Eurozone Unemployment Hits EuroEera High

Eurozone unemployment has surged to a fresh
euro-era high, strengthening the case for a more aggressive European Central
Bank response to the region’s debt crisis, even as inflation remains stubbornly
high.

The seasonally-adjusted jobless total in the
17-country region rose by 126,000 to 16.3m in October, the highest since
comparable pan-eurozone data stated in 1995, according to Eurostat, the
European Union’s statistical office. Italy and Spain saw further significant
rises in unemployment. But in sharp contrast to the overall eurozone trends,
Germany reported further falls.

Wednesday’s data highlighted the
rapidly-worsening economic outlook for the eurozone, which may already have
fallen into, possibly severe, recession. The ECB is expected next week to
announce fresh support for the region’s banks – with likely measures including
loans lasting as long as three years and a broadening of the collateral
accepted in return for liquidity.

“The rise in unemployment confirms that the
financial crisis is reaching the real economy. Additional policy support by the
ECB is warranted,” said Jacques Cailloux, European economist at Royal Bank of
Scotland.

Financial markets also expect a further cut
in the ECB’s main interest rate, which was lowered in early November from 1.5
per cent to 1.25 per cent. Some ECB governing council members, however, may
prefer to hold fire – so as to focus attention on support for the banking
sector and to keep monetary policy ammunition in reserve for use in 2012.
Eurozone annual inflation in November was 3
per cent – unchanged from the two previous months but otherwise the highest for
three years, according to separate Eurostat figures on Wednesday. The latest
reading suggested inflation pressures are taking time to abate, although they
are still expected to fall sharply in 2012. The ECB aims to keep the annual
inflation rate “below but close” 2 per cent over the medium term.

October’s rise took the eurozone unemployment
rate to 10.3 per cent of the labour force – up from 10.2 per cent in September
and compared with 9 per cent in the US. Joblessness remained highest in Spain,
where the rate hit 22.8 per cent. Italy’s unemployment rate rose to 8.5 per
cent.

Germany’s labour market continued to benefit
from the robust health of its industrial sector, however. Eurostat showed the
country’s unemployment rate falling from 5.7 per cent in September to 5.5 per
cent in October. National data also released on Wednesday indicated the
downward trend had continued. Seasonally-adjusted unemployment fell a further
20,000 in November to 2.9m, according to the Bundesbank. German jobless totals
have been falling steadily for more than two years.

Earlier this week, the German exporters’
association forecast further robust growth in 2012 and said financial market
turbulence had so far had little impact on the country’s economy.

Fed Leads Co-ordinated Central Bank Move

Fed leads co-ordinated central bank move
By Robin Harding in Washington
The US Federal Reserve has slashed the rate it charges other
central banks for access to dollars in an effort to counter a deepening credit
squeeze in the eurozone that threatens global growth.

As part of a co-ordinated action with the Bank of Canada,
the Bank of England, the Bank of Japan, the European Central Bank and the Swiss
National Bank the Fed is cutting the penalty that it charges over a basic rate
from 100 basis points to 50 basis points.
The move highlights both the deepening credit squeeze in
Europe as the sovereign debt crisis deepens and the extent of concern at the
Fed about how much the euro crisis could damage US growth.

It is also a tacit admission that the swap lines were not
effective at the higher price because they attracted little demand from
European banks. The ECB uses the dollar liquidity swaps to make dollars
available to European banks.

“The purpose of these actions is to ease strains in
financial markets and thereby mitigate the effects of such strains on the
supply of credit to households and businesses and so help foster economic
activity,” said the statement.

As part of the move, each central bank is setting up similar
swap lines for the others in its own domestic currency, so that US banks can
access yen or British banks can borrow Swiss francs. But the only demand at the
moment is in the eurozone where banks are facing growing struggles to fund
themselves in any currency in the private markets.

The Bank of Japan said in a statement: “There is ... a
possibility that Japan will be adversely affected, should conditions in global
financial markets deteriorate further. The Bank of Japan will continue to
maintain financial market stability in close co-operation with other central
banks.”

Green Energy's Mr. Fixit

Green
Energy's Mr. Fixit

The following is believed to be an acceptance letter from
Herbert M. Allison, a former chief financial officer of Merrill Lynch, chosen
by the White House to advise on the Department of Energy's "green"
loan program. He was recruited after the collapse of Solyndra, a solar company
that received $535 million in federal loan guarantees.

