Obama's Biggest Problems Still Lie Abroad

President Barack Obama has no shortage of nasty critics at home, including the present gong show known as the Republican presidential field. But despite them and what was already an uneven economic recovery, his biggest problems still lie abroad.

Obama has a multi-dimensional obstacle course to pick his way through when it comes to geopolitics. But this becomes his domestic political problem when it is boiled down -- or perhaps better put -- refined into one word: Oil.

Here's the general equation on oil: More chaos and conflict equals higher prices. Higher oil prices and higher gasoline prices equals economic trouble and political trouble.

President Barack Obama presented his reshuffling of much of the top national security team Thursday in the White House.

Economists have just noted that incomes generally rose in March, leading to higher spending. But too much of that money went to pay for more expensive gasoline. And for food made more expensive by higher energy costs.

As I pointed out here a month-and-a-half ago, Obama's domestic prospects were in a decided upswing with key economic measures ascending. And just a few days ago, an Associated Press survey of leading economists found increasing confidence in economic recovery. The only thing they could see stopping it is a new oil shock.

But a return to recession isn't needed to make very big trouble for Obama's re-election prospects. There may or may not be a big oil shock, but we're already seeing the impact of higher oil and gasoline prices on economic confidence. People are feeling it every time they go, or contemplate going, to the gas station.

Despite significant improvements in employment, investment and economic output, the new Gallup Poll survey on economic confidence finds it slumping. What's the fly in the ointment? Rising gasoline prices are now putting a crimp in consumer lifestyles. And gasoline is refined from, yes, oil.

Gallup's Economic Confidence Index dropped to -39 in the week ending April 24 -- a new weekly low for 2011. This continues a downward trend that began in mid-February. The current deterioration of confidence contrasts sharply with the improving trend found at this time a year ago...

Nearly half of Americans rated current economic conditions "poor" during the week ending April 24 -- the highest level of negativity on this measure so far this year. This is also somewhat worse than the 42% "poor" rating found in the same week a year ago...

So Obama's moves on geopolitics are key to his re-election prospects.

Obama is getting good early bipartisan feedback on changes he's making in his geopolitical team, with strong praise from Senator John Kerry and House Speaker John Boehner. Obama is replacing retiring Defense Secretary Bob Gates with CIA Director Leon Panetta, moving Army General David Petraeus (who will have to retire from the Army to take the post) from the Afghan War command to the CIA directorship, bringing former Ambassador to Iraq and Pakistan Ryan Crocker, a Bush favorite, back in to be ambassador to Afghanistan and replacing Petraeus in the Afghan command with a longtime associate, Marine Lieutenant General Mike Allen.

Russian Prime Minister Vladimir Putin, speaking on Tuesday in Denmark, lashed out at NATO asking who gave it the right to try to eliminate Libyan dictator Moammar Gaddafi.

Is Petraeus a good choice? I'm not sure. I don't share in the conspiracy theorizing around him, though he certainly became a favorite of the once dominant neoconservative faction in the Bush/Cheney Administration. But, like most top generals, he's a politician, obviously ambitious and a master of the courtier culture. And he was also a favorite of one of Obama's most controversial liberal advisors, National Security Council deputy Samantha Power.

What I wonder most about Petraeus is how helpful he will be in figuring out how to keep the price of oil down, or at least under control. Because that is the ballgame.

The Californian Panetta is a very familiar figure to me as a fellow Californian. He was a longtime congressman from the Monterey area on the Northern California coast who chaired the House Budget Committee and became Bill Clinton's federal budget director. Then he was Clinton's White House chief of staff.

Long touted as a candidate for governor of California, Panetta never made the race, which he would have lost as I always wrote. But as an amiable master administrator and canny Washington operator, Panetta is hard to match.

After heading his own policy center at Cal State Monterey and allying with Governor Arnold Schwarzenegger on political reform issues, Panetta became Obama's CIA director, over the objection of fellow Californian Dianne Feinstein, the chair of the Senate Intelligence Committee. I wrote about that here on the Huffington Post two weeks before Obama's inaugural, taking Feinstein to task and backing Panetta for the CIA directorship.

Clearly a big part of Panetta's charge will be finding ways to expand on Gates's beginning efforts to rein in Pentagon spending.

An Afghan military officer killed nine Americans on Wednesday at the air field in Kabul.

Obama's move is clever in that it certainly removes Petraeus from the game board as a potential Republican-oriented critic of Obama on Afghanistan, Iraq, or security in general. (Just as appointing the attractive Western governor Jon Huntsman as ambassador to China made his path forward much more complicated. And as appointing Hillary Clinton removed a major obstacle to consolidating his Democratic power base, as I wrote here in November 2008 in applauding the then rumored move.) Petraeus will essentially be a member of the Obama Cabinet.

Petraeus is probably leaving Afghanistan at a good time for his reputation.

Nine Americans were killed this week by a disgruntled Afghan Air Force colonel at the airfield in the capital city of Kabul. The Taliban claimed him as yet another in a string of jihadist sleeper agents to kill groups of NATO and Afghan soldiers.

Readers know that the Afghan War really hasn't been going well for quite awhile, and that I haven't thought much of Obama's approach for longer than that. And that popular support for the war has been sliding. Now recent incidents there which made it into the media have dropped support for President Barack Obama's management below opposition in a recent ABC News/Washington Post poll.

49% are opposed to what Obama is doing, while 44% are still in favor. And far more than that think the war is no longer worth fighting.

British, French, and Italian military advisors are now aiding the Libyan rebels.

Americans have given Obama wide leeway in escalating the conflict in Afghanistan, which as a presidential candidate he called "the war we have to win." That latitude is changing -- and fairly quickly -- as the longer-running of the two wars he inherited approaches the 10-year mark...

And, ominously, the shift in the poll comes before the news may get worse.

The change in public opinion comes at the start of the annual fighting season in Afghanistan, a period that U.S. military commanders have warned will probably be more intense than previous ones as the Taliban seeks to retake ground lost to U.S. forces over the past year...

Last month, the survey revealed that nearly two-thirds of Americans think the war is no longer worth fighting, the highest number recorded in response to that question.

And if things go wrong in Iraq and/or Libya, it only gets worse.

Between geopolitical risk premium-driven oil prices already impacting the economy, a misguided Afghan War, and the uncertain and still unfolding currents of the Arab Awakening, there's a lot that can go wrong for Obama's re-election. And if the Republicans are able to get their clowns back into the clown car, who knows?