The New New Deal Read online

  Obama was still a man of the left. As he explained to the uninitiated, his “views on most topics correspond more closely to the editorial pages of the New York Times than those of the Wall Street Journal.”28 He embraced the New Deal ideas that Americans have a stake in each other’s success, markets sometimes fail, and government can help promote prosperity. He endorsed the New Deal concept of a safety net to make sure Americans don’t go bankrupt when they get sick or hungry when they get old—and to promote economic risk taking the way an actual safety net promotes acrobatic risk taking. He credited FDR with laying the groundwork for the postwar growth that lifted workers into the middle class, creating consumer demand that kept the economy humming for decades. Modern Democrats, he wrote, should aim to “recast FDR’s social compact to meet the needs of a new century.”

  In Obama’s telling, New Deal liberalism simply failed to keep up with the times. In the 1960s, it came to be defined less by pocketbook issues than permissive attitudes toward the counterculture, alienating Americans who respected faith and flag. By the 1970s, liberals spoke the language of victimhood rather than community, ignoring middle-class concerns about crime, taxes, and government bloat. Ronald Reagan, with his appeal to patriotic families who played by the rules, tapped into a sense of common purpose that liberals no longer could. Their whiny attacks on kindly Ronnie as a racist meanie only made them look like “out-of-touch, tax-and-spend, blame-America-first, politically-correct elites.” And they didn’t appreciate the dynamism of capitalism. When factories fled overseas in pursuit of cheap labor, like the shuttered steel mills near the projects where Obama worked in Chicago, they had little to offer laid-off workers and hollowed-out communities but unemployment benefits and welfare checks. When schools failed to educate poor kids, another crisis he witnessed firsthand as an organizer, their only answer was to hike taxes and pour more money into the ratholes. As a professor at the University of Chicago, the global hub of laissez-faire economics, Obama didn’t drink the neoclassical Kool-Aid, but he did grow concerned that Democrats were “more obsessed with slicing the economic pie than with growing the pie.” They had become a pity party, with no vision for creating prosperity, only for redistributing it—until Bill Clinton came along.

  Obama was disgusted by Clinton’s shameless political posturing, especially the “frighteningly coldhearted” execution of a mentally retarded inmate before a primary. He thought the Clinton White House neglected families left behind in the global economy, trimming its policy sails to push poll-tested trivialities like school uniforms. But he credited the Man from Hope with dragging Democrats back to reality, reforming welfare, balancing the budget, and focusing on economic growth. Shortly after arriving in Washington in 2006, Obama signaled his sympathy with Clinton’s “Third Way” by speaking at the launch of the Hamilton Project, a Brookings Institution policy shop founded by Wall Street bigwig Robert Rubin, the former Clinton treasury secretary and godfather of Democratic centrists.29 “Both sides of the political spectrum have tended to cling to outdated politics and tired ideologies instead of coalescing around what actually works,” Obama said that day.

  Unfortunately, Obama wrote, Clinton’s biography—“the draft letter saga, the marijuana puffing, the Ivy League intellectualism, the professional wife who didn’t bake cookies, and most of all the sex”—catered perfectly to Republican stereotypes of sixties liberalism.30 Even as the economy boomed and the rising tide lifted almost every boat, a new generation of Republican hard-liners led by House speaker Newt Gingrich raised slash-and-burn partisanship to an art form. Politics eroded into good-versus-evil, jackboots-versus-hippies warfare, “the psychodrama of the baby boom generation … played out on a national stage.” And George W. Bush stole that stage after campaigning as “a uniter, not a divider,” with a platform of “compassionate conservatism” that sounded a lot like the Third Way.

