The world financial crisis centering in the American economy has apparently changed the course of the presidential elections. It is possible of course, that even without the crisis Barack Obama and Joseph Biden would have won a narrow victory, and, unfortunately, it is still imaginable that they will lose in spite of it. But today (October 12, 2008) it looks like the Democratic victory will be solid, and will also involve important gains in both houses of the legislature. Just at the moment when we may be witnessing a partial but extensive state capitalist take-over of the banking and financial systems of the advanced economies, in the United States at least a party may very well come to power that has the ideological inclination to carry out and solidify a paradigm change abandoning the Washington consensus, and in the direction of regulated capitalist economies. Moreover, this party, for a change, is led by a remarkable person, who has in domestic and economic policy at least a capable team around him. Obama is both sensitive to the demands of justice, and is intellectually fully capable of understanding the structural challenges that we face. Thus what we are witnessing is not only a dramatic crisis, but also its potential longer-term solution.

I must let others more expert than myself to deal with, as we immediately should, with the economic prospects and implications. Given the difference between the candidates, and the parties, it is however remarkable that it took a crisis of this magnitude to establish a solid (not yet overwhelming: 7-8% in the combined polls) lead for Obama. Before the collapse of Lehman Brothers, McCain, remarkably enough was leading. Perhaps this was a function of his large “bounce” produced by the Republican Convention that came after the Democratic one, and the initially popular choice of Sarah Palin as the running mate. Never mind that this choice was absurd and disastrous intellectually, and (given McCain’s age and health) even morally; where it was relevant, namely among key sectors of voters (religious fundamentalists, lower class whites, older less educated women, some centrist voters) it initially worked. As the negative news about Palin’s character and qualifications became better known the competition became more even, but Obama’s take-off can be precisely dated only with the appearance of disastrous economic news. There is little indication that without that news we would have anything more than a tie.

That fact alone is remarkable. Obama is a dramatically impressive candidate, and not only to Europeans. McCain is almost always ineffective and without any charisma. He is tied to an unpopular incumbent president, with one of the lowest popularity ratings in history. He has been an advocate of de-regulation across the board that caused the subprime lending crisis, and became a supporter of tax cuts that created the fiscal crisis of the state. His thoughtless proposals on healthcare (with 40% uninsured today) are cosmetic at best, and at worst would cause many currently insured to lose their private insurance. On all these issues Obama offers important if at times somewhat cautious reforms: much more regulation, investment in the infrastructure, fairer taxes, vastly expanded though not universal health insurance. Where McCain selected an incompetent to replace him, Obama chose a highly qualified running mate.

These moreover are not only my opinions; they show up in all the polls. In foreign policy, where Obama has gravitated much too much to the American center for my taste at least, nevertheless he retained the strong conviction that the war in Iraq was a catastrophic mistake, and everything else was linked to this basic notion. And on this his views were and have remained closer to the majority of voters than McCain’s contrary positions, in spite of the latter’s tactical advantage on the issue of the surge. The voters, like Obama want to leave Iraq as soon as possible, and don’t much care that the surge (but even more the Sunni oriented strategy of Petraeus!) may have made that option more viable in Iraq itself. In any case, Obama’s idea of using a time-table as a form of pressure for a new compromise in Iraq is much sounder than McCain’s indefinite continuation of the occupation, that especially now will also be financially tough to justify.

The race issue

So even before Lehman, Obama should have been winning certainly on personality, solidly on domestic policy and at least marginally on foreign and military policies. But he was not, and in fact he was running worse than a generic Democratic candidate against a generic Republican. The issue I think has to be race. I am not thinking of the Bradley effect, about which there is an immense debate right now. Indeed we still do not know if in every poll taken (depending on the ratio of white and black voters) we should subtract 1-3% from Obama’s totals because the people polled are ashamed to reveal that they will not in the end vote for a black candidate they otherwise prefer. This discrepancy has been measured in many previous elections, though in the last 10 years or so it seemed to have greatly diminished. We won’t even be able to suspect how much the Bradley effect is a factor now until we compare the final polls, the exit polls and the actual results.

What I am thinking of however is much more serious, though even less measurable. People opting for McCain in the polls (beyond the 6% who honestly mention Obama’s race as “the” or “an important” reason!) who actually may name any issue as decisive may in fact be rationalizing a prior choice based on race. Many people interviewed by reporters in Ohio for example typically say that race plays no role for them, and they may or may not be voting for Obama, but they attest that their neighbors, friends, and co-workers, but rarely family members will definitely not vote for a black person just because he is black. This type of evidence testifies to the simultaneous presence of race in the election, and the reticence of people to directly admit it. All the talk about Obama being Muslim, now even Arab are not very likely to convince a lot of people that he is a terrorist or that he, in Palin’s words, “pals around with terrorists”, but all these claims do call attention to the fact that he is very different than what an American president is supposed to be.

Thus the strategy we see the Republicans adopt right now was tailor made for all those voters who were susceptible to not voting for Obama because he is different. They were going to adopt this negative strategy of personal destruction no matter what, and not only to change the conversation from economics. Associations with the Weatherman Bill Ayres (a terrorist in the 70s), with Reverend Wright (Obama’s pastor for 20 years), and with the voter registration group ACORN (Obama was their lawyer in the early 90s) all are intended to show he is not one of us, that we don’t know who he really is, and that his brilliant performance in debates and when electioneering should be seen as a mask, and be held against him. That these immoral tactics unfortunately can work to an extent we can see not so much through the increasing excitement of carefully chosen audiences to whom the charges are delivered, but again in the polls that are not sufficiently effected by the clear victories of Obama and Biden in debates that the same polls register. After the current wave of attacks moreover, Obama seems to have lost a point or so in the polls, that he may recover since there is also a backlash against negativity.

It is hard to say whether negativity or the backlash count for more, and that explains McCain’s recent, quite inconsistent defense of Obama against the most extreme attacks (that he is an Arab, or that people should literally be fearful of him). If the polls are still gradually improving for Obama this is due to two factors. First, the economic crisis makes negative campaigning appear trivial, selfish and irrelevant even to people who might be otherwise susceptible to it. More importantly, the crisis is bringing down everything Republican, and McCain’ erratic attempts to separate himself from Bush only linked him, inconsistently, to the most radical wing of his party. In short, he performed poorly on the issue that the voters refused to be distracted from.

Obama on the other hand performed well. Perhaps offering the country a second comprehensive New Deal would have been better, but that would have exposed him to the charge of being presumptuous, of trying to be president before being elected. So he did the next best thing: behaved responsibly, consistently, firmly but with moderation, supporting the only government America currently has, but offering intelligent improvements on its proposals. As we now see, there were better plans possible than Henry Paulsen’s initial scheme, but arguably it was not Obama’s role to offer them. In any case he has distinguished himself as a tranquil force in the crisis, and that is not a bad thing under the circumstances, especially when compared to McCain’s inconsistent behavior that has been noted even by conservatives who now grudgingly admit that Obama has a “first class temperament” (along with a “first class intelligence” Charles Krauthammer in the Washington Post, who now seeks to discover alleged moral flaws that are non-existent.)

The election is not over. The factor of race, obliquely if inconsistently revived by McCain’s camp may still reappear in some unexpected form. Negative campaigning works strangely enough better for the right than for the Democrats. So it is possible that there will be a tightening of the competition still. Or: the last debate and steady polls could cause a rush to the leader, and Obama could even win in an overwhelming land-slide. What is most likely today is that he will win a solid enough victory to govern a country in need of very dramatic reconstruction. Let us hope that at least that will happen.