Pass the Hamburger Helper and the Milwaukee’s Best. Broom that interior decorator; Ikea’s got some dynamite furnishings. Boy, those public schools sure look better than I thought—what was so great about Dalton or Nightingale-Bamford or Saint Ann’s, anyway? Those Koreans make fabulous cars. And phones and TVs and everything else, for that matter.

What will New York look like a year from now? The answer: bad and probably worse, and perhaps downright catastrophic. Three degrees of awful. The first step was passing the bank-bailout legislation. Now that it’s done—and if it didn’t get done we would have been looking at a guaranteed economic collapse—the critical issue will be presidential leadership. And while any president will be an improvement over the current one, there is a growing belief on Wall Street that Barack Obama has the capacity to lead us out of this wilderness while John McCain does not. I’ll go a step further: Obama is a recession. McCain is a depression.

Wall Street usually favors Republicans when it comes to managing the economy, but this time around the financial community is skeptical. John McCain has done everything he can to avoid talking about the economy, lest he be tarred with the brush of George Bush’s ineptitude. And when McCain has attempted to step into the fray, he’s been far from reassuring. First, he insisted that the fundamentals of the economy were sound; then he turned around and told us it was the end of the economic world as we know it, and suspended his campaign to scramble back to Washington and save the day on the bailout bill—only to have little visible effect. For all his talk of being a maverick, McCain looks an awful lot like President Bush on the credit crisis: He doesn’t seem to understand Wall Street or Main Street, he is dogmatically anti-regulation, and his economic team is a joke. Carly Fiorina almost destroyed the onetime best technology company in America, Hewlett-Packard, and Meg Whitman took eBay, the best dot-com player, and turned it into a mediocre franchise that has no growth. Both are perceived by Wall Street to be also-rans who are on the team because they have nothing else to do.

Obama is no messiah, of course, but there’s a reason the Street sees him as a more capable manager of the credit crisis. He seems to understand the complexity of the problem, and while he’s nobody’s populist, he’s at least perceived as less tone-deaf to everyday Americans’ problems than his opponent. Obama also has a better team, in the likes of Larry Summers, the renowned economist and former Harvard president who probably knows more about this crisis than anyone, and Warren Buffett, the smartest man in business, period. And Obama is a globalist, in an age where the world’s economies are increasingly interdependent.

Some people discount the president’s role in managing the economy. They argue that the chief executive gets too much credit when the nation’s finances are good and too much blame when they’re bad. That may be true, but not in this case. One of the central causes of the current financial crisis is the now-epidemic lack of trust in the banking system. With the nationalization of Fannie and Freddie and AIG, the shuttering of Lehman, the shotgun marriages of Bear and Washington Mutual, the American people aren’t just shying away from risk, they are shying away from banks altogether, with the middle class leaving for the First National Bank of Sealy and the upper class headed to Duxiana Bank and Trust. That kind of pessimism, left unchecked, could easily turn a recession into a depression, as that sense of helplessness now pervades everyone who would invest in a new company, grow a small business, or buy a house or car. Having a president who can restore faith in the system as quickly as possible is critical to thawing the credit freeze. McCain’s stumbling and uncertainty are themselves a liability. Obama not only gives off the sense that he can solve the problem more effectively, but he’s a better communicator who’s more capable of inspiring confidence. Obama more than his opponent can convince us that the only thing we have to fear is economic fear itself. And with the economy going nowhere but south unless faith in the system is restored, we need convincing.

Let’s assume for the moment, if only because the most recent polls suggest it will happen, that Obama becomes president. How will the economy look a year from now? Still pretty damn bad. Before things settle down, we’re going to see credit defaults spreading from residential homes to commercial real estate to credit cards. I can see unemployment hitting 10 percent before heading down. It’s that tough to get credit right now, and it will take that much time for new money—even if it’s injected today, and people stop hoarding it—to make its way through the system. Things will be roughest in the most depressed housing markets, like those in Florida, California, Nevada, Arizona, Ohio, and Indiana, where foreclosures will remain an issue no matter how many bills get passed to buy up mortgages and mortgage-based securities.

