The Note: Econ 102

Oct. 14, 2008— -- So the Dow won its points back -- where does Sen. John McCain go to get HIS points back?

He's a day late, and $7.5 billion short (as measured by price tags). After realizing that it's all about the economy -- then seemingly forgetting it -- and after saying he would unveil new economic proposals -- then saying he wouldn't -- Team McCain on Tuesday turns the page back, again, to the only issue that's likely to really matter between now and Election Day.

Maybe Sen. Barack Obama really IS right where McCain wants him. (But maybe, since he spent Monday in Virginia and North Carolina, McCain was where Obama wanted HIM).

Assuming McCain, R-Ariz., hasn't precisely been where he wanted to be, this may be his way only way back -- with only a few detours, as arranged by Bill Ayers. His next step comes on a day where investors look to breathe again -- as he hopes that the public takes one more deep breath before Election Day.

From the McCain campaign Tuesday morning: "John McCain will address the ongoing economic crisis, with a special emphasis on those most badly hurt: workers, homeowners, savers, and seniors. He will announce specific proposals to build on his Resurgence Plan, which uses the $700 billion to keep Americans in their homes, stop the drop in housing values, stabilize financial markets and turn the corner on the crisis by charting New Directions for Workers, Seniors, and Savers. Unlike Barack Obama, John McCain understands that in a crisis raising taxes is an especially bad idea."

The details, per Reuters' Steve Holland: "McCain will propose that seniors pay a maximum tax rate of 10 percent on money they withdraw from IRAs and 401(k) retirement plans in 2009 and 2010, instead of paying the current higher tax rate."

"[Doug] Holtz-Eakin said McCain will also propose relief for Americans who are 'aiming toward retirement' and were counting on investment income to send their children to college or pay the mortgage. Internal Revenue Service rules say Americans can only deduct $3,000 in stock losses in any given year. McCain would expand that deduction to $15,000 a year for the tax years 2008 and 2009."

"We've got help at all levels of society, not just at one," former mayor Rudy Giuliani, R-N.Y., told ABC's Robin Roberts on "Good Morning America" Tuesday.

As for the shift in campaign tone: "They have great disagreements -- a lot of respect for each other -- but real disagreements," Giuliani said. "My advice to him is that he just has to get his message out."

The biggest thing going in McCain's favor is also his biggest enemy: time. There's not enough of it left to force a major shift in the race -- but there's just enough of it to cram in another storyline or two. And that demands more than one candidate.

The New York Times' Adam Nagourney: "Campaigns have rhythms, and inevitably swing back and forth for all kinds of reasons, including mistakes by candidates (think Senator Hillary Rodham Clinton and driver's licenses for illegal immigrants) and the news media's desire for a competitive race and tendency to find the 'underdog is surging' story line irresistible. The pendulum theory is certainly one that Republicans are grabbing onto these days."

There is time for another shift in scrutiny: "McCain is the focus because what was thought to be a close race doesn't look like one at this moment. Which is all the more reason that the real focus now ought to be on Barack Obama," Dan Balz writes in The Washington Post. "The presidential race is not over, but at this point, Obama has a better chance of becoming president than McCain, and as a result, the questions ought to be going toward him as much or more than McCain -- questions not of tactics but of substance."

(While we're shifting focus here -- why couldn't McCain's proposal have come Monday? What does it say about order and disorder in the campaign that the new plans were a go and then a no? What does it say that McCain was looking forward to asking questions at Cape Fear Community College but then didn't answer a single one?)

A hopeful sign for McCain, if you look hard enough (and why not look hard for such things, given the state of the race?): "Neither President Bush nor the two men vying to succeed him, John McCain and Barack Obama, has won the confidence of a majority of Americans that he and his advisers will be able to 'fix' the nation's economic crisis, according to a USA TODAY/Gallup Poll," USA Today's Susan Page writes.

It's Obama up 51-44 in the national numbers, but this qualifies as an opening: "Despite his lead, 50% of Americans say they don't have confidence in Obama and his advisers to fix the economy; 44% do. Even so, that lukewarm endorsement is better than the 31%-63% rating for McCain," Page writes.

But McCain is tasked with making up ground approximately everywhere. New battleground state polls out Tuesday morning from Quinnipiac University:

COLORADO: Obama 52, McCain 43

MICHIGAN: Obama 54, McCain 38

MINNESOTA: Obama 51, McCain 40

WISCONSIN: Obama 54, McCain 37

Says pollster Peter Brown: "The only possible bright spot for Sen. McCain -- and you would need Mary Poppins to find it in these numbers -- is that he is holding roughly the same portion of the Republican vote."

New allies for Obama, for better and/or worse: "The Illinois senator's increasingly confident campaign is also strengthening coordination with congressional Democrats on an economic agenda that could be ready before the next president takes office," The Wall Street Journal's Jonathan Weisman and Greg Hitt report.

"Obama aides and congressional leaders are discussing an economic package that Congress could handle in a special session after the Nov. 4 election," they continue. "That package is likely to include an expansion of food stamps, an unemployment-benefit extension, aid to states for health-care costs and funding for roads and bridges. While House Speaker Nancy Pelosi has been considering a package totaling $150 billion, several economists urged her at a closed-door meeting Monday to consider a package approaching $300 billion."

How will this fly? "House Democrats are contemplating a huge infusion of public cash -- as much as $300 billion -- to stoke economic growth by creating public jobs and padding the wallets of struggling consumers," Lori Montgomery writes for The Washington Post. "A spending package of that magnitude would be far larger than anything Congress has previously considered and would be nearly twice as big as the stimulus measure President Bush signed in February."

Your new race: "In delving more and more into the specifics of potential financial remedies, Obama and McCain are moving beyond trying to convince voters that he is best prepared to handle the crisis to offering specific proposals for relief, particularly to voters who think that 'Main Street' was not addressed when Congress passed a plan to rescue Wall Street," Robert Barnes and Shailagh Murray write in The Washington Post.

Obama's plan: "Senator Barack Obama proposed new steps on Monday to address the economic crisis, calling for temporary but costly new programs to help employers, automakers, homeowners, the unemployed, and state and local governments," Jackie Calmes and Jeff Zeleny write in The New York Times. "[Obama] proposed giving employers a $3,000 tax credit for each new hire to encourage job creation. He said he would seek to allow Americans of all ages to borrow from retirement savings without a tax penalty; to eliminate income taxes on unemployment benefits; and to double, to $50 billion, the government's loan guarantees for automakers."