Tuesday, October 09, 2012

And Speaking of Books. (Grunwald on the Stimulus)

I suppose I ought to say a word about The New New Deal, Michael Grunwald's chronicle of the notorious Obama stimulus.  It's a worthwhile and important (if imperfect--see infra) book which to my eyes doesn't seem to be getting the buzz it perhaps deserves.

The book falls analytically into two sections, maybe two and a half.  The first is the chronicle of the assembly of the stimulus bill.  It's another account of the inner workings of the sadly dysfunctional White House economic team, providing further evidence of what you knew from elsewhere--that Larry Summers, while not entirely a Wall Street tool, was just not at all effective at his assigned task: i,.e.,  organizing, focusing and clarifying the Obama economic message.  Important for the record, but not exactly stop-the-presses news. Also further evidence, if we needed any, of how completely in the tank for the big banks was Tim Geithner.

The more important part of the book is the long, detailed and sometimes wearying catalog of all the stuff we did with the stimulus money.  I don't know of any other easily accessible source that comes close to detailing this record so completely.  So far so good, but this is where the trouble starts, because it quickly becomes clear that Grunwald's dominant purpose is to persude us that the stimulus program was just dandy and that the critics are all knaves and scoundrels.

Now, it so happens I am generally hospitable to that view.  I've never pretended to be strong macro, which may distinguish me from all the other know-nothings who do claim to be strong at macro.  But I'm generally sold on the idea that  this crunch may indeed be a problem that you can solve by throwing dollars at it.  Still--really, a little critical detachment wouldn't have hurt.  Note in particular: reading Grunwald it becomes clear that "the stimulus" was partly about revving the engines (but please don't say "shovel ready"again).  Yet it is equally clear that a good many of the projects were not short-stem stimulus at all--rather, just substantive innovations that Obama thought were A Good Thing that he might as well ram through while he had the chance.

It's hard top get too worked up about this: I can't imagine any president who wouldn't have yielded to the same temptation.  But I would have loved a more candid and critical account of whether the zeal for particular projects may have hurt the overriding goal of getting the economy going again.

The "half" story is the account of the policing of the stimulus, so as to prevent fraud.  Here Grunwald gives a shout-out to Joe Biden.  And once again, I am disposed to think Grunwald must be on the right track.  But the way he tells the story, the bells are ringing, the whistles blowing, and we're on the first train out of happy town.  All I'd say is that Grunwald has a lot of guts as a journalist to stick his neck out quite as far as he does on this one.  I suspect there's bound to be some contrary evidence as time rolls on, but Grunwald has staked out his position as the original yea-sayer, and I hope he can live with it if as and when the picture out to be not quite so sunny as he paints them.


Ken Houghton said...
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Ken Houghton said...


"Also further evidence, if we needed any, of how completely in the tank for the big banks was Tim Geithner."

Your use of the past tense creates a false optimism.

"The 'half' story is the account of the policing of the stimulus, so as to prevent fraud. Here Grunwald gives a shout-out to Joe Biden."

Which eliminates either Grunwald's credibility or the idea that Summers/Geithner intended there to be any management at all. (In fairness, given other evidence, I would bet the latter.) When Senator MBNA is your custodient, the end is nigh.