Maybe the stock markets will bounce back and recover before the end of the day, but seeing the Dow Jones index fall below 10,000 for the first time (I believe) in the Bush presidency (lower than when Bush became president), is a symbolic blow of enormous proportions. I’ve long argued that giving workers a stake in the stock market through 401(k)’s led them to form the false impression that they were members of the investor class. People no longer see Wall Street as the enemy…their net wealth is tied up in those indexes. When the Dow falls, the day they can retire recedes into the future.
If the stock market remains sharply down today and tomorrow, it will be again be the economy that dominates tomorrow’s townhall-style debate between John McCain and Barack Obama. McCain knows the debate is critical.
…McCain appears to be engaged in especially serious preparations for Tuesday’s debate, one of his last opportunities to change the trajectory of a race that may be slipping out of his control. He is certainly doing more formal preparation than he did before last month’s debate in Mississippi.
McCain’s announced plan was to make every attempt to shift the focus of the campaign off of the economy and onto Barack Obama. In particular, McCain wanted to use a kind of Kevin Bacon seven-degrees-of-separation argument to tie Obama to the dubious activities of people for which Obama bears no responsibility. It was a weak strategy to begin with, but a tumbling stock market will make it impossible. Perhaps even more troublesome for McCain is the fact the Obama campaign has launched a major media campaign to re-raise and educate the public about the Keating 5 scandal. They created the KeatingEconomics.com website where, at noon, they will debut a 13-minute documentary about the scandal, McCain’s role in it, and why it mirrors the current mortgage crisis. This line of attack seems immeasurably more topical than McCain’s efforts to dredge up the Weather Underground’s domestic terror activities.
Moreover, the format of tomorrow’s debate is the townhall, where the questions come from ordinary citizens. Obama campaign strategist Robert Gibbs explains the problem for McCain:
“I think they’ve announced they want people to forget about the economy and talk about Barack Obama,” Gibbs said. “I think that’s very dangerous and very hard in a debate where you are taking questions from real people.”
McCain’s been preparing to go negative, but people want a sense of calm and confidence, not a growling curmudgeonly scold. John McCain has no clue about the economy and his record of corruption and deregulatory advocacy is poorly matched for the political moment.