The Note: Populism Now

GUSTAVUS, Ohio -- Where are Mitt Romney and Hillary Clinton when you need them?

Now that the campaign has devolved into full-on populism, remember that we've been here before -- and the memories aren't good ones for either candidate.

As ABC's "50 States in 50 Days" tour rolls through Ohio -- where the jobs are leaving, the economy is struggling, and voters are sick of empty promises -- remember the last time populism ruled the process.

It was the closest Sen. John McCain came to losing his grasp on the nomination, when Romney won Michigan with a fight-for-every-job rallying cry. It was also the closest Sen. Barack Obama came to losing the nomination, when Clinton ran off a series of late victories (including in Ohio) that almost cost him the prize he'd basically already won.

So it is that neither of the candidates is particularly good at the game they are both earnestly trying to play. (And two unfortunate surrogate statements plus one unfortunately timed Hollywood fundraiser tells you again that they'd rather be playing something else.)

"John McCain and Barack Obama are both calling for tougher financial regulations as Wall Street faces its deepest crisis since the Depression. Yet Obama's record in this area is thin, and McCain has spent most of his quarter-century in Congress advocating deregulation," Bloomberg's Alison Fitzgerald and Christopher Stern report.

And yet: "Enough is enough," McCain declares in his latest ad (bringing back the experience message, and now wholeheartedly embracing government intervention).

"The truth is that while you've been living up to your responsibilities Washington has not. That's why we need change. Real change," says Obama, in a new two-minute ad.

Here's how McCain argued his case to Robin Roberts on GMA this morning, defending his 9/11 commission and arguing for oversight (as opposed to the deregulation McCain helped usher through last decade:

We need to get the best minds in America together. This is a crisis. This is one of the most severe crisis in modern times. So we've gotta get the best minds in America together to say: Look, not only did this happen but we've all gotta work together -- Republican and Democrat. I mean, this calls for bipartisanship. This calls for patriotism. This calls for saving the economy of the people, the family on this farm. They're the heartland of America. So, clearly, we have to have transparency, we have to have oversight, we have to have to combine these regulatory alphabet soup organizations, we have to make them work. They need a chief executive who knows how to crack the whip and knows how to reform Washington and reform the way that we do business."

McCain goes from icy to a FED AIG bailout on Monday to a bit more thawed today on GMA. He didn't want the bailout, "But there are literally millions of people whose retirement, whose investment, whose insurance were at risk here. They were going to have their lives destroyed because of the greed and excess and corruption," he said.

As we look for some specificity behind the rhetoric, whose hurdle is higher?

"[McCain's] task is complicated by the tension between his plans to continue many of the economic policies of the unpopular incumbent Republican president he hopes to succeed, and his pledges to improve the American economy and shake up Washington," Michael Cooper writes in The New York Times. "Beyond striking a more populist tone and more explicitly acknowledging the nation's economic problems, his campaign also began an effort Tuesday to cast him as a strong leader with profound experience on economic issues, given his service on the Senate Commerce Committee, where he was chairman for six years."

"McCain was operating from a defensive posture, after his expression of confidence in the economy at a rally Monday in Jacksonville, Fla., on the same day the stock market slid more than 500 points," Michael Finnegan and Noam M. Levey write in the Los Angeles Times.

"McCain, in a striking departure from his platform of corporate tax breaks and an extension of President Bush's tax cuts, assumed the mantle of economic populist, blasting what he called the 'reckless conduct, corruption, and unbridled greed' of Wall Street and railing against multimillion-dollar severance packages for CEOs as 'disgraceful,' " Scott Helman writes in The Boston Globe.

If the McCain response to the economy seemed to evolve, Hotline shows it did, with a timeline of what he said this week: "A look at John McCain's response to the market downfall and the swirl of related news shows a marked evolution in the GOPer's language -- from reformer to crisis herald to populist, a position that could moderate Obama's edge on the issue. That said, the McCain camp seems to be struggling to find its footing, and the candidate has been forced to eat some of his words, and, gulp, utter others that seem positively Democratic in nature."

McCain supported the major deregulation legislation that passed a Republican Congress in the '90s and was written by his (erstwhile? current?) adviser Phil Gramm. But it was signed by President Clinton. And Robert Scheer looks at McCain's history on deregulation and the company Obama keeps.

"(McCain's) past support of congressional deregulation efforts and his arguments against 'government interference' in the free market by federal, state and local officials have given Sen. Barack Obama an opening to press the advantage Democrats traditionally have in times of economic trouble," Michael Shear writes in The Washington Post.

