Obama set to unveil economic rescue plan

(REUTERS/Carlos Barria)

As the first early voting in the American presidential election was getting under way, Barack Obama today attempted to seize all possible advantage from the crisis on Wall Street announcing the approach he would take to restore confidence in staggering financial markets.

Mr Obama, who is being hit for saturating the airwaves with negative advertising, outlined founding principles for addressing the crisis after huddling in Miami with a clutch of prominent economists, many former Bill Clinton aides, including Lawrence Summers and ex-Treasury Secretary Robert Rubin.

With the Bush administration unveiling its own blueprint for action to end the financial turmoil, the Obama presentation was little more than campaign posturing. It came, however, as both candidates sought to demonstrate that they would be best able to deal with a crisis of such great scope.

The emergency may become the ‘September Surprise' that completely changed the course of the 2008 race. Supporters of Mr Obama hope it will spur Americans to blame incumbent Republicans for the mess and turn their backs on John McCain. It is equally possible, however, that this moment of deep uncertainty may discourage them from voting for Mr Obama whom they may regard as too inexperienced.

It is a pivotal moment that comes just as some Americans get their first opportunity to exercise their judgement. The first ballots were being cast even yesterday as early voting stations opened in Virginia. To encourage higher turnout, early voting will

be allowed in 36 states this year, meaning that as many as one third of all voters may make their choice before 4 November, the official Election Day.

A sombre Mr Obama appeared before the cameras flanked by Mr Rubin and Laura Tyson, the former Dean and of the London Business School. "This is not a time for fear, it is not a time for panic. It's a time for resolve and it's a time for leadership. Our nation has faced even more difficult times."

Mr Obama held back from offering a plan that would directly compete with the one presented in Washington last night by Secretary Henry Pauslon, saying it was not a time for partisan warfare. He said the response to the crisis should respect four principles: any steps should help Main Street – ordinary Americans – as much as Wall Street, should not be seen to reward irresponsible actions by financial firms, should be temporary in nature and should be coordinated globally with the Group of Twenty.

It was not by accident that Mr Obama chose Florida to make his economic pitch. While early voting in that state does not begin for a month, the first absentee ballots were being posted yesterday. Recent polls, meanwhile, have portrayed Florida as a toss-up, perhaps tending slightly towards Mr McCain. Mr Obama will address another rally in Florida today. "The days are ticking down, and I believe this campaign visit is very, very important," said Terrie Brady, a former state Democratic Party chairman. "If he stays on message, it will be a home run. Like Bill Clinton said, ‘it's the economy, stupid.'"

Mr Obama's claims of being the candidate of hope were looking a tad threadbare, meanwhile, after a University of Wisconsin study showed that since the party conventions, 77 per cent of his radio and television advertising has been negative as opposed to 56 for Mr McCain. "Bambi is playing Chicago style," wrote Peggy Noonan, the Wall Street Journal columnist, not approvingly. This comes after Mr Obama told supporters to "argue" with McCain supporters and "get in their face".

Mr McCain tried to portray Mr Obama as part of the problem that gave rise to the current crisis, linking him directly to Wall Street lobbyists.

"But maybe just this once he could spare us the lectures, and admit to his own poor judgment in contributing to these problems," Senator McCain said. "The crisis on Wall Street started in the Washington culture of lobbying and influence peddling, and he was square in the middle of it."