  After a historically close election decided by the Supreme Court, pundits predicted that Bush would be forced to govern from the center. But soon he was slashing taxes for the rich; appointing timber, mining, and finance lobbyists to oversee their old industries; launching an un-provoked war; and generally governing as if “divider” were his job title. Republicans ditched the fiscal rectitude of the Clinton years, putting two wars, $2 trillion in tax cuts, a drug benefit for seniors, and a record earmarking binge on the charge card. Rather than ask Americans to make wartime sacrifices, Bush urged them to go shopping. His bank regulators posed with a chain saw in front of a stack of regulations. And a corruption scandal starring a sleazy Republican lobbyist named Jack Abramoff revealed the dominance of corporate interests in Bush’s Washington.

  Obama dropped his measured tone halfway through The Audacity of Hope to shred the modern GOP as a party of zealotry and magical thinking, controlled by K Street and its right-wing base, unswervingly opposed to taxes, regulation, and basic arithmetic. It was just as dedicated to redistribution as the old Democratic Party, except it redistributed wealth upward. Bush’s “Ownership Society” was a euphemism for leaving families on their own, a step toward replacing the New Deal with a winner-take-all society.

  Obama had an alternative vision of reconstructed liberalism. He imagined a country that embraced freewheeling capitalism, while still making sure every American could go to college, afford decent health care, and retire with dignity. It would finance forward-leaning public ventures, as Abraham Lincoln did with the transcontinental railroad and National Academy of Sciences, as FDR did with the Triborough Bridge and rural electrification, as postwar administrations of both parties did with the interstates and the Internet. Instead of squandering surpluses on pork for the connected and tax breaks for the rich, America would invest in modern schools, research, and infrastructure. Instead of ducking tough problems, it would tackle our addiction to fossil fuels and our dysfunctional health care system.

  That was Obama’s general case for change.

  A Race Against Washington

  It wasn’t really a case for Obama.

  It was a case for a Democratic president, but the black guy with the weird name had no reason to think he’d be that president. Hillary Clinton was the overwhelming Democratic front-runner, a star-power senator backed by her husband’s political machine. When The Audacity of Hope was published in 2006, Obama was two years out of the Illinois statehouse, known only for his electrifying “We Are One People” speech at the 2004 Democratic convention.31 He had never even shown he could take a punch, gliding into the Senate after a marital abuse scandal torpedoed his main Democratic rival and a swingers club scandal torpedoed his main Republican rival.

  But as Obama toured the country to flack his book and stump for Democrats, attracting mobs at every stop, he sensed he was tapping into the zeitgeist. Democrats of all stripes—liberal, conservative, urban, rural—wanted him by their side. New Hampshire’s governor quipped that he was a bigger draw than the Rolling Stones. He was hot, and he doubted he would get hotter sitting around Washington for another decade, risking early-onset senatoritis while acquiring enough gravitas to satisfy the arbiters of such things. He was bored in the Senate, a change-averse, geriatric debating club with stifling procedural rules. He expected 2008 to be a change election, and he looked like change.

  The case for Obama was not a substantive case for changing policies; Hillary was making a similar case with a better résumé. The case for Obama was a political case for why those policies never seemed to change. It implied that Hillary was part of the problem, that America couldn’t afford another decade of Clinton wars, that the political pettiness and nastiness that exploded during the Clinton era was the fundamental obstacle to fundamental change.

  Hillary’s one-word explanation for the persistence of the status quo was “Republicans.” Obama’s was “Washington,” the endless spin cycles, insult industries, and poll-driven platitudes that made tough choices and commonsense compromise impossible. As a symbol and a participant, Hillary was inextricably linked to that Washington gridl
ock machine, the bickering and parsing, the eternal boomer-driven relitigation of the sixties. She could never make a credible “We Are One People” speech, or bring people together to solve big problems; she had tried and failed in 1994 with her husband’s health care plan. The case for Hillary was that she knew how to fight Republicans, that she was comfortable in the muck. The case for Obama was that he could move politics beyond the muck.

