Gasoline prices at $4 a gallon. Home foreclosures at record levels. Most Americans saying they are financially worse off than they were a year ago, the highest number (55 percent) in more than three decades of Gallup polling.
And on Friday, a one-two punch: a stock market plunge and a government report showing the steepest jump in the jobless rate in 22 years.
With the general election at last under way, no policy issue is likely to dominate the presidential race as much as the economy. The implications for both candidates are huge: President George H.W. Bush lost a second term in 1992 to a Democrat – Bill Clinton – who reminded himself of voters' priorities with a sign at his campaign headquarters that has served as a guidepost for candidates ever since: "It's the economy, stupid."
Barack Obama, who struggled to win over white working-class voters during the Democratic primaries, is wasting no time reaching out to them now. He launched his general election campaign Thursday in southern Virginia coal country, telling voters that "so many people have been forgotten" and that "Washington hasn't been listening to you."
A two-week campaign tour that began Monday in North Carolina and sweeps through a series of swing states will focus exclusively on economics issues. Senator Obama, his campaign says, will be "talking to Americans about how the economy affects their everyday lives."
The election is "a choice between John McCain's plan to continue four more years of costly Bush economic policies that have widened inequality and ... Barack Obama's plan to provide relief to struggling homeowners, affordable healthcare and college for all, and a tax code that rewards work instead of wealth," an Obama spokesman said in a statement Monday.
Senator McCain, for his part, used Friday's jobs report to blast Obama for an "economic agenda based upon the policies of the past that advocate higher taxes, bigger government, government-run healthcare and greater isolationism."
McCain's glum take on the economy – he lost the Michigan primary after telling voters there that some jobs weren't coming back – has given way to more upbeat talk about the prospects for a turnaround. "The American people cannot afford more inaction from Washington," he said in a statement Friday, distancing himself from the Bush administration.
The candidates offer sharply different plans for the economy. Senator McCain wants to make the Bush tax cuts permanent, lower corporate tax rates, and double the personal exemption for dependents to $7,000 – a particular boon for larger families.
He is a proponent of free trade, backs a hiatus in the federal gasoline tax, and opposes farm subsidies. To fix Social Security, he has said he'd rather cut benefits than raise taxes. His healthcare plan uses market incentives to cut costs and tax credits to help families afford coverage.
Obama would keep the Bush tax cuts for everyone except those with incomes above $200,000. He would cut taxes for lower-income workers and the elderly and impose higher payroll taxes on wealthier Americans to shore up Social Security.
He wants to tie trade to overseas labor and environmental standards, opposes a gas tax holiday, and backed the recent farm bill. His healthcare plan mandates coverage for children, offers subsidies to lower-income Americans, and requires employers who don't offer coverage to contribute to a public health plan.
Both McCain and Obama support some form of government action to stem the mortgage crisis. But economists say their broader economic agendas deviate little from Republican and Democratic playbooks. Despite his one-time opposition to the Bush tax cuts, McCain is now in many ways "a pure small-government conservative – deregulate, privatize," says James Galbraith, an economist at the University of Texas at Austin.
Economists say that neither candidate has explained in enough detail how they would fund their proposals. Obama says he would raise money by taxing the wealthy and ending the Iraq war, while McCain would save $100 billion a year by ending pork-barrel Congressional spending. Many analysts see those plans as insufficient or politically untenable.
In choosing a president, voters are swayed less by their own pocketbooks than by their views of the national economic picture, says Garrett Glasgow, a political scientist at the University of California, Santa Barbara. And when times are bad, the incumbent president – and his party – tend to get the blame.
Voters now rank the economy as their top election issue, and according to a Gallup poll last week, more than 80 percent see the economy as worsening. That helps Obama. In a recent Pew Research Center poll, 51 percent of voters said they saw him as best able to improve the economy, compared with 36 percent for McCain.
"The shaky state of the national economy is going to be a problem for John McCain," Glasgow said via e-mail. "McCain will want to paint an optimistic picture and also try to distance himself from the current administration on economic policy. He'll probably do this by trying to convince voters that national security" – on which the Vietnam War hero enjoys higher ratings – "is the biggest concern facing the nation."