Celebrity-status political pundits Mary Matalin and James Carville say Bermuda might come up in damning news reports about offshore centres and occasionally be blamed by Capitol Hill legislators for America's job woes - but the Island really isn't the problem.

Nor is it ever likely to register at the top of American lawmakers' political agenda, the couple told The Royal Gazette.

The Island has been caught up in recent years in a high-profile US legislative and media debate on the impact to America from corporate inversions - US companies that move their headquarters offshore for tax reasons. Calls to shut down a so-called “Bermuda tax loophole” became a frequent reference by Senator John Kerry in his fight for the Presidential office last year. More recently, New York Attorney General Eliot Spitzer, another Democratic hopeful - in his case for the office of New York Governor - renewed a focus on offshore areas like Bermuda and Barbados after a high-profile insurance probe highlighting questionable transactions between some US insurance carriers and their offshore subsidiaries.

Just this week, in a speech in Seattle, Mr. Spitzer said reporters should be be doing their story digging in offshore locales.

But sitting down with The Royal Gazette yesterday, Democrat Mr. Carville and Republican Ms Matalin - a partisan husband and wife team that first caught media attention when each was strategic in the 1992 race for president: He for Clinton, she for George H.W. Bush - said Bermuda was the least of concerns on the American agenda.

The couple yesterday gave the keynote address at the Professional Liability Underwriting Society (PLUS) symposium taking place at the Fairmont Hamilton Princess.

Although they have been to Bermuda before, this visit was only for two days. Still, Ms Matalin and Mr. Carville were able to find out about the current political scene first hand when they sat down on Monday to what they called a “charming” dinner with the Premier, Alex Scott, Mrs. Scott, Deputy Premier Dr. Ewart Brown and Mrs. Brown, and others from Government and the private sector, including XL CEO Brian O'Hara.

Ms Matalin said Bermuda was a “stable, prosperous” country that could not be seen as a threat to America's biggest concern, national security.

Mr. Carville - a frequent guest on CNN's “Crossfire” and occasional movie star and film producer currently working on a remake of “All the Kings Men” starring Sean Penn - said he thought things like “the deficit, al Quaeda, the military, you name it,” were much more on the political radar in Washington despite Sen. Kerry's rhetoric about Bermuda on the campaign trail.

And he said that he didn't see Bermuda being an issue in the 2008 Presidential campaign.

“The US, its role in the world, in trade, immigration, jobs etc. all of these are going to be pretty ripe for discussion in 2008. I don't really see Bermuda being a defining issue.”

He said the Democrats had to figure out a way to turn the economy around, in the face of little growth while expenses have seen steep increases, but he said Bermuda was not the “silver bullet, or pink coral bullet”.

But Mr. Carville didn't deny that discussions on how to cut down on companies outsourcing jobs or moving offshore would likely continue to be a hot political potato - even if debate never led to meaningful change of US laws.

“What happens, is Bermuda becomes a kind of symbol for a sense that the United States is losing assets or something like that.”

He said as an issue this was: “Huge, huge. It is going to be a big issue in American politics, the whole offshore, outsourcing, and how do you deal with it? I probably have a different view [than my wife. I think people can legitimately say you aren't growing jobs, you aren't growing income, what is going on to deal with this.”

But both indicated there was little threat of lasting legislative action.

Ms Matalin said Sen. Kerry was not making serious threats: “It was not about Bermuda, it was not even about inversions. It was a time-honoured Democratic bogeyman. You can't be pro-job and anti-business. Kerry used it and then he got off it. It was a political tactic that didn't work. That party [Democrats is going to have to get off being anti-business.

“it is very easy to politically attack outsourcing until you look at the whole equation of how many jobs we insource. The dialogue is not as sophisticated and understanding as it will be if we are ever going to make policy off the issue.”

Ms Matalin declined to speak specifically to how Bermuda - both its Government and thriving insurance sector - might best handle the fall out from this kind of negative publicity, as with Mr. Spitzer's widening probe of insurance industry practices.

“You know we are not going down that long windy road of the New York Attorney General ... we are experts at national politics that is our subject of expertise and international politics in terms of the President's democracy programmes, we can talk about that ... I'm not going to get into your politics.”

But Mr. Carville later joked to the more than 100-strong crowd that gathered over lunch to hear the couple speak: “We are going to have a Spitzer fundraiser as soon as this is over.”

Bermuda got the thumbs up from both Ms Matalin and Mr. Carville, who said they recognised that Bermuda is influenced by the US but it also has a strong system of government and free enterprise that has helped it prosper.

Ms Matalin said the public-private partnership struck between Government and the company's bustling private sector was a positive.

