Markets Boo McCain's VP Choice

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Alongside last Friday’s announcement that Alaska Governor Sarah Palin would be John McCain’s running mate, the Dow Jones Industrial Average fell 170 points. Stocks have shown weakness ever since.

While there are many factors that move markets, a looming electoral contest between a tax-hiking Democrat versus a nominally pro-growth Republican surely weighs heavily on market psyche. It says here that the markets concluded last week that whatever John McCain’s true economic views, on Friday he handed the election to the anti-growth candidate with his selection of Palin.

Stocks were presumably booing a running-mate choice that will greatly aid Barack Obama’s election in November. Running against a candidate suddenly much less credible thanks to the Palin selection, Obama will now have much less reason to temper the liberal rhetoric that’s put him within striking distance of the White House.

Indeed, while various conservative columnists have excitedly written of disaffected Hillary Clinton voters that will be won over in concert with a now placated conservative base (the obvious paradox there remains unexplained), the fall in share prices perhaps speaks to the loss of economic libertarians (including this writer) and other conservatives who see McCain’s blatantly political move as evidence revealing how unserious and unprincipled he actually is.

Put simply, if he’ll suggest with a straight face that someone with a thin political resume about whom he knows very little is the most qualified person to replace him in the event of tragedy, wouldn’t he also talk up tax cuts with similar vigor despite a modern record showing hostility to same? For economic libertarians already skeptical about his pro-growth bona fides, McCain’s selection of an unknown when it comes to policy for the nation’s second highest office is evidence that he’ll say and do anything to get elected; his true views to be determined.

Seeking to make lemonade out of lemons, one pro-Palin op-ed noted a “maverick” Alaskan politician who risked “her political career by protesting ethics violations.” That sounds good at first glance until it’s recognized how very political were the “risks” Palin took.

Indeed, as the mayor of a town that until last Friday 99.9% of Americans had never heard of, it was politically astute for Palin to take on Alaska’s corrupt political establishment to clear her path to Juneau. In her coming-out speech Palin alerted voters to her opposition to the much reviled “Bridge to Nowhere,” but as a Washington Post story showed on Monday, her “opposition” to the Bridge was far more nuanced than she originally revealed. Further reports have shown Palin to have been far more open to earmarks, including those her running mate opposed.

In a Wall Street Journal op-ed, conservative commentator Fred Barnes lauded Palin’s selection for bringing “desperately needed diversity to the Republican ticket.” Put more bluntly, conservatives will now engage in gender politics without regard to actual merit or ideas in order to get elected. What’s that they say about what happens when a Democrat runs against a Democrat?

Worse, in another Wall Street Journal op-ed, McCain senior policy adviser Nancy Pfotenhauer ascribed chauvinism to those skeptical of Palin’s experience, all the while suggesting we should be impressed that Palin “has never shied away from challenging the influence of big oil companies.” It used to be that Republicans embraced oil companies for giving consumers what they wanted, but if conservatives can suddenly embrace gender rhetoric about “18 million new cracks” on the glass ceiling, why not the anti-business rhetoric that is also part of the opponent’s playbook?

But if Palin’s “toughness” when it comes to Big Oil is ignored, what’s gone unanswered is that if Palin was in possession of such a wise mind when it came to oil, and with oil a very large campaign issue, why up until now did McCain not actively seek Palin’s allegedly sage council on this most pressing of issues? Furthermore, why didn’t Palin have a senior position in the McCain camp all along to serve as his “energy czar”?

Since Palin was not part of McCain’s inner circle, we’re now asked to believe that someone he hardly knows is in his mind the most qualified person to potentially take the reins from a man who just turned 72. So while some may be giddy about a re-energized conservative base, what’s unknown is how many other Republicans and libertarians within the GOP bloc might sit on their hands in November rather than embrace the gender politics that led to the nomination of someone whose political leanings are mostly unknown, whose experience is charitably thin, and who possesses some of the anti-corporate views held by her perhaps future boss.

Time will tell, but market uncertainty since Palin’s nomination perhaps speaks to unhappiness among part of the electorate with the blatant, non-maverick, politics that led to her selection. To her credit, Palin is proud of her husband, but as the alleged party of economic growth, since when is it so that the Republican base would feel more in tune with Palin for her husband being a union member with a fancy for snowmobiling? Would she have not gotten the nod if her husband was an oil executive, investment banker or entrepreneur? Given their tight bond, would the whisperings of a non-union executive somehow hold less insight? Various commentators have waxed poetic about Palin’s down-home roots and an ability to talk on the same level as the “lunchbucket” (a more silly word would be hard to find) crowd, but if the base now embraces “glass ceiling” imagery, why not hit it with nonsensical talk rooted in class warfare?

If Palin’s experience or lack thereof for the nation’s highest office can be ignored in the way Obama partisans would like his similarly thin resume to be forgotten, the question when it comes to Palin becomes one of judgment. Both campaigns have done the politically correct thing in saying news of Bristol Palin’s pregnancy should be a private matter, but Palin’s non-mention of her 17-year old daughter’s pregnancy last Friday makes that an impossibility. That is so because the omission was political in nature.

Indeed, if they were in fact engaged before the news was leaked, why didn’t Palin trot out future son-in-law Levi Johnston, he of “I’m a f’in redneck” fame, when she introduced the rest of the family? Morality aside, is the shotgun announcement of marriage wrapped in the wonders of life’s sanctity not just another rank political act by Palin and the McCain campaign to save the former’s political skin? With adoption everywhere an option, is Palin showing good judgment in sanctioning marriage to a snowboard and dirt bike aficionado previously unmentionable who likes to “shoot some sh*t and just f’in chillin’ I guess”?

If with the vice presidency in mind Palin will countenance marriage by her daughter to someone who’s merely “in a relationship” but states flatly, “I don’t want kids,” how can we trust her to rationally choose a future Fed chairman, Treasury secretary, or with sound mind decide whether or not we should send troops to Georgia? If Palin will play politics with both her daughter’s and her grandchild’s lives, what other principles might she shed with political gain in mind?

Back when Bill Clinton got in trouble over Monica Lewinsky, while there was broad disagreement over what the affair said about his own morality, there existed somewhat of a consensus that he showed shocking disrespect for the Oval Office. Seemingly everyone agreed that the latter should be majestic and free of tawdry assignations.

In putting Sarah Palin potentially one heartbeat from the presidency, John McCain has for all his great service to this country shown an impressive disrespect for the same country’s highest office with this cynical gimmick. In doing so, he’s arguably handed the election to Barack Obama given the number of voters likely embarrassed by his choice.

Sadly for the economy and stock markets, McCain’s bad politics make clearer the path for a known redistributionist to win in November over a candidate whose true beliefs were made more opaque with this most shocking of selections.

John Tamny is editor of RealClearMarkets, Political Economy editor at Forbes, a Senior Fellow in Economics at Reason Foundation, and a senior economic adviser to Toreador Research and Trading ( He's the author of Who Needs the Fed?: What Taylor Swift, Uber and Robots Tell Us About Money, Credit, and Why We Should Abolish America's Central Bank (Encounter Books, 2016), along with Popular Economics: What the Rolling Stones, Downton Abbey, and LeBron James Can Teach You About Economics (Regnery, 2015). 

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