Analysis: Under Fire, Obama Struggles to Instill Confidence

(Reuters) - President Barack Obama is getting hammered on all sides for a stumbling U.S. economy and his uneven response to it, raising pressure on him to take steps to create jobs or risk being ousted in next year's election.

With markets in turmoil and the jobless rate stuck above 9 percent, Obama is struggling to instill a sense of confidence that there is a way out of the maelstrom.

He received negative reviews from pundits for a speech on Monday that offered no new policy ideas and failed to cushion a steep sell-off on Wall Street.

The president also is getting no sympathy from the right or left for a debt deal that averted a U.S. government default a week ago -- a debate that brought talk of any plan to create jobs to a screeching halt.

Obama's liberal supporters criticize the spending cuts included in the deal. Republicans want more cuts without tax increases. And Standard and Poor's still downgraded the U.S. credit rating and said the agreement just did not go far enough. That, coupled with poor economic news, sparked a market downturn that hurt Obama and voters' view of his leadership.

This is a bitter pill to swallow for the president, who has been trying to steer the economy through the worst recession since the Great Depression only to watch it slow to a crawl and threaten to lapse into another recession.

"Obviously we've had a tough couple of weeks in the economy," Obama told Democratic supporters on Monday. "Too much of it was self-inflicted. It had to do with political paralysis here in Washington."

Obama's saving grace so far is that Republicans are undecided about who will rise as their candidate to oppose his re-election in November 2012. None of the would-be challengers has gained much traction with the voting public.

LIBERALS COMPLAINING TOO

Still, it doesn't help to have your friends upset. Some liberal pundits are complaining about him, charging that he lacks empathy, needs to connect better with ordinary Americans and has to show strength against his Republican opponents.

"What happened to Obama?" was the title of a New York Times opinion article on Sunday by Drew Westen, a psychology professor at Emory University in Atlanta, who argued that Obama "seems so compelled to take both sides of every issue."

On the right, conservative critics argue that Americans do not think Obama's policy prescriptions have been able to get the economy going.

"Every time he opens his mouth, he subtracts from the sum total of financial capital," The Wall Street Journal's Bret Stephens wrote in an opinion piece on Tuesday.

Still, there is no sign that Obama has lost the confidence of the Democratic faithful or is at risk of being challenged in 2012 by a liberal Democrat. President Jimmy Carter faced that problem in 1980 before his defeat by Republican Ronald Reagan.

"It's a little late for that," said Jennifer Duffy, a political analyst at the non-partisan Cook Political Report.

A CNN/ORC poll last week showed 77 percent of Democrats approved of Obama's job performance.

"There's not a great deal of evidence that the last year or the last few weeks or months have damaged Obama's credibility with this group," said Ipsos pollster Julia Clark.

The Obama re-election campaign is shrugging off the complaints as isolated criticism from Washington's pundit class, "nothing more than Washington chatter that is not backed up by the facts on the ground."

But there are signs that the left is dispirited, whether liberals blame Obama or not.

"The frustration is with Washington D.C. as a whole," said Van Jones, president of Rebuild the Dream, a liberal group wanting a focus on jobs for the middle class.

NEW IDEAS WANTED

More debt battles are expected this fall and Obama will again argue that a balanced approach is needed to reduce deficits, notably including tax increases on wealthier Americans and reforms to popular programs like medical insurance for the elderly.

What Obama desperately needs is some positive economic news and a sense that the job market will pick up.

He is promising a central focus on jobs, pressing for completion of free-trade deals with South Korea, Panama and Colombia that have been stalled for years, and an extension of payroll tax cuts and unemployment insurance.

While these steps would be helpful, the ideas are not new and they may not be enough to jump-start the economy.

What Obama's supporters want are even bigger ideas for stimulating job growth.

"I don't think he can get things going on his own, but he's got to try as hard as he can," said Jared Bernstein, a former Obama economic adviser and now a senior fellow at the Center on Budget and Policy Priorities. "And if opposition forces are blocking him from going forward, he needs to at least let people know how hard he is trying."

David Yepsen, director of the Paul Simon Public Policy Institute at Southern Illinois University, said a host of problems is playing on Americans' minds, from weak job growth, and slumping markets to the recent deaths of 30 American troops in Afghanistan, a war that is increasingly unpopular.

"There's that feeling, that things are out of control, that we're not on top of this anymore," Yepson said.

(Editing by Christopher Wilson)