The New New Deal

by Grunwald, Michael

  (14) Obama listens to Senate Majority Leader Harry Reid before an event in Nevada.

  (15) Even if House Minority Leader John Boehner (left) had been interested in working with Obama, he had to guard his right flank against House Republican Whip Eric Cantor.

  (16) Senate Minority Leader Mitch McConnell wanted to prevent Obama from claiming bipartisan victories; he publicly acknowledged that his top priority was making Obama a one-term president.

  (17) The top chart shows how President Bush converted President Clinton’s surpluses into record deficits. The second chart shows that the deficit was mostly created by the Bush tax cuts, the Great Recession, and the wars in Iraq and Afghanistan. The stimulus did add to the deficit for a few years, but its impact on our current fiscal situation is negligible.

  (18) President Obama speaks at Solyndra, alongside a robot holding one of the company’s innovative solar panels. Solyndra was once the toast of Silicon Valley, raising a billion dollars from elite investors and a half-billion-dollar stimulus loan. It became a Republican attack line after it went bankrupt in September 2011, but the Obama administration always knew that some of the Recovery Act’s $90 billion worth of clean-energy investments would fail. Overall, the solar industry has expanded sixfold since 2008, and U.S. renewable power has doubled.

  (19) The New Deal dammed dozens of U.S. rivers. Obama’s new New Deal included the largest dam removal in U.S. history, restoring salmon runs on the Elwha River in western Washington.

  (20) The Recovery Act also jump-started New York City’s Second Avenue subway project, which had been on the drawing board for decades.

  (21) A General Motors manager delivers the first Chevy Volt battery from its new plant in Brownstown, Michigan. The Recovery Act included $2 billion to create an advanced battery manufacturing industry almost from scratch, financing 30 domestic factories.

  (22) A Navy Riverine Command Boat tests algae-derived biofuel produced by the stimulus-funded company Solazyme. The Recovery Act dragged the advanced biofuels industry out of the lab, financing the country’s first commercial bio-refineries.

  (23) Vice President Biden gives President Obama some support.

  — ABOUT THE AUTHOR —

  © DAVID WHITMAN

  MICHAEL GRUNWALD is a senior national correspondent at Time magazine. He has won the George Polk Award for national reporting and many other journalism prizes. He is the author of The Swamp: The Everglades, Florida, and the Politics of Paradise. He lives in Miami Beach with his wife, Cristina Dominguez, and their two children, Max and Lina. His website is www.michaelgrunwald.com.

  ALSO BY MICHAEL GRUNWALD

  The Swamp: The Everglades, Florida, and the Politics of Paradise

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  — NOTES —

  Introduction: Things That Never Were

  1 usher in a new birth of freedom: Obama announcement speech, February 10, 2007, http://www.presidency.ucsb.edu/ws/index.php?pid=76999#axzzlpxkCjpbY.

  2 “reinvent the economy to seize the future”: Barack Obama, Change We Can Believe In: Barack Obama’s Plan to Renew America’s Promise (New York: Three Rivers Press, 2008), p. 246.

  3 Steven Chu, a quantum physicist: Michael Grunwald, “Can Steven Chu Win the Fight over Global Warming?,” Time, August 23, 2009, http://www.time.com/time/magazine/article/0,9171,1916282,00.html. I first heard Chu complain about photosynthesis when I traveled with him to China in the spring of 2009 for this profile.

  4 using an atom interferometer: Holger Müller, Achim Peters, and Steven Chu, “A Precision Measurement of the Gravitational Redshift by the Interference of Matter Waves,” Nature, February 18, 2010.

  5 Chu was ARPA-E’s intellectual godfather: Steven Chu testimony, House Committee on Science, March 9, 2006, http://www7.nationalacademies.org/ocga/testimony/Should_Congress_Est_ARPA_E_Rising_Above_the

  _Gathering_Storm.asp.

  6 a cabinet meeting led by Vice President Joe Biden: I attended the meeting in the Eisenhower Executive Office Building on April 29, 2010.

  7 Obama’s approval ratings were around 70 percent: Gallup has tracked Obama’s approval ratings throughout his presidency at http://www.gallup.com/poll/113980/gallup-daily-obama-job-approval.aspx.

  8 Within a year, the percentage of Americans: According to a CBS News/New York Times poll on February 11, 2010, just 6 percent of the public thought the stimulus had created any jobs. According to a CBS News poll from 2002, 7 percent of Americans believe Elvis is alive.

  9 “avoid the word ‘stimulus’ like the plague”: Obama press conference, September 10, 2010.