  Obama was not a cockeyed optimist about getting the Crips and Bloods of the Beltway to call a truce. He knew a less myopic, more cordial politics might not be possible anymore:

  Maybe there’s no escaping our great political divide, an endless clash of armies, and any attempts to alter the rules of engagement are futile.32 Or maybe the trivialization of politics has reached a point of no return, so that most people see it as just one more diversion, a sport, with politicians our paunch-bellied gladiators and those who bother to pay attention just fans on the sidelines: We paint our faces red or blue and cheer our side and boo their side, and if it takes a late hit or a cheap shot to beat the other team, so be it, for winning is all that matters.

  Still, Obama felt like he matched the moment. He would run as an outsider against Washington, an insurgent against a quasi-incumbent, a start-up against a behemoth, change against business as usual. He figured his chances were slim, but hey, sure things don’t require the audacity of hope.

  In February 2007, Obama announced his candidacy outside the old state capitol in Springfield, the site of Lincoln’s “House Divided” speech.33 His theme was America’s divided house. “In the face of a politics that’s shut you out, that’s told you to settle, that’s divided us for too long, you believe we can be one people,” he told fifteen thousand shivering fans. Obama was aligning himself not only with Lincoln, but with civility; Springfield was also the place where he played poker with Republicans at night and legislated with Republicans during the day, the place where “we learned to disagree without being disagreeable.” Basically, he pledged to be a uniter, this time for real.

  But Obama’s ideas about changing politics were always a means to the end of changing policies. In Springfield, he listed the four main problems he was running to solve: “a dependence on oil that threatens our future,” “a health care crisis,” “schools where too many children aren’t learning,” and “families struggling paycheck to paycheck despite working as hard as they can.” He argued that real solutions would be impossible until Washington moved beyond the noise and the rage:

  What’s stopped us from meeting these challenges is not the absence of sound policies and sensible plans. What’s stopped us is the failure of leadership, the smallness of our politics—the ease with which we’re distracted by the petty and trivial, our chronic avoidance of tough decisions, our preference for scoring cheap political points instead of rolling up our sleeves and building a working consensus to tackle big problems.

  That was the essence of Obama’s case against Hillary Clinton.

  And it was wrong.

  It turned out that it was possible to make progress on long-term problems even while Washington remained distracted by the petty and the trivial. The proof would be in the Recovery Act. It would produce dramatic change on energy, health care, education, and the squeeze on struggling families—the four pillars of that “new foundation for growth” he would promise in his inaugural address—without any working consensus or any pause in the scoring of cheap political points.

  During the campaign, his policy proposals in those areas didn’t attract much attention. But not even he imagined he’d make serious inroads on all four priorities in a single bill during his first month in office. Since he did so much of what he said he’d do, it’s worth recalling exactly what he was campaigning to change.

  — TWO —

  The Four Pillars

  Energy: The Dream of a Green Economy

  In his first policy speech of the campaign, Obama paid tribute to FDR’s greatest Yes We Can achievement, the transformation of the U.S. economy into a lethal arsenal of democracy after Pearl Harbor.34 When Roosevelt’s brain trust had warned that his goals for retooling civilian factories were impossibly audacious, he had insisted “the production people can do it if they really try.” And they had done it.

  At the Detroit Economic Club in May 2007, Obama called for a similar miracle: the transformation of the U.S. energy sector. Once again, he warned, the future of the American experiment—and the planet—was at stake. “The country that faced down the tyranny of fascism and communism is now called to challenge the tyranny of oil,” he said. “The very resource that has fueled our way of life over the last 100 years now threatens to destroy it if our generation does not act now and act boldly.” Those last five words were straight out of FDR’s inaugural.35

  Obama used his Detroit speech to call out the Big Three automakers for their overreliance on gas-guzzlers, a bit of speak-truth-to-power political theater that led the news coverage. But his deeper message was that energy was the challenge of his generation, a slow-motion existential crisis that politicians always talked about but never solved. This was the kind of problem Obama was running to fix: “It will take leadership willing to turn the page on the can’t-do, won’t-do, won’t-even-try politics of the past, leadership willing to face down the doubters and cynics and simply say: ‘We can do it if we really try’.”

