As the first presidential debate approaches, Barack Obama must face a hard-pressed and fearful electorate. But the stakes are even higher for Mitt Romney, because – against all expectations – he is falling behind in the race

You could call it the clash of the titans, though scrap between a community organiser and management consultant might be more accurate. Next Wednesday, Barack Obama and Mitt Romney face off in the first of three televised debates that could seal not only their personal fates, but also determine the future direction of the world's most powerful nation.

For Obama, the encounter will be a chance to solidify the creeping lead he has gained over his rival during the past few weeks. He will aim finally to blow away the pall of doubt that has hung over his White House from the start: is he a one-term loser, a black Jimmy Carter? Or is he a titan, a two-term conqueror in the mould of Bill Clinton?

For Romney, the stakes are if anything even higher. The 60 minutes of verbal combat in Denver, Colorado, may be his last chance to rescue a campaign that is certainly floundering and at times has looked close to disintegration.

"Romney comes into the debates needing some luck, needing Obama to make a mistake, needing to win the first debate," said Steve Schmidt, a prominent Republican strategist who, as John McCain's campaign chief in 2008, knows all about the pitfalls of a presidential run. "He's on the edge of losing control over his own destiny."

That the two men enter the final stretch of the 2012 presidential marathon with the election Obama's to lose and Romney's yet to win is not how it should have been. No sitting president since Franklin Roosevelt has won re-election with unemployment above 7.2%, and with today's jobless rate of 8.1% Obama should be the one with rope burns on his back.

But in this election cycle we are watching conventional wisdom and historical precedent turned on their heads. The Real Clear Politics tracker poll of polls has Obama four points ahead on 49% to Romney's 45%. More significantly, Obama has begun to pull away from Romney beyond the margin of error in the swing states that matter most.

Recent polls show him in front in the seven states – Colorado, Florida, Iowa, Nevada, Ohio, Virginia and Wisconsin – that are most likely to determine November's outcome .

Of those, Florida and Ohio represent, as they so often do, the golden fleece of this year's presidential election. Without their combined 47 electoral votes, Romney will almost certainly fail to put together the 270 needed to win.

A new survey from the Quinnipiac University Polling Institute gives Obama a 53%-to-44% lead over Romney in Florida and a similar 53%-to-43% advantage in Ohio. "Romney is falling further behind and he's only got a few weeks left to make up ground," said Quinnipiac's analyst, Peter Brown.

So how did we get to this point, where an election that for months has been too close to call has begun moving in Obama's direction? Not, it has to be said, with any of the soaring rhetoric and appeals to what's good in the American soul that distinguished Obama's first run for the highest office in 2008.

At this point in 2008, millions of Americans were queuing around the block to enlist in the Obama army, brandishing their rising suns and chanting "Yes we can!" It was a time of great peril – Wall Street had just imploded – but also of great expectation that the coming presidential election would herald a new era.

Four years later, the country is approaching its moment of truth in a starkly different frame of mind. Where 2008 felt as though the American giant was reawakening, this year we find it nursing its wounds in a gloomy cave. The mood of the electorate, made weary by the search for work or the fear of losing jobs, is as sour as it was euphoric back then.

Take a look at the official store on the Obama for America website. The merchandise on offer is uniformly corporate: there are badges for sale featuring the Obamas' dog, Bo ("I Bark for Barack"), silver Michelle brooches and a $95 Yigal Azrouël scarf marked "Made in the USA". Gone is the exhilarating underground edginess of the 2008 campaign. Gone too is the single word that defined it: Hope.

In its place we have an election that matches the current disposition of the electorate: restless, dissatisfied, grouchy. In Ohio, voters may be starting to fall in behind Obama, but they remain an angry crowd, disillusioned by politics and scathing of both presidential candidates. As one voter, Larry Bushnell in northern Ohio, put it to the Guardian: "I think they both suck, honestly. They'll lie to get your vote."

