As the 2012 election gets underway, President Obama is still waiting to see who his opponent will be. Candidates and campaigns matter hugely, of course, but we should also pay attention to the field on which the match will be played—and at first glance, the lay of the political land doesn’t look so favorable to Obama and his party.

The lingering economic slump has demoralized voters and tilted the electorate rightward. With idle workers, underwater homeowners, exploding deficits and debts, growing inequality, and a bitter, broken political system, objective reality isn’t exactly working in incumbents’ favor. Upon closer inspection, however, the electoral landscape may not be as forbidding for progressives as it first appears.

For one thing, the recovery finally seems to be gaining momentum, complicating Republican attempts to cast Obama as a “failed president” who doesn’t have a clue about how the economy works. For another, Republicans are incumbents too, and their intransigence and obstructionism throughout 2011 will make many swing voters reluctant to entrust them with undivided control of the federal government. Finally, the fractious battle for the GOP nomination reveals a party at war with itself, while conservatives’ venomous attacks on Obama push Democrats toward unity.

But no matter whom the Republicans pick as their standard bearer, the tricky political terrain confronts Obama with three strategic imperatives: 1) roll up a big majority of moderate voters; 2) win back a good chunk of the in-dependents who deserted his party in 2010; and 3) fashion a stronger economic message that combines jobs and fiscal responsibility.

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Mitt Romney’s campaign for the Republican nomination is unfolding like a well-crafted business plan. He hit his numbers in New Hampshire last night, saw his most dangerous rivals tumble, and reinforced the aura of inevitability that surrounds his candidacy.

Everything seemed to fall Romney’s way. After his dizzying ascent in Iowa, Rick Santorum fell back to earth with a fifth-place finish. Newt Gingrich, who went snarling across New Hampshire like a wounded beast, flamed out. Ron Paul came in second, which suits Romney just fine. Paul’s libertarian purism inspires cult-like fervor among his young followers, but it will never command majorities in GOP primaries.

Yes, it was a good night for John Huntsman, but probably the best he’ll have this year. His did well among independents, moderates and voters who don’t like the Tea Party, a not-so-representative sample of the GOP electorate. He has nowhere to go, and it seems unlikely Romney would put another Mormon on his ticket.

Now it’s on to South Carolina, where Romney already leads, and where Paul’s useful presence will inhibit last-ditch attempts by conservatives to form an “anybody but Mitt” coalition. If he wins in the South, the race is effectively over.

This article is part of a a series of international responses to Policy Network‘s discussion paper In the black Labour: Why fiscal conservatism and social justice go hand-in-hand.

To most Americans, fiscal responsibility is a question of political morality. If Democrats allow the debate to be framed as a choice between more deficit spending and debt reduction, they lose

Much to the perplexity of US liberals, the politics of debt reduction dominated Washington in 2010, despite a faltering economic recovery.

No one was more incensed by the seeming illogic of this than Paul Krugman. The influential New York Times columnist railed often against “premature austerity” and urged President Obama instead to open the spigots of federal spending. It was the standard Keynesian prescription, but it betrayed a political tin ear. To a public alarmed by large-scale public borrowing and spending, it sounded like throwing good money after bad.

After 2007, US budget deficits ballooned as the Bush and Obama administrations spent heavily to bail out the big banks (plus insurance and auto companies) and counter the worst recession since the 1930s. The federal deficit, $469 billion in 2008, zoomed to an eye-popping $1.3 trillion in 2011. Coming on top of the Bush tax cuts and two costly wars, this emergency spending pushed the US national debt over 70% of GDP.

Had this torrent of spending – reinforced by generous doses of monetary “easing” – unlocked business investment and cut the jobless rate, all might have been forgiven. But it didn’t, and public apprehension about exploding debts amid a jobless recovery rose steadily, reaching a crescendo in the 2010 elections. Republicans swept House races and, lashed on by the Tea Party, stormed into Washington determined to cut government down to size.

AT&T is a big company, which perhaps explains why federal regulators are ganging up to block its proposed merger with T-Mobile. Big must be bad, right?

That’s certainly the view of consumer advocacy groups, which routinely oppose business mergers as threats to competition. They seem to have the ear of the Federal Communications Commission, which announced last week that it would join the Justice Department in opposing the deal, citing concerns about job losses and higher consumer prices.

