If John McCain wants my vote he must dump Sarah Palin and fast. Judging by the latest polls showing Barack Obama moving ahead and gaining traction, I'm not the only one that feels this way. The outcome of the election is key to investors worried about a range of issues including the $700 billion federal bailout of Wall Street.

Obama may lack the experience I would hope to see in a presidential candidate but to quote a friend and fellow McCain supporter "Sarah Palin is an idiot and the only way she should be allowed in the White House is if she buys a tour ticket." This is not a unique sentiment given the Sarah Palin must go stance taken by conservative columnist Kathleen Parker of the Los Angeles Times. She says her cringe reflex is being exhausted.

I do not like Obama's proposals on capital gains taxes, a windfall oil profits tax, new government programs and several other issues, but the idea of Palin being second-in-command is a joke. And speaking of jokes, if I have misjudged, and McCain and Palin win the election, then Oprah will be surpassed as the wealthiest female in the entertainment industry. The new titan will be 30 Rock and former Saturday Night Live star Tina Fey who will be racking up fat paychecks based on the never ending material supplied by Palin.

Whatever your political ideology happens to be, I think we can all agree on one thing: Given the complex economic issues currently facing our country -- many of which will continue to be important for the foreseeable future -- our next president must be someone who understand economics.

To that end, the latest issue of Barron's looks at the backgrounds of each candidate (subscription required), showing something troubling: McCain's financial expertise is pretty much limited to having married a rich woman. That's a good strategy to be sure, but not necessarily the best background for someone charged with dealing with the current mess. Advising struggling homeowners to scan the obituaries in search of newly widowed socialites might not go over well.

Then there's Barack Obama whose experience in the market is, according to Barron's, pretty much limited to having once lost $13 thousand on stocks acquired through a blind trust. Barron's writes that "Small wonder he's giddy to raise taxes on interest and dividends. Obama has little skin in the game ... He's as insulated from his own dividend and capital gains proposals as a penguin is from the cold."

Hillary Clinton's net worth is very high, but she owns little stock. Her experience on the board of directors at Wal-Mart (NYSE: WMT) is intriguing but, looking at the available information, one thing is clear: None of these candidates can be considered an economics expert, something that we badly need, although George W. Bush's MBA from Harvard did little to avert the current mess.

Perhaps we'll get our economics expert from the other half of the presidential ticket. Private equity titan Mitt Romney is rumored to be a possible pick for John McCain, and there is some speculation that Barack Obama could pair up with New York Mayor Michael Bloomberg.

When I think of Ralph Nader running for president again as an independent candidate and how that could affect the general election, I think he must be a closet Republican, or have a few advisers that fit the bill. He was the spoiler before and he might be again.

He says that Republican and Democratic candidates are too beholden to big business. Perhaps. He says we are not doing enough to protect the environment, also true. He thinks he knows better, maybe; but Cuba just had a guy named Fidel step down from his presidency (sort-of) who knew better also, or so he insisted since 1959.

In the 1960's and 1970's Nader was an important figure who successfully championed many causes including the environment, consumer protection, civil rights, disclosure laws and fought for those that could not fight for themselves. He was a man of the times. These are his times no more. His provocation of the electorate may stem more from being 'green with envy', as much as being a green party advocate.

As a registered independent who voted for Obama on Super Tuesday, I was interested in reading BusinessWeek's take on Obama's likely impact on the U.S. economy. Its conclusion is that Obama is thoughtful and refreshing and is willing to work with business leaders, many of whom may reject him because he does not hew to the Republican line on taxes.

Last Friday, while Guest Hosting CNBC's Squawk Box, I spoke with Obama's economic advisor, University of Chicago professor Austan Goolsbee. He made two points that I found interesting. First, he said that Obama is very enthusiastic about the prospects for the U.S. economy and the stock market. Second, he suggested that Obama was months ahead of Hillary Clinton in proposing an economic stimulus package.

