Sarah Palin’s private family emails have been compromised and published on the Web with the enabling of the MSM, specifically ABC News. Folks are calling for an investigation into — who illegally hacked her account and violated her privacy? No — rather, they want to know whether she may have improperly used her personal account to conduct official state communications.

Are these the same folks who howled when the federal government eavesdropped on terrorist communications that passed trough U.S. networks?

Just asking.

New terms are entering the public lexicon with the financial meltdown coinciding with the presidential campaign. The media would do well to explain “implicit guarantee” and “moral hazard” in their coverage, but naturally they prefer to concentrate on terms they already understand (“greed”) but do nothing to really explain the situation.

To complicate the situation, the candidates don’t seem to be able to explain the situation either, judging from the inane statments made so far. What are their economic advisors advising, exactly? 

It’s not rocket science. And you don’t have to be a regular reader of the Wall Street Journal to understand. When you take a financial risk, and keep the payout when the risk pays off, but transfer the loss to others (such as the taxpayers) when the risk fails, that’s a “Moral Hazard”.

Likewise, if a large financial institution profits from favorable financial backing which is not explicit (such as actual cash reserves), but taken for granted by all who invest in the institution, that backing is called an “Implicit Guarantee”.  

Either one of these distortions, if carried out on a large enough scale, can wreck a financial framework. Today, we’re faced with both simultaneously.

A lot of attention is being given to the Government Sponsored Enterprises (GSEs), Fannie and Freddie. Lots of experts have been warning for at least a decade that the implicit guarantee of a federal bailout should the values of their portfolios fall during a housing slump exposes too much risk to the taxpayer, unless the size of their portfolios were kept relatively small and manageable. Supporters of the GSEs (especially their highly compensated executives, shareholders, and political patrons) denied the existence of the implicit guarantee and allowed the portfolios to grow, surpassing $5 trillion and making  them the world’s largest holders of mortgage-backed securities.

When the housing downturn finally occurred, the critics were proved right and the taxpayers are now on the hook. Meanwhile, the shareholders were mostly bailed out, the executives kept their compensations and bonuses, and the politicians maintained their patronage. Implicit Guarantee, meet Moral Hazard. 

In fairness to the GSEs, who maintain that they didn’t ask for the bailout (thereby maintaining fealty to their denial of the implicit guarantee), we have to ask: what about Bear Sterns and AIG? Nobody thought that these financial giants were backed by an implicit guarantee, but now we see that they were, at least in the same sense that the GSEs were.

So now all a company has to do is accumulate sufficient financial liability to enter the category of “too big to fail” and therefore earn the implicit guarantee from the U.S. government. What’s next, the Big Three and the airlines?  

If our government is determined to follow this path to socialism, at least it owes the taxpayer the courtesy of not compounding it with more moral hazard, and not reward those who took the risk with our money.

One of Mac’s perceived strengths was his maverick reputation and the admiring coverage he received from the mostly liberal media for the decades since he first bucked the GOP establishment and selected policy objectives of GOP presidents since RR.

These ”strengths” were the same qualities that made conservatives suspicious of him, and attract so many crossovers from independents in large enough numbers to earn him the nomination.

But now that he’s the nominee, was he prepared for the turnaround of support from former “admirers”? Wasn’t he told that the media would abandon him in a heartbeat after the conventions? Was he prepared for the intensity of the bias and the vitriol from the big guns at the NYT, WaPo, MSNBC, CNN, Atlantic Monthly… ?

Perhaps he was. If so, the reasons behind his change in campaign tactics since the convention may be coming into focus.

Since Charlie Gibson interviewed Sarah Palin, there’s been lots of talk about the Bush Doctrine, and whether Gov Palin was prepared to talk about it. Thanks to the pundit who coined the term (Charles Krauthammer), the public should now know more about the Bush Doctrine than Charlie Gibson did when he asked the question.

Apparently, there are four parts to the doctrine as academically understood:

(1) The U.S. has the right to exercise its option to withdraw from agreements agreed by previous administrations when in its national interest (“unilateralism”, e.g., Kyoto and ABM Treaty)

(2) Neutrality in conflicts between the U.S. and its enemies, if it permits harboring terrorsists, is regarded as hostile (“You’re either with us or with the terrorists,” SOTU address)

(3) The U.S. has the right to neutralize immediate threats against its security before the attack occurs (“preemption”)

(4) Stability is best achieved through regime change and the growth of democracy in hostile countries (“democratization”, a.k.a.”neoconservatism”)

Separate parts of the Bush Doctrine are advocated and practiced by many countries and organizations (including the UN), and all have been practiced by the U.S. throughout its history, but not all by the same administration until GWB. Israel has invoked (3), and the UN has invoked (4). JFK has invoked (2), (3), and (4). Several presidents have invoked (1).