But there’s another important group of stakeholders that regulators should be listening to: AT&T’s workers. They are urging the government to take a broader view of the merger’s potential impact on U.S. investment and competitiveness.

At a time of shrinking private sector union membership, it’s worth noting that the company’s 42,000 wireless workers are represented by the Communications Workers of America (CWA). The union issued a report this month strongly supporting the company’s acquisition of T-Mobile as a spur to innovation and a job-creator.

A funny thing happened on my way to an international forum on democracy and human rights in Rome last week: the Italian government fell. It was hard to concentrate on the business at hand with crowds gathering in piazzas to demand the head, figuratively speaking, of the man who has dominated Italian politics since 1994—Silvio Berlusconi.

What sparked the crisis was a sharp spike last week in Italian bond yields, which raised doubts about Italy’s ability to service its $2.6 trillion debt. The prospect of a default by Europe’s fourth-largest economy sent tremors throughout the euro zone. Forget about Greece: If big countries like Italy and Spain can’t pay their debts, European banks that hold all that sovereign debt will fail. Then someone—most likely Germany—will have to finance a massive bank bailout just like the United States did in 2007. Otherwise, a financial collapse would likely throw Europe, and probably the United States, into a bona fide depression.

Fortunately, this prospect seems to have concentrated minds in Italy. Arriving in Rome on Thursday, I found its usually fractious political class galvanized by the crisis and resolved to put a new government in place before the markets open today.

On Friday, the Italian Senate passed a budget with an initial set of reforms (including a hike in the retirement age) tailored to European Union specifications. On Saturday, Berulsconi resigned, as gleeful crowds chanted “Bye Bye Silvio” and sang the “Hallelujah” chorus outside the Quirinal palace. And on Sunday, Mario Monti, a widely respected technocrat, agreed to form a unity government.

Is the supercommittee President Obama’s revenge?

After last summer’s showdown over raising the debt ceiling, Obama was roundly criticized for agreeing to a deficit-reduction deal that was all spending cuts and no tax hikes. Democrats, disconsolate over this seeming capitulation to House Republicans, saw it as the low-water mark of his presidency.

Yet the deal also created the bipartisan supercommittee, which was charged with finding at least $1.2 trillion (over 10 years) in additional cuts by Nov. 23. The supercommittee has a strong incentive to succeed, since its failure will trigger an automatic, equivalent cut in domestic and defense spending.

Now, as the supercommittee spars over dueling Democratic and Republican plans for meeting the target, Republicans are on the hot seat.

Democrats this week reportedly proposed a $3 trillion package over the next decade, including $1.2 trillion in revenue increases. Republicans came back with a smaller counteroffer of $2.2 trillion. The reason, of course, is that the GOP’s anti-tax fanaticism prevents it from matching the Democrats’ debt-reduction plan without proposing truly punishing cuts in federal spending.

Unlike the dictators of Tunisia and Egypt, Muammar el-Qaddafi refused to go peaceably when the Arab spring uprisings migrated next door to Libya. Last week he paid for that defiance with his life; an outcome that should rattle other regional tyrants, especially Syria’s Basher al-Assad.

Qaddafi’s ouster was a triumph not only for Libya’s rebels, but also for NATO, which turned the tide of battle in their favor. It also vindicated President Obama’s decision to let Europe take the lead and limit U.S. forces to a supporting role in enforcing the U.N.-sanctioned “no fly zone” over Libya.

I was skeptical that NATO airpower alone would be sufficient to defang Qaddafi, and wanted the allies to arm the rebels. It turns out, however, that NATO—in a very liberal interpretation of its mandate to protect Libyan civilians—worked closely with the opposition in a combined air and ground offensive that methodically wore down regime forces.

With a little help from their friends, Libyans liberated themselves, and some are now waving French and U.S. flags in gratitude. What we’ve witnessed in Libya, in fact, could be a new model for collective security in which the United States no longer bears a disproportionate share of the risks and costs of intervention. “We’ve demonstrated what collective action can achieve in the 21st century,” Obama declared last week. “Without putting a single U.S. service member on the ground, we achieved our objectives, and our NATO mission will soon come to an end.”

Unfortunately, the new model probably isn’t applicable to Syria, where another ruthless dictator confronts a popular revolt.

President Obama’s $447 billion jobs plan includes some constructive – literally – provisions for upgrading America’s economic infrastructure. These shouldn’t be controversial: Who could be against putting people to work rebuilding the rickety foundations of U.S. productivity and competitiveness?

