The New New Deal: A Book Argues That President Obama’s Stimulus Has Been an Astonishing Success

The New New Deal

The New New Deal

Interviews with a point.
Aug. 14 2012 4:30 AM

The New New Deal

President Obama’s stimulus has been an astonishing, and unrecognized, success, argues Michael Grunwald.

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This is an adulatory story about the Obama administration, depicting a subtle, engaged, brilliant president working for the long-term good of the nation, surrounded by brilliant, self-sacrificing scientists and thinkers who are looking for sweeping change, and opposed by venal, selfish, viciously partisan Republicans willing to sacrifice the health of the nation for political gain. That’s a portrait that will surely delight Democrats and irritate Republicans. Why should the average reader trust it? Why shouldn’t they see this as partisan hackwork in the service of the Obama re-election campaign?

Wow! Maybe you’re so accustomed to reading breathless tell-alls about the fumbling, bumbling hacks in the White House—by right-wingers, left-wingers, and even Obama supporters who basically approve of his agenda but want to show how independent and tough-minded they are—that my story sounds adulatory. The guy doesn’t walk on water. I write about his missteps and miscalculations as well as his achievements, and I reveal a lot of internal dissension on his team.

That said, I realize The New New Deal tells a story that, for the most part, Obama lovers are going to like and Obama haters on the left and the right are going to hate. I’d say that readers shouldn’t see this as partisan hackwork because I’m not a partisan hack. I’ve been a reporter for 20 years, and my reporting is accurate. In case people are curious, I’m a registered independent, socially liberal, otherwise pretty unpredictable. I voted for Obama in 2008, but I voted for Charlie Crist for governor over a generic Democrat in 2006, back when he was a rising Republican star. I do tend to be a contrarian. I think I was the first non-oil-stooge to write that the BP spill was not that awful an ecological disaster. But I was just following my reporting; I know a lot of scientists in Louisiana, and I got to see a lot of persuasive data. I feel the same way about the stimulus; the data tell a very different story than the prevailing narrative.


I don’t think my book portrays the Republicans as “vicious,” but I do show—thanks to a lot of in-depth interviews with GOP sources—how they plotted to obstruct Obama before he even took office. I show how the stimulus was chock full of stuff they claimed to support until Jan. 20, 2009—not just things like health IT and the smart grid and energy efficiency and scientific research, but the very idea of Keynesian stimulus. Every presidential candidate in 2008 proposed a stimulus package, and Mitt Romney’s was the largest. So I do spend a fair amount of time chronicling Republican stimulus hypocrisies. (Readers might enjoy the backstory of Sen. Judd Gregg’s short-lived nomination to be Obama’s commerce secretary.) In general, I’d have to say my reporting backs up the Norm Ornstein-Thomas Mann thesis that the Republicans have gone off the policy deep end—denying global warming, denying Keynesian economics (except when it comes to business tax cuts and defense spending!), trashing Obama’s government takeover of health care and also his Medicare cuts, drumming stimulus supporters like Crist and Specter out of the party. Then again, one Republican who comes off pretty well is Mark Sanford, a rare voice of honest small-government conservatism in the party. (He also says some pretty surprising things about his trip down the Appalachian Trail.)

I think there ought to be a great debate about the stimulus and its interventions in various sectors of the economy. But we haven’t had that debate. We’ve debated a bizarro-world stimulus that does not exist. And I think that’s true about Obama, too. I don’t think he comes across as “brilliant.” I think he comes across as a pragmatic left-of-center technocrat who wasn’t interested in pursuing lost causes, but basically tried to do what he said he would do during the campaign. He wasn’t a policy entrepreneur with new policy ideas, but he did his best to get 60 votes for old policy ideas that made sense, and then pushed his administration to put them into action as cleanly and competently as possible. And I did a lot of reporting in the bowels of the bureaucracy and around the country to show how change has been playing out.

I tried to tell the story as fairly and honestly as I could. But I didn’t try to be balanced for the sake of balance. When politicians were full of shit, I tried to point that out.

Can you explain why so many local Republican officials and organizations traditionally aligned with the GOP (like the Chamber of Commerce) supported the stimulus, while the national party was united against it?

The top priority for many local Republican politicians and Republican-leaning business organizations was avoiding a depression. They saw that the Obama stimulus wasn’t radical leftism; it was textbook countercyclical stimulus. Republicans had called for $300 billion worth of tax cuts, and that’s exactly what it had. Republican governors like Crist, Arnold Schwarzenegger of California, Jodi Rell of Connecticut, Jim Douglas of Vermont, and Jon Hunstman of Utah understood that its aid to states—over $160 billion worth—would prevent massive cutbacks of public services and massive layoffs of public employees. As the lobbyist for the Chamber of Commerce told me: When you sit where I sit, you don’t want to see an epic collapse of aggregate demand. Depressions are bad for business. I also tell a fun story of a Democratic aide screaming and cursing at some business lobbyists, warning that they’d get nothing from the Democratic Congress if they couldn’t support an economic recovery bill during an economic emergency.

But the top priority for Washington Republicans was denying Obama bipartisan victories, so that they could come back from political oblivion. There’s a lot of fun fly-on-the-wall stuff in the book about meetings where Eric Cantor, Mitch McConnell, and other GOP leaders made this case—and on-the-record quotes from former GOP congressmen like Mike Castle, George Voinovich, and Specter complaining about it. McConnell often reminded his caucus about the 1984 election. Everyone remembers it as the 49-state Reagan landslide, Morning in America; people forget that only one Republican challenger ousted a Democratic incumbent that year. (It was McConnell, so he remembers.) His point was that there was nothing to be gained by going along with Obama. If the recovery plan worked and the economy boomed, Republicans would get re-elected even if they had voted against Obama. But if the economy was still struggling in 2010, Republicans could make a comeback if they stuck together.

Did the Republican opposition ruin Keynesian stimulus for the indefinite future?

I doubt it. The opposition is mostly opportunistic. One of the Republican alternatives to the stimulus in the House was a $715 billion plan that included far more highway construction than Obama’s. Almost the entire GOP conference supported it. And Republicans still defend business tax cuts and defense spending in Keynesian terms, even though they’re generally mediocre as Keynesian stimulus. I suspect that if Mitt Romney wins the election, the Republican opposition to fiscal stimulus will vanish, along with their rhetorical commitment to reining in budget deficits.