Clearly, Romney plans to run against a crippled economy that’s been slow to heal, while Obama will try to remind Americans which party and which policies crippled it. At a deeper level, though, the 2012 election will be about values, about the purpose of the federal government, about our obligations to each other as Americans. The former community organizer whose rise was assisted by food stamps and student loans will argue that government can be a force for positive change, reining in the excesses of the free market, making strategic investments to help the nation and its people compete. The private equity titan from a wealthy family will make the case that government is the problem, constraining the genius of the free market, interfering with the decisions of “job creators.” Is Uncle Sam supposed to promote great national missions and a spirit of common purpose? Or is he just supposed to keep us safe and protect our rights?
These questions once seemed settled. The federal government gave us land-grant universities and the transcontinental railroad, the interstates and the Internet, the space program and semiconductors. The New Deal established the principle that Americans ought to take care of each other in hard times. Yet here we are, four years after the genius of an unconstrained free market brought the global economy to its knees, still unsure whether government ought to try to reshape our direction or just get out of the way.
It’s a legitimate question. The Founding Fathers would be amazed by the size and scope of today’s federal government. And it’s easy to imagine a pair of data-loving technocrats like Mitt Romney and Barack Obama having a wonky debate about how to make it work better. But the 2012 election will be about whether it can work at all. To Obama, the Recovery Act is proof that the federal government really can work, that it can create jobs and produce change. To Republicans, it’s proof of the exact opposite.
Obama has the facts on his side, but so far, he doesn’t have the public on his side. The stimulus has changed millions of lives, and it’s changing dozens of industries. But politically, what the ARPA-E chemist Eric Toone said about electrofuels applies to the Recovery Act as well: We know it worked. We just don’t know if it matters.
— ACKNOWLEDGMENTS —
This book exists because of Walter Alarkon, a wonderful journalist and a spectacular research assistant. Walter was a star reporter at The Hill before I lucked into hiring him, and he’s been getting a law degree at Georgetown University while making this book happen. I’m not sure when the dude sleeps, but I can’t thank him enough for all his terrific work. Walter tracked down countless facts, saved me from countless mistakes, and gave me perceptive advice every day. He gave the first edit of every word in this book. He also did some of the most important reporting in this book, working his congressional sources to help tell the Capitol Hill side of the stimulus story. The roots of the Republican strategy of obstructionism—the bulk of Chapter Seven—grew out of his reporting. The entire book was a partnership, and Walter was the perfect partner—smart, funny, supportive, unbelievably hardworking, and infinitely patient, a self-overrated tennis player but a great guy. I’m glad to be his friend, and I look forward to working for him someday.
I was also fortunate to work again with Simon & Schuster, especially my legendary editor Alice Mayhew, who dispensed typically wise advice and typically hilarious rants about the incompetence of the Obama message machine. Thanks also to publisher Jonathan Karp for his faith in this book, to Julia Prosser and Rachelle Andujar for helping to sell it, and to copy editor Fred Chase, Jonathan Cox, Mara Lurie, and the rest of the S&S crew. My agent, Andrew Wylie, is the best in the business; Scott Moyers was also a delight to work with before he went back to the editing world. And my pal Ashleigh Lindenauer did a beautiful job with the graphics.
I am especially grateful to my indulgent editors at Time magazine and Time.com, who have allowed me to pursue my dorky interests while living in the policy mecca that is South Beach. Michael Duffy, who first assigned me to write about the stimulus, is a fantastic boss and a good friend. As he will surely remind me, I owe him big-time. I am also grateful to Rick Stengel, who let me write about this stuff in the magazine and then granted me a leave of absence to finish the book. John Huey and Nancy Gibbs has also supported me at Time, as have Jim Frederick, Daniel Eisenberg, Mike Crowley, Adam Sorenson, and the dearly departed (from Time, not life) Josh Tyrangiel. Thanks to Jay Newton-Small for her gracious help, and to David Von Drehle for being David Von Drehle.
