Melanie Morgan

She marched right up on-stage in her high-heeled black boots, and dazzled California state Republicans with her pugnacious attitude, and her sexy smile.

Gov. Sarah Palin's appearance in the San Francisco Bay Area (one of the most liberal strongholds in the entire country) resulted in the biggest draw in state history, netting over 2 million dollars for Republican coffers, with over 1500 dining on quiche and a green salad. Powerline reports on the event here.

Tom Siebel, founder of Siebel Systems, remarked that he dodged a bullet by moving the event to the Hyatt Burlingame instead of his home as originally planned. He sure got that right. No CodePinko's to mow down his lawn, or irritate the neighbors.

While the mood was exuberant outside amongst the several hundred flag-waving grassroots supporters, many of the movers and shakers who contributed heavily to the Republicans are privately expressing the opinion that unless Senator McCain comes up with a game-changer during the debate Tuesday night, he is likely to lose this election. I heard Charles Krauthammer say the same thing on 'Inside Washington' when I got home.

Many of the money men (and women) who attended are very concerned that Senator McCain is not fluent enough in the language of money, and the economic narrative that has not yet been told.

But most of the attendees today were thrilled with Sarah Palin and her direct attacks on Senator Obama's association with unrepentent terrorist Bill Ayers. And Democrats were alternately alarmed by the tactics, and threatening. The brass-knuckles flashed in the political arena from Chicago Congressman Rahm Emmanuel.

"If we are going to go down this road, you know, Barack Obama was eight years old, somehow responsible for Bill Ayers," he said. "At 58, John McCain was associating with Charles Keating."

"If we really want to talk who is associating with who, we will," Emanuel said. "The American people will lose in that transaction."

Everyone with whom I spoke agreed that if the election is just about national or international security, then it belongs to McCain. And the troops certainly are voting with the Arizona Senator.

But, to quote James Carville "It's About the Economy, Stupid." And that is where McCain's campaign is stumbling.

I have photos coming up.

*Special thanks to Elizabeth Meyer, who invited myself, Brian Sussman and Catherine Moy as her guests, allowing us to observe a moment inside of the campaign.