The New New Deal (2 page)

Toone had never studied biofuels, but he took on the photosynthesis problem. It was a real problem; just about all our energy was ultimately derived from photosynthesis, including the hydrocarbons in gasoline and other fossil fuels, even including the carbohydrates we break down when we pedal our bikes. But Toone had an epiphany after consulting with two groups of scientists who shared his inexperience in the energy field: the synthetic biology community, which manipulates cells and molecules, and the “extremophile” community, which studies microscopic organisms in exotic eco-niches like hot springs and ocean floors. Some of those organisms had evolved to absorb energy without photosynthesis,
subsisting on hydrogen, ammonia, or even electric current. But none had been studied for fuel production. Toone realized that with the proper tinkering and the proper funding, it might be possible to train the kind of bacteria that eat electricity for breakfast to fuel our transportation sector someday. In October 2009, he hosted the first ever workshop on the topic, bringing together big brains from far-flung fields and encouraging them to imagine the possibilities.

“It was amazing how fast everyone went from ‘This is nuts!’ to ‘Hmmm,’” he recalls.

Soon Toone presented his findings to the ARPA-E team. Majumdar had a knack for gouging holes in talks like this, pulverizing tenured hotshots into stammering grad students. This time he just sat in silence.

“Holy shit,” he finally said in the lilt of his native Calcutta. “We’re talking about an entirely new scientific discipline.”

At a brainstorming session at ARPA-E’s unofficial watering hole, a D.C. dive bar called the Ugly Mug, Toone came up with the new discipline’s name: electrofuels. Within a few months, ARPA-E received 120 electrofuels proposals from scientists in all kinds of fields. And in April 2010, at a cabinet meeting led by Vice President Joe Biden, Chu unveiled thirteen electrofuels grants.
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A Boston firm planned to engineer E. coli into “a chassis for iso-octane.” A University of South Carolina team would study “electroalcoholgenesis-bioelectrochemical reduction of CO
₂
.” Biden’s staff had invited me to sit in during the meeting—I’m a journalist for
Time
magazine—and as Chu explained a Harvard Medical School team’s plan to create a “bacterial reverse fuel cell,” I could almost see a “WTF?” thought bubble forming over the vice president’s head.

Then Chu started talking a language everyone could understand; as a kid on Long Island, before his own circuitous journey from New York to Washington via San Francisco, he had been a baseball statistics nerd. “We’re swinging for the fences,” Chu said. “We’re going to strike out a lot, but we’ll hit a few grand slams.” Most of ARPA-E’s experiments would fail, but one successful project could kill off the internal combustion engine, or slash the cost of air-conditioning in half. Someday, electrofuels could be ten times as efficient as biofuels.

“Wow!” Biden crowed. “We’re talking about research that will literally revolutionize American life!” (Biden often says “literally,” or “literally, and I mean
literally
, not figuratively!” when he means “figuratively.”) He then veered into a soliloquy about American ingenuity, then a shaggy-dog story about an energy-efficient lighting firm, then on to other business. But afterward, Biden was still jazzed. “Was that mind-blowing or what?” he asked, throwing his arm over my shoulder as if we were lifelong pals, when we had just been introduced moments earlier. “This is the exciting part of my job: We’re building tomorrow!” We chatted for a minute about ARPA-E, and how it was a pretty striking example of the change Obama had promised during his campaign.

“That’s what nobody gets about the Recovery Act,” Biden said.

Yes, ARPA-E was launched by the American Recovery and Reinvestment Act, President Obama’s widely ridiculed $787 billion “stimulus” package. The audacity of hope made change possible. The Recovery Act is making change happen.

P
resident Obama signed the stimulus into law on February 17, 2009, less than a month after his inauguration, just a few months after the meltdown of the global financial system. The U.S. economy was in freefall, and Americans were desperate for change. Obama’s approval ratings were around 70 percent, Democrats had expanded their majorities in Congress, and talking heads were suggesting the Republican Party might be lurching toward extinction.
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Meanwhile, the rest of the world’s major powers were also preparing stimulus packages to defibrillate their flat-lining economies.

