Next President Weakened by Financial Crisis

After the American Century

The world stock markets have been in turmoil, falling drastically and bouncing back on the news that the US Federal Government will take over huge amounts of bad debt built up by irresponsible banks. Many of them, we now know, were lending out immensely more money than they had themselves, and often lending it to people who could not afford to meet the mortgage payments. Woody Guthrie once said that some men rob you with a six-gun, others with a fountain pen. The investment banks have robbed millions of Americans, not once but twice. First, by getting them into mortgages they could not afford, and second by dumping their mistakes on the taxpayer's doorstep. Elsewhere around the world, people and institutions who bought some of this debt were "only" robbed once.

Just how much this will cost taxpayers is unclear, but early estimates suggest $1 trillion. The US does not have a surplus in its coffers, nor does it currently have a tax system that can cover this sudden additional debt. Both McCain and Obama have been talking about reducing taxes on the middle class, but after this week that may not be realistic.

Foreign investment in US government debt has been keeping the country functioning. In July of 2008 Japan and China each owned more than $500 billion in US Treasury bonds, bills, or notes. Investors from oil exporting nations have bought $174 billion. (Click here for a full list.) Why should Chinese, Japanese, and Saudi investors still buy American debt? Why not buy European government debt which has a higher interest rate? Indeed, will there be enough buyers for $1 trillion in new US treasury bills and bonds? Keep in mind that because the dollar has weakened considerably during the Bush years, such investments may not be profitable.

I hope that I am wrong, but in twenty years historians may see that the autumn of 2008 was the moment when the US lost its leadership of the world economy, and argue that it was the time when the hegemony of the American century ended. Of course, it seems that the US government has just stepped in and saved the world's economy, after its reckless bankers almost ruined it. But the nation cannot emerge stronger than its rivals from this crisis. China, Japan, India, Brazil, and the EU likely will gain on the US. Their economies have not suddenly been burdened with $1 trillion extra debt on top of an equally large debt created by the Iraq War. (For more on this, see Niall Ferguson's thoughtful op ed piece in the Washington Post.)

Even before this crisis the US budget was severely out of balance. The sudden increase in debt means that the future president will have less scope in foreign policy. It will be - even more decisively than before - a debtor nation, one which cannot afford to offend its creditors. And should the next president want to start a new war or underwrite a new peace, how is he going to pay for it?

The added $1 trillion debt will also make it harder for the next president to fund social programs, such as extending medical coverage to all Americans. All of a sudden, there is a whole lot less money to work with. Borrow $1 trillion at, say, 4%, and just servicing that debt will cost $40 billion a year. That money will not be available for schools, research, creating a new energy economy, or roads and bridges.

The next president will struggle to move forward dragging a $1 trillion ball and chain. The investment banks have not only robbed the public twice; they have weakened the next president and diminished the US standing in the world.

McCain's Hypocritical Attacks on Wall Street

After the American Century

The Republicans have shown themselves to be reckless and irresponsible stewards of the economy, not just this time but in the 1980s as well. In each case, they overspent and undertaxed, weakening the economy and driving up the national debt. In each case, major banking scandals arose at the end of their eight years in office. Back in the first Bush presidency, it was the Savings and Loan Scandal, as more than 700 savings and loan banks went bankrupt. They had been deregulated - does this sound familiar? - by the Republican Administration. Capitalism freed of interference from Washington would flourish. Instead, a wave of mismanagement and corruption followed, and none was more flagrant that a certain Charles Keating. A Californian investor, he cultivated relations with five members of the US Senate. One of them was John McCain.

That deregulation debacle required a Federal bailout for the banks that cost the American taxpayer more than $120 billion. Senator McCain was involved, though he escaped indictment. For some reason, he does not talk much about this episode in his career. McCain was one of "The Keating Five," who were accused of improperly using their office to advance the interests of Keating's bank. In 1991 he was investigated by his colleagues in the US Senate. Though he was not found guilty of specific crimes, the Senate Ethics Commitee determined that McCain had shown "poor judgement" by being involved. Keating was found guilty of illegal activities and went to prison for five years.