With 39 days to go, that crankiness will continue to be the dominant chord of this election. Over the next five weeks we will hear the candidates and their backers trade yet more insults, see an avalanche of negative TV adverts bear down upon already cheesed-off voters, listen to the endless was-it-a-gaffe/wasn't-it-a-gaffe commentary of the 24-hour news channels. It will be brutal, and it will be ugly.

But it will be vital. Obama was right when he said in his nomination speech in North Carolina earlier this month that Americans face "the clearest choice of any time in a generation".

In Obama's blue corner of the ring, we have his bloodied but as yet unbowed vision of a collective future for America, in which government has a role to play in regulating the excesses of corporations, alleviating poverty and encouraging innovation.

Putting a spin on JFK's famous invocation "ask not what your country can do for you", Obama crystallised his position at the Democratic National Convention by saying: "As citizens, we understand that America is not about what can be done for us, it's about what can be done by us, together."

In the red corner of the ring, there is the paradox of the Romney campaign. The former governor of Massachusetts has flip-flopped on an almost metronomic basis, to the extent that it is virtually impossible to clearly define his political convictions.

All that can be said with certainty is that he goes to the ballot in November on a ticket that is dramatically to the right of George Bush and even to the right of John McCain, who had his own flip-flopping issues. In fact, much of the Romney position conforms to the extreme fiscal conservatism of the Tea Party.

His promises to rein back government, to cut taxes, including for the very rich, to stage another bonfire of regulations of the sort that put America in the hole from which it is still trying to emerge, to repeal Obama's healthcare reforms that will extend medical insurance to many of the 47 million uninsured – all these are classic Tea Party policies. Even his vice-presidential running mate, Paul Ryan, is steeped in the anti-government ideology of the movement.

That's one way to parse the importance of 6 November: can Obama stop the Tea Party taking possession of the White House? Another way of articulating the vital, almost existential, urgency of this election is that nothing less than the wellbeing of America's democracy is at stake.

If that sounds melodramatic, consider this: Romney's outside fundraising body or "Super Pac", called Restore Our Future, has no fewer than 25 billionaires on its list of donors. Sheldon Adelson, a Las Vegas casino magnate, has alone injected almost $40m into this election cycle in favour of Republican candidates and may approach $100m before it's done. Emboldened by the two court rulings in 2010 (Citizens United v Federal Election Commission and Speechnow.org v Federal Election Commission) that removed any barriers from the investment of corporate, union or private money into elections, Adelson and other mega-wealthy donors will have pumped in close to $500m come November. That in turn will bring the total cost of putting one man into the White House to a dizzying total of $2.5bn.

"Wealthy donors are injecting money into the electoral process at a level we have never seen before," said Bob Biersack, who tracks the influence of cash in politics at the Centre for Responsive Politics. "The danger is that this will swing the balance of power, effectively disenfranchising the majority of Americans."

It is another measure of how Obama is bucking the trend this year that this vast mobilisation of billionaires' funds has so far failed to have the impact they desired. The blitzkrieg of TV advertising that their money has afforded, portraying Obama as a European socialist intent on burying the American dream under a pile of government bureaucracy, has not yet turned the voter against the president. With less than six weeks to go to election day, it seems the American people cannot be bought as easily as Adelson and his peers assume.

Obama has fought off the march of Big Money partly by transmitting a positive message to voters of who he is and where he stands. His convention was a master-class in political communications, replete with a lecture from the master himself, Bill Clinton. With his help, Obama made the case that the continuing hardship felt by many Americans was not a reflection of his own failed policies, as the Republicans contest, but rather a sign that he needs more time to get the job finished. "It will take more than a few years for us to solve challenges that have built up over decades," he said.

The 2012 election was always going to be about the economy, and it remains Obama's most vulnerable point. But in this crucial area the Obama re-election campaign has coolly refused to be cowed by the Republican assault and calmly turned the argument back against them: the economic meltdown happened on the Republicans' watch; Romney opposed the bailout of the car manufacturers; though the economy still falters, the stock exchange is robust; and house prices are beginning to recover.

