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Barack Obama’s best voice: Michael Grunwald

7 December 2012

9:30 AM

7 December 2012

9:30 AM

No Obama policy – not even ‘Obamacare’ – has been derided quite as much as his stimulus package and the $787 billion Recovery Act passed in February 2009. It became a byword for failed big-government liberalism, and the Republicans’ staunch opposition to it underpinned their 63-seat gain in the House of Representatives in 2010. Yet, in this engaging and insightful attack upon the received wisdom of Obama’s failure, Michael Grunwald launches a lucid defence of the Recovery Act.

Grunwald’s key argument is that, whatever its imperfections, the US would have been a far worse place without the Recovery Act. Independent analysts agree that it has saved or created over 2.5 million jobs. But its impact went far beyond these jobs. America’s post-crash economic growth has been the envy of Europe, while the Recovery Act also focused upon making America better-equipped for what David Cameron describes the “global race”, through investing in green energy, healthcare and education. When analysing Obama’s record, it should also never be forgotten that the official GDP estimate for the fourth quarter of 2008 is -8.9% – as Grunwald says, “Great Depression territory”.

Rather than throwing money at projects that didn’t need it, the Obama stimulus was grounded in reason. In November 2008, a Confidential Discussion Draft for Obama wrote that strategy should “Look for ‘win-wins’ – targeted, temporary measures that lay the foundation for a long-term agenda”. The aim was for “Stimulus as down payment on long-term goals”. Projects such as the modernisation of Health IT (ending the situation where people could be mistreated because of bad handwriting), to which the Recovery Act awarded $50 billion over five years, amounted to this philosophy in action.

Grunwald skillfully undermines some of the arguments used against the Recovery Act – and, by extension, Obama himself. On a famous appearance on Oprah last year, Obama was asked why he prioritised healthcare over the economy. Grunwald convincingly argues that Obama viewed spiraling healthcare costs “as an economic as well as moral crisis, another crimp on competitiveness”. By lumping companies with huge costs and crippling entrepreneurial spirit by tying workers to jobs with health insurance healthcare was part of, not separate to, America’s economic problems. A study by the bipartisan Congressional Budget Office estimated that Obamacare would cut the deficit by $1 trillion over two decades.

Few Obama programmes are less talked about than his Homeless Prevention plan, yet it is a compelling riposte to the conventional wisdom of Obama neglecting America’s poorest. It was awarded $1.5 billion in the Recovery Act, a 60-fold increase on its previous funding, to help Americans on the verge of homelessness with utility bills, security deposits, moving expenses or rent. It may not sound glamorous, but it helped house over 1.2 million Americans in crisis. There have been no repeat of the ‘Hooverville slums’ that marked the Great Depression; the Recovery Act’s transfer payments lifted at least 7million Americans out of the poverty line.

To the right, the Recovery Act was not only flawed in its conception, but also deeply corrupt. Yet Grunwald contends that the Recovery Act is remarkably short of ‘pork-barrel spending’, with almost unprecedented levels of transparency. The website lists every stimulus contract and lobbying contract, along with quarterly data detailing where the money went, while Obama’s Vice-President, Joe Biden, was charged with ensuring that money wasn’t splurged: he blocked 260 Recovery Act projects that didn’t pass his ‘smell test’. Obama realised that nothing would discredit the notion of government intervention quite like corruption charges that stuck against the Recovery Act. Despite the Republicans’ best efforts, virtually none have.

No one reading this book would be surprised to find that Grunwald is an Obama supporter. The author’s political sympathies generally don’t preclude sagacious analysis, even if the attack on “the private equity titan from a wealthy family” – Mitt Romney – feels somewhat incongruous. It is also a shame that this book is slightly let down by unevenness in quality. Grunwald is particularly illuminating on Obama’s meticulous preparations for his presidency, and how he intended to have his Recovery Act ready as soon as possible – even the 28 days into his presidency that it took to become law were longer than he had originally hoped. However, the book becomes rather dense reading in some places, with the detail given to some Recovery Act programmes, notably solar power investment, over-technical.

But Grunwald’s principal achievement remains: he has perhaps mounted a more compelling and coherent defence of the Recovery Act, and Obama’s wider domestic policy agenda, than the President himself. As he asserts, many of the failings of the Obama presidency have their root in public relations failings; while the Recovery Act included the largest middle-class tax cuts since the Reagan years, polls have frequently show that fewer than 10% of Americans are aware of this. Maybe more should read Grunwald’s book.

The New New Deal by Michael Grunwald is published by Simon & Schuster. 

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