Dear Mr. President:

Thank you for placing your confidence in a non-Goldman
alum. Your chief of staff, citing my long career in business, said I was hired
because I'm "tough" and "always tell it like it is." This
is most flattering. I fully understand that these words are used in the
Washington sense.

Per discussions with your staff, I understand my mission
will be to ensure that, in the future, the "i's" are properly dotted
and "t's" properly crossed, that the highly effective habits of
highly effective managers are highly effectively employed, and that best
practices are practiced in the best practical way in the DOE loan program.

It won't be my job to question whether the policy itself
is stupid overly zealous.

I see, for instance, that four loans have been approved
to build solar power plants in California. DOE maintains these loans are
low-risk for taxpayers because contracts already are in place to sell the power
to local utilities. In April, Gov. Brown signed a law requiring California
utilities to get 33% of their power from "renewables" by 2020.

I will refrain from noting that California remains a
democracy and Gov. Brown and his policies may not be popular by the time the
plants are built. Voters may decide not to allow their electricity rates to be
increased by 50% to secure DOE's loans.

I also see that 15 electric vehicle models are expected
by 2014, with potential production four times greater than J.D. Power's
estimate of consumer demand, even assuming continuation of today's
$7,500-per-buyer tax credit.

The latest data also indicate that the average Chevy Volt
buyer has an annual income of $175,000. I will not examine the political
viability of an industry premised on taxing average Americans to subsidize cars
for wealthy Americans.

I also understand that the long-term economic viability
of the electric-car business depends on the adoption of unpopular policies that
neither you nor your predecessors nor any other candidate for federal office
has been willing to endorse, such as higher gasoline prices.

However, my focus will be on making sure the right forms
are filled out in the right order by the DOE's loan portfolio monitors.

As you know, I was previously hired to run Fannie Mae
after it went bust. It will not be among my duties to draw attention to
similarities between Fannie Mae and DOE's energy loan program.

I will also refrain from contradicting a meme by one of
your administration's supporters in the media, who claims a solar-based
"energy transformation" is at hand due to the operation of
"Moore's Law."

Solar-panel prices have come down sharply, it's true, but
the reason is not big efficiency gains. Under Moore's Law, computer chips
doubled their capacity every 18 months. It took 25 years for commercial solar
panels to double their efficiency to today's 10% or so, and no "transformations"
appear to be in the offing. Solyndra went bankrupt because its panels, with 12%
efficiency, couldn't be delivered at a competitive price.

The solar-panel price collapse has two causes: Chinese
overproduction and decisions by governments around the world that it no longer
is politically feasible to subsidize the industry. Listen to the words of
Chairman Michael Ahearn of First Solar Inc. on a conference call last week:
"Declining subsidy pool . . . Shrinking subsidy programs . . . European
countries reducing their subsidies . . . No significant new state-level solar
programs . . . Moving downward in terms of subsidies . . . A much lower subsidy
level . . . Solar industries feeding mostly off of legacy subsidies in
California."

My focus, however, will be on procedures, not on the
wisdom of taxpayer money being used to create a solar industry addicted to
subsidies and unable to survive without them, in a world where strapped
governments can't meet basic commitments to citizens.

Once again, thank you for the faith you have placed in
me. At Merrill, our rule was to invest in businesses that could sell their
products to willing consumers at prices greater than the cost of producing
them. A different approach has been adopted by DOE. I respect this difference.

In sum, if forms that should have been filled out in
triplicate were, wastefully, filled out in quadruplicate, or alternatively,
filled out malfeasantly in duplicate, I will leave no stone unturned to
identify the culprits.

I will not point out that Americans are made poorer by
all this, or that many of the beneficiaries of solar subsidies are large
campaign donors, or that the biggest danger now is political pressure for more
subsidies to cover up the failure of those already offered.

Pointing this out is not my job. It's the job of the
super committee.

Respectfully,

Herbert M. Allison Jr.

Credit: By Holman W. Jenkins, Jr.

The Long Haul: Slow Recovery Feels Like Recession

According to a study
done by former Bureau staffer Gordon Green and others at data-crunching firm
Sentier Research, the income of the typical American household, adjusted for
inflation and in 2011 dollars, has dropped well below the January 2000 level ($55,836).
Based on data such as consumer-credit levels, "it looks like we're at a
bottoming point," he said. [...] that process is over, it will constrain
the economy, even if the U.S. is spared additional adverse shocks, leaving
Americans groping for a way through an uneven recovery. --

Americans are two years into a recovery that doesn't feel
much different to many of them from life during the most bruising recession in
seven decades. Scenes of the long haul back from the slump show a nation
struggling to rebuild after a battering that crossed ages, regions and
occupations.

