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"In my heart of hearts I believe race is less of a factor today than it was at that time."

— Ex-Harvey Gantt '90 camp mgr/Rep. Mel Watt on the race factor in NC in '08, Media General, 10/31.

White House 2008

GENERAL ELECTION

1. Frightening Numbers

"The U.S. economy contracted in the third quarter, setting the stage for a deepening recession and handing" Dems "a new political weapon in the days before" 11/4. "The nation's output of goods and services shrank at a 0.3% annual rate" from July to Sept., "as consumers slowed spending."

The GDP "was the worst since the 2001 downturn," according to the Commerce Dept. "Consumer spending, which makes up more than 70% of total economic activity, fell at a 3.1% annual rate in the quarter, the first drop in 17 years and the sharpest decline" since '80.

"In coming months, ... employers are expected to slash jobs and consumers are likely to pare spending even more. ... The unemployment rate, now 6.1%, is likely to top 7% in the coming months and several forecasts show it hitting 8% by the end of next year"(Reddy, Wall Street Journal, 10/31).

Economic forecaster Allen Sinai: "The economy has taken a turn for the worse, big time. ... The fundamentals around the consumer are all negative, and there are no signs of any help anytime soon, from anywhere."

Campaigning in FL on 10/30, Barack Obama "seized on the latest evidence of the backsliding economy to warn" that John McCain "would deliver more of the same." Obama: "Our falling G.D.P. is a direct result of eight years of the trickle-down, Wall Street-first, Main Street-last policies that have driven our economy into a ditch. If you want to know where Senator McCain will drive this economy, just look in the rearview mirror."

But the McCain camp "asserted that Obama's efforts to increase taxes on wealthy Americans would deepen economic troubles." Spokesperson Douglas Hotlz-Eakin: "Obama's ideologically driven plans to redistribute income will impose higher taxes on families, small businesses and investors."

The WH "acknowledged the weakening of the economy, while pinning the blame on a series of unusual events and arguing that" the $700B bailout "would soon deliver relief." Spokesperson Dana Perino: "Today's G.D.P. report is weak, but it is not unexpected."

The dip in consumer spending was "the largest three-month drop since" '80, "a contraction that was in some sense artificial: the [Jimmy] Carter administration, seeking to suffocate inflation, imposed limits on bank borrowing. Putting that episode aside, this year's drop represents the sharpest decline in consumer spending since the end" of '74. And not since 1900, when Pres. William McKinley (R) won re-election "has the incumbent party retained" the WH "in the midst of a recession or within a few months after one" (Goodman, New York Times, 10/31).

Trickle Down And Out?

In today's Washington Post, E.J. Dionne writes, "For all of [McCain's] "relentless use of guilt-by-association techniques," WH'08 "is concluding on a remarkably substantive argument. It is a debate about what constitutes social fairness and whether a top-down or a bottom-up approach to economic growth will define the country's future."

"Obama is often described as cautious, but he has been bold and unrelenting in his criticism of trickle-down economics and tax cuts concentrated on the wealthy. He used" 10/30's economic news "to press his case against theories that conservatives have been touting for decades."

"Obama has presented McCain with a problem. By endorsing tax cuts for Americans earning less than" $200K a year -- "i.e., the vast majority of taxpayers -- Obama has complicated the typical" GOP claim that Dems "always support raising taxes. Obama is candid in saying that he thinks the wealthy should pay more so that most Americans can pay less. ... So McCain has actually had to defend giving large tax benefits to the wealthy and to business, and engage in a wholesale argument against any sort of redistribution."

If Obama wins on 11/4, "this election would not simply be a non-ideological verdict against the status quo. It would be a clear repudiation of conservative economic ideas and McCain's claim that a more egalitarian approach to growth constitutes 'socialism.' McCain's attacks on Obama's thinking have been so forceful and direct that they require this election to be seen as a referendum that will settle a long-running philosophical argument" (10/31).

Floodraising Be Dam'd

New York Times editorializes, "We were shocked when specialists predicted that this would be the first billion-dollar presidential campaign. Now it looks as if the tab could come close to a twice-as-shocking" $2B. "Clearly, the system must be fixed."

McCain and Obama "have both pledged to update the public financing system to keep spending in future elections within reasonable bounds. Obama bears particular responsibility: He is the first candidate to spurn public financing... Both candidates initially indicated that they would accept the public subsidy and the spending limits that come along with it."

