There's no question that concern over the faltering American economy has become the pre-eminent issue of the upcoming US Presidential elections being contested by US Senators John McCain and Barack Obama.
For proof, one need only look at last Friday's first presidential debate: though the stated topic -- agreed upon earlier by both campaigns -- was to be foreign policy, a full 40 per cent of the debate was dedicated to the two candidates' plans for America's economy.
In the most recent CBS/New York Times 2008 Presidential Election poll, 52 per cent of respondents identified 'the economy and jobs' as the issue that would most determine whom they vote for.
The second most pressing issue, according to the same poll, was terrorism and national security, which garnered only 11 per cent of responses. It's clear where prospective voters are assigning importance.
Of course, given the recent meltdown of the US financial sector, this emphasis on the economy is to be expected. The importance of this issue has only accelerated in recent weeks, with America, the epitome of capitalism, showing uncharacteristic signs of socialism.
It began with the government takeover of Fannie Mae and Freddie Mac in early September, and worsened with the market freefall and collapse of Lehman Brothers (which filed for bankruptcy on September 15), AIG (saved by $85 billion emergency funding from the US government) and Merrill Lynch (bought by Bank of America for just $50 billion), and culminating in the Capitol Hill drama over the $700 bailout plan for the accumulated bad assets that threaten to drown Wall Street. The pertinent questions, then, are: (1) What exactly do the two candidates promise to do with regard to economic matters; (2) How have they responded to this month's economic crisis; and (3) Whether or not their respective economic platforms are plausible. Because, when looking at the two plans, it's important to remember that what a candidate promises on the campaign trail is often wildly different from what he or she can bring about once in office.
Keeping that in mind, a quick perusal of the two candidates' economic positions shows many and vast differences of short-term policy and long-term opinion. These differences were only further highlighted during Friday's debate.
US Senator and Republican Party candidate John McCain is, first and foremost, a foreign policy wonk. The bulk of his experience centres on issues of national security and how the United States should operate in the international arena. His experience with economic matters, on the other hand, is somewhat lacking.
In fact, in 2005, McCain told the Wall Street Journal, "I know a lot less about economics than I do about military and foreign policy issues. I still need to be educated."
He followed that up by telling the Boston Globe, less than a year ago, "The issue of economics is not something I've understood as well as I should."
That being said, McCain does have a record on the economy, one that's caused consternation for rank-and-file Republicans in the past. He was one of two Republican senators to vote against a $1.35 trillion tax cut that President George W Bush proposed in 2001.
And though, at times, he's been opposed to federal regulation and oversight of Wall Street, he's recently begun to sing a different tune.
Having learned his lessons from a disastrous 2000 defeat in the Republican primaries to the eventual President, George W Bush, McCain has worked hard to curry favour from the party's right-wing, fiscally conservative establishment.
His economic platform has increasingly fallen in line with President Bush's, and can be perhaps best summed up by this quote from last Friday's debate.
"I want to cut taxes, to keep spending low," McCain said. "The worst thing we could do in this economic climate is to raise people's taxes."
o, not only has McCain promised to extend tax cuts that he once voted against, he's also promising to slash corporate tax rates (in order to stimulate job growth) and permanently repeal the Alternative Minimum Tax (a very unpopular item in the US tax code perceived to punish upper-middle class families).
Having come into the fold of the Republican Party, McCain seemed to be saying all the 'right' things about the economy while on the campaign trail. Unfortunately for Mr McCain, this idea of 'right' comes at a time when Americans increasingly disagree with Republicans about what is 'right' for the economy.
To be sure, McCain only made his problems on this issue several degrees worse with last week's complete and naked flip-flopping on the current economic crisis.
On a day that has quickly become known as 'Black Monday', September 15, the same day that saw legendary Wall Street institution Lehman Bros collapse, McCain uttered the phrase which may end up costing him the election: "The fundamentals of the economy are strong," he said.
As political pundits and economic gurus quickly pounced on this gaffe and began to run and rerun the tape, the McCain camp moved to frame the comments as 'patriotic,' saying that McCain meant the US workers and business infrastructure were strong. Apparently, Americans didn't buy what McCain's campaign advisor Steve Schmidt was selling, as McCain has witnessed increasingly poor polling numbers ever since.
Furthermore, having already made the statement, McCain would probably have been best served to leave the issue alone. He instead made the rather bizarre choice of abruptly calling a press conference nine days later to suspend his presidential campaign in the wake of what he now termed a "historic crisis."
He went on to say that if a bill was not passed and a resolution reached, "Credit will dry up, with devastating consequences for our economy. People will no longer be able to buy homes and their life savings will be at stake."
He then travelled to Washington in order to work with Congressional leaders and President Bush on the bill, though initial reports pegged his input as marginal at best, leading many commentators to call McCain move a political stunt and a sham.
