Earthquakes come largely unannounced, are over quickly, and leave the landscape dramatically changed. The recent tectonic shift in the world's financial markets has had an effect far beyond the failure of investment banks and plunging and then soaring stock indexes: It has also changed the landscape of the 2008 US election campaign. Prior to the sobering effect of the financial upheaval of last week, the American political contest seemed to be mired in a never-never land of trivial pursuit. The two national political conventions, one following immediately upon the other hyphenated by a hurricane, were grandiose pep rallies contributing nothing to a furthering of serious discourse. Further distracting from the serious, was the hysteria on both ends of the political spectrum over the selection of Governor Sarah Palin of Alaska as the Republican vice presidential candidate. The attention given to her professional and personal life further trivialized the campaign. It was clear that Palin's entry into the race gave John McCain a so-called ‘pit bull bounce' that allowed him to capture the momentum from Barack Obama. Poll numbers showed McCain ahead of Obama for the first time, and significantly Real Clear Politics Intrade Market Odds showed McCain with a three point advantage over Obama when since June, Obama had had a comfortable lead of 20 to 30 points. Clearly, something had happened after the conventions, and it was moving in McCain's direction. Now, however, after the sobering bloodletting on the world's markets, the collapse of the venerable Wall Street firm Lehman Brothers, the forced sale of the legendary Merrill Lynch, the 85 billion dollar Federal bailout of the international insurance giant AIG, and the announcement that US taxpayers will buy 700 billion dollars of toxic debt from financial institutions, it seems hard to believe that only a week ago all anyone wanted to talk about was mooseburgers, lipstick on pigs and being able to see Russia from a remote Alaskan island. Whatever were we thinking of then? How quickly times can change. The election is back to where it always should have been: All about the economy. The American people have always said that the economy was their number one concern, and that they wanted the candidates to tell them what they were going to do about. This makes the going just a bit rougher for McCain, and it gives Obama a chance to regain the momentum which recent polls indicate that he has done. John McCain has always been just a bit challenged by economic issues. He once famously said that he didn't know much about the economy, and when the financial crisis broke last week, he was quoted as saying that American economic fundamentals were strong. With major financial institutions going to the wall, everyone could clearly see that that was not the case, and some people might have wondered how in touch with economic issues a man could be who does not even know how many houses he owns. Barack Obama quickly hit back at McCain's seeming lack of understanding of the nation's economic problems. He said, “How can John McCain fix the economy if he doesn't understand it's broken.” He was also quick to connect McCain to the years of Federal deregulation of the financial markets which many experts now say has led to the present crisis. It appears that Obama's poll numbers, at least for the moment, have stopped falling and that the race is again very much even and most likely will be decided in the same few states that determined the results in the last two elections. What the financial earthquake has done is to stop everyone in their tracks by saying: From this moment on, it is time to get serious. It is time to start listening closely to what the candidates have to say about the economy and all the other issues. It is time to start gathering information so that one can make an informed decision before casting a vote on Nov. 4. This of course will mean that more emphasis is going to placed on the upcoming three debates (two presidential; one vice presidential) than would have been thought likely only a week ago. The candidates' abilities to inspire confidence based on their answers, demeanor, and past experience will be critical. None of the candidates has a background in economics, but what is required is the ability to reassure people in a time of crisis. With the Federal government about to embark on the largest intervention in financial markets since the 1930s, one that will force American taxpayers to the tune of hundreds of billions of dollars to rescue individuals and institutions who knowingly or unknowingly made financial mistakes, McCain and Obama are being required to show leadership even though they are not as yet involved in the decision making process. For his part, McCain has cautioned against more federal bailouts, while Obama has generally praised federal intervention, but has demurred when it comes to approving a federal plan on the not unreasonable grounds that, as of yet, there is no plan. So, who benefits as the national attention is refocused on economic issues? It should play into Obama's hand if he can tie present economic troubles to the Bush administration and convince people that McCain is really just four more years of the same. The renewed focus on the economy also removes the spotlight from foreign affairs in general and the success of the surge in Iraq in particular, both weak suits for Obama. Furthermore, Palin's pit bull bounce begins to look more and more like a two-week wonder with the prospects of it turning into a real handicap as she becomes required to address serious economic issues in a nationally televised debate and in live news interviews. However, although McCain's post convention momentum may have been blunted, he is far from being down and out. Neither Obama nor Biden have economic credentials, and there are no easy answers to the current crisis. It also remains to be seen if in a real crisis, the American people might not see McCain as safe and reassuring and Obama as inexperienced and untried. Moreover, with more than 40 days until Nov. 4, there is plenty of time for further earthquakes which may leave the landscape tilted in the direction of foreign affairs or national security and thus allow McCain to regain his footing and the momentum So, although there are no clear winners in the recent financial upheaval, and it is not clear how many serious aftershocks there may be, in the end the winner may be the American political process. The earthquake has put an end to the mindless clamor of the conventions, an end to the silly season. And now that people have stopped shouting, maybe they will start listening. It is time to get serious. __
