The Candidates Play the Market Meltdown

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Stephan Savoia / AP (L) / Cheryl Senter / AP (R)

Republican presidential candidate, Sen. John McCain and Democratic presidential candidate Sen. Barack Obama.

With panic on Wall Street spreading to Main Street after the collapse of major financial firms over the weekend, Barack Obama should have had a decided advantage on the trail Monday. The crisis is occurring on the Republicans' watch and even staunchly anti-regulatory observers blame lax federal controls for much of the problem. What's more, the return of the struggling economy to the political spotlight gave the Obama campaign a chance to go on the offensive after two weeks devoting most of its time to defending itself against GOP attacks. But while Obama tried to seize the moment Monday, McCain rebounded to hold his own, playing up unrelated issues like oil exploration and casting himself in the unlikely role of defender of the working class.

The Obama camp got off the mark first Monday morning, with a characteristically delicate attempt by the candidate to tie McCain to George W. Bush and the policies responsible for the crisis. In a statement released before dawn, Obama said, "I certainly don't fault Senator McCain for these problems, but I do fault the economic philosophy he subscribes to. It's a philosophy we've had for the last eight years — one that says we should give more and more to those with the most." Obama called for increased consumer protections and tighter oversight and regulation of the financial markets.

McCain's first statement two hours later was conflicted. On the one hand the Arizona senator called for reform on Wall Street, including increased "transparency and accountability," but on the other he warned against "ineffective regulation" and government bailouts. Most of all, he was heavy on atmospherics: "It is essential for us to make sure that the U.S. remains the pre-eminent financial market of the world. This will be a highest priority of my Administration. In order to do this, major reform must be made in Washington and on Wall Street."

McCain tried to sound optimistic, declaring the fundamentals of the economy to be strong. But after the Obama campaign seized on the statement as evidence of McCain being out of touch, the Republican nominee did his best to correct that notion. He argued that what he had meant by fundamentals was not unemployment data or inflation figures, but rather the backbone of the American economy, the working men and women. At a rally in Orlando, Fl, McCain said, "First of all a little straight talk... Our workers are the most innovative, the hardest-working, the best skilled, most productive, most competitive in the world. That's the American worker. And my opponents may disagree, but... I think they're strong."

As it happened, McCain rolled out Monday an ad campaign calling for tougher rules on Wall Street, lower taxes and more drilling. Only the first of those three issues relates to the Wall Street crisis, but expanding off-shore drilling has proven an electoral winner since gas prices topped $4 a gallon last spring, with Americans increasingly supporting increased domestic production over conservation. And lower taxes is the only other reliable winner in the Republican arsenal when it comes to the country's faltering economy.

The Obama camp toughened its attack on McCain during the day, saying, "John McCain has been in Washington for 26 years and hasn't lifted a finger to reform the regulations that could've prevented this crisis. In fact, his campaign is run by some of the very same lobbyists who fought against these regulations and worked to put special interest giveaways in our federal budget."

In the end, voters are more likely to be affected by the reality of closing banks, dwindling retirement accounts and a sputtering economy than by spin from either campaign. No amount of attacks and counterpunches by the candidates are likely to diminish the political impact of a financial crisis of this magnitude — or an economy as troubled as this one.

(See photos of the troubled economy here.)