A quarter century ago McCain had an up-close-and-personal look at the damange that deregulation can cause in the banking industry. But he apparently learned nothing from it, and today he advocates the same policies he did in 1990, the year before he was investigated. Keeping this episode in mind, what does he mean when he says, as he repeated in the midst of the current crisis, that the American economy is fundamentally sound? Is he naive? An apologist for the many bankers who have contributed to his campaign? Or possibly a fool when it comes to economics? You don't need to know economics to graduate from a military academy. And he was unable to manage the economics of his bid for presidency the first time around.

On the positive side, McCain has not flip-flopped on this issue, as he has on so many others. On banking regulation, he has held the wrong position consistently. And he has been quite willing to put the taxpayers' money to work bailing out the "free market" banks when they mismanaged themselves into insolvency. McCain is hypocritical when he attacks Wall Street. He has been in bed with the bankers during his whole Senate career. He takes their contributions and when they get in trouble, he bails them out. He is a hypocritical populist as well, because the Republicans ultimately bail out the banks, not the little guy facing foreclosure.

This should not surprise anyone. Bush II gave the largest tax cuts to the wealthiest Americans. McCain criticized that policy in 2001, but then flip-flopped. Today he endorses the Bush tax code and wants to perpetuate it. If only it had been the other way around. If only he had flip-flopped on bank deregulation and maintained his 2001 position on taxes. Then McCain would have the same ideas about the economy as Obama.

The Republican Economy Needs a Federal Referee

After the American Century

Some months ago I criticized the Bush Administration's decision to give money to taxpayers across the board, rather than focus it where the real need was, in the mortgage market. It was clear to me, but apparently not clear to Republicans, that home forecloseurs threatened the whole economy. In the last week this truth has been demonstrated with frightening clarity. Two of the oldest and largest and once most respected investment houses in the United States have disappeared. Lehman Brothers has gone bankrupt and Merrill Lynch has been purchased by Bank of America. Both got into trouble because the Republicans refused to regulate investment bankers, which meant that a large part of the economy escaped scrutiny from the Federal Government. This created an uneven playing field, where regular banks played by different rules than investment houses that went into banking. A great many irresponsible mortgages were approved. A housing bubble emerged and expanded - and then popped during Bush II's second term.

Bear Stearns was the first big investment bank to collapse, and the Feds brokered a deal to sell it off for a fraction of what had been its value. Quite properly, the regulators did not bail it out. But the underlying problem of unregulated investment banks making risky loans did not go away. In fact, so many people had been encouraged to buy property that they could not afford,that the Feds soon had to rescue Fanny Mae and Freddie Mac, as the two giant mortgage companies were known. These had functioned without serious problems for generations before the Republican true believers in unfettered capitalism let the investment banks run wild. Like athletes on steroids, they bloated up rapidly and looked powerful, but a mere slowdown in the economy, not even a major recession, put them in trouble. The home owners who went into foreclosure ended up dragging down to ruin some of the (once) most respected banking houses in the world. The end is not yet in sight.

Last night the Federal regulators reluctantly came to the rescue of the American International Group, the largest insurance company in the US. A "loan" of$85 billion dollars. I call that welfare for the capitalists. If the Bush Administration followed the logic of deregulation, then it ought to let any such mismanaged company go into bankruptcy, as Lehman Brothers did. But no one dared. The economic truth is that the markets for insurance and investments and real estate are now tied together in so many intricate ways that a gigantic failure like that would start an avalanche that no later intervention could stop. It would be 1929 once again.

