The stock market tanks. Major banks and investment firms fail. The economy flirts with recession.
Who would President Barack Obama or President John McCain call?
The answer might be found in the people they call now: former Cabinet officials and corporate titans, staffers to past presidents and Congresses, economists who tamed double-digit inflation and beat back budget deficits.
Some of the candidates' economic advisers have deep ties to Wall Street — and to the wildly lucrative, lightly regulated environment that contributed to the financial crisis rooted in risky mortgage lending.
As McCain rails against greed on Wall Street and Obama casts the current problems as the legacy of Republicans' devotion to deregulation of the financial industry, both candidates are in daily contact with a broad range of economic advisers — some of whom could be in the next administration.
Team Obama is an ideologically diverse group including policy veterans such as Paul Volcker, Robert Rubin and Lawrence Summers — people who served Jimmy Carter and Bill Clinton at the Federal Reserve, Treasury Department and White House. "A very reassuring team," says Maya MacGuineas, president of the Committee for a Responsible Federal Budget.
Team McCain is more professionally eclectic, reaching beyond Washington to Silicon Valley entrepreneurs who have run companies such as Hewlett-Packard and eBay. It trumpets low taxes and — at least until now — less regulation. "It's Reagan Republicanism," says Grover Norquist, president of the anti-tax group Americans for Tax Reform.
As the economy came to dominate the campaign agenda this week, it became clear that such advisers would play an increasingly important role in the seven weeks leading up to Election Day. The demise of Lehman Bros., the swallowing up of Merrill Lynch by Bank of America and the government's takeover of insurance giant American International Group seem to have given Obama the debate he sought to have with McCain over how the Republican administration of George W. Bush has managed the economy this decade.
Both candidates have been ducking into meetings with economic advisers. Stanford University professor John Taylor, author of a globally recognized rule that guides central banks on setting interest rates, flew to Green Bay, Wis., on Thursday to meet with McCain before a campaign stop. Today, Obama will meet with several of his economic specialists in Coral Gables, Fla.
The learning curve is large for two politicians with a combined 30 years in Congress but who have never run a major company — a point indelicately made by this week by McCain adviser Carly Fiorina, the former Hewlett-Packard chief who said none of the candidates for president or vice president was qualified to be CEO of a major company.
Don't look for all of these Democratic or Republican advisers to come to Washington in January. They're "not necessarily the cast of characters" who'll be in the next White House, says Stephen Hess, a Brookings Institution political scientist who worked in the Eisenhower and Nixon administrations. "Once Nov. 5 comes along, everything may be a different equation."
Veterans of economic wars
When Robert Reich, a University of California-Berkeley economist, showed up for an economic summit with Obama earlier this year, he was surprised by some of the company he was keeping.