Obama's October surprise

Main Street, Littleton, New Hampshire

Louis Bartoli, barber, Berlin, NH: "Bush is not all that's wrong here. But he's the front guy. That's why I don't want that job and I'm sure you don't, either.

Mike Young of the New Hampshire Veterans Association says McCain's service record is important to a lot of voters.

Weirs Beach, a resort town on Lake Winnipesaukee, is home to the NH Veterans Association.

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BERLIN, NEW HAMPSHIRE (Fortune) -- Mike Young, the impressively sideburned quartermaster of the New Hampshire Veterans' Association, stood on the front porch of his organization's 19th century headquarters in Weirs Beach, watching as workers set up a grandstand. Governor Palin was due here Wednesday for her second stop on a three-city tour of New Hampshire, hoping to shore up the McCain ticket's sagging support in this key battleground state as McCain and Obama prepared for their final debate.

"I guess I'm leaning toward McCain because of his service record," Young said. "That means a lot to me and it means a lot to a lot of our people."

That said, Young has observed a definite shift lately, away from his candidate - particularly among younger voters - and the polls confirm his hunch. As recently as October 2, according to the Real Clear Politics poll average, McCain and Obama were running neck and neck in New Hampshire - a state Bush captured in 2004 but lost to Kerry in 2008, both times by the narrowest of margins. Since then, Obama has opened up a double-digit lead - a surge that corresponds with the escalating crisis on Wall Street.

Suddenly, it seems, the economy is front and center, and not just in New Hampshire. Democrats have long worried about an "October surprise" - a national security event that would benefit Republicans. Turns out Republicans have had to face a different kind of October surprise - an economic crisis that has some voters taking a fresh look at their options.

On Tuesday, I drove from Laconia in the Lakes Region to Littleton in the White Mountains and Berlin in the Great North Woods. Everywhere I went, voters expressed deep concern about the economy mixed with uncertainty about how they would respond on election day. "People are very undecided right now," Young said. "They don't know what they're going to do until the last minute."

Angie Clark is a customer service rep at Northway Bank in Berlin, an old paper mill town that has clearly seen better days. Clark voted for Bush twice. Now she can't make up her mind. While she's fed up with the response to the current economic crisis by both candidates ("instead of focusing on the issues they're focusing on each other"), her biggest beef is with the party in power. Forget Obama; she sounded like she was almost ready to vote for Ralph Nader.

"A message needs to be sent to the government," Clark said, standing on a Berlin sidewalk. "They need to watch out for the people within our community, within the United Sates. We're constantly sending money out to Iraq to rebuild them after we destroyed them, and what about rebuilding our own country? Think about what happened with Hurricane Katrina. People are still struggling with that."

As for the $700-billion government bailout, "It doesn't make sense to give so much money to the big businesses when there are so many people, small people, who are struggling even to survive. People who are losing their homes, people who are ready to retire and are losing their shirts, who've done everything right and what do they have to show for it?"

Clark's last word: "The ones who were for McCain before" - and she included herself in that category - "are now on the fence."

At the Topic of the Town restaurant on Main Street in Littleton, I met Joe (he wouldn't tell me his last name), a retired technician who worked for Raytheon. He and his wife were on their annual pilgrimage north to enjoy the fall foliage. Joe defies a lot of stereotypes. He's an African-American who has sometimes voted for Republicans, he said, because "as born-again Christians, we're concerned not only with the secular stuff but the moral dimension as well. Of course the Democrats, they were wanting in that area, and are wanting."

McCain's own standing among such voters is not much better. Palin was supposed to help him there. But with Joe, at least, the move backfired. Palin's presence on the ticket makes Joe "much less" inclined to support McCain, he said: "She's definitely, unarguably, well over her head for that position. I don't know why they don't use the same slogan Hillary used: The phone rings at 3:00 in the morning and Sarah's there to answer the phone, how would you feel?"

Joe gives Obama credit for the way he's handled himself these past two weeks as the crisis on Wall Street has unfolded. His dilemma, he says, comes down to this: "Wanting to know who to go with and be true to your faith, but also who's the better person. I know I'm going to have to bend on one end or the other and take the lesser of two evils. Or, sit it out."