06/15/2011 01:19 pm ET | Updated Aug 15, 2011

Obama's 2012 Campaign Slogan: From "Change You Can Believe In" to "Things Could Have Been Worse"

After Monday's lackluster Republican presidential debate, it might be easy to assume that President Obama is a shoo-in for reelection. My analysis is, not so fast.

With unemployment likely to be above 8% come election time and no meaningful program that's likely to create large numbers of jobs other than jaw-boning, President Obama remains highly vulnerable. If Mitt Romney, Jon Huntsman or Tim Pawlenty prove capable of moving far enough to the right to win the Republican nomination and then pivoting far enough to the center in the general election to appear reasonably moderate, and can add a vice presidential candidate like Michele Bachmann or Rick Perry to keep Tea Party voters in line, it's entirely conceivable that Obama, like Jimmy Carter, could be a one-term president.

Remember back to winter, 2009, shortly after Obama took office with huge Democratic majorities in Congress. Many of us laughed as we watched the likes of John Boehner, Eric Cantor, Mitch McConnell and Jim DeMint spout off what seemed to be inanities and promised to make Obama a one-term president. Those of us who were progressives may have had reservations about the corporate-oriented economic team of Tim Geithner and Larry Summers whom Obama appointed, Obama's failure to rein in the Too Big To Fail Banks who had caused the economic crash and received hundreds of billions in Federal aid, the inadequate size of the stimulus, and Obama's refusal to go after high Bush officials who may have broken the law. But hope was in the air, a long-term Democratic majority seemed in the offing, and if Obama was a bit timid in his programs, there seemed time to fix things. Even if a little bit skeptical, we still had hope in Change You Can Believe in and never thought a year or so later the best we could say is Things Could Have Been Worse.

Flash forward less than two years. In January, 2009, when Obama took office, the unemployment rate was 7.6%. In November, 2010, when the midterm elections took place, unemployment was 9.8% (down from a peak of 10.2% in October, 2009). Moreover, by election time, the Democratic majority in Congress had failed to even pass a budget for the current fiscal year, nor to fulfill Obama's and the Democrat's campaign promise to return taxes on people making over $250,000 a year to where they were when Bill Clinton was president. Democrats thus lacked a narrative to explain the dismal state of jobs and income, except to make the argument that without the stimulus, things could have been worse. It might have been factually correct, but it wasn't much of an election slogan, and Republicans won the midterm elections in a landslide.

"Things Could Have Been Worse" didn't win the election for Democrats in 2010 and it's unlikely to be any more successful for Obama and the Democrats in 2012.

Keep in mind that no American president since FDR has won reelection when the unemployment rate on Election Day was more than 7.2%. Virtually no economists foresee unemployment dropping that low by November, 2012. Moreover, this has not only been a jobless recovery but wageless recovery. As Northwestern University's Center for Labor Market Studies Report:

Aggregate employment still has not increased above the trough of 2009, and real hourly and weekly wages have been flat to modestly negative. The only major beneficiaries of the recovery have been corporate profits and the stock market and its shareholders. Most holders of savings and money market accounts [i.e. most people saving for retirement or trying to live on their retirement savings] also are net losers due to declining real interest rates which have been in negative territory for many interest bearing and money market accounts.

Obama and the Democrats seem to have no program for increasing jobs and no appetite for finding one. They seem to have joined the Republicans in focusing on deficit reduction and the only debate in Washington is whether cuts should be bigger or smaller. If anything, the result is likely to be a double dip recession which will make the job picture even worse by election day.

So where does that leave Obama and the Democrats? They can argue that the Republican program of bigger tax cuts and more deregulation will just return the country to where it was under George Bush when the economy crashed. They're probably right that a Republican victory and a return to Republican policies will only make things even worse for the middle class. But by election day, that will be 4-year old history and the Bush recession will long ago have become the Obama recession. They can argue, truthfully, that without the stimulus, and the auto-bailout, unemployment would be even higher. But that's not much solace to people who are losing their jobs and their homes.

At least if the Democrats had a narrative to explain the economic decline, they might have a chance to rebut Republican talking points. They need to explain that it was caused by 30 years of deregulation and tax cutting that let to stagnant wages for 90% of the population, doubling of the wealth of the top 10% combined with massive tax cuts for the wealthy and corporations, starving of the government so it can't provide adequate services and protect the safety net, and an out of control financial sector that engaged in a Ponzi scheme that crashed the economy and dried up jobs.

Barack Obama is supposed to be the great communicator, but Robert Reich, far less of a public speaker than Obama, can explain in just over 2 minutes what Barack Obama has been unable to explain in over two years:

Such a speech from Obama would be a start.

Then Obama and the Democrats need to put forward a program to rebuild the middle class. As economist Jeff Madrick suggests, here's some of what such a program would call for:

We need more stimulus, an outright jobs creating program, tax incentives to keep jobs here, serious infrastructure and manufacturing investment by the governments, and perhaps a reconsideration of free trade policies. As far as I can see, Washington [including the Obama administration]just thinks we will blithely grow our way out of this.

With Republicans controlling the House and Republican filibusters blocking real change in the Senate, this kind of program probably stands little chance of passage in the next 18 months. But a compelling narrative of how deregulation and tax cuts for the rich got us into this economic mess, and a compelling program of what's needed to get out of it and restore a viable middle class would give the Democrats something to run on in 2012.

But don't count on it. Obama seems more intent on reassuring his friends on Wall Street who gave millions to his 2008 campaign that he's still their friend and they should give more millions to his 2012 campaign. He believes he needs to raise $1 billion to win reelection, and that's not going to come from lots of small donors. But no matter how much he raises, it still takes votes to win.

And a campaign theme of "Things Could Have Been Worse" just may not cut it, particularly with unemployment running well above 7.2% on Election Day.

If Republicans can manage to nominate someone who's not visibly crazy to head the ticket and attach a VP candidate acceptable to the Tea Party to prevent a challenge from the right, then a victory by a Romney/Bachmann, Huntsman/Rick Perry, or a similar presidential ticket in 2012 along with Republicans taking control of the Senate as well as keeping the House is more than possible. (Maybe Obama and the Democrats can just squeak in by convincing voters they're all that stands between Republicans and the end of Medicare; that is if Obama doesn't negotiate his strong defense of Medicare away in some "bipartisan" agreement to reduce the deficit.)

But with unemployment still at 7%-8% and no meaningful Democratic program to create jobs, I wouldn't bet the house against a Republican victory in 2012. And then the economic sh*t storm will really hit.

President Obama -- if you can't communicate a compelling narrative about the causes of the economic crisis and a plausible program to create jobs and economic growth, I'd keep an eye in the rear view mirror.