Is it time to panic?

Why is this election so close? Shouldn't Obama be cleaning McCain's clock, given his advantages in funding, organization, charisma, party ID trends, etc?

Not necessarily. Most presidential elections just aren't blowouts. In particular, presidential elections without incumbents are usually pretty close. As I've mentioned before, the last non-incumbent to win by more than 10 points was Ike in '52. Even Dukakis, who basically refused to fight back under attacks from the Bush Sr. campaign, only lost by eight points.

To me, the closest historical parallels to this election are those of 1952 and 1968. In both cases, the incumbent administrations (Truman and Johnson, respectively) were terribly unpopular with voters, largely because of unpopular wars. The incumbents declined to run that year for fear of losing. Their anointed successors (Adlai Stephenson and Humbert Humphrey, respectively) were solid candidates wearing the albatross of an unpopular party label. And in both cases, the incumbent party lost, but it was actually pretty close in 1968. Indeed, it might have gone the other way had George Wallace not taken some southern electoral votes from Humphrey as a third party candidate that year. McCain is in the unenviable position of Stephenson and Humphrey, trying to argue that he'll pursue the incumbent party's policies but in a more competent manner. It's difficult, but again, Humphrey almost pulled it off.

Most predictions I've seen (including my own) based on the economy, presidential approval, etc., suggest that Obama will win, but only by 4 to 6 points. Is there a penalty for being black? Possibly, which would knock Obama down by one or two points. So again, a really close race, which is exactly where things were just before the convention. Then Obama got a bounce out of his convention, and then McCain got a bounce out of his convention. After a week or so, things will probably settle down to where they were just before the conventions, which was pretty close.

Of course, we should still recognize that presidential elections are not national contests, but rather 51 statewide contests. In the state polling, Obama's position still looks pretty strong, as he's likely to take all the Kerry states, and traditionally red states like Montana and Virginia are in play.

Again, we'll have a more realistic idea of what the race looks like in a week or so. But it's likely to remain a nailbiter.