"It's the Economy Stupid"

On a day when Wall Street was melting down, Republican Sen. John McCain insisted Monday that the nation's economy was "fundamentally strong," drawing criticism from Democratic leaders and his opponent for the presidency, Sen. Barack Obama.

While the Obama camp talked of how the bankruptcy of Lehman Brothers Holdings and selloff of Merrill Lynch posed a threat to the nation's economy, McCain initially told supporters in a speech in Jacksonville, Fla., that while there was trouble on Wall Street, the nation's economy was still strong.

The opening may be just what the doctor ordered for the Obama campaign as it seeks to turn the publicity tide back in its favor in the wake of McCain's selection of Alaska Gov. Sarah Palin as his running mate.

It appears McCain may have tried to correct the potential gaffe in a later speech, however, as his campaign staff issued remarks that expounded on the statement. Campaign officials said McCain ad libbed his speech from notes in Jacksonville Monday without a prepared text.

Commenting on the financial market's troubles, McCain initially said: "You know that there's been tremendous turmoil in our financial markets and Wall Street. And it is, it's - people are frightened by these events. Our economy, I think, still, the fundamentals of our economy are strong but these are very, very difficult times. And I promise you, we will never put America in this position again. We will clean up Wall Street. We will reform government."

The McCain camp later issued prepared comments that were to be made later in the day when the candidate was scheduled to appear in Orlando, Fla. Those comments were altered to pay homage to American workers when saying the economy is "fundamentally strong."

"Today we are seeing tremendous upheaval on Wall Street. The American economy is in crisis. Unemployment is on the rise and our financial markets are in turmoil. People are concerned about our economic future. But let me say something: this economic crisis is not the fault of the American people. Our workers are the most innovative, the hardest working, the best skilled, most productive, most competitive in the world," McCain's prepared text said.

The text went on to say: "My opponents may disagree, but those fundamentals of America are strong. No one can match an American worker. Our workers sell more goods to more markets than any other on earth. Our workers have always been the strength of our economy, and they remain the strength of our economy today."

McCain made the remarks on a day when venerable brokerage Lehman Brothers Holdings declared Chapter 11 bankruptcy protection, and one of its chief rivals, Merrill Lynch & Co agreed to be bought by Bank of America in order to avoid a similar fate.

The Dow Jones Industrial Average ended up losing more than 4.4%, or 504 points at the close. The S&P 500 and Nasdaq made similar plunges.

McCain's comments drew immediate, sharp criticism not only from the Obama camp but from other Democratic leaders. McCain campaign officials, however, downplayed the significance of the remarks.

"The intent was the same," spokesman Tucker Bounds said. When asked whether the remarks were alarming to some, Bounds replied: "It alarmed the Obama campaign."

Obama's running mate, Sen. Joe Biden took the issue and combined it with previous McCain statements that the nation has made great economic progress under the Bush administration in a speech he gave at Saint Clair Shores, Mich.

"Ladies and gentlemen, I could walk from here to Lansing, and I wouldn't run into a single person who thought our economy was doing well, unless I ran into John McCain," Biden said.
Obama had issued a statement earlier in the day, after Lehman had declared bankruptcy, discussing Wall Street's troubles.

"This turmoil is a major threat to our economy and its ability to create good-paying jobs and help working Americans pay their bills, save for their future, and make their mortgage payments," Obama said in prepared remarks.

Obama added: "The challenges facing our financial system today are more evidence that too many folks in Washington and on Wall Street weren't minding the store. Eight years of policies that have shredded consumer protections, loosened oversight and regulation, and encouraged outsized bonuses to CEOs while ignoring middle-class Americans have brought us to the most serious financial crisis since the Great Depression."

In 1991, James Carvil, who was Bill Clinton's campaign manager used the catch phrase "It's the economy stupid" to help propel Clinton into the White House. How should the Democrats respond to this current issue and how should the GOP fix it?