Matthew Norman: This is a terrible reverse, but don't write off Obama

There is discontent about the US economy. But that is expected to improve dramatically

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As first-anniversary gifts go, the one prematurely delivered to Barack Obama on Tuesday night must be the least welcome in human history. I'm a bit startled to type those words, recalling the reaction of a friend's wife on unwrapping his present to mark their first year of wedlock to discover a top-of-the-range Dyson. But there it is. The voters of Massachusetts have filled Edward Kennedy's Senatorial seat with a Republican – an upset akin to the Tories taking Sunderland North – and Obama's flagship domestic policy, and some argue his presidency itself, is in jeopardy.

With the Democrats' filibuster-proof 60-40 Senate majority gone, Obama faces what may prove the political battle of his life (and that's saying something after the war with Hillary Clinton) to extend adequate health care to the near 50 million Americans without insurance.

The symbolism of defeat can be barely less distressing than the fact. That it was the death of Teddy Kennedy, heroic fighter for universal health care for decades, that imperils it now has the strong flavour of one of those immorality tales in Greek myth about the brutal capriciousness of the gods.

What the result reveals about the state of Obama's presidency is harder to discern, especially from this side of the Atlantic, but even the thirstiest Kool Aid drinker accepts that it puts the seal on a troublesome year in which his approval rating has dipped from 70 per cent to 50. He has displeased far more than the Birthers – those lynch-mob fantasists who affect the belief that he was born in Kenya and is therefore constitutionally debarred.

With the Afghan troop surge and failure to punish the bankers, Obama has disappointed those on the left who moan that his fiscal stimulus was too small. He has infuriated the "Tea Partiers" of the right, so many of them voluble fans of Jesus's teachings, who regard the extension of medicine to the poorest as a pernicious tax. They complain that his stimulus package was too large.

He has pissed off the the deranged, the credulous and the repulsive across the political spectrum, but plenty of independents in the middle as well. And he has done so by staying uncannily loyal to not only his general promise to govern from the centre, but (the closure of Guantanamo apart) his specific campaign pledges too. Even acknowledging his naïveté in confusing Benjamin Netanyanu with an Israeli leader interested in peace, and in underestimating the ferocity of public resistance to health care, he has made no dreadful mistakes. He has averted the depression, and shepherded the economy back into modest but promising growth.

He has, as he always said he would, stayed in Afghanistan. He has radically reformed foreign policy towards the Islamic world. He has elegantly reversed the Bush-Cheney march towards pariah statehood. Al-Qa'ida, though still a grave threat, is thought to be in decline.

"A new dawn of American leadership is at hand," he reassured the world in his election victory speech in Chicago, and there he has been as good as his word. Whether his election will prove a false dawn for America is a verdict that the jury won't return for years, but to this self-confessed Obamaniac he has made a hugely encouraging start.

If many already dismiss him as a one-term president on Jimmy Carter lines, a rival precedent strikes others as more persuasive. Ronald Reagan inherited a gruesome legacy of economic chaos and degraded international status from Obama's fellow Nobel laureate Mr Carter, and a year into his tenure his approval rating had also slumped to about 50 per cent. It would sink much further in his second, but two years later he was re-elected, winning every state but Walter Mondale's native Minnesota.

Reagan won that historic landslide not just because he, like Obama, was droll, likeable, supremely comfortable in his own skin, and gave great speech. It was, as always, the economy, stupid. Then, as with all modern US recessions, the growth in jobs lagged far behind the improving statistics, but midway through that term unemployment began to fall. Those who claim to understand such things believe that the trajectory of the economic cycle will be no less favourable to Obama.

Given that and the rudderless drift towards the rocks of a dementedly vindictive Republican party that may be crowing today but still lacks a single credible presidential candidate, the even money about Obama's re-election available on Betfair looks to me the bet of the millennium.

For all that, there is no denying the voters of Massachusetts sang him a slightly less seductive version of Happy Birthday Mr President than Marilyn Monroe's, or that losing that 60-40 majority in the Kennedys' backyard is a nauseating blow to the solar plexus.

The Democrats now face a horrendous logistical and political scrap to enact universal health care, which has defeated administration after administration. An earlier Teddy, Roosevelt, had the first crack almost a century ago, but so impotent in effecting domestic change is an American president that the Founding Fathers might recoil at the result of their genius. Their righteous obsession with building a power counterbalance between President and Congress into the Constitution, as a check against tyranny, creates such stasis that, at times like this, benign dictatorship seems alarmingly attractive.

Such is the reality of US democracy, though, and Obama is nothing if not a realist. He is also inhumanly calm under fire. It must infuriate him that they will, to pay brief tribute to the late and great rugby commentator Bill McLaren, be dancing in the boardrooms of the insurance firms today. It must disgust him that the hundreds of millions of dollars this endlessly poisonous industry has spent hiring thousands of lobbyists, to peddle such lunacies as "death panels" in the cause of denying one in six Americans access to treatment, has helped to win this triumph.

But he won't panic. Nor will he be tremulously humming the Bee Gees line that "All the lights went down in Massachusetts". If he is in the middle of a tunnel, the true cause of the dark discontent is a sluggish economy expected to improve dramatically by 2012, and he foresaw this backlash with crystal clarity at his Inauguration. "Today I say to you that the challenges we face are real," he cautioned America a year and a day ago, in a speech that sounded strangely downbeat then but reads rather better now. "They are serious and they are many. They will not be met easily or in a short span of time."

The United States was too intoxicated to hear that warning or notice that the elegiac verse of his campaign had already given way to the stolid prose of governing. Those who mistook him for a quick-fix Messiah then were as deluded as those who see in him a red revolutionary now.

Obama is to his core a pragmatic centrist, however guided by liberal instincts, and every bit as granite tough as he is whippet smart. He has made about as strong a start as the barely imaginable pressures on so many fronts permitted. And while there's no disputing the horror of this reverse, the one thing likely to leaven his gloom is the memory that all those, like Hillary, who have written him off in haste before soon enough had cause to repent at leisure.

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