NEW YORK — US President Barack Obama has shrugged off his political woes and swept into New York City for a star-studded fundraising blitz which could net his 2012 reelection bid $2.3 million.

The president, trying to bounce back from the worst week of his crisis-hit White House term so far, rubbed shoulders with Gwyneth Paltrow, Vogue editor Anna Wintour and R&B diva Alicia Keys at a top dollar fundraiser.

In the intimate basement of movie mogul Harvey Weinstein's brick row home, the president sought to inspire his high rolling donors as he sets off on a 16-month drive to his reelection bid in November 2012.

"This is a pretty good looking crowd," Obama joked to a 50-strong group, each of whom had paid $35,800 to share the evening with him.

The White House dismissed suggestions that it was inappropriate for Obama to rub shoulders with New York millionaires at a time when Americans yet to recover from one recession are living in fear of another.

"Americans understand that our political system functions the way it does and that candidates have to raise money," said White House spokesman Jay Carney.

"I certainly expect that members of Congress are doing the same thing, as well as presidential candidates."

Obama noted how he had just flow in from midwestern Michigan and had felt a rising energy in the heartland as the election approached, adding that most people outside Washington thought warring politicians were from "outer space."

"What was remarkable was to see outside of Washington, the enthusiasm, the energy, the hopefulness, the decency, of the American people," Obama said, as he spoke without notes and a microphone in the intimate setting.

"What I said to them is: 'You deserve better than you have been getting out of Washington over the last two and a half months, for that matter, for the last two and a half years.'"

"If that energy is harnessed and tapped I am absolutely convinced this country is going to be on the upswing in the next couple of years."

Obama was reeling from the worst week of his presidency, which saw ratings agency Standard & Poor's strip the United States of its AAA debt rating. That, along with European debt woes, sent shock waves through global markets.

But Obama argued that America was still the safest investment in the world.

"I don't know if you noticed when the stock market went down. What did everybody buy after the downgrade? US Treasuries."

"Everybody understands that the United States still has the greatest economic potential... The market voted with its feet."

Earlier, Obama held an smaller fundraiser for 15 people, each of whom also paid $35,800.