  10 A politically disastrous January 2009 report: Christina Romer and Jared Bernstein, “The Job Impact of the American Recovery and Reinvestment Plan,” January 10, 2009, http://otrans.3cdn.net/ee40602f9a7d8172b8_ozm6bt5oi.pdf.

  11 the official price tag would eventually climb to $831 billion: “Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output from July 2011 Through December 2011,” Congressional Budget Office, February 2012, http://www.cbo.gov/publication/43014.

  12 the stimulus helped stop the bleeding: CBO report on ARRA, February 2012; Alan S. Blinder and Mark Zandi, “How the Great Recession Was Brought to an End,” July 27, 2010, http://www.economy.com/mark-zandi/documents/End-of-Great-Recession.pdf; “MA on Fiscal Stimulus, the Definitive Answer: It Works. MA Refutes the Demagoguery,” Macroadvisers: The Blog of Macroeconomic Advisers LLC, February 19, 2010, http://macroadvisers.blogspot.com/2010/02/ma-on-fiscal-stimulus-definitive-answer.html; “Fiscal Stimulus: A Little Less in Q2, A Little More Later,” Goldman Sachs, August 4, 2009; Jackie Calmes and Michael Cooper, “New Consensus Sees Stimulus Package as Worthy Step,” New York Times, November 20, 2009.

  13 the low point came right before: The biggest monthly job loss during the recession was in January 2009, when the economy shed 818,000 jobs.

  14 The economy was shrinking at an unheard-of 8.9 percent rate: “Results of the 2011 Flexible Annual Revision of the National Income and Product Account,” Bureau of Economic Analysis, July 29, 2011, http://www.bea.gov/national/pdf/NIPAbriefing_AR2011.pdf. The BEA is my source for all data on economic output.

  15 Today, those independent analysts: The various estimates are listed in “The Economic Impact of the American Recovery and Reinvestment Act of 2009: Eighth Quarterly Report,” White House Council of Economic Advisers, December 9, 2011, http://www.whitehouse.gov/sites/default/files/cea_8th_arra_report_final_draft.pdf.

  16 the Recovery Act increased output over 2 percent: A February 2012 CBO report found that the stimulus boosted quarterly economic growth by as much as 4.6 percent, http://www.cbo.gov/sites/default/files/cbofiles/attachments/02-22-ARRA.pdf. Private forecasters have estimated that the maximum effect was as little as 2.1 percent and as much as 3.8 percent. White House CEA report, December 2011.

  17 “Oprah, I’ve got to tell you”: Obama interview, The Oprah Winfrey Show, May 2, 2011.

  18 this was the moment: Obama speech following Iowa caucuses, January 3, 2008, http://www.presidency.ucsb.edu/ws/index.php?pid=76232.

  1. A Man With a Plan

  19 Obama’s speech was memorable: Obama inauguration speech, January 20, 2009, http://www.presidency.ucsb.edu/ws/index.php?pid=44&st=&st1=#axzzlmfRjZahX

  20 The Recovery Act checked off: The text of the Recovery Act can be found at http://www.gpo.gov/fdsys/pkg/BILLS-111hr1enr/pdf/BILLS-111hr1enr.pdf.

  21 “a president we know less about”: The quote is from former Mississippi governor Haley Barbour at a Washington round table on September 7, 2010.

  22 We know plenty about Barack Obama: Obama’s own books, Drea
ms from My Father: A Story of Race and Inheritance (New York: Three Rivers Press; 2004 edition) and The Audacity of Hope: Thoughts on Reclaiming the American Dream (New York: Three Rivers Press, 2006), are the best introduction to his life and his mind. The best Obama biographies so far are David Remnick, The Bridge: The Life and Rise of Barack Obama (New York: Knopf, 2010) and David Mendell, Obama: From Promise to Power (New York: HarperCollins, 2007). (I reserve the right to revise and extend those remarks after David Maraniss weighs in.) David Freddoso’s The Case Against Barack Obama (Washington, D.C.: Regnery, 2008) looks at Obama without sympathy but with facts from a conservative perspective. James T. Kloppenberg’s Reading Obama: Dreams, Hope, and the American Political Tradition (Princeton: Princeton University Press, 2009) is an interesting intellectual biography.

  23 “could probably do every job”: David Plouffe, The Audacity to Win (New York: Viking, 2009), p. 8.

  24 “white folks this and white folks that”: Obama, Dreams from My Father, p. 81.

  25 “We should be guided by what works”: Obama, The Audacity of Hope, p. 159.

  26 Aside from the wingnut screeds: Jack Cashill, Deconstructing Obama: The Life, Loves and Letters of America’s First Postmodern President (New York: Threshold Editions, 2011); Dinesh D’Souza, The Roots of Obama’s Rage (Washington, D.C.: Regnery, 2010).

