Why Obama won debate No. 2

Tuesday night’s “town-hall” meeting from Nashville had all the hallmarks of what voters have come to dislike about these non-debates. The candidates often avoided directly answering questions, they broke the rules their campaigns had agreed to, and they speechified rather than engage in a serious discussion of the issues.

And yet, for one moment, Barack Obama showed why he is ahead in the polls. He did it by giving the single best explanation I’ve seen from anyone — politician, Treasury Secretary Henry Paulson, the talking heads — of why the rescue plan Congress passed last week is good for the American people. Remember, the conventional wisdom, certainly among angry opponents of the bill, is this is a Wall Street bailout and doesn’t do enough for Main Street.

When Oliver Clark asked the candidates what’s in the plan to help ordinary people, John McCain answered first, railing against “greed and excess in Washington and Wall Street,” blaming Obama’s “cronies” at Fannie Mae (FNM) and Freddie Mac (FRE), patting himself on the back for suggesting two years ago that the housing situation needed fixing, all before finally saying, “So this rescue package means that we will stabilize markets, we will shore up these institutions.” McCain then took another swipe at Obama.

Here, from the CNN transcript of the debate, is Obama’s complete response, up to the point where he too began congratulating himself for his foresight on the issue:

Well, Oliver, first, let me tell you what’s in the rescue package for you. Right now, the credit markets are frozen up and what that means, as a practical matter, is that small businesses and some large businesses just can’t get loans. If they can’t get a loan, that means that they can’t make payroll. If they can’t make payroll, then they may end up having to shut their doors and lay people off.  And if you imagine just one company trying to deal with that, now imagine a million companies all across the country.  So it could end up having an adverse effect on everybody, and that’s why we had to take action.

Nailed it. This is exactly what a leader should do: communicate to the people in clear, truthful terms about important topics. Obama succinctly explained exactly why it’s important to inject liquidity into the system — and why that’s more important now than directly helping individuals. (I wondered, by the way, if it was accurate to refer to “millions” of companies in the United States. In fact, according to the IRS, 5.7 million corporations filed business income tax returns in 2005, the last year the agency provided data. Obama not only knows the price of gas in Nashville, he also knows how many companies there are in America. And he found a way to simplify a complex topic without dumbing down his explanation.

McCain wasn’t terrible Tuesday night. But he did whiff a number of times. Why would he mention as a potential Treasury chief Warren Buffett, while also noting that WB supports Obama? As for citing Meg Whitman, the former CEO of eBay (EBAY), because “she knows how to create jobs,” did anyone tell McCain that the company Whitman headed until six months ago, getting badly outmaneuvered by Google (GOOG) and Amazon.com (AMZN) in the process, just announced it is letting go 1,000 employees? His most newsworthy comment, a proposal to spend $300 billion on bad mortgages, came off as a hastily conceived gimmick that if he’s serious ought to have been part of the Senate debate, not a populist grenade tossed on national television.

Then there was McCain’s bizarre off-the-cuff comment about how perhaps he needs hair transplants in the context of, if you can follow this, the types of rich folks whose health insurance policies are so good (even hair plugs are covered!) that they wouldn’t benefit from his tax-credit plan.

Obama wasn’t perfect. He gave a Clintonian answer when asked if he’d defend Israel from an attack by Iran when a simple “yes” would have sent a more powerful message to Jewish voters. But then brevity and concision isn’t a strong point of either candidate.

On balance, Obama more frequently respected the undecided voters in the hall by answering their questions. He’d ask Americans to sacrifice by expanding the Peace Corps; he wouldn’t necessarily take up Social Security reform in the first two years of his administration because there are more pressing matters. McCain, meanwhile, wants a commission to solve the Medicare problem, referred to his “hero,” Ronald Reagan, before referring to “my hero, Teddy Roosevelt,” and more than once talked down to voters, suggesting that they’d probably never heard of Fannie and Freddie before a few months ago.

The political pundits all said McCain needed to deliver a knockout punch to get back in this race. Looks more like he swung and missed.

Subscribe to Well Adjusted, our newsletter full of simple strategies to work smarter and live better, from the Fortune Well team. Sign up today.