How did President Obama, a brilliant campaigner, fail to grasp the imperative of continuing to campaign against those determined to make him a one-term president from his first day in office? The economy was in a free fall in January 2009, but most Americans were ignorant of its severity and depth. President Obama chose to rely on the same economic officials President Bush had put his confidence in, believing perhaps that any sudden shift in leadership of the economy would trigger a further collapse in market confidence.
In doing so, he cast his political fate with those rowing the lifeboat before he won the presidency. In retrospect of scarcely four years, what matters is that a radicalized GOP leadership decided to sink Obama as its first priority. In 2009 -- the year Mike Grunwald focuses on in his new book -- GOP insiders may have understood better than Obama how the political and economic gears continue to spin the same direction no matter which party occupies the White House. This phenomenon may explain why Obama did not make an abrupt break with economic policy but how he did not foresee the need for a permanent campaign remains a question.
Obama believed he could bridge the partisan divide. George W. Bush said the same, but Barack Obama meant to prove it. He did not believe in neutralizing much less in rooting out (like the GOP) ideological enemies. (cf. Lee County Commissioner Ray Judah, below.) "A rising tide lifts all ships" is still a central tenet of Democrats and applies to thinking behind the largest economic stimulus in US history, the subject of Mike Grunwald's new book, "The New New Deal: The Hidden Story of Change in the Obama Era". That is not what the GOP believes.
The GOP believes that if the conditions are right for the top entrepreneurs and business elite -- the "job creators" -- that the greatest benefit will accrue to the middle class. Let the queen bees thrive, and so will the worker bees. Just get government out of the way, the thinking goes, and the world will be fine.
Well. It may be possible to think so, for the top one percent who have experienced no ill-effects of the hidden inflation that marked the last twenty five years of the US economy. That hidden inflation is the cause of what Thomas P. Edsall calls "The Age of Austerity". It is largely in response to austerity -- again, the consequence of hidden inflation that government statistics under Democrats and Republicans alike have masked-- that a "me first" program began to materialize as a core GOP principle; a prosperity doctrine crowned by religious faith, blind conviction and a deliberate mis-reading of Ayn Rand.
Within the GOP, the result has been the growth of an ideological orthodoxy that pushed moderates from the party and allowed the infiltration of a toxic hysteria. The Tea Party. "Keep government out of our lives" was used by Republicans to foster antipathy to government at a time, during the Bush era, when the political response to perceived threats created the conditions for the largest intervention of government in personal liberties since the nation was founded.
Through this maelstrom, President Obama won election in 2008. As Mike Grunwald documents in clear, exacting analysis, Obama quickly rose to the occasion. With bold and decisive action, he lead the fight for the stimulus saving the economy from a second Great Depression. It might have been larger, along the lines that economists like Paul Krugman advocated, but Grunwald documents: Obama cut the best deal he could with Republicans.
But the maelstrom did not subsequently abate. Of the mysteries of the Obama presidency, one is why the president -- an excellent orator compared to his predecessor -- could not explain to the American people the dynamics of what they were enduring. Perhaps he was convinced that talking about bad news would not help his standing. Once in the White House, the doors closed behind, one imagines it is phenomenally difficult for a president to avoid being entrapped by the bubble. Grunwald details how the GOP leadership was determined to keep Obama inside that bubble. Even if they voted for his stimulus package in early 2009, they would figuratively drown him in the bathtub for the remaining years of his presidency.
Yes a rising tide lifts all ships, except those moored to the bottom with a tight chain. Those, sink.
From The Economist: "The truth is that no one really knows yet how well spent the longer-term parts of the immense Recovery and Reinvestment Act will turn out to have been. But no writer has yet gone this far, at least in unravelling where the money has gone. “The New New Deal” is the most interesting book that has been published about the Obama administration. Even Republicans should read it." (for the full review, click 'read more')
The New New Deal: The Hidden Story of Change in the Obama Era. By Michael Grunwald. Simon & Schuster; 519 pages; $28. Buy from Amazon.com
THE word “boondoggle”, Michael Grunwald points out, was coined back in the days of the original New Deal, to describe “make-work” bits of arts and craft paid for by the government at a price that was out of all proportion to their actual value.
