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Obama rides a wave of bad news

Times Staff Writers

For months, Mark Wagner stuck by John McCain, even as the economy stalled and other Americans came to blame Republican leadership. Then, about three weeks ago, the deepening economic downturn pushed him to reconsider.

Now, the Florida salesman and staunch Republican has abandoned the GOP ticket. Sarah Palin, he thinks, looks under-equipped to be vice president. And McCain, he says, displayed an unsteady response to what may be a global economic depression.

The financial crisis has turned the last three weeks into a crucial and possibly decisive period in the presidential contest -- a time when many Americans have taken a new look at each candidate and then moved toward Democrat Barack Obama.

Like a wave, the crisis has washed over other factors in a contest that had seemed to be a dead heat, moving enough voters to give the senator from Illinois a consistent lead in polls nationwide and in key battleground states, including Florida, Virginia and Ohio, where President Bush secured his reelection four years ago.

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Republican officials in several states say they fear voters have judged McCain and Palin harshly in how they reacted to the financial downturn. Obama, meanwhile, now looks like an acceptable alternative to many voters who had been hesitant to pull the lever for him because of concerns about his untraditional background and relatively recent appearance in national affairs.

“If you looked at some of the decisions that Obama’s made, and the consistency and levelness that he’s had in these trying times over the past few weeks, in my opinion he’s blown McCain away,” said Wagner, 47, of suburban Tampa.

In addition, Wagner disapproves of Palin’s refusal to cooperate with a state legislative investigation that found she had abused her power as Alaska governor, and he calls McCain’s recent attacks on Obama’s character and past associations “disgusting.”

“McCain was supposed to be the steady hand with experience,” he said.

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Some Republicans report hearing of similar conversions in Ohio, Indiana and North Carolina, and they fear that the change is irreversible. Voters who have been blaming Bush and Republicans in general for the financial crisis now seem to be tying it around McCain’s neck as well.

Rep. Mark Souder, an Indiana Republican, said he was looking at an “Obama tide” in his district and wondering about his own reelection: “Can I withstand a firestorm?”

“The impression of McCain on the economy is that he wanted more deregulation than Bush” at a time that voters are demanding more help from the government, he said. “I’m not sure right now that McCain can carry seven states,” added Souder, whose home state has not picked a Democrat for president since 1964. “In the end I think McCain will carry Indiana. But if you are fighting for Indiana, you are in trouble.”

Tom Ellis, GOP chairman in Butler County, Ohio, a key Republican stronghold in 2004, said there had been “some slippage” for McCain in recent weeks. He said Republicans were finding it “hard to penetrate” the torrent of bad economic news and deliver an effective pitch to independents. And the Arizona senator’s attacks on Obama’s past links to former radical William Ayers, he said, “do not garner him any advantage” with swing voters.

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“There’s a sense of frustration at this point,” Ellis said. “What I hear is people are expecting more of the Republican ticket. They’ve got to speak directly to the economic issues. People want to hear specific solutions from Sen. McCain.”

With 23 days to go in a campaign marked by many surprising twists, there is still time for McCain to make up lost ground. Polls show that many voters still question Obama’s experience; and McCain’s message, particularly his questioning of Obama’s character and judgment, could take hold among the swing voters who will decide the election.

The credit market could stabilize, calming public anxiety and allowing McCain to change the subject to more favorable issues. An outside event, namely one that returns the discussion to national security, might allow McCain to remind voters of his strength in that area.

But polls clearly show that a major shift occurred in mid-September, just as Wall Street financial institutions started to fall and Congress began debating its $700-billion rescue plan. On Sept. 24, McCain took the surprising step of “suspending” his campaign, returning to Washington to participate in the negotiations and attempting to pressure Obama to delay their first debate.

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That very week, as Obama aides began to cast McCain’s actions as erratic, and as voters recoiled at the huge price of the bailout, Obama moved ahead in some so-called red states that are must-wins for McCain. Obama took a lead in several polls in Florida, Ohio and Virginia, while the race tightened in two other Republican-dominated battlegrounds, Indiana and North Carolina.

