Construction bonds are the thing contractors need to buy and post to undertake construction contracts.
They are exactly the kind of product blue collar tradesmen worry about. Which is exactly the swing voters McCain-Palin needs.

Counterparty risk has no impact on main street. Main street holds money in banks that are FDIC protected anyway.

Do you feel stupid getting on your high horse without even googling the product?

A couple days ago, a commenter said she reminds him/her of a student who crammed for a test so he can write BS essays. The construction of her answer yesterday earns that commenter a big fat "Kudos".

Exactly--it is almost unfair of McCain to set up Palin like this. The little bit of unscripted talking she's been allowed to do so far has been fairly excruciating. I'm embarrassed for her--almost. I say almost because her arrogance at thinkning she could handle this is utterly breathtaking. McCain and Palin are made for each other--just not for leading the nation together.

Impactful? Is this grammatically correct?

Impactful? Is this grammatically correct?

Impactful? Is this grammatically correct?

She wouldn't have accepted the job if her ambition did not infinitely exceed her intelligence. So I will feel sorry for her when pigs fly (whether or not they're wearing lipstick).

Is there some connection between construction bonds and AIG that I'm not seeing? Will Palin talk about bail bonds when she is asked about Lehman Brothers?

Construction bonds are the thing contractors need to buy and post to undertake construction contracts.
They are exactly the kind of product blue collar tradesmen worry about. Which is exactly the swing voters McCain-Palin needs.

Do contractors on small individual jobs take out construction bonds? I'm curious. I always thought of them as things you get when you build a skyscraper. And are they traded? They're not written up specifically for each contract, like an insurance policy?

Note to Biden:

For the debate, have at the ready 6 polite, jovial, crowd-pleasing ways to ask: "Why the HELL are you even here?"

I guarantee you'll need at least 3 of them.

Ah, but you're assuming the MSM will give a damn about this or about McCain's giant gaffe on Spain. They won't. It will disappear down the rabbit hole like Troopergate is about to do.

Oh, incidentally, McAristotle, I note here after an internet search that a "performance bond" is the more common term for a "construction bond". So the citation provided from Kevin Drum is right on the money. The explanation Kevin wants how AIG's performance bonds might have put regular contractors at risk; he seems to think that doesn't make sense.

Well, at least she didn't blink when McCain asked her to be his VP. Once you get that part of the job right, everything else is easy.

AIG does have a significant surety bond business, which is what construction loans are. However, that part of AIG was not at risk. Given that Gov. Palin presented her take on AIG in gramatically challenged format, I wouldn't assume any level of sophistication on her part. IF you are going to make the connection from Wall Street to Main Street it has to be a little more than a sound bite.

Construction bonds might be something Palin knows about, but so far as I can tell, nobody's attributed AIG's demise to them. I suspect Palin mostly made this up out of whole cloth.

Last night, in a town hall meeting, she was asked by a (friendly!) audience member for "specific skills" she could cite to rebut critics who question her grasp of international affairs. Here's how she answered:

"I have that confidence. I have that readiness," Palin said. "And if you want specifics with specific policies or countries, you can go ahead and ask me. You can play 'stump the candidate' if you want to. But we are ready to serve."

Stump the candidate? This lady's a friggin clown.

The problem McAristole is that AIG's problems had nothing to do with so-called construction bonds. Their problems stem from a lack of liquidity in the securitization markets and their general inability to raise funds (banks are reluctant to lend). This in turn, caused them to be down-graded, which in turn triggered their obligation to post additional collateral for derivative transactions (swaps) that they entered into.

So she said something unintelligent about a product that has nothing to do with the problems facing AIG. Don't you feel stupid about getting on your high horse without any understanding of the underlying problem? Or was your readiness such that you were prepared not to blink in the face of that reality?

Keep her talking. Hubris knows no bounds. Just look at how utterly stupid people like O'Reilly, Hannity, and Limbaugh appear when they open their mouths. She'll get better but perhaps not until her numbers are so low it won't matter and her "personality" will be attached to that of a liar who doesn't know too much. Just like those guys mentioned above. Oh, I know full well the vast majority of those who support these characters don't believe or care that they are liars. Those lemmings won't be voting for Obama anyway. They wouldn't vote for Jesus if he were dark skinned and a liberal. Hey, I think he was...

