Economic meltdown? What economic meltdown?

Cognitive dissonance: holding two contradictory ideas simultaneously.

There was an old rule in the travel industry that, after a crash, airlines suspended their consumer advertising for a few days. Not so now. In the midst of the most serious financial and economic crisis since the Great Depression, financial houses which have contributed to the crisis keep running TV commercials inviting us to send them our money. Same with producers of pricey automobiles consumers no longer can afford.

On the political front, both Sens. Barack Obama and John McCain have avoided until now offering comprehensive plans of their own to revive financial markets and the economy. Both continue to offer spending programs and tax cuts which have absolutely no realistic chance of enactment in 2009 — as if nothing had happened since the proposals were framed weeks ago. At the state and local levels, proponents of big tax increases and spending programs on our November ballots continue to advertise and mail us literature — even while candidates are beginnng to acknowledge that reduced state and local economic activity will necessitate belt tightening.

Obama faces a special challenge

Barring a near-term collision of Earth with an asteroid, Obama is headed for a comfortable electoral victory next month.

The bad financial/economic news has intensified voters' historic preference, dating back to President Franklin D. Roosevelt, for Democratic governance in hard times. Moreover, the Obama campaign has a huge financial advantage over McCain's and is outspending him in key electoral states. Democratic new-voter registrations are heavily outnumbering Republican registrations in even heavily Republican states. McCain, for his part, has been showing his 72 years, shifting from one message to another, day by day, and quite obviously missing his talking points in nationally televised debates. His campaign, strangely, has chosen late in the race to raise questions about Obama's credibility, with emphasis on his relationships with former terrorist Bill Ayers, among others. Normally, such questions would be raised at the outset of the campaign — in an attempt to define a still relatively unknown candidate negatively — rather than down the stretch, when voters are far more interested in central domestic and foreign-policy issues. Right now voters are worried about their economic security, not about Obama's relative closeness or distance from people they do not know. (The McCain communications and research operation has been among the worst I have seen in several decades' involvement in national campaigns.)

Obama thus far has made generally positive responses about the Bernanke/Paulson rescue package, which lies at the center of White House-congressional efforts to stem a financial freefall. But he has issued no credible, comprehensive plan of his own.

He probably can cruise to victory without doing more. But he could do more than that. A credible and comprehensive statement on the crisis could instill confidence in foreign and domestic financial markets that strong, sure leadership will be in the White House in January. That, conceivably, could help generate recovery now. Such a statement would have to include plain talk for the American people, including the news that White House, Congress, and the American people are in for a period of shared sacrifice — ending, of course, with an expression of confidence that the country is stronger than its problems and will see them through. Such a statement, made even before the final debate with McCain on Wednesday night, Oct. 15, could help Obama win even more handily than foreseen and provide him with congressional majorities large enough to pass difficult legislation.

In meantime, we are watching markets gyrate, day by day, in irrational panic. Former Fed Chair Paul Volcker, in a weekend interview, stated that the G-7 and U.S. actions taken to date were entirely sufficient to stabilize the situation. He also stated, however, that it would be many weeks and months before their impact would be felt. Both investors and ordinary citizens are looking for some demonstration of leadership to which they can cling. They know, for example, that Treasury Secretary Hank Paulson will be gone in a few weeks. Whom will Obama appoint as his successor? What changes would Obama make in the rescue package? Any? Many? What changes would he make in 2009 taxing and spending plans to adjust to the new situation? It would be better to get these answers now rather than having to wait many weeks for them. The payoff would come next year. The new president would have built a public mandate for difficult change.

Later this month I will tell you how I am voting on key ballot measures and candidacies. For now, let me suggest a checklist.

• Which measures can be afforded in the new financial/economic climate?

• Which would enhance or dampen the chances for recovery?

• Which candidates have the intellectual independence and financial/economic knowledge to take politically difficult decisions?

Conventional wisdom, at present, is that new taxing and spending proposals will be defeated and that incumbents will face difficulty, except where they are strongly identified with common-sense financial management. But don't be so sure. Things may be in crisis elsewhere, but here at home there remains a tendency to believe that nothing has changed. Our city, county, and state sometimes have shown themselves to be isolated and provincial. Will we get the message here or maintain cognitive dissonance and choose to believe, simultaneously, that crisis is upon us but that business as usual is OK?