The Sydney Morning Herald

by Geoffrey Garrett

Barcack Obama has never been a big admirer of his Democratic predecessor, Bill Clinton.

But as Obama faces voters' rejection of him and his party in next week's congressional elections, emulating Clinton is about the best he can hope for - and something he might achieve.

The fundamental story of the upcoming midterm referendum on Obama is substantial accomplishments overwhelmed by the worst economic downturn since the 1930s.

Obama got out of Iraq ahead of schedule, avoided chances of a second Great Depression by passing the world's biggest ever fiscal stimulus less than a month into office, and presided over the biggest healthcare overhaul since Lyndon Johnson and the biggest financial reforms since Franklin Roosevelt.

There are also real signs of life in the American economy. The sharemarket has rebounded strongly since late 2008, growth has been positive for more than a year, and American companies are cashed up.

The problem for Obama and the Democrats is that none of this matters to average Americans. Unemployment is stuck near the double digits, with about as many more Americans too dispirited to register for the dole or working part-time jobs when they want full-time ones.

About one-third of Americans with mortgages owe more on their homes than they are worth, with negative equity averaging about a third of the outstanding mortgages. One in seven Americans is living in poverty, the highest rate ever recorded.

On top of today's misery, Americans are scared about the future of their publicly funded pensions and healthcare in retirement because Obama's spending sprees have added trillions to government debt.

Obama is paying a heavy price for this carnage in middle America, made worse by the contrast with the sky-high expectations of 2008 Obama-mania. Things have become so bad that he is increasingly derided from the right and left in Jimmy Carter-like terms - incompetent, ineffective and out of touch.

Conservatives seethe that Obama is a socialist, a Muslim and even an illegal immigrant, with the Tea Party capturing and fuelling the ''just-say-no-to-government'' venom. The left disdains Obama as being soft on Wall Street and not fighting hard enough for Main Street.

Obama's Democrats seem destined to lose control of the House of Representatives and will be saved from losing their majority in the Senate only because just one-third of the upper house is up for re-election.

But big midterm swings against the president are not uncommon. In 1994 Clinton's Democrats lost both houses of Congress to fired up anti-government Republicans during an economic downturn.

Clinton recovered to win landslide re-election in 1996, balanced the budget, brokered China's entry into the World Trade Organisation, and stopped Milosevic's atrocities in Kosovo. His post-1994 modus operandi was to tack to the centre at home and be more active on the world stage. It worked because the Republicans moved too far to the right and the US economy bounced back better than ever.

Obama must be hoping for a similar rebirth, and he is likely to use a similar strategy. He will get serious about deficit reduction without raising taxes, reduce US entanglements in the Middle East and increase engagement in east Asia.

The better the Tea Party does this year, the more likely the Republicans will be pushed to the unelectable right in 2012. No longer the leader of his party in Congress, Obama could play leader of his country - defending the people's interests against Republican zealotry.

The media is salivating at the prospect of Sarah Palin going head to head with Obama. She could win the Republican nomination, but the smart money says she has little chance against Obama in the 2012 presidential election.

The economy is the wild card but the good news for Obama is that housing has bottomed out and unemployment always lags growth in economic recoveries.

The Democrats will take a bath at the polls next week. But like the self-styled ''comeback kid'' Clinton, Obama may well bounce back to stay in the top job for another six years.