REPUBLICANS are concerned that John McCain’s presidential campaign is running on empty populist rhetoric now that a postconvention bounce in the polls provided by the selection of Sarah Palin as his running mate is over.

The White House race has entered a new phase with Republicans and Democrats vying to be “prolier-than-thou” in their appeal to working people.

Palin, the governor of Alaska, still thrills the crowds, but the cultural war unleashed by the moose-hunting hockey mom has led some conservatives to wonder whether the savaging of America’s snooty, overeducated liberal “elite” has gone too far.

McCain’s attack on Wall Street “greed and corruption” and call for greater regulation in response to last week’s financial crisis has added to concerns about the tenor of his campaign. A Wall Street Journal editorial warned that he would “never beat Obama by running as an angry populist like Al Gore, circa 2000”.

McCain was caught out yesterday arguing in a health magazine for deregulating the health insurance industry in the same way as banking, a gift to Barack Obama’s campaign.

But the Democrat is also under fire from his own side for failing to press home a clear economic message that will convince working-class voters he is one of them, instead of the wine-drinking, rocket salad-eating, pointy-headed elitist of Republican legend.

“What we’re seeing in both campaigns is a fierce determination to win and that principles don’t matter,” said Heather Mac Donald, an influential thinker at the free market Manhattan Institute. “There is a lot of populist demagoguery.”

McCain began last week by claiming the “fundamentals” of the American economy were strong but ended it as a raging champion of the “worker” against the fat cats backing Obama, such as Jim Johnson, the former head of Fannie Mae, the troubled mortgage giant, who led the Democratic candidate’s search for a vice-president. Obama, in turn, accused McCain of being “a little panicked right now” and claimed his “big solution for the economic crisis was to blame me for it”.

“Now he tells us that he’s the one who will take on the ‘ol boys’ network’,” Obama scoffed. “In the McCain campaign, that’s called a staff meeting.” His campaign went on to release a list of 26 McCain advisers and fundraisers involved in lobbying Fannie Mae and its sister company, Freddie Mac.

In the middle of this war of words, Palin, 44, has been cramming on economic and foreign policy with McCain’s advisers. She is to be introduced to foreign leaders by McCain at the United Nations general assembly in New York on Tuesday. However, her lack of experience is being touted by the McCain campaign as a qualification for office in itself – the ultimate proof that she is a maverick and Washington outsider.

For others, it has reinforced fears that the Republican party under McCain has lost its moorings. “The implosion of anger against anyone – heaven forbid – being elite or having experience that isn’t moose-hunting makes me uncomfortable,” Mac Donald said. “There is no question that I would have preferred someone with business experience in the White House.”

George Will, a leading conservative commentator, compared Palin’s new-found celebrity to that of a winner of American Idol, the television show, and predicted the nation’s romance with her would soon cool. “The world is a sweeter place because Sarah Palin has increased the quantity of love, but this is not a reliable foundation for John McCain’s campaign,” he warned.

The battle for white, working-class voters and “Wal-Mart moms” is being fought in the economically depressed industrial and farming swing states of the Midwest, where the election is likely to be decided.

In Wisconsin, which John Kerry won for the Democrats by 0.4%, the narrowest margin of the 2004 election, the two campaigns are fighting on the same turf.

McCain and Palin spoke together – as they almost always do nowadays to boost McCain’s crowds – at a rally for 12,000 people at an ice hockey stadium in Green Bay, an industrial meat-packing town. Tomorrow, Obama will hold his own rally at the same venue. The air-waves are flooded with political advertisements from both camps. The most recent poll shows Obama leading McCain in Wisconsin by just 1%.

A paper mill near Green Bay is about to close with the loss of 600 jobs. A General Motors car plant in Wisconsin laid off 1,000 workers this year.

“I’m very worried about the economy,” said Maria Blahnik, a retired nurse. “I’ve got four sons and I told them we’re going to have to tighten our belts. Our kids don’t know how to. They’ve never been through tough times.” But she was cheered by the selection of Palin and had no doubt she was up to the job.

“I love Sarah. She’s already proved that she can do it all. I love it that she is a hockey mom. My husband and his friends have put a picture of her in their hunting cabin. They’ve normally got pin-ups of girls with big boobs there and instead they’ve got Sarah. Isn’t that fun?”

In Wisconsin, the crowd waved green and yellow balloons, the colours of the American football team the Green Bay Packers, as Palin began to speak. On this occasion, she finally dropped the claim that she had stopped a so-called “bridge to nowhere” in Alaska after it was revealed that she supported the project until it became a shameful national symbol of waste.

