble.
Submitted by Jassalasca Jape (not verified) on Mon Sep. 8, 2008 11:31 PM PDT.
Been reading a bit of pre-bubble legal scholarship on real estate securitization (for other reasons), and the rating agencies mentioned by Jeff II keep coming up. The vehicles developed to support real estate securitization were scultped to conform (with the emphasis on form) to the conditions set down in the risk assessment manuals published by Moodys and other leading rating services. A loan with a AAA pixie-dust rating became a fungible asset that could be bundled and sold onward, ultimately landing in the Fannie Mae or Freddie Mac pool (or shall I say "puddle"). It took a lot of effort from a lot of gleeful players to bring us here. As Jeff II says, it's a failure of oversight. Markets are great, but they don't happen by magic; they only work if they (are forced to) operate by sensible rules. That's what government used'ta be for, back in the day.
If the implied government guarantee for GSEs is to be expensed as a put option, then wouldn't we need similar put options for every conceivable future event in which the government can be expected to have unplanned outlays? Such as -- every possible future war, natural disaster, systemic financial failure, pandemic, collision with an asteroid, etc.?
The "GSE Implicit Subsidy" has undoubtedly been a tangible benefit to FM/FM, but this benefit was based only on the guarantee, not on any ongoing taxpayer costs. Although it may be possible to quantify the benefit, its valuation has nothing to do with the cost of a partial or total default -- and deriving an option valuation from this guarantee would be less than trivial (to begin with, you could not come up with any meaningful estimates of volatility or amount to be paid on "exercise", and of course there is no expiration date). And, as a matter of practice the government has not been doing this.
In substance, it seems that the Treasury acted mainly not to protect taxpayers but to reassure foreign buyers of US debt who had been buying FM/FM securities with the understanding, however unstated, that they were backed by the US government. The US cannot afford to make these foreign buyers nervous, or much worse things could happen.
As a Government subsidized entity, the state of Alaska is far bigger that Fannie and Freddy (I've noticed some have started to call them Franny)combined. Plus those rugged individualists that live there each get a check from the state's oil revenue.
Submitted by stefan (not verified) on Tue Sep. 9, 2008 3:46 AM PDT.
JS writes:
"The "GSE Implicit Subsidy" has undoubtedly been a tangible benefit to FM/FM, but this benefit was based only on the guarantee, not on any ongoing taxpayer costs. Although it may be possible to quantify the benefit, its valuation has nothing to do with the cost of a partial or total default -- and deriving an option valuation from this guarantee would be less than trivial (to begin with, you could not come up with any meaningful estimates of volatility or amount to be paid on "exercise", and of course there is no expiration date). And, as a matter of practice the government has not been doing this."
The US government can have expenditures other than handing over cash now. For instance, I'd be happy to be paid in out of the money put options on the S&P 500 that I promise will not be exercised for several years. Please send them my way JS since they don't cost you anything in your view. Yes, valuing put options even approximately is harder than incorrectly valuing them at zero. Yes, US government accounting does not reflect underlying economic realities. None of this means that the implicit GSE guarantees are not a cost for the government.
"Brian J, I suggest you make some attempt to educate yourself rather than relying on others."
What stefan was saying didn't seem to be accurate, so I was hoping that if I asked him to provide some numbers for his claim, he'd perhaps give a link to some research that proved it. Like you, I think Gov. Palin is talking out of her ass here.
"I'm a shill? For pointing out that her statement is at odds with Kevin's claims? For asking Kevin to think before posting the current day's meme?"
You're a shill because you continue to defend her indefensible and ludicrous statements and complete lack of understanding regarding subjects that should be 2nd grade math for a VP candidate. If she can't state what FM&FM are better than what she has, then we're in deep doo-doo.
"For saying that wrongly flogging this dead horse doesn't get us to defeating McCain?"
It's not a dead horse. This shit is important. We are going through some serious economic times right now entirely because of mortgage securitization, and if she can't be bothered to know about the finer distinctions regarding these issues, then she's unfit as a VP candidate.
"What did she mean by it? I certainly don't know. As I said, from the clip Kevin (and everyone else) chose to play up, it's quite conceivable she meant the damn things are too large too fail."
