Nightmare on Wall Street a Setback for Brand McCain

But Some Feel Upheaval Will Leave Voters Reluctant to Change

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WASHINGTON ( -- Political pros from both parties are predicting the economic meltdown will rewrite the presidential election. And the latest version of the script doesn't exactly favor John McCain.

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Coming just as poll numbers showed Mr. McCain gaining some traction, capitalizing on the selection of Alaska Gov. Sarah Palin as running mate and seemingly successfully raising questions about his opponent, experts said a focus on the economy and Wall Street regulatory issues will likely favor Barack Obama. "The economic meltdown of the last few days has transformed the race, a race already transformed many times by unpredicted and improbable events," said Alex Castellanos, of National Media, one of the biggest GOP ad shops. Mr. Castellanos was part of the George W. Bush ad team.

"Until a month ago, the Republican brand was defined by what the GOP had been: George Bush. Then the Palin pick and the GOP convention gave McCain the opportunity to redefine the GOP brand as what it was going to be: John McCain, not George W. Bush.

"Now this meltdown drags guess who back onto the stage? George Bush. It's his economy. His meltdown. The debate is about his oversight. George Bush is back in this election, and so the Republican brand is again being defined by what it was, not what it hopes to be."

Mr. Castellanos said the one advantage for Mr. McCain is that upheaval can make voters unwilling to change horses.

Political tsunami
"In stormy seas, people cling to the life raft they are on. In a more uncertain world, there is often less of a desire for change. ... People value stability, maturity and experience. That's John McCain."

Democrats, of course, take issue with that last bit of reasoning.

According to Carter Eskew, chief strategist for Vice President Al Gore's campaign eight years ago and a founding partner of Glover Park Group, a major Washington advertising and public-relations shop: "The impact of these meltdowns and the market correction that goes with them is having a profound impact on political attitudes. It is hitting Main Street ... right in the pocketbook: higher mortgage costs, tanking 401ks and rising unemployment. This on top of gas prices, and you have a political tsunami that points more than ever to a 'change' election. That is good news for Obama."

"The news of the last few days has clearly advantaged the Obama campaign," said Mr. Eskew. "The polls, which had been trending against him since the Palin pick, have now rebounded.

"The uptick for Obama makes sense. The strongest factors for Obama in this race are the economy and people's antipathy toward Bush. This takes the race back to much better turf for Obama. The economy has always been McCain's Achilles' heel."

Punch, counter-punch
The candidates have been doing their part to carve out territory on the issue with a raft of advertising and stump speeches. While it's unclear exactly how many of the ads launched on the web last week actually made it on air, the charges and countercharges came quickly and furiously.

The Obama campaign struck a blow after Mr. McCain said last Monday that "the fundamentals of the economy are strong."

"How can John McCain fix our economy if he doesn't understand it's broken?" asks an Obama campaign spot introduced early last week. A second version begins by citing the Wall Street meltdown before saying the same thing.

The Obama campaign then announced it would air a two-minute spot featuring Mr. Obama talking about the economy. Mr. Obama, perhaps understanding that Middle America is more concerned about bread and gas prices than Wall Street, focuses on the overall economy.

"In the past few weeks, Wall Street's been rocked as banks closed and markets tumbled," he says in the ad. "But for many of you -- the people I've met in town halls, backyards and diners across America -- our troubled economy isn't news. Six hundred thousand Americans have lost their jobs since January. Paychecks are flat, and home values are falling."

The ad goes on to urge change in Washington and deliver a slap at Mr. McCain.

Hitting home
"This is no ordinary time, and it shouldn't be an ordinary election. But much of this campaign has been consumed by petty attacks and distractions that have nothing to do with you or how we get America back on track. Here's what I believe we need to do: Reform our tax system to give a $1,000 tax break to the middle class instead of showering more on oil companies and corporations that outsource our jobs. End the 'anything goes' culture on Wall Street with real regulation that protects your investments and pensions."

After the AIG takeover, things got even more frenetic as the Obama campaign noted that Mr. McCain had opposed an AIG bailout one day, then supported it the next.

Meanwhile, the McCain campaign sought to portray its candidate as decisive and willing to make difficult decisions, including being willing to fire the chairman of the Securities and Exchange Commission, a fellow Republican. Though he started off the week saying the "fundamentals" were strong, by the end of the week, Mr. McCain almost sounded like a populist Democrat, railing against the "greed" of Wall Street and promising to offer regulation that could rein in the corporate fat cats. It was an odd position for the flag bearer of the anti-regulation Republican Party.

Mr. McCain's ads, though, say he and Palin were the ones who could fix the mess.

McCain 'flailing'?
"Our economy is in crisis. Only proven reformers John McCain and Sarah Palin can fix it," says an initial ad.

A second ad features Mr. McCain saying American workers are "the best in the world. But your economic security has been put at risk by the greed of Wall Street." The ad calls that "unacceptable."

"My opponent's only solutions are talk and taxes. I'll reform Wall Street and fix Washington. I've taken on tougher guys than this before," Mr. McCain says in the ad.

It's hard to determine how Mr. McCain's positioning is playing in the heartland, but writing in Time, Joe Klein flatly said, "This is called flailing."
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