Blown Opportunity: Michael Grabell Revisits The Stimulus

In Stoppard's Rosencrantz & Guildenstern Are Dead, Guildenstern, just before his execution, says to his doomed friend: "There must have been a moment at the beginning, where we could have said no. Somehow we missed it. Well, we’ll know better next time."

Michael Grabell's Money Well Spent? is the story of legislators given the briefest of opportunities to resuscitate a broken country and "somehow missed it," again and again. The achievement of Grabell's book is to draw a line from the bungling of lawmakers at the highest levels all the way down to the struggling workers at the bottom. Readers who have been living with unacceptably high unemployment rates for so long are liable to wonder what might have been every few pages of this terrific book.

It's irrelevant that much of the story of the American Recovery and Reinvestment Act, particularly the sections on the Congressional machinations, has already been told. The book is effective because it reopens old wounds. We are reminded of the aggravating lawmakers who were neither dogmatically against the stimulus nor inclined to pass a strong bill -- and yet, because Republican support was nearly nonexistent, were the linchpin of the effort.

Senators Arlen Specter, Susan Collins, Olympia Snowe and Ben Nelson were famously able to water the stimulus down, to chip away at the price tag by citing their personal bugaboos, greatly diminishing its potential efficacy and job-creating capabilities. Collins, for example, forced the removal of a provision "designed to encourage federal workers to point out cases where taxpayer money is subject to waste, fraud, or abuse."

As Paul Krugman wrote, 10 days before the bill was signed:

Now the centrists have shaved off $86 billion in spending — much of it among the most effective and most needed parts of the plan. In particular, aid to state governments, which are in desperate straits, is both fast — because it prevents spending cuts rather than having to start up new projects — and effective, because it would in fact be spent; plus state and local governments are cutting back on essentials, so the social value of this spending would be high. But in the name of mighty centrism, $40 billion of that aid has been cut out.

The stimulus was not considered adequate then and it isn't now. Granted: there would be "between 2.2 million and 4.2 million fewer Americans employed if the bill had never passed," but this isn't good enough. As Grabell succinctly put it in a recent interview:

The stimulus did a lot of good but ultimately failed to bring about the strong recovery the public expected. The money was spread so far and wide that in a lot of different programs it was absorbed into existing budgets. The tax cuts weren’t strong enough and public enough to overcome these prevailing fears of losing a job, a home, or years of retirement savings.

For this reason, there may be no more nauseating moment in Money Well Spent? as when Nelson tells the Senate, "We trimmed the fat, fried the bacon, and milked the sacred cows." It is Grabell's achievement to make the reader appreciate how this triumphialism -- along with the outdated government funding formulas that determined the distribution of dollars -- led to the devastation Nelson seems so gleeful to have wrought.

To take one example: Grabell reports that the stimulus funds oftentimes did not get proportionally allocated to states that needed them most. South Dakota, for instance, had minimal unemployment yet received $1,952 per person, while Florida -- with more than double the percentage of unemployed -- received less. Why? Because there was "no relationship" between where projects were funded and the levels of unemployment and poverty. That meant that a place that was really hurting, such as LaGrange County, only got $213, while Thomas Country (population: 538) was awarded $7 million for a viaduct.

Grabell digs even deeper, putting a face on the Americans who were ostensible targets of the stimulus. His portraits are disparate: among them, Ed Neufeldt, who worked for a shuttered RV factory in Indiana and "briefly became the face of the economic downturn"; Derrick McRae, a carpenter from Paterson who tells Grabell, "right now I'd probably be homeless" were it not for the stimulus; and Malcolm MacIver, a neurobiology and engineering professor who received "a $1.25 million grant to use electric fish from the Amazon to study how animals take in sensory information to move quickly in any direction."

Ultimately, Grabell calls the American Recovery and Reinvestment Act "an extraordinary and flawed endeavor." It wasn't an abject failure, but it certainly wasn't the second coming of the New Deal -- which is what the country required -- but a defanged imitation.

Well, we’ll know better next time.