This is not necessarily a bad thing. In times of economic woe, when normal patterns of consumption and investment are frozen, prodigal government spending can sometimes be the only way to break the vicious circle of declining demand and shrinking employment. Value for money, paradoxically, can sometimes be an unaffordable luxury. To sum up John Maynard Keynes, it can even make sense to bury money in bottles, so that miners, and the suppliers of their pickaxes and overalls, and those who sell food and materials to those suppliers can, in turn, benefit from the circulation of money that they dig up. Mr Grunwald’s new book is the story of what was arguably the greatest boondoggle in history and the politics that surrounded it, both before and since.
Barack Obama’s $787 billion stimulus package, enacted within a month of his taking office in January 2009, amounted to about 4% of America’s GDP. In the Depression of the 1930s, the biggest stimulus in any year of Franklin Roosevelt’s New Deal amounted to only about 1.5% of GDP. The American Recovery and Reinvestment Act, as Mr Obama’s bill was formally named, was a tale that grew in the telling. In the months running up to the election in November 2008, the economy entered virtual free-fall. The severity of the downturn surprised the participants, but long before he was elected, Mr Obama knew that he faced a crisis of 1930s proportions.
Mr Grunwald’s book does a meticulous job, casting much new light on the advance thinking of Mr Obama’s team, both before the election and, especially, during the long transition. In the last quarter of 2008, the final three months of the Bush era, the American economy contracted by an astonishing 8.9%. By early 2009 job losses hit 800,000 a month. The size of the policy response grew too. An early plan, calculated at $300 billion, grew, long before inauguration day, to around $800 billion. And that, as Mr Grunwald makes clear, was very much at the low end of what Mr Obama’s economists thought was required.
One thing that may surprise readers not fully acquainted with the grisly nature of political sausage-making is the degree of cynicism that surrounded the passing of the Recovery Act. It was naive of Mr Obama to expect the Republicans to play ball. But because he needed to win at least a couple of their votes in the Senate to break the threat of a filibuster, he tried hard to court them. Mr Grunwald lays out in shocking detail how the Republican leadership decided early and wholeheartedly not to co-operate with the new president. So deep was their opposition that they even opposed things that they supposedly supported, such as the Recovery Act’s deep tax cuts and its emphasis on infrastructure.
As cynical as this may have been, it made political sense. If the stimulus succeeded, Mr Obama would get all the credit. If it failed, the Republicans could portray themselves as having been on the side of fiscal prudence. Since then, the economy has stubbornly refused to grow at anything beyond an anaemic rate. Many Republican economists, such as the respected Mark Zandi, who advised John McCain in his contest with Mr Obama, agree that without it, things would have been even worse. But the problem is that it did not work well enough. As a result, the Republicans triumphed at the mid-term vote and Mr Obama’s ratings are now uncomfortably low as he struggles for re-election.
Mr Grunwald’s heart plainly beats on the left, and it is clear that he admires Mr Obama, with his “hyper-rational side”. At the same time, the author does make some effort to explain the Republican point of view. The whole point of an economic stimulus is that it is supposed to stimulate. It needs to move money out of the door fast, get it quickly to where it can do most good and not carry with it a tail of long-term spending commitments. But Mr Obama’s agenda was always much bigger than that, and it is in explaining this that Mr Grunwald’s book is at its best.