Yet Obama’s 1,073-page response to the worst crisis since the Great Depression swiftly became a national laughingstock—and the launching pad for the Republican revival. It was the Ur-text of the Obama administration, a microcosm of policy and politics in the Obama era. “No question about it, the stimulus was the defining moment,” says former Republican senator Mel Martinez of Florida. “The Recovery Act set the tone,” agrees David Axelrod, Obama’s top political adviser.

Within a year, the percentage of Americans who believed the stimulus
had created any jobs was lower than the percentage of Americans who believed that Elvis was alive.
⁸
Resurgent Republicans mocked the law as “Porkulus,” a bloated encapsulation of everything wrong with the Obama presidency. “Failed-stimulus” became a fourteen-letter GOP buzzword of choice, repeated incessantly in floor speeches, press conferences, and attack ads. Senate minority leader Mitch McConnell snarked that even Tiger Woods and John Edwards, the sex scandal stars of 2009, had better years than the failed-stimulus. A drumbeat of gotcha stories chronicled silly expenditures, like costumes for water safety mascots; silly-sounding legitimate expenditures, like a brain chemistry study of cocaine-addicted monkeys; and fictitious expenditures, like levitating trains to Disneyland or a snow-making machine in Duluth. Even Jay Leno got in a dig about communism, “or, as we call it in this country, a stimulus package.”

The mockery got so intense that Democrats stopped saying “stimulus” in public. And their sidestepping got so blatant that a reporter confronted Obama about it at a news conference, asking why his aides “avoid the word ‘stimulus’ like the plague.
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Is that because the original stimulus is so deeply unpopular?”

The president wouldn’t even use the word “stimulus” in his response.

The stimulus had one overriding public relations problem: The administration marketed it as a measure to prevent rampant unemployment—and then rampant unemployment happened anyway. Americans understood that Obama inherited a mess, but they didn’t understand how horrible a mess, and the stimulus was touted as a job creator at a time when jobs were disappearing at record speed. A politically disastrous January 2009 report by Obama’s economics team intensified this problem by warning that the jobless rate could hit 9 percent
without
the Recovery Act, while predicting it would stay below 8 percent
with
the Recovery Act, a gaffe that launched a thousand talking points after unemployment reached 10 percent
despite
the Recovery Act.
¹⁰
These were understandable forecasting errors, based on consensus assumptions; it soon became clear that the pre-stimulus situation was much worse and disintegrating much faster than most economists realized at the time. But Republicans recognized
the report as a gift that would keep on giving, and have savaged the stimulus ever since as a massive boondoggle charged to our maxed-out national credit card. Meanwhile, the left has griped that it wasn’t massive enough. And the media have repeatedly dismissed it as a failure “by the administration’s own standards.”

The Recovery Act certainly wasn’t perfect. It was the product of an imperfect legislative process, authored and implemented by imperfect human beings. It was oversold as a short-term economic fix, undersold as a long-term catalyst for change, and fumbled as a political football. It didn’t create full employment. And its critics inflated the failure of a stimulus-funded solar manufacturer called Solyndra into a classic Washington pseudo-scandal.

I worked for nine years in Washington as a national reporter for
The Washington Post
, mostly writing critical stories about dysfunctional government agencies. I was familiar with the city’s groupthink, the way its media narratives can harden into conventional wisdom. But I didn’t live in Washington anymore, so I didn’t swim in circles where suggesting that the stimulus was anything but a joke was a sign of credulity and cluelessness. And I still wrote about domestic policy, so I knew that the Recovery Act was more than the honeybee insurance, contraception subsidies, and other porky-sounding line items that got so much airtime on TV. It seemed like a big deal—actually, a collection of big deals. I didn’t know if it was a good deal, but it reminded me of the New Deal, a mammoth government effort aimed at short-term Recovery and long-term Reinvestment.

I spent two years researching the stimulus, and I found that it is a new New Deal. Much of the Recovery Act’s impact has been less obvious than the original New Deal’s, but it’s just as real.

N
ostalgic liberals complain that the Recovery Act pales in comparison to the New Deal. It didn’t create giant armies of new government workers
in alphabet agencies like the WPA, CCC, and TVA; ARPA-E is its only new federal agency, with a staff smaller than a Major League Baseball roster. It didn’t establish new entitlements like Social Security and deposit insurance, or new federal responsibilities like securities regulation and labor relations. It didn’t set up workfare programs for the creative class like the Federal Theatre Project, Federal Music Project, or Federal Art Project. (Obama aides grumble that it could have used a new Federal Writers Project to churn out better pro-stimulus propaganda.) And it didn’t raise taxes; it reduced taxes for the vast majority of American workers, although few of them noticed.

