Can Obama heal America?

The most striking thing about Barack Obama is not his youth, his oratory, or even the colour of his skin. It's simply that he knows what he's about. The vast crowd spread out before him in Chicago late on Tuesday night was transported with joy. America and most of the rest of the world hailed the moment as if it were the Second Coming.

But there in the midst of the frenzy, at this moment of supreme accomplishment, stood Mr Obama – cool, collected and already focused not on the historic victory he had just won in defeating the Republican John McCain and becoming America's first black president, but on the monumental problems he will confront, and that will not await his inauguration on 20 January 2009.

This outcome had been predicted (this time, mercifully, the polls were pretty much spot-on). But when the epochal event finally came to pass, it was still hard yesterday for most people to come to grips with it. The implications for the foreign and domestic policy of the US, for how America sees itself and how the world sees America, are too vast. The one person who appeared to grasp exactly what had happened, and what it might mean, was... Mr Obama himself.

In two-and-a-half months' time, he will take the helm of a country embroiled in two draining wars, with its name tarnished around the world, with a slumping economy and bleeding financial system, facing a federal deficit of a mind-boggling $1 trillion. No president since Franklin Roosevelt, three-quarters of a century ago, has faced such challenges.

But as the country's very foundations have trembled, the one point of calm has been a man of 47, his name all but unknown barely four years ago, and by conventional political yardsticks with next to no experience to speak of. Yet as he spoke yesterday to America and the world, Mr Obama projected an almost preternatural sense of destiny, as if he had been preparing for the moment all his life. "A new dawn of American leadership is at hand," he said, and a world long disenchanted with American leadership ached to believe him.

Mr Obama's mission is now to transform his country. But even before he starts, he has transformed its political geography. The continental divide evident in the two most recent elections is no more. The cleavage between the coasts and the upper Midwest coloured Democratic blue; and the heartlands, the West, and the South that remained a uniform Republican red, has been blurred to the point of invisibility.

On Tuesday night, Mr Obama captured the Republican strongholds of Ohio, Florida and Virginia. Yesterday, even more remarkable, he was declared the winner in Indiana, a state that previously had voted Republican in every election since 1964. He is the first Democrat to win more than 50 per cent of the national vote since Jimmy Carter in 1976. He has secured the most convincing electoral college victory in a two-candidate contest since the elder Bush's rout of Michael Dukakis in 1988.

Not since Ronald Reagan has a president entered the White House in a stronger position. Mr Obama prevailed in every major demographic group except the over-65s. He may draw on a colossal reservoir of goodwill, even among many of his opponents. President George Bush, not noted for his generosity to Democrats, yesterday hailed the extraordinary nature of what had happened. "All America", he said, "can be proud of the history that was made".

Condoleezza Rice, the thoroughly Republican Secretary of State (but of course an African American) seemed almost moved to tears. The election was "an extraordinary step forward" she said.

The Republicans have lost at least 16, and perhaps as many as 25, seats in the House of Representatives. In the Senate they have lost at least six seats, though they will prevent the Democrats from reaching the 60 required to break a filibuster, and have thus retained the power to block legislation. In reality however, Republicans are leaderless and ideologically bankrupt. Mr Obama may well be given more trouble by his friends than his opponents – by a Democratic leadership on Capitol Hill giddy with victory and eager to tip the country further to the left than it wants to go.

America cannot wait to see the back of Messrs Bush and Cheney. It is fed up with negative campaigning and with the politics of slash and burn. It is tired of the endless, unproductive fights on Capitol Hill. That is why it has elected a first-term senator who is still relatively uncontaminated by Washington.

Every victorious presidential candidate says he wants to govern across the political divide: even the super-polarising George W Bush did so in 2000 and 2004. But if anyone means it, Mr Obama does. This election may have swept an African American into the White House, and given Democrats simultaneous control of the White House and Congress for the first time since 1992. But as the President-elect knows full well, the US remains a centre-right country. Back in 2004, Mr Obama first made his name with an electrifying speech in which he proclaimed there was not a "blue America" or a "red America", but a single United States of America. On the printed page, those words read like a cliché. But like most clichés they are true – or at least Americans fervently pray they are true.

