I have no doubt that if President Bush were on the ballot in November, he would probably suffer a crushing defeat. Like Jimmy Carter bad. A weak economy, or the perception that the economy is weak, is what leads to incumbent presidents getting thrashed. Yet poll after poll shows John McCain in the lead, despite the best efforts of Barack Obama to paint a McCain first term as Bush's de facto third term. Will the big shakeup on Wall Street do anything to change that? I don't think so, a belief I had even before checking the Intrade betting odds that have McCain leading Obama, 53 to47, though he's down a smidgen today. Anyway, here is my reasoning:
1) McCain has done about as good a job as possible, both through his convention speech and his veep choice of Sarah Palin, of making himself the nominee of the McCain Party rather than the Republican Party.
2) It's tough to directly tie the credit crisis, or the housing crisis for that matter, to anything Bush has done or failed to do. The Federal Reserve, Wall Street, and homeowners all deserve a chunk of the blame. We had a bubble, and it burst.
3) Likewise, no candidate has a simple answer about what to do next.
4) In tough times, polls show, people become more skeptical of government. That may hurt Obama, who is proposing more government activism and higher taxes on business, investments, and incomes (at least on the wealthier folks).
5) To a great extent, this is all still thought of as a Wall Street problem. Most people don't know much about Lehman Bros. or AIG. The market is down today but not crashing. And the drop in oil prices is raising the real incomes of average workers.