ANALYSIS:Could the crisis on Wall Street help propel Barack Obama into the White House? It has certainly given him a boost, writes Denis Staunton
THIS WEEK'S meltdown in the markets has produced few winners but if the ill wind that has blown away half the investment banks on Wall Street has benefited anyone, it is Barack Obama.
After two weeks in the doldrums in the wake of the Republicans' unexpectedly buoyant convention and the emergence of Sarah Palin as a fresh political star, the Democrats are back on top in the race for the White House.
Obama has regained the lead in national polls and wiped out McCain's advantage in a number of key battleground states as the economy drives every other issue out of sight.
McCain has been floundering all week, starting with his declaration on Monday that the fundamentals of the American economy are strong - a statement he sought to explain by claiming that he was referring to America's workers.
Democrats usually benefit when the economy moves to the centre of the political debate, just as the Republicans gain when the focus is on national security.
The current crisis is especially auspicious for Obama, however, because it highlights in the most dramatic way the failure of a philosophy that has been at the heart of McCain's entire political career.
As Americans watched the Dow Jones lurch and plunge this week, they saw not just the fortunes of a handful of Wall Street dealers hang in the balance but their own net worth shrinking before their eyes.
Most Americans save for retirement by investing in plans linked to the stock market, so a sharp fall in the market could mean a smaller pension or the need to work longer before retiring.
The complicated financial instruments that sent billions of dollars in toxic debt coursing through the financial system are so obscure that even the investment bankers themselves struggle to understand and control them.
But most voters understand very well the link between the current crisis and the deregulation of financial markets that Republicans in Washington have long promoted.
As the crisis deepened this week, Americans have seen the greatest expansion of government power over the economy in decades as the Federal Reserve seized control of mortgage giants Fannie Mae and Freddie Mac and took over AIG.
The massive rescue plan announced yesterday will see the government sweep up billions of dollars worth of distressed assets from financial institutions as new rules are put in place to ban practices such as short-selling.
If McCain has struggled to respond to these events, it is because, as one of the most ideologically pure fiscal conservatives in Washington, he has spent decades calling for less regulation and greater licence for the markets.
He initially opposed the takeover of AIG, reversing his position when it became clear that public opinion was overwhelmingly in favour of decisive government action.
As the week progressed, McCain adopted a more populist tone by promising to "clean up" Wall Street and declaring that he would sack Christopher Cox, the chairman of the Securities and Exchange Commission.
Cox, a former Republican congressman who serves at the pleasure of President George Bush, pointed out that he had always planned to step down at the end of the year.
For his part, Obama has appeared to gain confidence from the crisis, identifying the economic philosophy that has dominated Washington for the past eight years as the cause of much of the trouble.
Obama is anything but radical on economic policy - he ran to the right of Hillary Clinton and John Edwards in the Democratic primaries on everything from healthcare to taxation - but he has been able this week to make a plausible case against "trickle-down" economics and in favour of targeting taxation policy to benefit the middle class rather than the very rich.
Palin's selection as McCain's running mate brought cultural issues to the fore of the campaign, allowing the Republicans to pound home their message that Obama is exotic, elitist and unable to connect with many white Americans.
The economic crisis has provided the game-changing event Obama needed to shift the momentum back in his favour but McCain has an opportunity to reverse the trend next week.
Next Friday, the presidential candidates will meet at the University of Mississippi for the first of three debates and the subject will be foreign policy, McCain's strongest suit.
Obama can be long-winded, ponderous and professorial during debates whereas McCain is often concise, nimble and utterly ruthless.
The debate will offer voters their first chance to see the candidates side by side and interacting over an extended period and the impression each creates could prove decisive in a race that remains effectively tied.
At 72, McCain could come across as too old - an impression the Obama campaign has sought to reinforce with a nasty new ad - or Obama could appear callow and unfamiliar with world events.
This week's events have thrown the advantage back to Obama and calmed Democratic nerves but with six weeks left until America votes, the safest prediction about this unprecedented contest may be for more dramatic shifts ahead.