The New New Deal Read Online Free
Author: Michael Grunwald
stations, the Joseph R. Biden Jr. Railroad Station in Wilmington, Delaware, federal buildings, Grand Canyon National Park, trails, libraries, courthouses, the “national stream gauge network,” hospitals, Ellis Island, seaports, airports, dams, locks, levees, Indian reservations, fish hatcheries, coral reefs, passport offices, military bases, veterans cemeteries, historically black colleges, particle accelerators, and much more.
Today, those independent analysts believe the Recovery Act came close to achieving its goal of saving or creating at least 3 million jobs in the short term. 15 The concept of “saving or creating” has inspired a lotof sarcasm—Obama joked after his annual Thanksgiving pardon that he had just saved or created four turkeys—but it simply means that close to 3 million more people would have been unemployed without the Recovery Act.
Unfortunately, the housing and banking apocalypse that preceded it wiped out about eight million jobs, so it didn’t come close to filling the entire hole. Unemployment soared to double digits while it was still kicking into gear. State and local governments offset much of its impact with anti-Keynesian austerity, raising taxes, slashing spending, and sucking money back out of the economy. Still, the CBO and the private forecasters concluded that at its height, the Recovery Act increased output over 2 percent, the difference between growth and contraction. 16 It also helped balance every state budget, sparing public jobs and public services from the chopping block; many Republican governors attacked it as out-of-control spending, but all of them took its cash. It made a painful time less painful, helping millions of victims of the Great Recession keep food on their tables and roofs over their heads. And the Chicken Littles who warned that a $787 billion fiscal stimulus would lead to runaway inflation or exorbitant interest rates were wrong. Inflation remained extremely low, interest rates historically low. The stimulus didn’t end America’s very real pain, but then again, the New Deal didn’t end the Depression. World War II ended the Depression.
Political critics have seized on that historical fact to try to discredit Obama’s stimulus, ignoring the more salient facts that Roosevelt’s commitment to stimulus was sporadic, the New Deal’s stimulus did reduce unemployment when it was in effect, and World War II was the mother of all stimulus programs. But facts have not driven the debate. Republicans have stuck to their failed-stimulus message with impressive discipline. They’ve argued that government simply can’t create jobs, often while attending ribbon cuttings for job-creating stimulus projects in their districts; that government shouldn’t help private companies, often while writing letters seeking stimulus funds for firms in their states; and that government can only create government jobs, even though all of America’s post-stimulus job growth has been in the private sector.They’ve argued that Keynes was wrong about stimulus, except when it comes to high-end tax cuts, military spending, and other stimulus they like. They’ve portrayed the Recovery Act as larded with earmarks, when it was the first modern spending bill with no earmarks, and riddled with fraud, when investigators have been amazed by the lack of fraud.
It’s been a brilliant strategy, and it planted the seeds for the Republican comeback.
“The stimulus was an Alamo moment for us, but we stuck together and made it out alive,” says Republican congressman Tom Cole of Oklahoma. “Now ‘stimulus’ is a dirty word.”
He’s right. A colossal package of tax breaks and spending goodies that were almost all popular individually has become toxic collectively, as if the proper response to the crisis would have been a stiff upper lip, as if Herbert Hoover had it right the first time. Obama has struggled to explain the counterintuitive Keynesian insight that government needs to
Today, those independent analysts believe the Recovery Act came close to achieving its goal of saving or creating at least 3 million jobs in the short term. 15 The concept of “saving or creating” has inspired a lotof sarcasm—Obama joked after his annual Thanksgiving pardon that he had just saved or created four turkeys—but it simply means that close to 3 million more people would have been unemployed without the Recovery Act.
Unfortunately, the housing and banking apocalypse that preceded it wiped out about eight million jobs, so it didn’t come close to filling the entire hole. Unemployment soared to double digits while it was still kicking into gear. State and local governments offset much of its impact with anti-Keynesian austerity, raising taxes, slashing spending, and sucking money back out of the economy. Still, the CBO and the private forecasters concluded that at its height, the Recovery Act increased output over 2 percent, the difference between growth and contraction. 16 It also helped balance every state budget, sparing public jobs and public services from the chopping block; many Republican governors attacked it as out-of-control spending, but all of them took its cash. It made a painful time less painful, helping millions of victims of the Great Recession keep food on their tables and roofs over their heads. And the Chicken Littles who warned that a $787 billion fiscal stimulus would lead to runaway inflation or exorbitant interest rates were wrong. Inflation remained extremely low, interest rates historically low. The stimulus didn’t end America’s very real pain, but then again, the New Deal didn’t end the Depression. World War II ended the Depression.
Political critics have seized on that historical fact to try to discredit Obama’s stimulus, ignoring the more salient facts that Roosevelt’s commitment to stimulus was sporadic, the New Deal’s stimulus did reduce unemployment when it was in effect, and World War II was the mother of all stimulus programs. But facts have not driven the debate. Republicans have stuck to their failed-stimulus message with impressive discipline. They’ve argued that government simply can’t create jobs, often while attending ribbon cuttings for job-creating stimulus projects in their districts; that government shouldn’t help private companies, often while writing letters seeking stimulus funds for firms in their states; and that government can only create government jobs, even though all of America’s post-stimulus job growth has been in the private sector.They’ve argued that Keynes was wrong about stimulus, except when it comes to high-end tax cuts, military spending, and other stimulus they like. They’ve portrayed the Recovery Act as larded with earmarks, when it was the first modern spending bill with no earmarks, and riddled with fraud, when investigators have been amazed by the lack of fraud.
It’s been a brilliant strategy, and it planted the seeds for the Republican comeback.
“The stimulus was an Alamo moment for us, but we stuck together and made it out alive,” says Republican congressman Tom Cole of Oklahoma. “Now ‘stimulus’ is a dirty word.”
He’s right. A colossal package of tax breaks and spending goodies that were almost all popular individually has become toxic collectively, as if the proper response to the crisis would have been a stiff upper lip, as if Herbert Hoover had it right the first time. Obama has struggled to explain the counterintuitive Keynesian insight that government needs to
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