Michael Grunwald is exactly the person who should have written a book about the stimulus.
He's not a fan of everything government does. He'd like to privatize the Post Office, for instance. And as Time magazine's senior national correspondent and the author of a book about the Everglades -- 2007's The Swamp -- Grunwald is intimately familiar with the boondoggles government can get us into... and help get us out of, if we're lucky.
Mark Schmitt called The New New Deal "the best book about the Obama administration." It's an enthralling narrative that captures the battle to pass the bill along with the explosion of good the stimulus did, contrasted against the tidal wave of misinformation synchronized by the far right to not only hide the incontrovertible evidence that the president's first huge and possibly most important legislative achievement worked -- but to even rewrite the history of the original New Deal.
Grunwald spoke to me about The New New Deal as his indispensable book about the American Recovery and Reinvestment Act of 2009 came out in paperback with a new afterword.
You can purchase The New New Deal or Grunwald's 2007 book The Swamp here.
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Have your thoughts on the stimulus evolved at all since Obama's re-election?
Not really on the substance. I still think it was a huge deal, as important as Obamacare, and I still think it was a huge success, as a short-term boost to the economy and as a long-term driver of change. But the re-election did get me thinking about the politics. The stimulus was hideously unpopular. And when it was done, Obama bailed out the auto industry, also hideously unpopular. Then he started with health care, even more unpopular. He kept doing all kinds of controversial things -- pulling out of Iraq, pushing cap-and-trade, endorsing gay marriage -- and pundits kept accusing him of political malpractice. But he got re-elected anyway -- partly because the stimulus (and the auto bailout) made the economy much better than it would have been, partly because some bartender dude brought an iPhone to a fundraiser in Boca. My takeaway is that when you've got power, you might as well try to do stuff, rather than obsess about the political ramifications. Because really, who knows how the politics are going to play out?
You said you've regretted spreading the meme that 97 percent of the Department of Energy's stimulus loans were successful to contrast the GOP's Solyndra fixation. Why?
I think I started that meme on Twitter during one of the presidential debates, after Mitt Romney claimed that half the stimulus-funded clean energy companies had gone bankrupt. Which was bullshit -- as you said, only 3 percent of the companies that got loans went under. (It's less than that for stimulus funds in general.) As I explain in the book, just about everything Republicans have said about Solyndra is bullshit. But I do regret that the 97 percent meme has become such a big thing. For starters, more companies are going to fail. That's what happens in a capitalist economy. And then critics are going to say, oh, look, now it's only 91 percent, or 82 percent, or 74 percent. But the point of the program wasn't cradle-to-grave assurance of success for all these companies; it was a jump-start, with the hope that some of these companies will change the world. And they are. They're bringing solar and wind and advanced biofuels to scale. In fact, if I had to criticize the loan program, I'd say some of its loans were too safe, financing projects that might have gotten financing without government help. I'd like to see more technological and entrepreneurial risk and more failure, which would mean even more upside from the projects that succeed.
What is the best value we've gotten out of the stimulus that almost no one knows about?
Oh, that's like asking which of my kids I like best. Creating a domestic battery manufacturing industry for electric vehicles out of thin air was gigantic. Dragging health care into the digital age was enormous, too; by 2015 or so we should all have electronic medical records. One of my favorites is "homelessness prevention," a program that started as a pilot in the Bush administration and got a 6,000 percent funding increase in the stimulus. Basically, it helped out families who are at risk of homelessness with back rent, security deposits, utilities, and so on. For $1.5 billion, it helped keep 1.2 million Americans off the streets. Here in the Miami area, it helped 7,500 people, and only 103 of them returned to the shelter system. If you were wondering why homelessness actually declined a bit during the Great Recession, well, there you go.
Stimulus denial and climate change denial are nearly identical phenomenons, if not fraternal twins. The science and the scientists nearly all say it worked. Is there any way to argue against something conservatives are so incentivized and committed to disputing?
Oh, when there's a Republican president, Republicans will learn to love fiscal stimulus again. In 2008, every presidential candidate wanted a big stimulus, and Mitt Romney wanted the biggest. Even in the fiscal cliff debates, when Republicans were clamoring for austerity, they kept saying that cutting military spending would kill jobs in local communities. Climate change denial is going to be more resilient, although thanks to the stimulus, green stuff like energy-efficient light bulbs, wind power and especially solar power are getting so cheap that the financial calculus behind denial might start to change. In Georgia, the Tea Party helped to push solar power, because it saves ratepayers money.
Will the myth that the stimulus could have been bigger ever die?
I tried to show that not only did three Republican senators (Snowe, Collins, Specter) insist that the stimulus couldn't be more than $800 billion, more than a half-dozen Democratic senators (Nelson, Begich, Landrieu, Pryor, Lincoln, McCaskill, etc.) drew the same line in the sand. And nobody -- not Nancy Pelosi, not David Obey -- was talking about anything north of a trillion. (Pelosi was one of the reasons the stimulus included a $75 billion fix of the alternative minimum tax that provided almost no stimulus.) Remember, Obama did end up getting over $1 trillion in additional stimulus in 2009 and 2010, even though Republicans were marching in lockstep against motherhood-and-apple pie stuff like unemployment benefits and even small-business tax cuts. George Voinovich told me he got into a fight with Mitch McConnell about those tax cuts; McConnell said if Obama was for it, they had to be against it.
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