JOHN McCAIN and Sarah Palin are in a deep, dark, tough corner and they did not punch out of it in Debate II.

The economic tsunami is placing the election further out of their reach as Barack Obama solidifies support in the Democratic blue states and is in the process of shifting the outcome in the Republican red states of Virginia, Ohio, North Carolina, Florida and maybe even Indiana.

The trajectory of the election is decidedly with Obama. The economy is the dominant issue and profound change is in the air.

McCain's main positioning and issue - commander-in-chief in the war against terror - has smaller traction today than at any other time this year. On every other issue - the economy, how the candidates handled the bail-out crisis, approval/disapproval, enthusiasm voters have for the ticket - Obama is vaulting ahead. (Palin has been adjudged as not having sufficient experience to be president and she will be unable to reverse that sentiment before November.)

In this debate, Obama pitched strongly to the middle class, about government that is seen to be working for you, and health care as a basic right, and against deregulation and tax breaks for the rich. McCain stressed energy independence, delivering on health care, and cutting taxes and government spending - both maverick and conventional solutions.

The conventional wisdom before this debate was that McCain had to go deeply negative on Obama - to question his experience, associations, politics, and to assert that he is too liberal, and has ties to too many who are too extreme. To prove that Obama is not in the American mainstream, and is therefore un-American.

But Obama was more on the attack - on McCain's giveaway-to-the-rich tax program, and on deregulation. But by weaving a clear view on recent history into the necessity of reform, he did it in a way that was less personal and more quietly effective.

We saw again in this debate an Obama who was steadier, measured, and with a deeper understanding of what the country needs right now. On Pakistan, Iraq and Russia, he more than held his own against the more experienced McCain.

McCain desperately needs to unlock Obama's transaction with the American people. He failed to do that in this second debate. McCain is running out of time and electoral real estate; the election is less than four weeks away.

Bruce Wolpe has worked on several Democratic political campaigns and blogs on the US election for smh.com.au. He is director of corporate affairs for Fairfax Media.