Sleeves up, time to hit the hustings

Music trumpets his arrival: this time, it's U2's City of Blinding Lights, the upbeat chords echoing Barack Obama's 2008 campaign and his euphoric inauguration in the icy mid-winter of January, 2009. ''Oh you look so beautiful tonight. In the city of blinding lights.''

A little greyer, and now 50, Obama strikes all the familiar notes of a seasoned campaigner, and his adoring, mostly young audience is aglow.

"We love you," someone cries out. "I love you back," he obliges, 'I do', before reprising themes that are coalescing into a new bumper sticker. "I'm here because I need your help … We've got to finish what we started in 2008."

People's faith in the American Dream has been shaken over the past decade, the 44th president reminds them. The crisis had been building for years and ''wasn't going to be solved overnight''.

''So the question now, in 2011, is not whether people are still hurting,'' says America's CEO, dressed in regulation charcoal grey suit and crisp white shirt. ''Of course they are … The question is not whether this country has been going through tough times. The question is, where are we going next? What does the future hold?''

It is a pivotal moment in the President's pitch to Americans, which he repeats over and over across the nation to audiences just like this one, gathering at the Sheraton Downtown Hotel in Orlando, Florida.

But 12 months out from that ''first Tuesday in November'', the immediate prospects for many Americans - and for Obama's re-election - look bleak. Two decades after Bill Clinton's memorable campaign slogan captured the essence of a different contest, the message - ''It's the economy, stupid'' - still rings true. And the tepid nature of recovery stands as Barack Obama's greatest obstacle to re-election.

So, how is 2012 shaping up? And how is the campaign being fought?

Wait on. The election is still a year away. Has the campaign already begun?

Absolutely. In fact, Obama has been sharply rebuked by Republicans - and some conservative commentators - for using an extensive road-show, supposedly to sell his latest plan for creating jobs, as a cover for campaigning and fund-raising.

The charge carries some weight, because the two go hand-in-hand, and because Obama's recent $US450 billion ($A436 billion) jobs bill was destined to fail before it was officially unveiled, since it contains in part tax increases, which Republicans flatly reject as part of any remedy to reinvigorate the flagging US economy.

With Republicans controlling the House of Representatives, following the Democrats' ''shellacking'' in last November's mid-term elections, the White House was never going to push through legislation without their imprimatur. Democrats simply don't have the numbers. Thus, the futility of Obama's road trip and the reason it was more about the ideological battle ahead than it was the task at hand.

His proposed tax increases for the wealthy were actually ramped up by liberal Democrats and packaged as a ''millionaire's tax''. Says the President, in an oft-repeated refrain: ''Warren Buffett's secretary shouldn't pay a higher rate than Warren Buffett. A teacher, or a nurse, or a construction worker making $50,000 a year shouldn't be paying a higher rate than somebody making $50 million a year.''

But Republicans have held firm - they advocate tax cuts, not tax increases - and counter that Obama is inciting class warfare.

So, who's right? And how can the deadlock be broken?

The debate has been deeply polarising. The Republicans contend that lifting taxes on the rich will suppress job creation because it is the rich who hire and fire Americans. But many Democrats and labour economists such as Robert Reich, a member of the Clinton administration, reject this assertion, arguing that the ''trickle-down effect'' is a myth.

The chances of compromise appear remote. The bitterness of the mid-year prevarication over raising America's debt ceiling and arguments on how best to manage the $US14 trillion America owes the world lingers. Some moderate Democrats, too, are mindful that the Obama jobs package is a de facto stimulus that relies mostly on new borrowings at a time when there is cross-party agreement that the US must deal with its yawning annual deficits. Stemming from those debt concerns was the establishment of a bipartisan congressional super-committee charged with identifying a further $1 trillion-plus of government spending cuts by Thanksgiving, in a fortnight. The deadline portends a likely new eruption in hostilities as the parties search in vain for compromise.

So, where does that leave Obama?

In a sense, he is trapped. His legislative agenda came to a thudding halt once the newly-shaped Congress in January was sworn in. But it has also provided him with a fulcrum on which to mount a campaign. He says that Americans have a choice between equity and privilege: if he was Australian, Obama would cite the ethos of the "fair go". In tough times, he says, America's wealthy, who benefited most from big tax cuts during the years of George W Bush, can - and must - contribute more.

And statistics underscore a widening gap between the ''haves'' and ''have nots'': official figures show the top 1 per cent of American taxpayers now account for almost a quarter of all income - double their share in the mid-1980s. And they control about 40 per cent of America's wealth, compared with 33 per cent back then.

Why does America need another stimulus anyway?

Because the recovery that took grip, officially, in mid-2009, sputtered to a near-halt and the economy is now only inching ahead. Republicans say this proves the nearly $US800 billion stimulus package that Obama pushed on taking office was a failure. But just as many on the left say it was never going to be large enough to reinvigorate properly an economy belted by the sub-prime mortgage fiasco that precipitated the ''Great Recession''.

With confidence crushed, American corporations are sitting on $US2 trillion of cash, reluctant to invest while the outlook is fuzzy. Europe's current troubles have added to the reticence. But Obama sees an opportunity for Washington to lead because, he says, "we can't just cut our way out of the problem. We've also got to grow our way out of the problem. We've got to invest in those things that help us grow and put people back to work."

