"It's the economy, stupid," campaign strategist James Carville famously scrawled on a blackboard at the beginning of then Arkansas governor Bill Clinton's bid to become president in 1992. If, 20 years later Barack Obama's residency in the Oval Office ends after a single term, he and his supporters will likely mutter, "It was the stupid economy."

The consensus among both political experts and the democratic grassroots is that, barring a natural or terrorist catastrophe, money matters will dominate Americans' decisions as they go to the polls next year.

Take, for example, Dan Odenwald, a 36-year-old sales consultant and Washington, DC resident who's been an active Democrat his entire life.

"There's a saying in the US that 'Americans vote their pocketbooks,'" Odenwald told Deutsche Welle. "With unemployment over eight percent, the economy limping along and people feeling generally insecure about their financial futures, the economy will be center stage. Ultimately Americans will vote for the candidate who they think can best return us to growth and prosperity."

Josef Braml, an expert on the United States at the German Council on Foreign Relations in Berlin, concurs with that assessment.

"The economic situation will be the crux of the coming presidential and congressional elections," Braml told Deutsche Welle. "He was elected primarily by younger voters and African- and Hispanic- Americans because they had more faith in him than in his opponent, John McCain, to get the economy moving again. Now he has to deliver and turn that promise into reality."

Not only are large numbers of Americans out of work. Growth in real GDP remained below two percent for the first three quarters of 2011 - despite a $787 billion (604 billion euros) stimulus package which was passed in 2009 and which should be kicking in by now.

In soccer terms, Obama's challenge is a bit like having to overturn a two-goal deficit with only about 20 minutes remaining on the clock. The incumbent sorely needs a bit of economic luck to keep his "team," the coalition of voters that swept him to power in 2008, motivated and in line.

Fragile alliances

As George W. Bush showed in 2000, when he won the presidency in the electoral college without a majority of the popular vote, presidential elections are less about getting sheer numbers of voters than about putting together the right combinations of voters in the right states.

America's economic difficulties have led to dissatisfaction among many of Obama's core groups of supporters. And that could make it hard for him to convince them to go to the polls in 2012.

"One third of Latinos and African-Americans live below the poverty line," Braml pointed out. "Some of his former voters could stay at home, sitting out the election this time around."

Obama is also at risk of losing traction among that group of voters who usually swing elections in a country split roughly evenly between committed supporters of the two big parties - the independents.

"Every election is a referendum on how people feel about the direction of the country and its future, and if voters think they'll be worse off with the guy in charge still in office, they'll vote him out," Odenwald said. "If the electorate splits, which it will likely do, then the narrow swath of independent voters in the middle, who went for Obama in 2008, could decide the election in favor of his opponent."

Yet if the economy is that x-factor that has thus far run against Obama's chances for re-election, the Republican party's choice of an opponent could be the one that works most in his favour.

Difficult balancing act

Privately some Washington and Democratic Party insiders marvel at the fact that Obama still looks like a decent bet to stay in offiice amidst all the economic bad news. Polls carried out late in 2011 suggest that the incumbent has a slight to substantial lead in most of the bigger states.

That's because in the run-up to the unofficial start to the campaign, the Iowa Caucus on January 3, none of the eight major Republican candidates has emerged as a frontrunner. The situation reflects the inherent difficulty of uniting the three major groups of potential Republican supporters: the religious right, business-oriented "Rockefeller Republicans" and libertarian-leaning "Tea Party" activists.

"Obama's re-election would be endangered by a candidate who could secure the blessing of Christian conservatives while also gaining the support of free-market adherents and the libertarians around Ron Paul," Braml analyzed.

In a field where some candidates suffer from name-recognition problems, while others have undermined themselves with personal scandals and public displays of ineptitude, former Massachusetts governor Mitt Romney and ex-Speaker of the House Newt Gingrich are most highly touted.

Of the two Gingrich, with his garrulous and sometimes grating public persona, is probably the underdog. While in Congress he was censured for ethics violations, two divorces after extra-marital affairs will hardly appeal to values voters, and his recent work as a corporate consultant makes it hard for him to portray himself as a new broom to sweep clean.

Instead, Obama's most serious challenger could be Romney.

"Of the current crop of Republican candidates he has the most cross-over appeal," Odenwald believes. "I could see him drawing large swaths of disillusioned Democrats and independent voters. His history as a successful businessman might appeal to those seeking 'an expert' to turn around the economy. He's also less shrill and less frightening to the vast American middle than the other GOP contenders."

Romney's drawbacks, for a Republican candidate, are the facts that he is a Mormon who comes from a relatively liberal state in the Northeast. That might or might not be a problem with one of the GOP's traditional power bases, as could also be the case with Gingrich.

"Neither of the leading candidates fulfils all the criteria," Braml said. "It may be that the religious right settles for a 'lesser of two evils' with the overriding interest being beating Obama. That would depend upon who else is on the ticket. A vice-presidential candidate who is close to the religious right could work wonders."

But it may take an even bigger miracle to enlist the support of libertarians, who already seem to have found the man they want.

Running with Ron

As Republican candidates go, Texas Congressman Ron Paul is anything but standard issue, having opposed the US-led Iraq War and advocated that a broad range of issues, including abortion and the legalization of marijuana, be decided on the state level.

That probably puts him outside serious contention for the presidency.

"Ron Paul appeals to a very small, very vocal and very passionate libertarian constituency in America - but has no wide appeal," Odenwald argues. "His views on some topics, such as returning to the gold standard, are downright wacky, and his exceedingly strict reading of the Constitution embarrasses even the most conservative of Republicans."

But as an ideologue who sticks to his libertarian guns, he could prove a thorny adversary for candidates trying to stake out middle-of-the-road, compromise positions.

"As in the past, Ron Paul will poll around 10 percent in the primaries, getting the votes of libertarians," Braml said. "He has no chance of becoming president, but he'll force the other candidates to discuss his libertarian economic topics."

If Paul does well in Iowa, he could further shake up a primary campaign that could yield a victor too badly damaged to go on to win the White House. And that would play right into Barack Obama's hands.

Author: Jefferson Chase
Editor: Rob Mudge