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Gary Younge
The politics of smear won't work in the middle of a stockmarket crash

As the nation's attention keeps skipping from the financial meltdown to the presidential election and back again, nothing serves as a more apt metaphor for John McCain's campaign right now than the state of the markets and the popular response to it.

People hold on, thinking it will bottom out, only to find it plumbing new and unexpected depths. Gripped by panic and fuelled by fear, those responsible for guiding it to a better place keep steering it into the ground. No one knows where it will all end, but it is already clear that it will end badly and that everyone will have to pay for it.

The McCain campaign is in freefall. This time last month, fresh off the nomination of Sarah Palin and their convention, the Republican ticket held a two-point lead in national polls and was ahead in all the states that George Bush won in 2004 with the exceptions of New Mexico, Colorado and Iowa. McCain was also mounting a serious challenge in Michigan, Pennsylvania and New Hampshire - states that Democrat John Kerry won with slim margins in 2004. McCain was not in a strong position, but it was a viable one.

Today he is trailing by an average of seven points nationally, has pulled out of Michigan and finds himself struggling in Virginia, North Carolina and Indiana - states where Republicans don't usually have to run seriously, let alone sweat. Meanwhile, he is now losing in Florida and Ohio - the totemic prizes of 2000 and 2004 respectively. On most present projections, McCain could win every remaining toss-up state and Obama would still take the White House by a huge margin. If the vote were held today and the polls were accurate, we would be witnessing a landslide.

So if the McCain campaign seems desperate it's because it has every reason to be. It has a candidate - who thanks to his war record and foreign policy experience, would have been formidable in 2004 - being handled by Bush strategists who are working from a playbook of smear and innuendo that worked brilliantly in 2000 and 2004, and running on a tax-cutting manifesto that has barely been updated since the mid-80s. The result is a mixture of the demotic, the erratic and the irrelevant.

"I think you're seeing a turning point," says Saul Anuzis, the Republican chairman in Michigan. "You're starting to feel real frustration because we are running out of time. Our message, the campaign's message, isn't connecting."

If anything, the trouble is quite the opposite. Their message is connecting too well. Last week the plan was to change the message from fixing the economy to denigrating Obama's character. This task was left to Palin, who executed it faithfully and effectively.

"For me, the heels are on, the gloves are off," she told Republican donors in Florida. For the rest of the week she invoked Obama's association with Bill Ayers, the former 60s radical and founder of a domestic terror group, as though Obama had just emerged from the Tora Bora mountains with a "Vote for Bin Laden" sign under his arm.

Obama, she claimed, has been "palling around with terrorists and launched his political career in the living room of a domestic terrorist". "This is not a man who sees America the way you and I see America," she told one crowd. "I'm afraid this is someone who sees America as imperfect enough to work with a former domestic terrorist who had targeted his own country," she told another.

The truth is that Ayers, who is now a professor of education at the University of Illinois and a former aide to the Chicago mayor, Richard Daley, lives a few blocks from Obama, donated $200 to his re-election fund to the Illinois state senate in 2001, and sits with Obama on the eight-person board of the Woods Fund, which supports low-income and minority groups on the South Side of Chicago.

But in post 9/11 America, where fear often works better than truth, Palin certainly connected with her audience. Her rallies have taken on the air of lynch mobs, with supporters yelling "Kill him", "Terrorist" and "Treason" at the mention of Obama's name. Meanwhile, local officials introducing McCain have been emphasising Obama's middle name, "Hussein".

Given that Hillary Clinton was the first to raise the connection between Obama and Ayers during the primaries, it is difficult for the Democrats to now claim it is off limits. But the Republican base, which has been in a rage for some time, has taken it to a whole new level. For six years the party controlled all three branches of the government. They slashed taxes, started wars and ignored international agreements at their whim. Eight years on America is poorer, weaker, and more isolated and vulnerable than it has been in several generations. They look around for someone or something to blame. As their own president is poised to nationalise the banking system, they hear Obama's name and reflexively scream "socialist".

On Friday McCain had to pull them back from the brink. One man said he was "scared to bring up [his] child in a world where Barack Obama was president". McCain replied: "He is a decent person that you do not have to be scared of as president of the United States." The crowd booed. Later a woman said she could not trust Obama because he is an "Arab". McCain grabbed the microphone from her before she could go on. "No ma'am, he's a decent family man, a citizen, who I just happen to have disagreements with on fundamental issues." The crowd applauded.

The trouble is that if Obama is the man they say he is, then the crowd has every reason to be scared - after all, what decent family man "pals around with terrorists"?

Indeed, ordinarily these attacks and McCain's agenda would work. But not in the middle of a stockmarket crash. People are more concerned with keeping their jobs than with being taxed in them; more focused on economic security than on national security; and they care more about their retirement accounts and homes than they do about Ayers - whom most have never heard of.

It's not that the barely veiled racial slights don't resonate with some. It's that when faced with the question: do you hate black people more than you like your house, your job or your retirement account, for many the hurdle of racism does not seem quite so high.

Nonetheless there are a few reasons why Obama should not be complacent. First of all, the election is not today. What has turned around in a month can turn back again. After the final debate in 2000 Al Gore was leading Bush by 11%; we all know how that turned out. Second, the polls may not be accurate. True, all of the last 30 polls show him ahead. But while nine give him a double-digit lead, 10 have him ahead by just five points or less - within the margin of error. In other words, it could yet tighten and probably will.

But for now the fundamentals of his campaign are strong. And while McCain may keep trading in smears, for the time being no one seems to be buying them.

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