McCain's running mate, Alaska Gov. Sarah Palin, speaking in Colorado Springs, Colo., said Fannie and Freddie had "gotten too big and too expensive to the taxpayers." The companies, however, aren't taxpayer funded but operate as private companies. The takeover may result in a taxpayer bailout during reorganization.Stein then went on to quote both liberal and libertarian analysts to say that she had made a mistake in saying that the two mortgage giants are "too expensive to taxpayers."
However, the Los Angeles Times real estate expert Peter Viles disagrees.
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 M. Paulson Jr. a blank check* to invest in Fannie or Freddie. It OKd 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.I'm sure she'll make mistakes in the next two months before the election. But we'll have to wait a bit longer for that true gotcha moment.
*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. (Emphasis in the original.)
(H/t Hot Air)
UPDATE: SCSU Scholars econoblog has some more analysis of this supposed gaffe.
Perhaps her opponents would like to score a TGO (technical gaffe-out), but I would say this argument barely lays a glove. The dollars were committed many, many years ago, back in its 1960s when the government was put on the hook for this and later legislation which allowed Fan and Fred to take on investments that were never the intent of the original design. The argument being made is akin to saying your home only cost you dollars after you paid the mortgage, not when you signed for the loan.