For the mismanaged Bush economy is by no means out of the mess that the Republicans have created, both as lawmakers against investment bank regulation and as the the party of Wall Street. If McCain were elected, one can expect more of the same mismanagement. He has never been a supporter of regulation, but rather when things go wrong he has intoned against "greed on Wall Street." Such moralism appeals to non-investors on small incomes, but it is hypocritical for McCain to pretend that the whole problem is due to a few greedy people. McCain and the Republicans generally, do not want to recognize the need for government. On the highway we need police to regulate traffic, so that reckless drivers do not cause major accidents. In the same way, Wall Street banks need some limits (try collateral) and safety controls (such as larger minimum cash reserves) so that foolish loans do not wreck the financial system. Instead, they are rushing in after the fact with an $85 billion bailout, guaranteed by the taxpayers.

McCain naively believes in "market discipline." That is like saying he expects football players not to be rough if there are no referees. Actually, McCain seems to believe in a system in which potential referees can accept payments from players. The New York Times reports that the McCain campaign has received large contributions from investment bankers, including more than $300,000 from individuals working for Merrill Lynch. His contributors are the very people he now condemns for being greedy capitalists.

Senator Obama, in contrast, back in March was calling for investment bank regulation. He has consistently done so. In the current economic meltdown, it is well to remember how well the economy was doing from 1992-200o, when the Democrats were in charge. More than one million new jobs were created each year during the Clinton Administration, and the budget was in surplus, with the national debt rapidly disappearing. In the Clinton economy almost everyone was better off. Obama is calling for a return to that tax system, which did ask wealthy people to pay more, but they ultimately also benefited from growth and a strong economy.

George W. Bush dismantled that system, which was working so well. Americans now have an economy where everyone is losing. Homes are losing value, stocks are falling, and jobs are disappearing. Bush will be remembered as a president who failed both domestically and in foreign affairs. McCain, who voted with Bush II 90% of the time, offers more of the same.

Sarah Palin Failed Her Oral Exam

After the American Century

Two weeks after she was unveiled as the VP nominee, Sarah Palin has done nothing to dispell fears that she knows little if anything about foreign affairs. She performed poorly in the only interview she has given the press, even though that interview was restricted to one journalist from ABC News, and even though the interview only dealt with the single topic of foreign affairs.

Palin had days to prepare herself for this interview, and she had access to experts to help her, including Joe Lieberman, who spent time with her. Either he was a poor teacher, or more likely, she was a poor student. For she showed herself completely unable to explain the Bush Doctrine or to say anything coherent about Russia and the crisis in Georgia. She was hardly being asked arcane questions. These are matters that any regular reader of the New York Times, Los Angeles Times, or Washington Post should be able to talk about.

Palin had less knowledge about US foreign policy than my graduate students. They are Danish and speaking a second (or third) language. Palin only got a passport last year, has never lived or worked abroad, never met a head of state, never learned a foreign language, never been involved in anything international, and never said anything thoughtful or clever about foreign affairs. Had Palin been taking an oral exam for a course on American foreign policy, I would have failed her, and so would any other professor. She kept talking off the point. She did not know about major recent events, She obviously had not done any reading, and she was unable to offer any larger perspective on the issues raised. Like the ABC interviewer, I might have ended up going easy on her, not asking any really hard questions, so as not to destroy her self-confidence too much.

What can we conclude from the Palin interview?

(1) Palin does not know anything about recent developments in foreign affairs. She apparently thinks that we invaded Iraq to get the terrorists responsible 9/11. This preposterous lie was repeatedly told by the first Bush Administration, but has been discredited, along with the non-existent weapons of mass destruction. But it does seem quite possible that Sarah Palin herself could become a weapon of mass destruction, should she get her hands on the nuclear button. As she put it, "I have the confidence in that readiness and knowing that you can't blink, you have to be wired in a way of being so committed to the mission, the mission that we're on, reform of this country and victory in the war, you can't blink."

(2) Palin does not regularly read the newspaper stories about foreign affairs, she has almost certainly never read a book about any aspect of it, because she could not even recover her gaffe - not knowing the Bush Doctrine - by at least discussing the history or background of such a policy. She simply has no clue. This makes her quite dangerous as a national leader. Add to this that neither she nor McCain ever studied law, so they are ill-equipped to think about treaties, if they ever wanted to negotiate one rather than to intervene or fight.