Though he's in the past been a champion of Wall Street's deregulation, McCain is now advocating governmental oversight. It would be political suicide not to, though McCain's new take on the issue must be a bitter pill to swallow for many US conservatives.
Given all this, McCain performed surprisingly well during the portion of last Friday's debate that was devoted to economics.
He iterated and reiterated the Republican talking point of spending cuts and lower taxes, even saying he would go so far as to implement a 'spending freeze', which would cut off funding to all but the most essential of government expenditures. He also promised to balance the budget, though didn't give a timeline for achieving this seemingly lofty goal.
On the other hand, 47-year-old US Senator Barack Obama's stance on economic matters presents a stark contrast to Senator McCain's.
It's safe to say that Obama strikes fear in the heart of many fiscal conservatives, who have labelled him everything from a 'Spend-ocrat' to a 'Socialist' and 'Anti-Capitalist'. To combat this image of being a tax-raising, big government Democrat (the kiss of death in US national politics), Obama has worked hard to cultivate his image as champion of the Middle Class.
An outspoken opponent to the George W Bush tax policy and the Republican Party's famed 'supply side, trickle down economics', Obama has promised tax cuts for 95 per cent of Americans, failing to mince words on how he will manage to pay for such a move: He will close loopholes in the tax code that favour corporations and their fatcat executives. He will punish companies who ship jobs overseas and reward those who try to create American jobs. Those who make over $250,000 a year will certainly face tax hikes.
He's even gone so far as to suggest 'windfall profit' taxes on Big Oil companies, arguing that at a time of record profit for the oil industry, the average American is paying more at the pump than ever. When this suggestion, the windfall profit directive, drew howls, scowls and intensified cries of 'socialist', Obama backed off the plan.
While Obama's economic stances resonate with what he calls 'Main Street', he's clearly found an enemy in Wall Street.
The junior US Senator from Illinois and Democratic Presidential candidate has pulled no punches in decrying what he calls the 'culture of greed' and the 'failed economic policies of the last eight years', saying the current crisis we face is the 'logical end result' of unfettered, unregulated markets. He's also a staunch advocate of raising the minimum wage and a friend of unions and workers' rights group.
Republicans have hit back at Obama by saying his policies make employers vulnerable and would lead to a deep recession. They also paint him as having the 'most liberal voting record in the US Senate', though Obama defends this charge by saying his voting record is just the result of 'being against George W Bush's wrong-headed policies.'
One thing is certain, however: as much as the financial meltdown is hurting the US economy, it is serving Senator Obama's electoral chances. It all fits quite nicely into his narrative about corporate greed and reckless handling of the US tax-payer's dime. His message stressing the need for increased oversight and federal regulation of Wall Street comes across as extremely prescient, and there's no doubt he's sitting in the cat bird's seat on economic issues, at least in prospective voters' eyes.
But how feasible are these plans? After all, President Clinton built nearly his entire campaign in 1992 around the idea of a more centralised, all-encompassing medical plan. It was to be his baby, his pride and joy.
Early into his first term, however, faced by staunch opposition of Congressional Republicans, Clinton saw his medical plan fade into obscurity, not to be heard from again. 16 years later, medical coverage in the United States has become, if anything, more dependant on HMOs and the private sector. So it's not always, "What you see is what you get."
For one thing, should Senator McCain be elected, he will be facing, in all likelihood, a rather powerful Democratic majority in Congress. Though he's called for a spending freeze, without the consent of Congress, he has no authority or jurisprudence to do so, and might be thwarted.
He's also promised to keep the George W Bush tax-cuts and current funding for Iraq ($12 billion a month), while simultaneously balancing the budget. Looking at the massive federal budget deficit, which has grown dramatically under George Bush's watch, these claims seem long on promise but short on plausibility.
If he wins and is able to cobble together a majority voting bloc comprising moderates from both parties, perhaps he would be able to pursue some of his agenda. But given the current highly partisan political climate of US national politics, where votes often fall directly down party lines, this seems a long-shot. In all actually, in terms of economics, a McCain term would look much like the last two years under President Bush, with a stubborn Democratic majority in Congress perpetually at odds with a stubborn Republican President.
With Barack Obama, on the other hand, the question is simple: How's he going to pay for all this stuff? In Friday's debate, he mentioned increased spending for health care, primary education, science and technology, infrastructure and alternative energy initiatives.
But when debate moderator Jim Lehrer pressed him on how he could reconcile these plans with what could be a smaller than expected federal budget, Obama seemed stumped, eventually conceding that lower tax revenues will likely alter his short-term plans but not his long-term vision.
Make no mistake: the US is facing its greatest economic crisis since 1930s' Great Depression. In the voters' eyes, this issue has surpassed all others in importance. And the candidate who best speaks to the concerns of a worried electorate will waltz his way into the White House.