Much of the meat involves parsing the issues that riled the Republicans: how the stimulus bill was to be used as a tool to transform American society. Right from the start, Mr Obama wanted his Recovery Act to spend money on a low-carbon future, on radical school reform, on health reform and on creating jobs. All of these, Mr Grunwald thinks, are laudable aims. Many readers would agree. But Republicans in Washington have other views. New energy projects, like job creation, should be left to the market, not picked by bureaucrats; school and health reform should be a matter for individual states. What they saw was an attempt to use the crisis to push the political economy of America in a more statist and Washington-centric direction. Mr Grunwald does not attempt to deny that; it is simply that he has no problem with it.
The most interesting part of the book is the part that leaves most questions open. What will be the legacy of all Mr Obama’s greening and rebuilding? Mr Grunwald waxes on about the cleverness of Steven Chu, the president’s energy secretary, and all the amazing things that his scientists think they can do with their oodles of new cash. But there have also, as he admits, been many failures. Mr Grunwald’s instinct is to praise the splashing around of government money for untested new technologies which, when exposed to life without the government teat, may quickly wither. Governments make bad venture capitalists, as the book quotes Larry Summers, a key member of the president’s original team, as saying.
The truth is that no one really knows yet how well spent the longer-term parts of the immense Recovery and Reinvestment Act will turn out to have been. But no writer has yet gone this far, at least in unravelling where the money has gone. “The New New Deal” is the most interesting book that has been published about the Obama administration. Even Republicans should read it.
In doing so, he cast his political fate with those rowing the lifeboat before he won the presidency. In retrospect of scarcely four years, what matters is that a radicalized GOP leadership decided to sink Obama as its first priority. In 2009 -- the year Mike Grunwald focuses on in his new book -- GOP insiders may have understood better than Obama how the political and economic gears continue to spin the same direction no matter which party occupies the White House. This phenomenon may explain why Obama did not make an abrupt break with economic policy but how he did not foresee the need for a permanent campaign remains a question.
Obama believed he could bridge the partisan divide. George W. Bush said the same, but Barack Obama meant to prove it. He did not believe in neutralizing much less in rooting out (like the GOP) ideological enemies. (cf. Lee County Commissioner Ray Judah, below.) "A rising tide lifts all ships" is still a central tenet of Democrats and applies to thinking behind the largest economic stimulus in US history, the subject of Mike Grunwald's new book, "The New New Deal: The Hidden Story of Change in the Obama Era". That is not what the GOP believes.
The GOP believes that if the conditions are right for the top entrepreneurs and business elite -- the "job creators" -- that the greatest benefit will accrue to the middle class. Let the queen bees thrive, and so will the worker bees. Just get government out of the way, the thinking goes, and the world will be fine.
Well. It may be possible to think so, for the top one percent who have experienced no ill-effects of the hidden inflation that marked the last twenty five years of the US economy. That hidden inflation is the cause of what Thomas P. Edsall calls "The Age of Austerity". It is largely in response to austerity -- again, the consequence of hidden inflation that government statistics under Democrats and Republicans alike have masked-- that a "me first" program began to materialize as a core GOP principle; a prosperity doctrine crowned by religious faith, blind conviction and a deliberate mis-reading of Ayn Rand.
Within the GOP, the result has been the growth of an ideological orthodoxy that pushed moderates from the party and allowed the infiltration of a toxic hysteria. The Tea Party. "Keep government out of our lives" was used by Republicans to foster antipathy to government at a time, during the Bush era, when the political response to perceived threats created the conditions for the largest intervention of government in personal liberties since the nation was founded.
Through this maelstrom, President Obama won election in 2008. As Mike Grunwald documents in clear, exacting analysis, Obama quickly rose to the occasion. With bold and decisive action, he lead the fight for the stimulus saving the economy from a second Great Depression. It might have been larger, along the lines that economists like Paul Krugman advocated, but Grunwald documents: Obama cut the best deal he could with Republicans.
