#69 It's still the economy....

Two debates down, two to go. But the debates--so far at least--haven't done much to change the direction of the election. "It's the economy...," to quote part of James Carville's mantra from eight years ago.

"Employers cut 159,000 jobs, most in more than 5 years; jobless rate holds steady," is today's AP online headline. And of course the stock market has been tanking, with its double-digit moves down and up--mostly down--for several weeks. This drop in the Dow Jones Industrial average, the S&P 500, Nasdaq and nearly every other indicator was foreshadowed months ago when the Dow Jones Utilities average broke below its 474 support level. It's at 415.52 as we begin trading today.

The economy has taken its toll on the Republican ticket, and probably not just on John McCain/Sarah Painful. If there is not a dramatic, and highly unusual movement upward in the next month (or a dubya-manufactured October surprise), expect Democratic majorities in the House and the Senate to increase significantly.

The economy hits home first and hardest and most obviously. People vote their pocketbooks. And many more people are unemployed and homeless today than a year ago, with unemployment up nearly 33% from the 4.6% average 2007 US unemployment. Banks and investment firms are going out of business, or are being bought up at bargain prices by their stronger former competitors; and over a trillion dollars was lost in one day in retirement accounts this past week.

McCain has all but pulled his support staff and advertising budget from Michigan, once thought to be a battleground state, conceding its 17 electoral votes to Obama. North Carolina is now a tossup; Pennsylvania--another battleground state--seems to be moving solidly toward Obama; Nevada and Colorado are battleground states, while New Mexico (which I moved weeks ago to the Obama side) now is more solidly Blue. Montana, on the other hand, seems pretty solidly a Red state again.

If NV and CO actually vote Democratic for president this year, Obama might not need to win Ohio, though I still don't trust the close polls, especially with a significant number of "undecided" voters out there.

But the economy has shaken things loose and shaken up the McCain campaign. We have 32 days until the election. Still anything can happen, but September and early October have been disastrous for the economy, and for the Republicans.

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