The New New Deal: The Hidden Story of Change in the Obama Era [View all]

[savalez]

Hi, everyone. I’m Michael Grunwald from TIME Magazine, and Josh has generously invited me to blog this week about my new book, The New New Deal: The Hidden Story of Change in the Obama Era. It’s the story of President Obama’s $800 billion stimulus bill, which—wait, don’t click away!—was one of the most important and least understood pieces of legislation in modern history. The much-mocked Failed-Stimulus was actually a remarkable success. It was also the purest distillation of what Obama meant by change. And the story of the stimulus is the best way to understand the president, his policies, his approach to politics, his achievements, and his problems marketing those achievements in a city that’s gone bonkers. It’s also the best way to understand his enemies; The New New Deal documents how Republican leaders secretly devised their strategy of all-out obstructionism before he even took office.

I’ll be in Tampa for the GOP convention, so I’ll write about the Republicans tomorrow. Today I’ll give a taste of what I discovered about the stimulus, because almost everything most Americans think they know about it is wrong. The bottom line is that the American Recovery and Reinvestment Act is, as Vice President Biden would say, a BFD, both the short-term Recovery and the long-term Reinvestment. Even though Washington thinks it’s a joke. Even though the country agrees.

In 2010, a poll found that the percentage of Americans who believed the stimulus created jobs was lower than the percentage who believed Elvis was alive. I’m sure many TPM readers are in the minority who understand that the stimulus helped prevent a full-blown depression, that the economy was bleeding an unthinkable 800,000 jobs a month before the stimulus helped cauterize the wound. But it’s hard to remember just how horrible things were when Obama took office, and just how quickly the stimulus started to turn things around.

In the fourth quarter of 2008, the U.S. economy shrunk at an 8.9% annualized rate. That’s depression territory. At that rate we would have lost an entire Canadian economy worth of output in 2009. Job losses peaked in January, and Obama signed the stimulus in February. There’s been a lot of talk about shovel-ready projects that weren’t shovel-ready, but the Recovery Act quickly poured hundreds of billions of dollars worth of textbook Keynesian stimulus into the economy to boost demand: massive aid to state governments to prevent Medicaid cuts, teacher layoffs, and other public-sector anti-stimulus; unemployment benefits, food stamps, and other assistance for victims of the recession; $250 checks to seniors and the disabled; and tax cuts for 95% of American workers that less than 10% of them actually noticed. Liberals often complain that the stimulus wasn’t big enough—and they’re right, although my reporting demonstrates that there was no way Obama could have squeezed another dime out of Congress—but it was pretty damn big, more than 50% larger than the entire multi-year New Deal in constant dollars.

more at link http://talkingpointsmemo.com/archives/2012/08/the_new_new_deal_the_hidden_story_of_change_in_the.php?ref=fpblg