“It obviously is effective as manifested by the success as the premier centre for such enterprise ... and it does require effective interaction with the United States government.

“We had a wonderful dinner last night with the intersection of the public-private sector. There is a confluence of interest that results in the whole being greater than the sum of the parts.”

She continued: “You also have you are blessed with little bureaucracy and fewer impediments.. that is a huge advantage. You can see that, as a general proposition, going to countries around the world, on democracy issues. The less bureaucracy, the better. It makes a big difference. I just love this, you can do here what can there take months of negotiation.”

Mr. Carville quipped you should be able to move quickly: “Well, it is a nation with 60,000 people.”

He predicted that the way things happen in America was ripe for change, even to predicting a third neo-isolationist political movement getting up and running before the 2008 election.

“The world is changing at a really rapid pace. We are in the last throes of a debate we have become accustomed to in American politics. I think there are going to be some new emerging fault lines based on how do we deal with this. And also how do we deal with the humungous imbalances we have in the American fiscal position. There used to be a lot of isolationism and nationalism, but I think that is to a certain extent the culture wars are going to take a back seat. I think we are going to have a huge debate on what we are going to do about an ageing population and how we are going to stay competitive.”

Ms Matalin said the shift would be to a “less rhetorical” debate.

“I'm not picking on Kerry but the presentation on what happened here was inaccurate. People don't understand it enough, politically Joe Six-Pack hears about the outsourcing thing, and they you say well, your job is insourced. All these giant issues - increasing health care costs, social security reform ... it takes a long time in a country our size ... Take Iraq. It took four years between 9/11 and the elections in Iraq. You have to have an ‘OK I get it' ... that is how change happens.”

Mr. Carville said: “If there is no interest growth in the country there is no income growth. That is why people are in a foul mood. But I agree with my wife that we are in the last throes of an old debate and we are coming up to a new one; I think it is going to be pretty dramatic. I think it is fair to say that neither party knows where they are going to be in the debate.”

But Ms Matalin said: “The businesses that are here [in Bermuda, there would be significant economic consequences not just to Bermuda, and not just to their industry but to our economy. Small does not mean unmighty. It is not the size, it is the intelligence, the support. There was not anybody at the table last night who was not very effective at communicating at how it worked and why it continues to work that way. All were well-positioned to decision makers in Washington. It is not your size, it is your leverage.”

Mr. Carville said the AIG story - with the commercial insurance giant, including its Bermuda subsidiaries - coming under intense scrutiny from Mr. Spitzer, was a sign of how Bermuda was influenced by the outside world.

“So much of what happens here depends on what happens some miles west of here. No man is an island and no country is an island anymore. Physically it is an island but economically it is not.”

When asked if Bermuda going independent would change its profile in Washington, both said not. “As I understand it the Government wants to disseminate information on what it means [Independence. To be honest with you I've asked the doorman as my own little focus group how would life be different tomorrow if you became independent at midnight tonight. I think if people in Bermuda vote one way or another it will fine with people in America. It is their Island, their choice,” Mr. Carville said.

Ms Matalin said: “In terms of our current strategic interest and policy, first and foremost is our security. It is not Republican or Democrat, it is not if you are a liberal, it is in the strategic interest of the United States. Stable and prosperous countries are not breeding grounds for terrorism. That is our strategic interest. Bermuda does not fall into that.”

Mr. Carville added: “It is not like you [Bermuda are going to align yourselves with North Korea.”

“Right, when you talk about policy Bermuda has strategic influence but when you talk about our national policy, your status would not have too much bearing because you are going to be stable no matter what,” Ms Matalin said.

“Most people would say if you go for it fine, stay with the commonwealth, fine. But understand it is a completely self-governing place. The position of most in the United States is it a nice place to come. I think most have a favourable view of Bermuda. I know I do. I'm always glad when I get invited here...it is easy to get to.”

Mr. Carville, who regularly consults for foreign countries and leaders on their policies and procedures, said no one had approached him on this Bermuda trip about offering expertise to the Island. “I've done work for the Bahamas, but never Bermuda. I'd love to. It is a great place.”

“I was very charmed by the Premier last night,” Mr. Carville said. Mr. Carville, often referred to as the ‘ragin' Cajun' was also taken to find a fellow native from Louisiana - the wife of Dr. Brown- at their dinner with public officials and private sector executives.

(By the way, Mr. Carville has previously worked with UK Prime Minister Tony Blair, and predicts he'll win that country's general election tomorrow. However, he said that if the Labour Government scrapes in with under 75 seats, Chancellor Gordon Brown could be made Labour leader.)

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See Carville and Matalin this Sunday on NBC's Meet the Press at 10 a.m.