Why Wall Street should fear Sarah Palin

November 12, 2010

The only people in Manhattan who are probably eager for a Sarah Palin presidential run are the supposed comedy writers at “Saturday Night Live.” Wall Street bankers, on the other hand, not so much. Big Money has been snarkily dismissive of Palin’s recent opining on monetary policy, the dollar and the dangers of inflation. But guess what? A “free-market populist” campaign in 2012 would likely further highlight that Palin’s not too big a fan of them, either. And her economic musings are yet another sign she’s running

In a speech and a pair of Facebook postings this week, Palin unexpectedly warned her followers about the inflationary dangers of the Federal Reserve’s “pump-priming addiction” — a reference to the latest round of bond-buying by the U.S. central bank, known as quantitative easing. That’s hardly a novel or unreasonable critique. Many conservatives, and even some Fed officials, share Palin’s unease.

It’s the politics and timing rather than the substance that is raising eyebrows. Avid Palin-watchers see her move into economic commentary as further evidence of a run for the White House. Indeed, the campaign team for putative Republican frontrunner and former banker Mitt Romney is assuming she will be in the race. And her upcoming, much-hyped reality television show, “Sarah Palin’s Alaska,” will no doubt play like an extended campaign commercial. And polls certainly hint she would be right in the thick of the fight with Romney and Mike Huckabee, if he runs (via CNN):

In Iowa, it appears Mike Huckabee’s still got a base: the former Arkansas governor is tied with Mitt Romney at 21 percent, with Sarah Palin close behind at 18 percent, and Gingrich nabbing single-digit support. In New Hampshire, former Massachusetts governor Romney displays his home court advantage: he draws more support, at 39 percent, than the rest of his top rivals combined. Palin once again nabs 18 percent.  And in the key early-voting state of South Carolina – where Sarah Palin and Mitt Romney both endorsed Gov.-elect Nikki Haley in the GOP primary this year – Palin, Huckabee and Romney are again neck-and-neck.

If Palin does get in the game, her views leave her — not for the first time — well positioned to exploit the zeitgeist. Voters right now seem dubious of Big Anything, be it Government, Business or Money. In her 2009 book, “Going Rogue,” Palin offered a remix of 1980s-style Reaganomics — low taxes, less government spending, strong dollar. That’s all perfectly sync with her recent Fed-bashing. But she also attacked “corporatism” in which government and business conspire against entrepreneurs and consumers. This view fuels Palin’s critique of Obama’s financial reform plan, which she portrays as a creation of Wall Street designed to perpetuate bank bailouts. As she wrote on Facebook:

Of course, the big players who can afford lobbyists work the regulations in their favor, while their smaller competitors are left out in the cold. The result here are regulations that institutionalize the “too big to fail” mentality. … The president is trying to convince us that he’s taking on the Wall Street “fat cats,” but firms like Goldman Sachs are happy with federal regulation because, as one of their lobbyists recently stated, “We partner with regulators.” …  You’ll find the name Goldman Sachs on many an Obama administration rĂ©sumĂ©, including Rahm Emanuel’s and Tim Geithner’s chiefs of staff. We need to be on our guard against such crony capitalism.

Palinomics, embryonic as it is, seems to be rooted in “free-market populism,” a version of conservative thinking that is pro-market rather than pro-business. It says the role of government is to help markets function more fairly and efficiently for everyone, encouraging competition and “creative destruction” (which Palin specifically mentioned in her book).  Pro-business policies, by contrast, can end up subsidizing favored companies, raising barriers to entry and otherwise entrenching the status quo.

Palin is also familiar with one of the champions of free-market populism, the University of Chicago’s Luigi Zingales, linking to his writings from her Facebook page. It’s easy to imagine her campaigning against corporate tax breaks, say, or in favor of limiting the size of banks under the belief that as long as they are ginormous, government will find a way to bail them out. That agenda might not attract much campaign cash from Manhattan bankers or Washington lobbyists, but it could be a compelling formula in the new Tea Party-infused Republican party. Then again, bankers who care about cutting government spending and keeping taxes low might want to take a second look.

8 comments

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[...] comedy writers at “Saturday Night Live.” Wall Street bankers, on the other hand, not so much. James Pethokoukis This entry was posted in Global News and tagged fear, Palin, Sarah, should, Street, wall. [...]

Fat Wall Street Cats have a right to fear Palin and the Tea Party. That’s because the Tea Party is about freedom, and that includes economic freedom. Which means support for small business.

