Paul Vallely: 'Yes we can, but...' is a triumph for realism

Only a fool would laugh at a President honest enough to admit that he can't do everything overnight

Everyone had a good chortle at Barack Obama when he was forced to repeat his famous campaign slogan "Yes, we can" with the addition of a long pause, followed by the word "but". The laughter came from the usual cynics – people who are ever adept at passing judgment but who never take the risk of doing anything more difficult than turning a waspish phrase. But it also came from naive idealists who see politics as a kind of fairytale or parable, but who have no real understanding of the complexities the political art involves.

Obama's accommodation with political reality reminded me of another seminal moment. Sitting in his kitchen in Wales, after it was announced he was to become Archbishop of Canterbury but while he was still the comparatively obscure Bishop of Monmouth, Rowan Williams said, in a moment of terrifying illumination: "People are going to be very disappointed in me." Of course they won't, I told him. "They will, it's inevitable," he insisted. What Rowan had glimpsed, and Obama has gradually learned, was the terrible burden of conflicting expectations.

As he approaches Tuesday's mid-term congressional elections it's easy to list all the things the American president has not got right in the past two years. He has not kept his promise to close down the Guantanamo detention centre, hasn't quelled the rising voices of critics at home, has echoed George Bush's bellicosity on Iran and has been crassly nationalist with BP while refusing to shut down offshore oil exploration. He's allowed himself to be pushed around by the Israelis as they refuse to stop building settlements on Palestinian land. He has not brought in a carbon tax or reversed Bush's tax cuts for the rich.

Yet there is a lot to set against that. His massive, $787bn (£490bn) fiscal stimulus has been crucial in averting global depression. He's prevented trillions of dollars of mortgage-backed securities unravelling worldwide which would have meant even more people losing their homes. He has kept millions in work by bailing out the US car industry. He is one of the few world leaders not to be panicked by the latest voodoo economics into rushing prematurely into austerity – a policy which one wag in America described as the economic equivalent of creationism. Instead he's embracing a "growth now" strategy.

His healthcare reform, for all its flaws, has achieved something which has eluded Republicans and Democrats for decades. He has transformed US attitudes to the Muslim world, improved relations with Russia and introduced a humbler, more consensual, approach to international relations. He has negotiated an exit of sorts from Iraq. He has appointed the first Hispanic Supreme Court judge and an unprecedented three women to sit on the top court's nine-member bench. He has bravely spoken out against the state of Arizona's controversial new immigration law

To rework the words of Abraham Lincoln, he has learned that you can please almost all the people some of the time, some of the people all the time, but you can't please all the people all the time. Things which sound easy enough on the election campaign look trickier from the other side of the Oval Office desk.

One of my own formative political experiences came quite late in life. After decades of reporting from Africa, and shouting at politicians back home about what needed to be done, I took a break from journalism in 2004/5 to work for the Commission for Africa set up by Tony Blair. During and after it I worked with Bob Geldof and Bono lobbying the world's most powerful leaders in the run-up to the Gleneagles summit.

At one point, a senior European politician asked me to stop passing notes to Geldof prompting him to attack the Common Agricultural Policy. "Whatever you think about it, that's not going to be addressed through this forum," he said. "If you carry on people will think you're not serious about achieving what change is feasible." Politics, you swiftly learn from the inside, is indeed the art of the possible and compromise is at its heart. Only half of what Gleneagles promised was ever fulfilled, yet it delivered 2,000 times more to children in Africa than Live Aid.

It's not hard to imagine the kind of compromises which have been presented to Obama. He will swiftly have been shown the security dossiers on those detained in Guantanamo and asked whether he was prepared to take responsibility for what havoc they might wreak if they were released. He made the wrong call, but he was prey to the classic fear of Democrats – that of being seen to be weak on national security. That's why he is sending 30,000 more troops to Afghanistan in an unwinnable war, stepped up drone strikes in Pakistan to record levels, and plans to treble George Bush's plans for weapons sales to the Saudis. The burden of conflicting expectations.

It explains why a man who has made such significant steps on international nuclear disarmament with Russia – so much so that he was, early on, awarded the Nobel Peace Prize – has also promised $80bn to modernise the US nuclear deterrent.

It accounts too for the ambiguity in his attitude to the reform of Wall Street. The measures he is introducing are far reaching. He has created new regulations for the hedge funds, private equity funds and, above all, the derivatives which added the opacity and leverage to the financial system which brought the great crash. There are tougher rules on consumer products, limits on betting the market using other people's money and requirements for banks to disclose potential conflicts of interest to customers. There will be powers for regulators to seize control of bodies such as Lehman Brothers and AIG, which imploded in the meltdown.

All that is good. But under pressure from corporate America, which accused him of being anti-business, stifling innovation and crushing confidence, the President removed some of his more radical proposals. It will only become clear if his reforms have tackled the issue of banks "too big to fail" when the next crisis arrives. And he has not forced financial institutions to hold more capital and liquidity, making collapses less likely – an issue he has left to the Basel Committee on Banking Supervision. Even so he has put in place the greatest tightening of financial rules since the Glass-Steagall Act of 1933, which was repealed in 1999 to bring in the era of deregulation that led to the current crisis.

Barack Obama has been caught between America's rock and hard place on that and so many issues. This week's elections will doubtless make his room for manoeuvre even tighter. But under Obama – a man who takes the long-term view – the US has reclaimed much of its moral authority.

With the Republicans in such disarray under pressure from the populist fanatics of the Tea Party movement, Barack Obama looks a lot better than the alternatives. "Yes, we can," he modulated the other day, "but it is not going to happen overnight". Only a fool would have supposed that it could.