A year ago, the big political conventions had just ended, and with Election Day less than two months away, a remarkable two-year competition for the White House was reaching a climax. Over the course of the campaign, there had been heated debates about the war and about national security, but suddenly there was just one story and just one issue: the economy.
Cable and business news channels warned of a financial free fall, of global markets in turmoil, and of stocks tanking as the crisis heated up.
Meanwhile, President Bush, overshadowed for much of the year by the campaign to replace him, now had another major crisis to deal with. Last Sept. 18, Bush spoke in the Rose Garden.
"The American people are concerned about the situation in our financial markets and our economy," Bush said. "I share their concerns."
Economy And The Campaign
The two major party nominees also made it clear that they shared those concerns. The crisis provided a challenge for Democrat Barack Obama and Republican John McCain. Neither could make policy, but each needed to demonstrate his readiness to handle the crisis if elected.
For McCain, however, it presented an additional problem. His strength was national security, and he had built his campaign on his resume as a Vietnam-era prisoner of war and war hero. For the Arizona senator, the economy had been a weak spot throughout his campaign, going back to the primaries.
When Lehman Brothers failed, a week after the government takeover of Fannie Mae and Freddie Mac, the Republican candidate's first reaction was an effort to reassure the public.
"The fundamentals of our economy are strong, but these are very, very difficult times," he said while campaigning in the important battleground state of Florida.
Obama, on the trail in Colorado, pounced on that remark, seeing a chance to tie his opponent to Bush's economic policies.
"This is what happens when you see seven years of incomes falling for the average worker while Wall Street is booming and declare, as Sen. McCain did earlier this year, that we've made great economic progress under George Bush," Obama said at the time.
Then came the attack that the Democratic nominee would repeat over and over in the coming weeks.
"That is how you can reach the conclusion, as late as yesterday, that the fundamentals of the economy are strong."
The Turning Point
McCain tried to explain his line, saying he was talking about the fundamental strength of "American workers," but Obama kept up the attack. McCain's problems were compounded by a decision to suspend his campaign until Congress dealt with emergency legislation to bolster the economy. McCain even said he was canceling his appearance at a presidential debate, scheduled for days later in Oxford, Miss. He later reversed both decisions.
Earlier in September, the McCain campaign was feeling good about how the race was shaping up.
After the Democratic and Republican political conventions ended, polls showed the Republican with a modest lead in the polls. He had also received at least a temporary bounce from the selection of Alaska Gov. Sarah Palin as his running mate. But once the economy became the issue, Obama took the lead and began to pull away.
Looking back, this was the decisive moment in the fall campaign. But David Axelrod, a senior adviser to the president and a top Obama campaign strategist, says the outcome wasn't so clear at the time.
"I think it became a great test of leadership at the moment, and I think it redounded to his benefit," Axelrod says.
But Axelrod said they couldn't say for sure it would break in Obama's favor at the time.
"All we knew was a very serious crisis was in the offing and he wanted to deal with it in as serious a way as possible," Axelrod said.
Voters Concerned By The Economy
On Election Day, Obama won handily, with polls showing that the economy was a major issue for voters.
Once he was in the White House, the serious crisis that dominated the campaign's final months continued for the new president. Within weeks of Obama's inauguration, Obama signed into law a $787 billion economic stimulus package.
"Today does not mark the end of our economic troubles," Obama said, "nor does it constitute all of what we must do to turn our economy around. But it does mark the beginning of the end."
The stimulus passed without a single Republican vote in the House and, in the nearly seven months since, the opposition has continued to accuse the White House of trying to spend its way out of recession while running up huge deficits.
Among the most persistent critics is Republican Whip Eric Cantor from Virginia.
This summer, Cantor told Fox News, "I think it is fair to say that the stimulus is a flop."
Cantor complained about the continued job losses in the country and the rising rate of unemployment. The White House counters, however, that the benefits of the stimulus have only begun to be felt, and that without it the recession might have been far worse.
'Road To Recovery'
On Labor Day, Obama attended a big union picnic in Cincinnati sponsored by the AFL-CIO. He defended his policies, saying people seem to forget how bad things were a year ago, even as he expressed displeasure that the job losses continue to mount — an additional 216,000 in August. Even in that number, however, Obama sees some reason for hope.
"For the second straight month, we lost fewer jobs than the month before, and it was the fewest jobs that we had lost in a year," he told the overwhelmingly Democratic crowd.
Then, kicking into campaign mode, Obama said: "So, make no mistake, we're moving in the right direction. We're on the road to recovery, Ohio. Don't let anybody tell you otherwise."
Still, it demonstrates that the road to economic recovery can be long, hard and politically painful. It's a challenge for the White House to hang on to support along the way, a task made even more difficult for a president and a party that that took office promising to bring an end to the economic crisis.