Yesterday's meltdown on Wall Street brought the economy roaring back to the center of the presidential campaign, and the question for the final seven weeks of the general-election campaign is whether Barack Obama or John McCain can convince voters that he is capable of leading the country out of the morass.
McCain faces the bigger challenge. As the Republican nominee, he must answer for what has happened on President Bush's watch and offer a plausible explanation for why his conservative administration would be genuinely different. Obama already is attacking him as ill-equipped to deal with the financial crisis and has aggressively moved to tie a future McCain administration to a lobbyist-dominated Washington culture.
Obama's challenge is different. He begins with the reality that Democrats are seen as the party that is more trusted to deal with the economy. Despite that, he has struggled through much of the year to develop a compelling economic message. Where he remains suspect is on the strength of his leadership and his ability to connect with working- and middle-class voters.
McCain is playing on those qualms in his counterattacks.
Even before yesterday's bad news, the economy was the top issue on voters' minds. But over the past two weeks, other issues -- Alaska Gov. Sarah Palin being the most obvious -- have dominated the political discussion. That phase of the campaign may have ended.
The debate will now probably shift back to fundamentals. Whom will voters trust to lead the country out of this problem and whom do they believe has a credible plan for doing so? What matters now is how McCain and Obama respond to the latest evidence of an economy still struggling to overcome the damage inflicted by the real estate and home mortgage crises.
Neither has truly won the confidence of voters, and yesterday neither offered fresh ideas about how to deal with what has become a mess of huge proportions.
By McCain's own admission, the economy is not his natural turf, and his comments yesterday seemed less than sure-footed. At his first event of the day, he acknowledged that the economy is in difficult straits and promised to shake up Washington and Wall Street. But he also said he still thinks that "the fundamentals of our economy are strong."
The Obama campaign pounced on those words, saying they showed McCain to be "disturbingly out of touch" with the reality that everyday Americans face. At a rally in Grand Junction, Colo., Obama wondered: "What economy are you talking about?" The comments also seemed at odds with McCain's new television commercial that declares an economic crisis.
By the time the Republican nominee had made the short flight to Orlando for a town hall meeting, his campaign had e-mailed reporters new remarks he would deliver. They seemed a 180-degree turn. If McCain's earlier comments had seemed designed to reassure, his new ones were dire. "The American economy is in a crisis -- in a crisis," he repeated.
Obama has been under pressure from Democrats, nervous about McCain's post-convention rise in the polls, to refocus his campaign message on the economy. Campaigning in Colorado, he described the recent series of events as "the most serious financial crisis since the Great Depression" and accused Washington and Wall Street of failures.
"I certainly don't fault Senator McCain for these problems," he said. "But I do fault the economic philosophy he subscribes to. It's the same philosophy we've had for the last eight years -- one that says we should give more and more to those with the most and hope that prosperity trickles down to everyone else."
Obama accused McCain of embracing a philosophy that has opposed tougher regulations -- "one that says we should just stick our heads in the sand and ignore economic problems until they spiral into crises." McCain's campaign accused Obama of embracing "pessimism, defeatism and weakness" in questioning the Republican's praise of the ingenuity and vitality of American workers and charged that an Obama administration would mean higher taxes and burdensome regulation just when the economy can least afford it.
"Everything that's been happening in the last week and a half reminds voters what's at stake in this election," Democratic pollster Peter Hart said. "Lehman Brothers, Fannie Mae, Freddie Mac -- they all may sound like arcane terminology to the voters. But in the end they know it's about housing, about the ability to invest in new ideas, and it's about holding on to jobs."
Response seen as critical
As a result, voters will be looking for more than accusations and boilerplate from the two nominees. "How the candidates respond to this will be critical to Americans' assessment of whether they're ready for the job," Republican pollster Neil Newhouse said in an e-mail. "In the big picture of this campaign, this issue is a 'jump ball.' "
That the issue of the economy is anywhere close to even between the candidates is remarkable. Given that Republicans have controlled the White House for the past eight years and that the normal advantage Democrats hold as the party best able to handle the economy, Obama ought to have a clear edge over McCain.
The Democratic nominee does score higher than his rival on the economy, but not by as much as he should, which is why Democratic strategists have been urging his campaign to refocus its message on the economy and to do so more forcefully.
In a memo issued over the weekend, Democratic pollster Stan Greenberg concluded that by emphasizing a reform message aimed at shaking up Washington, McCain and Palin had managed to draw even with Obama on who would stand up to special interests in Washington, narrow the gap between the two tickets on the economy and diminish the importance of economic issues as the most significant driver of voters' decisions.
Greenberg predicted in a telephone interview that the economy "will soar as a voting issue" because of the huge shocks that have hit Wall Street. "It will force the discussion to a very serious thing -- not that Palin is frivolous -- but I think now people want to know where McCain and Obama are going to take the country."
Helping voters understand
The challenge for McCain and Obama is to help people understand what has happened. The shocks have come from many directions this year. The mortgage crisis and the wave of foreclosures hit from one direction. Rising world oil prices -- and with them higher prices at the gas pump and for the coming winter's supply of home heating oil -- seemingly came from another.
Added to that is the collapse of financial giants, beginning with the bailout of Bear Stearns and continuing through Sunday's decision not to bail out Lehman Brothers. These financial market meltdowns have both symbolic and real effects on average Americans, even if they cannot understand exactly what has happened or why.
President Bush, Treasury Secretary Henry M. Paulson Jr. and Federal Reserve Chairman Ben Bernanke are on the front lines of this crisis now, but come January, McCain or Obama will be in charge. They have less than 50 days to demonstrate they're capable of dealing with it.
Howard Wolfson, who was communications director for Sen. Hillary Rodham Clinton's Democratic primary campaign, described the financial meltdown as a "3 a.m. moment" for Wall Street. "Will either candidate offer an explanation of the problem and a plan to fix it that will reassure voters and break through the din?" he asked.
After all the uproar and chatter of the past two weeks, the campaign may be heading back to fundamentals.
Barnes, traveling with McCain, reported from Florida. Michael D. Shear in Washington contributed to this report.