Market collapse has frozen presidential contest in place

WASHINGTON — America's economic crisis is shaping its presidential election in ways seldom — if ever — seen before. In past elections, candidates have run with one eye on employment and inflation figures. But this year, it is the tanking stock market that has the rapt attention not only of the candidates but also of the voters as well.

Pollsters have no clear way of calibrating the drop in the stock market with the political fortunes of Democrat Barack Obama and Republican John McCain. "Honestly, there are no simple formulas," pollster John Zogby said. "There are so many variables — age, race, gender, trust and so on."

Still, the stock market decline over the last couple of weeks seems to have frozen the presidential contest in place, to the advantage of Obama. As Frank Newport, editor-in-chief of the Gallup Poll, put it in his most recent report, the economic crisis and its dramatic effect on the world's financial markets "to some degree drowns out the typical campaign back and forth that characterizes the presidential race at this point."

In Gallup's daily national tracking poll, there has been no change in the last 15 days, with Obama currently the choice of 51 percent of registered voters, and McCain trailing at 41 percent.


'Worried about money'
About half of those polled indicated that "they personally had worried about money the day before they were interviewed," Newport said, "underscoring the major impact the economy is having on Americans' lives and the degree to which their presidential choice may be filtered through the prism of economic angst."

Even so, Obama has pulled ahead in key battleground states, especially in the industrial Midwest in areas whose economic slide began long before the financial markets experienced their current difficulties. The McCain campaign, in fact, has all but written off Michigan, which has the highest unemployment rate in the nation, 8.9 percent, and trails Obama in Ohio, where the jobless rate is 7.4 percent, well above the national rate of 6.1 percent.

In the past, "electoral fortunes have been linked to job losses and inflation, not the stock market," said Darrell West, a senior political analyst at the Brookings Institution. "However, if big stock losses translate into big headlines every day, they will scare voters into believing the economy is headed into the tank." And that favors "the party not controlling the presidency," meaning Obama, West added.

As the stock market on Friday ended one of its worst weeks in history, McCain focused his attacks as much on Obama's character and questions about his association with former 1960s radical William Ayers as on his latest economic proposal — to suspend a requirement that investors age 70 1/2 begin to draw down their retirement accounts, which could force them to sell stocks at low prices.

But, as conservative columnist George F. Will wrote, the attacks about Ayers "have come just as the Obama campaign is benefiting from a mass mailing it is not paying for" — the envelopes containing third-quarter reports on their 401(k) retirement accounts "telling each household its portion of the nearly $2 trillion that Americans' accounts have recently shed."


Broad economic problems
"Obviously, the economic crisis has helped Obama considerably, but there is no obvious way to correlate the two," Larry Sabato, director of the Center for Politics at the University of Virginia, said in an interview. "I think Obama's gain is due to economic problems much broader than the stock market — gas, food, mortgages, inflation, stagflation."

It is the stock market, though, that is dominating the presidential campaign and the debates so far. It is likely to be the most talked about issue in the third and final presidential debate Wednesday in New York.

Unable to shift attention away from the economic meltdown, some conservatives are trying to make the case that the prospect of an Obama presidency is what is driving down the market — an argument that John Pitney, a political science professor at Claremont McKenna College, says is "silly."

"The relationship works the other way," Pitney said in an interview. "Bad economic news is good political news for the party not holding the presidency. There is no precise formula. The most you can say is that the stock market plunge has made McCain even more of a longshot."

Consequently, in recent days, Obama has been playing it safe. He has taken to reading his speeches, reducing the chance of gaffes. He has stuck to mostly general criticisms of McCain's economic proposals. And he has not taken questions from traveling reporters in two weeks, a period in which the savings of millions of Americans have vanished and the global economy has come to teeter on the brink of collapse.

Source: http://www.chron.com/disp/story.mpl/business/6052528.html