  27 Obama’s mother, Ann Dunham: Obama, The Audacity of Hope, pp. 45, 59; Obama, Dreams from My Father, p. 72.

  28 As he explained to the uninitiated: Obama, The Audacity of Hope, pp. 156–57.

  29 the launch of the Hamilton Project: Video of Obama speech, April, 5, 2006, http://www.youtube.com/watch?v=P-5Y74FrDCc.

  30 “the draft letter saga”: Obama, The Audacity of Hope, p. 35.

  31 “We Are One People” speech: Video of Obama speech, July 27, 2004, http://www.youtube.com/watch?v=eWynt87PaJ0.

  32 “Maybe there’s no escaping”: Obama, The Audacity of Hope, p. 41.

  33 Obama announced his candidacy: Obama announcement speech, February 10, 2007, http://www.presidency.ucsb.edu/ws/index.php?pid=76999.

  2. The Four Pillars

  34 In his first policy speech of the campaign: Obama speech, Detroit, May 7, 2007, http://www.presidency.ucsb.edu/ws/index.php?pid=77000. Obama’s campaign book: Change We Can Believe In: Barack Obama’s Plan to Renew America’s Promise outlines his specific policy agenda. The transition then posted much of it at http://change.gov/agenda.

  35 Those last five words: Franklin Delano Roosevelt inauguration speech, March 4, 1933, http://www.presidency.ucsb.edu/ws/index.php?pid=14473.

  36 Oil imports had more than doubled since 1973: 1.4 billion barrels of oil were imported in 1973; 3.7 billion were imported in 2007: U.S. imports of crude oil, 1973 to January 2012, U.S. Census Bureau, Foreign Trade Division, http://www.census.gov/foreign-trade/statistics/historical/petr.pdf. “World Proved Reserves of Oil and Natural Gas, Most Recent Estimates,” U.S. Energy Information Administration, March 3, 2009, http://www.eia.gov/international/reserves.html.

  37 The ten hottest years on record: Currently, the ten hottest years by temperature, according to the NASA Global Land Temperature Index, are: 2010, 2005, 2007, 1998, 2009, 2002, 2003, 2006, 2011, and 2004. So far, 2012 is looking like another hot one.

  38 In an October speech in Portsmouth, New Hampshire: Obama speech, October 8, 2007, http://www.presidency.ucsb.edu/ws/index.php?pid=93305&st=portsmouth&st1=obama#axzz11AFdDYKd.

  39 “standard goody-bag politics”: Robert Samuelson, “The Obama Delusion,” Washington Post, February 20, 2008.

  40 a renewable energy resource that’s perfectly clean: Michael Grunwald, “America’s Untapped Resource,” Time, December 31, 2008, www.time.com/time/magazine/article/0,9171,1869224,00.html.

  41 A McKinsey & Co. study found that efficiency: “Unlocking Energy Efficiency in the US Economy,” July 2009, http://www.mckinsey.com/Client_Service/Electric_Power_and_Natural_Gas/Latest_thinking/

  Unlocking_energy_efficiency_in_the_US_economy.

  42 It was analog in a digital world: I learned a lot about the smart grid from Peter Fox-Penner and his book Smart Power: Climate Change, the Smart Grid, and the Future of Electric Utilities (Washington, D.C.: Island Press, 2010). I wrote about it in Time: Michael Grunwald, “Street Smarts,” September 30, 2011, http://www.time.com/time/magazine/article/0,9171,2094362,00.html.

  43 “It’s safe to say”: David Roberts, “Obama Talks Up Electrical Grid Improvements on Cable TV—Seriously, I Have Video Evidence,” Grist, October 31, 2008, http://grist.org/politics/grid-me-barry-one-more-time/.

  44 The ethanol boom: Grunwald, “The Clean Energy Scam,” Time, March 27, 2008, www.time.com/time/magazine/article/0.9171.1725975,00.html.

  45 our share of the market had plummeted from 40 percent to 8 percent in a decade: “Trends in Photovoltaic Applications,” International Energy Agency, Photovoltaic Power Systems Programme, August 2011.

  46 the Energy Department’s research budget had plunged 85 percent: Daniel M. Kammen and Gregory F. Nemet, “Reversing the Incredible Shrinking Energy R&D Budget,” University of California, Berkeley, Issues in Science and Technology, Fall 2005, http://rael.berkeley.edu/sites/default/files/old-site-files/2005/Kammen-Nemet-ShrinkingRD-2005.pdf.