Well, Republicans, that’s who. They have dismissed the president’s call for $50 billion in new infrastructure spending as nothing more than another jolt of fiscal “stimulus” masquerading as investment.

It’s hard to imagine a more myopic example of the right’s determination to impose premature austerity on our frail economy. From Lincoln to Teddy Roosevelt to Eisenhower, the Republicans were once a party dedicated to internal nation building. Today’s GOP is gripped by a raging anti-government fever which fails to draw elementary distinctions between consumption and investment, viewing all public spending as equally wasteful.

But as the White House’s Gene Sperling said yesterday, Republicans can’t claim credit for fiscal discipline by blocking long overdue repairs of in the nation’s transport, energy and water systems. There’s nothing fiscally responsible about “deferring maintenance” on the U.S. economy.

Sperling, chairman of the president’s National Economic Council, spoke at a PPI forum on Capitol Hill on “Infrastructure and Jobs: A Productive Foundation for Economic Growth.” Other featured speakers included Sen. Mark Warner, Rep. Rosa DeLauro, Dan DiMicco, CEO of Nucor Corporation, Daryl Dulaney, CEO of Siemens Industry and Ed Smith, CEO of Ullico Inc., a consortium of union pension funds.

Fiscal prudence means foregoing consumption of things you’d like but could do without if you can’t afford them – a cable TV package, in Sperling’s example. But if a water pipe breaks in your home, deferring maintenance can only lead to greater damage and higher repair costs down the road.

Public attitudes toward politics and government today resemble a game of limbo: how low can you go? Just when you think Americans’ confidence in their government has hit rock bottom, it sinks even further.

Consider these eye-opening findings from Gallup’s newly released governance survey:

• 57 percent of Americans lack confidence in the federal government’s ability to solve domestic problems.
• 69 percent have no confidence in Congress, an all-time high.
• The public thinks Washington wastes 51 cents of every tax dollar.
• Nearly half believe “the federal government has become so large and powerful that it poses an immediate threat to the rights and freedoms of ordinary citizens.”

These numbers point to a fundamental breach of trust that goes far beyond Americans’ habitual grousing about government. The public is losing faith in their political system’s basic capacity to forge consensus and grapple effectively with national problems. We’re experiencing a crisis in democracy that eclipses all the other big challenges we face.

And it poses a particular problem for President Obama and his party, who believe in government’s ability to do good. How can they convince a jaundiced public that government isn’t the problem, but part of the solution?

President Obama’s tax offensive may be aimed at energizing his despondent base, but it’s also touching a nerve with the broader public. A new Gallup poll finds that Americans overwhelmingly (66 percent) back the president’s call to raise taxes on families making more than $250,000 and individuals making more than $200,000.

Evidently, you don’t have to be a European-style social democrat to believe that the rich should chip in more to help get federal deficits under control. Grover Norquist take note: We are all class warriors now.

Official statistics on incomes explain why. According to the Congressional Budget Office (CBO), the top 10 percent of earners on average have seen their income grow a whopping 106 percent since 1979. Over the same period, those in the middle and lowest quintile have experienced meager income growth of just 15 percent and 6 percent, respectively.

Moreover, IRS data show that the top 10 percent have received 42 percent of the total share of adjusted gross income earned between 1986 and 2008. Conservatives lament that high earners are also paying a higher share of their earnings in taxes. That’s true, but their income is growing faster than their tax burden. The share of income taxes paid by the top 10 percent increased by 28 percent from 1986 to 2008. (IRS tables)

Top U.S. officials this week accused Pakistan of abetting a terrorist group responsible for attacks on U.S. forces in Afghanistan. The bombshell here isn’t Pakistani duplicity—that’s old news—but the Obama administration’s decision to go public. It means Washington finally has run out of patience with our supposed “ally.”

The U.S. complaint centers on the Haqqani network, an Afghan terrorist group holed up in Pakistan’s North Waziristan region. Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, told Congress that the network is “a veritable arm of Pakistan’s Inter-Services Intelligence agency.” He said the ISI helped Haqqani operatives carry out a truck bomb attack that wounded more than 70 U.S. and NATO troops on Sept. 11, as well as a suicide assault on the U.S. Embassy in Kabul.

