Glass Half Empty

I suppose when you've got a book to sell, I guess this is your story and you're sticking to it, and while there's some degree of truth to the argument, well, uh, inadequacy:

For starters, the stimulus was by far the largest energy bill in history, pouring a mind-boggling $90 billion into clean energy when we had been spending just a few billion dollars a year. It included unprecedented investments in wind, solar, and other renewables; energy efficiency in every form; a smarter grid; electric vehicles; advanced biofuels; and the factories to build all that green stuff in the U.S. The clean energy industry was on the brink of death after the financial collapse of 2008, but thanks to the stimulus, U.S. generation of renewable power has doubled under Obama. The stimulus is building the world’s largest wind farm, a half dozen of the world’s largest solar farms, and the nation’s first refineries for cellulosic biofuels. It created an advanced battery industry for electric vehicles almost entirely from scratch, financing 30 new factories. And it launched a research agency called ARPA-E, modeled on the Pentagon’s DARPA unit that pioneered the Internet and GPS technology, that’s already creating the clean-energy breakthroughs of tomorrow.

As they say in the infomercials, that’s not all. The stimulus also poured $27 billion-with-a-b into health information technology that will drag our antiquated pen-and-paper medical system into the digital age, so just about every American will have an electronic medical record by 2015, and doctors will no longer kill their patients with chicken-scratch handwriting. The Recovery Act included the most dramatic federal education reforms in decades, including the Race to the Top competition that has transformed the national debate over public schools. It launched the most extensive infrastructure investments since Eisenhower, including a high-speed rail initiative that could transform America’s pathetic inter-city passenger trains. It modernized the New Deal-era unemployment insurance system, and extended broadband to underserved areas in ways reminiscent of the New Deal’s rural electrification. It included a new homelessness prevention program that kept 1.2 million Americans off the streets, so the homeless population declined despite the weak economy, and a new municipal bond program that financed $180 billion worth of public works, a stimulus hidden inside the stimulus. And so on [...]

Let’s just say that Americans don’t seem to have gotten the memo. Republicans have destroyed the reputation of the stimulus through a relentless campaign of distortion, dismissing it as $800 billion worth of mob museums, levitating trains to Disneyland, honeybee insurance and other fictional nonsense, while hyping the Solyndra non-scandal into a second Watergate. Democrats have been far more likely to quibble about the Recovery Act’s size or contents than to defend it, reinforcing the GOP message that it’s a big-government mess. The White House has made its own political miscalculations and messaging mistakes. And the media has blown the story as badly as it blew the run-up to the war in Iraq.

Americans haven't "gotten the memo" because the Recovery Act, for all its many virtues, did not address their most pressing concerns and most urgent needs in January 2009. Yes, the Teabillies demagogued it shamelessly, and yes, the Beltway press corps did a horrible job of reporting it, and yes, all of the investments in infrastructure and technology and green energy were, and are, much needed---and perhaps, 20 or 30 years from now, we'll be able to sit back with the advantage of hindsight and appreciate how this single piece of legislation launched a New American Renaissance. Or perhaps not. At present, we simply cannot know.

What we can know, however, is that the Recovery Act mortgaged the present to pay for the future. Because what Americans most desperately wanted and needed from their government in 2009---and what they still need now---were not Race to The Top, or digital medical records, or DARPA 2.0, or anything that will make government run more efficiently ten years from now, but jobs, and, money, and mortgage relief. And while it did some measurable good, the fact is that the Recovery Act---which was larded up with $300 billion in tax cuts to gain Republican support that never existed---simply didn't (a) provide enough jobs, (b) give people enough money, (c) abdicated responsibility for mortgage relief. Also too, (d) the administration did next-to-nothing to ensure that the causes of the Great Recession could never be repeated:

[W]hen the history of the Obama Administration is written, there will be some positive things to say about it, but also two particular blots on its escutcheon. First, the failure to act decisively to help homeowners avoid foreclosure, and second, the failure to hold anyone accountable for the financial crisis. These two failures are intimately tied, of course. Both are explained by the "Obama administration’s emphasis on protecting the banks from any perceived threat to their post-bailout recovery."

The logic here is that financial stability and economic recovery are more important than rule of law. There's an argument to be made that law has to give way to basic economic needs. I, however, would reject the choice as false. Instead, the best way to restore confidence in markets is to show that there is rule of law. The best route to economic recovery wash through [the] rule of law, not away from it. (Yes, I realize there are those who would argue that the GM/Chrysler bankruptcies and cramdown aren't rule of law, but rule of law can include flexible systems like bankruptcy, rather than just rigid rules.)

The Administration, however, determined that it wasn't going to rock the boat via prosecutions, even though there is no person in the banking system who is so indispensible to economic stability as to merit immunity from prosecution, and as the experience of 2008-2009 shows, recapitalizing institutions isn't rocket science. In any case, the Administration's policy has produced the worst of all worlds, where we have neither justice nor economic recovery. This is our new stagflation.

And I'm sorry, but whatever "homelessness prevention" program was in the Recovery Act, it sure as hell didn't affect my neighborhood on the west side of L.A. We had no appreciable number of homeless people to speak of in my ZIP code five years ago---but we began to see a noticeable swelling of their ranks starting in late 2009, and their numbers have only increased since then. Sorry to be such a wet blanket, but that's the reality of our neoliberal New New Deal.

---Vitelius