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If Wall Street "Recovers" Does That Help McCain?

Friday, 19 Sep 2008 | 4:07 PM ET
AP

You can tell the American political community is genuinely shaken by the sight of officials in both parties, from the Bush administration and the Democratic Congress, standing side by side and promising to work together--fast.

It happened after 9/11, and again last night when Washington decided that only government intervention could halt the spreading crisis within the us financial system.

That crisis has already tilted the landscape of the 2008 presidential race in Barack Obama's favor. The question now is whether initial signs of recovery on Wall Street will ease pressure on John McCain.

Throughout the week Obama has moved to capitalize on mounting economic anxiety, sharpening his arguments for change after eight years of Republican control of the white house.

A range of polls have shown him moving slightly ahead of John McCain, after trailing slightly last week.

Today, Obama sought to strike a presidential tone, standing alongside the like of Paul Volcker and Robert Rubin and endorsing action by the Treasury--but calling for additional steps to help main street as well.

Protecting Your Portfolio - An Investment Guide
Protecting Your Portfolio - An Investment Guide

After initial missteps, including his own statement that America’s economic fundamentals are strong, John McCain has turned harsher--toward not just Obama but also the bush administration and wall street itself.

He has called for the firing of Securities and Exchange Commission Chairman Christopher Cox, and sought to blame the crisis partly on Obama by linking him to donations from executives of Fannie Maeand Freddie Mac. He has blistered corruption and greed among the nation's financial community.

Like Obama, McCain has declined to join critics of the Treasury intervention, however. if in fact it quiets jitters among the nation's investors, that intervention may help the Republican candidate stabilize his own standing in the race.

For Investors

For months the economy has been the top issue in the presidential race, and the events of this week virtually guarantee that won't change between now and election day.

But the less distress voters feel about it, the easier it is for McCain to direct attention toward his areas of relative strength. One of them is the cluster of cultural issues that in recent elections have favored his party.

Another is his history-making running mate Sarah Palin. And a third is his edge over Obama on national security, which is the focus of the first general election presidential debate next week.

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Insight on the politics of the bailouts, with CNBC's John Harwood

Questions? Comments? Write to politicalcapital@cnbc.com.

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