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Obama, McCain duel over economy
San Francisco Chronicle


July 08, 2008

SAN FRANCISCO -- It's the summer of the headache-inducing gas prices, the scary home mortgage crisis and rising food costs -- a world of hurt that has brought both the Republican and Democratic presidential campaigns this week to the same prime location on the campaign trail: "economy, economy, economy."

A key strategy for both on the big issue of the day: Blame the other guy.

Illinois Sen. Barack Obama, the presumed Democratic presidential nominee, planned a major address on the economy earlier this week in North Carolina, titled "An Agenda for Middle-Class Success."

The formal speech was postponed because of a mechanical problem on his plane, but Obama took to the phones to dramatize his bottom line: "If you are satisfied with the way things are going now, then you should vote for John McCain," he told supporters. "If you think that we need a fundamental change ... then we have a clear choice in this election and we've got to seize it."

His message got support in California from House Speaker Nancy Pelosi, who held an event across from a San Francisco gas station -- where regular unleaded was $4.61 per gallon -- to lambaste Arizona Sen. John McCain for offering "a warmed-over stew of the same Bush policies that we've had in the last seven and a half years," policies that she said have "put money into the oil companies' pockets" and left the consumer bleeding.

McCain, in a "Jobs for America" plan unveiled in Denver, also attacked his opponent, saying that Obama's plan relies on typical Democratic spending and "will hurt the economy and cost us jobs ... at a time of increasing gas and food prices. American families need tax relief and I -- not my opponent -- will deliver it."

The expected GOP presidential candidate also got help from former eBay CEO Meg Whitman, who said McCain will boost America's small businesses, which represent "70 percent of new job growth." She said McCain's policies are about "how do we help the government help small business ... instead of standing in the way."

With just weeks until the major parties' nominating conventions, the flurry of activity underscores that in the 2008 election, pocketbook issues dominate the polls and political conversations on both sides, overshadowing past headline grabbers like Iraq, terrorism, national security, same-sex marriage and abortion.

Stephen Levy, director of the Center for the Continuing Study of the California Economy, a Palo Alto, Calif., economic research group, said that dramatizes how national conversation on economic issues has shifted since the last presidential campaign, when headlines concentrated on "the safety net ... people seeing their health benefits cut ... and retirement plans being cut."

"And that was when times were good," he said. "Now we have all of that -- plus the value of your home is down, job opportunities are slowing, gas prices are through the roof."

Pelosi, speaking earlier this week at the San Francisco gas station, said the rising gas prices affect consumers, nonprofits, businesses and families, as well as the American lifestyle -- and their impact represents "the fight of our generation."

"This issue is as local and as personal as everyone who fills up his tank, and it is as global as the entire planet," she said.

McCain, she said, followed Bush's lead and has not taken action on ideas that will reduce the price of gas at the pump now, including cracking down on price gouging, enacting a "use it or lose it" policy for oil companies to drill on the 68 million acres of undeveloped federal oil reserves and suspending the filling of the Strategic Petroleum Reserve.

But Adam Mendelsohn, a GOP strategist who works with the McCain campaign, said the Democrats' attempts to link McCain and Bush simply do not reflect the GOP candidate's record.

"Ultimately, what people have to understand is that Barack Obama voted the Democratic Party line all the time ... and the Democratic Party line is one for more taxes, more regulation and ultimately not growing the economy, but empowering government," Mendelsohn said. "McCain has been someone engaged in helping the economy grow day in and out. ... He consistently does what is in the best interests of the voters -- rather than the party."

But Levy said both candidates have challenges when they talk economic issues.

For Obama, "the problem is ... he wants to wipe out the tax cuts and wind down the war -- but he has more priorities than he has solutions. And he goes for a tax swap rather than paying down the deficit," Levy said.

"And the McCain position is very much like Bush: We need more tax cuts to get the private sector going," he said. But "I'm mystified why the private sector would get going if consumer doesn't have money, and their homes and stocks are worth less."

Bottom line, Levy said, is that "most economists agree that what this country can do is invest like mad: Invest in our people or help them invest in themselves, with, say, a new GI bill."

"It's time to stop complaining and get on with the show -- and investing means temporarily reducing current consumption to put aside the resources to do that," he said.

For McCain and Obama, the economic message should be that "we can't make (Americans') house value go up and gas prices go down, but we can improve education, work on alternative energy and invest in infrastructure. And probably if they weren't in the middle of the campaign, they would be a lot closer on doing that."


E-mail Carla Marinucci at cmarinucci(at)
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