The 2009 stimulus halted a Second Great Depression and began building each of President Obama’s four pillars for a sustainable 21st Century nation. (More)

The New New Deal, Part II: Making It Work

This week Morning Feature considers Michael Grunwald’s The New New Deal: The Hidden Story of Change in the Obama Era. Yesterday we saw the challenges of drafting and passing the American Recovery and Reinvestment Act. Today we look at the challenges of making the stimulus bill work. Tomorrow we’ll interview Michael Grunwald and see how the ARRA’s successes became ‘The Greatest Story Never Told’ … until now.

Michael Grunwald is a senior national correspondent for Time magazine. Before joining Time, Grunwald was a congressional correspondent, New York bureau chief, and investigative reporter for the Washington Post, and a local and national reporter at the Boston Globe. He has received the George Polk Award for national reporting, the Worth Bingham Prize for investigative reporting, the Society of Environmental Journalists award for in-depth reporting, and numerous other journalism awards.

A $10,000 shopping list and a 10-cent stick of gum

Imagine sending someone to out prepare your home or business for an approaching Category 5 hurricane. You give them a shopping list and $10,000, with instructions to buy only necessities. At the end of the day, they return with $9,999.90 in hurricane supplies – enough to minimize the storm’s damage – and one 10-cent stick of gum.

In economic terms, the 2008 meltdown was a Category 5 hurricane. In the fourth quarter of 2008, the economy was collapsing at an annual rate of 6.3%. The downturn was already underway in January of 2008, and between September 2008 and August 2009 over 5,131,000 Americans lost their jobs. But this was no act of nature. As we discussed earlier this month the collapse was a man-made disaster caused by blind faith in an economic myth, and outright financial looting.

The American Recovery and Reinvestment Act was a $770 billion shopping list to minimize the damage from that disaster. Grunwald reports that economists, using data from other large government and corporate projects, expected about 5% to be lost in fraud. Instead auditors found only $7.2 million in fraudulent claims. That’s 0.001% … one 10-cent stick of gum from a $10,000 shopping list.

Transparency at work

That astonishingly tiny level of fraud was due, in part, to President Obama’s commitment to transparency. The Recovery Act website, online immediately after the landmark bill was enacted, details every project funded by the ARRA, and every grant and contract awarded. President Obama assigned Vice President Joe Biden monitor the ARRA, and Grunwald reports that the Recovery Oversight Board used state-of-the-art software to not only detect fraud but to identify and preempt likely offenders before they got their hands in the till.

The transparency came with a price, Grunwald reports. With so much data being made public, media watchdogs made hay with “Gotcha!” stories like contracts and grants going to non-existent congressional districts. Those were, of course, typos made by clerks hurrying to post data in almost real-time as reports arrived at the oversight offices. Grunwald cites stories grousing that too many weatherproofing grants were going to hot-weather climates and – weeks later, by the same reporters – that too many weatherproofing grants were going to cold-weather climates.

Prompted by the lure of being the next Woodward or Bernstein, in a media culture focused on government failure, fed by often outlandish Republican claims, Grunwald writes that thousands of reporters began acting as special prosecutors. Fraud that didn’t happen, and grants and contracts for projects that made sense and were done on time and within budget, were as interesting to report and as likely to make headlines as stories about planes that land safely and pets that don’t get lost.

Yet even the incessant, exaggerated, and often false stories about fraud had a silver lining. With so much data so so public, being picked over by so many, fraudsters may have stayed away. As an Oversight Board member told Grunwald, “It would be stupid to try to scam here.”

Change You Can Believe In

The “Recovery” part of the ARRA could not stop the economic hurricane, and Republicans have made hay on President Obama’s over-optimistic prediction that the bill would hold unemployment under 8%. In fact, unemployment was passing that mark when he made that prediction, although the horrific January-March data wouldn’t reveal that for several weeks. Still, the Congressional Budget Office and other independent analysts estimate that Recovery Act projects created or saved at least 2,300,000 jobs. Despite the unemployment and increase in poverty, homelessness actually declined during the Great Recession, due to Recovery Act projects like the Homeless Prevention and Rapid Re-Housing Program Recovery Plan. A 2010 First Focus report found that the Recovery Act provided “a lifeline for low-income families” whose children might otherwise have gone hungry.

Beyond simply easing the pain, the “Reinvestment” part of the ARRA laid the groundwork for a sustainable, 21st Century economy. Grunwald reports countless examples of “Change You Can Believe In,” including:

  • The world’s largest wind farm is now being built in Oregon, primarily with American-made components.
  • Total U.S. wind power generation went from 25 gigawatts in 2008 to 50 gigawatts in 2012, a level forecasters said we would not reach for decades.
  • Weatherproofing programs have saved the equivalent of 21 coal-fired power plants in energy.
  • The U.S. solar energy industry went from “death’s door” in 2008 to a net exporter in 2012.
  • Advanced biofuel companies can now create jet fuel from algae, with minimal CO2 emissions.
  • Programs underway to reach zero-net energy consumption within 20 years in office complexes, malls, government buildings, and military bases.
  • Total U.S. CO2 emissions are now 20% lower than in 1994.
  • Many parts of the U.S. now have a long-needed “smart grid” that provides real-time monitoring of electricity production, transmission, and usage, to reduce our energy needs and prevent and minimize blackouts.

And that’s just in energy. The Reinvestment Act has also destroyed hundreds of obsolete dams, renovated thousands of roads, bridges, tunnels, and utility lines, helped to modernize schools, brought broadband internet access to millions of businesses and families, computerized millions of health records, and funded research comparing the effectiveness of prescription drugs, surgeries, and other treatment options.

That “Change We Can Believe In” is already happening, improving our lives and our grandchildren’s futures, even as we struggle with the lingering damage caused by the Great Recession. And, contrary to Republican claims, President Obama has limited federal spending better than any president since Dwight D. Eisenhower.

That’s a very big, very effective shopping list … and tomorrow we’ll discuss with Michael Grunwald why the media narrative has been all about that one piece of gum.


Happy Friday!