When President Obama signed the American Recovery and Reinvestment Act into law on February 17, 2009, the program’s place in American history was widely remarked. It was the greatest stimulus effort since Franklin Roosevelt’s New Deal.
But this was incorrect: By every measure, Obama’s stimulus was far greater than FDR’s New Deal. It involved more dollars in absolute terms and even accounting for inflation. It represented a far greater share of the U.S. economy. It was openly devoted to fiscal stimulus in a way that the original New Deal hadn’t approached until five years of FDR’s administration had already elapsed. And its impact on the economy has been far more pronounced than that of the New Deal.
Yet most Americans seem to be laboring under the misapprehension that the Obama stimulus has failed.
In The New New Deal: The Hidden Story of Change in the Obama Era, Michael Grunwald documents the very real achievements of Obama’s $800-billion stimulus, chronicles its painful gestation both within the White House and in Congress, and ponders why its success has not been given its due. Grunwald, a senior national correspondent at Time and winner of the George Polk Award for national reporting among other laurels, had exceptional access to the architects of the stimulus program. More to the point, The New New Deal gives us not only a broad picture of its stormy course toward enactment and its sometimes inept execution, but also of how it has changed the lives of the millions of Americans it has provided with new jobs or saved jobs, with more money in the pocket, and with access to new technologies that will transform our world.
Grunwald tells a story filled with colorful heroes and villains: Berkeley economist Christina Romer, an expert in Great Depression history, who along with other newcomers to the White House found herself grappling with ever more grim indicators of the magnitude of the economic collapse even as she tried to map out a stimulus that would be big enough to work but not too big to be passed. The conflicts involving Romer and Obama economic aides Larry Summers and Austan Goolsbee have been chronicled elsewhere, but never outlined with as solid a sense of what was in stake as it is here.
The New New Deal is especially good on the Administration’s difficulty communicating the logic and the success of the stimulus to voters. One reason was the obdurate opposition of Congressional Republicans, who in their determination to take back the White House in 2012 shed all responsibility for succoring Americans through the worst slump in eight decades. In Grunwald’s telling, the villain of the piece may be Senate Minority Leader Mitch McConnell, who united his caucus behind the idea that they could not yield on a single point, lest they give the Democrats a success story to exploit for Obama’s reelection campaign.
Another dysfunctional player: The press. Ignorant and math-challenged reporters seized on manifestly misleading yarns of programmatic waste to undermine perceptions about the program’s aims and successes. Let McConnell slander a legitimate livestock disaster program as “honeybee insurance,” or let Louisiana Governor Bobby Jindal ridicule a volcano monitoring program in a nationwide television appearance—the press ate it up, overlooking real gains at job-creating infrastructure construction sites at their back doors.
That the stimulus raised gross domestic product by as much as two percentage points, created or saved millions of jobs that might have been lost had the slump taken its course, that didn’t seem to be news. But addiction research using primates that could be ridiculed as “monkeys on cocaine”—that was always worthy of Page-One play. Small wonder that a poll in 2010 determined that only 6% of Americans thought the stimulus had created any jobs, or that Obama, considered to be one of the premier communicators in American politics, couldn’t communicate the simple fact that it had created millions.
The New New Deal poses compelling questions about our economics and our politics, and about the different approaches to both by Barack Obama and Franklin D. Roosevelt—the latter of whom faced his own challenges in communicating his achievements to his voters and maintaining support for his program among progressives in the Thirties—on both sides of the political aisle. The issues raised in this fascinating book span the decades, and we should all look forward to a vigorous and wide-ranging forum.
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