To those on the right, the stimulus was over the top and part of a broader program of overreaching government that has characterized this administration. In this view, in the face of a steep economic decline, tax cuts should have been the entire focus, a further step along the road to reducing the economic role of government.
Presidents are evaluated in part on their economic track record — and that is entirely appropriate. The Federal Reserve may control interest rates, and Congress holds great sway over budget details, but time and again our modern presidents have made the big calls on taxes and spending. The reelection attempts of Presidents Reagan, Clinton and both Bushes were significantly affected by how they had handled the budget. President Obama is running very much on the basis of how and why he used fiscal stimulus to tackle the financial crisis of 2008-09; his opponent, Mitt Romney, is running on the premise that those efforts fell short.
“The New New Deal,” by former Washington Post reporter Michael Grunwald, and “The Escape Artists,” by Noam Scheiber, a senior editor at the New Republic, are both good narratives of what happened with the stimulus and, more or less,why. Grunwald takes the view that it achieved more than is commonly supposed — or even than is claimed by the administration. Scheiber is more inclined to the view that the policy was bungled — the extent of the economic collapse was initially understated, so the response was insufficiently bold.
Both authors give strong voice to policy advisers and politicians and provide a nuanced portrayal of the thinking and tactics on either side of the aisle. Both are distinguished reporters, and their focuses reflect their somewhat different interests. Grunwald has more material on the broader inside-the-Beltway debates, while Scheiber digs deeper within the White House and the Treasury Department.
Both books read well. Rahm Emanuel has most of the good lines in “The New New Deal,” although the cuss words quickly wear thin. Larry Summers looms large in “The Escape Artists.” Grunwald has the more intriguing thesis: Despite the rush and the compromises, the Obama administration has made investments that will transform our economy through a variety of initiatives, including green energy, education reform and high-speed rail.
The energy point is worth making. Changes in technology can have a transformative effect, and an Energy Department program modeled after the Defense Department’s blue-sky grant-making should not be dismissed out of hand. The government may not be a good venture capitalist — a favorite line of Summers’s — but if the military can sometimes back winning technologies (think the Internet), why can’t other agencies? Grunwald offers a balanced discussion that serves as a useful reminder that for most of our history, there has been a symbiotic relationship between private enterprise and government. (Disclosure: I’m a professor at MIT, and the engineering/science side of the school comes off very well in this part of the book.)