It was a gritty campaign and it brought one last pivot for Barack Obama – the candidate who once promised the voters hope and change – as he appeared in Chicago to mark his victory. Amid a soaring speech about the US, he acknowledged that his job at the White House is to find jobs for others.
Mr Obama’s first duty as president is to permit the nascent economic revival to take root. In his first term, he battled to stop the economy and employment collapsing in the wake of the 2008 crisis. Now, he must stop the US government from standing in the way of recovery.
If he succeeds, he could go down as another Bill Clinton, a Democrat president who balanced the budget and helped companies to forge a long period of expansion. If he fails, he will be remembered for having wasted his second term by letting the US veer off course.
This job should be easier. Expectations are low since he did not raise them in the campaign. He need not focus on emergency aid to Wall Street in crisis or a failing auto industry. He does not need to expend his capital on a flagship programme – healthcare reform – that is politically divisive.
There is a clear priority: long-term budget reform to take the US past the fiscal cliff (the imposition of $607bn of spending cuts and tax increases) next year. On this rests not only the US credit rating but faith among businesses that the country remains a sound place to invest accumulated cash.
Mr Obama has to demonstrate political leadership and a willingness to engineer an agreement on tax and spending reforms in person. If he allows the agenda to drift, or relies on Democrat leaders on Capitol Hill to strike a bargain with Republicans in the House of Representatives, all could be squandered.
This time he has natural allies outside Congress, among businesses that want stability and a predictable investment environment. In his first term his administration clashed with Wall Street over the Dodd-Frank Act and had a difficult relationship (since then somewhat improved) with big business. Now they can help each other out of a fix.
On Tuesday, before the election results, I canvassed two Democrats on the financial and business agenda for the next president: Robert Rubin, the former Treasury secretary under Mr Clinton, and Larry Fink, chief executive of BlackRock, the asset management firm, and a possible successor to Tim Geithner as Treasury secretary.
In 1993, Mr Rubin fashioned a plan to eliminate the US budget deficit, which laid a solid foundation for growth and helped the US to create 22.5m jobs in eight years. “We thought that if we put a sound fiscal programme in place, it would help business confidence, but we did not foresee how big an effect it would have,” he says.
BlackRock was among a group of investors and fund managers that called earlier this week for a similar deal on the current budget crisis. “It is hard for businesses to have long-term confidence when we have repeated problems over the debt ceiling and the prospect of endless deficits,” says Mr Fink.
Mr Obama would gain hugely from hammering out a long-term approach to deficit reduction. Not only would he prove himself to be a bipartisan leader but the economy could also gain jobs. Any deficit reduction plan would further squeeze public sector employment, so he needs companies to pick up the slack.
A deal won’t be easy to negotiate. The Tea Party wing of the House Republicans will try to block any tax rises. But, if he is adept, Mr Obama has a chance of outmanoeuvring his most intransigent – and most bitter – opponents by marshalling the backing of business leaders as well as Democrats. A grand bargain requires a broad alliance.
Mr Fink says, for example, that tax reform might include a change in the capital gains tax regime. At the moment, a gain on an investment held for only one year qualifies for the lower rate of capital gains tax. “Why is a one-year holding period long-term?” he asks. “We have weak infrastructure and we need to reward investments over years.”
With a plan in place, the president could move on to more detailed business-related reforms. “We need to navigate past the fiscal cliff and get to a sustainable path involving [tax] increases and spending cuts. After that, there are several policies that could help,” says Jan Rivkin, who chairs Harvard Business School’s strategy unit.
Mr Obama can derive some hope from the fact that many ideas for stimulating enterprise and job creation – investing in infrastructure, education and science; issuing visas for highly qualified immigrants; corporate tax reform; reducing complexity in regulation – are bipartisan, although left and right have different priorities.
Democrats tend to place more weight on infrastructure investment while Republicans are keener to cut the regulatory burden on businesses. But there is some common ground: Elizabeth Warren, the new Democrat senator for Massachusetts, argued in favour of simplifying small business rules in her campaign. It ought to be possible to strike some legislative compromise.
This duty, however, falls not only on the president but on businesses. Many chief executives favoured Mitt Romney during the campaign but they must work with the president they have. It isn’t enough to moan about Washington gridlock; they must help to solve it.