The New New Deal And The Little-Known Transformation Of American Government

The New New Deal isn’t just another book about the White House or Congress. It tells the story of what happens when laws are passed and governing begins.

What’s the best book about the Obama administration, particularly on domestic policy? A few months ago, I would have recommended Noam Scheiber’s The Escape Artists, but The New New Deal, by Michael Grunwald of Time, is not only the best book about the administration and its immediate challenges, but perhaps the only one that will (and should) continue to be read long after 2016. This post isn’t a full review of the book (for that, I recommend Michael Cohen in The Guardian, but others are forthcoming) – rather, I want to highlight two aspects of the book that both made me feel a little guilty and got me thinking.

The narrative takes place in three locations: at the White House, in Congress as it interacts with the White House over the stimulus, and deep in the executive branch of government. Grunwald is very good on the drama in the White House, as economic advisors including Larry Summers, Christina Romer, and Jared Bernstein struggled to find a formula to contain the economic disaster that was also politically viable in an environment where neither politicians nor the public fully appreciated the depth of the crisis or the logic of Keynesian stimulus. If his book has none of the contrived Oval Office melodrama of Ron Suskind’s Confidence Men, it’s because Grunwald understands the subject, and thus knows that the range of options – and the range of real disagreement — was not that wide.

He amply demonstrates that the great alternative-universe fantasy — in which the stimulus could have been much, much larger and only political malpractice held it back – is exactly that, a fantasy. The miracle is that the economic stimulus, even if inadequate to fully restore the economy’s lost output, was as large as it was, and managed to contain such a multitude of new ideas. Nonetheless, Grunwald acknowledges and digs deeply into the errors that the White House made, such as asking Romer and Bernstein to put forth a projection of unemployment rates with and without the stimulus – which may have been accurate in estimating the difference between the two, but not the overall employment picture.

The New New Deal also shines in its accounting of the legislative response, particularly the Republican opposition to the stimulus — or, more correctly, to Obama. Grunwald offers a good model for journalists that it’s possible to do more than just transcribe something like, “Senator X said he opposed the stimulus because it didn’t contain enough tax cuts and infrastructure spending.” When a politician’s stated positions make no sense and are glaringly inconsistent, a real journalist can say just that. His parsing of Senator Judd Gregg’s shifting logic on the stimulus as he flirted with becoming Obama’s Secretary of Commerce is masterful, as is his interview with former Delaware Rep. Mike Castle, a moderate Republican whose amiable rationales make even less sense than those of conservatives.

But The New New Deal made me feel guilty in two big ways. First, I’ve on occasion made the argument that progressives don’t really have an adequate set of new ideas, especially about the future of the economy. But as Grunwald shows, not only are there ideas, but many of them are being put into place as we speak, from the Race to the Top education reforms to the birth of an American solar energy and battery industries to the mundane work of weatherization of millions of homes and businesses to save energy. I didn’t fully appreciate the scope of the changes to the Unemployment Insurance system, for example. It’s far from sufficient to offset the lost potential from the recession; there’s a lot more to be done to rebuild the foundations of a broad and secure middle class, and some of it can’t be done by government. But the germ of the ideas that will build the future are there.

Why has it been so easy to overlook that? That’s the second point on which I feel guilty. Like most writers about public affairs, I tend to focus somewhat on electoral politics and on legislative politics and policy. Most media coverage is grossly overweighted toward electoral politics – that’s why there are 15,000 reporters in Tampa to cover a fully scripted non-event. But even those of us who try to focus more on policy and legislation often overlook the big third dimension, which is government. Virtually nothing is written about the actual implementation of policy in the executive branch or in the states. Newspaper coverage is limited to a watchdog role that seeks out stories like the failed loan to Solyndra, which is how that one failure (which Grunwald shows was already underway in the last days of the Bush administration, under an existing loan program) could become the proxy for the entire stimulus, or as they call it in Tampa, the “failed stimulus.” Most federal agencies have no journalists at all covering them on a daily basis, other than reporters for specialized publications and industry newsletters.

While there are books comparable to Grunwald’s about legislation (The Bill, by Steve Waldman, about the early Clinton public service and education initiatives, Showdown at Gucci Gulch, about the 1986 tax reform, and the classroom classic, The Dance of Legislation, by Eric Redman, which is about the 1970s), very few continue to look at what happened in government after the legislation passed. The richest sections of Grunwald’s book open up the internal politics of government: one great set piece tells the story of the Department of Energy’s office responsible for administering weatherization assistance for low-income families, one that had been a “turkey farm” (a term commonly used in public administration to refer to an unimportant office to which useless employees are assigned) and couldn’t even get funds out the door. Given an impossible assignment in the stimulus – to weatherize 600,000 homes – an entepreneurial young leader, Claire Broido Johnson, turned the office around and exceeded the goal.

Such stories, along with accounts of the ARPA-E clean-energy research program and the Race to the Top education program, show that the Obama administration is changing government in ways that go much further than the “Reinventing Government” initiatives of the Clinton-Gore era, which focused mainly on government’s relation to citizens, who would be treated more like customers. Creative, ambitious leadership is encouraged, and real competitions, like Race to the Top, are replacing the formula- or earmark-funded programs of the past. It took a while to get started (which is why some of it was ineffective as short-term Keynesian stimulus), but its long-term effects on both government and the economy are likely to be profound.

To restore confidence in government, it is necessary to do all these things – to make government more responsive, imaginative, tough on failure but supportive of promising ideas. But it won’t do any good if people don’t know about it, and the phrase “failed stimulus” goes unchallenged. The New New Deal is not only one of the two best books ever written about government (the other is Cadillac Desert by Marc Reisner), but an acute reminder to every journalist, political writer and political analyst to pay more attention to real stuff of government, which doesn’t happen at either end of Pennsylvania Avenue.

Mark Schmitt is a Senior Fellow at the Roosevelt Institute.

Cross-Posted From Rediscovering Government

The Roosevelt Institute is a non-profit organization devoted to carrying forward the legacy and values of Franklin and Eleanor Roosevelt.


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