During the campaign, the Republicans constantly pointed out that he had among the most, if not the most, liberal voting record in the Senate. "The truth is, he's a socialist," one normally judicious Republican senator intoned. But Mr Obama in office will not behave like one.

Though his mandate for change is sweeping, he is likely to govern from the centre. Yes, the US is entering a period of more activist, interventionist government. The economic crisis, the urgent need to improve the nation's education, health care, and infrastructure, demand no less. Indeed, one of President Obama's first acts will be the signature of a massive new economic stimulus programme (that is, if a lame duck President Bush has not done so already, in the waning weeks of this administration). But it is also a truism of American politics that really important legislation can only pass with bi-partisan support, and if ever really important legislation is needed, it is now.

Yesterday Mr Obama was in Chicago, working out at the gym, but also working with his closest advisers on the transition and the make-up of his cabinet. Never has an incoming administration more urgently needed to hit the ground running.

To signal his intentions, Mr Obama will probably soon name a Republican to one of the two top national security jobs, either Secretary of State or Secretary of Defence. He may also choose a non-party figure to be Treasury Secretary, right now the most important cabinet post of all. Democratic sources revealed last night that Rahm Emanuel, a former aide to Bill Clinton, hadbeen appointed his WhiteHouse chief of staff.

From day one, they will have their work cut out. Abroad, the Obama administration must find a way out of Iraq, and prevent the war in Afghanistan, and the situation in neighbouring Pakistan, from slipping out of control.

It will be dealing with a resurgent, prickly Russia – which chose yesterday of all days to announce it was moving missiles to its Baltic region to counter the "threat'" posed by the US missile defence installations in Europe. It must restart work on the stalled Doha round of global trade talks.

At home, the new president not only has to tackle the immediate economic crisis. He must deliver on lavish election promises of middle-class tax cuts and the expansion of health care coverage, even though these can only push the federal deficit still higher. He must build a credible energy policy. He must place the US at the forefront of the battle against global warming.

On the campaign trail, the disconnect between the candidates' economic rhetoric and the grim daily economic reality experienced by voters was often almost surreal. Now Mr Obama has somehow to bring his country down to earth, yet without destroying the enchantment that lifted him to power.

In Grant Park, the President-elect made a start. The changes would come: "We as a people will get there." But the journey would be long, and the problems so great that they might not be solved in a year or two years, or even by the end of his first term. Again and again, he wove into his speech his campaign refrain of "Yes, we can".

But he uttered the phrase less as a triumphant statement of fact than as a quiet aspiration. Henceforth Mr Obama and the Democrats will no longer have the most unpopular president in modern US history to kick around. If they mess up, and on occasion they will, the fault will be theirs alone.

But if the overwhelming weight of expectation is Mr Obama's greatest problem, he by every indication knows how to handle it. Just as during the tough stretches of the campaign, everyone else might lose their heads – but not him.

One way or another, the man about to become the 44th president knows what he's about.

How I see it: Reactions to the Obama victory

"I wish God speed to the man who was my former opponent and will be my president. I call on all Americans... to not despair of our present difficulties but to believe in the promise and greatness of America."

John McCain

"I am especially proud because this is a country that's been through a long journey inovercoming wounds, and making race not the factor in our lives. That work is not done, but yesterday was obviously an extra-ordinary step forward."

Condoleezza Rice

"Your victory has demonstrated that no personanywhere in the world should not dare to dream of wanting to change the world for a better place."

Nelson Mandela

"I congratulate President-elect Obama on his historic victory. Now it's time to begin unifying the country so we can take on the extraordinary challenges that this generation faces."

George Clooney

"It feels like hope won. It feels like it's not just victory for Barack Obama. It feels like America did the right thing. It feels like anything is now possible."

Oprah Winfrey