Economy yet to dominate Republican convention

20 hours ago

ST PAUL, Minnesota (AFP) — The economy may be the number one issue in the White House race, but the Republican National Convention has yet to dwell on the troubles of Americans trying to make ends meet.

Vice-presidential pick Sarah Palin and party stalwarts Wednesday argued Democratic presidential candidate Barack Obama would swamp hopes of growth by dumping a massive tax burden on the slowing US economy.

"Taxes are too high ... he wants to raise them," said Palin, governor of resource-rich Alaska who Republicans say introduced trailblazing reforms which busted corruption in her home state.

"His tax increases are the fine print in his economic plan -- raise income taxes, payroll taxes, investment income taxes, the death tax, business taxes, the tax burden on the American people by hundreds of billions of dollars," she said.

With oil prices still high, the US economy is sputtering amid a weak housing market, squeezed credit and lackluster consumer spending, while inflation pressures are high, the Federal Reserve said in a report Wednesday.

While much of the convention rhetoric focused on patriotism and attacking Obama, Mitt Romney -- a multi-millionaire former chief executive and ex-Massachusetts governor -- reminded delegates about the economic slowdown this year but did not set out a policy prescription.

"Mortgage money was handed out like candy, speculators bought homes for free -- when this mortgage mania finally broke, it slammed the economy. And stratospheric gas prices made things even worse," he said.

Romney then said the US economy was "under attack," blaming China for "acting like Adam Smith on steroids, buying oil from the world's worst, and selling nuclear technology."

Russia and the oil states were also not spared.

They are "siphoning more than 500 billion dollars a year from us in what could become the greatest transfer of economic wealth in history," Romney said.

In an immediate response, Obama's spokesman Robert Gibbs said the Republicans did not say what they planned to do to better the economy.

The Obama campaign has accused Republican President George W. Bush's administration of creating the economic crisis, saying the party's White House prospect John McCain lacked the necessary skills to grapple with it.

McCain doesn't know "how to fix the economy or the foreign policy or the direction the country's going," Gibbs said.

The struggles of the US economy could give a boost to Obama over John McCain in the November election, according to a study released Wednesday.

The report by Moody's Economy.com suggests Obama is likely to carry 33 states plus the District of Columbia, for a total of 388 electoral college votes -- well above the 270 electoral votes needed to win.

"With inflation high and the labor market getting worse, economic conditions still favor the Democratic candidate," Augustine Faucher, director of macroeconomics at Economy.com.
"The highest inflation rate since 1991 and increasing unemployment rates in most states are creating a difficult environment for the incumbent Republicans and their nominee, Senator John McCain."

But former Republican presidential hopeful Mike Huckabee went out of his way to sympathize with Americans suffering from the weak economy and insisted that the party could make amends.

"When gasoline costs four dollars a gallon, it makes it tough if you're a single mom to get to your job each day in the used car you drive. You want something to change," he said.

"If you're a flight attendant or baggage handler and you're asked to take a pay cut to keep your job, you want something to change.

"If you're a young couple losing your house, your credit rating, and your American dream, you want something to change," said Huckabee, who enjoys support from conservative Christian voters who disdained McCain.