But does Obama get any credit for his handling of the economy?

He should. Economists acknowledge universally that the combined actions of the departing Bush administration and incoming Obama team probably staved off a depression. The auto bailouts rescued America's car industry - and saved Detroit. And, notwithstanding the government's residual equity stakes in banks and finance sector companies, as well as in General Motors, almost 80 per cent of the money made available under TARP, the Troubled Assets Relief Program, has been repaid to the US Treasury.

Still, America's jobless queues remain Obama's biggest challenge. No president in the past 70 years has won a second term with an unemployment rate above 7.2 per cent. Currently, it's stuck above 9 per cent, where it has hovered for 27 of the past 29 months. Before then, America's jobless rate had only risen above 9 per cent in 20 single months since Harry Truman inhabited the White House.

So, what are Obama's key achievements?

His supporters would list pulling the US back from the economic brink, for one. And most would list Obama's healthcare reforms as the signature achievement of his first term. But that big win came at a cost: so much time and energy were expended getting ObamaCare through Congress that the White House took its eye off the economy, or at least was suckered into thinking its $US787 billion stimulus had done the trick of righting the good ship USA.

Obama also managed to make good on some election promises during the lame duck session of the previous Congress, repealing the military's ban on openly gay members of the forces (the so-called ''Don't Ask, Don't Tell'' policy), winning ratification for a new arms control agreement with Russia, extending benefits for long-term unemployed, and cutting payroll taxes. The latter came in a compromise with Republicans that saw the Bush-era tax breaks for the rich extended, a deal criticised by Obama's base, who lamented a lost opportunity. Democrats had controlled the White House, as well as both houses of Congress, for two years, but had they made the most of it?

What about National Security? How does Obama fare?

On this score, Obama chalks up the most pluses. Osama bin Laden is dead, and al-Qaeda severely depleted, and there has been no major terrorist attack on US soil under Obama's watch. US troops will be out of Iraq by Christmas and a timetable has also been struck for the drawdown of troops from Afghanistan after 10 long years of war. The Arab Spring will present challenges for years to come and the US is carefully pivoting to engage with the emerging democracies. Muammar Gaddafi is gone, too, with Obama having successfully aided the revolution without risking US boots on the ground.

That sounds like a plus, along with - presumably - the power of incumbency?

Exactly. Obama himself doesn't face a challenge, so he can bide his time waiting to see who his Republican opponent will be. In the meantime, he can continue to dovetail fund-raising with official business. He gets to jet around the country in his personal 747, mostly at taxpayers' expense. Air Force 1 costs around $200,000 an hour and the Democratic Party only have to chip in when he attends a party event.

And it doesn't hurt that the President happens to be likeable. "He's a guy who is perceived by many more Americans as likeable, smart, funny with a dynamic wife, cute kids, a dog, and stuck in an impossible job trying to do the right thing," says Aaron David Miller, of the Woodrow Wilson International Centre for Scholars. "He hasn't even come close to the 'I can't stand to look at the guy' reaction which haunted LBJ, Nixon, or the shrill moralism ('I'll never lie to you') of a Jimmy Carter."

So, how does Obama campaign for a second term?

Obama's historic victory in 2008 brought with it historic-sized expectation: huge hopes for massive change. That wasn't to be, which in part probably explains his approval rating in the low 40s, though opponents argue that Obama's chief fault is a lack of leadership. This time, while supporters may believe Obama's rhetoric that things will get better, this may be a big ask for African Americans who turned out to vote in record numbers in 2008 but who, four years on, belong to communities hit hardest by unemployment.

So, what's a good line for the Obama camp?

"You know, his slogan should be 'GM is alive and Bin Laden is dead'," joked Obama's campaign aide David Axelrod recently, before adding: "We've got a lot of work to do … not just [to] put people back to work but also to restore the security that the middle class has lost for a long period of time."

Which gels with Obama's seemingly futile road-show flogging the dead horse that is his jobs package, allowing him to mark out territory for the 2012 campaign - a "fair shake for all", he says, in which those who have done well in America put back through higher taxes. "That's not class warfare. That's not an attack on anybody. That's just common sense. That's just fairness."

What are the odds on an Obama win?

That depends on so many variables - for starters, how the economy fares (growth might at last be back on an upward trend) and who his opponent ultimately is. Clearly, the Obama camp is banking on facing Mitt Romney come the main event, directing plenty of invective the way of the former Massachusetts Governor and venture capitalist. White House adviser David Plouffe, who ran Obama's 2008 campaign, says Romney "has no core".

So far, Romney has kept his powder dry, describing the President as "a nice man with a nice family". "He didn't cause the economic mess, but his actions have made things worse. He's clearly in over his head," Romney observed in one televised Republican debate.

The softly, softly approach is doubtless grating on Obama, who continues to portray himself as the underdog, a status with which the New York Times's resident handicapper concurs.

In an article to be published this weekend, the paper puts the odds of an Obama win when pitted against Romney and a stagnant economy at just 17 per cent - far worse than the response to one recent poll in which 55 per cent of people thought a Republican most likely would win the White House in 2012. Just 37 per cent backed the incumbent.