But the maelstrom did not subsequently abate. Of the mysteries of the Obama presidency, one is why the president -- an excellent orator compared to his predecessor -- could not explain to the American people the dynamics of what they were enduring. Perhaps he was convinced that talking about bad news would not help his standing. Once in the White House, the doors closed behind, one imagines it is phenomenally difficult for a president to avoid being entrapped by the bubble. Grunwald details how the GOP leadership was determined to keep Obama inside that bubble. Even if they voted for his stimulus package in early 2009, they would figuratively drown him in the bathtub for the remaining years of his presidency.
Yes a rising tide lifts all ships, except those moored to the bottom with a tight chain. Those, sink.
From The Economist: "The truth is that no one really knows yet how well spent the longer-term parts of the immense Recovery and Reinvestment Act will turn out to have been. But no writer has yet gone this far, at least in unravelling where the money has gone. “The New New Deal” is the most interesting book that has been published about the Obama administration. Even Republicans should read it." (for the full review, click 'read more')
The New New Deal: The Hidden Story of Change in the Obama Era. By Michael Grunwald. Simon & Schuster; 519 pages; $28. Buy from Amazon.com
THE word “boondoggle”, Michael Grunwald points out, was coined back in the days of the original New Deal, to describe “make-work” bits of arts and craft paid for by the government at a price that was out of all proportion to their actual value.
This is not necessarily a bad thing. In times of economic woe, when normal patterns of consumption and investment are frozen, prodigal government spending can sometimes be the only way to break the vicious circle of declining demand and shrinking employment. Value for money, paradoxically, can sometimes be an unaffordable luxury. To sum up John Maynard Keynes, it can even make sense to bury money in bottles, so that miners, and the suppliers of their pickaxes and overalls, and those who sell food and materials to those suppliers can, in turn, benefit from the circulation of money that they dig up. Mr Grunwald’s new book is the story of what was arguably the greatest boondoggle in history and the politics that surrounded it, both before and since.
Barack Obama’s $787 billion stimulus package, enacted within a month of his taking office in January 2009, amounted to about 4% of America’s GDP. In the Depression of the 1930s, the biggest stimulus in any year of Franklin Roosevelt’s New Deal amounted to only about 1.5% of GDP. The American Recovery and Reinvestment Act, as Mr Obama’s bill was formally named, was a tale that grew in the telling. In the months running up to the election in November 2008, the economy entered virtual free-fall. The severity of the downturn surprised the participants, but long before he was elected, Mr Obama knew that he faced a crisis of 1930s proportions.
Mr Grunwald’s book does a meticulous job, casting much new light on the advance thinking of Mr Obama’s team, both before the election and, especially, during the long transition. In the last quarter of 2008, the final three months of the Bush era, the American economy contracted by an astonishing 8.9%. By early 2009 job losses hit 800,000 a month. The size of the policy response grew too. An early plan, calculated at $300 billion, grew, long before inauguration day, to around $800 billion. And that, as Mr Grunwald makes clear, was very much at the low end of what Mr Obama’s economists thought was required.
One thing that may surprise readers not fully acquainted with the grisly nature of political sausage-making is the degree of cynicism that surrounded the passing of the Recovery Act. It was naive of Mr Obama to expect the Republicans to play ball. But because he needed to win at least a couple of their votes in the Senate to break the threat of a filibuster, he tried hard to court them. Mr Grunwald lays out in shocking detail how the Republican leadership decided early and wholeheartedly not to co-operate with the new president. So deep was their opposition that they even opposed things that they supposedly supported, such as the Recovery Act’s deep tax cuts and its emphasis on infrastructure.
As cynical as this may have been, it made political sense. If the stimulus succeeded, Mr Obama would get all the credit. If it failed, the Republicans could portray themselves as having been on the side of fiscal prudence. Since then, the economy has stubbornly refused to grow at anything beyond an anaemic rate. Many Republican economists, such as the respected Mark Zandi, who advised John McCain in his contest with Mr Obama, agree that without it, things would have been even worse. But the problem is that it did not work well enough. As a result, the Republicans triumphed at the mid-term vote and Mr Obama’s ratings are now uncomfortably low as he struggles for re-election.