And that's why I think you're shilling for her. You take a statement like that and assume the most innocuous reason. Most people that know about these things in depth do not. It belies a greater problem with understanding and/or conveying serious economic matters.
"Do I think she's an economic wiz? No. Do I think it's quite likely in her role as homeowner and then to governor she has some familiarity the F&F? Yes. Do I think that means she knows it's a GSE? I have no idea what she knows."
Bingo. And instead of saying that we should just move on like yourself, I think a wiser choice would be for the media to press her on this issue so that we actually do know what a candidate does or doesn't know *before* they are elected. Bush pulled this with the US in 2000, and look where that got us.
"All I said was Kevin's quote doesn't live up to his claim.
And that makes me a shill."
Given what I've read from you in other posts, yes, it does. Read that sentence again. As Kevin stated she specifically uses too adjectives (big and expensive) that aren't in any way, shape, or form, true.
"Well, Mr. So Scared to Talk Politics that you're too afraid to even use a first name, you might consider why it is that many people consider us Democrats to be assholes and hypocrites. And why they might find "average Sarah" appealing, or god forbid, even "average George"."
Yeah, using my first name would make all the difference in the world, wouldn't it ?
"It might be because of douchebags such as yourself, who hate it when Bush says, "you're with us or against us" and then display the same sort of idiocy and thought and speech policing in web forums."
What are you talking about ? *You* are the one that took issue with Kevin's post. I'm simply saying that you're jumping to Palin's defense (again) in a dishonest fashion.
"Jerry doesn't agree with Kevin, ergo, I shall call him out as a shill."
That's not what is happening here, and you know damn well that it isn't. Kevin is attempting, as are other bloggers, to finally hold some of these ass-hat Republicans to *what they say*. Apparently you have no problem just letting these things go because you think they don't mean anything. I, on the other hand, demand a higher standard of candidate than you and expect people that want to hold the levers of power actually understand the issues that they'll be making decisions on.
"Keep playing divide and conquer with identity politics, jingoism, and web bullying, and watch us go down to defeat. Again."
Sorry if you can't take the heat, but my taking issue with your comments does not equate to us winning or losing, so get over yourself.
"In the meantime, brave little tyke, I would like to know OhNoNotAgain, why we aren't wiping out preferred stockholders and all holders of debt."
We are giving them a pretty big haircut, according to Barry Ritholtz at The Big Picture:
http://bigpicture.typepad.com/comments/2008/09/gse-takeover-ov.html
I think that a knowledgeable politician might have said "risky for the taxpayers" instead of "expensive to the taxpayers". As stated, I think Palin's words suggest strongly that she doesn't understand what's going on -- rather than that she holds the nuanced position that risk equals cost. Of course, both of these words have meanings that are often stretched -- but they are distinct words and concepts, and I don't think people in business or government should say "cost" when they mean "risk".
Again: If all possible future circumstances in which the federal government may reasonably be expected to spend unbudgeted funds (natural catastrophes, wars, etc.) were to be assigned current monetary costs, the government would be permanently bankrupt. (That applies to all businesses as well -- public companies are obliged to list their known business risks, but not to enter them in their expense or liability columns).
But I agree that guarantees should not be extended easily, precisely because of the risk they involve. And, having been extended, they should lead to a more intelligent analysis of current market circumstances, with the understanding that, historically, bubbles do happen and the government does not have to participate.
These GSEs were created by the government as private companies, presumably because of the prevailing notion that private businesses do things better. It's interesting that, when they screwed up (by riding the bubble), a Republican administration concluded that the government must step in, take them over, and replace their management.
One other point -- I think that the Democrats could use what happened here to explain why government guarantees are important -- and that privatizing social security would result in the removal of such guarantees, exposing everyone to the risks of runaway inflation and market crashes. The same, to a great extent, applies to health care that is not government guaranteed -- at a minimum, your insurance company can drop you for any reason at any time. It's easier to walk away from a house with negative equity than to lose your pension check or your health care.
Come on Barack, hit them with this one and expose the con game of the Republicans.