It helps to have friends who really know how to read. Peter Canellos and Manuel Roig-Franzia were awesome pro bono editors. They really saved me. Phil Arlen, Gary Bass, Jon Cohn, Alan Farago, Jed Kolko, Indira Lakshmanan, and Mark Wiedman also read chapters and provided valuable feedback. So did a few sources who will have to go unnamed but not unappreciated. And Cristina Dominguez, whose interest in the stimulus did not extend too far beyond the high-speed trains we had hoped to ride to visit her parents in Orlando, slogged through my drafts anyway, surely the ultimate marital sacrifice. Peter Baker, the best White House reporter, and Susan Glasser, the smartest Washington journalist, helped me figure out what I wanted to say during one of my frequent visits to their home.
I have a separate note on sources, but I did want to single out my two patient guides to the Energy Department, Sanjay Wagle and Matt Rogers. I’ve been pals with Sanjay since he was breaking sleep records in college; Matt is a new friend. I was lucky to be able to pick their brains about clean energy, and all of us who pay taxes in the United States were lucky to have them working for us. I also want to thank my official sherpas, Liz Oxhorn and Jamie Smith, for helping me navigate the White House from a thousand miles away. My unofficial sherpas have my gratitude as well.
Finally, I want to thank my family for tolerating me and my disappearances during this project. Judy, Steve, Zach, Allie, Jake, Dave, Ruchi, Maylen, Phil, Sofia, Carmen, Jim, and Humberto, I’m looking forward to catching up. I also need to spend some quality time with my parents, Doris and Hans Grunwald, who are still an inspiration. I can’t thank them enough for their love, support, and babysitting. Speaking of which, muchas gracias a Gloria Herrera, my semi-replacement over the last year while I’ve been a presentee dad. I’m tired of telling Max that I can’t play right now, and seeing Lina’s sad little face before I close my office door. They’re such amazing kids, and they’ve been so patient and loving. They make me so proud. They’re about to get some serious Daddy time, and I can’t wait.
Finally, this book is dedicated to Cristina, who really is my stimulus, my teammate, my partner, the love of my life. She picked up the slack while I was in my hidey-hole, and she got me through this with my sanity intact. I can’t express how lucky I am to be a part of her life. She’s going to get some serious Daddy time, too.
— A NOTE ON SOURCES —
I don’t want to be ungrateful, but since this is a note on sources, I do want to be honest: Sources lie. They embellish. They omit. They have agendas, hidden and not. They exaggerate their own prescience and the folly of their rivals. And sometimes their memories honestly fail them. Phil Schiliro, President Obama’s legislative director, warned me about this when I interviewed him in the West Wing: “Everybody has a different recollection, sometimes of the same facts.” I told him that’s why I beg my sources for documents. “Documents are sometimes misleading, too,” he said.
This is a long-winded way of admitting the inherent weaknesses of books like this. The New New Deal is a work of nonfiction, based on interviews with more than four hundred sources—I do appreciate their help!—as well as hundreds of pages of administration documents. It’s written in that omniscient tone that has become standard for reported narratives. But I’m not omniscient. I’ve tried to confirm every scene with multiple sources, and when sources have disagreed about what happened I’ve erred on the side of omitting the scene. I’ve tried to put as many quotes as possible on the record, although quite a few White House officials, members of Congress, and staffers spoke to me and my amazing research assistant, Walter Alarkon
, on a not-for-attribution basis. And I’ll post some of the documents on my website, www.michaelgrunwald.com. Still, I’m painfully aware of the shortcomings of this genre. This won’t be the last draft of history.
One specific shortcoming of this book is that President Obama did not grant me an interview. I’ve only met him once, at the White House holiday party. When I told him I was writing a book about the Recovery Act, he said: “You’ve gotta talk to Biden.” The vice president did graciously grant me two on-the-record interviews, in April 2010 and March 2011, and it probably goes without saying that they were lengthy. He and his staff were also kind enough to let me sit in on Recovery Act cabinet meetings he led in April 2010 and September 2010. I also spoke to half a dozen cabinet secretaries, and most of the major economic players from the Obama White House. And I traveled to stimulus projects around the country.
