The New New Deal: The Hidden Story of Change in the Obama Era, by Michael Grunwald (Simon & Schuster, 528 pp., $28)

Journalist Michael Grunwald wants to convince readers that it’s not President Obama’s record that matters but his ideas. In The New New Deal, his book on Obama’s stimulus plan, Grunwald argues that because the stimulus will transform American industry in the long run, it doesn’t matter that the immediate employment situation has improved so little. The “change” that Obama promised, contends Grunwald, “is a direction, not a destination.” Put differently: the stimulus was “only partly about stimulus” and “also about metamorphosis.” Who needs results when you’re busy shaping the future?

Administration officials certainly saw the stimulus the way Grunwald does. “Stimulus czar” Matt Rogers, for instance, said of biotech investments that “we don’t know which of these approaches will work. . . . We don’t care.” Grunwald endorses this nonchalance, touting the Obama administration’s efforts at industrial policy—such as rejuvenating the renewable-fuel industry and expanding clean-technology loans—as a bold new direction for the American economy. But Grunwald also shows that Obama didn’t always favor such flightiness. On the campaign trail, Obama conceded that investing in alternative energy would “not . . . deal with the immediate crisis” but would “use economic hardship as a rationale for enacting an ideologically driven policy agenda.” As the crisis deepened, however, Obama and his advisors realized that it would allow them to implement bigger projects, and they began referring to the stimulus as a “down payment on long-term goals.” As Grunwald delicately puts it, this was the president’s “one shot to spend boatloads of money pursuing his vision.”

This new attitude drastically changed the nature of the stimulus. Whereas Obama’s advisors had previously stressed “timely, targeted, and temporary” investments, they now made quick and capricious decisions. One advisor described the process as “Someone would make a single phone call, and suddenly it’s, ‘All righty. Put a billion dollars over there.’” Seeking to recreate FDR’s public-works projects, Obama encouraged this haphazard approach. And Grunwald approves, arguing that “it made sense to fund things that deserved funding anyway.” Moreover, he asks rhetorically, would it have been better for Obama to “fill out the $800 billion with things he didn’t want to do?” The idea seems to be that Obama had to spend that sum. Grunwald is so convinced by the righteousness of the stimulus that he cannot conceive of an alternative.

Grunwald suggests that Republicans’ objections to the stimulus were unprincipled and merely an opportunity to oppose the president. But the stimulus provided sound basis for opposition: in addition to the well-publicized failures of Solyndra and Ener1, numerous infrastructure projects faced local obstacles and delays, leading to Obama’s memorable admission that “shovel-ready was not as shovel-ready as we expected.” The fact that the stimulus didn’t fulfill its original objective of improving the jobs situation doesn’t matter to Grunwald. He justifies the many government-funded failures by arguing that “businesses fail all the time,” neglecting to mention that taxpayer dollars don’t fund most businesses. To Grunwald, federal spending for a good cause justifies itself, even when it’s patently ineffective.

Only when rebutting charges that the stimulus picked “winners and losers” in the energy industry does Grunwald show any discomfort with central planning. Yet even here he fails to recognize the true scope of the federal government’s intervention. He defends the Department of Energy by noting that Secretary Steven Chu recruited experts to vet potential projects so that funding decisions could be made “according to merit.” That doesn’t exactly rebut the charge that a small coterie of elites was directing policy. Grunwald contends that the DOE picked “the game”—clean-energy projects—but not its winners and losers. Of course, the DOE’s choice of this particular “game” meant that clean energy had already won.

In Grunwald’s account, Obama comes across as similarly unaware of the limits of top-down planning. The president underestimated the manifold obstacles that he would face, such as zoning restrictions, building regulations, and opposition from local officials. In one memorable scene, Obama assures his advisors that he can persuade state and local officials to approve his energy projects. Concerned that the president will embarrass himself, they demur. The anecdote fits perfectly with what seems to be Obama’s longstanding attitude toward politics: an impatience with debate and the messy process of crafting bills, a yearning for a system in which writing our convictions into law requires less effort. The recession allowed Obama to play out this fantasy briefly and embark upon his visionary projects without serious interference from Congress.

As the president saw it, Americans had asked for this politics of impatience when they demanded “change.” The 2010 midterm elections, however, shattered the illusion that Obama and Grunwald share. It remains to be seen what message voters will send in November.


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