By Geoffrey Garrett
There's little love lost between Bill Clinton and Barack Obama. Clinton played the race card to help his wife battle Obama in 2008. Obama dismissed Clinton's pragmatic centrism, styling himself as the left's answer to Ronald Reagan.
But last Friday a new Clinton-Obama alliance was born. Obama hopes the second act of his presidency turns out as well as it did for Clinton - not only is he reading from a script Clinton wrote 15 years ago, he is also embracing Clinton the man, the enduring darling of the Democrats as their love affair with Obama sours.
After a damning midterm referendum on his presidency in 1994, Clinton ran headlong to the right, capturing what he termed the ''vital centre'' of American politics. He turned the Democrats into the party of balanced budgets, pledged to ''end welfare as we know it'' and championed free trade. The economy recovered, Clinton was easily re-elected in 1996 and then strode the global stage with elan and impact.
Since his own midterm ''shellacking'' last month, Obama has signed a free trade deal with South Korea he had long opposed, proposed lower and flatter taxes and, most importantly, cut a deal with Republicans to extend the Bush tax cuts.
That Obama has undone the core economic policy pledge of his campaign shows just how desperate he is to revive the economy - and his chances of re-election in 2012. Clinton's experience and today's opinion polls say Obama is right about this strategy, although success depends on whether America's near double-digit unemployment rate falls over in the next 18 months and by how much.
Obama's America is now centrist, pro-business and pro-trade - a far cry from the lofty left-liberal goals of two years ago. Rank-and-file Democrats are apoplectic. The Speaker of the House of Representatives, the Democrat Nancy Pelosi, perhaps Obama's closest political ally in the past two years, has said she may not even bring Obama's tax proposal up for a vote in the final few weeks before she loses the power to control the congressional agenda.
Enter Clinton to salve the wound, calling Obama's tax cut deal ''the best bipartisan agreement we can reach to help the most Americans''.
These are hard words for Obama to swallow. On announcing the deal he said: ''I'm as opposed to the high-end tax cuts today as I've been for years.'' He called the Republicans ''hostage takers'' for insisting the cuts were the price he had to pay for extending tax cuts for average Americans.
Obama will no doubt grow into his new role as the great triangulator, possibly with more lessons from Clinton, because the political logic is impeccable. For two years the Republicans have been able to blame Obama and the Democrats for the parlous state of the economy because they have not voted for any of the big Obama measures - on fiscal stimulus, healthcare and financial regulations - that they labelled the apotheosis of big government leftism.
Now it will be hard for Republicans to oppose extending tax cuts, even though Obama added more unemployment benefits to the mix. Democrats may squawk about Obama's tax heresy but they know that if they do not pass his deal before the end of the year, Republicans will be able to impose even harsher measures when they take control of the house next month. Moderate Democrats know they will be branded job killers if they sit on their hands and allow taxes to rise in the new year.
So Obama's tax plan will pass eventually. Republicans will probably have to support the Korean free trade deal. So will some Democrats because of new concessions Obama won for the car industry.
Swallowing lower, flatter taxes and cuts to pensions and healthcare will be harder. The long-term ''fiscal responsibility'' agenda will allow Obama to pit himself against Congress in a fight to sustain the US economy.
The building blocks of recovery are in place, most importantly the $2 trillion cash mountain US corporations have accumulated as they cut costs and jobs in response to the global financial crisis.
This cash will be reinvested, and when it is this will mean more jobs.
The path back to prosperity and re-election will be hard, but walking in Clinton's footsteps may make Obama another ''comeback kid''.
Geoffrey Garrett is chief executive of the US Studies Centre.