Now that I’ve dissed the genre, I should acknowledge that I’ve benefited from several earlier books about Obama and his administration, which are all included in the source notes. The president’s own books, Dreams from My Father and The Audacity of Hope, provide a valuable introduction to his life and his mind. And Vice President Biden’s stream-of-consciousness autobiography Promises to Keep is a trip. Otherwise, I’m particularly indebted to David Mendell and David Remnick for their insightful Obama biographies; John Heilemann and Mark Halperin, Obama campaign manager David Plouffe, and Richard Wolffe for their accounts of the Obama campaign; Bush treasury secretary Hank Paulson, Andrew Ross Sorkin, and David Wessel for their accounts of the financial crisis; Steven Brill for his look at Race to the Top; Eric Pooley for his investigation of the political wars over climate change; and Jonathan Alter, former White House official Steve Rattner, Ron Suskind, and Wolffe for their accounts of the Obama White House. There is valuable stuff in every one of those books. (Alter gets extra credit for writing a terrific book about the old New Deal as well.) Finally, I want to acknowledge three authors who scooped me by publishing books while I was finishing mine: David Corn, Noam Scheiber, and Michael Grabell, who wrote an alternative take on the Recovery Act.
I’ve been harsh on the media coverage of the stimulus, but I still relied heavily on the reporting of great national newspapers like the New York Times, the Washington Post, and the Wall Street Journal, as well as Washington watchdogs like Politico, Roll Call, ProPublica, and Congressional Quarterly. I also consulted The New Yorker, The New Republic, The Atlantic, The Economist, Slate, and of course the work of my colleagues at Time. I often learned a lot from websites like Talking Points Memo, Daily Kos, the Huffington Post, ThinkProgress and ClimateProgress on the left, or National Review’s The Corner and RedState on the right; even for source materials that aren’t solely on the Internet, I’ve tried to include links whenever possible. For what it’s worth, I particularly admired the work of Ezra Klein and Alec McGillis of the Washington Post, David Leonhardt of the Times, Ryan Lizza of The New Yorker, Jonathan Chait of The New Republic, Joshua Green at The Atlantic, Matthew Yglesias of Slate, and David Roberts of Grist. My former boss at the Washington Post, Steve Coll, blogged the text of the Recovery Act with his usual brilliance. And like everyone else who wants to know what’s going on in D.C., I read my friend Mike Allen’s Playbook every morning.
Thanks to my indulgent bosses, some of the reporting in this book first appeared in Time and Time.com. My first Recovery Act article, “How to Spend a Trillion Dollars,” ran in January 2009; my story in May 2010, “How the Stimulus Is Changing America,” gave me the idea for this book. I’ve also cannibalized my Time articles on topics like energy efficiency, biofuels, green infrastructure, high-speed rail, health care costs, Steven Chu, Ben Bernanke, John Boehner, President Obama, California, and the Republican Party, as well as my blog posts about politics at Swampland.
I also spent an inordinate amount of time reading government websites and reports. The White House Council of Economic Advisers (www.whitehouse.gov), the Government Accountability Office (www.gao.gov), and the Congressional Budget Office (www.cbo.gov) all issued regular reports on the Recovery Act. Biden’s office and the Department of Energy (www.energy.gov) also produced helpful reports, as did inspector generals across the government. The official Recovery Act website, www.recovery.gov, is also an excellent source of information, notwithstanding the occasional brouhahas over phantom congressional districts and what-not. The American Presidency Project at the University of California-Santa Barbara has compiled Obama’s public remarks at http://www.presidency.ucsb.edu/index.php. The Bureau of Labor Statistics (www.bls.gov) and Bureau of Economic Analysis (www.bea.gov) were my sources for data on employment and the economy, while I relied on the Energy Information Administration (www.eia.gov) for energy data. The House and Senate debates on the Recovery Act are all in the Congressional Record.