I asked Goolsbee what he thought was the cause of the economic slowdown. He thought the problem was the cash-strapped consumer and that tax rebates were the solution. I argued that the problem is that banks lack sufficient capital to offset the write-downs they're taking in the wake of the evaporation of demand for the Collateralized Debt Obligations (CDOs) they hold. Goolsbee thought this was a secondary problem and did not embrace my proposal to recapitalize the banks.

In the midst of all the bad news it's hard to imagine the stock market ending the year higher than it started. However, that is entirely possible and probably much better than a 50/50 bet. If you want to play it safe consider buying into an index fund or exchange traded funds (ETFs) instead of banking on individual stocks.

For broad coverage you cannot beat the Vanguard Total Stock Market or the Total International Stock funds with the lowest fees and longest history in this area. I think it has also been generally accepted investing strategy over the last few decades that in bearish markets there is a run to quality and "guns and butter" stocks. If you were to follow this old adage you would be considering three sectors, healthcare, defense and consumer staples.

Mutual funds and ETFs (with less history) are less volatile and offer greater diversification than most investors could achieve, and at much lower cost. If you dollar cost average over the next few months you should also be able to smooth out some bumps in the current market.

When the political machine goes to work to juice the economy the market has most often responded positively. That does not mean it's smart for the country, but since when is a politicians first thought about the country.

When the Federal Reserve Board meets later this month to consider lowering interest rates, it seems the question will once again be -- by how much? Chairman Ben Bernanke and crew have been bringing up the rear for over a year, doing what they are supposed to do ... fret over inflation.

This next meeting might find them doing an about face. Oil prices have been coming down in the face of disappointing economic news, and if that continues Fed Officials may feel they have enough political cover to act. The next meeting of the Committee will be held on Tuesday-Wednesday, January 29-30, 2008.

After the last meeting, the Street was disappointed by the 25 basis point reduction in rates. When the "baby did not get it's bottle", the stock market responded with a 300 point drop in the DJIA. This time, I do not think even a cut of 50 basis point will be taken seriously by Wall Street market makers if the next two weeks are similar to the last two weeks. I think expectations are high that the Fed will make a significant move and 50 basis points would be the minimum. But that might be just a blip, coming too late, since the impact would trail the cut by six months at least.

A new report from the Congressional Budget Office has a pretty startling finding: From 2003 to 2005, the income growth of the top 1% of American income earners exceeded, by 37%, the total earnings of the bottom 20%.

It sounds bad -- it is, after all, about as compelling evidence as you'll find of increasing income inequality. The lowest-earning fifth of households had total income of $383.4 billion in 2005, while the richest 1% saw their earnings increase by $524.8 billion.

One factor was the appreciation in the stock market over that period, with about half of the earnings growth of the top1% coming from investments and business ventures.

Jared Bernstein of the Economic Policy Institute told the New York Times that "A lot of people justifiably feel they are working harder and smarter, they are baking a bigger and better pie, and yet their slice is not growing much at all. It is meaningless to middle- and low-income families to say we have a great economy because their economy looks so much different than folks at the top of the scale because this is an economy that is working, but not working for everyone."

This is bad news for the Republicans, who are facing pretty long odds at maintaining control of the White House. While they can point to economic growth over the past few years, the reality is that working-class Americans saw an increase in their income that is barely significant -- Wealthy Americans cleaned up.

The actual importance of income inequality is a debate that has no end in sight: Does the fact that rich Americans saw their earnings increase a lot really have anything to do with the lowest 20% of income-earners? It doesn't matter because it still make for great election-year rhetoric.

Some might say that President Bush started fiddling with things during his first election. Many in the opposition certainly felt that one of the Bush's was fiddling with something down in Florida. In any event a whole lot of fiddling has been going on since that time. Whatever credit he wants to take for the economy because of his tax cuts (think manipulation or confuscation) of which I am a benefactor, I think it is more delusion on his part.

The real reason as most would acknowledge, even if it is in hindsight, has been the easy credit. We have heard of dumb money -- this was stupid money or insane money -- but fiddle he did. And now that the house (deflated of course) of cards is in the process of coming down, along with the value of our currency we do not see anyone stepping up to shoulder the blame or offer true leadership how to improve our position. Instead we see a lot of finger pointing.