The ISI’s ties to Haqqani network date back to the anti-Soviet jihad and subsequent Taliban takeover of Afghanistan. Apparently, the ISI sees no reason to sever those ties just because the Haqqanis are now killing U.S. and NATO forces instead of Russians. As Mullen explained, the ISI sees the network as a valuable “proxy” that can give Pakistan leverage in Afghanistan, especially after U.S. forces have gone home. There’s another somewhat more sinister explanation: many in the ISI and army hierarchy share an ideological affinity with Islamic terror groups that target both Afghanistan and India.

So is Pakistan really an enemy masquerading as a friend? The situation is complicated because Pakistan has cooperated with the United States in targeting al Qaeda and the Taliban, even as its army rebuffs our pleas to expel the Haqqanis from North Waziristan.

Palestinian Authority (PA) President Mahmoud Abbas will ask the United Nations tomorrow to welcome Palestine as its 194th member and newest state. As Abbas well knows, that’s not going to happen. So why are Palestinians devoting their diplomatic energies to scoring purely symbolic points at Turtle Bay?

In essence, Palestinians are engaging in a kind of forum shopping. Historically, the U.N. has been sympathetic to their plight, and notoriously hostile to Israel. Abbas comes to New York seeking statehood on terms more favorable than the Palestinians have been able to get from nearly two decades of peace processing with Israel. It’s part of an all-too-familiar pattern in which Palestinian leaders expect the international community to spare them from making the unpopular concessions that peace with Israel demands.

Abbas claims his hand has been forced by Israeli intransigence. There’s something to that: The right-listing government of Prime Minister Benjamin Netanyahu has been obdurate and prickly in its dealings with everyone, from the PA to Washington. It has failed to offer imaginative proposals for rekindling stalled peace talks, to confront a settler movement that threatens to hijack Israel’s domestic politics, and to counter effectively a spreading campaign to isolate and delegitimate the Jewish state.

The White House this week is dribbling out new details about Obama’s forthcoming jobs package. Liberals already are complaining that the president is thinking too small, while conservatives dismiss his ideas as just more “stimulus” in drag.

Neither critique gets to the heart of the problem. The U.S. economy is enduring an investment and job drought that began well before the Great Recession hit late in 2007. The public is strikingly pessimistic about the nation’s economic prospects and has lost confidence in the conventional remedies pushed by both parties.

More than a batch of new programs, Americans need a new story about how to regain our economic dynamism. We need a fundamentally new model for economic growth, and the president’s kit-bag of new micro-initiatives doesn’t add up to one.

Some liberal commentators marked the 15th anniversary of welfare reform this week with a curious lament: Welfare rolls aren’t growing fast enough.

“If you think the point of the program is to help the poor, then no, welfare reform is not working,” asserts Ezra Klein of the Washington Post. He cites an article by Jake Blumgart in The American Prospect, who frets that welfare rolls have “merely inched upward” during the late recession and jobless recovery.

“At the heart of the worst recession in 80 years, TANF (Temporary Assistance for Needy Families) funds only reached 4.5 million families, or 28 percent of those living in poverty,” Blumgart writes. “By contrast, in 1995, the old welfare system covered 13.5 million families, or 75 percent of those living in poverty.”

Before we wax too nostalgic for the good old days of big welfare rolls, it’s worth remembering that progressives led the charge for welfare reform.

Libyan rebels—the “rats” as Muammar Qaddafi calls them—are closing in on the eccentric dictator. Although a hundred things could go wrong in post-Qaddafi Libya, Americans should always welcome a tyrant’s fall.

Rather than ponder what comes next, the ever-parochial U.S. media is fixated on whether Qaddafi’s ouster will boost President Obama’s sagging poll ratings. Thus do all those ordinary Libyans who gave and risked their lives to liberate themselves get reduced to bit players in Washington’s never ending political melodrama.

Obama deserves some credit for lending a hand, but he wasn’t the instigator of the Libyan intervention. That honor goes to France and Britain, who were most determined to prevent Qaddafi from carrying out threats to obliterate regime opponents. Already mired in two wars, the United States was happy to fall in behind its allies, and after some opening salvos, content itself with mainly providing logistical support.