Steve, I don't think McCain realizes that he's setting Palin up for a major-league fiasco. He's so used to getting a free pass from the supine media that he probably figures everyone does.

I also don't think that any amount of political seasoning and cramming will ever make Palin palatable to the general American public. Ideologically she's somewhere to the right of Attila the Hun at a time when the public's very tired of extremism of any stripe.

This is all part of the McCain-Palin master plan. They're going to roll up the idiot vote with this equation:

He's dumb as a stump + She's dumb as a stump + I'm dumb as a stump = I'm going to vote for them.

Which is as much math as any of them are capable of.

"Stump the candidate? This lady's a friggin clown."
Posted by: Jake on September 18, 2008 at 9:17 AM

Don't tell Candy Crowley. She will have to do a 20 minute hit piece on Biden to balance things out.

It's pretty clear Palin wanted to sound like she was knowledgeable about the ways that high finance that "impact' Main Street - like performance bounds - or the lack of them might. Average Joe is not going to know whether they were at risk or not in the case(or care that much). She is living in the moment- trying to impress the immediate audience with sound bites about "holding construction bonds" - She probably succeeded. The rest of us don't matter.

Serious Male Voice: Sarah Palin. Because What America Needs Right Now is a Pretty Face.

Nasal, Fingernails on Chalkboard Voice: I'm Sarah Palin and I thought approvefully of this message.

This morning on NBC, Bill Bennett was asked how he explains even conservatives, like George Will and David Broks, questioning Palin's credentials.

Bennett responded with "Well, they're intellectuals."

I'm not kidding. Palin really does appear to have a gift for making folks embarrass themselves on national television.

Close your eyes and have someone read that response to you. Do you hear our esteemed current leader? I do. It will take some getting used to, to hear it in that annoying nasal "Fargo" accent, but I'm sure my brain will recalibrate soon enough.

I have a new theory that makes a lot of things fall into place. I believe there is a substantial number of Americans that will never vote for anyone smarter than they are.

I ... assume she was told something about home mortgages, and even housing construction, and got very very confused.

This morning on NBC, Bill Bennett was asked what he thinks about even conservatives like George Will and David Brooks questioning Palin's credentials.

His response: "Well, they're intellectuals."

I'm not kidding. Palin does appear to have talent, particularly when it comes to having conservatives make fools of themselves on national television.

With apologies to Alexander Pope:

The Biblical blockhead ignorantly unread

With loads of learned talking points...

Stuffed in her head.

Two minutes ago, she knew less than nothing about AIG. Her ability to descant learnedly on the subject is akin to her ability to explain quantum thermodynamics. Smart people know when to keep their mouth's shut...

Fools rush in where angels fear to tread.

Fox has become a 24-hour Palin network, and a lot of people watch Fox. Palin may be an ignorant, dangerous candidate, but she's a hottie who talks tough, and that's enough for big chunks of the electorate. If Americans cared about rogue ideologues and abuse of power they would have taken to the streets long ago.

From what I can tell the media, including NPR, is still doing their "he said she said" routine with precious little analysis or historical context. You would think after the media's shameful performance during the march to the war that they would do their jobs during this critical election season. Call and complain:

CNN
404-827-1500

FOX
888-369-4762

Fox Chairman and CEO Roger Ailes
212-556-2500

MS-NBC
212-664-4444

NPR
202-513-3232

This morning on NBC, Bill Bennett was asked what he thinks about even conservatives like George Will and David Brooks questioning Palin's credentials.

His response: "Well, they're intellectuals."

Eh. Describing Brooks or Will as an intellectual is pretty damn embarrassing no matter the context.

Construction Bonds? Maybe she's thinking of boondoggle Sports COmplexes out in the middle of nowhere that costs the taxpayers more money than anticipated and built on unpaid for land.

http://www.southcoastsurety.com/What-is-Surety.htm

These are all over the place. Small contractors use them, big contractors use them. If you can't get them people who work in hours eventually get less hours.

