McCain on U.S. economy: From 'strong' to 'total crisis' in 36 hours

By Michael Cooper
Wednesday, September 17, 2008

On Monday morning, as Wall Street was absorbing one of the biggest shocks to the financial system in generations, Senator John McCain said he believed the fundamentals of the U.S. economy were "strong."

Hours later he backpedaled, explaining that he meant that American workers, the backbone of the economy, were productive and resilient. By Tuesday he was calling the economic situation "a total crisis" and decrying "greed" in Wall Street and Washington.

McCain's sharp turnabout in tone and substance reflected not only a recognition that he had struck a discordant note at a sensitive moment, but that he had done so on the very issue on which he can least afford to stumble.

As economic conditions have worsened over the course of this year and voter anxiety has increased, McCain has had to work to counter the impression - fostered by his own admissions as recently as last year that the economy is not his strongest suit - that he lacks the experience and understanding to address the nation's economic woes.

In this case, McCain first sought to explain away his remarks about the economy's fundamental soundness by saying he had been referring to the American people and almost daring his Democratic rival, Senator Barack Obama, to contradict him on that score. But within hours of his original remarks on Monday morning, his aides were scheduling appearances for him on morning television shows on Tuesday so he could erase the impression being promoted aggressively by the Democrats that McCain was out of touch.

His campaign sent out to reporters the advance text of a speech he was delivering later on Monday that contained much starker language about the financial crisis, and by Tuesday the campaign had produced a new ad asserting that McCain's experience and leadership were necessary in a "time of crisis."

Aides and advisers repeated the phrase that followed McCain's comments about the economy's fundamental strengths: "These are very, very difficult times."

For much of this year, McCain has seemed to struggle to strike a balance between conveying the optimism that many voters seem to want in their leaders, and the I-feel-your-pain empathy that they crave during hard times. His task is complicated by the tension between his plans to continue many of the economic policies of the unpopular incumbent Republican president and his pledges to improve the American economy and shake things up in Washington.

Beyond striking a more populist tone, and more explicitly acknowledging the nation's economic problems, McCain's campaign also began an effort Tuesday to cast him as a strong leader with deep experience on economic issues by virtue of his service on the Senate Commerce Committee, which he presided over for six years.

That effort quickly hit a pothole when one of his economic advisers suggested that he had helped to create the BlackBerry, by virtue of his role in brokering telecommunications legislation. The McCain campaign later disavowed the suggestion as "boneheaded."

As recently as this January, McCain argued at a Republican debate that Americans were better off now than they were eight years ago; by this summer he had released an ad that said "we're worse off than we were four years ago."

McCain's first big speech on the mortgage crisis warned against excessive government intervention; a month later he released his plan for government action to help people keep their homes. And a tour he began in July to emphasize his understanding of the economic pain Americans feel was overshadowed when one of his top economic advisers, former Senator Phil Gramm of Texas, was quoted as saying that the United States was only in a "mental recession" and had become "a nation of whiners."

The most recent episode began Monday morning at a rally in Jacksonville, Florida, when McCain spoke of the troubles in the financial sector. "There's tremendous turmoil in our financial markets and on Wall Street," he said. "People are frightened by these events. Our economy, I think still, the fundamentals of our economy are strong.

"But these are very, very difficult times. And I promise you we will never put America in this position again. We will clean up Wall Street. We will reform government. And this is a failure."

His statement about the strength of the fundamentals of the economy was one he has made many times, for nearly a year now, usually adding that times are tough or people are hurting. But his reiteration of the remark on Monday, after the bankruptcy of Lehman Brothers helped send the stock market plunging to its steepest lost since the terrorist attacks of Sept. 11, 2001, quickly became a political problem.

The McCain campaign then swung into action, to try to put the remark "in context," as one top aide said, and to brush back what they felt were unfair attacks coming from the Obama campaign.

On Tuesday morning, McCain was interviewed for CBS, ABC, NBC, Fox News, CNN, MSNBC, and CNBC. Again and again, he explained that he understood the "crisis" and called for a new commission to study the problem, modeled on the one that investigated the Sept. 11 attacks.

On NBC's "Today" show, one of the hosts, Matt Lauer, asked McCain how he could say that "the fundamentals of our economy are strong" while his campaign was releasing a television ad that said that the economy was in crisis.

"Well, it's obviously true that the workers of America are the fundamentals of our economy, and our strength and our future," McCain replied. "And I believe in the American worker, and someone who disagrees with that - it's fine. We are in crisis. We all know that.

"The excess, the greed and the corruption of Wall Street have caused us to have a situation which is going to affect every American. We are in a total crisis."