These attacks on Mitt work on 2 fronts.

It is clear that one of the goals is to saddle Willard with a particularly repellent image given the state of the economy. An additional benefit is that it strengthens Obama's image as a forceful leader who is willing to fight for what he believes.
This should not only energize his base but also assuage some of the doubts independents have as to his leadership qualities. What we have seen so far in the campaign is the President's professorial persona taking a back seat to his Chicago politician self. I confess to liking both aspects of his personality but in dealing with the RW, more toughness and a bit less persuasion is what is called for.