In an age where politics and business thinking have become ever more fused, an appropriate way of looking at the United States presidency might be to see the president as a trader in a political market. He enters the White House with a stock of political capital, accumulated in the successful campaign and in his whole earlier career. To keep afloat, he must venture that capital. If he successfully turns a political profit, he will acquire the means to accomplish what he set out to achieve, and what his supporters expect from him. But he must speculate to accumulate. His future reputation and success will depend on how successfully he trades in the market. 

How can he, and his customers, calibrate the price of his political stock so as to decide whether he is trading at a profit or at a loss?

There will be measurable achievements: bills passed by the Congress, crises managed, election victories for those he has endorsed and - starting with the mid-term elections in his four-year term - arithmetical evidence of his and his party’s performance. 

There will, too, be the political background-noises, the almost constant drumfire of comment by pundits hostile and favourable. And of course there will be the polls, which certainly provide numbers, though it is not always easy to work out exactly what they mean.

What do all these indices suggest about President Obama’s market value amid tough current trading conditions that the approach of the mid-term elections in November 2010 is likely to make even harder?  The space for policy formation and consolidation is tightening. The first primaries and party conventions will in the coming weeks choose candidates for a contest in which thirty-six of the 100 seats in the Senate, all the 435 sets in the House of Representatives and thirty-seven state governorships will be decided. The money is being accumulated. America will soon be in full pre-election mode.

The political sales-graph

Some issues are already clear. In his witty speech on 1 May 2010 at the Washington political community’s biggest social event – the White House correspondents’ dinner - President Obama laughed off his falling poll-numbers. Those who see him report a visible lightening in his step since the passing of the healthcare bill and the nuclear agreement with Russia. 

The president was able to joke about his ratings, at the time of writing 51% for the core “approval” figure (though lower in some measures). It’s true that this compares unfavourably with the approximately 55% average for all modern presidents at the same stage of their administration, though that can be partially attributed to the continuation of a long downward trend. After just over fifteen months in office, Jack Kennedy’s popularity stood at 74%; Lyndon Johnson’s at 68%; Ronald Reagan’s (perhaps surprisingly, at least to those conservatives who look back on his presidency as a golden age) lower than Obama’s at 44%; and Jimmy Carter’s at 41% (and that was more than a year before the disastrous moment when Carter returned from a summit in Tokyo to find his energy policy in tatters). 

There are two salient facts about Obama’s popularity. First, over the whole of his first year in office, Obama averaged 57% approval. The passage of (a diluted form of) his healthcare-reform legislation boosted his numbers just above 50%, though the effect of that legislative success has overall been limited.

Second, the president’s ratings have been more polarised by far than those of any other recent president. Even a few weeks after he was inaugurated, 88% of all Democrats, but only 27% of all Republicans, gave him their approval. By January 2010, on his anniversary in office, the gap was even wider: the Democrat number had held steady at 88%, the Republican one had declined to 23%.   

Many Washington observers would argue that that the president’s performance has improved after the very low point reached in January 2010 when the voters of Massachusetts chose a Republican, Scott Brown, for the Senate seat held by Edward Kennedy. But this has not altered the fundamental reality that American politics are today as fierce or bitter since the time of the Senate’s censure of Joe McCarthy in 1954.

The extreme divisions between Democrats and Republicans extend across a wide range of political, social and even cultural issues (see Ronald Brownstein, The Second Civil War: How Extreme Partisanship Has Paralyzed Washington and Polarized America [Penguin, 2008]).  The Republicans are also divided among themselves, with even conservatives (such as David Frum) finding themselves too moderate for the hard-right and a less partisan figure such as Charlie Crist choosing to run for the Seante as an independent in Florida (where he is governor) rather than accept the agenda of the Republican jihad. 

The spectrum of Republican views of the president goes from the sulphurous to the deranged: he is either leading the country to ruin, a demon (as the shock-jock Glenn Beck says), a Muslim (or in this mindset some other form of non-American), or even - as some seriously maintain - the anti-Christ. Some of the language used at meetings of the “Tea Party” comes close to calling for the president’s assassination (see "The great American refusal", 23 March 2010). 