According to a study
done by former Bureau staffer Gordon Green and others at data-crunching firm
Sentier Research, the income of the typical American household, adjusted for
inflation and in 2011 dollars, has dropped well below the January 2000 level ($55,836).
Based on data such as consumer-credit levels, "it looks like we're at a
bottoming point," he said. [...] that process is over, it will constrain
the economy, even if the U.S. is spared additional adverse shocks, leaving
Americans groping for a way through an uneven recovery. --
Americans are two years into a recovery that doesn't feel
much different to many of them from life during the most bruising recession in
seven decades. Scenes of the long haul back from the slump show a nation
struggling to rebuild after a battering that crossed ages, regions and
occupations.

A sobering set of economic statistics is at the heart of
tales of Americans moving in with relatives, switching careers and dialing back
on spending to cope with straitened circumstances amid the fitful rebound.
One benchmark, income of the median household -- meaning
the one in the very middle of the middle -- declined 3.2% to $53,518 during the
2007-2009 recession and fell a further 6.7% to $49,909 between June 2009 and
June 2011, according to an analysis of monthly Census Bureau numbers. According
to a study done by former Bureau staffer Gordon Green and others at
data-crunching firm Sentier Research, the income of the typical American
household, adjusted for inflation and in 2011 dollars, has dropped well below
the January 2000 level ($55,836).

Other data paint a similarly bleak picture. No recession
since the Great Depression was deeper or longer than the most recent. It has
taken two years for the nation's total output of goods and services to return
to pre-recession levels, longer than after any recession since World War II.
And on a per-capita basis, the Commerce Department said Thursday, output
remains 3% lower than it was at the end of 2007.

Since the recession's end in mid-2009, the economy has
been expanding but it isn't adding jobs at a fast-enough pace -- at least
150,000 a month -- to absorb the growing population. The unemployment rate
stands at 9.1%, and nearly half the unemployed have been out of work for six
months or more. Housing, the most fragile sector, has yet to rebound. As of
June, home prices were 10.1% below mid-2009 levels. One in five mortgage
borrowers has a loan bigger than the value of the underlying home.

Education, once a reliable means to employment and
earning power, has been no insurance against declining incomes during the
recovery. Between June 2009 and June 2011, the median income of households led
by high school graduates fell 8.2%, Sentier estimates. Households led by people
with two-year associates degrees saw incomes fall even more: 11.2%. And even
those led by individuals with bachelor's degrees were squeezed: down 5.9%.

Recoveries are hard-pressed to take hold when earnings
tread water or fall behind. Consumers who have less income and smaller
retirement accounts -- or who are underwater on their mortgages -- are likely
to spend less. Worries about finding or losing a job, or paying back debts,
translate into cautious spending. Only 21% of Americans responding to the
October Wall Street Journal/NBC News poll said they expected the economy to
improve in the next 12 months. In the latest Wall Street Journal survey of
economists, respondents said it would take more than a decade for median income
to return to pre-recession levels.

Amid meager, if any, income growth, U.S. households are
gradually whittling down their debt burdens. Americans are roughly halfway
through efforts to reduce their debt, according to Jerry Webman, senior
investment officer and chief economist at Oppenheimer Funds. Based on data such
as consumer-credit levels, "it looks like we're at a bottoming
point," he said. Until that process is over, it will constrain the
economy, even if the U.S. is spared additional adverse shocks, leaving
Americans groping for a way through an uneven recovery.

Retrenching After
Earnings Decline

Annual salary
In 2007: $50,000

In 2011: $40,000
Groundhog Day, Feb. 2, 2010, isn't a day that Tanya
Ross-Lane of Akron, Ohio, wants to relive.

After 13 years helping workers at Diebold Inc., a maker
of ATMs and security systems, update their job skills through training
programs, she was laid off from her job, which paid $55,000 a year.

At the time, her husband, Michael Lane, also was
unemployed, having lost his job with a home contractor, where he was earning
$15 to $20 an hour pouring concrete and installing cabinets and floors. The
couple sold her 10-year-old Saab, kept their 2003 Jeep, and worked out a lower
interest rate on their mortgage. "We keep things modest. We don't go out
much. We cut off the lights and don't buy steak," Mr. Lane said.