(3) Palin apparently does not exactly know that she is unprepared. She appears to think that the rest of the world is not that difficult to grasp, and whatever knowledge necessary can be picked up on the run. The main thing, apparently, is, as she kept repeating, one must not blink. One must be tough. We have now had eight years of mostly mindless toughness. It is a failed approach - let us not pretend it amounts to a policy or a philosophy. Palin is so ignorant that it is only vaguely beginning to dawn on her that she knows nothing, and the immediate reaction seems to be to blame the media. How dare they attack her? How dare they embarras her? How dare they think that what they know is so important? And so forth.

(4) The McCain team have had good reason to keep Palin away from the press. She has also refused to answer any questions from the public off-the-cuff. Unfortunately for McCain, this is a long ways from the "straight talk express."

The Republicans have found, in Sarah Palin. the potentially most deadly form of mass destruction yet seen. In the last seven years they may not have found whoever sent that anthrax powder through the mails. In the last seven years they may not have caught Osama bin Laden. They may not have found any weapons of mass destruction in Iraq. They may have run up the deficit and the balance of payments to their highest levels in history, destroyed the housing market and quite a number of banks. But surely the American public will not let a few mistakes like that undermine support for the Republican Party?

We must give John McCain and his fervent Republican supporters full credit for finding someone, right in the United States, who has the potential to unleash destruction on an unheard of scale. Her ignorance and self- assurance are perfectly combined. I feel confident that Sarah Palin is prepared not to blink if given the opportunity. I feel certain that, like George Bush, she will start a new war or use any means necessary to defend the world as she sees it. Having no law degree and filled with a sense of righteousness, she is not merely unqualified to be vice president; she is spectacularly dangerous, a real bombshell.

What the Press Must Find Out About Palin

After the American Century

Sarah Palin remains largely an unknown. But some disturbing questions have arisen since her nomination. She must be judged in the court of public opinion, like all other candidates. Voters have a right to know what a candidate actually stands for. All of the following statements now appear to be true, but we need further investigation by the press to be certain.

(1) Palin is a Prevaricator. She lied about her support for the Bridge to Nowhere, and actually did support it and ultimately did get the pork: $223,000,000 from the US Treasury that Alaska did not need.

(2) Palin attempted to censor the books in her town library, and to fire the town librarian without cause.

(3) Palin holds extremist views on evolution, global warming, and biological research, and would use her public office to promote her views, for example through giving large sums of money for conferences devoted not to scientific research but to promoting her views. [As governor she has given $2 million to a conference seeking to discredit the reality of global warming.]

(4) Palin has fired public officials guilty of no wrong-doing, misusing her power.

(5) Palin has little knowledge of the law, specifically the Constitution of the United States, and might not be a reliable guardian of its provisions concerning the separation of church and state.

(6) Palin and her husband have given support to a party that is working for Alaskan independence, on the grounds that its accession to statehood did not meet UN guidelines.

(7) Palin has been a member of an extremist church that holds views many other Christians would not find acceptable.

Again, these statements appear to me to be true, but the evidence is sketchy, and the candidate has not been forthcoming. To date, she has not given a press conference or a no-holds-barred interview. Such seclusion is inappropriate for a someone running for Vice-President.

For more questions rasied about Prevaricator Palin, see this piece in the New York Times. Or have a look at this editorial in the same newspaper.

Prevaricator Palin is a Pork-Barrel Politician

After the American Century

McCain and Palin are claiming that they are running against Washington and against pork in the budget, with the "bridge to nowhere" as their shining example.

Here is what Rueters says about it: "In the city Ketchikan, the planned site of the so-called "Bridge to Nowhere," political leaders of both parties said the claim was false and a betrayal of their community, because she had supported the bridge and the earmark for it secured by Alaska's Congressional delegation during her run for governor."

