Market mayhem has McCain doing the mamba

by Lisa Van Dusen | September 21, 2008

Back in 1992, when James Carville posted his immortal sign on the war room wall in Bill Clinton's Little Rock, Ark., campaign headquarters, "It's the economy, stupid" was only No. 2 on his list of three campaign themes.

No. 3 on the list was,"Don't forget health care" and No. 1 was, "Change vs. more of the same."

The fact that all three themes are just as relevant in a presidential campaign 16 years later is either proof of the cyclical theory of change or proof things haven't changed at all.

Back then, the "stupid" was a rhetorical slap upside the head for Clinton and anyone else in the campaign tempted to forget which ball to keep their eye on.

At the time, Americans were still reeling from the effects of a recession made worse by high oil prices following the U.S.-led invasion of Iraq under the last President Bush, who represented 12 years of Republican rule, or "more of the same."

This past week, "It's the economy" has been made so glaringly clear as a campaign issue that it no longer needs the "stupid" because nobody smart enough to know what "the" means much less what "economy" means could still be stupid enough not to get it.

With Wall Street collapsing like a house of cards, oil prices ravaging sector after sector like a virus and the Federal Bailout of the Week program now up to US$900 billion with the addition of this past week's winner, AIG, the U.S. economy is in what even AP, which doesn't go in for hyperbole in its news copy, called "the worst financial meltdown since the Great Depression."

On Thursday, in his first public appearance since the Dow Jones industrial average fell more than 500 points Monday in its steepest plunge since 9/11, the current President Bush gave a two-minute statement to White House reporters, saying nothing really about what he would or even could do to stanch the hemorrhage.

Bush can't blame the crisis in the U.S. economy on anything that happened anywhere else; he can't blame it on contagion from an Asian financial meltdown or a distant currency collapse or banking crisis (though the Japanese banking crisis of the late '90s was a big fat warning about the subprime mortgage collapse).

This disaster is not pneumonia caught from a sneeze sneezed halfway around the world. It's not a tornado unleashed by the fluttering of a butterfly's wings 10 months ago in Thailand.

The problems that have led to this black, black week are domestic, structural, regulatory and a traceable product of the priorities and loyalties of the Bush administration and the Republican party.

That's why the president cancelled his fundraising appearances for Republican candidates last week, drew the shades and became very, very busy.

McCain, meanwhile, kept distancing himself from the president, from his party and from himself as a supporter of both in the past eight years by continuing to talk to voters about the economy as though he just rode into town and can't believe all the cattle rustling and carousing going on.

On the AIG bailout, McCain's statement Wednesday read, "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."

But a day earlier, he told CNBC, "I understand the economy. I was chairman of the (Senate) commerce committee that oversights every part of our economy."

Things did change after 1992, but then they changed again. In arguing that presidents make a difference, Barack Obama can point to Bill Clinton's eight years of congressional budget battles leading to a US$127-billion budget surplus Bush has turned into a record US$482-billion deficit; to the longest sustained economic expansion in U.S. history compared to, well, this week; and to 22.5 million jobs created versus less than half that under Bush so far.

For John McCain to now be running as a Washington outsider who was in the men's room when all the big economic decisions were made at the same time as he's taking credit for steering the economy amounts to a targeted, tactical appeal to the one group of voters who could actually believe both to be true.

Maybe somewhere at McCain headquarters, there's a sign on the wall that reads, "It's the stupid, stupid."