  Ever since 1973, when Richard Nixon vowed to end oil imports by the decade’s end, every president had made we-can-do-it promises about energy independence. “I happen to believe that we can do it,” said Gerald Ford. Jimmy Carter had proclaimed this crusade “the moral equivalent of war.” Even George W. Bush had pledged “to move beyond a petroleum-based economy.”

  So far, the doubters and cynics had been right. Oil imports had more than doubled since 1973.36 We were shipping $1 billion overseas every day to buy crude, empowering petro-thugs, exposing our economy to the whims of OPEC and Mother Nature. When oil prices spiked, the pain we felt wasn’t just at the pump; tourism suffered, petroleum products like chemicals and plastics got pricier, and our manufacturers, farmers, airlines, and shippers all faced higher costs. We were a captive superpower. Osama bin Laden recognized this addiction as our Achilles’ heel, urging al Qaeda operatives to “focus your operations on oil.” And we couldn’t drill our way out of this mess; we were sitting on less than 3 percent of the world’s oil reserves, devouring 25 percent of the world’s oil.

  Meanwhile, a broad scientific consensus had emerged that carbon dioxide emissions from fossil fuels were warming the planet, and that the world needed to slash emissions 80 percent by 2050 to avoid science-fiction disaster scenarios. A documentary about Al Gore’s PowerPoint had just won the Academy Award, and Gore was about to win the Nobel Prize. The ten hottest years on record had all occurred in the previous twelve years; glaciers were retreating, droughts intensifying.37 Obviously, we couldn’t drill our way out of that mess, either.

  Under Bush and Dick Cheney, a pair of Texas oilmen, White House loyalty to hydrocarbons approached self-parody. Bush renounced his campaign pledge to reduce greenhouse gas emissions, and Cheney presided over a secretive energy task force dominated by Big Oil and other extraction industry interests. A former petroleum lobbyist on Bush’s staff was caught editing climate reports to downplay global warming, while a hard-nosed federal watchdog named Earl Devaney unearthed proof of oil regulators having sex with oil executives, smoking pot with oil executives, and generally doing whatever oil executives asked. Congress approved new loan programs for clean-energy projects and fuel-efficient carmakers, but the administration failed to make a single loan.

  So we were still hooked on oil for transportation and coal for electricity. Nearly three decades after Carter installed solar panels on the White House roof—and two decades after Reagan tore them down—solar energy produced just 0.1 percent of our power. Wind, our fastest-growing source of renewable electricity, also generated less than 1 percent of our juice. We were the world’s worst energy
hogs by far; the average U.S. home had over two dozen plug-in devices slurping electricity, while the average U.S. commuter spent nearly an hour a day behind the wheel burning gas. And the energy forecasts all predicted more demand, more carbon-spewing coal plants, and more oil imports from countries that hated us.

  In an October speech in Portsmouth, New Hampshire, Obama unveiled his plan for a real clean-energy push.38 Like all his Democratic rivals, Obama proposed to cap carbon emissions and set up a market-based trading system that would reduce emissions by the necessary 80 percent by 2050. (Republican John McCain had a cap-and-trade plan, too, with a 60 percent emissions reduction.) Obama also vowed to invest $150 billion in clean energy over a decade, about five times the Bush status quo. Establishment pundits dismissed this as a brazen overpromise, “standard goody-bag politics.”39 But the Recovery Act would get three fifths of the way there in Obama’s first month.

  On the trail, Obama often touted a renewable energy resource that’s perfectly clean, instantly available, and almost infinitely abundant.40 It doesn’t depend on future technological breakthroughs, and we don’t need to import it. Unlike coal or petroleum, it’s zero-emissions. Unlike solar or wind, it works in any weather. Unlike nuclear, it doesn’t produce radioactive waste, risk a calamitous meltdown, or take a decade to build. And it’s the cheapest energy resource we’ve got.