Since then, the congressional bailout plan and other rescue measures from the Federal Reserve and the Treasury have failed to ease a credit crisis that is threatening many businesses and causing panic among investors. In national opinion surveys, Obama has risen from a statistical tie to a lead, according to an average of polls compiled by RealClearPolitics.com.

As the financial crisis deepened in recent weeks, Harold P. Pelzel, 62, a utilities consultant and lifelong Republican, was moved to volunteer for Obama’s campaign in Cary, N.C., a bastion of moderate conservatives near Raleigh that Obama is targeting for crossover votes.

Pelzel said he decided to support Obama during the Democratic primary due to the souring economy, but now the continued downturn has given him the time and motivation to work the phones for the campaign. He was downgraded from full-time employee to contractor at the consulting firm where he works -- and consulting contracts have dried up recently as companies cut back, giving him time to volunteer.

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Now, at the campaign office in downtown Cary, Pelzel said he spoke almost every day with conservative or Republican voters who tell him they are also leaning toward Obama because of the faltering economy.

“They tell me: ‘I’ve been a Republican all my life, but I can’t support them any more,’ ” Pelzel said, adding: “I don’t even have to try to convert them. Most of them decide to switch on their own.”

In conservative Naples, Fla. -- a heavily white, Republican area -- retirees and other residents have been hard hit by plummeting property values, rising tax bills and skyrocketing insurance premiums -- and McCain advisors, citing internal campaign polling, concede that the GOP nominee is “underperforming” there.

Last week in Naples, 300 donors attended an Obama fundraiser hosted by Republican real estate developer Jack Antaramian. A former Bush donor who had attended the inauguration, Antaramian said the fundraiser drew a number of Republicans who had grown uncertain of McCain’s ability to lead on economic issues.

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Antaramian said he couldn’t support Republicans when family members were losing their homes to foreclosure. And if McCain should die or leave office, he said, “I just can’t visualize Sarah Palin having the capability of dealing with the magnitude of events” of the financial crisis.

“I really believe that Obama has a much better grasp of what the middle class is going through right now,” Antaramian said.

Polls show that McCain retains solid support among core Republicans, a group that had once viewed him skeptically but has been enthusiastic ever since he named Palin to the ticket. Some local and state-level party officials, however, acknowledge that the financial crisis has moved moderates and independents toward Obama -- and some blame McCain for doing little to stop it.

Moreover, GOP officials said, they had already been seeing large voter registration gains by Democrats and independents in North Carolina, Ohio, Virginia and Indiana, foreshadowing tighter elections than they were used to.

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“The frustration I hear is McCain’s message isn’t getting out that he was trying to regulate Fannie Mae and Freddie Mac years ago,” said Linda Smith, Republican chairwoman in Clark County, Ohio. She was referring to the mortgage giants that were recently taken over by the government amid a tide of loans that went bad.

“I have to blame the McCain camp for not pushing it hard enough,” added Smith, whose rural county lies between Dayton and Columbus. “It’s so ingrained in people’s minds that Republicans are good on national security, but Democrats are good on the economy, and it’s very hard to counter that.”

In rural Holmes County, Ohio, GOP Chairman Rob Hovis said that the dire headlines about the economy had made it harder for McCain to connect on the social issues that are the most important to the area’s large Amish community.

“Being pro-life is the overriding issue here,” Hovis said. “Because of the economic situation, that isn’t getting through. Our chief effort is to help Amish and other conservative voters realize that the candidates are different on the social issues that matter most to them.”

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Rep. Paul D. Ryan (R-Wis.), who emceed a McCain rally last week in Waukesha, said Obama had been “pulling the wool over people’s eyes” by casting himself as best-suited to lead on the economy.

But Ryan conceded that he understood why the polls were moving in Obama’s favor. “People are nervous,” he said. “They’re scared and they are fed up. Naturally, they take it out on the incumbent class. [Obama] has appeared reasonable.”

--

peter.wallsten@latimes.com

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david.zucchino@latimes.com

bob.drogin@latimes.com

Wallsten and Drogin reported from Washington, Zucchino from North Carolina. Times staff writer Janet Hook in Washington contributed to this report.


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