As usual, I don’t really know. I will say that two of three tracking polls that include 10/6 have McCain within the margin of error. And the newest polls from the battleground states do too. The econmic news, of course, remains really bad, and McCain really hasn’t gotten his anti-Obama message down yet. So I think there’s reason for hope, as there’s also reason to fear a Democratic landslide. I agree with Mike Murphy that the three McCain talking points about Obama should be--too weak, too liberal, too inexperienced. To be balanced, let me add that if I were Obama, here would be my three McCain points--too old, too unbalanced, too Bushie.

As we look back, a cycle of the McCain campaign is discernable. From roughly mid-July to the week after the Republican convention McCain was running circles around Obama on a daily basis, culminating in a slight lead in the polls on early September after the Palin nomination.

But with the financial crisis obviously the wheels have come off the Straight Talk Express Bus. Right now McCain-Palin think Obama is vulnerable on the fact that many voters still don’t know that much about him, and especially how left he may or may not really be. Fine and dandy, but it may be too late for this to work. I suspect Obama has a strong answer in the can to use tonight about William Ayers if McCain brings it up. Will McCain have a hide-ripping riposte?

This WaPo article describes the results of a poll showing Barack Obama leading John McCain in Ohio.

The Harry Reid/Nancy Pelosi directed Congress now has an approval rating of just slightly less than 17% . . . Nearly 76% of the American people disapprove of the way Congress is doing its job.

These are numbers that would be very interesting to me if my name were John McCain. It’s fair to say that the "Republican" brand is weak because of the low approval numbers for President Bush. But his ratings, low though they are, outdistance the ratings of Congress by more than the spread between Obama and McCain.

1. The national polls have Obama at 50% or better and an average of about 7% over McCain. The senate polls suggest a real possibility that the Democrats could win 62 seats, including MN, MS, and GA. That would include Senator Al Franken (who hasn’t even been funny for a decade), a possibility that deserves but will not get a hilarious SNL skit.

2. One reason can be seen in the article from the WaPo below: Obama seems to be more competent when it comes to things economic, his advisors more expert, etc.

3. But the author of said article may have a clever "subtext" that "subverts" what he actually says: The evidence suggests that deregulation is not the real cause of our financial crisis. The main damage came from the risky business of the intensely partisan and hyper-regulated Fannie and Freddie. The main danger is that the crisis will produce an angry and really completely misguided overreaction against deregulation.

4. Obama himself could conceivably be prudent enough to manage that anger and not come forward with too many perverse new policies. But Obama with a heavily Democratic Congress? Wrongheaded animosity is bound to run amok in Congress, and a Democratic president can’t be expected to control it. The Democratic Congress, as the author says, will deeply compromise what MIGHT be the personal prudence of the president and his advisors. A united Democratic government is bound to mess up the economy more.

Did you know that "Obama-Biden" offers up the following anagram: "Bomb an Idea"? I’m working on snipping up and rearranging a bumper sticker and lawn sign now.

No shill for the McCain-Palin campaign, the WaPo’s Sebastian Mallaby shows how the Obama campaign’s deregulation narrative is either stupid or mendacious.

In so doing, he cites two papers written by Columbia University economist Charles Calormis. I’ve read the second one, not (yet) the first (which is 113 pp. long). Suffice it to say that the deregulation of the financial services industry by Republicans in the last eight years is obviously not the problem. On the other hand, a major contributor is Fannie Mae’s and Freddie Mac’s management of "political risk," which involved enormous lobbying expenditures and the adoption of a new mission--the aggressive promotion of affordable housing--that ensured Democratic opposition to Congressional efforts to rein these GSE’s in.

Here are two snippets from the second paper:

In June 2003, in the wake of the failures of Enron and WorldCom, Freddie’s board of directors suddenly dismissed its three top officers and announced that the company’s accountants had found serious problems in Freddie’s financial reports. In 2004, after a forensic audit by OFHEO, even more serious accounting manipulation was found at Fannie, and Raines, its chairman, and Timothy Howard, its chief financial officer, were compelled to resign.

It is eloquent testimony to the power of Fannie and Freddie in Congress that even after these extraordinary events there was no significant effort to improve or enhance the powers of their regulator. The House Financial Services Committee developed a bill that was so badly weakened by GSE lobbying that the Bush administration refused to support it. The Senate Banking Committee, then under Republican control, adopted much stronger legislation in 2005, but unanimous Democratic opposition to the bill in the committee doomed it when it reached the floor. Without any significant Democratic support, debate could not be ended in the Senate, and the bill was never brought up for a vote. This was a crucial missed opportunity. The bill prohibited the GSEs from holding portfolios of mortgages and mortgage-backed securities (MBS); that measure alone would have prevented the disastrous investment activities of the GSEs in the years that followed. GSE immunity to accounting scandal is especially remarkable when it is recalled that after accounting fraud was found at Enron (and later at WorldCom), Congress adopted the punitive Sarbanes-Oxley Act, which imposed substantial costs on every public company in the United States. The GSEs’ investment in controlling their political risk--at least among the Democrats--was apparently money well spent.

