Sarah Palin steps down as Alaska governor

Sarah Palin stepped down Sunday as Alaska governor to write a book and build a right-of-center coalition, but she left her long-term political plans unclear and refused to address speculation she would seek a 2012 presidential bid.

In a fiery campaign-style speech, Palin said she was stepping down to take her political battles to a larger if unspecified stage and avoid an unproductive, lame duck status.

"With this decision, now, I will be able to fight even harder for you, for what is right, and for truth. And I have never felt that you need a title to do that," Palin said to raucous applause from about 5,000 people gathered at Pioneer Park in Fairbanks.

Her first order of business as a private citizen is to speak Aug. 8 at the Ronald Reagan Presidential Library in California. She also wants to campaign for political candidates from coast to coast, and continue to speak her mind on the social networking site Twitter, one of her favorite venues to reach out to supporters.

Free speech was a theme of her farewell speech at a crowded picnic in Fairbanks, as the outgoing governor scolded "some seemingly hell bent on tearing down our nation" and warned Americans to "be wary of accepting government largess. It doesn't come free."

She also took aim at the media, saying her replacement, Lt. Gov. Sean Parnell, "has a very nice family too, so leave his kids alone!"

And she told the media: "How about, in honor of the American soldier, you quit makin' things up?"

She didn't elaborate, but Palin said when she announced her resignation July 3 that she was tired of the media focus on her family and felt she had been unfairly treated by reporters and bloggers.

Friend and foe alike have speculated that Palin may host a radio or TV show, launch a lucrative speaking career or seek higher office in Washington.

Palin hasn't ruled out any of those options, and her political action committee, SarahPAC, has raised more than $1 million, said Meghan Stapleton, a spokeswoman for the committee and the Palin family.

Stapleton said Palin is still deciding what her future will be.

"I cannot express enough there is no plan after July 26. There is absolutely no plan," she told The Associated Press.

Palin's surprise announcement she was stepping down 17 months before the end of her first term pushed her favorability rating down to 40 percent, according to a Washington Post-ABC poll. Fifty-three percent of those polled gave her an unfavorable rating.

Last summer, almost six in 10 Americans viewed her favorably. The latest poll was taken July 15-18.

Nearly 20 ethics complaints had been filed against Palin, and the outgoing governor cited the resulting investigation's financial toll — both on her and the state — for stepping down. An independent investigator looking into the complaints found evidence she may have violated ethics laws by trading on her position as she sought money for lawyer fees, according to a report obtained recently by The Associated Press.

Parnell, 46, of Anchorage, was sworn in Sunday as the state's new governor.

"I'm firmly convinced that Alaska's greatest days are ahead," Parnell said in pledging to continue Palin's policies, which he said "put Alaska first."

Palin received a warm welcome Sunday, both during her speech and as she served food at the annual Governor's Picnic.

Among those present was Donna Michaels, 57, of Fairbanks, who wore a red T-shirt that said: "Palintologist."

The T-shirt defined a Palintologist as "someone who studies Palin and shares her conservative values, Maverick attitude and American style."

Michaels also held a poster board sign showing the front page of the Fairbanks Daily News-Miner when Palin announced she would resign. Michaels altered the banner headline "Palin steps down," replacing the last word with "up."

"She's really not stepping down. She's stepping up to do something bigger and better," said Michaels, who attended the picnic with her daughter and two granddaughters, one of whom who wore Sarah Palin-style eyeglasses.

Larry Landry, 51, of Fairbanks held up a red, white and blue sign that that read, "Quitting: the new American value." The other side read: "Thanks for the laughs."

Landry, a registered independent, said he respected Palin when she ran for governor in 2006, but he felt she changed during last year's presidential campaign.

"She turned into a vicious vixen," he said. "She descended into ugly, divisive politics."

Alaska's first female governor arrived at the state Capitol in December 2006 on an ethics reform platform after defeating two former governors in the primary and general elections. Her prior political experience consisted of terms as Wasilla's mayor and councilwoman and a stint as head of the Alaska Oil and Gas Conservation Commission.

Unknown on the national stage until Republican John McCain tapped her as his running mate, Palin infused excitement into the Republican's presidential bid. But she also became the butt of talk-show jokes and Democratic criticism, especially after it was revealed that the Republican Party spent $150,000 or more on a designer wardrobe for Palin.

Former state House Speaker John Harris, a Republican with sometimes chilly relations with Palin, said he thinks Palin will run for president in 2012, although he has no inside information.

