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Jane Ahlin, Published October 27 2012

Ahlin: New book explodes myths associated with ‘stimulus’

New York cop plans to boil women slowly, then eat them! Leopard shark falls from sky and lands on 12th tee of golf course!

With those sensational, Halloween-type stories in the news, it’s hard to admit I’ve had my nose in a book all week – a rather long (more than 400 pages) but highly researched and entertainingly readable book titled “The New New Deal.” In it, award-winning author and journalist Michael Grunwald tells the story of the $800 billion federal stimulus, a program he came to view as a success “hidden in plain view” that in the long-term bodes well for America’s future.

According to Grunwald, the achievements of the “American Recovery and Reinvestment Act” (the official name) mostly have been ignored or minimally reported by the mainstream media because certain storylines took hold early on, more specifically, two competing, negative, in-the-Beltway storylines that say more about political attitudes than the substance of the act.

On the Republican right, the storyline was wasteful spending during a recession. (Austerity! That’s the ticket.) On the Democratic left, the storyline was that the stimulus was not big enough to do what needed to be done. (Too little, too late!)

Grunwald discredits both with a narrative in the middle: In the short term, the 2009 stimulus kept America from falling into another Great Depression; in the long term, stimulus investments positioned the nation for future growth. Actually, Grunwald sees the investments paying off already. After doing 400 interviews and sifting through a mountain of data, Grunwald says, “The long-term reinvestment part (of the stimulus) is working … It’s doubled renewable energy. It’s started an electric battery industry from scratch. It jump-started the smart grid. It’s bringing our pen-and-paper medical system into the digital age. It’s got Race to the Top” (for education) … and “the biggest middle-class tax cuts since the Reagan era. It prevented seven million people from falling behind the poverty line.”

Grunwald is particularly impressed by the competitive resurgence of “renewables,” a part of the energy sector that was sputtering for lack of private investment as the recession took hold. (And, yes, he does tell the whole Solyndra story.) He also spends time on the odd acceptance by Democrats of the Beltway-hyped “narrative of failure” in 2010 and the Obama administration’s problems communicating the good in the stimulus to the American people. In Grunwald’s words, “One poll found only 6 percent of Americans believed (the stimulus) had created any jobs. That was less than the percentage who believed Elvis was alive or the moon landing was faked.”

Grunwald also details Republican obstructionism, not as a reaction to Obama proposals but as a conscious strategy for getting back into power, decided upon before Obama took his oath of office. The reasoning of Republican leaders was that the worse the economy, the greater the chance the next election would go their way. It worked in 2010, although in the House, the incoming group was so far right in ideology (including Rick Berg of North Dakota) that they were impossible for the GOP leadership to deal with. Bipartisanship to them was the same as selling out.

Still, after the stimulus was passed in 2009, job growth began and has been slow but steady ever since. More surprising, the program was almost unbelievably well-run, beginning with choosing “projects safe enough that taxpayers would get repaid, yet risky enough that banks wouldn’t finance them without federal help.” Also, “the stimulus met all its deadlines, hit all its jobs targets and avoided humiliating screw-ups.” In addition, there was an extremely low incidence of fraud. Grunwald found himself admiring the stringent accountability measures Obama put in place and the thoroughness of follow-through.

In North Dakota, it’s meant high-speed Internet to underserved rural areas, new hospitals for Jamestown, Crosby and Williston, and “clean and reliable drinking water” for Linton, Strasburg and Hague among many other projects.

We can’t know what the national economy would look like without the stimulus, but “The New New Deal” makes the case that we’re better for it.


Ahlin writes a Sunday column for The Forum.