Right Turn in July Put McCain on Unfamiliar Path

When the Stock Market Tanked

Schmidt was with Palin, watching on a JetBlue charter's in-seat television screen with growing horror.

The cable news networks had a split screen: On one side was the tanking stock market, already 700 points down. On the other were Republicans, whining about how the economic stimulus package had been defeated because House Speaker Nancy Pelosi had given a partisan-tinged speech.

"It was a moment of pure disaster," Schmidt recalled thinking. "The Republican Party was making the argument that we tanked the economy because Nancy Pelosi was mean to us. It was devastating."

For McCain, the economic crisis created a sense of despair.

"How could you not despair?" Graham said. "You're about to break out, and all of a sudden you've got Bush on the news every day talking about the economy."

McCain advisers thought their candidate would be criticized no matter what he did in the face of the crisis: If he continued to campaign, he would be blamed for failing to help pass the rescue package; if he returned to Washington, he would be accused of inserting politics into a national crisis.

"At that point, in the middle of an economic catastrophe, as a political matter, the campaign was check-mated," said Schmidt, who rejected criticism that the problem was McCain's erratic response.

The 96 hours after McCain announced he was suspending his campaign were nearly fatal -- in part because of little mistakes such as criticizing Obama for "phoning it in" while telling reporters that McCain would stay in his Crystal City headquarters "on the phone" with lawmakers a few miles away.

And McCain's top strategists tip their hat to Democrats, who they say effectively sold a story about how McCain's intervention helped unravel a pending deal. Few Republicans on Capitol Hill rushed to his defense.

"When Democrats attacked, Republicans were in the fetal position," a top adviser said. "It was clear at that moment, in the most vivid way, that John McCain stood alone in this race. It was a moment when you saw the defeated Republican Party, bankrupt and ruined, facing off against the resurgent Democratic Party."

Two Late Campaign Gifts

As the economic crisis deepened and his poll numbers dropped, McCain found himself short of cash and unable to penetrate through the massive Obama ad buys. McCain started shifting, pulling out of Michigan, for example, to divert staff and advertising money elsewhere.

That McCain still had a chance to win was the result of two late gifts -- both from men named Joe.

Sen. Joseph R. Biden Jr.'s comment about the likelihood that foreign adversaries would "test" a President Obama gave McCain the chance to change the subject to experience, once again making the case that voters should worry about entrusting the country to a junior senator.

And Obama's remark to Joe Wurzelbacher -- a.k.a. Joe the Plumber -- about "spreading the wealth" offered McCain a last chance to draw a sharp contrast with Obama, this time over the issue of taxes.

Both proved too little, too late. In public surveys in the final days, voters gave Obama the clear edge on both leadership and the economy.

As he conceded to Obama on Tuesday night, McCain seemed to acknowledge the difficulties in his campaign, thanking his staff members who "fought so hard and valiantly, month after month, in what at times seemed to be the most challenged campaign in modern times."

But he was unwilling to second-guess himself.

"I don't know what more we could have done to try to win this election," he said. "I'll leave that to others to determine. Every candidate makes mistakes, and I'm sure I made my share of them. But I won't spend a moment of the future regretting what might have been."