Those arguments have played well in battlegrounds like Ohio, where Obama's role in having saved the auto industry resonates among its thousands of car parts and distribution outlets. The state has a jobless rate of 7.2%, notably below the national average.

Across the country, the anxious electorate appear to have been listening. This week's Quinnipiac poll records that for the first time since it began following the Obama-Romney race, the president has come out on top on the economy. Some 51% of likely voters said that Obama would do a better job on the economy to Romney's 46%.

Obama has also delivered a positive message on his healthcare reforms. While committed Republican voters continue to see "Obamacare" as a socialist Trojan horse, for many middle-of-the-road Americans, worried about losing their jobs and hence their health insurance, the promise of affordable medical cover for all sounds increasingly attractive.

On foreign policy, too, Obama has rammed home the incumbent's advantage. At the Democratic convention he was profuse in his praise of the military, rebutting Romney's jibes that he was an apologist for his country by donning the uniform of the commander in chief.

References to the president's overwhelming foreign affairs achievement were kept to a minimum, but who needs quantity when you have the quality of John Kerry's TV-friendly jingle: "Ask Osama bin Laden if he's better off now than he was four years ago."

But these positive messages are only a small part of the ruthless effectiveness of the Obama re-election machine. Campaign strategist David Axelrod and his Chicago-based spin wizards have primarily gone negative, weaving a straitjacket for Romney that has constricted his every move.

While Romney and his conservative rivals were slugging it out with each other for the Republican nomination, the Obama team were quietly working behind the scenes to define Romney's biography. In a series of attack ads aired remorselessly in the swing states, they painted him as a rich kid born with a silver spoon in his mouth who had no affinity with the daily trials of the middle classes, destroyed ordinary people's lives as head of Bain Capital, and was so arrogant that he wouldn't declare his taxes.

Quinnipiac's Peter Brown, who as a polling analyst sides with neither of the two main parties, says he has never witnessed such a successful character assassination in a presidential race. "They have turned Romney into a wealthy, out-of-touch elitist, who is just not someone the average voter wants to have a beer with."

Republican strategist Steve Schmidt believes the rot set in earlier this year when the Romney campaign made the mistake of conserving its war chest rather than investing it aggressively in a counter-offensive. Inexplicably, in his view, the Republican candidate was unprepared for the onslaught; he was caught off guard by the furore over his tax returns and was ill-equipped to defend himself on Bain Capital – a bizarre weakness given that Romney's record at the firm has been a political thorn in his side right back to his 1994 duel with Ted Kennedy for a US senate seat.

In Schmidt's opinion, Romney made the basic error of seeing the election as a referendum on Obama's four years in office and not as a choice between two conflicting political visions: "The Romney campaign was premised on the notion that Obama could not be re-elected with unemployment as high as it was and pessimism running in the country as high as it was. All that Mitt Romney had to do was to hold steady and the electorate would come to him."

It didn't. Since the start of the presidential election proper this month, Romney's malaise has only deepened. Everything he has done since, according to Schmidt, "has been the opposite of what he needed to do to get over the plausibility bar, so that people look at him and see him as a commander-in-chief."

First he forgot to mention Afghanistan and returning war heroes in his convention speech – an astonishing error from the party that claims to own national security. Then he made hasty remarks about the death of the US ambassador in Libya.

And to cap it all, there was the "47 per cent" gaffe. In remarks made before donors paying $50,000 per plate, he essentially accused almost half the nation of being lazy no-hopers suffering from a victim complex and languishing in the pocket of the president.

Given that litany of horrors, Romney faces huge difficulties as he goes into Wednesday night. This race is not over: there is time yet for an upset. But the challenger from Massachusetts must access hidden strengths if he is to appear on 7 November looking like a titan and not a mouse.