WHEN the Republican Party convention rolls in to New York City on Monday, one of the first supporting speakers to take to the podium will be Senator John McCain. McCain, a former prisoner of war in Vietnam, was one of the losers when George W Bush first won the Republican presidential nomination in 2000. The

Arizona senator knows what it's like to be Bush-whacked.

Back then, Bush publicly sided with a member of a veterans' group that accused McCain of abandon-

ing them in Vietnam. McCain's environmental credentials were also attacked by a group calling itself, ironically, Republicans for Clean Air.

The senator demanded Bush ''tell his sleazy Texas buddies to stop those negative ads''.

Now the most searingly negative ads are from a different group, Swift Boat Veterans for Truth. And the target is another Vietnam veteran, the Democrat contender for the White House, Senator John Kerry. The group alleges Kerry lied about his war record and faked wounds to win his three Purple Hearts. The Bush camp has consistently denied any involvement with Kerry's tormentors.

But the group's major financial backer, a wealthy Texan housebuilder and Republican called Bob J Perry has enjoyed a close 25-year friendship with Bush's chief political strategist, Karl Rove. And on Wednesday Benjamin L Ginsberg, national counsel to the president's re-election campaign, resigned after it emerged that he was also providing legal advice to the Swift Boat group.

At the beginning of this week, the Bush camp clearly thought significant damage was being done to Kerry's credibility. The president met the press outside his Texas ranch to condemn the activities of all 527 groups, so called under the section of the American tax code that allows them to air their views and peddle their hobby horses during elections.

But Bush pointedly refused to condemn the Swift Boat veterans. And, as he and his top team - Cheney, Rumsfeld, Rice - turned to retrace their steps, you could just tell from the smirks they exchanged what a good day's work they thought they had done. However, by Wednesday, with Ginsberg's abrupt departure, the tide had clearly turned. The smear campaign was beginning to rebound.

And that leaves Senator McCain with a nasty dilemma. One of his closest friends in the US senate

happens to be John Kerry. McCain has already let it be known that he

is so annoyed by the Swift Boat group's television ads that he

wants George W Bush to condemn them publicly. He promises to ''express my displeasure'' personally to the president when the two meet next week.

But don't expect a big public rift over the issue at the Madison Square Garden podium next week. This presidential race is so finely-balanced that every effort will be made to keep a tight lid on such campaigning luxuries. However, the seal's already proving leaky. In Iowa on Tuesday, Vice-President Cheney distanced himself from his boss on whether same-sex marriages should be banned under the American constitution. Cheney, who has a gay daughter, wants the issue to be left to individual states. But if the vice-president wants to stay on the ticket, he'd better make sure that's the last break with the party line.

While the more liberal wing of America's media commentariat

and Bush's many critics in the wider world may regard judgment on the decision to invade Iraq, the now-acknowledged evidence of instances of torture in Abu Ghraib prison and the questionable legal status of the judicial proceedings now under way in Guantanamo Bay as the real moral and political substance of this November's poll, the likelihood remains that the average American citizen who bothers to vote will be more swayed by their own material circumstances. Can I find a job and does it pay as much as jobs used to? Can I still afford to fill my tank with gas? Can we meet those spiralling health-care costs? Has George W Bush done a good job with our economy?

The author of one of the two reports published this week on the abuses inflicted on inmates at Abu Ghraib prison, Major General George R Fay, has openly acknowledged that there were instances where ''torture was being used''. But, while the Fay report has tied the abuses to the activities of intelligence officers as well

as prison guards, the author of the other, James R Schlesinger, one-time defence secretary in the Carter administration, while detecting deficiencies that ran all the way back to the Pentagon, has explicitly stopped short of calling on the current defence secretary, Donald Rumsfeld, to resign.

Defence lawyers for the first batch of detainees to face charges at Guantanamo Bay have been doing a good job challenging the credentials of the five-man panel that is both judge and jury in these preliminary hearings. Only one of the five, a colonel, has any legal training. And he is a long-time close personal friend of the man who appointed him. As justice it stinks. But the whole saga of what is going on in Guantanamo is getting precious little airtime in America.

So, the broad mass of undecided American voters in the 21 swing states that will decide the outcome of this election is effectively being invited to focus on their own economic circumstances. The destiny of this Bush presidency will - as was that of his father before him - come down to the economy, stupid. But, for the incumbent, even that's a fraught story.

George W Bush doesn't just go into this election as the first president since Herbert Hoover to preside over an economy that has lost more than a million jobs on his watch. Official census data released yesterday shows that, despite the great tax giveaway of his first term, the Bush administration has presided over rising levels of poverty especially among children, lower household incomes and more people without any health insurance coverage.

The number of Americans officially living in poverty hit 35.9 million in 2003, a rate of 12.5%. It's the third successive increase since this president first took office. For children under 18, the rate is now 17.6%. The ranks of the uninsured have also grown for three straight years and stood at 45 million people in 2003. Median household income, having fallen sharply in 2001 and 2002, stabilised in 2003. But the steady rise in average prosperity during the 1990s is now a distant memory.

America, under this president, is becoming a more materially polarised society. Traditionally, many of the poor don't even bother to vote. If you're poor, black and live in Florida, the authorities may even do their damnedest to prevent you from

voting. John Kerry's destiny will be determined, not by smears on his

war record, but by how effectively

he can appeal to America's economically dispossessed.

He pledges ''to put middle-class families first'', to be the champion of that middle-class and all who are ''struggling to join it''. Whether that's enough remains to be seen.