During the primaries and the election itself Barack Obama was frequently compared to three of the most charismatic presidents in the history of the United States: Abraham Lincoln, who fought the Civil War to maintain the unity of the United States and free the slaves; Franklin Roosevelt, who overcame the Great Depression and won the Second World War; and John F. Kennedy, who averted a third world war by his cool handling of the Cuban missile crisis. All three were gifted orators and inspiring leaders. Mr Obama has created similar expectations.

In March 1933, when Franklin Roosevelt was inaugurated as president, he had to face the Slump. Unemployment was by then running at about 30 per cent. Roosevelt introduced the New Deal, based on an extensive programme of raising employment through public works. Unemployment did actually fall to about 5 per cent by the time of Roosevelt's second election victory in 1936. There continued to be stumbles along the way, particularly in 1937.

The American recovery in the 1930s was less rapid than that of Germany or Britain. Nevertheless one can fairly say that the New Deal succeeded in reducing the level of unemployment, which it was designed to do. In the 1936 election the American voters expressed their gratitude by giving Roosevelt a landslide victory; he won every state except Maine and Vermont.

The challenge Mr Obama now faces is surprisingly similar to the one that faced Roosevelt in 1933: an economic crisis. That is different from the challenges that faced Lincoln or Kennedy, who were essentially war presidents. Roosevelt became a war president only in 1941, after Pearl Harbor. He is perhaps the only US president to have been equally gifted at defence and at handling economic crises.

If anyone doubted the nature of the challenge to Mr Obama, last week should have removed their doubts. On Friday it was announced that non-farm payrolls, the normal measure of US unemployment, had fallen by 533,000. That is the biggest drop in the monthly figure since 1974, a worse figure than had been expected even by pessimists. It means an unemployment rate of 6.7 per cent.

Most people expect US unemployment to continue to rise in the next 18 months, possibly longer. It could come close to 10 per cent by the end of 2009. One American economist, Ian Stephenson, has observed that “this is almost indescribably terrible”, though others take a calmer view.

Mr Obama's policies, in most respects, seem to be following the pattern of Roosevelt's. He has said that there can only be one president at a time - Roosevelt was very anxious not to share President Hoover's responsibility for the slump or his mistakes. Like Roosevelt, Mr Obama has realised that the president's strongest weapon is his relationship with the public.

Just as much as war, economics is ruled by psychological factors: by morale, by expectation, by leadership. Whatever the present difficulties, the new president has to conquer the demons of depression and despair, just as Lincoln had to conquer them in the Civil War, and particularly as Roosevelt did in the Depression.

Roosevelt developed the idea of “fireside chats”, when he used the radio to talk to the American public in their homes. On March 12, 1933, shortly after his inauguration, President Roosevelt had an audience of 60 million Americans who listened as he explained his proposed banking Bill and discussed the banking crisis.

President-elect Obama will not have to rely on radio and he does not call his addresses to the nation “fireside chats” - he calls them webcasts, which sounds a good deal less cosy. But their function is the same; Mr Obama is creating a close personal relationship with the American people which allows him to promote his own policies, and particularly his policies to fight the 2008 depression.

In last week's webcast, Barack Obama discussed the rise in unemployment with the American people. It turns out that he is not only going to have his own “fireside chats”, but he is going to introduce his own New Deal. He is advocating the largest investment in the American infrastructure since the great road-building programme of the 1950s. He is going to modernise the whole American schools system. He is going to rescue the automobile industry, which desperately needs to be rescued.

The big figure is reserved for employment. Last week President Obama committed himself to a programme that would create 2.5 million new jobs, divided between the public and the private sector, through investment in the national infrastructure.

Questions need to be asked. Will this public works programme turn around the recession? Will it come in time? School building, even road and bridge building, take years to plan and years to construct. What will this do for the federal budget? In the last 20 years the record of Japan has not been encouraging. Spending on public works can produce an increase in debt disproportionate to the increase in jobs.

There are bound to be many disappointments. The world depression has so far resisted most of the efforts that have been made to rebuild optimism. The Bush Administration itself is likely to go down in history as the cause of an unpopular war and even more unpopular depression. President-elect Obama has the record of President Bush to help him to win in 2012.

The first reaction of many governments to the present global recession was to get out their chequebooks. That may have rescued many of the banks, but it did not prevent the recession getting worse, and it did not stop unemployment rising. President Obama's New Deal is operating against powerful forces of deflation. Yet his fireside webcasts are creating a new relationship between a president and the people. That is his real power.

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