Two weeks later, the House Republicans helped make Obama’s point for him: They refused to go along with a bipartisan Senate compromise to extend unemployment benefits and the payroll tax cut for two months. But Obama now felt emboldened to confront GOP obstructionism, and the Republican leadership blinked; Boehner ended up embarrassingly losing this game of chicken. Soon afterward, the president would issue a recess appointment for Richard Cordray to head the new Consumer Financial Protection Bureau—in defiance of Senate GOP filibusters. And in a feisty State of the Union speech in January, he laid out the choice: “We can either settle for a country where a shrinking number of people do really well while a growing number of Americans barely get by, or we can restore an economy where everyone gets a fair shot.” At stake, he added, was nothing less than “American values.”

Obama’s new tack did seem to yield political dividends. By late 2011, he scored better than Republicans when poll respondents were asked whom they trusted to handle the economy and even the deficit. Plouffe could barely believe it—he told people it was as if the Republicans were ahead on the issue of children’s health care. A core GOP strength had been neutralized.

Yet as they looked to 2012, Obama and his advisers had one key number in mind: No president since FDR has ever won reelection with unemployment greater than 7.2 percent. If the election evolved mainly into a referendum on Obama’s economic policies, he would be in deep trouble. But if he and his team could shape it as a choice between two sharply distinguished sets of values, he would have a fighting chance.