Ms. Ross-Lane, 54 years old, took a six-week job with the
Census Bureau. She also joined a local church's Community Job Club to keep her
spirits up and network. Through Diebold connections, she learned of an opening:
the Portage Lakes Career Center, a technical school in Uniontown, Ohio, needed
a Human Resource Development Coordinator to design classes to help workers
update skills. Ms. Ross-Lane started Nov. 1, 2010, earning $40,000 a year.

But she still goes to Job Club meetings. "So many
people who lost jobs have an identity crisis. They don't know what to do,"
she said. "I want to give back and help other people improve their
interview skills, coach them on careers and offer encouragement."

In May 2010, Mr. Lane, 58, landed work through a
temporary agency, earning $9.50 an hour with a window-installation company. At
first, business was good. Last year, when homeowners were receiving tax credits
for new energy-efficient windows, he was working 70 hours a week. The company
promised full-time employment after 120 days, but 16 months in, Mr. Lane is
still a temp -- now working 40 hours a week.

Prospects aren't great: The company has a hiring freeze.

One coworker with a 22-year tenure is making $12 an hour. Still, Mr. Lane would
like the security and benefits of being a company employee. "It's clean
and the work is not extremely hard," he said. "I could be working at
a lot worse places."
-- Clare Ansberry

Retrenching After
Earnings Decline

Annual salary
In 2007: $50,000
In 2011: $40,000

Groundhog Day, Feb. 2, 2010, isn't a day that Tanya
Ross-Lane of Akron, Ohio, wants to relive.

After 13 years helping workers at Diebold Inc., a maker
of ATMs and security systems, update their job skills through training
programs, she was laid off from her job, which paid $55,000 a year.

At the time, her husband, Michael Lane, also was
unemployed, having lost his job with a home contractor, where he was earning
$15 to $20 an hour pouring concrete and installing cabinets and floors. The
couple sold her 10-year-old Saab, kept their 2003 Jeep, and worked out a lower
interest rate on their mortgage. "We keep things modest. We don't go out
much. We cut off the lights and don't buy steak," Mr. Lane said.

Ms. Ross-Lane, 54 years old, took a six-week job with the
Census Bureau. She also joined a local church's Community Job Club to keep her
spirits up and network. Through Diebold connections, she learned of an opening:
the Portage Lakes Career Center, a technical school in Uniontown, Ohio, needed
a Human Resource Development Coordinator to design classes to help workers
update skills. Ms. Ross-Lane started Nov. 1, 2010, earning $40,000 a year.

But she still goes to Job Club meetings. "So many
people who lost jobs have an identity crisis. They don't know what to do,"
she said. "I want to give back and help other people improve their
interview skills, coach them on careers and offer encouragement."

In May 2010, Mr. Lane, 58, landed work through a
temporary agency, earning $9.50 an hour with a window-installation company. At
first, business was good. Last year, when homeowners were receiving tax credits
for new energy-efficient windows, he was working 70 hours a week. The company
promised full-time employment after 120 days, but 16 months in, Mr. Lane is
still a temp -- now working 40 hours a week.

Prospects aren't great: The company has a hiring freeze.

One coworker with a 22-year tenure is making $12 an hour. Still, Mr. Lane would
like the security and benefits of being a company employee. "It's clean
and the work is not extremely hard," he said. "I could be working at
a lot worse places."
-- Clare Ansberry

As Jobs Vanish, Sticking to Knitting
Student-loan and car debt In 2007: $0

In 2011: $48,500

Shelby Stofle graduated in December from the University
of California at Berkeley with $10,250 in student-loan debt -- and no job
offers from a dozen applications.

The 24-year-old had hoped to work in environmental
conservation or sustainable agriculture but struck out even at a grocery store
near her rural hometown of Suisun City, Calif.

"It wasn't what everybody tells you is going to
happen when you graduate," said Ms. Stofle, who studied abroad in Ghana
while in college, raises chickens in her backyard and dyes wool as a hobby.

Discouraged, she shifted gears and signed up in January
for a free state-run training program near Suisun City. Over several months,
she learned how to install solar panels and other skills, but nothing
translated into a job.

In March, Ms. Stofle was hired to tend and sell plants
for a nursery. But her hours have been cut and she now works part-time, taking
home about $1,200 a month after taxes.

