In this post, I'd like to chart the effect the financial crisis has had on each candidate's standing in the polls. The following graphs the RCP average from 9/7 to yesterday.

As of this writing, the average of the most recent polls shows McCain at 43.3%, which means he has suffered a 3.4-point slide in the last three weeks. Barack Obama stands at 47.9%, an increase of 2.7-points.

For reference, I've included the key events in the last week in the chart. You'll see that McCain lost ground in the wake of the events of 9/14 through 9/16: Bank of America's purchase of Merrill Lynch, Lehman Brothers filing for bankruptcy, and the rescue of AIG. McCain also suffered after the bailout deal was announced. Obama saw his biggest increase in the middle of the month; his numbers have not changed much since the bailout was announced.

Immediately prior to the start of the Democratic National Convention, Obama led in the RCP average 45.5% to 43.9%. In June, he had an average lead of 47.1% to 42.4%. So, from June to the beginning of the conventions, McCain whittled down Obama's lead from 4.5 points to 1.6 points. The Republican National Convention put him ahead of Obama, but recent events have wiped that lead away. Currently, the race stands roughly where it did in June, though McCain is in a slightly better position.

It stands to reason that the financial situation has been a campaign "moment" that has favored Barack Obama. So far, its effect is similar to him winning the nomination in June or heading to Europe in July.

A additional few points are worth noting.

First, the number of undecided voters has increased in the last three weeks, from a low of 6.3% of the electorate on 9/8 to 8.8% last night.

Second, the polls themselves have been very volatile this month. The Gallup tracking poll had a crazy week last week, and individual pollsters are disagreeing with each other quite a bit. Much of the disagreement has to do with McCain's share of the vote. The standard deviation of McCain's share in the current RCP average is 2.8%. Obama's is 2.0%. [The standard deviation is the average distance between an individual poll's result and the average of all polls.] By comparison, the final RCP average in 2004 had John Kerry's standard deviation at 1.7% and Bush's at 1.3%. This is a sign of volatility in the current race. Pollsters are finding fairly divergent results.

Third, there is a good subset of the electorate that claims to make up its mind in October or November. That might be hard for political junkies who have been following every twist and turn for 18 months to believe - but it's true! In 1996, 30% of respondents claimed to make up their minds a day to a month before the election. In 2000, that number was also 30%. In 2004, 21% of the public made that claim.

These three points indicate that caution is required in projecting the state of the race forward. There seems to be a lot of uncertainty out there. Practically speaking, average voters are probably more focused on the economy than on politics. As noted above, the number of undecideds has ticked back up, there has been a lot of volatility in the September polling, and we know a lot of people will make up their minds next month. The events of the last 20 days could be the break Obama and his supporters have been waiting for - something that induces the remaining undecideds to abandon the status quo and embrace "Change That Works For You." But it might also be the case that this is just another turn on a very windy road - something that, like the trip to Europe, loses much of its effect after it drops from the news.

What really matters is if, when, and how this financial situation resolves itself. It is fair to say that, on a purely political basis, McCain needs a resolution more than Obama. His numbers have taken a hit - and, despite his best efforts, he has not successfully gotten in front of this issue. That's not to say that he needs this particular bill to pass - the fact that members of Congress in the most competitive districts voted against the bill tells us something. Rather, McCain needs this issue to become less immediate, less salient. Nothing else is getting through right now. McCain needs this to drop off the front page as a first step to recover the ground he has lost in the last 20 days.

-Jay Cost