McCain in 'difficult spot'
2008-09-18 12:04
Washington - The US economic free fall has played havoc with Republican John McCain's presidential campaign, as he tries to distance himself from the unpopular Bush administration and walk away from his own record as a champion of government deregulation.
As the stock market has plummeted, polls show support rising for Democrat Barack Obama in recent days, erasing the bounce McCain enjoyed after the Republican National Convention and his surprise pick of Alaska Governor Sarah Palin as the party's first female vice presidential nominee.
McCain found himself in a particularly difficult spot on Wednesday as the bellwether Dow Jones Industrial Average fell nearly 450 points - slightly more than four percent and the second huge loss this week - after an $85bn government bailout of one of the world's largest insurance companies, American International Group Inc. McCain had vigorously opposed the bailout just hours before it was announced.
The move by the Federal Reserve, the US central bank, forced McCain to quickly retool his message from one of opposition to a grudging acceptance and acknowledgment that the government had acted to protect millions of Americans from further financial hardship.
American voters' prime anxiety ahead of the November 4 election is the struggling American economy, and McCain is particularly vulnerable on that issue.
McCain said during the primary campaign - and likely to his everlasting regret that he was not as well versed on economic issues as he would like. Compounding that, the 72-year-old former Vietnam prisoner of war has been closely tied to President George W Bush, whose popularity is at near record lows and most likely falling further under the weight of the economic slide this week - a meltdown not seen going back nearly 80 years.
Obama, who appears to have regained his focus in the White House contest, was hitting McCain hard as a product of a Republican drive over recent decades to deregulate the financial markets, moves that the first-term Illinois senator blamed for the mounting damage to the US economy.
The economic crisis, Obama said, is "a stark reminder of the failures of crony capitalism and an economic philosophy that sees any regulation at all as unwise and unnecessary".
'We are going to fight the greed and irresponsibility on Wall Street'
McCain campaigned in Michigan, one of the states hardest hit by eight straight months of rising unemployment.
At the General Motors Orion assembly plant, he told workers: "We are going to fight the special interests and corruption in Washington. We are going to fight the greed and irresponsibility on Wall Street." Some workers chanted Obama's name as McCain left the plant.
On Wednesday in Elko, a conservative, rural Nevada mining community, Obama mocked McCain's response to Wall Street's meltdown.
"Yesterday, John McCain actually said that if he's president he'll take on - and I quote - 'the old boys network in Washington.' I'm not making this up," Obama said. "This is somebody who's been in Congress for 26 years, who put seven of the most powerful Washington lobbyists in charge of his campaign.
"And now he tells us that he's the one who's going to take on the old boys network," Obama said. "The old boys network. In the McCain campaign that's called a staff meeting. Come on."
While McCain was forced to retreat on his opposition to the Federal Reserve bailout, re-calibrating his remarks about the lifeline tossed to AIG, he called for an investigation to uncover any wrongdoing.
"The government was forced to commit $85bn," McCain said in a statement. "These actions stem from failed regulation, reckless management and a casino culture on Wall Street that has crippled one of the most important companies in America."
Obama sought advantage in the financial carnage and purchased an extraordinarily long two minutes of television time across several battleground states to air a lengthy commercial.
No easy solution
In it, Obama says: "600 000 Americans have lost their jobs since January. Paycheques are flat and home values are falling. It's hard to pay for gas and groceries and if you put it on a credit card they've probably raised your rates.
"You're paying more than ever for health insurance that covers less and less. This isn't just a string of bad luck. The truth is that while you've been living up to your responsibilities, Washington has not. That's why we need change. Real change."
While declaring there was no easy solution to the deep troubles facing the United States, Obama said he "approved this message because bitter, partisan fights and outworn ideas of the left and the right won't solve the problems we face today. But a new spirit of unity and shared responsibility will".
Neither McCain nor Obama offered specifics about what kind of regulation they would bring to the economic crisis. Complicating matters, some of the biggest fundraisers for both campaigns are executives from the stricken financial services industry.
Merrill Lynch & Co's chief executive, for example, has raised more than $500 000 for McCain's campaign. Obama has received at least $1.5m collected by three senior executives at Lehman Brothers.
Republican vice presidential nominee Sarah Palin, meanwhile, accused Democrats of being out of bounds for criticising McCain when he said on Monday that the fundamentals of the US economy are strong.
"It was an unfair attack on the verbiage that Senator McCain chose to use because the fundamentals," Palin said in an interview with Fox News Channel. "He means our work force, he means the ingenuity of the American people. And of course, that is strong and that is the foundation of our economy."
Palin, cloistered since her surprise pick as the Republican Party's vice presidential candidate, answered questions from members of the public for the first time since joining the ticket when she joined McCain at a town hall meeting in Grand Rapids, Michigan, on Wednesday night.
- AP