Voters in the USA go to the polls today to elect the 45th president amidst the worst economic crisis since the Great Depression of the early 1930s. The election campaign, which political historians call the most bitter in US history, features Democratic Party candidate and the first black American presidential candidate Senator Barack Obama, and the Republican Party's Senator John McCain.

KEN CHAPLIN

The devastation of the US economy which has resulted in foreclosures of more than 700,000 houses since January, the loss of 760,000 jobs and a debt of US$900 billion could tilt the election in favour of Harvard-educated Obama. The Democrats have linked the financial problems to the policies of Republican President George W Bush who has been in office for eight years. It is really a bread-and-butter election.

McCain and his camp have been labelling Obama "a terrorist", because of his passing association with Bill Ayres, a terrorist of many years ago - when Obama was eight years old. Ayres is now a respected university professor. McCain also links Obama with Rashid Khalili, a Palestinian-American who was one-time spokesman for the Palestine Liberation Organisation. Khalili is now a respected professor at a university in the USA. Khalili was the founder of an organisation of which McCain was chairman which he helped to finance. Obama was also a member of that organisation.

As Obama took the lead in the presidential race, McCain and his vice-presidential running mate, Alaska governor Sarah Palin and their camp launched a campaign of distortion, misrepresentation and misinformation against Obama. For example, one of McCain's campaign workers reported that she was beaten by a "big black man" because she was wearing a McCain pin. After investigations, the police charged her for making a false report. McCain described Obama as a "socialist" and an advertisement said "a vote for Obama is a vote for socialism". Obama had to spend a great deal of time refuting charges by McCain, perhaps remembering what happened to Democratic Party candidate, John Kerry, in the race against Bush in 2004 when he failed to respond to misinformation to his own peril.

Obama linked the economic woes to the presidency of Bush and emphasised that McCain was a staunch supporter of those policies. McCain voted for Bush's policies 94 times in the Senate and when the crisis broke Bush did not act quickly enough. The financial crisis began as a problem in a single sector of the US economy, that is, the housing market where financial institutions with high levels of liquidity lowered their lending standards and took on excessive risk. Mortgage banks provided loans to home buyers who could not qualify for conventional loans and were not prime mortgagers, hence the term sub-prime mortgage. These individuals, in some instances, either had low or no credit ratings, or were unable to substantiate their income. Sub-prime borrowers were given variable rate mortgages where the initial rates offered were below the market rates. These rates were later increased resulting in the sharp rise in cases of delinquencies and foreclosures. This led to an oversupply of houses on the market which resulted in significant price cuts. Mortgage companies were therefore left with billions of dollars in debt which could not be recovered. Since the start of this year, residential investment recorded an average quarterly decline of 17.9 per cent. Financial regulation and supervision were rather weak. All this led to a credit crunch, investment downturn, loss of jobs and of confidence in the financial system.

Then the credit squeeze developed which affected the lives of millions of Americans and over the past year thousands lost their homes and jobs, and many small businesses collapsed. Some Americans had to resort to food stamps to survive. The economy became the first, second and third issue in the election. A US$700 billion economic recovery programme was put forward by Bush and approved by Congress of which $250 billion was allocated to banks to help ease the credit crunch.

Obama's main platform is to restore financial stability, give tax relief to 95 per cent of workers earning under US$250,000 and provide universal health care. McCain picked on Obama's description of tax relief as spreading the wealth which the Republican candidate said is socialism. He used this as his mantra in the campaign. McCain himself offered tax exemptions. A lot of his other proposals were apparently lost in his prolonged attack on Obama as the polls in the final days favoured Obama. As to whether this strategy will pay off in the election is left to be seen.

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