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Obama, McCain attacking on economy

The World Today - Friday, 31 October , 2008 12:10:00

ELEANOR HALL: But first to the worrying signs of recession in the world's largest economy.

The latest figures show that the US economy is shrinking, with consumer spending in some sectors
collapsing at a rate not seen since 1950.

The economy is dominating the final days of the US Presidential race, with Barack Obama and John
McCain sparring over the causes and cures for America's economic woes.

The Democrat candidate, Barack Obama, is trying to tie his Republican rival to the failed economic
policies of the Bush Administration.

Senator McCain's team is warning that an Obama win would drive the US deeper into recession.

Washington correspondent Kim Landers has our report.

KIM LANDERS: The Presidential election is in sight and the American economy is reeling. US
consumers have cut back spending so sharply that the economy has shrunk - all signs that America is
hurtling towards a recession.

It's fodder for a new Barack Obama TV ad which contends that the downturn is the result of eight
years of Republican economic policy and it shows the faces of John McCain and George W Bush
together in a car's rear view mirror.

VOICEOVER (excerpt from advertisement): Look behind you. We can't afford more of the same.

KIM LANDERS: It's a message that Barack Obama is hammering at his campaign rallies too.

BARACK OBAMA: George Bush has dug a deep hole for us and he wants to hand the shovel to John
McCain. The cost of this economic crisis, the cost of the war in Iraq means that Washington is
going to have to tighten its belt. It's going to have to put off spending on things we don't need.
As President I'm going to go through the Federal Budget, line by line, and we're going to end
programs that we don't need.

KIM LANDERS: The McCain campaign says Barack Obama's economic plan is driven by job killing tax
increases and it's got a driving analogy of its own, warning that the Democratic nominee would
drive the economy off a cliff.

At a campaign stop in Ohio, John McCain didn't dwell on the fact that the US economy has suffered
its sharpest contraction in seven years. Instead he pointed to the news that Exxon Mobil has topped
its own record for the biggest US quarterly operating profit and he's pointed out that Barack Obama
once voted for legislation that included millions in tax breaks for oil companies.

JOHN MCCAIN: Senator Obama voted for billions in corporate giveaways for the oil companies. I voted
against it.

KIM LANDERS: While the gloomy economic news of the past few months has given Barack Obama an edge
in the White House race, John McCain is trying to boost his own economic credentials.

JOHN MCCAIN: And get America's economy out of the ditch by keeping your taxes low, less government,
lower spending and give the government back to the people and take it out of the hands of the
special interests.

KIM LANDERS: But just how much will America's economic crisis affect the new president and how will
he deal with it?

Jeremy Mayer is an associate professor in the School of Public Policy at George Mason University.

JEREMY MAYER: Well the question is when does it become his fault? At what point in the next
president's term do Americans stop blaming Bush for the economy and start blaming his successor? Is
it a month? Is it six months? So I think that's a key question.

But make no mistake - the challenges facing whoever wins on Tuesday are the largest that have faced
any president probably since Richard Nixon in 1969 in the depths of Vietnam or maybe even Franklin
Roosevelt or Harry Truman.

There is an upside for Barack Obama or John McCain. It is these type of moments where great
presidents get identified.

There's a very poignant scene in a couple of biographies of Clinton where he takes someone aside
and says, "Do you think I'll be a great President?" And in once case it's Dick Morris, the
pollster. And Dick Morris says, "Hey, great presidents have to do great things. They have to face
great challenges like a war or a depression. You can't be in the top 10 presidents for that very
reason." And Clinton goes, you know, "Well, it's too bad. How good can I do without that?"

So they both have an opportunity.

KIM LANDERS: How much is the American economic situation going to shape a president's ability to
deliver on all of the promises that have been made over this very long campaign?

JEREMY MAYER: There is no way that the plans that John McCain and Barack Obama laid out when they
launched their general election campaigns after they locked up the nomination can be done given the
economic climate. They both have acknowledged in vague ways that they can't do everything they
promised three or four months ago. But neither of them will specify what that means and we're going
to wait until after the election to find out.

KIM LANDERS: What is clear is that either Barack Obama or John McCain may be dealing with a severe
and long lasting recession in the United States.

This is Kim Landers in Washington for The World Today.