Obama rides a wave of bad news

"The impression of McCain on the economy is that he wanted more deregulation than Bush" at a time that voters are demanding more help from the government, he said. "I'm not sure right now that McCain can carry seven states," added Souder, whose home state has not picked a Democrat for president since 1964. "In the end I think McCain will carry Indiana. But if you are fighting for Indiana, you are in trouble."

Tom Ellis, GOP chairman in Butler County, Ohio, a key Republican stronghold in 2004, said there had been "some slippage" for McCain in recent weeks. He said Republicans were finding it "hard to penetrate" the torrent of bad economic news and deliver an effective pitch to independents. And the Arizona senator's attacks on Obama's past links to former radical William Ayers, he said, "do not garner him any advantage" with swing voters.

"There's a sense of frustration at this point," Ellis said. "What I hear is people are expecting more of the Republican ticket. They've got to speak directly to the economic issues. People want to hear specific solutions from Sen. McCain."

With 23 days to go in a campaign marked by many surprising twists, there is still time for McCain to make up lost ground. Polls show that many voters still question Obama's experience; and McCain's message, particularly his questioning of Obama's character and judgment, could take hold among the swing voters who will decide the election.

The credit market could stabilize, calming public anxiety and allowing McCain to change the subject to more favorable issues. An outside event, namely one that returns the discussion to national security, might allow McCain to remind voters of his strength in that area.

But polls clearly show that a major shift occurred in mid-September, just as Wall Street financial institutions started to fall and Congress began debating its $700-billion rescue plan. On Sept. 24, McCain took the surprising step of "suspending" his campaign, returning to Washington to participate in the negotiations and attempting to pressure Obama to delay their first debate.

That very week, as Obama aides began to cast McCain's actions as erratic, and as voters recoiled at the huge price of the bailout, Obama moved ahead in some so-called red states that are must-wins for McCain. Obama took a lead in several polls in Florida, Ohio and Virginia, while the race tightened in two other Republican-dominated battlegrounds, Indiana and North Carolina.