KEY POINTS:
LOS ANGELES - It's the economy all over again, stupid. America's presidential candidates may have thought this election race was going to be about Iraq or terrorism or healthcare, but the US Federal Reserve's three-quarter point interest cut earlier this week has confirmed what was already becoming obvious: that the deepening economic crisis will dominate everything between now and November.
Republican and Democratic candidates are rushing to fill their speeches with proof of their bona fides as economic managers, with claims and counter-claims about tax cuts, rebates, stimulus packages and who was first to propose what. The latest opinion polls confirm that the economy has leapt into first place among voters' concerns, offering the most obvious immediate benefit to Hillary Clinton for the Democrats and Mitt Romney for the Republicans.
The latest survey taken in California - the state with single largest economy, whose primary takes place on Super Tuesday, 5 February - showed that voters prefer Senator Clinton over her nearest rival, Barack Obama, by a 2-1 margin on economic issues. Overall, she leads in the Golden State by 12 percentage points.
Mrs Clinton's dominance on the economy appears to derive from her White House experience and her political savvy in proposing a comprehensive economic stimulus package a week before Senator Obama. It was her husband who famously focused on "the economy, stupid" and denied George Bush Snr a second term in the middle of a recession.
Mr Romney, the former Massachusetts governor, derives his authority on economic issues from his long, lucrative experience in the private sector.
Polls show him very close to both John McCain and the former New York mayor Rudy Giuliani in Florida, and catching up fast with Senator McCain in California.
This week, Mr Romney issued a new economy-centred campaign advert, proclaiming: "I know how America works because I spent my life in the real economy. I ran a business, turned around the Olympics and led a state. My plan will make our economy strong. We need to invest in people and business with tax cuts."
Tax cuts are the predominant theme on the Republican side, with candidates falling over each other to proclaim that their tax cuts are the biggest.
Many candidates are pushing for big corporate tax breaks rather than relief for individuals. Many want to make President Bush's controversial tax-cut package - weighted heavily in favour of the richest 2 per cent of Americans - permanent. The former Arksansas governor Mike Huckabee wants to abolish income tax altogether. On the Democratic side, the emphasis has been more on tax rebates for ordinary working families and pensioners.
Senator Clinton did her best to sound authoritative on White House protocol by calling for a meeting of the President's working group on financial markets to address what she called a "global economic crisis".
John Edwards, the former North Carolina Senator now struggling to stay in contention, was bold enough to declare the economy was already in recession and, like his adversaries for the Democratic nomination, blamed the Bush White House for much of it. "
The tragedy of all this is that this could have been largely avoided," he said.
- THE INDEPENDENT
