A castor oil presidency
THE SENSE of relief on Wall Street didn't last long. Stock markets did surge Monday, after Treasury Secretary Henry Paulson took steps to infuse billions of dollars in capital into big banks and take equity shares in return, and after governments in Europe began doing the same. Yet as the week wore on, investors' mood darkened. The Dow Jones Industrial Average dropped nearly 8 percent yesterday on news of slowing retail sales and manufacturing activity.
The downbeat news only added to the pressure on presidential candidates John McCain and Barack Obama, one of whom will have unpleasant budget and policy decisions to make come January.
In the run-up to last night's debate, neither candidate had fully admitted how much the financial crisis would constrain his ambitions. The usual methods of fighting recession - low interest rates and heavy spending - have been standard procedure in recent years, but the government will have less flexibility to use them now. Amid tight credit and mounting public debt, there's no easy way to hold off economic pain.
Voters already know this. During the vice-presidential debate earlier this month, Republican candidate Sarah Palin most impressed CNN's dial-flipping focus group when she declared, "Let's do what our parents told us before we probably even got that first credit card: Don't live outside of our means." Obama made a related point this week. "Part of the reason this crisis occurred," he said, "is that everyone was living beyond their means, from Wall Street to Washington to even some on Main Street."
Optimism wins elections. But the next president will be judged by his ability to guide a worried electorate through unprecedented economic turmoil. 