Palin only dropped her support after protest and ridicule was heaped on the project. But Palin still got the pork, $223,000,000. Without building the bridge she still got her hands on the money and spent it on projects in Alaska. Put this in perspective. Alaska has enormous oil revenues and charges its citizens not one dime in income tax, but instead sends them a sizable check every year. Yet Sarah Palin had her greedy hands out for $223,000,000, money that US taxpayers can ill afford to give away.

Alaska can afford to take care of itself, but Palin wanted to have it both ways. She wanted to strut around the stage in St. Paul claiming she stood on principle against that nasty bridge to nowhere, and yet at the same time she took a quarter of billion dollars in pork. So should we give her the name she deserves, Sarah "Pork-Barrel" Palin? Perhaps this has unacceptable sexist connotations, as does Sarah "Piggy" Palin. Therefore, in this space she will now be labelled in a more genteel manner, as Prevaricator Palin. Because she lied. She lied first to the people of Ketchikan, saying she supported the project and then did not. And then she lied to the American people, presenting herself as a reformer, when she is the worst sort of politician. The worst kind is the one who not only lies but double-crosses her supporters. That is what Palin did.

She cannot take the money and then say she is against pork. She claims to be running against Washington, but she was quite happy to rob the American treasury of money that Alaska did not need.

Prevaricator Palin is also rather coy about her past. We are still curious about her husband's membership in a political party that wants Alaska to succeed from the United States. We do know that she issued a friendly message to that party when they held a convention. Prevaricator Palin may not be aware of it, but there was a Civil War fought about this particular question. And here is a news flash for her: the right to succeed was not vindicated in that conflict.

We still do not know why she attended four different universities to get her BA.

We do not know why, as mayor, she build a sports center on land without clear title to it, costing the town large sums in legal fees.

We still do not know why she on several occasions asked her town librarian about removing books from the library. What books was she concerned about? Books about evolution? Why did she try to fire the town librarian? Did she abuse her office in firing other persons, both as Mayor and Governor? She did fire a number, and in at least one case it seems to have been a personal vendetta. What does Prevaricator Palin have to say about this?

I am counting on the American press to vet her, just as they have the other candidates. And I am counting on Prevaricator Palin to scream discrimination and sexism and who knows what every time the American press finds out anything about her. But news flash: that is how democracy works.

Who Would Win If the Election Were Tomorrow?

After the American Century

With less than two months to go, the presidential election still looks very close. According to a compilation of many polls made by Real Clean Politics, Obama has a very small lead. Their projection is that if the voting were tomorrow, Obama would get 273 electoral votes, just three more than needed to win. McCain would get 265. This is something of a worst case scenario for Obama, because it assumes that he loses Ohio, Indiana, Virginia, North Carolina, and Florida, while winning Pennsylvania, New Hampshire, Colorado, and New Mexico. For McCain, such a map suggests that he should make a special effort to win New Hampshire and New Mexico, because as it now stands, getting either one would make him President. For Obama, it is equally clear that he should try harder in Virginia, Indiana and Ohio.

However, these polls should not be taken too seriously. The majority of the state polls that are the basis for this map are still from before either of the conventions. They do not reflect the Democratic show of unity or Palin's addition to the Republican ticket. More revelations about her background are possible, and newer polls will reflect the continuing exposure she receives. Given the lag time between polling activity and events, a better picture should emerge in about two weeks.

Nevertheless, the strength of the Republican ticket should be worrying the Democrats. They seem much further ahead of Republicans in the battle for House and Senate seats. Certainly, they cannot now assume they will win the White House in November.

Of course, there are also national polls focusing not on the electoral count, but on the percentage of support for either candidate. Neither has been able to rise above 50% in these polls. Three released yesterday all put Obama ahead, by 2% (Rasmussen), 4% (Gallup), and 6% (Hotline). Looking at these is a bit like reading tea leaves, but it struck me that the poll giving Obama the biggest lead also had the largest number of undecided voters, no less than 14%. The more voters were forced to make a choice, it seems, the better McCain did in these surveys. In other words, it looks as though about one voter in seven is uncertain, but if forced to choose, they go to McCain more easily than to Obama. The next 58 days both candidates will be fighting to win these swing voters, especially in the swing states.

Update: Since writing this, new polls made by Rasmussen put McCain and Obama in a dead heat, while at least one other poll suggests that McCain is leading after the Republican National Convention. Sarah Palin has emerged as the most popular of all four candidates, at least for the moment. This is a remarkable tribute to the gullibility of the electorate, and it illustrates the size and sheer stupidity of the right wing of the Republican Party.

Compared to Biden, Palin Beyond the Pale

After the American Century

Compare Sarah Palin with Joe Biden. He went to the University of Delaware, majoring in history and political science, and then completed a law degree at Syracuse University. He was elected to the Senate when just 29 and now has served there for 35 years. He has been fully vetted by the press, as a result. There is little likelihood that there are any skeletons in his closet.

In contrast, Palin's shorter life remains largely undisclosed. Several blogs back I said that she had attended the University of Idaho for her BA. This was what it said on her official website, and I was silly enough to believe it. In fact, she attended four different schools, moving five times in the space of five years.

Hawaii Pacific University fall, 1982, in business administration
North Idaho College spring and fall, 1983, general studies
(whereabouts unclear) spring of 1984
University of Idaho fall 1984, spring 1985, broadcast journalism
Matanuska-Susitna College fall 1985,
University of Idaho spring 1986 to spring 1987, broacast journalism.

It seems difficult to uncover good reasons for all this moving around. In my more than three decades of teaching, I have found that such peripatetic students are rare, and usually there is something wrong. A student who moves that many times cannot build lasting friendships and usually there is something amiss when someone never settles down for long . It can be problems at home, poor grades, a stalker, a death in the family, pregnancy, or any number of things. College students can have a huge range of problems. Palin studied for nine semesters over a space of five years to get a four year degree. So either she failed some courses or some of them were not deemed transferable. There may be good explanations for this moving around, but it would be nice to know what was going on before election day. Even if the explanations are convincing, her education could not have been particularly coherent, being a mishmash of courses from different curricula.

None of the schools Palin attended is an educational powerhouse. They lie on the outer edges of quality. There is some meaning in the ratings of universities put out by various independent organizations, notably Business Week. None of the places Palin attended is in the top 400 institutions of higher learning in the United States. To bounce around in this educational nether world is not encouraging. At the very least, it suggests merely average intelligence and lack of focus. Her record is quite a contrast to Joe Biden's, who completed both his BA and law degree in the minimum time - 7 years - attending just two universities, both of them well-regarded.

Imagine that you have a job to fill. Not something as exalted as Vice President of the United States, but a mid-level position at a fortune 500 company. Imagine that Biden and Palin applied, and imagine that the selection process was blind. All you have to go on is their educational transcripts, with no idea of whether the candidates are male or female, old or young, experienced or not. Which one of these applicants would set alarm bells ringing, and which one would seem a good prospect? Biden alone stands for stability, rapid execution, and quality. Palin stands for uncertainly, instability, slow execution, and mediocrity. Palin just doesn't measure up.

There is a clear connection between having a second-rate, mishmash of an education and many of the policy positions Palin holds. How many well-educated people think that "creationism" is a valid theory that ought to be taught in the schools? She does. How many well-educated people think that global warming is not a problem and that it is not caused by human activities? She does. How many well-educated people would agree with Palin that there is never a good case for abortion, even when the mother's life is threatened or even when she has been raped? She does. Is there any pattern here?

It seems unlikely that Sarah Palin actually has any ideas beyond what she reads on the teleprompter. She merely has opinions that she has received uncritically from others. She is passionate about unexamined notions, and she has the self-righteous certainty of a poorly-furnished mind. Putting her a heartbeat away from the presidency would be the worst mistake the American electorate ever made. (And I make that statement with a full knowledge of some impressive past mistakes.)