Obama and his aides thought a lot about the New Deal while assembling the Recovery Act, but in some ways it’s an apples-to-bicycle comparison. While President Franklin D. Roosevelt forged the New Deal through a barrage of sometimes contradictory initiatives enacted and adjusted over several years, the stimulus was a single piece of legislation cobbled together and squeezed through Congress before most of Obama’s appointees were even nominated. The New Deal was a journey, an era, an aura. The Recovery Act was just a bill on Capitol Hill.

But it was an astonishingly big bill. In constant dollars, it was more than 50 percent bigger than the entire New Deal, twice as big as the Louisiana Purchase and Marshall Plan combined. As multibillion-dollar line items were being erased and inserted with casual keystrokes, Obama aides who had served under President Bill Clinton occasionally paused to recall their futile push for a mere $19 billion stimulus that had seemed impossibly huge in 1993, or their vicious internal battles over a few million bucks for beloved programs that suddenly seemed too trivial to discuss. And the Recovery Act’s initial estimate of $787 billion turned out to be too low; the official price tag would eventually climb to $831 billion.
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After a live microphone caught Biden accurately calling Obama’s health reforms “a big fucking deal,” I suggested to his chief of staff, Ron Klain, that the stimulus was just as big.

“Bigger!” Klain replied.

Biden’s boast about the Recovery Act building tomorrow was accurate, too. It was the biggest and most transformative energy bill in U.S.
history, financing unprecedented government investments in a smarter grid; cleaner coal; energy efficiency in every imaginable form; “green-collar” job training; electric vehicles and the infrastructure to support them; advanced biofuels and the refineries to brew them; renewable power from the sun, the wind, and the heat below the earth; and factories to manufacture all that green stuff in the United States.

That’s a lot of new precedents.

The stimulus was also the biggest and most transformative education reform bill since the Great Society. It was a big and transformative health care bill, too, laying the foundation for Obama’s even bigger and more transformative reforms a year later. It included America’s biggest foray into industrial policy since FDR, biggest expansion of antipoverty initiatives since Lyndon Johnson, biggest middle-class tax cut since Ronald Reagan, and biggest infusion of research money ever. It authorized a high-speed passenger rail network, the biggest new transportation initiative since the interstate highways, and extended our existing high-speed Internet network to underserved communities, a modern twist on the New Deal’s rural electrification. It updated the New Deal–era unemployment insurance system and launched new approaches to preventing homelessness, financing infrastructure projects, and managing stormwater in eco-friendly ways. And it’s blasting the money into the economy with unprecedented transparency and oversight.

“We probably did more in that one bill than the Clinton administration did in eight years,” says one adviser to Clinton and Obama.

Critics often argue that while the New Deal left behind iconic monuments—the Hoover Dam, Skyline Drive, Fort Knox—the stimulus will leave a mundane legacy of sewage plants, repaved potholes, and state employees who would have been laid off without it. Even the Recovery Act’s architects feared that like Winston Churchill’s pudding, it lacked a theme. In reality, it’s creating its own icons: zero-energy border stations, state-of-the-art battery factories, an eco-friendly Coast Guard headquarters on a Washington hillside, a one-of-a-kind “advanced synchrotron light source” in a New York lab. It’s also restoring old icons: the Brooklyn Bridge and the Bay Bridge, the imperiled Everglades and
the dammed-up Elwha River, Seattle’s Pike Place Market and the Staten Island ferry terminal. But its main legacy, like the New Deal’s, will be change.

That is also its main theme.

No, it’s not the New Deal. Obama is not a classic New Deal liberal, and while he shares some of Roosevelt’s traits—self-assurance bordering on egomania, a Harvard pedigree, an even keel, an allergy to ideologues—he’s not the second coming of FDR. He didn’t grow up rich and he didn’t battle polio. He doesn’t welcome the hatred of the elite and he hasn’t forged a unique bond with the masses. He doesn’t share Roosevelt’s mistrust of credentialed experts, and he takes his campaign promises much more seriously than FDR did.