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« With Just 50 Days Left, Christie Maintains Lead In N.J. | Blog Home Page | Obama: Wall Street Owes A Debt To American People »

One Year Ago, A 'Fundamental' Turning Point

President Obama will be speaking in the next hour about the road forward in restoring confidence in the nation's financial markets. He makes this speech as president in large part, one can argue, because of a single comment that his campaign rival, John McCain, made last year in the wake of the Lehman Brothers collapse.

"The fundamentals of our economy are strong, but these are very, very difficult times," McCain said at a town hall meeting in Orlando on Sept. 15, 2008.

McCain's remark, abridged simply to, "The fundamentals of our economy are strong," instantly became to the Obama campaign a symbol of his being "out of touch" with the realities of the crisis.

"It's not that I think John McCain doesn't care what's going on in the lives of most Americans. I just think doesn't know," then-Sen. Obama said in Colorado that day. "He doesn't get what's happening between the mountain in Sedona where he lives and the corridors of Washington where he works."

His running mate, Joe Biden, echoed that, saying in Michigan: "Ladies and gentlemen, I could walk from here to Lansing, and I wouldn't run into a single person who thought our economy was doing well, unless I ran into John McCain."

RCP's polling average of the presidential race showed McCain at the downslope of a brief lead at this point in the 2008 campaign. It was at 1.6 points on Sept. 15, but in just a week, it was Obama who led, by 2.7 points. It was a lead that continued to grow right through Election Day.

Within months of taking office, the Obama administration itself found itself tripped up by economic language. Council of Economic Advisers chair Christina Romer attracted attention in March for saying the fundamentals of the economy were "sound." "The fundamentals are sound in the sense that the American workers are sound, we have a good capital stock, we have good technology," she said on "Meet The Press," echoing the sentiment of the statement that the Obama campaign had bludgeoned McCain for.

Here's how Robert Gibbs handled the comment the next day:

Q Robert, Christina Romer yesterday on the Sunday shows said that the fundamentals of the U.S. economy are sound. Last Friday, the President himself spoke about sound fundamentals in the economy. Yet when John McCain said that on the campaign trail last fall, he was "out of touch" and was portrayed that way by then-Senator Obama.

MR. GIBBS: Well, I think that --

Q What's the difference? Are the fundamentals so much sounder now?

MR. GIBBS: Well, if I remember -- if I remember correctly what then-candidate McCain said, he said that the fundamentals of our economy were strong. I would tell you that I think that the United States -- nobody exceeds the United States in our production capacity, in our entrepreneurial capacity, in our capacity to innovate, in our research universities, in the depth and the breadth of our capital markets.

But as the President addressed in the debates later that fall, he said that the strength of our fundamentals should be measured as to whether the middle class is getting a fair shake -- are we taking steps to create jobs; are we taking steps to prevent home foreclosures; are we taking steps to put money back in people's pockets who most deserve it, rather than to continue tax cuts that reward those that have done just fine over eight years.

Remember the backdrop of this entire debate was: action versus inaction. There was a great debate about the exact financial regulatory structure that we have discussed throughout today's briefing. The question was, were we going to move forward in a plan that would create jobs, a plan that would stem home foreclosures, a plan that would reward the middle class with tax cuts, and a plan that would re-regulate our financial industry -- or were we not?

I think that debate is largely over. I think that campaign was won by a particular side. And the President, as he said, has taken steps to ensure that each of the pillars of our economy that need to be in place in order to strengthen and turn it around, he's working on putting those in place just this year.

Q You're saying the difference is between the use of the word "sound" versus the use of the word "strong" -- is that what you're saying?

MR. GIBBS: I'd certainly think that's one of them, yes. Do I think there's a definitional difference between "sound" and "strong"? Absolutely.

Q Okay. And the fundamentals are now not strong, still, -- they're sound?

MR. GIBBS: I think the fundamentals, as Ms. Romer said, are sound; that the President is taking steps each and every day to strengthen those fundamentals, to ensure that the pillars that we need to turn our economy around to create the jobs the President talked about, to give the middle class finally a fair shake, and to put ourselves on a path towards sustained economic growth, is exactly what the President is focused on each and every day.

Q Using that phrase does not make the people now sound as out of touch as John McCain may have sounded, with a slightly different -- with a different word.

MR. GIBBS: I don't think so.

McCain has not made any statement on the anniversary of the Lehman collapse yet. As fate would have it, he, like Obama, is in New York today -- he's appearing on "Late Night with Jimmy Fallon" tonight.