Sarah Palin's Clichéd Acceptance Speech

After the American Century

Many people felt that Huckabee was an inexperienced, right-wing, findamentalist Christian who would be completely unsuited to be President. Sarah Palin is Huckabee with less experience and wearing a skirt. But in her acceptance speech last night she downplayed her more extreme views to appeal to the mainstream. She did not say much in her 38 minutes, and indeed there was not a single idea in the first 17 minutes, as she introduced her children, her parents, and her husband, and presented herself as a typical "Hockey Mom" who got into politics at the local level.

She also presented herself as an opponent of the oil companies, who nevertheless pay most of Alaska's expenses. It is quite a good joke for the Republicans to pretend they are against big oil companies, who contribute to their campaigns. Both Bush and Cheney are former oil executives with close ties to the industry. But the current administration was erased from the speech. Were it the only document of these years to survive into some distant age, a historian would not be certain who was president or vice-president.

Palin presented herself as a fiscal conservative who kept the budget balanced. News flash: Alaska, like oil-rich Norway and Kuwait, has long had a budget surplus. She came close to claiming that the US could produce enough of its own oil and gas to avoid dependence on unstable foreign supplies. Not true, of course. As is typical of Republicans, her claim was that all the US needs to do is produce more and more power of all kinds. This failed "policy" has been the Republican mantra since Richard Nixon and Gerald Ford. Republicans always focus on enlarging the supply, forgetting about the far more easily achieved possibility of reducing wasteful demand.

Palin also attacked Obama, of course, the usual task of vice presidential nominees being to attack the other side. She said that having run a small town of 6,000 was more valuable experience than being a community organizer, because she had real responsibility. She did sink to a new low, however, in ridiculing the idea that people of accused of terrorism have legal rights. This sounds like the Bush approach to human rights. Of course she did not mention that she has at best a sketchy idea of law, having never been the law school. Obama has taught constitutional law at one of the finest law schools in the United States, the University of Chicago, and he was editor of Harvard Law Review. McCain finished in the bottom 2% of his undergraduate class and has no further education.

Palin accused the Democrats of preparing to raise taxes. She managed to avoid mentioning anything about the Bush Administration's large and unfunded reductions in taxes, most of which went to the wealthy. She managed to avoid any admission that the largest dificit in American history was created under the present Republican administration. Listening to her, it seemed that the Democrats actually were responsible for the deficit and unbalanced tax system.

In a particularly Orwellian moment, Palin presented McCain and herself and the Republicans in general as the enemies of special interests! But which candidate has accepted their contributions and filled his staff with lobbyists? Which candidate has voted with George Bush more than 90% of the time? It is absurd to pretend that McCain is an outsider who is against the establishment, against lobbyists, against Washington. His father was a 4 star admiral, he went to the Naval Academy, he has been a Senator for decades. McCain is the insider in this election, though you would not guess it from Palin's speech. And indeed, that is one of the reasons she was selected, because she is from the place farthest away from Washington. (Except Obama's Hawaii, of course.)

There was little content in Palin's 38 minute speech, often punctuated by wild cheering and sign waving, as is the custom. At the end she stood on the stage with all her children, holding her baby. The crowd loved it, and went completely wild when McCain made a surprise appearance on the stage.

Conclusion: this was a successful speech for the party faithful, but an empty Orwellian moment for anyone who thinks about it. There was not one new idea anywhere in that speech. Palin made it sound like the Republicans had not been in the White House the last eight years, and that she was running against the party in power. She scarcely mentioned the terrible state of the economy. She wrapped herself in the flag and ran against Washington. The old cliche is that when a politician has nothing else to offer, then it is time to campaign on God, the flag, family values and apple pie. That is all we got from Surah Palin.

Palin's speech illustates once again H. L. Mencken's aphorism, "No one ever went broke underestimating the intelligence of the Ameican public." Palin will appeal to many precisely because she has no new ideas, because she repeats clichés with enthusiasm and apparent conviction, and because she has five children.