The Sydney Morning Herald

By Richard McGregor

Barack Obama was once memorably described by a biographer as a ''shape-shifter'', a political being whose racial background and peripatetic upbringing and education gave him unique skills to inspire and ingratiate himself with a new breed of voters. Three years on, the President is shifting into a different sort of shape, a once giant figure drifting towards the horizon, off the political map.

In private, Obama likes to joke that August has always been his darkest month. Hillary Clinton's brief ascendancy in 2007 in the Democratic primaries was followed by the financial crisis the following year and the excruciating town hall meetings lambasting his healthcare reform in 2009. Last year, he was readying for the mother of all election losses to the Tea Party-stirred Republicans in the mid-term polls.

This year, August marked a new low point in his presidency. After failing to strike a grand bargain over the budget with John Boehner, the Republican House Speaker, he was shunted aside when Congress eventually did a deal itself to avoid the US defaulting on its debt. Then, Obama had to bear the ignominy of Standard & Poor's downgrading the country's credit rating.

Soon after, came the first of the administration's insiders-tell-all tales. Confidence Men, by Ron Suskind, portrayed Obama in his first two years in office as a kind of hapless referee, buffeted between the strong-willed economic advisers Larry Summers and Peter Orszag.

Obama recast his White House team following the devastating losses in the mid-term elections of November 2010. Summers and Orszag have gone, as has his abrasive chief of staff Rahm Emanuel. The choice of a new chief of staff, William Daley, a veteran politician from the Chicago political dynasty with extensive commercial experience, symbolised the new path that Obama was setting out on - a systematic shift to the middle ground, to dispense with the charge that he was anti-business.

But the shift to the centre ended with the debacle over the debt ceiling in August. Obama looked the way a President should never look: ineffective and even irrelevant. He could point to all sorts of achievements, ranging from health reform to the killing of Osama bin Laden only a few months before. But with the economy still anaemic and unemployment stubbornly stuck above 9 per cent, his successes have mattered little.

For too much of the time, the President seemed to be shifting into one shape too many for the electorate, to the point where he either stood for little at all, or for whatever label his opponents were able to pin on him.

James Kloppenberg, a Harvard historian and author of Reading Obama: Dreams, Hopes, and the American Political Tradition, says the President is little understood on either side of politics. He depicts Obama as a classic pragmatist in the US tradition, a person who constantly updates and revises his ideas to find his way through an ever-changing world.

''To critics on the left, he seems a tragic failure, a man with so much potential who has not fulfilled the promise of change that partisans predicted for his presidency,'' he told The New York Times earlier this year. ''To the right he is a frightening success, a man who has transformed the federal government and ruined the economy.''

Now Obama is remaking himself again, in what most commentators expect will be his final configuration as the country races into next year's presidential election. Pragmatism and an instinct for survival have dictated the latest pivot, back to the left and to his Democratic base. After a period of trying to compromise with Republicans, he has also decided to get tougher with his opponents.

The vehicle for Obama 2.0 is a bill to boost jobs growth by cutting payroll taxes for employers and employees and paying for it largely with new taxes on the wealthy. Many Democrats who had despaired about his shift to the centre and the way the hardline Republicans had left him stranded there have applauded the President's new approach. ''This is the only winning strategy,'' Andy Stein, a former union leader, told me. ''You cannot be reasonable with unreasonable people.''

Sooner or later, voters will have to choose between Obama and a Republican. With such ferment in conservative politics, there is no saying who that will be or what the Republican nominee will represent. But Obama's lurch to the left has given him a base on which to build. In August, he couldn't even boast of that.

Richard McGregor is the Washington bureau chief of the Financial Times. This an extract from his essay in the latest edition of American Review published by the US Studies Centre at the University of Sydney, available as an iPad app.