At this time next year, I could see the Dow as low as 8,300. That’s more than 40 percent off its October 2007 high of 14,164. On Main Street, that means a further slowdown in consumer spending, as buyers feel poorer, and another hit for 401(k) and college savings accounts. For Wall Street, it means more bank closures and mergers and still more layoffs. The two remaining independent commercial banks–née–investment banks, Goldman Sachs and Morgan Stanley, will have to fight mightily to remain independent. The bet here is that Goldman makes it but Morgan Stanley succumbs to one of the four emerging megabanks—Citigroup, JPMorgan, Bank of America, and Wells Fargo. Even those banks that survive will be letting people go—that’s the only way the economics of these deals work. Those people who left investment banks for hedge funds will now find the doors closed should they seek to return (and with the hedgies getting clobbered, too, they will seek to return). Bonuses will be slashed industry-wide, as banks seek to hang on to capital. And even the megabanks, the big winners in the subprime shakeout, will rein in salaries. Why not? If someone doesn’t like it, there are more than 100,000 out-of work bankers ready to take their place.

In terms of investing between now and next fall, I’d buy the stocks of only companies you can’t not use—Kellogg’s, General Mills, Kraft, P&G. You can’t trust anything to do with financial paper—there’s still too much uncertainty (if a bailout bill does pass, at what price will the toxic bonds be marked?). And commodities have been bid up too high—demand soared as investors sought shelter from stocks—to buy for some time. Oil’s going to $50 on weaker demand; when it gets there, we can revisit the oil stocks.

Main Street will look different too. After years of overexpansion, retail’s going to be in massive retreat, except Wal-Mart, Costco, outlet malls, and a couple of Lowe’s. Amazon will become your de facto store, as it will be providing pretty much everything. By this time next year, Amazon could be rolling out national same-day service, which would be a real bricks-and-mortar killer, the last nail in the retailers’ coffin, not unlike what Google’s done to the media. Without job growth, we will have anemic auto sales, and by this time next year the big automakers will have burned through the subsidies they just received and either come back for more or, yes, declare bankruptcy, something that’s definitely on the table with this ailing group. And even though gasoline will come down, a sense of feeling poorer will still crimp travel and entertainment.

At this time next year, I could see the Dow as low as 8,300. That’s more than 40 percent off its October 2007 high of 14,164.

Here in New York, so many professionals made so much money when things were booming that I believe our economy will be cushioned somewhat, even as Wall Street’s taking it on the chin. That’s why you still see people shopping, despite the headlines. The weak dollar and the foreign investment it attracts will help, too, although that economic engine will also slow somewhat as the world economy cools. If you worked at Bear Stearns or Lehman Brothers or AIG or Washington Mutual, you are no doubt already singing the praises of in-home eating, and most of us will have to accept a lower standard of living. Those of us lucky enough to have socked away savings from the seven fat years before this will work our way through the lean times; we may bargain-hunt at Century 21, but we won’t hang ourselves with the ties we purchase there. Many of those without a nest egg will find themselves in foreclosure, personal bankruptcy, or other dire financial straits. Tax hikes, cuts in government services, soaring budget deficits, or all of the above are in the offing, too. Not even Mike Bloomberg, should his third-term wish come true, can spare us from some significant pain. Although I don’t see a return to the pre-Rudy days, it’s hard to imagine how upticks in the welfare rolls and crime rates aren’t on the horizon. According to the most recent real-estate statistics, released last week, the average price of a Manhattan apartment rose some 10 percent in the third quarter over last year, to about $1.4 million. But for the first time in years, the number of apartments sold dropped sharply. That’s an ominous sign.

If all that seems depressing, take heart. The same sector that got us into this mess—housing—will lead us out of it. The federal government, sub rosa, has determined that we will have a European-style financial system, consisting mainly of the four megabanks I mentioned—Citigroup, JPMorgan, Bank of America, and Wells Fargo. These are the institutions that will be deemed too big to fail and will be protected no matter what. In return for the creation of the jolly oligopoly, these four banks will have to make mortgage money available to all at a reasonable price, something that will help real estate bottom and begin heading upward before this time next year. Of course, it helps that Fannie Mae and Freddie Mac are nationalized and can absorb hundreds of billions in losses to make it so. It will also help that I expect short-term interest rates to decline to 1 percent as the Federal Reserve wakes up to the notion that the battle was, is, and will be deflation, not inflation, so rates have to be as low as possible to stir economic activity and drive unemployment down. Once that happens, and housing rebounds, the rest of the economy will follow.

James J. Cramer is co-founder of TheStreet.com. He often buys and sells securities that are the subject of his columns and articles, both before and after they are published, and the positions he takes may change at any time. E-mail: jjcletters@thestreet.com. To discuss or read previous columns, go to James J. Cramer’s page at nymag.com/cramer. Get all of James J. Cramer’s stock picks via e-mail, before he makes the trades, by subscribing to Action Alert Plus. A two-week trial subscription is available at thestreet.com/aaplus.