Enter Douglas Holtz-Eakin, channeling Al Gore, holding up his BlackBerry to serve as a visual: "Asked what work John McCain did as chairman of the Senate Commerce Committee "He did this," Holtz-Eakin told reporters Tuesday, per Politico's Amie Parnes. "So you're looking at the miracle John McCain helped create and that's what he did."

And how about Carly Fiorina -- asked if Sarah Palin could run a major corporation: "No, I don't," she replied. "But that's not what she's running for."

Then, she made it worse: "I don't think John McCain could run a major corporation."

"McCain also tripped up yesterday, claiming that 'I was chairman of the Commerce Committee that oversights every part of our economy,' " Michael D. Shear writes in The Washington Post. "In fact, the committee's scope legally excludes 'credit, financial services, and housing' -- the very areas now in crisis."

(Does this mean Team McCain has to bench two of its top economic surrogates, just when he needs them on the field?)

Obama is making it all about Bush -- and, by extension, McCain: "What we've seen the last few days is nothing less than the final verdict on an economic philosophy that has completely failed," Obama said Tuesday.

"Senator McCain offered up the oldest Washington stunt in the book -- you pass the buck to a commission to study the problem," Obama said, per ABC's Jake Tapper.

"Mr. Obama is urgently working to seize the economic issue, using the collapse of Wall Street firms to illustrate a need for greater regulation and stronger oversight in the financial sector," per The New York Times. "But he is facing a challenge on that front from Senator John McCain, who has adopted a populist reformer message in vowing to 'clean up Wall Street.' "

"He can try to out-populist the newly populist McCain, although that is not his natural style," The Washington Post's Dan Balz reports. "He can simply stay on the attack, and that could pay dividends. But it's likely he will need more."

"Mr. Obama originally built his campaign on his opposition to the Iraq war, but his message has shifted to the economy," writes Jeff Zeleny, in The New York Times. "And now the financial crisis is presenting Democrats with a fresh political argument as they try to win back the White House."

Pitfall for Democrats? "Democrats are straddling two, conflicting arguments in their criticism of Sen. John McCain on the economy," ABC's Z. Byron Wolf reports. "With one foot, they're kicking forward the notion that McCain is a new Herbert Hoover, deluded and talking about a strong economy even as the stock market crumbled. At the same time, they're telling Americans there's not depression in the offing and 'Don't panic.' "

"At the same time that McCain is doing everything he can to associate himself with change, the Obama campaign is fighting back just as hard to remind voters of Sen. McCain's long tenure in office and close association with President Bush," Howard Wolfson writes for The New Republic.

A class war can work for Obama: "There has scarcely been a better time to shove the arugula aside and talk about the realities of class," Thomas Frank writes in a Wall Street Journal column. "It is heartening to see that Barack Obama is beginning to do just that, but he must keep hammering at the point until everyone in America understands the choice that lies before us."

But perceptions matter: "Barbra Streisand sings and the Obama campaign cash register ka-chings," Michael Saul writes in the New York Daily News. "The moneymaking festivities -- including a dinner at the opulent Greystone Mansion followed by a concert with Streisand at the Beverly Wilshire Hotel -- were expected to generate upward of $9 million for Obama and the Democratic National Committee."

"As if on cue, John McCain used the Illinois senator's lucrative detour from battleground states to Beverly Hills to mock Obama's professed solidarity with working people 'just before he flew off to Hollywood for a fundraiser with Barbra Streisand and his celebrity friends,' " Dan Morain and Michael Finnegan white in the Los Angeles Times.

"Obama's huge windfall is believed to be a record amount raised in a single evening by a candidate," Variety's Ted Johnson writes. "But it came with a price: Criticism from his rival McCain, who tried to characterize Obama's appearance in well-heeled circles as more evidence that he is beholden to entertainment elites."

Beyond appearances, Obama fundraises while McCain campaigns and WP's Matt Mosk does the math and finds it hard for Obama to justify his decision to opt-out of public financing: "[P]residential strategists and campaign finance experts expressed surprise yesterday that Obama's decision to become the first presidential nominee to swear off public funding for the general election -- and McCain's decision to finance his bid with a single $84 million infusion from the federal government -- has not given Obama a clear financial edge."

Obama, overstepping: "In January, I outlined a plan to help revive our faltering economy . . . which formed the basis for a bipartisan stimulus package that passed the Congress," Obama said Tuesday.

ABC's Jake Tapper: "Is that true? Democrats on Capitol Hill who support Obama say no."

