FOR the first presidential debate, the Jefferson County Republican Party had spared no expense.

A private room at the Triple Play Cafe in Steubenville had been decked out in patriotic bunting, with a big screen and a projector tuned to Fox News at deafening volume. There were badges and stickers to be had and flyers on the tables, in which Mitt Romney and Paul Ryan – "America's Comeback Team" – promised to "preserve and strengthen Medicare, stand up to China on trade, reward job creators and get America working again."

The restaurant's owner, Albert Macre, had laid on free pizza, barbecued chicken wings and iced tea. He was confident that Romney would do well locally and take back the White House. "I believe he will win Jefferson County and Ohio. It was very close last time and now that Obama's a known entity, we know how he governs," he said.

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His only concern was whether the former Governor of Massachusetts can find a way to connect with working-class voters. "I grew up in a blue-collar town and think that it might be a problem for someone from that background to relate to Romney."

There were only 12 people in the room, including the barmaid, fewer than had shown up for midweek karaoke in the saloon next door, but the atmosphere grew increasingly festive as the debate progressed and it became clear that it would be Romney's night. Each time the Republican nominee landed a convincing jab, the man sitting behind me barked, like a dog, for emphasis.

"I think 95% have probably made up their mind at this point," Macre said. "I'm not sure there's anything either candidate can do. People are looking for a reason to vote for Romney. I think they already have a reason not to vote for Obama."

Across town at the Obama For America office, the mood was defiant, despite the President's curiously passive, downbeat performance. The posters – Workers For Obama, Women For Obama, African-Americans For Obama – spoke to the Democratic Party's Ohio coalition. The turnout was no better here, at around a dozen, mostly members of Steubenville's small black community.

A former steel worker, Bob Atkinson, was the only middle-aged white man in the room. He denied that Romney had won the debate. "Only if you consider lies a strong night," he said. "That's where we come in. We've got to tell people what the facts actually are." In this, his options are limited: a bad knee prevents him from canvassing and he has stopped cold-calling voters. "I get too angry," he shrugged.

He wasn't confident that Obama would carry Jefferson County. "There's a significant racist quotient and there's people that don't pay a lot of attention," he said. "People have had the wool pulled over their eyes."

Carmen Thompson admitted that, compared to Obama's election campaign four years ago, it has been harder to convince people to volunteer. "In 2008 it was a mass movement, it was the thing to do, there was enthusiasm," she said. "But I have dedicated myself to come down here every day. I know that every door knock counts."

Obama's margin of victory over John McCain in Jefferson County was 76 votes out of 36,000 ballots cast, making this the most evenly divided area in the most contested swing state of all. Steubenville, the county seat, is a former steel town struggling to reinvent itself as an alternative to the Pittsburgh suburbs. In the glory years, they sometimes had to stop baseball games because so much soot fell on the field, but this week the skies were a clear, post-industrial blue. One in three families lives below the poverty line.

IF Romney is to win Ohio, he will need to peel off voters that supported the Democratic ticket four years ago. Obama's problem winning over white working-class voters is longstanding, ever since his indelicate comments at a fundraiser about "bitter" people in western Pennsylvania – just across the Ohio River from Steubenville and culturally alike – who "cling to guns or religion, or antipathy to people who aren't like them".

A recent study from the Public Religion Research Institute suggests Obama's problem with whites has been overstated. There are huge regional differences: in mid-August polling, Romney led Obama among whites without a university degree by 62% to 22% in the South. In the Midwestern states, including Ohio, the president enjoyed a slim lead, 44% to 38%. Whether he can convince them to vote is another matter.

At its peak, the Wheeling-Pittsburgh steel mill in the town of Mingo Junction near Steubenville employed thousands of people, mostly locals who walked down steps cut into the embankment to begin their shift. The signs at town limits say "Steel Town, Still Proud" but on Wednesday morning at nine o'clock, the only businesses open on the main drag were the American Legion, a deserted diner and a bar, where a few drinkers were starting early.

A woman driving past wound down her window and introduced herself: Kay Shannon, born and raised in Mingo. "When Bill Clinton was here, we had a fighting chance," she said. "Since he's not around, it's gone to hell. I'm glad I don't have no kids."

A few miles south, the Wheeling Casino was humming. The third of the month is Social Security cheque day and by mid-morning there were already a few hundred people playing the slots. Bill Bunkley, a retired bore-maker, was lugging his oxygen tank from machine to machine. "I welded, smoked, drank for 30 years, and this is the result," he said, with an emphysemic rasp.

