On Political Books

November/December 2012 Act of Recovery

Only one national reporter, Michael Grunwald, bothered to take a detailed look at how well the $787 billion stimulus was spent. What he discovered confounds the Beltway conventional wisdom.

By Ryan Cooper

The book also contains a well-crafted Woodwardian story of how the stimulus was negotiated and passed. Grunwald puts paid to the idea that the Obama team could have somehow wrung more stimulus money out of Congress. With nearly all GOP senators implacably opposed, a handful of persuadable moderates—Arlen Specter, Olympia Snowe, Susan Collins, and Ben Nelson—had all the leverage. They used it to set a completely arbitrary, non-negotiable $800 billion upper limit on the stimulus, a number far below the $1.2 trillion recommended by Christine Romer, chairman of the president’s Council of Economic Advisers. The only plausible way of obtaining more funds would have been a quick evisceration of the filibuster right at the start of the 2009 Congress, something Majority Leader Harry Reid ruled out even in 2010. The original stimulus should have been bigger, and the administration miscalculated in thinking that it could persuade Congress to pass a second big one later if needed (Larry Summers, in an on-the-record interview with Grunwald, even credits Paul Krugman for correctly predicting this effect). Still, Obama did manage to squeeze out a few mini stimuli in the form of extensions of the payroll tax cut and unemployment benefits, which put total stimulus spending closer to Romer’s estimate.

Grunwald does sometimes get a bit overexcited about the scale of the Recovery Act’s transformation of the economy; the medium- to long-term effects of the act have obviously not yet been firmly established. But slightly overselling the stimulus’s longer-term impact doesn’t negate the importance of what Grunwald has delivered. The depth of his reporting and his understanding of the enormity of the Recovery Act’s accomplishments are both impressive. One of the most telling moments in the book comes when several Obama aides, veterans of the Clinton administration, pause their frantic work on the act to recall the knock-down, drag-out fight the Clinton administration had in 1993 over a relatively piddling $19 billion stimulus— a fight the administration lost. They note how strange it feels to remember the bitter arguments over line items of a few million dollars—the kinds of things that were inserted and deleted by the hundreds in the process of negotiating the Recovery Act. By American governance standards, the stimulus was colossal on a scale very difficult to grasp. We should be grateful that Michael Grunwald, at least, has gotten out his tape measure.



Ryan Cooper is a National Correspondent at The Week, and a former web editor of the Washington Monthly. Find him on Twitter: @ryanlcooper

Comments

  • peter eliel on November 14, 2012 5:46 PM:

    Wall street Journal "opinion" pieces like the one you just sent me are mostly highly partisan, overwrought exercises in distortion etc.

  • David in NY on November 28, 2012 12:03 PM:

    I don't know about the book, but I don't think the reviews slam of Krugman, et al., is supported by the description of the book that you give. I don't believe that Krugman, for example, has ever denied that the stimulus did a lot of good. But it was foreseeable at the time, and Krugman and others foresaw, that it was only about 1/2 of what was necessary, given the depth of the depression. And history has pretty much shown that to be true. Sure, we would have been a lot worse off without it, and kudos to Grunwald for writing something that supports that view. But we could have been a lot better of as well, if Obama and the Democrats, with crushing majorities in both houses, had fought, and spoken out, for an adequate stimulus. We had the chance to avoid this limping recovery, and we blew it.

  • FlipYrWhig on November 28, 2012 5:01 PM:

    @ David: You write "But we could have been a lot better of as well, if Obama and the Democrats, with crushing majorities in both houses, had fought, and spoken out, for an adequate stimulus." Well, yes and no. Yes, we would have been better off with a bigger stimulus. No, we could not have gotten a bigger stimulus by "fighting" or "speaking out," because, as Grunwald rightly observes (and Ryan accurately represents), the senators whose votes were needed decided to draw an arbitrary line they wouldn't cross. There was no persuading them. They were consciously and deliberately unpersuadable.