Meet Bizarro Hillary

John McCain the maverick is back and has defied convention and the odds makers by picking Alaska governor Sarah Palin to join him on the GOP ticket. There are some risks with this pick but, it could be a brilliant move or come off as exceedingly calculated and condescending to voters. The McCain campaign certainly must be aware of the danger but had to weigh those risks against the long shot chance of winning this election. Defying convention with Palin is one way to shake up the race and create their own fate. I agree with Ed Shultz, it has the feel of a Hail Mary pass. It is telling about how hard they think it's going to be to win the election.

IOKIYAR Alert

Obviously her lack of experience in Washington in the foreign policy milieu is going to be hard to shake. Andrew Sullivan makes a good case for
not going the Palin route at the Daily Dish:

The first criterion for a veep - and I'm simply repeating a truism here
- is that they are ready to take over at a moment's notice. That's
especially true when you have a candidate as old as McCain. That's more than especially true when we are at war, in an era of astonishingly difficult challenges, when the next president could be grappling with war in the Middle East or a catastrophic terror attack at home. Under those circumstances, we could have a former Miss Alaska with two terms years under her belt as governor.

There's no easy way to predict what the McCain handlers were thinking. Here are some reasons that the McCain people must have used to rationalize the Palin pick:

The Bizarro Hillary

Attract the legions of disaffected Hillary supporters that supposedly have left the Democratic party. Have these guys read the latest polls? The massive carve out of Hillary supporters heading for the McCain camp looks more and more like a media concoction built up to attract
eyeballs to cable news channels. How many pant suits does this women have? She will need a lot of them to pull of the Hillary switcharoo if that's what she plans to do.

A Biden Factor

A perceived vulnerability of Biden by McCain could be a factor in selecting Gov. Palin. He will easily demonstrate his gigantic advantage in foreign policy over Palin during the VP debate. Biden has legendary loose lips and they may perceive a slight chance that he could mutter something condescending or rood during the debate. The echo chamber would cycle such caddy behavior and pull Biden down with it. On the other hand he may try to hold back and not completely school her to avoid looking like a jerk.

Bucking Party Orthodoxy - To a Degree

Palin has the appropriate bona fides. She is of course a pro-life evangelical, a lifetime member of the NRA, an advocate of small government, anti-earmarks, pro-drill-the-shit-out-of-everywhere and a defense hawk (how can you tell). She does however support some rights of gay couples, is an advocate of energy diversification and likes basketball. I think the McCain camp realizes the Republican brand is in shambles and introducing a female VP pick that has a mavericky edge like him could be effective in attracting independent and swing voters. This may not be 100% amiable to the GOP faithful but they will fall in line in the end of this pick pays off.

As much as he annoys me I think Romney would have been a better pick for McCain. He espoused all of the right conservative viewpoints on the primary trail as evidenced by the prattling done over him on right wing radio. He would also give McCain the edge in Michigan. And since he isn't a Washington fixture or a party insider he has some of the outsider cache that today's right wingers thirst for. Apparently the focus group horseshit conducted by Team McCain said otherwise.

Obama certainly has many angles to go after on the Palin VP pick and he should exploit those where possible. In the end I wouldn't underestimate Palin. She has risen in a meteoric fashion to get to the governorship of Alaska. I know it's only Alaska and not a mighty swing state like Ohio or Michigan but, her political achievements like those of Obama have come at a relatively early age which speaks to her determination and savvy.

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Big Dog Shows Ann Curry Some Unity

The Olympics are over and Ann Curry has been reassigned to asking every delegate and VIP at the Democratic National Convention about Hillary and party unity. The Today show host was apparently set loose on the convention floor with only one assignment, keep pushing the media theme of party disunity and the Clinton-Obama schism.

I've turned to MSNBC for some of my coverage mainly to laugh at Pat Buchanan's comb over and watch the commentary of Olbermann and Matthews. Ann was part of the mix from the mix from the beginning. On Monday night she accosted Nancy Pelosi and Jimmy Carter within the same hour and wouldn't let them go until they admitted Hillary was a ticking time bomb that was going to tear the Democrats apart. After the "sisterhood of the traveling suit pants" speech on Tuesday you would have thought Ann would give it a rest but she was at it again tonight going after more victims.

I think the speech by Bill Clinton may be enough to put the disunity storyto bed. Clinton was clear and concise on his support for Obama. His criticism of Republican policies and the damage to America as a result of those polices was strongly worded and direct. As effective as Hillary's speech was on Tuesday, Bill's was even better. He compared the story of his run in 1992 and the uphill battle he faced convincing voters he would be an effective president to that of Obama's quest to win the election in 2008. In doing so he helped dispel the effects of the 3AM adds that Hillary launched against Obama during the primary run. They may have had their fingers crossed behind there backs but Bill and Hill delivered the goods. Ann you are free to return to the Today show.