Stapleton said the answer will emerge in the coming weeks.

On Monday, "we'll sit down and say, 'OK, here are your options. How do you now want to effect that positive change for Alaska from outside the role as governor?'" Stapleton said.

Bernanke had to 'hold my nose' over bailouts

Federal Reserve Chairman Ben Bernanke said Sunday that he had to "hold my nose" over last year's taxpayer-financed bailouts of big financial companies but argued that the action had to be taken to avoid a major meltdown of the U.S. financial system and the broader economy.

Bernanke's comments came during a town-hall style meeting in Kansas City, Mo., where he was peppered with several questions about government decisions last year to rescue so-called "too big to fail companies" like insurance giant American International Group, whose collapse would have wreaked havoc on the global economy.

A small-business owner complained to Bernanke that such actions were "hard to swallow," saying he felt like small businesses -- also struggling to survive the recession and all the financial fallout -- were being shortchanged.

"Nothing made me more frustrated, more angry, than having to intervene" when companies were "taking wild bets," Bernanke said. But not acting would have had grave consequences for the economy, he added.

"I was not going to be the Federal Reserve chairman who presided over the second Great Depression," he said. "I had to hold my nose. ... I'm as disgusted as you are. ... I absolutely understand your frustration."

Public television's Jim Lehrer moderated the one-hour town hall meeting. It will air this week in three installments on PBS' "The NewsHour with Jim Lehrer."

At the height of the financial crisis last fall, Bernanke recalled spending nights on the sofa in his office. It was a "perfect storm," he said, where housing, credit and financial problems converged into a major crisis the likes of which haven't been seen since the 1930s. To deal with the crisis, Bernanke said he sometimes had to do things "outside the box."

The financial crisis underscores the need for Congress to enact legislation that will create a government mechanism for safely unwinding big financial companies, along the lines of the process used by the Federal Deposit Insurance Corp. to handle failing banks, Bernanke said.

When asked about the Fed's diligence in protecting consumers, Bernanke acknowledged that "we were late in addressing the subprime lending problem," referring to the risky mortgages and dubious lending practices that powered the housing boom and contributed to its crash. "We have to take some heat for that."

Still, Bernanke made the case -- as he did last week on Capitol Hill -- that consumer protection oversight should stay with the Fed. An Obama administration proposal would create a new consumer protection agency overseeing mortgage, credit cards and other financial products, stripping the Fed of some of its duties. Of setting up such a new agency, Bernanke seemed to soften his earlier stance, saying, "I'm neither opposed to it or in favor or it."

When Lehrer said some people think the Fed is the fourth branch of the government, Bernanke responded, "That's a tremendous exaggeration." He said the Fed's independence from political interference in setting interest rates to influence economic activity is crucial. "You get much better results" for the economy when this is the case, he said. "We're very, very sensitive to this issue."

Asked about President Obama's $787 billion stimulus package of tax cuts and increased government spending, Bernanke said most of the money will flow in 2010 so "it might be a little bit early" to judge its effectiveness. Although big budget deficits couldn't be avoided this year and next, given government efforts to help the economy, Bernanke urged Congress to develop a plan now to bring back "fiscal sanity."

On the economy, Bernanke repeated the Fed's forecast that unemployment will probably top 10 percent this year, even as the economy starts growing again in the second half of 2009. The jobless rate is now at a 26-year high of 9.5 percent. In a "few years" the economy will be back on track and "growing strong again," Bernanke said. "It will take some patience."

The Fed, he said, "has been putting the pedal to the metal" to turn the economy around.

Bernanke's appearance on the program is part of a broader campaign, unusual for a Fed chairman, to reach out to ordinary Americans. In March, Bernanke granted a rare TV interview, appearing on CBS' "60 Minutes."

His efforts to explain the Fed's actions to get the economy and financial markets back on firm footing comes as the clock ticks on Bernanke's term as Fed chief. His term expires early next year, and President Barack Obama has not said whether he will be reappointed.

The Fed chief, who took the helm on February 2006, has been on the front lines of efforts to battle the financial crisis and end the recession, the longest since World War II.

His aggressive and unconventional actions -- including supporting the bailout of AIG to the tune of more than $180 billion -- have been credited with averting a financial catastrophe last year but also have touched off anger from the public and lawmakers on Capitol Hill about helping financial companies that made reckless gambles.