  47 U.S. health spending had quadrupled in two decades: For more on U.S. health spending, see the National Health Expenditure database at the Center for Medicare and Medicaid Services website: http://www.cms.gov/NationalHealthExpendData/02_NationalHealthAccountsHistorical.asp#TopOfPage.

  48 The Congressional Budget Office warned: “The Long-Term Outlook for Health Care Spending,” CBO, November 2007, http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/87xx/docs8758/11-13-lt-health.pdf.

  49 One study of preventable deaths: “Measuring the Health of Nations: Updating an Earlier Analysis,” Health Affairs, January 2008.

  50 Less than half of U.S. medical treatment: “Learning What Works Best: The Nation’s Need for Evidence on Comparative Effectiveness in Health Care,” Institute of Medicine of the National Academies, September 2007, http://www.iom.edu/~/media/Files/Activity%20Files/Quality/VSRT/ComparativeEffectivenessWhitePaperF.ashx.

  51 Studies by Dartmouth researchers: Jonathan Skinner and Elliot S. Fisher, “Reflections on Geographic Variations in U.S. Health Care,” Dartmouth Institute for Health Policy and Clinical Practice, March 31, 2010, http://www.dartmouthatlas.org/downloads/press/Skinner_Fisher_DA_05_10.pdf.

  52 Consumer Reports had compiled evidence: Consumer Reports Best Buy Drugs studies, February 2011, http://www.consumerreports.org/health/best-buy-drugs/best-buy-drugs/generic-and-brand-drugs/index.htm.

  53 Gingrich coauthored an op-ed: Billy Beane, Newt Gingrich, and John Kerry, “How to Take American Health Care from Worst to First,” New York Times, October 24, 2008.

  54 “It’s an attempt to say to patients”: David Leonhardt, “After the Great Recession,” New York Times, April 28, 2009.

  55 “They wanted more school”: Obama, The Audacity of Hope, p. 250.

  56 “Few of these educators”: Obama, Dreams from My Father, p. 386.

  57 “labeling a school and its students as failures”: Obama speech to the American Federation of Teachers convention, July 2, 2008, http://www.presidency.ucsb.edu/ws/index.php?pid=77653.

  58 “I’m running for president”: Obama speech, Dayton, Ohio, September 9, 2008, http://www.presidency.ucsb.edu/ws/index.php?pid=78610.

  59 “will help determine not only whether our children”: Obama speech, Indianapolis, Indiana, May 3, 2008, http://www.presidency.ucsb.edu/ws/index.php?pid=77203.

  60 his first major economic speech: Obama speech, Nasdaq headquarters, September 17, 2007, http://www.presidency.ucsb.edu/ws/index.php?pid=77012.

  61 wages had been flat: “Income, Poverty, and Health Insurance Coverage in the United States: 2008,” U.S. Census Bureau, September 2009, http://www.census.gov/prod/2009pubs/p60-236.pdf.

  62 Bush returned more cash to the top 1 percent of taxpayers: “Tenth Anniver
sary of the Bush Tax Cuts,” Economic Policy Institute, June 1, 2011, http://www.epi.org/publication/tenth_anniversary_of_the_bush-era_tax_cuts/.

  63 In a speech at Brookings: Obama speech, September 18, 2007, http://www.presidency.ucsb.edu/ws/index.php?pid=93293.

  64 when your drapes cost more than an average worker’s yearly salary: Obama, The Audacity of Hope, p. 193.

  65 “more of the same old Democratic campaign playbook”: Ruth Marcus, “The Two Obamas,” Washington Post, September 26, 2007.

  66 A magazine profile about “Larry Summer’s Evolution”: David Leonhardt, New York Times Sunday Magazine, June 6, 2007.

  3. The Collapse

  67 “the Bush boom is alive and well”: Larry Kudlow, “Bush Boom Continues,” the Corner blog, National Review, December 7, 2007, http://www.nationalreview.com/corner/153626/bush-boom-continues/larry-kudlow.

  68 “History has cautioned”: Speech by Larry Summers, Brookings Institution, Washington, D.C., December 19, 2007, http://www.brookings.edu/~/media/Files/events/2007/1219_economy/20071219_summers.pdf.

  69 Republican Mitt Romney proposed the most aggressive plan: John Harwood, “Romney Offers an Economic Stimulus Plan,” New York Times, January 19, 2008.

  70 Keynes wrote his masterpiece: John Maynard Keynes, The General Theory of Employment, Interest and Money (New York: Classic Books America, 2009; first published, 1936).

  71 Summers thought it should have been titled: Ezra Klein, “Larry Summers: ‘I Think Keynes Mistitled His Book,’” Washington Post, July 11, 2011.