I've also watched the PBS coverage because they tend to focus on the actual convention and not media driven memes. Lehrer is always good and of course Shields and Brooks provide great analysis. Although David Brooks seemed to be more antsy than normal. Maybe he's regretting some of those NYT columns he wrote on Obama's candidacy.

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Finally a Foothold for Obama

The McCain house party has hit the news cycle and this should be seen as manna from heaven by the Obama campaign. With the polls looking tighter and the negative adds taking there toll on Obama the momentum was on McCain's side. Being able to counter the typical GOP attacks of 'Obama's an elitist" depends on taking advantage of the statements like those made by McCain this week. Being rich is one thing. Being so rich that you have houses laying around like dirty underwear just seems out of touch with average people. That's the theme that has to be replayed over and over in order to have an impact on voter perceptions.

Of course team McCain had to hit back and they came back swinging. Unfortunately for McCain they hit like a girl (not PC, I know) and appear to be desperate for any comeback. The latest counter attack goes for the old reliable Obama - Rezko association and all that stuff. It's kind of a curious move because the Rezko material is not easy to grasp and not in your face like actually not knowing how many homes one owns. And it won't be hard for Obama to see that Rezko and raise McCain one Charles Keating. Funny how years of inside the beltway dealings leave a residue on the Senator from AZ.

Anyway Obama needs to hold on to this foothold like grim death. Let the 24 hour news cycle work for us for once and drill this one into the popular lexicon. In fact why not carry the theme of an out of touch McCain right into the convention next week?

Akron Sewer Smack Down

The plan to leverage a lease of the Akron sewer system to fund a scholarship program still looks like a loser. After Monday's council meeting in which numerous proposed charter amendments were given up or down votes the odds of the proposal being implemented as envisioned have decreased. As reported in the ABJ the propsals veered of course at times. Council ended up voting down large portions of the Mayor's thrust to make the lease happen. The measure related to allowing the City to spin off city infrastructure to larger governmental entities actually fit into Plusquellic's vision of consolidating (read regionalizing) local governance. What we're left with in teh wake of the this latest round of bickering is a flawed approach to making the Akron education plan work.

Uses of Funds

The idea for an educational fund to enable the youth of Akron to attend college or vocational schools has merit. We all agree here that education is the great equalizer and the best economic development engine is job creation. The good mayor likes to refer to the Kalamazoo Promise as a way to move forward on meeting these needs. As his media release states even the crazies at the Wall Street Journal have admitted to the benefits of free college education plans like the one in Michigan. I would agree that a well thought out and extensive plan of this sort could be just as advantageous in Akron. There are two catches to the Akron proposal that are potential deal breakers. The first is the thirty year residency requirement for the students that use the plan to attend college. The plan stops being free if the participants take the money and run. Considering all of the issues around employee residency requirements and Ohio cities this feature may be troublesome.

The other sizable hurdle for the Plusquellic's plan is of course funding it. The Kalamazoo plan is funded through private donations from multiple sources. The Akron plan is not based on this concept. That leave the controversial approach of selling or leasing a public asset to generate the dollars to fund the program.

Sources of Funds

The concentration from the Mayor's office has been on the universally appealing aspects of providing higher education to our youth. The ability of a lease of a piece of public infrastructure (smallish in size relatively speaking, it's no PA turnpike) to generate the millions of dollars touted seems nefarious. I'm waiting to see an overview of a proposed financial structure that shows the net savings (which would be used for funding said plan) from lease back agreement would bring in enough. Has someone at Morgan Stanley (they love these things) provided the City with a viable financing plan? Have any of the companies, most of them foreign, that specialize in infrastructure leases expressed any interest?

Until there is more information provided by the City on the sources of funds this thing is not even realistically going to deliver as promised. There are plenty of us finance geeks out there that would love to see some numbers on the lease end of this proposal. For now I'll refer back to my previous posts and stick with the time tested free lunch limitation of all financial transactions.

Petroblogging: A Modest Proposal on Offshore

After several weeks of dueling on the supposed merits the political tide is turning for offshore drilling. The possibility of opening up most of the coastal U.S. for oil exploration looks more likely as of this week. This change in direction had nothing to do with sound economic strategy or a thorough technical review of the feasibility of increasing offshore drilling. The basis for the looming shift in energy policy is due to people (citizens, politicians, pundits) freaking out over a wrinkle (high gasoline prices) in their daily lives. As is often the case with wide reaching policy changes the patch for this problem is an over reach from policy actors who put offshore drilling into play.