The horizon of choice

In such an atmosphere, President Obama faces a number of tough battles – foreign as well as domestic - where his stock trade will be tested in the five months leading to the mid-term elections.  The several dangerous foreign issues include the war in and relationships with Afghanistan and Pakistan, which remain as difficult as ever. The impasse over Israeli settlements and the dwindling prospect of peace talks between Israel and the two political tribes of Palestinians has implications that reach deep into domestic politics (see "Barack Obama: imperial president, post-American world", 7 December 2009). 

The prospect of Iran acquiring nuclear weapons is a major threat to the whole American posture in the middle east, and there are hints that this is taken even more seriously in Washington than official statements of policy would suggest (see Paul Rogers, "A tale of three cities: Washington, Baghdad, Tehran", 22 April 2010). For example, former New York Times journalist James Risen is defying demands that he reveal his sources for reporting that the CIA – in what he calls a “reckless” ploy - tried to feed nuclear disinformation to the Iranians.  

At home, there are a number of issues that could end up in the Supreme Court, and the president also faces a fight over the court’s membership. Many believe, for example, that the tough Arizona state statute limiting immigration is unconstitutional (see Saskia Sassen, "Immigration: control vs governance", 28 April 2010).. The government’s decision to take Goldman Sachs to court over fraud charges could backfire, as the evidence seems fragile. Obama has promised to act over the summer to nominate a successor to Justice John Paul Stevens, who has resigned from the court on reaching the age of 90. Whoever he chooses, the president is likely to face a fight before his nominee receives the Senate’s approval. 

All of these matters will challenge further Obama’s considerable political skill and formidable self-confidence. But the real political test of his presidency will be on the second anniversary of his election in November 2008.

Many important and controversial issues will determine the mid-term results. But what will set the tone of the elections, and decide the president’s ability to trade at a profit in his third and fourth years - and therefore have a big influence on his chances of re-election to a second term - is the extraordinarily angry mood of the American people. 

It is now widely believed in the president’s entourage that Scott Brown’s capture of Ted Kennedy’s seat in Massachusetts, which was a severe shock to Democrats and hailed by Republicans as vindication of their rejection of Obama’s healthcare reforms, had in fact little to do with healthcare. Massachusetts, after all, already has had a popular healthcare reform not dissimilar from the president’s proposals. The explanations, Democrats are now coming to believe, was simply that the voters were plain grumpy.

They voted for Brown to express their general anger at the recession and at revelations of greed and incompetence on Wall Street and in Washington. There are signs of economic revival. That could cheer up some of the discontented voters. But the scars of the recession remain deep. While stock markets have recovered and bankers are back to paying themselves bonuses as big as ever, many Americans have lost their jobs or their homes, and many more have had a scare that has made them worry if the good times will ever roll again. 

Barack Obama, however, has shown himself to be realistic and resilient. He may lose the Democratic majorities in the Senate and the House in November. But that is not certain. Until then he will be able to pass more legislation. He had not intended to bring forward immigration legislation until his second term, but he may be able to get a major success there. The polls suggest there may be support for a thorough reform of the financial sector, which if achieved should be enough to ward off serious electoral losses. 

Foreign policy is more problematic. American presidents often turn to foreign issues in search of easy victories. The world beyond the homeland does indeed offer opportunities for a president to appear active and powerful. But presidents, in the global arena even more than at home, do not have as much power to command success as they think. And there is always the possibility of something going spectacularly wrong.  If (for example) Iran were to explode a nuclear weapon, an Islamist government were to take power in Pakistan, or just one suicide-bomber succeeded in inflicting mass murder in America, all Barack Obama’s accumulated capital would be in danger of turning into junk-bonds overnight.      

America’s political market is pitiless, even more in this era of social hardship, political fluidity and media frenzy. But this president has shown an impressive ability to recover his standing from a period when his leadership seemed trapped and in want of serious achievement. It is not yet time to sell his stock short.