I give you that the solvency rules for insurance companies actually protect these pretty well in the event of holding company default, but its still a concern of Main Street.

Seriously, how much googling would it take for Wash M (Kevin has moved on) to work out that Sarah's response was spot on for Main Street...because she is Main Street.

I automatically dock 10 points from anyone who uses mutations of 'impact' as a verb or adjective. I lived 35-40 years before I first heard this abomination. I know language is dynamic but any modifications should increase fluidity not clumsiness or Germanic cadence. You know it was a whitey who started this.

Of course performance bonds/sureties are used on a number of projects. I would further suspect that with the real estate market tanking, they are being required more frequently. But I can tell you that in my experience in construction law in the 2005-2007, it was rare to see performance bonds required on anything other than public works projects.

Bonding requirements undoubtedly variy from state-to-state, but the idea that the gov't stepped in on behalf of AIG in order to ensure that AIG does not default on its surety obligations and that its surety obligations would be the biggest impact from AIG folding seems far fetched at best...

Similarly, the idea that surety bonds are things that "Main Street" understands and is concerned about is specious on a number of levels.

Why is Sarah Palin rebelling against God over Troopergate? Why won’t she read Romans 13 and submit to the governing authorities within the Alaska Legislature?

"Seriously, how much googling would it take for Wash M (Kevin has moved on) to work out that Sarah's response was spot on for Main Street...because she is Main Street."

Seriously, how much brain power does it take to know for a fact that "Main Street" doesn't have the foggiest idea that AIG does anything other than what they see in the AIG ads on their television screens?

Palin didn't have a clue what she was talking about, period. It's another prime example of her trying to cover her atrocious lack of knowledge with some soundbite answer that makes no sense.

I'm a volunteer for the Obama campaign, so I am in no way defending the clear ignorance and hubris of Sarah Palin. But I think if you go back and read her comment carefully, she's not saying in any way that construction bonds caused AIG's downfall, which is what a lot of people on this site and others seem to believe. She's saying that she understands that the fall of AIG would cause problems for a lot of people (including those who have construction bonds through AIG), and that that's probably part of the decision to bail out AIG. She doesn't like the taxpayer-funded bailout, but sees the reason for it.

There are plenty of good examples of uninformed, ignorant, and willfully base-riling crap she's said without twisting a relatively innocuous comment into another one. But then again, this is what happens when you push someone who is clearly unprepared into the limelight -- eventually, everything they say looks stupid, even if (for a wonder) something they say actually isn't.

Construction loans are not based upon bonds issued by AIG or any other Surety. That component of their business has no relation to the current situation on Wall Street. Because she has limited experience with local government spending, she seized upon the one are where she may have encountered AIG.

A surety bond for construction contracts are normally divided into two segments: a payment bond and a performance bond. The payment bond protects suppliers and subcontractors from non-payment for their goods and services - thus protecting the owner of the project. The performance bond guarantees that the project will be completed if the contractor fails.

Since I work for a local government agency with extensive construction contracting I have had more experience in this area than I prefer. This area of construction contracting is very complex and I know that none of our board members would have anything beyond a basic understanding of these instruments. At the same time, none of my board members have the potential to be the POTUS.

Irony alert: McAristotle -- who is rivaling even "Orwell" for regurgitating idiotic right-wing talking points -- asks "Do you feel stupid?"

I've been a newspaper editor, and I can't even figure out a way to punctuate that -- even with em-dashes and parentheses -- so that it comes out intelligibly.

Based on this, what's the difference between Sarah Palin and Dubya? Lipstick.

She mentioned construction bonds in reference to AIG in her Hannity interview, too. Pretty much the same wording:

I do not like the idea though of taxpayers being used to bailout these corporations. Today it was AIG, important call there, though, because of the construction bonds and the insurance carrier duties of AIG. But first and foremost, taxpayers cannot be looked to as the bailout, as the solution to the problems on Wall Street.

sceptic said:
"I have a new theory that makes a lot of things fall into place. I believe there is a substantial number of Americans that will never vote for anyone smarter than they are."

