Battered economy dominates US presidential race

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(Agencies)
Updated: 2008-09-20 22:29

WASHINGTON - A battered US economy continued to dominate the US presidential race as rivals Barack Obama and John McCain traded barbs over who to blame for the troubles and sought to position themselves as the candidate best suited to handle the tough times.

US Democratic presidential nominee Barack Obama speaks during a rally at Cashman Field on September 17, 2008 in Las Vegas. [Agencies]

Both men responded cautiously Friday to a government plan to stop the economic upheaval, which Obama, a Democrat, blamed on the administration of Republican President George W. Bush.

McCain, a Republican, said Obama contributed to the problem by accepting campaign contributions from Fannie Mae and Freddie Mac, the mortgage companies rescued by a government takeover earlier this month.

"Maybe just this once he could spare us the lectures, and admit to his own poor judgment in contributing to these problems," McCain said of Obama.

McCain neglected to say that some of his closest advisers had ties to or lobbied for the home loan companies.

Meanwhile, a new AP-Yahoo News poll finds that one-third of white Democrats harbor negative views toward blacks, a finding that could cost Obama, who would be the US's first black president, the election in a close vote.

The poll, conducted with Stanford University, suggests that the percentage of voters who may turn away from Obama because of his race could easily be larger than the final difference between the candidates in 2004 - about two and one-half percentage points.

More than a third of all white Democrats and independents - voters Obama can't win the White House without - agreed with at least one negative adjective about blacks, according to the survey, and they are significantly less likely to vote for Obama than those who don't have such views.

Republican presidential candidate John McCain addresses NASCAR fans on September 14, 2008 in Loudon, New Hampshire. [Agencies]

The economy has continued to overshadow other issues on the campaign trail especially in light of the sharp market drop earlier this week. The market fell steeply Monday in response to the bankruptcy of storied Wall Street investment bank Lehman Brothers, the decision of a second powerful investment house to sell itself at a fire-sale price, and the Federal Reserve's intervention in insurance company American International Group Inc.

But Wall Street enjoyed a huge rally Friday after the government said it was creating a plan to rescue troubled US banks from their souring debts. If such a plan is put in place, it could help alleviate the uncertainty that has been sending the markets into tumult over the past week.

McCain has been battling to differentiate himself from the unpopular Bush and his economic policies, and also to square his long history of advocating deregulation with voter concerns about the crisis in the US financial landscape. He also is trying to recover from a series of gaffes this week, starting with his Monday assessment that US economic fundamentals were strong.

He made little mention Friday of the massive proposal being crafted by Treasury Secretary Henry Paulson that could amount to a $1 trillion taxpayer bailout of the mortgage industry.

Instead, McCain said simply that leaders should put aside partisan differences and "any action should be designed to keep people in their homes and safeguard the life savings of all Americans."

McCain spokesman Matt McDonald said the campaign was reviewing the Paulson plan and McCain had not yet taken a position on it. "He's supportive that there are steps being taken," he said.

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