In these endnotes, I’ve tried to identify sources of information that weren’t readily available elsewhere. I also occasionally used the notes to provide information—usually scintillating factoids like the difference between the 1703 and 1705 loan guarantee programs—that didn’t fit into the text of the book. I didn’t put interviews in the endnotes. When I quoted someone talking to me directly, I tried to use signals like “says” or “recalls” or “told me.” I tried hard to confirm that what they said and recalled and told me was correct; I’m confident that this book is the truth. But again, I realize it’s not the whole truth.
(1) President Obama faced the greatest economic challenge since Franklin D. Roosevelt took office in March 1933 during the Depression, and the comparisons began shortly after his election.
(Reprinted with permission of TIME magazine. Copyright © 2008.)
(2) President Obama put Vice President Biden in charge of the Recovery Act, and relied on him for unfiltered advice about the stimulus and everything else. “He wanted me to be the bastard at the family picnic,” Biden says.
(3) Chief of Staff Rahm Emanuel reads a story about the White House’s struggles with messaging. Some Obama aides thought Rahm’s frantic horse-trading had tarnished the president’s theme of change. “Come on, man, he was pure!” Rahm says. “It was his chief of staff who was the whore.”
(4) President Obama’s cabinet was responsible for putting the Recovery Act into action. The White House considered (from left) Education Secretary Arne Duncan, Energy Secretary Steven Chu, and Housing and Urban Development Secretary Shaun Donovan to be its leading reformers.
(5) Transportation Secretary Ray LaHood, a former Republican congressman from Illinois, runs interference for President Obama before a meeting with House Republicans. LaHood’s loyalty to the president was not a surprise, but his enthusiastic embrace of reform was.
(6) President Obama’s economic team was not a well-oiled machine, but it helped prevent a second depression. The team met in the Roosevelt Room on February 6, 2009. In the left foreground, Treasury counselor Gene Sperling talks numbers with Office of Management and Budget director Peter Orszag, while Treasury Secretary Tim Geithner makes a point to National Economic Council director Larry Summers. In the background, OMB deputy Jeff Liebman chats with NEC deputy Jason Furman.
(7) The president walks in the Rose Garden with senior adviser Valerie Jarrett (far left), Vice President Biden’s chief economist Jared Bernstein (holding coffee), Peter Orszag (holding a diet Coke), Council of Economic Advisers chair Christina Romer, and Jason Furman.
(8) After shedding over 800,000 jobs in January 2009, the economy slowly started to improve after the Recovery Act began to inject stimulus into the economy. Private forecasters and the nonpartisan Congressional Budget Office would later conclude that the stimulus helped avoid another depression and end a brutal recession.
(9) Blake Jones, the CEO of Namasté Solar, talks to Vice President Joe Biden and President Barack Obama on the roof of the Denver Museum of Science on February 17, 2009, minutes before the president signed the American Recovery and Reinvestment Act into law. Jones tried cracking a joke, but Obama didn’t laugh; he wanted t
o talk solar policy. “He had twenty minutes, and he was going to make the best use of every one,” Jones later recalled. “He was purpose-driven. I was thinking: Is he on like this all the time?”
(10) Most of the Recovery Act was tax cuts, emergency fiscal relief to help states avoid layoffs and massive cuts in services, and aid to unemployed workers and other victims of the Great Recession.
(11) Governors were not required to post signs identifying stimulus projects, and the cluttered Recovery Act logo didn’t do much to drive the message, either. But the projects made a real difference.
(12) For example, the Recovery Act included $6 billion for cleaning up the radioactive legacy of America’s nuclear program. Here a shuttered reactor’s exhaust stacks are demolished at the Savannah River Site in South Carolina, the largest stimulus project.
(13) There was often friction between the White House and congressional Democrats, but they agreed on almost all of their policy goals and accomplished a lot together. Obama listens to House Speaker Nancy Pelosi, while Vice President Biden holds the lapel of House Democratic Whip Jim Clyburn.
The New New Deal Page 50