Big Business? These are the people who would sell us the poisons to kill us if they could get away with it. They won’t. We want our economic freedom *FROM* “Big Business”.

Here’s hoping Sarah or someone like her runs, wins and then turns around and cleans the clock of *Big Business*.

Posted by pabarge | Report as abusive

Right now we have crony capitalism. In return for streams of campaign contributions politicians write regulations that prevent competitors from entering the marketplace. At some point in time it will become evident that the information age has given us the opportunity to enter a post-bureaucratic world where the laws of economy of scale don’t apply in every instance.

Posted by Nexialist | Report as abusive

Palin is also familiar with one of the champions of free-market populism, the University of Chicago’s Luigi Zingales, linking to his writings from her Facebook page. It’s easy to imagine her campaigning against corporate tax breaks, say, or in favor of limiting the size of banks under the belief that as long as they are ginormous, government will find a way to bail them out.

WHAT???? But how can that be??? You people in the MSM have pretty much convinced us that Sarah Palin is functionally illiterate. How on earth would she be capable of referencing a University of Chicago economist? You people will have a lot to answer for one day very soon. And, oh my, what an ominous headline when the content of this article makes it sound like Palin’s approach would be a very good thing for the rest of America, indeed. I’m afraid the multi-nationals may just have to shift for themselves for a change. What a pity.

Posted by cynccook | Report as abusive

Wall Street should fear Sarah Palin …… Everybody else does. The Republican Old Guard establishment is scared silly of her. Almost every one, with very few exceptions, fears a primary election challenge with Sarah endorsing their opponent.
She also haunts the minds of the Democrats and they can’t stop knocking her and telling us they wish she will be the Republican candidate but they have their fingers crossed behind their backs and are shaking in their boots at that prospect.
Wall Street, especially those establishments tied to the Democrats and “World Governance”, knows Sarah will put an end to the financial games and the bailouts of the money firms.
Everybody fears Sarah other than a ever growing number of the common people. God bless and God speed Sarah Palin!

Posted by arnonerik | Report as abusive

[...] via Why Wall Street should fear Sarah Palin | Analysis & Opinion |. [...]

Right now we have crony capitalism.

This is the problem. Both parties work for their respective interest groups, not the voters.

Posted by ArmsMerchant | Report as abusive

Like it or not, she is the most powerful person on the right these days.

Posted by Conservative100 | Report as abusive

Liberal posters, in their usual hateful fashion, dismiss Sarah Palin’s written opinions as having been written by someone else, because they think she’s not smart enough to have written them herself. I don’t care whether she wrote them herself or not, as long as she brings whoever it is that’s writing them with her to the White House, should she ever get there. Her written opinions are spot on!

Posted by MissButterfly | Report as abusive

[...] It’s got to be something more than a fear that she can’t win. Reuters’ columnist James Pethokoukis offered a clue in a column Friday titled “Why Wall Street should fear Sarah Palin”. [...]

[...] PETHOKOUKIS: Why Wall Street Should Fear Sarah Palin. “Palinomics, embryonic as it is, seems to be rooted in ‘free-market populism,’ a [...]

[...] Why Wall Street should fear Sarah Palin | Analysis & Opinion |. [...]

[...] care about cutting government spending and keeping taxes low might want to take a second look. Reuters Opinion The piece links to: Goldman Sachs wants regulation, not laissez-faire Business schools are now [...]

[...] Why Wall Street should fear Sarah Palin – James Pethokoukis, Reuters Filed Under: Humor, Politics Tagged With: Barack Obama, China, G20 Summit, Saturday Night Live About JeffJeff Setaro is a 40 something IT professional and sometimes photographer from Connecticut. [...]

[...] James Pethokoukis of the Wall Street Journal says that Wall Street should fear the pro-market populism being expressed by Sarah Palin. Palinomics, embryonic as it is, seems to be rooted in “free-market populism,” a version of conservative thinking that is pro-market rather than pro-business. It says the role of government is to help markets function more fairly and efficiently for everyone, encouraging competition and “creative destruction” (which Palin specifically mentioned in her book).  Pro-business policies, by contrast, can end up subsidizing favored companies, raising barriers to entry and otherwise entrenching the status quo…read more [...]

[...] vs. Wall Street Posted on December 25, 2010, 10:10 am James Pethokoukis warns Wall Street:  If Palin does get in the game, her views leave her — not for the first time — well [...]