Even Barak Obama has expressed his support of parts of the doctrine, though he has not openly used the term “Bush Doctrine” when expressing his intention to unilaterally withdraw from NAFTA (1), and invade Pakistan to pursue Bin Ladin (2 and 3).

So it must only be the promotion of democracy abroad (4) that Sen. Obama and his supporters have problems with, not wanting to be in the same camp as those nasty neocons.

It’s interesting to observe that in spite of the overly-long and expensive presidential campaign season, that one candidate’s vulnerabilities and weaknesses are only now becoming apparent, after the party’s convention, and less than two months from the election.

Of course, much may have to do with the special nature of the two candidates — both Clinton and Obama had significant weaknesses, yet both were historical in terms of their identities, and neither had the temerity to stand up to the extremist wing of their party.

Yet if only Sen. Clinton had the wherewithal to stay in the race for a little while longer, she likely would have beat Obama, and things would be quite different today. A Clinton-Obama ticket would poll in the high 50′s, and McCain would be history.

Andy McCarthy on Obama’s campaign stumbles:

But he’s like a guy who got called up for the World Series after winning the high school championship: now, suddenly, the fields are bigger, the crowds are enormous and more discerning, and the other team is accomplished, professional and comes to beat your brains in — not to provide an exhibition in good sportsmanship.

It’s wrong to believe that Hillary’s supporters were anti-Obama. They were anti-Obama for president in 2008.

It’s obvious at this point that the sane, rational, long-term strategy for the Democratic party to regain the White House and become the party of Change was a Clinton-Obama ticket. This ticket would have been unbeatable. No one would be talking about Obama’s inexperience, or be uneasy about his flimsy past.

But they were too impatient. They wanted to leapfrog over the opportunity to elect the nation’s first woman president, and elect the first African American president. This mistake will prove costly, and is likely to prevent either from happening.

Instead, they ended up with an upside-down ticket, with the inexperienced youth at the top and the grizzled vet at the bottom. Almost like the Bush-Cheney ticket, except that Cheney had no ambition to be president, and Bush knew it.

Richard Cohen views the clawing and biting reaction from the Democrats backed into a corner as “consolidation“:

Thank God for Sarah Palin. Without her jibes, her sarcasm, her exaggerations, her smug provincialism, her hypocrisy about family and government, her exploitation of mommyhood and her personal attacks on Barack Obama, the Democratic base might never be consolidated. This much is certain: Obama could never do it.

He wants Obama to fight back, apparently unaware that condescending words such as his (e.g., comparing Palin to Caligula’s horse) have done precisely for the GOP ticket what he wishes for Obama-Biden.

If the Newseum needs to exhibit a current phenomenon afflicting the MSM, they could examine the growing propensity by major news organizations to report rumors before researching their veracity (or even bothering to). Do the “journalists” at the NYT, MSNBC, Newsweek, etc., do nothing more than scan the left wing blogs before reporting them?

Apparently they do, else they wouldn’t have been caught flat-footed when McCain announced his VP pick. Oops. Sarah Palin wasn’t even rumored to be on the short list. I can imagine what the editors were screaming to their “reporters.”

Embarrrassed that a leak wasn’t dropped into their laps by a left-wing blogger, they had to do something to save face. They could have admitted their surprise and praised the McCain campaign for its originality and discipline.

Or not. Instead, they dutifully reprinted every rumor they could find, and when the rumors were later found to be (a) false or (b) irrelevant, no problem, bring up a new one. And when no more rumors could be uncovered after a couple of days, then start one yourself, namely that since McCain was (presumably) unprepared for the barrage of rumors, then she couldn’t have been properly “vetted.”

So now we are supposed to believe that these bumbling news organizations who were not only clueless about the actual McCain campaign inner workings to anticipate its VP pick, but also completely ignorant about the pickee, are now suddenly and sufficiently informed to conclude that the vetting job was too hastily performed?

Back to the Newseum: this whole affair deserves its own gallery, alongside the John Edwards and Dan Rather episodes.