"You hear you're going to get into a career, and
it's going to start paying a lot -- that's why you go to school," she
said. "But I make as much now as my 17-year-old co-worker. I took the time
and spent the money to go to school. Did it mean anything?"

Her husband, Greg King, a 29-year-old student at
California State University at Sacramento, brings in $700 after taxes each
month as a part-time food clerk and bookkeeper at grocery chain Safeway.

That leaves the couple scraping to pay their monthly
bills, including $525 in rent, a $300 car payment, and Ms. Stofle's
student-loan payment of $110. Their expenses will increase when Mr. King
graduates in December with $30,000 in student loans.

Ms. Stofle just learned that the nursery won't need her
after the busy season ends in November -- although she may be asked back in
February, when business ramps up. With many employment options exhausted, she
said she feels her best shot is to set up her own business, selling her
hand-made scarves at craft fairs and farmers' markets. Meanwhile, Mr. King, who
is studying for his bachelor's degree in criminal justice, said he "didn't
want to put all my eggs in one basket" so he also is training to be an
emergency medical technician and pursuing an electrician's apprenticeship.

All the hustling is hard on the couple's marriage.

Because of work schedules, they sometimes go days without seeing each other.
"We're really worried and stressed, but we know that someday it'll pay
off," Ms. Stofle said. "That's our hope, at least."
-- Vauhini Vara

Restaurant Gives Way to Food Truck

Weekend sales in 2007: $7,000, from 18 goats
In 2011: $4,000, from nine goats

When Cupertino Cid came to the U.S. in 1988, the Mexican
immigrant brought an expertise in preparing barbacoa, a goat-meat specialty
that is slow-cooked overnight. "I always hoped to make a living from
barbacoa," he said.

After 15 years managing pizza parlors in Los Angeles, Mr.
Cid, 51 years old, realized his dream. He opened a small restaurant -- 12
stools around a counter -- and an outdoor stall at the Alameda Swap Meet, a
market frequented by fellow immigrants.

In 2007, he employed four full-time workers. Each
weekend, sales topped $7,000; he grilled 18 goats to make enough barbacoa
tacos, burritos and sandwiches to meet demand. "There were lines going
back farther than you could see," Mr. Cid recalled.

When the economy began to sputter, the swap meet lost
customers -- and Mr. Cid's establishments began to lose money. Two years ago,
he closed the restaurant and stall. He bought a food truck, which he parks

Saturdays and Sundays on the edge of the swap meet.

Retrenching has been painful for Mr. Cid, his wife,
Maria, and their four children. Debts have mounted and the family sometimes is
behind the $1,500 monthly rent on their three-bedroom apartment, he said.

These days, it takes just nine goats to feed the typical
weekend crowd, and sales rarely top $4,000. To keep costs down, everyone in the
family helps out on the truck.

On weekends, Ana, 20, and Carlos, 18, both at the
University of California in Santa Barbara, head home to pitch in. "It's
been tough juggling school and work," Carlos said. Ana and Carlos cover
their $31,000-per student annual tuition with a grants, loans and part-time
work -- along with help from their father. Ana worries about their financial
circumstances. But, "my parents tell us that all we should focus on is
going to school," she said.

The youngest, 11-year-old Alfredo, delivers food orders
to shopkeepers and picks up supplies. "I know the whole swap meet by
heart," declared the sixth-grader, who earns $20 a weekend in pocket
money.

Alfredo likes playing videogames. He wishes he could get
a PlayStation 3 console. "My parents said it's expensive for now," he
said, adding that he hopes to save money for one, after buying family Christmas
presents.

"Times are tough but I don't give up," Mr. Cid
said. "I'm sure my children's future won't be selling tacos."
-- Miriam Jordan

Corporate
Safety Net
Slips Away

College savings
In 2007: about $100,000
In 2011: $22,000

Terry Sullivan spent more than a decade at Verizon
Communications Inc., working his way up to become a marketing director at the
telecom giant.

But when it came to marketing himself, Mr. Sullivan's
initial efforts fell flat. After being laid off in December 2009 -- among about
26,000 workers let go -- Mr. Sullivan spent six months at home in Flower Mound,
Texas, applying for jobs online.

When his applications got no response -- despite
experience such as overseeing a $105 million annual budget and more than 1,000
employees and contractors in his most recent post -- the 56-year-old realized,

"My resumes were falling into a sinkhole," and changed tack.

