Is Barack Obama’s "presidency in peril," as the title of Robert Kuttner’s new book suggests? When the book went to press in early March 2010, things certainly seemed that way. After a year of tortured debate, healthcare reform legislation appeared dead. Financial reform legislation looked toothless and pathetic. Obama’s popularity—and that of his party—was plunging. Republicans had just picked up a Senate seat in deep blue Massachusetts. The author of Obama’s Challenge: America’s Economic Crisis and the Power of a Transformative Presidency, published just months before the 2008 election, had every reason to fret.

What happened to the progressive moment that was supposed to follow Obama’s historic election? Well, Kuttner argues, it was hijacked by financial elites, thwarted by White House economic advisers who prioritized Wall Street over Main Street, and squandered by an unexpectedly passive and status quo occupant of 1600 Pennsylvania Avenue. This was not how events were supposed to turn out.

Kuttner, a co-editor of The American Prospect and fellow at the think tank Demos, calls Obama’s appearance on the political scene "an almost providential rendezvous of man and moment." In his 2004 keynote speech at the Democratic Convention in Boston, Obama "displayed a superb facility for framing boldly progressive ideas as reassuringly patriotic," Kuttner writes. Following his election, Kuttner believed, "the stage was set, seemingly, for a great ideological and political reversal, comparable to the Roosevelt revolution. Obama was poised to create a new majority coalition, built on the premise that rapacious private finance had to be contained so that the rest of America could thrive." Of course, that’s not what happened, which is why Kuttner wrote his latest book. He notices "startling continuity" between the new president and his predecessor on economic issues and warns that "a rare opportunity for realignment and reform is being missed."

Kuttner identifies four main reasons for why BHO is thus far no FDR. "One is his own character as a conciliatory consensus builder," he writes. "A second is that economics was never Obama’s strong suit. A third is the residual power of Wall Street; without a president personally committed to Roosevelt-scale change, even a national financial collapse has not been able to shake the hegemony of finance. And a fourth is that the social movements that were so prevalent during the other eras of crisis and great presidential leadership are largely absent today." Such an outcome was by no means inevitable or preordained, Kuttner believes, despite the awful hand the new president was dealt. "In Obama’s fateful first year, there was a road not taken, a possible road to radical reform, broadened prosperity, and the mobilization of an appreciative citizenry," he writes. Kuttner faults Obama for this, but is far more critical of the president’s top advisers, who he believes led an inexperienced leader astray. "In many respects, the path Obama chose was determined by the people he appointed," Kuttner asserts.

Rather than breaking with the failures of the past, Obama largely reinforced Washington’s entrenched establishment. The book’s lead villain is Robert Rubin, the former treasury secretary under Bill Clinton and Goldman Sachs alum who contaminated Clinton’s administration with deregulatory fervor, helped run Citigroup into the ground and managed to emerge from the economic collapse with his prestigious reputation somehow unsullied, as two of his protégés, Larry Summers and Tim Geithner, assumed top economic posts in the Obama administration. "Obama felt he needed men like Rubin and Summers for tutelage, access and validation," Kuttner writes. "Instead of the team-of-rivals model that Obama had often invoked, Obama hired a team of Rubins."

Kuttner writes damningly of both Summers and Geithner, describing the former as a zealous deregulation advocate and tone-deaf bully with "the tragic flaw of certitude," and the latter as a hapless apparatchik who "epitomized the politics of continuity with Bush." He’s also no fan of Federal Reserve Chair Ben Bernanke, whom he argues was asleep at the switch during the economic crisis, nor White House Chief of Staff Rahm Emanuel, who recruited and enabled the "Wall Street Democrats" that have blocked or stalled major progressive reforms. As a result, Kuttner argues, we got a feckless mortgage rescue plan that did little to help struggling homeowners, a stimulus package that was too small to lift the country out of recession, two huge taxpayer-funded bailouts with scant accountability for Wall Street and a severely compromised healthcare bill diluted to please the insurance industry.

