The weekend did not bring any greater optimism over the state of the economy and its negative impact on President Obama's prospects for reelection. Not only is the jobs picture bleak, the stock market, which boomed during the first part of the year, has now surrendered its gains. The S&P is almost as good a predictor of political outcomes as are unemployment numbers. And for those looking for more clouds than silver linings, check out this analysis that predicts we are on the cusp of a bear market. Worth a read.

So all this brings back the question: What can Obama do now that, as I argued on Friday, a major argument of his campaign — a slowly improving economy — seems contradicted? One path is to do what Stephanie Cutter did so gamely yesterday on a Sunday talk show: Argue the facts, point out that the economy is improving in areas where the president programs were enacted and lagging in others where they were not.

Indeed, there are interesting and very supportive facts for the president. As you can see in this analysis, the economic recovery in private-sector jobs is on par, or ahead of, prior economic recoveries. Where jobs are lagging are in the private sector where local and state governments are having to cut back as the result of overexpanding in the boom and no longer having the cushion of the stimulus. But however true these arguments are, they are  neither politically nor substantively sufficient. They read more like an excuse, and campaigns are never won on those.

So what should the president do? In previous posts, I have suggested something close to what Laura Tyson wrote about last week recently.  The president should put forth a new version of a "grand bargain" — more government stimulus tied to serious long-term deficit reduction. As growth improves, deficit reduction kicks in.

Just as important as a comprehensive program is a new approach to campaigning. Obama is facing not only an economic crisis but a confidence crisis.  Even some of his supporters are beginning to doubt seriously whether he has the vision and drive necessary to restore the economy. Now would be a good time to prove them wrong.