DETROIT -With national tracking polls showing Barack Obama widening or maintaining his lead over John McCain (See Gallup here: http://www.gallup.com/poll/110740/Gallup-Daily-Obama-Moves-50-42-Lead.aspx and Rasmussen Reports here: www.rasmussenreports.com/public_content/politics/election_20082/2008_presidential_election/daily_presidential_tracking_poll), the Democratic nominee this afternoon said his GOP rival “stood there,” paralyzed by the chaos on Wall Street and subjecting America to a “Katrina-like” reaction when the nation needed more.

Straying from prepared remarks on his nearly ubiquitous TelePrompTer, Obama said when the financial pillars on Wall Street began to fall:  “…his (McCain’s) first response to the greatest financial meltdown in generations was a Katrina-like response. Sort of stood there. Said ‘the fundamentals of the economy are strong.’ That’s why he’s been shifting positions these last two weeks, looking for photo-ops, trying to figure out what to say and what to do.”

The orginial remarks did not include the reference to Katrina or that McCain just “stood there.”  Here are the remarks as prepared for delivery: “That’s why his first response to the greatest fiscal meltdown in generations was to say that ‘the fundamentals of the economy are strong.’ That’s why he’s been shifting positions these last two weeks, looking for a photo-op, and trying to figure out what to say and what to do.”

Linking McCain to Katrina is something Obama has avoided in the campaign, instead listing it as part of a long line of Bush administration failures.  The reference is even more sensitive in light of McCain’s decision to scrub the first day of the Republican National Convention to turn party activities toward fund-raising for potential victims of Hurricane Gustav.

Moreover, while it’s true McCain’s campaign has spent considerable time digging out from McCain’s “fundamentals of the economy are strong” remark, Obama and McCain took almost identical approaches to the Wall Street rescue legislation now before Congress.

Both called for outside oversight, taxpayer protections, foreclosure relief and caps on CEO golden parachutes in separate speeches on Sept. 19. In fact, McCain’s plan came a few hours before Obama’s.

Read McCain’s speech here: //www.johnmccain.com/Informing/News/Speeches/9a604256-0519-46e6-a1ce-e70798b39ec2.htm

Read Obama’s remarks here: www.barackobama.com/2008/09/19/remarks_of_senator_barack_obam_119.php

Campaign spokesman Bill Burton said Obama’s impromptu Katrina reference may not happen again.

“I don’t know that it’s really going to remain timely,” he said.

As for the rescue plan before Congress, top Obama officials said the senator will support it. The only potential fly in the ointment is if the legislative language doesn’t match the outline of the deal described to Obama by Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi.

Don’t worry. It will. Senior Obama advisers spent this afternoon reading the latest draft text and say Obama’s on board.

As for the changes made to the bill over the weekend, Obama’s not a big fan of the House-GOP language seeking a bond insurance guarantee for mortgage-backed paper purchased by Treasury. Private-sector insurance premiums will support the plan. Obama doesn’t think the idea can work, unlike economist Larry Kudlow, who thinks it can (Read why here:  http://article.nationalreview.com/?q=YWE3ZTg5MDZjOTI2MDA4MjYxMGQ3ZDg1YzI5MTBmOWE=).

Since the insurance guarantee is only an option, it’s not a big deal for Obama or, apparently, congressional Democratic leaders who think just as little of it as Obama.

Obama also doesn’t oppose the striking of funds in the rescue bill that could have been funneled to  housing advocates and other community organizations such as ACORN (Association of Community Organizations for Reform Now). A senior adviser said Obama “supports the housing provisions that are in the bill,” but declined repeated attempts by The Bourbon Room to find out if Obama tried to protect the money that might have gone to ACORN or other groups. If he did, he failed. If he didn’t, ACORN knows it by now.

Obama also likes the addition of a so-called financial stability fee to be assessed on bailed-out firms if they recover but the taxpayers don’t recover billions paid out in the original rescue package. This fee was originally sought by Democrats as part of the price of the bailout, but it morphed into fee to be assessed only after 5 years, and only if the rescue package doesn’t pay for itself by then.

Obama called for such a fee on Sept. 23 and his advisers call it a “unique” contribution to the final bill. They also concede it’s merely a “backstop” to help taxpayers five years hence. The Bourbon Room wonders just how much we will all remember of this rescue legislation in 2013, a full presidential term and presidential campaign from now.

If there is one question transfixing market watchers in America and in exchanges the world over it is this: what will become of American International Group?

