WASHINGTON –There’s more to it than lipstick on pigs.
The defining issue of the presidential campaign — the economy — confronted the nominees this week in the starkest of terms. This came about as the meltdown on Wall Street and government bailouts sent Sens. John McCain and Barack Obama scrambling to find footing on uncertain terrain where any misstep could end their hopes for the White House.
It sets the stage for a six-week run to Nov. 4 that promises to look more like off-road racing in mud-covered monster trucks than a dignified dash between two thoroughbreds.
Today, as Treasury Secretary Henry Paulson talked up a still-vague program — expected to be finalized and approved as early as next week — potentially committing hundreds of billions of tax dollars to buy up bad loans and stabilize housing and financial markets, both candidates honed their messages with the possibility the U.S. economy could collapse before Election Day. “This is just an incredible outcome,” said Dana Johnson, Comerica’s chief economist, based in Dallas. “The only precedent that comes close is the bank failures of the 1930s.”
Now voters can add to the long list of issues — the solvency of Social Security, health care, energy policies, tax policies and the war in Iraq — this big one: who has the best plan to bring regulatory reform to the financial markets.
“The array of economic issues that are going to have to be dealt with by the next president is just mind-boggling,” Johnson said. That doesn’t make the choice easier for voters, but it sharpens campaign strategy.
It also adds import to next Friday’s first of three presidential debates. It is to focus on domestic issues. “The first debate may well decide the whole thing,” said Joe Trippi, who ran Howard Dean’s unsuccessful 2004 presidential campaign, but also helped provide a model for the grassroots support Obama has tapped this year.
Accusations fly both ways
A week ago it seemed the bright shiny object in the campaign — McCain’s pick of Alaska Gov. Sarah Palin as his running mate — might divert attention from tough issues. It all changed with Wall Street’s meltdown and the Bush administration’s response — a rush toward federal intervention that may have seemed surprising for the Republican White House but was generally supported by both nominees.
Obama should have an advantage on economic doubts in battleground states like Michigan and Ohio precisely because a Republican is president and a backlash could be expected.
But that edge is dubious, especially in Michigan where a Democratic governor has been unable to steer the economy into safer harbor.
The Wall Street turmoil gives McCain an opportunity — as long as he can avoid serious missteps like early this week when he said the economy was “fundamentally strong.”
Already staking a claim to being “the original maverick” for bolting his party at times — on immigration and tax cuts, for example — the financial crisis gives him a chance to appear strong and bipartisan, as well as well-prepared to moderate a free-market philosophy for the good of the country.
Obama, of course, has the same chance to make his case as the agent of clear-thinking change.
McCain called today for more investment transparency, regulatory reform and creation of a trust to bolster mortgage holders and financial institutions. On Thursday, he said he’d fire the Securities and Exchange Commission chair (though there’s a question whether the president can).
But he also sounded a partisan note, taking to task Democrats leading a “do-nothing Congress” and Obama, whom he linked to the excesses of mortgage backers Fannie Mae and Freddie Mac.
The problem is it set off a new round of finger-pointing. Democrats sent reporters a newspaper article listing McCain’s campaign links with Fannie, Freddie and the mortgage meltdown — while Obama, after meeting with his economic advisers in Florida, suggested that what the markets need is confidence that “partisan wrangling” won’t slow reform.
Obama set down the tenets he believes need to guide Washington — saying whatever happens needs to help people on Main Street as well as Wall Street, be coupled with new regulations and be developed to stabilize global markets as well.
“John McCain and I can continue to argue about our different economic agendas for next year, but we should come together now to work on what this country urgently needs this year,” he said.
Partisans take their sides
The reality is that it is difficult for either party or candidate to win the blame game except with their partisans.
McCain is an unapologetic free market believer who has voted for deregulating markets in the past (though he also supported regulation at times as necessary). His friend and former adviser Phil Gramm helped to create a system to deregulate financial institutions — but it was approved by Democrat Bill Clinton’s White House and supported by some of the same people now advising Obama.
Unless there’s a major misstep, the race probably won’t come down to specific proposals. The intricacies of the market don’t, as Comerica’s Johnson said, lend themselves “to sound bites.”
McCain will smear Obama as the president who’ll raise your taxes. Obama has said he wants to keep middle-class tax cuts and raise taxes only on people making more than $250,000 a year and on oil company profits. Obama will smear McCain as a tool of rich corporate interests and their lobbyists, which, if nothing else, his support for financial reform this week seems to throw into doubt.
Which brings the campaign back — albeit more urgently — to where it was.
Can Obama lure the new voters who seem to be registering in battleground states, convince blue-collar voters that he will protect their interests and win the argument that McCain represents four more years of President George W. Bush’s policies?
Or can McCain keep his conservative base energized (without Palin in the forefront), swing the same blue-collar voters and, critically, women, to his side by getting them to find their comfort level with him?
The battle lines may not have changed, but now we’re talking about the cut and quality of the pork, instead of the shade of the makeup.
Contact TODD SPANGLER at firstname.lastname@example.org.