Political prognosticator Rhodes Cook has a very detailed post examining whether President Obama is a one or two term president. Cook concludes that the state of the economy is vital to Obama’s success in 2012:
Yet all these political “what ifs”—a Democratic primary challenge to Obama, an effective Republican challenger, even a potent third party movement in 2012—will largely pivot off his handling of the economy.
To be sure, elements of a recovery are beyond the president’s control. But it is the nature of politics that he would receive the lion’s share of the credit or the blame regardless of what happens. So, the better the economy is approaching next fall’s election, the smoother his path to reelection. In short, it is probably time for Obama to begin channeling his “inner Reagan.”
I suggest reading Cook’s post, as it contains a lot of good insight.