As if to highlight the economic and employment hurdles that confront both the president and his challenger Mitt Romney, less than 12 hours after Obama's acceptance speech the Labor Department released the August employment report. This showed the unemployment rate at 8.1 per cent, down from 8.3 per cent in July only because fewer people are looking for work, and with mediocre job gains that indicate little headway in putting 12.5 million unemployed Americans back to work.

The inability of Democrats and Republicans to work co-operatively to address the nation's fiscal problems is chronicled in excerpts from Bob Woodward's new book, released last Sunday. The pundits argue that a weak economy is a liability for Obama and the Democrats and often cite the way in which the economy sealed Ronald Reagan's win over Jimmy Carter. But this is not 1980, when the GDP was in decline and inflation was growing; today's economy is weak but not failing. And despite the Republicans' traditionally strong standing with voters on the economy, this has not translated into poll gains for Romney.

So 2012 may not be the year of ''It's the economy, stupid.'' Speakers at the Democratic National Convention framed the choice between Obama and Romney as one with profound consequences for the economy and jobs, taxes and deficits, health and education, war and peace, and the ability of all Americans to achieve the American dream.

The Democrats aggressively defended their view of government and outlined how the power of government can be used to build the nation and address inequalities. In a stem-winder of a speech, former president Bill Clinton outlined the differences between a Republican ''you're-on-your-own, winner-take-all society'' and a Democratic vision of ''a country of shared prosperity and shared responsibility - a we're-all-in-this-together society'', asking, ''What kind of country do you want to live in?''

Arguably there are many progressives who wish that this aggressive support for the issues around healthcare reform, entitlement programs, education and taxes had emerged earlier to make the public case for the achievements of Obama's first term. As an example, for too long the administration shunned the word ''Obamacare'' which was used pejoratively by their opponents. Only now can the Democrats counter with ''It's Obamacare because Romney doesn't care.'' What we saw and heard throughout the Democrats' convention was a more inclusive approach to government and to tackling national, community and individuals' problems. It was an American version of ''a rising tide lifts all boats'' philosophy. There was as much emphasis on social issues such as equal pay for equal work, gay marriage and abortion rights as there was on debt reduction, jobs and business. The compelling stories of Massachusetts Governor Deval Patrick, San Antonio Mayor Julian Castro, congressional candidate Tammy Duckworth, and First Lady Michelle Obama helped make the case for the Obama-Biden ticket and reached out to key constituencies such as Hispanics, gays, military families and the elderly.

So now the Democrats stand in stark contrast to the Republicans who promulgate a pro-business, anti-government agenda. The convention clearly achieved the aim of galvanising the base, and several polls released in the last few days show Obama pushing ahead of Romney, who got no bounce in the polls after the Republican convention. Still, we can expect to see Romney and Ryan relentlessly challenging voters with that 1980 question, ''Are you better off now than you were four years ago?'', although they have little concrete to offer as a remedy. How undecided voters answer that question may determine the election outcome.

These political and policy differences will almost certainly be more sharply drawn in the upcoming debates. The real issue is what they mean for governing the nation over the next four years. There is a growing sense that Republicans and Democrats occupy parallel universes, with their own facts and philosophies, party platforms that are poles apart, and their own approaches to government. There is now a total disregard for, even ignorance of, the bipartisan efforts that enacted Social Security, Medicare and Medicaid and the Civil Rights Act, to the extent that bipartisan efforts to strengthen the financing of these programs are impossible to imagine. Obama's ability to meet this year's election promises should he be re-elected will depend less on cooperation from congressional Republicans and the enactment of legislation and more on an economic recovery, drivers at the state and local level, and a willingness to wield presidential powers.

Dr Lesley Russell is a Research Associate at the Menzies Centre for Health Policy at the University of Sydney. She is currently living and working in Washington DC.