The most reliable surveys put McCain five to seven points behind Obama as we enter the last week of this interminable campaign. But in a race that will be famous for years afterwards for its volatility, it is not too late for the Republican to pull out a victory.
For Harry Truman in 1948, the presidential race shifted dramatically in the final week, and it's happened three more times in the past 30 years. In 1980, Reagan came from eight points behind to a solid victory by winning his sole debate with Carter in the last week of October. In 1992, Clinton, who had fallen behind in the polls because of the pounding he was taking over his liberalism and propensity to raise taxes, surged ahead of Bush when Special Prosecutor Lawrence Walsh announced that he was indicting Defense Secretary Casper (Cap) Weinberger, an indication of Bush's possible complicity in the Iran-Contra scandal. And in 2000, Bush's three-to-four point lead in the polls was erased over the final weekend when reports surfaced that he had been cited for DWI 20 years before and had not revealed the fact to the public. Bush still won the election, of course, but Gore won the popular vote by half a point.
What does McCain have to do to pull off a similar shift this time?
1. Use the stock market crash to highlight the tax issue. With the Dow Jones dropping each day by hundreds of points, this election is being held against a backdrop of economic fear unlike any since the Depression. Almost every reputable economist agrees that it would be catastrophic to add to the economy's woes by raising the capital gains tax. But Obama is on record as favoring an increase from 15% to 20% and suggested during the primaries that he would consider hitting 28%.
McCain should jump on the issue and challenge Obama to agree to a two-year moratorium on increases in the capital gains tax. If Obama agrees, McCain will score points for leadership. If Obama refuses, or ignores the challenge, McCain can attribute much of the drop in the market to the fear of increased capital gains taxation once Obama takes over. After all, its pretty obvious that if you keep 85% of your capital profits right now but stand only to keep 80% or 72% once Obama takes over, it's prudent to unload now. This pressure to sell is exactly what the markets do not need, and McCain can hammer the point home.
McCain can say that Obama's refusal to join in supporting a moratorium on capital gains taxation increases shows his commitment to class warfare - and that big government exceeds any concern he might have for stock market stability or the value of 401Ks or retirement pension funds.
McCain has already scored mightily with his invocation of Joe the Plumber and, polls show, he won the third debate by using the issue of taxes and small businesses. By early this coming week, his advertising will have achieved sufficient levels of frequency to have an impact on the polling.
2. Bring back Rev. Jeremiah Wright. For reasons that are beyond me, John McCain has vowed not to make an issue out of Rev. Wright's extreme anti-American statements. But that should not stop independent expenditure and 527 groups from raising the issue.
McCain is likely fearful that the establishment media would condemn him for running the ads. Their very effectiveness would ensure that the liberal media would fall all over themselves to denounce the tactic. But independent groups who want to prevent a leftist takeover of the government should not let liberal organs dictate their campaign tactics or their message.
3. Warn voters of impending socialism in America. The recent bailout legislation puts the United States government inside the ownership, management and direction of many of our major companies and financial institutions. The bureaucrats have entered as firefighters, trying to extinguish the blazes that threaten to consume these companies. But once the flames are put out, will the firefighters go home or will they set up shop and give the United States a socialist economy akin to that of Western European nations? Will the bureaucrats relinquish the power they are being given in a time of crisis?
McCain needs to point out that bureaucrats never let go of power unless they have to. He should say that with an Obama Administration and a highly Democratic Congress, we could face a long and perhaps permanent period during which entrepreneurial, private-sector capitalism disappears and loan applicants must win government approval for their financing.
Many people have become concerned with the growing power of foreign sovereign wealth funds in major American businesses. Will these funds use their influence and power to alter the financial policies and lending practices of America's leading banks and investment houses? But now the danger comes not just from abroad but from government intervention at home. The sovereign wealth fund that might be most influential in distorting our private capitalist system is the United States Treasury and the Federal Reserve Board.
Under conservative, pro-capitalist Republican management, we can, presumably, trust these institutions to exercise their power benignly and to turn control over to the private sector as soon as possible. We can count on their taking a hands-off policy toward the investment of the banks and financial firms in which they acquire an equity position. Except to control abuses like subprime mortgages and making marginal loans, we can expect that these federal institutions will act in our interest.
But if Obama's appointments take over the Treasury and the Fed, can we be as sure? McCain needs to point out that it was political meddling by liberals that led Fannie Mae and Freddie Mac to encourage subprime mortgage loans in the first place. Were it not for the pressure in the Clinton Administration to expand home ownership to poor people and minorities, Freddie and Fannie would not have relaxed their down payment policies and would not have been willing to guarantee mortgages without proof that the borrowers had sufficient income to repay the debts.
McCain needs to point out that it is precisely this sort of liberal pressure which led to the disaster and to warn that the power the bailout legislation gives the next president is so potent that it could destroy our concept of a private economy.
If the Dow continues to terrify investors and distract voters from the election, it will continue to bolster Obama's candidacy and his lead. But if there is some stability in the final week before the election, there is every chance that voters will take another look at Obama and decide that he is too risky. By stressing the tax issue and the potential of an Obama regime to subvert our free enterprise system, McCain can harness the crisis and warn voters of the impact of a decision to elect the most radical candidate for president in our nation's history.