There is no consensus among the talking heads and know-it-alls about how Alaska Gov. Sarah Palin performed in the vice-presidential debate Thursday against Sen. Joseph Biden.

Opinions are also divided about what the debate will mean, if anything, for Sen. John McCain or Barack Obama as they enter the homestretch for the White House.

Some say Palin's performance was good enough to revive the GOP campaign. Others say it will make no difference, or even hurt. A New York Times editorial dripped with disdain when it quoted Palin's response to a question about Israel in which she said she supported "a two-state solution, building our embassy also in Jerusalem, those things that we look forward to being able to accomplish with this peace-seeking nation."

Nobody will say that was a sharp response, but if every nonsensical utterance by a politician were disqualifying, the halls of Congress and the White House would be empty.

We'd say that Palin's ability and all that she represents give McCain a chance to rejuvenate his seemingly winded campaign. The two should go on the offensive in an area that Palin neglected in the debate: asserting the benefits of the free market and the dangers of regulation. Now more than ever Republicans should stand up for free enterprise.

For his part, Biden blamed deregulation for the financial shocks. But the real culprit is excessive regulation. It was Clinton-era social engineering -- admittedly bipartisan -- that forced lending institutions to give loans to people who couldn't repay them. Government-backed institutions Fannie Mae and Freddie Mac poured more gasoline on the fire by funding the mortgage madness.

Then another "reform" called fair-value accounting or mark-to-market requirements forced banks to apply artificially low values to their assets, driving some into bankruptcy and destroying $5 billion in lending capacity.

The reality is that the Bush years have seen little deregulation. The last big act of deregulation, the repeal of the requirement that separated commercial and investment banks, passed long ago. That act of deregulation turned out to be a lifesaver in this crisis by allowing foundering investment banks such as Goldman Sachs and Morgan Stanley to survive by turning themselves into commercial banks.

McCain, Palin and conservatives in general must counterattack if they expect to win in November. Palin, the one-time basketball point guard, may be a good point person for this effort. She has the most valuable gift a politician can have: the ability to connect with ordinary people. Republicans should recognize their asset and use her to advantage.

Palin is, unfortunately, open to honest criticism about her credentials. But the left is taking that criticism to extreme and unfair levels, even sneering about her degree from the University of Idaho instead of some grander institution. Since 1980 either the president or vice president has attended Yale, Harvard, or both.

If elected, Obama, the Harvard grad, would continue the legacy of elite chief executives. We think it might actually be a breath of fresh air to have somebody in high office from U.I.

Biden succeeded in presenting himself as the more experienced candidate in Thursday's debate. But as the non-elite candidate, Palin could help shift the argument by bringing issues home to ordinary people.

The tremors on Wall Street are likely a sign of a much deeper shift. The economic and political landscapes are morphing in ways we still only vaguely grasp. If the Republicans don't come on strong in the remaining weeks they should prepare to lose the election.

Obama, on the other hand, appears to be gaining traction for his proposals to redistribute wealth. He has been called (and not without some justification) the most left-wing candidate ever to have a real chance at the presidency. If elected, he'll have a Congress behind him that's run by Harry Reid, Nancy Pelosi and others in the same political spectrum.

Four years of that could do far more damage to free markets than the current distress. But will Palin or Biden be a factor? Time will tell.

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