The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (TheStreet) -- As the holidays approach and the year draws to a close, the thoughts of Washingtonians are focused on one thing: the upcoming 2012 presidential election. The Republican candidates are getting ready for hard charges in Iowa and New Hampshire and, much as Newt Gingrich and Mitt Romney might wish it otherwise, the Republican primary is still anybody's game. It's a foregone conclusion, though, that President Obama will stand for re-election as his party's candidate. The question is, however, which Barack Obama will be running for president in 2012?
This isn't the first time in recent history that a sitting president has run for re-election facing vastly different circumstances than he did when first elected. In many ways, President Obama's situation is eerily similar to that faced by then-President Bill Clinton in 1996.
Like Obama, Clinton came in as a charming whiz kid, the smartest guy in the room whose charisma and optimism made him an easy choice for voters who wanted to dream of a brighter future. Clinton, like Obama, saw his party lose control of Congress in the mid-term election following his inauguration, and was suddenly forced to deal daily with political opponents who had little interest in compromise. And, like Obama, Clinton was saddled with a bad economy that he had arguably inherited but, after four years, had become his own.
Clinton famously dealt with his problems by adjusting his campaign strategy. In a move that enraged the more liberal wing of his party, Clinton chose a practical, middle path. He triangulated both parties, adopting non-ideological positions that offended the far left and right alike, but appealed to voters who were more interested in practical solutions than party politics. His strategy worked; Clinton was re-elected and served as president for another four years.
Faced with similar circumstances, President Obama might be tempted to adopt Clinton's re-election strategy. Unfortunately, Clinton's approach probably wouldn't succeed now for at least three reasons:
There's no political center in Washington. Whatever voters might prefer, Congress is bitterly divided along ideological grounds. Any attempt President Obama might make to achieve non-partisan compromise is likely to be criticized by his own party even as his opponents sneer at his weakness. Like it or not, the president will have little choice but to take tough positions in the coming months and, even then, gridlock between the two houses of Congress will likely be the result.
The economy continues to founder. No matter what politicians and their advisers may tell voters, the American economy can be remarkably unresponsive to quick fixes. Unfortunately, it doesn't appear that either party (or its economists) really knows how to turn things around, and it will probably take at least two years before prosperity starts to return. Consequently, President Obama can't credibly offer a practical plan to get the economy moving -- if he could have, he should have done it already.
Barack Obama isn't Bill Clinton. While Bill Clinton initially ran as a Washington outsider and made many of the mistakes an outsider would when he first took office (remember the haircut that tied up LAX's runways for nearly an hour?), he didn't exactly break the "typical politician" mold. Barack Obama, on the other hand, ignited the collective imagination of so many voters precisely because he would be the first-ever African-American president. On the day he was elected and again during his inauguration, for many Americans it felt as if anything was possible. If Obama abandons the idealism that fueled his first campaign for a more practical approach, his most devoted fans may be most likely to stay home.
So, what will it take for President Obama to win a second term? The pundits will undoubtedly offer him reams of conflicting advice, but here's one approach that might just carry the day:
Strut the successes. The first months of the Obama administration saw some major initiatives sail through. For example, the health care overhaul has been dubbed "ObamaCare" by the President's critics, so he might as well embrace it. And then there's the President's success in bringing the war in Iraq to a close -- he'd be downright foolish not to point to that accomplishment with pride.
Don't sidestep the battle. President Obama's opponents will criticize him no matter what he does. Speaking to compromise will only make them bring out bigger knives. Instead of looking for middle ground, Obama should use his vaunted debate skills to explain clearly to the voters what he believes and why it's a better approach.
Take us on the high road. While President Obama sometimes comes off as a little too cool, this election will be the time for him to fire up the rhetoric. Unless the pollsters are completely off or something really unexpected happens, Newt Gingrich or Mitt Romney will likely be the Republican nominee. Both can be off-putting, cocky and inclined to criticize, and neither is likely to inspire the most conservative Republicans to rush to the polls.
If President Obama can inspire his base -- and enough other voters -- with a compelling vision of a brighter, more inclusive future for Americans, they may well rally to his side. We've been living through a nightmare these past years. Reminding us to dream of a better future may be President Obama's most successful strategy.