Political Ramifications
At first the spillover from the offshore drilling debate was contained the floor of Congress and cable news shows. Then McCain took hold of the meme and sharpened his sword with it using it to go after Obama. The tactic has seemed to payoff. The latest round of polls from swing states in particular showed McCain gaining ground partially over the fear of high gas prices and Obama's lack of support for a supply side view of the oil world. Even polls on the average person's view of offshore drilling were working in McCain's favor. Who wouldn't take the advice of overly fanaticized and uninformed consumers looking for any magical form of relief from high gasoline prices. The Republican tizzy in the House of representatives on Friday afternoon was probably the last tipping point in the often ignored and seemingly mundane topic of drilling for oil out in the ocean.

The leading edge of the Democratic shift in offshore also came Friday when Obama announed he would suppport a compromise in lifting the offshore drilling moratorium. Obama made the policy statement to the Palm Beach Post in an interview and didn't sound to excited with the revised stance on drilling:

"Like all compromises, it also includes steps that I haven't always
supported," he said. "I remain skeptical that new offshore drilling
will bring down gas prices in the short-term or significantly reduce
our oil dependence in the long-term, though I do welcome the
establishment of a process that will allow us to make future drilling
decisions based on science and fact."

That last part about basing decisions on science and fact is a bit ambitious considering how the debate has transpired. Anyway allowing offshore drilling is not the end of the world. I think there is much to be gained in a compromise deal in the way of environmental protections and exploration related revenue.

Let Them Have It
So the oil companies will expand web of drilling platforms up and down the Eastern Seaboard. Does anyone think they are going to jump into the new exploration at full clip? Would it really behoove Exxon or Shell to layout perhaps billions of capital dollars in the near term and quickly begin delivering massive amounts of oil to the world market? Hell no. The last thing they would do is knowingly bottom out the market for crude oil by driving the price down. Did you see their quarterly earnings numbers that were announced last week? That's a cash cow that they aren't going to mess with. So give them a longer leash to explore and drill the entirety of the coastal waters of the U.S. They'll gladly accept the fortuitous turn of events and then sit on the newly available leases as they see fit.

The Compromise Is The Key
Both Obama and McCain are signaling that they would be agreeable to an energy compromise bill that lifts the ban on offshore drilling and throws in other policy objectives related to energy independence. My favorite is the requirement that all oil produced in the offshore sites be sold in the American market. Go right ahead and add that to the compromise. Any oil that does get produced (if they get around to it) will be used to supplant oil from other regions of the world that was destined for the U.S. I think a developing country like China may be interested in buying the redirected supplies of oil not destined to the U.S. markets.

The other key component that should be in the compromise would be the agreement to not open up ANWR as part of the deal. With the vastness of the offshore sites being offered dwarfing ANWR there may be some traction to keep the Alaskan wilderness untouched for the foreseeable future. I haven't heard any major rumblings about opening ANWR up as part of the latest offshore drilling proposals so maybe this would fly.

To achieve real compromise that is beneficial to the greatest number of stakeholders a deal on offshore drilling should include these nuggets:

Structure a revenue sharing system like that used between oil companies and other countries. These profit sharing agreements (PSA) devote a set rate of royalties that paid back to the Federal or state government for leasing the offshore sites for exploration and recovery. This would be on top of the normal leasing revenue.

The Federal portion of the PSA royalties would be directed to an alternative energy development fund. The dollars fed into the fund wold be dedicated to the ellusive Apollo type project for renewable energy that everyone keeps yammering about. The majority of the funding could be directed at spurring R&D through grants to public and private instituions.

The states that benefit from leasing offshore sites should sign a compact that defines their role in revenue sharing and use of the royalty payments. These states stand to benefit handsomely from the production of oil off their shores. Of course with that reward comes the risk of getting slimed and having beach tourism and fishing industry ruined by oil spills. The risk is commensurate with the return. This being the case the compact entered into by the states should require all costs related to oil spills be borne by those states. There should be no Federal bailout of an oil rich Florida or whatever other state decides to take a chance with oil drilling offshore.

Other odds and ends that could be included in the compromise would be requirements to offset carbon emissions from the additional exploration, revisiting CAFE standards and a review of any remaining tax subsidies oil companies are currently receiving to see if they can be phased out.

In the end a successful compromise package will remove offshore drilling from the arsenal of the McCain attack dogs during the campaign and they would be free to focus on other fluff material. The American people in turn get some temporary and psychological relief from their oil price angst. My guess is that in seven to ten years from now oil prices will not have subsided in the least and the once ballyhooed new drilling will not have delivered as promised. Most of the new leases will probably not be producing in the ten year time period. The good news is that the lack of production will have spared coastal states from nasty oil spills.