The Treasury Department and Federal Reserve are wrestling with this multi-billion-dollar question. The answer will not only affect AIG, but probably the stock market, banks and a variety of businesses and governments holding AIG-backed insurance policies.

So, what do the presidential campaigns have to say about this test of leadership?

Next to nothing.

The only official comment from John McCain’s campaign is through spokesman Tucker Bounds, who says “no taxpayer dollars should be involved in a bailout of AIG.”

But a bailout is not on the table. So that doesn’t get matters very far.

But it’s more than Barack Obama’s campaign has to say, which is nothing.

On background, senior Obama economic advisers say any comment about AIG in the heat of this crisis would be “irresponsible.”

One adviser said: “None of us (in Obama’s inner circle) have access to AIG’s books. Therefore questions about what the government should do an unanswerable.”

A senior economic adviser to McCain’s campaign said there’s no way to evaluate the risk an AIG collapse would have on the markets, although he said many legitimately fear the effect could be “systemic.”

That means it could trigger other failures as capital markets tighten and short-sellers abandon once robust institutions that don’t have massive ready capital reserves.

What about a bridge loan, with repayment dates and interest charged? Does either campaign favor that remedy?

Not on the record. Not even on background.

A top Obama adviser said it’s simply too early to advise the Fed and Treasury whether it should use a loan to “backstop” AIG until it can find more capital and boost either its stock price or credit rating.

“At this late hour, there are no good options for the government or the private sector,” the Obama adviser said.

Certainly the Fed, Treasury and private firms evaluating AIG understand that. But they must wrestle with these issues in real time — possibly they have less than 24 hours to come up with a plan — while the presidential campaigns have the luxury of waiting to see what happens and offering pronouncements then.

A senior McCain adviser said the question about a bridge loan to AIG with repayment dates “was a good and hard one.” He then proceeded to paraphrase the late Massachusetts Sen. Paul Tsongas who would often say: “that’s a good, hard question, now let me see how I can avoid answering it.”

The truth is, neither presidential campaign wants to answer the AIG question. This is mostly because it can’t — campaigns can’t pry open AIG’s books like Treasury, the Fed and possible suitors can.

Campaigns can set broad principles or goals. But the truth of this fast-moving Wall Street crisis is this — forces are in motion that haven’t been seen before and government institutions are making moves never before contemplated (see Bear Stearns).

That’s why presidential campaigns enjoy politicking at times such as these. And why government institutions sweat bullets as they try to solve problems.

GOLDEN, Colo. –

Awaiting Barack Obama here at the jam-packed Colorado School of Mines.

And though the Obama campaign rails constantly about GOP attempts to make a big election “about small things,” this morning the campaign and the DNC are enjoying gales of laughter at the expense of John McCain’s economic adviser, Douglas Holtz-Eakin.

In a session with reporters today, Holtz-Eakin was asked:

Q: “What has he (McCain) done on (the) Commerce Committee (which McCain chaired from 2003-2005) that will convince Americans he understands financial markets?

Holtz-Eakin:  “He didn’t have jurisdiction over financial markets, but first and foremost he did this (Holtz-Eakin holds up his BlackBerry), telecommunications of the United states, the premier innovation in the past 15 years comes right through the Commerce Committee. So you’re looking at the miracle that John McCain helped create.”

Q: Did he regulate the industry?

“He both regulated and de-regulated the industry as appropriate.”

Privately, McCain’s camp knows this a significant gaffe, eerily reminiscent of Al Gore’s much-maligned (though contextually within bounds) assertion that through his work to boost federal research he helped create the internet.

The only saving grace for McCain is that he didn’t say it on camera.

There’s now an effort in McCain-land to portray Holtz-Eakin as bungling an attempt at humor. Those present say there was no sense Holtz-Eakin was trying to be funny, even allowing that a former director of the Congressional Budget Office might be uniquely able to disguise a joke.

Bill Burton, spokesman for Obama, said the following via e-mail sent to BlackBerries across the land:

“If John McCain hadn’t said that ‘the fundamentals of our economy are strong’ on the day of one of our nation’s worst financial crises, the claim that he invented the BlackBerry would have been the most preposterous thing said all week.”

A senior adviser to McCain, Matt McDonald, said that the senator “laughed” when he Holtz-Eakin’s  comment.

“He would not claim to be the inventor of anything, much less the BlackBerry,” McDonald said. “This was obviously a boneheaded joke by a staffer.”

It wasn’t obvious to those who witnessed Holtz-Eakin’s BlackBerry brandishing. What is obvious is that “small things” in this campaign clearly are in the eye of the beholder.