So credit NATO as well as the rebels if Qaddafi is toppled or flees. Assuming Libya does not dissolve into Iraq-style chaos, either outcome would be a big morale boost to an alliance that hasn’t gotten much respect lately. NATO’s decision to enforce a “no fly, no drive” zone in Libya was widely panned as ineffectual, a half measure that would make Europeans feel good but only prolong the violence and end at best in stalemate. On the other side, non-interventionists of the left and right complained that NATO has used its U.N. mandate to protect civilians as cover for waging an offensive war on the regime.

Our country is struggling to find a way out of overlapping economic crises. One is cyclical: an agonizingly slow, jobless recovery from a recession made worse by a financial crash. The other crisis is structural. Our economy suffers from a dearth of capital investment and innovation, mismatches between workers’ skills and available jobs, and unsustainable budget and trade deficits.

Even before the recession struck late in 2007, the Great American job machine was sputtering. According to a recent report by the McKinsey Global Institute, “Between 2000 and 2007, the United States posted a weaker record of job creation than during any decade since the Great Depression.” Not only are good jobs vanishing, wages have been falling for all but the top U.S. earners.

One explanation for America’s ebbing dynamism is a long pause in innovation. Since 2000, technological advances have stalled, outside of the dynamic communications industry. In particular, tighter regulation—for good or for bad—appears to be slowing innovation in the healthcare sector.

Research from the Kauffman Foundation also points to a loss of entrepreneurial verve. The number of business start ups, which Kauffman says generate most of U.S. net job growth, has plummeted by about a quarter since 2006.

Most political reporters have chalked up the debt ceiling deal as a “W” for House Republicans and a humiliating loss for President Obama. But when we consult actual voters, the political scorecard looks quite different.

Americans, says veteran pollster Stan Greenberg, aren’t just irritated by the games politicians play, they are “explosively angry” at Washington. There’s no love lost for either party, but Congressional Republicans now actually rank lowest in public esteem. The only “winners” in the debt limit fiasco were potential third party candidates.

According to Greenberg’s latest Democracy Corps survey, a majority of Americans (53 percent) say they would consider voting for a third party candidate. That could just be a momentary measure of public disgust, but it also points to the first serious opening for a challenge to the two-party duopoly since Obama took office. And when you break down the numbers by party affiliation, or lack of it, things start to get interesting.

By a whopping, 45-point margin (70-25) independents are the most receptive to a third party candidate. These voters swung decisively toward Obama in 2008, cementing his majority, but they are utterly up for grabs in 2012.

When you compromise between a good plan and a bad plan, you get a less good plan. So what happens when you compromise between two bad plans? We’re about to find out, as Congress this week tries to reconcile deficit reduction blueprints drawn up by House Speaker John Boehner and Senate Majority Leader Harry Reid.

That we are now reduced to fallback House and Senate plans reflects the failure of the nation’s political leadership to rise to the occasion and forge a common approach to solving the debt crisis. The road not taken was the “grand bargain” every serious budget analyst knows is substantively and politically the only way to control the debt: trade more tax revenues for cuts in the unsustainable growth of entitlement spending.

While it’s easy to assume a posture of Olympian detachment and blame both sides for this failure of nerve, it’s wrong. The grand bargain died because House Republicans killed it. As President Obama said last night, it was scuttled by the “ideological rigidity” of Tea Party extremists who are trying to dictate national fiscal policy from the House.

Not a moment too soon, the Gang of Six has resurfaced in the U.S. Senate, breathing new life into hopes for a bipartisan “grand bargain” on deficit reduction.

Even if Eric Cantor were abducted by aliens, there’s no way that Congress could pass the Gang’s elaborate plan to solve the debt crisis before Aug. 2. But the Gang’s resurgence, with growing support from GOP Senators, adds to mounting public pressure on House Republicans to end their self-isolating intransigence on taxes.

By refusing to budge on tax revenues, House Republicans have blown a rare chance to get Democrats to swallow trillions of dollars in federal budget cuts. As New York Times columnist David Brooks notes in a shrewd piece today, cuts of such magnitude would have provoked a rancorous split between President Obama and liberals.

Instead, Republicans have opted for ideological purity, including today’s purely symbolic vote on a balanced budget amendment that isn’t going anywhere.

The Balanced Budget Amendment (BBA) is an almost perfect embodiment of the contemporary GOP’s gimmicky approach to governing. It’s an uncomplicated way to convey toughness, and it allows conservatives to drape themselves in the mantle of fiscal responsibility without taking the heat for cutting specific programs. And like many of the faux solutions to which Republicans seem fatally attracted, it would damage our economy.