He grew up in Mingo and still lives there, but doesn't go downtown since he stopped drinking. "They can't afford to run the street lights in Mingo, so they're talking about shutting them off. They were dependent on Wheeling-Pittsburgh Steel and now they don't have it. They put all their cookies in one place."

He was inclined to give Obama the benefit of the doubt. "When you leave a guy in there for a second term he knows what's going on. He's done alright." This was the closest to an endorsement that I heard in Mingo, for either candidate. The bartender, Big Ed, spoke for his customers: "The two of them ain't worth shit." No votes to be won here.

You wouldn't know it in Mingo, but Jefferson County is on an economic upswing. The Marcellus and Utica shale formations extend under Ohio and advances in hydraulic fracturing mean that the gas they contain can now be tapped. Most of the well technicians come from established oil states like Texas, Wyoming and Nebraska, leading to resentment that out siders are taking what should be local jobs, but in the last year, the unemployment rate has dropped from 13% to 10%, as prosperity ripples outward. "A less interfering government from an environmental standpoint might be better for our future," Macre told me.

THE Republican Party has seized on shale gas as a wedge issue, portraying Obama as an environmentalist opposed to fossil fuels. In the debate, Romney repeatedly brought up the administration's $90 billion investment in green energy. There were more yard signs for local and state candidates at the roadside in Jefferson County than either of the presidential nominees, but there were plenty reading: "Stop the war on coal. Fire Obama."

A Romney advert, filmed at the Murray Energy pit in Bealsville, Ohio, showed him standing in front of miners in hard hats, their faces covered in dust. "We have 250 years of coal," Romney said. "Why wouldn't we use it?" Within hours of the first broadcast, several miners called up a local talk radio show to complain they had been forced to attend the rally, unpaid. Employment in the coal industry has risen under Obama, but the United Mine Workers of America has not endorsed either candidate.

No Republican has ever won the presidency without winning Ohio, which is considered a swing state in national elections but favours conservatives at a local level. In the Republican wave of 2010, the party captured the state legislature, five of the Democratic party's 10 congressional districts and unseated the Governor, Ted Strickland, gaining almost total control.

"If these polls are accurate and Obama is up between 5%-9%, that's amazing for Ohio," the Democratic president of Canton City Council, Allen Schulman, told me. A month ago, George Bush's strategist Karl Rove openly speculated that Ohio might be a lost cause for Romney and suggested he could win the White House without it.

There are several reasons for this. The government bailout of General Motors and Chrysler that Romney opposed, in an editorial headlined "Let Detroit Go Bankrupt", has saved hundreds of thousands of jobs in Ohio, something that Obama always mentions in his campaign speeches but failed to capitalise on in the debate.

A measure to cripple public-sector unions pushed through by the new Republican Governor, John Kasich, was repealed by a referendum, creating ties between the Democratic party's natural allies in the labour movement, and police and fire fighters who tend to vote Republican. The Fraternal Order of Police, which traditionally endorses the Republican candidate for president, is sitting it out this year.

Most importantly, polls show that Romney is deeply unpopular in Ohio. This is partly self-inflicted and partly the result of the devastatingly selective adverts about his tenure at Bain Capital, presenting him as a remorseless vulture capitalist. There is still time to change this perception, particularly if Obama turns in tepid showings at the remaining two debates.

Ohio Democrats also worry about the "Bradley effect" which can lead African-American candidates to underperform at the polls as a result of undeclared or subconscious prejudice. "I think a lot of it, when you dig down, it's just racism," Shulman claimed. "They cannot stand the idea that a black man is President of the United States. In order to avoid that conclusion, they find other reasons."

In Steubenville, I heard references to Obama's "post-colonial" mentality, his relationships with "terrorists" and objections that his friendship with pastor Jeremiah Wright did not receive the coverage it merited four years ago, but these are standard Fox News talking points and the people repeating them were all registered Republicans.

"I don't know if there's a concern about a black man that gets aggressive, but he's got to be more assertive at the next debate, flash a little anger," Shulman said. "He had an opportunity to put it away, and he didn't do it. We had them on the ropes and he didn't finish it off."

It is hard to believe that Obama can be so meek next time – and Friday's national jobs report, showing unemployment dropping below 8% for the first time in his presidency, will give him something to talk about – but for the first time in months, Romney looks like a winner.

After defeating Obama in the first televised debate, there are signs Mitt Romney is winning over disillusioned voters in a key American swing state

By Andrew Purcell in Steubenville, Ohio