Market crisis may be a boon for Obama
marketwatch.com
McCain struggles to cast himself as economic commander-in-chief
By Robert Schroeder, MarketWatch
Last update: 3:32 p.m. EDT Sept. 17, 2008
WASHINGTON (MarketWatch) -- The historic shake-up on Wall Street and gut-wrenching drops in markets this week have thrust the economy back into the forefront of the presidential campaign, and so far it's Sen. Barack Obama who appears better off because of the events, analysts say.
With less than two months until Election Day, both Obama and Sen. John McCain are scrambling to show that they're best-prepared to take the reins and put the economy back on track. But with McCain famously admitting the economy isn't his strongest suit and Democrats gaining the advantage in polls about the economy, the Arizona Republican appears to be in potential trouble despite his current lead in general election polls.
"It helps the Democrats," said Floyd Ciruli, a Colorado-based political analyst. "They tend to be stronger on the economic issues." Moreover, he added, the market troubles take the focus off of the campaign trail's newest star: Gov. Sarah Palin, McCain's running mate. The Democrats "needed this desperately," said Ciruli. Largely unknown before being picked, Palin has stolen the limelight from Obama in recent days.
No more. Now it's the economy that's front and center, and McCain appears to be playing catch-up as Obama is reminding voters he floated a plan to clamp down on financial companies as far back as March. He's also been bludgeoning McCain for his repeated insistence that the economy's fundamentals are strong.
"We are in the most serious financial crisis in generations," Obama said in Golden, Colo. on Tuesday. "Yet Sen. McCain stood up yesterday and said that the fundamentals of the economy are strong."
In fairness to the Arizona Republican, McCain also said the economy is going through "very, very difficult times." He said his administration would clean up Wall Street and reform government. Wednesday morning, the McCain campaign launched a new TV ad slamming Wall Street greed and blaming markets for jeopardizing the economic security of American workers. He took a few shots at Obama as well, painting the Illinois senator as a typical tax-happy liberal.
McCain should keep up that line of attack, analysts say. The "reform" mantra is a smart one, especially when one of McCain's economic strong suits -- increased oil drilling -- is receding as an issue.
"What he mainly needs to do is link whatever he says to his major theme, which is that 'I am a reformer,'" said Ciruli.
McCain has strongly backed expanding offshore oil drilling, a proposal that's won over some voters who have been punished by high gasoline prices. "The energy piece [of the economy], I think, slightly has been tilting to McCain," said Ethan Siegal of The Washington Exchange, a group that researches public policy for investors. But as oil prices retreat, McCain has one less arrow in his economic policy quiver.
McCain is also of course at a natural disadvantage. He aims to follow the unpopular President Bush into the White House, on whose watch, Democrats argue, the foundations for the current mess were laid. Obama is also mocking McCain for embracing regulation after subscribing to a deregulation philosophy for years.
"Despite his eleventh hour conversion to the language of reform, Sen. McCain has subscribed to this philosophy for twenty-six years in Washington and the events of this week have rendered it a colossal failure," Obama said Wednesday. That's not entirely true: McCain voted for the 2002 Sarbanes-Oxley Act, which tightened accounting rules on companies after the Enron, WorldCom and Tyco scandals.
The problem for McCain, though, is that he also later said he regretted the vote. McCain often touts his record and experience on the campaign trail, while belittling Obama's thinner resume. Obama has less experience, to be sure, which gives him the luxury of floating ideas that sound good. McCain, meanwhile, has his record to promote -- or try to downplay.
McCain has already shifted to the right this campaign season, telling the Republican faithful that he's a true conservative. He now backs oil drilling and President Bush's tax cuts, things he opposed in the past. With the GOP party in the political dumps after eight years of the Bush administration, party members are eager to embrace any Republican with a decent shot at winning the White House.
With the economy in crisis, McCain now appears to be shifting to the left, touting regulation and straying from the usual free-market Republican script. That may be a good response now, to calm investors' and consumers' nerves at a time when markets are shaky and his opponent draws better reviews on the economy. But the risk for McCain is that he will alienate conservatives by trying to out-do Obama when it comes to responding to this crisis.
McCain may believe the economy is fundamentally strong. But if he doesn't get his message right, his campaign is going to look seriously weak.
-Robert Schroeder is a reporter for MarketWatch in Washington. |