Kuttner contrasts Obama’s tepid response to the great recession with Roosevelt’s bold action. "In the years after Roosevelt, the state, a more engaged citizenry, a strengthened trade union movement, and a mostly progressive Democratic Party roughly offset the concentrated economic and political power of organized finance," the author notes. Roosevelt embraced that fight as a cornerstone of his presidency. "We now know that government by organized money is just as dangerous as government by organized mob," Roosevelt famously proclaimed in 1936. "They are unanimous in their hate for me—and I welcome their hatred." It’s practically inconceivable to imagine Obama voicing a similar reaction—he wants to please everyone, even those who caused and profited from economic misery. "In the Bush and Obama eras, the Fed and the Treasury often behaved precisely as the Washington branch of Wall Street," Kuttner writes. "For this collusion, Obama was attacked as a socialist! The disgrace of the reign of finance created an opportunity to build a radically different economy and to energize a resurgence of progressive politics. Instead, it brought us closer to a corporate state."

Kuttner’s pointed critique is now a familiar one in progressive circles. But he does point out that not all is awry in Washington, profiling a few heroes of the loyal opposition, including FDIC chairwoman and Kansas Republican Sheila Bair; TARP watchdog Elizabeth Warren; former Fed chairman and on-again-off-again Obama adviser Paul Volcker; and Washington Senator Maria Cantwell, an unusually aggressive (and effective) proponent of Wall Street reform. Moreover, Obama has experienced something of a bounce since Kuttner finished the book. Healthcare reform legislation passed, miraculously, and even though the final bill was weaker than many progressives had hoped, its culmination still represented a major legislative and substantive achievement for the president and his party. Obama delivered a far more vigorous sales pitch in the final weeks of debate than anything we’d seen in the previous year, reminding his supporters that the dynamic leader they’d elected hadn’t disappeared into a Beltway cocoon. In addition, financial reform legislation has become unexpectedly tougher in recent months (though not as tough as some reformers would like), angering many of Obama’s friends in finance. The economy is now growing, thanks in part to the underappreciated stimulus bill. A durable recovery may be years away, but the worst of the recession has hopefully passed us.

Yet much of Kuttner’s assessment remains relevant today, as Obama still seems to react to events defensively instead of shaping them. Rather than redefining politics, could he be presiding over what Kuttner, citing the British historian A.J.P. Taylor, calls "a turning point of history on which history failed to turn"? That the overwhelmingly white and statistically well-off Tea Partiers have become champions of the displaced is perhaps the cruelest paradox of the era we’re in. "In an economic collapse, popular frustration has to go somewhere," Kuttner explains. "If progressives don’t tell a coherent story about the culpability of capacious elites and work to restore some balance to the economy, right-wing populists are happy to supplant the narrative. A moment when progressives were primed to take back a majority of politics has been not just lost but actually ceded to the right." Despite the ideological incoherence of the GOP, Democrats are almost certain to lose a lot of seats in November, though they may retain a slim Congressional majority, while Obama’s own re-election is by no means assured, especially as long as oil continues to flow into the Gulf.

Perhaps FDR was too lofty of a reference point, even for a leader as gifted as Obama. In a more realistic yet still hopeful scenario, Kuttner writes, Obama could end up as Truman—left for dead, misunderstood by many but now judged a great and consequential leader. Or, in a supreme irony, he could become another Clinton, a charismatic leader who saved his own skin (figuratively speaking) but did his party great harm and governed jerkily in a period of intense partisan rancor and bitterness. Though Clintonites dominate his cabinet—and both men share a penchant for compromise and triangulation—Obama seems to grasp that he has a mandate to tackle the country’s most immovable problems. According to Jonathan Alter’s new book, The Promise, Emanuel begged Obama not to pursue healthcare reform. "This is about whether we’re going to get big things done," Obama responded. "I wasn’t sent here to do school uniforms."

Kuttner hopes that, going forward, such aggressive ambition, matched with a willingness to confront and defeat those who stand in the way of long-overdue progressive reforms, will animate Obama’s presidency. Near the end of the book he quotes Bill Moyers from September 2009, during one of the low points of the healthcare fight. "Come on, Mr. President," Moyers says. "Show us America is more than a circus or a market. Remind us of our greatness as a democracy." The president can still chart his own course, occupying a historical genre that has yet to be defined.