So any day I expect to see President Bush pick up a fiddle just like Nero, position himself on the balcony and start to whip out a tune. As he does, you can just picture Hillary Clinton ordering him to be gently lifted out of the White-house while he continues to play, not realizing that his time has past and it is her turn to point fingers.

Even though Hillary Clinton appears to have high negative sentiment in certain corners, it is also looking more and more like she can start thinking about running mates. Not publicly of course, but the nomination seems to be hers to lose on the Democrat's side. On the Republican side there does not seem to be a bounty of ideas, and none of the candidates will be able to help themselves in any way by linking their futures to Bush or any recent successes of the party. As it stands now, no matter who wins the Republican nomination, it is hard to run on $100 a barrel oil, 40% less potent dollars, no game plan for Iraq, growing deficits, and more.

The University Southern California (USC) had such a good recruiting season under super coach Pete Carrol that one of their star running backs transferred out because he thought he would not get enough playing time, and they have been favored since the end of last season. USC is no longer undefeated --- UGH! Yesterday they were upset by unranked, 40.5 point underdog, Stanford University -- AT HOME -- double UGH!! This ended a 35 game home winning streak and a 24 game Pac-10 conference streak.

Last week against Washington University they pulled out a squeaker after committing 16 penalties -- read that as "freshman mistakes," although not all caused by freshman. Those of us delusional alumni rationalizing the close game bantered about how good a team you would have to be to win a game where you had to overcome 16 penalties. Now USC loses to Stanford (my father-in-law's Alma mater) at home after supposedly spending all week at practice refocusing. Not that all freshman are bad, Stanford's freshman quarterback Tavita Pritchard, in his first start played the game of his life.

So why is this relevant to business:

• Trying to guess what something is worth and predicting the future, like point spreads and rankings, is hard without the advantage of a track record.
• Attempting to manage an organization that is constantly changing by throwing together a lot of new people from different places (or enterprises) can create havoc, integration problems and lack of efficiency.
• An abundance of talent and potential can be a detriment if it does not perform as a cohesive unit. Teams win, not individuals, and in USC's case all the individual talent in the world does not seem to be meshing.

Now compare this to the exclusive club of senior (Christian Coalition) republicans that met this week to discuss their displeasure with their presidential candidates. They are so unhappy with their choices because none of the candidates are pounding the pro-life/anti-abortion drum, or the family values drum, or the school voucher drum, or several other drums, that they are actually making noise about opting for a third party. This would a freshman mistake of the highest order!

For 16 years I worked directly with French and British portfolio managers advising them on their U.S. stock portfolios. I visited Paris and London on more than 225 separate trips during that period. My mother was born and raised in France, her father, a captain in the French army was killed in World War II. My own father was educated at a French medical school and I had the privilege of spending several summers as a youth in Southern France. Through all this, I learned to adore the country and in another, sense feel sorry for it.

The French way of life is truly embodied in the joie de vivre. The work ethic in France has always been "do your job, but no more," and forget overtime work -- its not the money, its the infringement on free time. A person starts a new job and is instantly granted 5-6 weeks of vacation. The French medical and pension system is among the most generous in the world. My own mother worked exactly for three months in a temporary agency in 1954, left for the United States with my dad, a newly minted physician. She became an American citizen, and yet when she turned 65, she was informed that she qualified for a French pension. She was flabbergasted to learn that the French government was depositing $175 per month in her American checking account . She did not earn a cumulative total of $175 in her three-month temp career! When she inquired she was told that "you are entitled! You were born here!" She felt so guilty that her monthly deposit was immediately given to charity.

The months of July and August are renown for the French vacance -- vacation. I dealt with portfolio managers that took five weeks off in a row, which is great work if you can get it, but no one backed up or watched their portfolios. I remember asking several of them what if there was an emergency on one of the stocks they held? The common response was, it will have to wait.