***

The events in 2003 and 2004 had undermined the legitimacy of the GSEs. They could no longer claim to be competently--or even honestly--managed. An important and respected figure, Alan Greenspan, was raising questions about whether they might be creating excessive risk for taxpayers and systemic risk for the economy as a whole. Greenspan had suggested that their most profitable activity--holding portfolios of mortgages and MBS--was the activity that created the greatest risk, and three Federal Reserve economists had concluded that the GSEs’ activities did not actually reduce mortgage interest rates. It was easy to see at this point that their political risk was rising quickly. The case for continuing their privileged status had been severely weakened. The only element of their activities that had not come under criticism was their affordable housing mission, and it appears that the GSEs determined at this point to play that card as a way of shoring up their political support in Congress.

From the perspective of their 2008 collapse, this may seem to have been unwise, but in the context of the time, it was a shrewd decision. It provided the GSEs with the potential for continuing their growth and delivered enormous short-term profits. Those profits were transferred to stockholders in huge dividend payments over the past three years (Fannie and Freddie paid a combined $4.1 billion in dividends last year alone) and to managers in lucrative salaries and bonuses. Indeed, if it had not been for the Democrats’ desire to adopt a housing relief bill before leaving for the 2008 August recess, no new regulatory regime for the GSEs would have been adopted at all. Only the Senate Republicans’ position--that there would be no housing bill without GSE reform--overcame the opposition of Senators Christopher Dodd (D-Conn.), the banking committee chairman, and Schumer.

The GSEs’ confidence in the affordable housing idea was bolstered by what appears to be a tacit understanding. Occasionally, this understanding found direct expression. For example, in his opening statement at a hearing in 2003, Representative Barney Frank (D-Mass.), now the chairman of the House Financial Services Committee, referred to an "arrangement" between Congress and the GSEs that tracks rather explicitly what actually happened: "Fannie and Freddie have played a very useful role in helping to make housing more affordable, both in general through leveraging the mortgage market, and in particular, they have a mission that this Congress has given them in return for some of the arrangements which are of some benefit to them to focus on affordable housing."[12] So here the arrangement is laid out: if the GSEs focus on affordable housing, their position is secure.

Thomas Sowell reminds us of the large role government pressure played in the explosion of the subprimes. He also reminds us of the many close connections between Fannie Mae and the Democrats, not to mention how much Fannie has contributed to Obama in just a few years and the role the mismanager Franklin Raines has played in advising his campaign. The narrative of the unregulated free market being the cause of what ails us doesn’t hold up that well under close examination. McCain has to understand and use this stuff to restore morale and credibility to his campaign. He shouldn’t exaggerate it, but just say what’s straight-talk true. He should also, of course, lay off the earmarks.

McCain’s comfortable double-digit lead has dropped to only six, according to the latest study. And Obama is clearly organized in the state, and McCain isn’t. Here’s a conversation I overhead between two average white businessmen at the local PANERA this morning:

First guy: "I’ve already voted. I just don’t like what’s going on."

Second guy: "Maybe I’ll vote for Bush for dictator. Don’t you think it’s sketchy he wanted to give $700 billion dollars with no strings to someone he appointed?"

First guy: "I had to cancel a trip this week because I couldn’t get any gas. That damn [Republican Governor] Sonny Perdue should have had a plan ready, but he didn’t." [There’s been a severe gas shortage in Georgia, with almost all stations out at times. And the charge that the governor decided not to have an emergency plan ready is semi-true, as far as I can tell.]

The New York Times attempts to dismiss the notion that Obama and unrepentant terrorist Bill Ayers have a close relationship. But read closely the article raises more questions than it settles, many of which have been more thoroughly investigated by Stanley Kurtz’s NRO columns and other writings. McCain touched on the issue once a few months ago but failed to follow through on it.

As vital as it is for the McCain campaign and its supporters to focus on facts and ask pointed questions, it is also incumbent on our side to shoot down crazy allegations, which are readily refuted and discredit those raising the real problems of Obama’s associations. In a recent talk WSJ reporter John Fund referred to Obama as a potential "facilitator president"--one who would appear moderate but make possible the wildest dreams of the most extreme leftists, through funding their non-profits or appointment to lower-level government positions.

I cracked open my first bottle of Palin Syrah tonight, to accompany a BBQ grilled, butterflied chicken, Alton Brown-style.

An unusual wine--full bodied in color and texture but at the same time light on the palate. And while dark, it was also quite clear--it has been filtered. I thought it would open up more with some air (like our Sarah), but not much. Not at all tart! But very drinkable and enjoyable. Solid, I’d say. Especially at a mere $12 a bottle. Maybe not a wine to make you wink at the world, but I’d definitely recommend it. Liberal wine snobs will definitely turn their nose up at this wine, just as you’d expect them to. It’s a wine for the rest of us.