Yesterday's big story was the rise of Barack Obama. Today's big story is the decline of John McCain. You've probably heard the news by now that the former Republican frontrunner is laying off at least 50, and maybe 80 to 90, workers from his campaign organization. The cuts are a neccessity, because after another poor fundraising quarter, McCain has only $2 million on hand, a state of affairs the AP rightly calls "abysmal."
The chatter about a McCain withdrawal, a low murmur last week, is about to get a lot louder. But I think that as bad as it looks (and as terminal as it probably is), I don't see the guy who happily accuses the other side of wanting to "surrender" in Iraq "cutting and running" from his last shot at the White House. He still has the Kerry-was-in-the-same-spot-in-'03 illusion to cling to, plus he's got to realize how feeble the other three front-runners are (even if he's weaker right now). And as much as the fund-raising numbers seem bad for him, he's actually in a better spot than he was in 1999-2000–he's raised much more money for himself, and there's a much smaller gap between him and the other big dogs. I know the idea was he'd be in first place with money this time, but that was probably always unrealistic with the lobbyist enemies he's made. For now, he's got enough to ride it out and see if he can become the next Kerry–and to avoid the name-calling that would accompany quitting, something that I think would be particularly hard for him to handle.
If he were to quit, however, I think McCain would need to seize on some kind of "honorable" way out, the way Joe Biden in '87 was able to pretend he was leaving to fight the Robert Bork nomination. Maybe there's some scenario in which he could portray his exit as serving the larger war effort. But my read on him is that he'd rather run and lose (badly) than be called a quitter.
UPDATE: Ryan Sager liveblogged the McCain campaign's afternoon conference call and said Terry Nelson and John Weaver sounded "just about ready to slit their wrists." So the financial situation may be even worse than it appears. Obviously, McCain can't fall back on his heiress wife's fortune, as Kerry could in 2004.