Swinging back is House Minority Leader John Boehner, R-Ohio: "Sen. Obama had less to do with the stimulus bill than Al Gore did with inventing the Internet."

What's not being done: Per The Wall Street Journal, "Neither candidate has embraced a more radical plan that would allow the government to take over the bad assets currently fouling the financial system."

One upshot of all of this (we hope): "The political exchanges threatened to force the campaign conversation back to serious policy ground after days of coverage saturated with Mrs. Palin's lipstick, glasses and prowess as a moose hunter," Valerie Richardson and S.A. Miller write in the Washington Times.

From the Palin files: "A former top Justice Department prosecutor now working for John McCain's presidential campaign has been helping to direct an aggressive legal strategy aimed at shutting down a pre-election ethics investigation into Alaska Gov. Sarah Palin," Newsweek's Michael Isikoff reports. "The growing role of Edward O'Callaghan, who until six weeks ago served as co-chief of the terrorism and national security unit of the U.S. attorney's office in New York, illustrates just how seriously the McCain campaign is taking the so-called 'troopergate' inquiry into Palin's firing last summer of Walt Monegan, Alaska's Public Safety Commissioner."

Remember cooperation? "Alaska's investigation into whether Gov. Sarah Palin abused her power, a potentially damaging distraction for John McCain's presidential campaign, ran into intensified resistance Tuesday when the attorney general said state employees would refuse to honor subpoenas in the case," per the AP's Steve Quinn.

From the annals of transparency: "Using a personal email account to conduct official business is what officials of the Bush administration -- perhaps most notoriously Karl Rove -- in an apparent attempt to circumvent any subpoenas," ABC's Jake Tapper writes. "Is following that model 'transparent'?"

Sen. Hillary Clinton is not eager to do a riff with Sarah Palin of SNL: "Alaska Gov. Sarah Palin, the hockey mom GOP phenom, is coming to New York next week to carry John McCain's flag at a pro-Israel, anti-Iran rally. But she won't be sharing the stage with Sen. Hillary Clinton, who backed away from the event after learning Palin was coming. "Her attendance was news to us," Clinton spokesman Philippe Reines said last night. "Clearly there was some miscommunication because this was never billed to us as a partisan political event. Sen. Clinton will therefore not be attending this event.""

Speaking of which, Politico's Ben Smith is on the trail of a push poll: "The poll asked voters their response to negative statements about Obama, including reported praise for him from a leader of the Palestinian terror group Hamas and a friendship early in his career with a pro-Palestinian university professor. Some Jewish Democrats who received the poll – including a New Republic writer who lives in Michigan – were outraged by the poll, describing it in interviews as "ugly" and disturbing."

In retail politics department: Barack Obama's campaign today is announcing a plan -- with five points and $5 billion to be spent over 10 years -- to clean up the Great Lakes," writes Stephen Koff at the Cleveland Plain Dealer, who goes on: "You're forgiven if you think this sounds like a lot of other Great Lakes restoration plans, all announced to fanfare over the years. The difference, say supporters of Obama, including Sens. Debbie Stabenow of Michigan and Amy Klobuchar of Minnesota, is that this plan would get funded. President Bush has made similar proposals but has never followed up with actual dollars, the lawmakers said. Bush even proposed a budget last year that would have cut Great Lakes funding by 16 percent, Stabenow said in a conference call with reporters this morning.

On Capitol Hill, the minority Republicans succeeded, after months of almost myopic concentration on domestic energy production and "drill drill drill" got a vote in the House on offshore drilling, although they opposed it for not going far enough.

From Zachary Coile at Nancy Pelosi's hometown paper: The energy bill, passed with the support of most Democrats, would let states decide whether to drill between 50 and 100 miles off their coasts while allowing the federal government to open areas beyond 100 miles. Republicans opposed the bill, calling it a sham because it would not give the states any financial rewards for drilling and would ban exploration within 50 miles of shore….The vote marked a tactical retreat by Democrats, who have fought each year since 1982 to renew the ban. But House Speaker Nancy Pelosi, fearing a backlash for her party in November with polls showing growing support for new drilling, agreed to lift the moratorium as part of a broader energy bill."

Its an energy bill that exists in a different form (to the extent that it exists at all yet) in the Senate. And so it stands very little chance of becoming law in the next 50 days. But in the meantime there will be plenty of votes to provide electoral cover to lawmakers from both parties.