Mr Grunwald’s heart plainly beats on the left, and it is clear that he admires Mr Obama, with his “hyper-rational side”. At the same time, the author does make some effort to explain the Republican point of view. The whole point of an economic stimulus is that it is supposed to stimulate. It needs to move money out of the door fast, get it quickly to where it can do most good and not carry with it a tail of long-term spending commitments. But Mr Obama’s agenda was always much bigger than that, and it is in explaining this that Mr Grunwald’s book is at its best.
Much of the meat involves parsing the issues that riled the Republicans: how the stimulus bill was to be used as a tool to transform American society. Right from the start, Mr Obama wanted his Recovery Act to spend money on a low-carbon future, on radical school reform, on health reform and on creating jobs. All of these, Mr Grunwald thinks, are laudable aims. Many readers would agree. But Republicans in Washington have other views. New energy projects, like job creation, should be left to the market, not picked by bureaucrats; school and health reform should be a matter for individual states. What they saw was an attempt to use the crisis to push the political economy of America in a more statist and Washington-centric direction. Mr Grunwald does not attempt to deny that; it is simply that he has no problem with it.
The most interesting part of the book is the part that leaves most questions open. What will be the legacy of all Mr Obama’s greening and rebuilding? Mr Grunwald waxes on about the cleverness of Steven Chu, the president’s energy secretary, and all the amazing things that his scientists think they can do with their oodles of new cash. But there have also, as he admits, been many failures. Mr Grunwald’s instinct is to praise the splashing around of government money for untested new technologies which, when exposed to life without the government teat, may quickly wither. Governments make bad venture capitalists, as the book quotes Larry Summers, a key member of the president’s original team, as saying.
The truth is that no one really knows yet how well spent the longer-term parts of the immense Recovery and Reinvestment Act will turn out to have been. But no writer has yet gone this far, at least in unravelling where the money has gone. “The New New Deal” is the most interesting book that has been published about the Obama administration. Even Republicans should read it.
6 comments:
Excellent post, g-eye. What this confirms to me is that Rs undermined the president and fought for his failure at every step. To me the outrageous extremist's actions border on treason, not political powerbuilding. Obama's greening and rebuilding was an attempt to pull the U.S. into the rest of the world's reality and catch up with them. And he was entitled ot be given a chance to success with his agenda because he was elected. But as always, the Ds allow the conservatives to run with their propaganda without the needed opposition, and we see question it questioned in sature only on places like "The Daily Show" or very progressive groups, and not from Obama's bully pulpit. A German friend of mine said that when growing up, their schools required lessons in fascism and how it takes root (in order to avoid it happening again). He says they should reqire it here since he sees those roots growing in the mainstream; but of course we American's aren't allowed to speak those truths. In an ultimate irony, I recall the right using "Nazi" and Obama in the same breath. This country scares me and we need a wakeup call.
Obama had a filibuster-proof majority in 2009. There is nothing the Republicans could have done to stop the stimulus plan even if they tried.
This book sounds like a work of fiction.
G.O.D. when are you coming back? With all due respect to G-eye, I miss youuuu!!!!
Obama said the unemployment rate would not go above 8% if his stimulus enacted. However, the jobless rate skyrocketed as soon as he signed it into law and began his reckless spending spree. The unemployment rate is now 9.5% in Miami-Dade.
Obama blew all that stimulus money on bogus solar companies and we have nothing to show for it. He pushed us into a worse recession and increased our national debt by more than $5 trillion. Obama will go down in history as one of our worst presidents.
As I said over and over when Obama won the election:
Meet the new boss... same as the old boss.
And the rigged system will continue to put out no choice decisions like Romney who is exactly like Bush and Obama with a more ridiculous background.
That stimulus money was just pissed away. I cant believe some left-wing Obama worshiper is now trying to spin it as the Second New Deal. LOL!
OBAMA, WHERE ARE THE JOBS?
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