The American election looks to have taken a new direction in the last couple of days as John McCain and Barack Obama switch their attention to plans to revive the flagging US economy.

High oil prices in the US are one factor making the economy a bigger election issue than Iraq – and in the Republican Party’s plan to expand drilling for oil off the US coast and in Alaska the McCain campaign team believes it has found a vote winner.

Obama has returned from his ten-day tour of the Middle East and Europe to find that foreign policy is no longer the dominant issue of the 2008 election. America’s motoring season is well under way, and car drivers are finding the cost of petrol too high to bear.

A stagnating domestic economy
Add in falling house prices, rising unemployment and a stock market in the doldrums – which will personally affect more US voters than those in countries like the UK because Americans tend to directly invest larger portions of their savings in shares – and it is clear why the stagnating domestic economy has become voters’ biggest concern.

Obama’s answer so far is to promote a package of measures designed to kick-start economic growth, and he met with business gurus like Warren Buffet, the world’s wealthiest man, yesterday to learn exactly what that package should contain.

McCain’s political strategy
McCain’s focus on bringing down the cost of gas may prove to be the cannier political strategy, however.

The public might also fear that Obama’s plan simply massages the economy without getting to the root of its problem.

It is also simpler for voters to equate a single factor like petrol prices with their economic wellbeing. Pain at the pumps can be directly translated into pounds (or dollars) in their pockets. Complicated tax-breaks and incentive schemes might not be so easily understood.

Furthermore, America’s reliance on overseas oil is deeply linked in the public mind to George W Bush’s Middle Eastern policy and specifically the Iraq war – which Obama claims he can solve, but McCain has struggled to extricate his image from.

Promoting a domestic solution to the oil crisis could both negate Obama’s foreign policy strength while appealing to an electorate that is heartily sick of the Iraq muddle.

No bounce for Obama
Obama’s resistance to offshore and Alaskan oil drilling has also allowed McCain to christen him “Dr No” – giving voters a simple equation: McCain = cheaper gas; Obama = higher prices.

All of which could explain why despite its saturation media coverage Obama’s world tour has not translated into a boost at the polls. He still leads McCain in most surveys, with around 45 to 49 per cent of respondents saying they would vote for Obama compared to 40 to 45 per cent for McCain.

But political betting veterans will remember that many candidates have had bigger leads at this point in the campaign and still lost the presidential election – and may note that at 5/2 William Hill is currently offering the best price around on a McCain victory.

Posted in The Grandstand View