Agreed, though it is hardly new. It's the basis for the whole 'have a beer with him' mentality that got Bush elected. It's how Reagan played the game. It's why Clinton spent much of the 92 and 96 Presidential campaigns hiding his intelligence behind his Arkansa charm and "I feel your pain" comments.

There is a large segment of American society that resents intelligence and hates people with extensive 'book learning'.

Ms Palin is the governor of a state. A state that is involved in large construction projects. Hell, she individually engineered a huge gas pipeline project for her state. It makes sense that a large part of the negotiations for the project had to do with project bonding and that the State of Alaska has/has had dealings with AIG. One would think that a state governor would be able to discuss intelligently a serious problem that a person in that position (a governor of a state) should be immersed in currently. This is a national problem, being delt with, one hope by all fifty + Governors. Governors make on the fly , intelligent comments to constituents daily (at least the Governor of Maine does). Making an unintelligent sound bite for local contractors in reference to an international issue is quite un-vicepresidential and leudicriste, and un-Governorlike. The presidential political process is making us all fools, but the McCain/Palin faction is trying to make us all morons.

Wally,

I understand that Palin was saying that the reason a bailout was needed was to prevent default on surety obligations that would be felt by the average-Joe. The problem is that I can't possibly see that being the case. Construction, while a large industry, certainly doesn't impact the range of folks that would necessitate a bailout, as Palin suggests.

The reason AIG was bailed out was because of the value and importance of the good performing segments, not the sub-prime mortgages that cause the problem.

This is why it is important to have separate companies for banking, investing and insurance. Combining them can cause a cross sector meltdown, which is what is happening now.

Whatever construction bonds are is beyond me, and probably beyond Palin. There are many more well known examples like car, home and business insurance. Would you drive without auto insurance, or feel safe without home insurance? Your mortgage probably requires insurance. She should have used these examples, but the pick was probably more a random pick.

I'm actually astounded that any of you can figure out what she meant to say based on the words that actually came out of her mouth. In this case, as earlier in the ABC interview, she lets loose with some sentences that simply defy parsing. You meet a lot of people in life who are stupid but don't realize it. Most of them end up earning a living and making the lives of their co-workers a living hell. Others end up on both ends of Republican Presidential tickets.

I'm Ace Sydney McCain, and I approve this message.

And we count on Gregory to give insults where facts should be. Back to your cave Gregory until we need you again - the adults are talking now.

Palin gave an informed answer and people here are discussing if it was the correct answer to the problem. The PDS patients here apparently do not understand that everyone is trying to figure out how to fix the problem except for the congress who decided to head home.

Great job Democrats. Run when the real problems hit.

So far no one has asked the $64,000 question! Did she address the crowd as "guys and gals"??? Inquiring minds want to know!

Palin's answer to everything might as well be...

I can see Russia from my house! Lipstick!

Now, now. Whether brainiacs like McAristotle can turn the sentence fragments Palin belched into a correct answer or not is hardly the issue. This is:

She's been the GOP candidate for VP for three weeks and this is the first spontaneous answer she's given to a spontaneous question. Real questions [those not about family or hunting or God] tend to render her speech-impaired.

McA and Orwell, you can look deep into these clumps of pale tea leaves for evidence that Palin has some useful knowledge swirling around the bottom of the cup. But, you're having to try awfully hard to get there. Do you really think that's a good sign?

Just a note--there are two kinds of 'construction bonds'.

The first is surety/performance bonds: those are project-specific, and tend to be for large projects.

The second are basically insurance: to be a contractor and take on projects above a certain dollar value (in TN, 10 years ago, it was $10,000) you must be "licensed and bonded." If you are in construction and have your name in the phone book, you will almost certainly have a posted bond.

Ace Sydney McCain wrote: "...You meet a lot of people in life who are stupid but don't realize it. Most of them end up earning a living and making the lives of their co-workers a living hell. Others end up on both ends of Republican Presidential tickets.

I'm Ace Sydney McCain, and I approve this message."

Great post.

I have no sympathy for a person who "didn't blink" when asked to run for VP. The only explanation for this is sheer arrogance and ruthless ambition, with no substance whatsoever. What sane person wouldn't hesitate to give the question serious thought, particularly given McCain's age and health concerns?

Then, again, Palin is wired for the mission.