Saturday, September 13, 2008
The Last Pivot
For the moment, the Presidential race has found its equilibrium. McCain has a small lead, and the Obama campaign appears lost. As things stand, both sides look ready to fight the trench warfare at the end of Presidential elections: sound bites, debates, ritual denunciations, the ground war, etc. McCain has a small advantage here, but it's too vulnerable to try to protect. One mistake in a debate, poor organization in Ohio, and it all goes away.
It doesn't have to be that way. McCain has had a good six weeks. I'm reminded of a thought of Judge Sonia Klonsky in Laws of Our Fathers by Scott Turow, where she thinks (and I paraphrase), "This is the only cross-examination in my entire career on the bench that is actually going to change the verdict of the case." Everything that's gone right for the McCain campaign, the Saddleback Forum, the "celebrity" ad, the Palin selection, it all sets the stage for what happens next.
Now, while McCain has everybody's attention, he needs to execute the Michigan pivot. Ie, he tells the voters "Vote for me and the 1932-scenario is out of play. Vote for the other guy and it's a very real possibility." It's important to maintain as high a signal-to-noise ration as possible, and avoid electioneering theatrics. Fortunately, there are several very specific, very tangible data points available to make that clear. Michigan has been in a one-state recession for the last six years. The Democratic-controlled House of Representatives turned off the lights in lieu of debating energy production. The housing GSEs, whose management has largely been a gravy train for Democratic insiders, have failed and now require a government bailout.
One thing McCain can do is promise to drill, or more importantly, "all of the above". The second thing he can do is cut spending and talk up the dollar. The biggest problem with credit now is not risk of default. The lending bubble has largely been written down. Instead, it's about currency risk. Anybody loaning money to an American on any terms is going to be paid back in dollars and therefore taking a risk that the dollar will depreciate. Fortunately for McCain he has credibility on spending. He just needs to apply it in the right place.
If McCain can do this, I don't see this as a close election. This is where the voters are and Obama can't follow him. Obama has had his chance of running on a message and blew it, the voters are ignoring him at this point. I see a McCain win of 5-8 points and with a drama-free Election Day (and drama-free for the three weeks leading up to it as well). Will McCain actually make this pivot? It's anybody's guess.