There was applause, too, for her husband Todd Palin. His lawyer announced that the self-styled “first dude” would defy a subpoena from the state of Alaska to testify in the so-called Troopergate case – an investigation into whether Sarah Palin tried to sack the chief of police over a family feud with her brother-in-law.

The inquiry is now unlikely to proceed until after the election, despite Palin’s offer to let the public “hold me accountable”.

Republican activists were not bothered. There was no doubt that Palin was a bigger attraction than McCain, although on this occasion she remembered to refer to the “McCain and Palin” ticket. She got it the wrong way around at an earlier gathering prompting jokes that the “black widow” of Alaska was already elbowing the 72-year-old Arizona senator out of the top spot.

However, a stream of reports questioning her status as a reformer – she ran up as much as $27m in requests for much-despised congressional spending as mayor of the small town of Wasilla – has taken a toll on her popularity. A national poll last week by Quinnipiac showed Obama leading McCain among women voters by 54 to 40 points.

One Republican from Green Bay, who did not wish to be named, said the pregnancy of Palin’s daughter Bristol, 17, remained an unacknowledged problem. “There’s a lot of grumbling about this teenage pregnancy thing. If she can’t take care of her daughter, how can she take care of the country?” she said.

Her concern is shared by Mac Donald. “Sarah Palin has obvious political charisma and she might win the election for the Republicans, but at great cost to conservative principles. The debate from now on about family values is going to be extremely complicated.”

Palin’s rapturous reception at the Republican national convention and angry denunciations of “sexism” initially stifled this discussion. But Mac Donald believes her selection has wider implications.

“It’s going to be difficult to speak in a more straightforward manner about the devastating impact of teen pregnancy. It is amazing to me that conservative pundits have thrown aside their principles in order to justify her pick,” she said.

She also wondered about Palin’s ability to juggle the demands of the vice-presiden-cy with the needs of her children, including Trig, her five-month-old Down’s syndrome baby. “She could be in the middle of a crisis or a terrorist attack that could take her attention for months. You can’t say, ‘I’ve changed my mind, I need time off with my kids’.”

Mac Donald is considering voting for Obama, even though she fears he is also underqualified. “I go back and forth on it. I would not rule it out,” she said.

In the short term, the financial instability has benefited Obama, returning him to the top of the polls by an average of 1.9 points, according to Real-ClearPolitics. The most recent Gallup tracking poll showed him surging into a five-point lead, his strongest showing since a brief bounce after the Democratic national convention in August.

In Wisconsin, Susan Edwards, 26, a member of the food workers’ union, said: “I really think the election is going to come back to the economy. A lot of people liked Sarah Palin’s flashiness, but there is not a lot behind it.”

Some Democrats are concerned that Obama has the same problem. In a withering article in The Democratic Strategist, a political journal, William Galston, a former White House policy adviser, complained in an open letter to Obama that few if any voters could cite a single economic proposal of his.

“I’ll get right to the point,” he wrote. “You are in danger of squandering an election most of us thought was unlosable. The reason is simple: on the electorate’s most important concern – the economy – you have no clear message, and John McCain has filled the void with his own.”

Obama called for an economic stimulus package for working families and said he would stick to proposals for middle-class tax cuts. However, he said he would delay his own plans for a financial rescue package until he had heard what the Bush administration proposed.

“You don’t do it in a day,” he added in measured tones. “We’d better do it in an intelligent, systematic, thoughtful fashion. I’m much less interested in scoring political points than I am in making sure we have a structure in place that is actually going to work.”

McCain had no such inhibitions, saying that Obama was “right square in the middle” of the culture of lobbying – despite his own heavy reliance on lobbyists to advise his campaign. He unveiled a punchy new slogan: “That’s not country first, that’s Obama first.”

Thomas Frank, the author of What’s the Matter with Kansas?, an influential account of conservative populism, said the Republicans were engaging in class and cultural warfare.

“It is pure opportunism,” he said. “There is no way John McCain can pretend to be an economic populist. He’s always been a deregulator. But when the economy is as bad as it is, the Republicans have to go to cultural war, because it is the only way they can win.” The importance of Palin, he added, was that “she is McCain’s proxy cultural warrior. She’s really good at it. She’s phenomenal”.

American voters will get the chance to show their approval or disapproval on November 4. Cindy Smith, 52, the owner of a furniture shop, said after attending the rally in Wisconsin: “It’s not my grandmother’s party any more. We’re a lot more liberal than in her day.” She did not mind a bit.

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