The election is over, says Howard Wolfson. It's over because the economy is more important than Bill Ayers, and therefore, what Wolfson calls "swiftboat tactics" won't work.

While I often wish the election were over so I could blog about other things, Wolfson's simplistic dichotomy rests on two major assumptions:

1. that the current economic mess was caused by (as Wolfson argues) "the Republican mania for deregulation and slavish devotion to totally unfettered markets."

2. That raising legitimate questions about Obama's connections to an unrepentent terrorist (I should say "terrorists" in the plural, because Bernardine Dorhn is being systematically overlooked) constitute "swiftboating."

For those who want to think about these things, economist Greg Mankiw links former Washington Post and Economist editor Sebastian Mallaby who debunks the "deregulation" meme:

The key financiers in this game were not the mortgage lenders, the ratings agencies or the investment banks that created those now infamous mortgage securities. In different ways, these players were all peddling financial snake oil, but as Columbia University's Charles Calomiris observes, there will always be snake-oil salesmen. Rather, the key financiers were the ones who bought the toxic mortgage products. If they hadn't been willing to buy snake oil, nobody would have been peddling it.

Who were the purchasers? They were by no means unregulated. U.S. investment banks, regulated by the Securities and Exchange Commission, bought piles of toxic waste. U.S. commercial banks, regulated by several agencies, including the Fed, also devoured large quantities. European banks, which faced a different and supposedly more up-to-date supervisory scheme, turn out to have been just as rash. By contrast, lightly regulated hedge funds resisted buying toxic waste for the most part -- though they are now vulnerable to the broader credit crunch because they operate with borrowed money.

If that doesn't convince you that deregulation is the wrong scapegoat, consider this: The appetite for toxic mortgages was fueled by Fannie Mae and Freddie Mac, the super-regulated housing finance companies. Calomiris calculates that Fannie and Freddie bought more than a third of the $3 trillion in junk mortgages created during the bubble and that they did so because heavy government oversight obliged them to push money toward marginal home purchasers. There's a vigorous argument about whether Calomiris's number is too high. But everyone concedes that Fannie and Freddie poured fuel on the fire to the tune of hundreds of billions of dollars.

So blaming deregulation for the financial mess is misguided. But it is dangerous, too, because one of the big challenges for the next president will be to defend markets against the inevitable backlash that follows this crisis.

I don't know which is more absurd: the argument that "deregulation" caused this mess or the argument that McCain of all people suffers from deregulation "mania." Ironically, to the extent McCain shares blame for what went wrong, it would be for something quite the opposite, for he was no enemy to government regulation, then or now. The other issue, of course, is regulating what? Fannie Mae? (On that account, if we compare McCain to Obama, Frank, and Dodd, McCain comes out looking like a choir boy.)

What worries me is that ordinary voters don't have time to study these things. It's been somewhat of a crash course for me, but for most people, the only crash course they'll get are media sound bytes.

As to Ayers, the idea that a presidential candidate worked closely with an unrepentant terrorist who wishes he did more -- and whose group sought to brutally murder American NCOs -- is a completely legitimate subject of inquiry.

As an issue, it is far more heinous, and not logically comparable in form or content to the numerous "swiftboat" allegations, which were raised by Kerry's former colleagues. Even though many of them were found to be true, the word has became code language for partisan political smears.

While discussions of Obama's Ayers connection would be a smear if the allegations were untrue, there's more and more coming out all the time -- to the point where even the New York Times was forced to admit that Obama had underplayed the connections.

Which issue will ordinary American voters think is more important?

-- A spurious charge of "deregulation mania"?

or

-- A legitimate inquiry into whether a presidential candidate worked closely with former terrorists who never should have been mainstreamed by the Democratic Party?

I don't know, but I don't think it's quite time to be gloating over victory.