There are several reasons why the race is still close between Barack Obama and John McCain:
1. John McCain is slightly better than a generic Republican. He can credibly claim to have broken with his party a couple of times.
2. John McCain has a better bio than most generic Republicans.
3. Power-crazy Hillary Clinton smeared Barack Obama for months on end during the Democratic primary. She and her husband racebaited him and convinced many voters that he was a corrupt lying scumbag.
Point #3 is the most important point, because Hillary Clinton's various smears against Obama have really taken a toll. She stayed in the Presidential race for months after she was mathematically eliminated. She convinced millions of older voters that Obama was an "affirmative action" candidate who was being promoted over a more deserving white. She openly declared John McCain as the only plausible Commander in Chief (aside from herself). Finally, she convinced many voters that Obama was an elitist who cared little about the problems of working class voters. This is making it difficult for Obama to connect on economic issues.
Despite the unprecedented onslaught of Clinton sleaze, Obama has made lemons out of lemonaide and currently enjoys about a 5-6 point lead (on average) when you look at registered voters. The lead is slightly less when you apply a "likely voter" screen.
Barack Obama is not a perfect candidate, but it is remarkable that he's survived the onslaught of both of the Clintons and now the entire Right-wing for more than a year. The race is close despite the Clinton's best efforts to sabatage Obama during the primaries months after they were mathematically eliminated.
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