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Nov. 5, 2008, 9:46 a.m. EST

Obama sweeps to victory on mantle of change

Democrat completes historic journey to become first black president

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By Russ Britt and Robert Schroeder, MarketWatch

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Obama completed a remarkable journey that started 21 months ago when he first declared himself a candidate for president. Along the way, he thwarted the candidacy of former First Lady Hillary Clinton, now a Democratic senator from New York, and a number of other challengers, including the man who would become his running mate, Sen. Joseph Biden of Delaware.

Clinton in many ways was his most formidable challenger, but one of his secrets in defeating Clinton was keying in on states that picked delegates via the caucus process. Clinton largely ignored those states and paid the price for it. The most notorious example came when Clinton won the popular vote in a two-tiered election process in Texas, but Obama won a subsequent caucus, and ended up with more delegates from the state.

More than $600 million

Another key was Obama's unprecedented fundraising effort, garnering more than $600 million through September, which helped him to outlast both Clinton and McCain. Obama did it largely through small donors gathered via the Internet and his supply of contributors seemed to be never-ending.

He also managed to distance himself from Clinton by saying he opposed the war in Iraq from the very beginning, while Clinton voted for initial funding of the costly conflict. He then used that against McCain, who was less conciliatory that Clinton and maintained the U.S. was right to remain involved in the fight there, despite its $10-billion-a-month price tag.

Obama staked out to a lead over McCain once Clinton dropped out in early June and held on to it until his opponent took the unexpected step of naming Alaska Gov. Sarah Palin as his running mate, the second woman ever named to a national ticket. Palin was named the day after Obama delivered his acceptance speech at the Democratic National Convention in Denver.

Palin excited the conservative Republican base and helped McCain overcome his initial disadvantage in polls, but that bounce quickly dissipated as questions about her qualifications arose.

Economic troubles

Obama's advantage was solidified when a global credit crunch caused a number of Wall Street brokerages to collapse or seek shelter in the arms of healthier rivals. A massive $700 billion bailout of Wall Street was deemed necessary to ward off an economic breakdown not seen since the Great Depression of the 1930s, a threat that still remains.

"I know you didn't do this just to win an election and I know you didn't do it for me," Obama told the throngs in Chicago. "You did it because you understand the enormity of the task that lies ahead. For even as we celebrate tonight, we know the challenges that tomorrow will bring are the greatest of our lifetime - two wars, a planet in peril, the worst financial crisis in a century."

The market downturn also appeared to strike the first death knell for McCain's campaign, as that, coupled with the unpopular Iraqi conflict, proved too much for voters to reward the GOP with a return trip to the White House. Obama never trailed in polls from that moment on, despite McCain's efforts to characterize his economic policies as "socialism."

"It was certainly the bringing back of President Bush in the race, with he and [Treasury Secretary] Henry Paulson on the television all the time -- that wasn't good for the McCain campaign," said Scott Rasmussen, independent pollster and publisher of Rasmussen Reports.

The one economic issue where McCain was initially able to strike a chord with voters - gas prices - faded into the background as gas prices plunged by nearly $1.50 nationwide since the economic crisis came into play. With GOP faithful chanting "drill, baby, drill," McCain's call for additional offshore oil exploration was at first embraced by voters, but that exhilaration dissipated as the credit crunch grew more dire.

Economy most important

Exit polls said 62% of voters believe the economy was the most important issue to them, CNN reported. The Iraq war was next, with 10% of respondents saying it was most critical. CNN also reported that 72% of first-time voters cast their ballot for Obama.

"This has been coming for a long time," said Larry Sabato, director of the University of Virginia's Center for Politics. "The fundamentals were just overwhelming. It was impossible for a Republican to win this year."

U.S. voters turned out in huge droves on Tuesday, lining up from coast to coast to cast their ballots in the history-making election. Record turnout was seen in most states.

While Obama held on to traditionally Democratic states such as New York, Massachusetts and his home state of Illinois, it was his string of victories in battleground states and close calls in what are normally safe GOP havens.

Obama will face a number of challenges in his first year in office, including how to resolve the ongoing financial-markets turmoil and to determine what strategies to adopt for Iraq and Afghanistan, where thousands of U.S. soldiers remain locked in battle with extremists.

Obama has vowed to pull out of Iraq by 2010, reduce taxes for all those with incomes of less than $200,000 and initiate a sweeping program to wean the nation off foreign oil.

Obama's presidency may well hinge on whether he can accomplish those tasks with the backing of a Democratic Congress.

"Governing is a lot tougher than getting elected, I can assure you," said New Jersey Gov. John Corzine, a former Democratic senator who supports Obama, in an MSNBC interview.

Russ Britt is the Los Angeles bureau chief for MarketWatch. Robert Schroeder is a reporter for MarketWatch in Washington.

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