Drilling is an issue Republicans have cornered and it will continue to be on the Presidential campaign trail, according to Massimo Calabresi at Time: "But even as House Speaker Nancy Pelosi steered the bill through procedural hurdles to passage during the day, Senator John McCain was demonstrating the continued power of the issue on the campaign trail. At a rally in Tampa, Fla., McCain segued away from prepared remarks on the uncomfortable matter of the Wall Street collapse (which he sometimes admits is the result of years of lax Republican oversight in Washington) and added comments on a much more rewarding topic: oil exploration. As he started on the subject, someone in the audience yelled "Drill, baby, drill." To which McCain responded, "Right, drill, baby, drill." To which the crowd responded, chanting: "DRILL, BABY, DRILL!""

The budget fight in California is worth a look. Its based on local issues, obviously, but the Republican Governor and Democrats in the State House just can't seem to agree on how to tax and how to spend.

The looming shutdown there is a reality that could be writ large in a McCain presidency, were he to try to actually keep his anti-earmark pledge, a notion that has some Republicans concerned, according to Martin Kady II in Politico: "Out on the stump, John McCain gets wild applause each time he promises as president to veto every spending bill that contains an earmark. But McCain will find it almost impossible to live up to his vow, and gridlock would result if Congress refused to go along with such an executive branch power grab. And that's what members of McCain's own party are saying."

The Sked:

Obama continues campaigning out west, spending Wednesday in Nevada. He will hold two rallies: one at 12:30 pm ET in Elko, Nev., and the second at 8:00 pm ET in Las Vegas.

Joe Biden spends the day in Ohio, holding rallies in Maumee, Ohio at 9:30 am ET, and in Wooster, Ohio at 4:00 pm ET. He sits down with ABC's Kate Snow for an interview, to be broadcast on "Good Morning America" Thursday.

Michelle Obama spends Wednesday in Virginia. She will hold an economic roundtable with working women in Richmond at 12:30pm ET and then a voter registration drive in Charlottesville at 4:50 pm ET.

John and Cindy McCain spend the morning on a farm in Gustavus, Ohio, where ABC's "Whistle-Stop Express" catches up with them.

Back together on the trail, John McCain and Sarah Palin hold a town hall in Grand Rapids, Mich. at 7:30 pm ET.

Also in the news:

A pre-emptive strike in Michigan: "The Obama campaign and DNC have filed an injunction in federal court as an effort to challenge what they deem as illegal voter suppression of people whose houses are in foreclosure," ABC's Karen Travers and Arnab Datta report.

Geared up for some more? "Election Protection, a nonpartisan voting-rights coalition, plans to launch on Wednesday an expanded voter-services program, including a hotline and Web site for citizens to report voting problems and get information about election procedures," Amy Merrick reports for The Wall Street Journal. "The group revamped its Web site so that voters can report problems and chat online with volunteers. Election Protection also will have footage on its Web site from a group called Video the Vote, which documents snafus at polling places."

Voting has already begun: "Pennsylvanians serving in the military may have completed the task already. Kentuckians and North Carolinians can start any time now. And in the next week or so people in up to a dozen more states can go ahead and be done with it," per ABC's Gary Langer.

Palin branches out: "Republican vice presidential candidate Sarah Palin will meet with foreign leaders next week at the United Nations, a move to boost her foreign-policy credentials, a Republican strategist said," Monica Langley writes in The Wall Street Journal.

Wake-up call in Massachusetts? "Sen. John Kerry fended off his first Democratic opponent in nearly a quarter century, but he got a message from voters when his relatively unknown challenger earned more than 30 percent of the vote," the AP's Steve LeBlanc reports.

Watch out, media covering Obama, citizens are on patrol, according to the Chicago Tribune's John McCormick, with the story of how WGN in Chicago was barraged with comments for an interview with an anti-Obama writer: "Now Obama's presidential campaign is increasingly using the list to beat back media messages it does not like, calling on supporters to flood radio and television stations when those opposed to him run anti-Obama ads or appear on talk shows."

McCain's campaign has found its most success attacking Sen. Obama's strengths and turning them into weaknesses and Democrats are trying a little bit of that themselves, launching a website tracking how often the candidate, perceived as open the press and committed to an open campaign, talks to the press. By their count its been 34 days.

The Kicker:

"I thought there was no press here tonight. Hmmm. YouTube junkies." -- Barbra Streisand, speaking at the Obama fundraiser on Los Angeles.

"I'm the only guy you know who doesn't drink." -- Sen. Joe Biden, riding the rails, and ordering a cranberry juice.

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