Center Stage

The mood at the normally staid Obama headquarters had been giddy when the news of McCain's veep choice was first announced. "OK, game over," someone ventured on the morning staff phone call. But anxiety soon set in. Axelrod was offended when one staffer dared to suggest that Palin was almost as good a politician as Obama. He said he was sure that the untested rookie Alaska governor would eventually implode. Plouffe was his usual "No-Drama Obama" self, urging everyone to calm down and wait for Palin mania to pass.

One senior aide would later recall that when Obama dipped in the polls and McCain appeared to nose ahead, thanks largely to a surge of new women supporters, he wasn't so much worried about the polls as about the impact on Obama headquarters. "People went a little Kerry and Dukakis there for a couple of days," he recalled. They seemed back on their heels, unsure of how to strike back at a woman who had so gleefully mocked Obama in her convention speech.

There wasn't real panic at Obama headquarters on North Michigan Avenue—such emotionalism (normal in most campaigns) was taboo. But Palin was so unexpected a choice that some staffers were rattled. So this aide, a veteran of some nasty campaigns, would go up to staffers and say, "Get her out of your head! It's McCain!" It was an effort to force the slightly dazed staffers to see that they needed to stay focused on McCain, not his running mate.

The vast flow of information unleashed by the revolution in media technology defined issues and character at warp speed. For months, the worst rumors and conspiracy theories had been aimed at Obama: the Illinois senator had been educated in a Muslim madrassa, he had taken his oath of office on a Qur'an, he was close friends with a former Weatherman bomber from the '60s. But Obama's aides began to notice that the media and blogosphere were now buzzing with comments attributed to Palin—that she wanted to privatize Social Security, that she read the magazine of the ultrarightist John Birch Society, that she had been a member of a political party that wanted Alaska to secede from the United States. The Obama campaign did not have to do anything but watch the rumors fly. "A lot of this is being generated by people in the outside world," the Obama aide noted, adding with a smile that "I believe our rumors are, at worst, truthy," borrowing comic Stephen Colbert's definition of information that sounds true, even if it isn't. The rumor mill was starting to drag down Palin in some key places like the swing state of Florida, where she was regarded in the senior citizens' condos as a dangerous right-winger.

This aide's other metaphor for the world of TV pundits and Internet bloggers was a kids' soccer game. The swarm moved from topic to topic (and target to target) in a pack, like a herd of yelping kids chasing the ball at Saturday-morning soccer. The trick was to try to nudge the ball in a certain direction so all the kids would follow. Sometimes this was as simple as linking news stories and sending them out to Web sites. As reporters descended on Alaska to look into charges that Palin had removed the chief of Alaska's state troopers because he refused to fire Palin's ne'er-do-well ex-brother-in-law, the Obama campaign had only to make sure the stories got wide distribution. As Palin's nomination stirred a feeding frenzy, reporters shifted their attentions from Obama to Palin. Though the Obama campaign had seeded the ground with some oppo research on Palin, with the arrival of investigative reporters like NEWSWEEK's Michael Isikoff "there's no point for us to be on it," the Obama aide noted in mid-September. Isikoff had been writing about Obama's ties to Tony Rezko. Now he was writing about Troopergate. "I thought, 'Go, Mike!' " the aide said. "Especially with the cover-up dynamic."

In mid-September, McCain was in Florida when the financial crisis broke. First the venerable investment-banking house Lehman Brothers announced it would file for bankruptcy, then the giant insurer AIG sought an emergency loan from the Federal Reserve, then the giant Merrill Lynch collapsed in a fire sale to Bank of America. At a rally in Jacksonville, McCain trotted out a familiar line from his stump speech. "The fundamentals of our economy are strong," McCain insisted, as he had for months. "But these are very, very difficult times … I promise you, we will never put America in this position again. We will clean up Wall Street. We will reform government."

At Obama headquarters, the oppo team wasted no time. "We're grabbing up YouTube, we're driving it, everywhere," an aide recalled. "McCain says economy 'strong'," read an e-mail from the Democratic National Committee. In Colorado, Obama openly mocked McCain, in a way that not too subtly depicted the 72-year-old senator as mentally out of it. "It's not that I think John McCain doesn't care what's going on in the lives of most Americans. I just think he doesn't know. Why else would he say, today, of all days, just a few hours ago, that the fundamentals of our economy are strong? Senator, what economy are you talking about?"

Now it was McCain's turn to seem caught unawares, to appear knocked back and unsteady. His campaign tried to explain that by "fundamentals," he meant American workers, and if Obama disagreed with that, well, then the Illinois senator was clearly against American workers. This spin was so outrageous that the regular traveling press laughed out loud.

McCain, the fighter pilot, began to swoop and veer. On the "Today" show, he declared, "We are in crisis. We are in total crisis." He called for a 9/11-style commission to investigate what exactly had gone wrong. He was ad-libbing; his staff was caught by surprise. Obama attacked again, mocking McCain for offering up "the oldest stunt in the book—you pass the buck to a commission to study a problem." McCain never mentioned the commission again.

But he continued to lurch. He announced that as president he would fire Chris Cox, the chairman of the Securities and Exchange Commission. It was pointed out to him that the president does not have the power to fire the SEC chairman, who serves a fixed term. McCain, now in forgiveness mode, called Cox a "good man" but said he would ask for his resignation anyway.

McCain's campaign slogan, "Country First," was more than a slogan to McCain. It was his life and his family's legacy. So when the crisis deepened, and Treasury Secretary Henry Paulson announced that the administration would ask Congress to pass a $700 billion bill to rescue the foundering financial institutions, McCain's instinct was to plunge in. He saw himself as Teddy Roosevelt, "the man in the arena," but he became the butt of late-night ridicule.

On the morning of Sept. 24, Barack Obama tried to call McCain to discuss a joint statement, a kind of let's-rise-above-politics declaration endorsing the bailout bill. Obama had been talking by phone to Paulson and Federal Reserve chairman Ben Bernanke. Obama's cautious instincts told him he should stay out of the negotiations between Congress and the administration. He told his aides that he did not want to say anything beyond enunciating some broad principles (the need for bipartisan oversight, for helping Main Street as well as Wall Street, for cutting off golden parachutes for executives seeking federal aid). Obama had been impressed by the sincerity—and the deep worry—of the administration's top moneymen, and he didn't want to politicize the delicate bargaining process. He contemptuously referred to George W. Bush's reign as "the incredible shrinking presidency." In his deliberate way, he wanted to try to engage his opponent in a moment of nonpartisan calming of the waters.

But McCain took his time returning Obama's phone call. McCain's aides would later say that he didn't want to talk to Obama until he had firmed up his own plans. At about 2:30 that afternoon, McCain called Obama and told him that he was thinking of suspending his campaign, asking to postpone the first debate (scheduled for two days later) and heading to Washington to join the negotiations. About five minutes after the two men hung up, McCain went public with his plans. Obama's advisers were flabbergasted. In the ever-paranoid view of rival campaigns, they thought that McCain was somehow trying to set up Obama—at first refusing his phone call, then springing on him this elaborate plan to head back to Washington and suspend the campaign. Meeting with reporters, Obama seemed slightly perplexed by McCain's to-ing and fro-ing, saying that he saw no need to put off the debate—that presidents had to be able to do two things at once, and America needed to hear from the candidates now more than ever.