McCain hopes to highlight economic strengths

John W. Schoen Senior producer • Profile • E-mail

As Republicans wrap up their storm-shortened convention Thursday, presidential nominee Sen. John McCain is expected to underscore his plans to revive the slumping economy.

But while polls show the economy is still the biggest issue on the minds of  American voters, it’s not clear how much impact either candidate's policies would have in boosting growth.

With inflation and unemployment rising in the final weeks of the presidential campaign, American voters are understandably nervous about economic security. In a recent Gallup poll, 43 percent identified the economy as the most important issue in the election.

On issues such as fighting terrorism or dealing with a newly energized Russian adversary, McCain holds a commanding lead in polls over his Democratic rival, Sen. Barack Obama. But by a sizable margin — 52 percent to 40 percent — likely voters said Obama is better able to handle the economy.

Obama also is seen as the better candidate to deal with issues such as health care and energy, according to Gallup. (Poll respondents gave Obama a statistically insignificant edge over McCain on tax policy.)

Republicans are hoping to tip those numbers this week in their candidate's favor. Meg Whitman, McCain campaign adviser and former eBay CEO, says the Arizona senator's speech will focus on "reform, prosperity and peace," including economic policies that are “first and foremost focused on small business."

“What he understands is that creating jobs is the most important thing as we go forward," she said. "And as you know, 70 percent of new jobs in America are created by small business. So his tax policy and regulatory policy is focused around small business.”

Special feature Compare candidates McCain and Obama on economic issues

The McCain campaign faces a tough set of challenges addressing economic issues. The Obama camp has made strides linking the current sluggish economy and stagnating wages to the policies of the Bush White House. That means key issues — like the weak job market — may upstage some of the “bump” the McCain camp might otherwise expect this week.

“On Friday morning we have an unemployment report, and it's probably going to be a pretty soft one,” said Greg Valliere, a political analyst at Stanford Financial Group. “That's the one issue that will come back and come back, I think, to Obama's favor.”

While both campaigns are going to great lengths to highlight differences in their economic proposals, neither side so far has advanced ideas that will have much immediate impact. Both advocate increasing offshore drilling and developing alternative energy sources to blunt the impact of rising energy prices, but those efforts will take years.

Rising inflation is being fueled by increased global demand for a variety of commodities from corn to steel. The mortgage meltdown and the resulting credit crunch are proving stubbornly resistant to the Federal Reserve’s efforts to push large quantities of money into the financial system. Job cuts lost to globalization will not be easily restored.

Neither candidate has outlined detailed plans to head off the huge financial strains faced by Social Security and Medicare as baby boomers begin to retire in greater numbers. Both candidates' proposals would increase the national debt, according to independent analysis.

McCain also faces a difficult task in striking the right balance between advancing solutions to economic issues such as home foreclosures and stagnant wages without overstating the economy’s weakness. Though economists are divided on whether the United States has entered a recession, the economy continues to show surprising strength — particularly in farming and manufacturing industries critical to several important swing states.

McCain’s personal wealth makes him vulnerable to voter fears that he’s out of touch with the problems faced by budget-stretched, middle-income voters.

"If the Republicans go down the road they went down in 1992 and said, 'Gee, things are actually getting better, this economy is pretty good,' they are going to run into the same kind of hostility and disdain," said Democratic strategist Robert Shrum. "And they’re going to make a bad situation politically even worse."

MORE FROM EYE ON THE ECONOMY

Eye on the Economy Section Front

Strong bank results mask wider weakness Jobless consumers will hold back recovery Rising rates could threaten recovery Geithner says global recession losing force Foreclosures stymie efforts to revive economy Falling prices could bring a nasty hangover More light pokes through economic clouds If my bank is ‘stressed,’ should I be, too? Bank tests bring a new set of stresses Corporate profits continue to slide Eye on the Economy Section Front   Add Eye on the Economy headlines to your news reader: