June 5 (Bloomberg) -- In January, John McCain campaigned for the Republican nomination in Michigan by giving voters in the economically depressed state a taste of his signature ``straight talk'': some of the jobs they've lost won't be coming back.

Nowadays, the party's presumptive nominee is singing a different tune, striking a populist pose and saying ``new jobs are coming.''

McCain, 71, has changed his message to address voters' anxiety about the economy and disaffection with President George W. Bush's policies, even among Republicans. The shift in tone and emphasis has been notable in Michigan, which has the highest U.S. unemployment rate and is the biggest state that voted Democratic in 2004 that the McCain campaign sees as ripe for moving into the Republican column this year.

``He has to show empathy,'' said Greg Valliere, political strategist at Stanford Group Co. in Washington.

In the primary season, McCain centered much of his economic pitch on lower taxes and curbing spending. He praised Bush's tax policies and said Americans had flourished during the eight years the president has been in office.

`Buggy Factories'

In a January speech in Livonia, McCain said it ``wasn't government's job to protect buggy factories and haberdashers when cars replaced carriages and men stopped wearing hats.'' He didn't want to raise ``false hopes that somehow we can bring back lost jobs,'' he added.

By contrast, McCain's Republican opponent, former Massachusetts Governor Mitt Romney, who was born in Michigan and won the Jan. 15 primary, vowed to ``fight for every good job for Michigan.''

Over the past few months, however, McCain has taken a lesson from Romney, acknowledging recently that ``Americans are hurting.'' Returning to Michigan last month, the Arizona senator told a local television station that he would fight for new jobs and the state wouldn't ``be left behind.''

Doug Holtz-Eakin, the candidate's senior economic adviser, said McCain is now laying out an economic vision that departs sharply from the Bush administration's approach.

`Richer View'

``He has a richer view of what is the economy than this administration, when the economy was taxes up or taxes down,'' Holtz-Eakin said.

This is in sharp contrast to McCain's tone of six months ago, when he said that Bush's policies had been a boon.

``Americans overall are better off because we have had a pretty good prosperous time, with low unemployment and low inflation, and a lot of good things have happened,'' McCain said in a Jan. 30 debate of Republican candidates at the Ronald Reagan Presidential Library in California.

His presumptive Democratic challenger, Senator Barack Obama of Illinois, has made clear he plans to use such rhetoric to argue that a McCain presidency would represent a third Bush term.

``McCain wants to double down on the Bush economic plan,'' Obama said in Troy, Michigan on June 2.

Reflecting his recent populist approach, McCain now rails against excessive compensation for corporate executives and even joined Democratic Senator Hillary Clinton in supporting a gasoline-tax holiday.

Mortgage Plan

His most dramatic shift, Valliere said, was to reverse his opposition to a federally funded home-mortgage bailout plan. The McCain campaign said that, unlike the Democrats' proposals, McCain has always rejected any broad rescue for banks and that his plan targets homeowners directly.

Last month, McCain began running an ad in Michigan that pledges to hold corporate chief executives ``accountable,'' restructure mortgage debt, make energy cleaner and cheaper and taxes simpler and fairer.

That compares with December, when McCain unveiled a plan called ``Bold Solutions for Michigan'' that emphasized tax and spending cuts, lower barriers to trade paired with aid for displaced workers, and making Bush's tax cuts permanent.

Spencer Abraham, a former Michigan Republican senator, said McCain's new tone in the state isn't surprising. Ronald Reagan combined populist, small-government and low-tax themes to create pockets of support in areas like Macomb County, a ``Reagan Democrat'' enclave of blue-collar workers that is viewed as a political barometer for Michigan.

Reagan Democrats

``That's historically the kind of Republican appeal that has worked with that voter in Michigan,'' Abraham said.

To be sure, there are some areas where McCain hasn't altered his tone. He continues to defend free-trade policies such as the North American Free Trade Agreement, which is highly unpopular in working-class areas around Detroit.

McCain was more nuanced than in January, when he said ``some of the jobs that have left the state of Michigan are not coming back.'' New York Senator Clinton and Obama have said they would seek to renegotiate or pull out of Nafta.

McCain's statement ``was largely blamed for the margin that he lost to Mitt Romney,'' said Susan Demas, an analyst for the Michigan Information & Research Service.

McCain has always displayed a populist streak, from his sponsorship of tighter campaign-finance rules and his work on a patients' bill of rights with Democratic Senator Ted Kennedy of Massachusetts to his advocacy for a cap-and-trade system to battle climate change.

`Quite Good'

``It strikes me more as just McCain being McCain,'' said Pat Toomey, president of the Washington-based Club for Growth, a small-government advocacy group that typically sides with Republicans. McCain's positions on other issues have been ``quite good,'' he said.

Toomey cited McCain's support for a reduction in corporate tax rates, his free-trade and limited-spending stances and his opposition to a recent farm bill.

McCain's efforts in Michigan and other Rust Belt states may be hampered by his relative lack of comfort when it comes to discussing economic policy versus foreign affairs and national security. For his last appearance in Michigan last month, he delivered a speech on human trafficking.

``The big picture was how bizarre it was,'' Demas said. ``Almost all the questions were about the economy.''

To contact the reporter on this story: Heidi Przybyla in Washington at hprzybyla@bloomberg.net.

Last Updated: June 5, 2008 09:55 EDT