Last night's presidential debate was certainly John McCain's strongest performance yet.

He attacked Obama, if belatedly, and emphasized the difference between their records on spending.

But my reaction to the debate overall was "so what?", and I believe the debate was effectively a negative for McCain's electoral chances in the sense that he really needed a big win.

The town hall format should have benefited him, and he did reasonably well, but Barack Obama has clearly increased his speaking abilities in the absence of a teleprompter.

I watched the debate with my wife, a new American citizen, who is (in my opinion) of slightly more-than-average political and economic understanding, but neither economics nor politics is something she spends much time thinking about.

Her take was that Obama's positions are not smart, his delivery is very smooth and it's easy to imagine people who don't think about taxes or the economy much (until we're in a crisis) believing what he's selling.

She thought McCain's positions were mostly smarter, but he seemed like he could be Obama's grandfather and a time like this requires someone with a lot of energy.

My views were similar but stronger. Obama simply deflects or lies about some of his most important positions, such as claiming that he's not planning to massively increase spending and not admitting that much of his so-called "tax cut" is really socialism, i.e. the government paying money to low-income people by taking that money from high-income people. McCain specifically asked Obama how much he would fine employers who don't meet Obama's health care demands and Obama didn't answer.

It is rather remarkable how to what lengths Obama will go to refuse to admit that the surge was a success. I wonder if that implies anything about Obama's personality, i.e. being as bull-headed as people think McCain is.

Obama did not deny McCain's assertion that Obama has voted 94 times to support tax hikes or oppose tax cuts. That's something that should weigh heavily on peoples' opinions as they consider whether to believe Obama's claims that he'll cut taxes and not increase spending.

Neither candidate offered good answers on entitlement reform, but at least McCain said there should be reform and noted that fixing Social Security is theoretically an easier problem than fixing Medicare. He also noted that future benefits would have to be lower than current benefits. Obama offered a non-answer about stabilizing Social Security.

A truly important distinction between the candidates came when they were asked whether health care was a right or responsibility. McCain said the latter, Obama the former. This is a very big deal and deserved a lot more discussion during the debate. This idea that everything under the sun is a "right" because we're a rich country is precisely what will end up causing us to no longer be a rich country. It represents Obama at his most dangerous.

McCain had some very strong points when he argued about taxes and spending, but he said a few things which I thought were just terrible. First, he again blamed the current financial market troubles on Wall Street, which is not the primary source of the turmoil. (Later, he blamed it on the Democrats' coziness with Fannie Mae, but it was the third debate in a row where McCain or Palin let the Democrat blame this mess on deregulation, whereas the real cause was anything but deregulation.)

Second, McCain said he'd order the Secretary of the Treasury to buy bad mortgages and then renegotiate them at "diminished home values". Not only is this socialist and a completely improper use of government, but it's also stupid. How many banks do you think will give mortgages knowing that the Secretary of the Treasury (or a judge, as Democrats would like to see) can simply change the terms of a loan...and not just the interest rate, but also the principal amount due.

Third, McCain went on a rant about the "danger of global warming gasses". Hasn't he noticed that the planet hasn't warmed in a decade? I've written enough about this subject, so I'll keep my critique here short and sweet: McCain's "cap and trade" legislation is a bigger threat to the American economy than Obama's tax and spend policies. McCain's legislative "solution" to something that isn't a problem will make the bailout's insertion of the government into our financial system look like outright laissez-faire.

Fourth, it turns my stomach every time McCain is proud of "reaching across the aisle" to Russ Feingold, Joe Lieberman, and Ted Kennedy. Every time he reaches across the aisle, our liberty is diminished. McCain bipartisanship is simply his trying to move conservatives to a liberal position, never the other way around.

McCain still seemed stronger than Obama on foreign policy, but Obama is getting sharper in that area as well, and people are much less focused on Afghanistan than on wondering whether their bank deposits are safe.

Unfortunately they didn't get to discussing free trade. McCain mentioned that Obama would be a protectionist and assumed a question would deal with the topic later, but that question never came. Obama's views on trade are not just stupid, they're dangerous. When you hear someone say the believe in trade that is "free and fair", just remember that their definition of "fair" almost certainly means something other than "free".

Overall, the debate was essentially dull. Tom Brokaw wasted a great opportunity to create an interesting event by choosing from what must have been some interesting questions submitted by the audience in the room and via the internet. Instead, he chose completely typical questions which turned the town hall into just another series of stump speech sound bites.

And a dull debate, even if you'd call it a tie in terms of pure debating points (or maybe even a modest win for McCain, though I'm sure Obama supporters could argue the other way), in election terms it was a win for Obama. He showed himself to be plausibly presidential and that was all he needed to do.

I continue to maintain that John McCain could have helped both his nation and his electoral chances by opposing the bailout, especially all the other junk that was attached to it.

My view has been slowly but surely crystallizing around what my gut instinct has been for most of the year. The economic crisis has cemented my view:

Obama will be a terrible president. His positions are anathema to fundamental American principles. But John McCain is not better enough to be supportable, particularly in the very important areas of economic understanding and "climate change". The GOP should be made to think that they can give us a candidate as flawed as John McCain and win. Furthermore, the economy is going to be bad for a couple of years. No politician will be able to help that. We might as well let the Democrats wear it. Yes, they'll work hard to say that the crisis started under a Republican president. But I don't think most voters are putting this at the feet of George W. Bush. Republicans will be able to make a strong case for tax cuts and spending cuts, and will do well in the 2010 elections.

Barack Obama stands a real chance of being the second Jimmy Carter. Maybe his presidency will be the catalyst for the appearance of the next Ronald Reagan who, while not without his flaws, was certainly the best president of my lifetime.