"But before anyone gets too misty-eyed about grass roots financing," the Obama camp "also has relied on more than 300 special-interest money bundlers who raised up to" $500K "a pop. The McCain primary campaign showed comparable success with fat-cat bundlers." The $84M public subsidy "must be increased in future races" (10/31).

At Least One Sector's Booming

According to a Univ. of WI Advertising Project study released this a.m., from 10/21 to 10/28, spending on TV ads "totaled nearly" $38M. The Obama camp spent nearly $21.5M; the McCain camp spent $7.5M. Another $6.7M was spent by the GOP and $2.2M by interest groups.

"Because these numbers are for the most recent period for which data are available, they do not include the millions Obama spent" 10/29 "on a 30-minute infomercial that aired on seven networks. They combine to put the Obama campaign on track to spend more money" in Oct. on broadcast TV -- over $100M dollars -- "than any campaign has ever spent in history" (release, 10/31).

Passing On The Broken Pottery

New York Times's Mazzetti and Schmitt report, "Two weeks ago, senior Bush administration officials gathered in secret with Afghanistan experts" from NATO and the UN "at an exclusive Washington club a few blocks from" the WH. "The group was there to deliver a grim message: the situation in Afghanistan is getting worse. Their audience:" advisers from the McCain and Obama camps.

"Over two days, ... the experts laid bare Afghanistan's most pressing issues. They sought to make clear that the next" POTUS "needed to have a plan for Afghanistan before" taking office. "Otherwise, they said, it could be too late."

"American intelligence officials believe that Taliban commanders are convinced that they are winning. Not only are they establishing themselves in larger swaths of the country, but their campaign of violence is shaking the will of European countries contributing troops to the NATO mission."

"The briefing on Afghanistan appears to have been the most extensive that Bush administration officials have provided on any issue to both presidential campaigns. ... The sessions were unclassified, but the participants agreed not to discuss their briefings or the contents of their discussions publicly" (10/31).

Kicking While He's Down

"According to an Internet video posting," al Qaeda leader Abu Yahya al-Libi "has called for" Bush and the GOP "to be 'humiliated,' without endorsing a party" for Election Day.

Libi, "a top al Qaeda commander believed to be living in Afghanistan or Pakistan, called for God's wrath to be brought against Bush, equating him with past tyrants in history." Libi: "O God, humiliate Bush and his party, O Lord of the Worlds, degrade and defy him."

"The remarks were the first from a leading al Qaeda figure referring, albeit indirectly, to the U.S. elections" (Reuters, 10/31).

Bring Out The Feds

DoJ's Civil Rights Division "will send 800 federal observers and justice department staff to 59 jurisdictions in 23 states on Election Day to monitor polling places and elections."

DoJ "is required to monitor polling places covered by the Voting Rights Act or related court orders. In addition, its Civil Rights Section will send watchers to counties in several battleground states." In Sept., "in response to concerns about voter intimidation raised by numerous civil rights and voting rights groups," DoJ "agreed not to use criminal prosecutors as elections observers, as had been done in the past with observers" from the AG's office (Flaherty, "The Trail," Washington Post, 10/31).

The Obama Effect

"From the battle over gay marriage" in CA "to the governor's race" in NC, "local election fights across the U.S. may turn on the ballots cast by an influx of voters backing" Obama. In WA, "his supporters may help bolster" Gov. Christine Gregoire's "bid for a second term." In CO, "where polls show Obama leading, voters may defeat a measure banning abortion."

Voters on 11/4 "will decide on 153 ballot measures touching everything from taxes to the rights of farm animals, as well as the governorships of 11 states. The local contests are being waged against the backdrop of a national presidential election that has attracted new" Dem voters (Selway, Bloomberg, 10/31).

Editor-in-Chief: Amy Walter

Executive Editor: John Mercurio

Managing Editor: Quinn McCord

Senior Editors: Maura O'Brien, Tim Sahd, and Reid Wilson

TV Editor: Abby Livingston

Senior Writers: Holly Noe and Rachelle Douillard-Proulx

Staff Writers: Ian Faerstein, Sean J. Miller, Steven Shepard, and Felicia Sonmez

Online Producer: Carrie Dindino

Executive Assistant: Meredith Nettles

Associate Writers: Cyra Master, Michelle Price, Beth Sussman, and Kurtis Lee

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