He began attending a Dallas-area support group for job
seekers and setting up events for his local chapter of the American Marketing
Association. In late 2010, Mr. Sullivan's networking efforts brought him to a
presentation given by Mark Bourg, who runs MarketCision, a Dallas-area
marketing firm. Impressed, Mr. Sullivan approached Mr. Bourg after his talk.

The relationship resulted in a consulting gig. He is still looking for
full-time work.

These days, instead of family trips to the movies and
restaurant dinners, the Sullivan family will spend evenings helping mom,
Cydney, decorate the purses she sells at craft fairs.

The Sullivans have had to raid the college money they set
aside for their son and daughter -- a high school senior and junior,
respectively.

-- Ben Casselman

As Liberals Warm Up for Elections, Obama Feels a Chill

Liberal activists who helped propel Barack Obama to the White House are coming back to life after more than a year in the doldrums. But much of their support isn't aimed at the president.

Instead, they are working on a more diffuse set of objectives centered on state fights, non-presidential races and the Occupy Wall Street protest movement. Activists say that is partly because the presidential election is a year away, but they also cite disenchantment with Mr. Obama as the reason for pursuing other outlets for their political efforts.

"The activists are in the process of rallying based on their own priorities, not Barack Obama's priorities," said Roger Hickey, co-director of the liberal group Campaign for America's Future. To be sure, he added, "almost all the people that we're talking about now will probably pull the lever for Barack Obama."

In cities across the U.S., Occupy Wall Street is geared around populist protests that aren't remotely focused on re-electing the president. Other activists are focused on relatively narrow issues, such as opposing construction of the Keystone XL pipeline that would carry oil from Canada. Just last week, a protester interrupted Mr. Obama during a Denver speech to voice opposition to the pipeline, and activists plan to join hands and encircle the White House on Sunday in protest.

In Ohio, unions are leading a fight to repeal a state law curbing collective-bargaining rights for public employees. Voters will decide the matter Tuesday. In Wisconsin, they are gunning to recall Gov. Scott Walker. And in Florida, budget cuts and layoffs by the Republican governor spurred "Awake the State" rallies.

Mike Podhorzer, political director for the AFL-CIO, expects national labor unions to continue their focus on state races through next year, in addition to the presidential contest, a contrast from 2008, when they focused their energy on electing Mr. Obama. For the coming election, "it's hard to imagine that there would be something that would be as inspiring" as Mr. Obama in 2008, he said.

Even in states that don't have high-profile fights with GOP governors, liberals aren't focused on the national scene. In Colorado, where Democrat John Hickenlooper is governor, activism on the left is directed at ballot-access decisions by the Republican secretary of state, said Ellen Dumm, director of Campaign for a Strong Colorado, a coalition of progressive groups. She said "it's too early to say" what role they would play in the 2012 election.

Mr. Obama's campaign recognizes the dynamic, but believes state-level activism will have a spillover benefit for the president. "These state fights are really what's motivating our people," said Jim Messina, Mr. Obama's campaign manager, who said he has "seen some benefit in volunteer hours and excitement."

The Obama campaign also said its supporters have organized 17,111 local events since the re-election campaign launched earlier this year. In Ohio, Obama staff and volunteers helped local activists to collect signatures to put a repeal of the union law on Tuesday's ballot.

"I need your help," the president said at a recent fund-raiser in San Francisco. "When you look at what's going on in Washington, it's easier to become cynical than ever before about the possibilities and prospects of change through our politics." He added: "The one way to guarantee that change won't happen is for all of us just to give up."

In recent weeks, liberal activists have been happier with the president than they were during the summer, pleased he is campaigning for federal spending on job creation and not for cuts to programs they like.

But the liberal base of the Democratic Party is never going to be as Obama-centric as it was three years ago, said Justin Ruben, executive director of liberal Moveon.org, which was early to endorse Mr. Obama in 2008. He blames the president's "split-the-difference" approach with Republicans in trying to govern.

"The best thing that can happen for the president is for the base to get fired up, but that's not what we've committed ourselves to," said Van Jones, who worked for the White House early in Mr. Obama's term but resigned after controversial past statements came to light. He is now a leader of the American Dream movement, a coalition of liberal groups trying to replicate the tea party's success.

Mr. Jones said the newfound energy on the left is there for the president to win, but added, "It's not automatically going to come to him."