Did Palin really make a Fannie-Freddie “gaffe”? Posted on September 9th
“Palin Makes Her First Gaffe,” the left-leaning Huffington Post reports tonight, arguing that Alaska Gov. Sarah Palin has made her first big mistake of the campaign, in a comment about the Fannie Mae and Freddie Mac bailout.
Here’s the comment at issue: Over the weekend Palin said Fannie and Freddie had “gotten too big and too expensive to the taxpayers.”
Gotcha, says HuffPost — the bailout has yet to cost taxpayers anything! It’s not expensive — at least not yet! Palin’s wrong! Blogger Sam Stein writes:
Economists and analysts pounced on the misstatement, which came
before the government had spent funds bailing the two entities out,
saying it demonstrated a lack of understanding about one of the key
economic issues likely to face the next administration.
“You would like to think that someone who is going to be vice
president and conceivable president would know what Fannie and Freddie
do,” said Dean Baker, co-director of the Center for Economic and Policy
Research.
My take: The Palin comment is well within the margin of error on the campaign trail. There is no “gaffe” here. Congress earlier this summer — in the housing bill that both John McCain and Barack Obama supported but didn’t bother to vote on — gave Treasury Secretary Henry Paulson a blank check* to invest in Fannie or Freddie. It OK’d a big bailout. Perhaps in your book a blank check freshly signed by Congress is not “too expensive.” Perhaps you trust the government not to spend a blank check. Perhaps pigs have wings. Palin was right: The very existence of a blank check means that Fannie and Freddie are too expensive to taxpayers.
*In a comforting bedtime story that several members of Congress actually believed, Paulson said the blank check was so big and powerful (a bazooka of cash!) he would never have to use it. By the time Palin spoke, it was clear that Paulson’s attempt at “verbal intervention” had failed and that real taxpayer money will be spent to prop up Fannie and Freddie. No one knows how much, but the Treasury has signed contracts to invest up to $100 billion in each company. Oh, and loan them money too. Oh, and buy their mortgage-backed securities. Do you really want to argue that she made a mistake by saying the two companies are “too big and too expensive to the taxpayers”?
Give her time, and a few one-on-one interviews. I’m certain she’s as capable of the other three of a real screwup. This is not it.
–Peter Viles
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Photo Credit: A.P.