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As economic distress deepens, McCain has toughest climb

Dante Chinni

Posted: 07.14.2008 / 10:15 AM PDT

No matter what people call the economic downturn – whether or not they use the r-word – there is no question that the situation is worsening for communities across America. And the bumpy road is going to affect the 2008 presidential campaign, likely damaging John McCain’s prospects.

Patchwork Nation’s second monthly Economic Hardship Index, a composite of key economic indicators, finds declining conditions in the majority of the nation’s 3,141 counties. The hardship is acute on the West Coast and in the Mountain West, where political observers expect a fierce fight this fall.The index crunches county-level figures for unemployment, foreclosures, and gasoline prices to create a 1-to-100 score that shows relative economic stress by location. The numbers show a stark decline across all of Patchwork Nation’s 11 community types. Counties hit hard are probable battlegrounds in the fall – places with high numbers of service workers (“Service Worker Centers”) and places that are growing and diversifying (“Boom Towns”).Counties with a large population of Christian Evangelicals (“Evangelical Epicenters”) have been rocked by climbing gasoline prices and foreclosures, pushing up their hardship scores from 13.5 to 16.9.Overall, the average hardship score in Patchwork Nation’s community types for July is 14.9, compared with 13.4 in June. Four different community types in July surpassed June’s highest hardship score of 15.2 in “Service Worker Centers.”That means that the 2008 election is likely to be even more about choosing a president who will usher in “change” – which helps Barack Obama and hurts Senator McCain.

For one, the economy is not McCain’s strongest issue, national security is. Then, there are McCain’s ties to the Bush administration’s economic policies, which many Americans associate with today’s tough times. Last week, in particular, showed the trouble McCain is having connecting with voters on the economy.

As the Arizona senator campaigned throughout the country talking about its financial state, former Sen. Phil Gramm, a top McCain adviser, said America was suffering through a “mental recession” and that the United States had become a “nation of whiners.” At the same time, the Dow Jones Industrials officially fell into bear-market territory and mortgage-finance giants Fannie Mae and Freddie Mac were rumored to be headed for a government bailout.The Hardship Index scores bring into sharper relief the pains that many places around the country are feeling. The pocketbook issues of rising food and fuel prices on top of a bad mortgage market are poised to affect voting decisions.

That’s especially true in the Mountain West. Counties in the key battleground states of Colorado, Nevada, and New Mexico are experiencing some of the steepest declines of the downturn, according to the July index – hurt by gasoline prices and foreclosures. Senator Obama is making a serious play for these red states that went for President Bush in 2004.In the swing state of Florida, which may well be a must-win for McCain, conditions have also deteriorated for the same reasons.Of all the community types, “Service Worker Centers” are in the worst shape, with the nation’s highest gasoline prices pushing the hardship score to 17.7. Obama may benefit from the continued economic strains in these parts, as Patchwork Nation has noted previously.

For the McCain camp, the struggles in “Boom Town” counties must be a concern. Early on, such rapidly growing areas were good prospects for McCain because they have higher incomes and trended Republican in the 2004 presidential race. He has logged considerable time on the campaign trail in such places. But the adverse effects of the mortgage meltdown have taken their toll: “Boom Towns’ ” hardship score in July is on the high end at 15.5.

The economic bright spot for Team McCain may be in the nation’s wealthy suburban counties (“Monied ’Burbs”).These überbattlegrounds are the largest community type by population. Even though the July index shows that their economic hardship is increasing, their score is still lowest among the 11 types. There may a better chance, in other words, to make the 2008 campaign about an issue besides the economy.

In the end, time could be the biggest savior for McCain. July isn’t November after all, and it’s possible that the country’s economic fortunes will improve or another topic will grab voters’ attention. On the flip side, the economy could take a deeper dip.