Free The New New Deal by Michael Grunwald Page B

normal downturns, so the definition of what counted as “timely” stimulus could be stretched. Obama’s new plan included public works, like energy-efficient school retrofits as well as typical road and bridge repairs, even though his economic team considered infrastructure projects a leisurely way to move money. Obama even proposed some of the low-income heating aid that his economists had mocked in Hillary Clinton’s stimulus proposal.
    “We were no longer thinking solely about speed,” Goolsbee says. “This was a totally different ball game. We were staring into the abyss: ‘Whoa, is this the start of another depression? Is this something that could go on for years?’”
    Consumer confidence was at a forty-year low. The Dow was still plunging, the auto industry was hemorrhaging, and Bernanke was blasting out emergency loans as if he were allergic to money. Polls suggested only 5 percent of Americans thought the country was headed in the right direction, and you had to wonder what those 5 percent were smoking. Obama was buying low, all right. In his Toledo speech, he wasalready trying to temper expectations about the recovery. “I won’t pretend this will be easy,” he said. “George Bush has dug a deep hole for us. It’s going to take a while for us to dig our way out.”
    He just didn’t realize how deep a hole, or how much digging would be required. At the time, $175 billion worth of backfilling seemed extraordinarily aggressive, more than the Pentagon spent that year on the war on terror.
    “We thought we were pushing the envelope,” recalls Brian Deese, Furman’s deputy for economic policy. “It was amazing how fast what was considered substantial kept changing.”
    Once again, a Washington consensus was emerging for government action. The Washington Post reported that “stimulus proposals are proliferating like Halloween pumpkins,” and even the conservative Washington Times noted widespread agreement that “the next administration should—initially, at least—open its wallet, not tighten its belt.” 85 86 McCain proposed emergency tax cuts, and Bernanke, who usually tiptoed around fiscal issues, urged Congress to enact a “significant” stimulus to prop up the economy. Pelosi and Reid threatened to call Congress back after the election to pass another $150 billion stimulus.
    A secret team of Obama advisers was already thinking bigger.
The Shadow Transition
    T he Obama-Clinton fight was a bitter slog. Clintonites saw Obama as a presumptuous line cutter. Obamans saw Clinton as a poll-driven, say-anything symbol of a broken system. But once the fight was over, Obama ordered his staff to act like it was over. This wasn’t just a strategy to win over the Hillary dead-enders who were calling themselves PUMAs (Party Unity My Ass) and vowing to vote for McCain. Obama needed the Clintonites. They were the Democrats with governing experience. He knew he couldn’t make change happen without an executive branch that could execute.
    Obama’s put-the-past-in-the-past approach became a big story afterthe election, when he chose Hillary to be his secretary of state; tapped Congressman Emanuel, a Clinton White House adviser, to be his chief of staff; and stocked his economic team with Clinton-era veterans like Summers, Geithner, Orszag, and Furman. Quietly, though, Obama had already cast his lot with the Clinton crowd after sewing up the nomination, when he asked John Podesta, President Clinton’s former chief of staff, to lead a secret “shadow transition” to prepare for an Obama administration. All nominees do at least some pre-transition planning, but Obama’s was by far the most elaborate in history.
    Podesta was a logical choice to lead it, a Washington insider who spent the Bush era getting ready for the next Democratic transition. He led the Center for American Progress think tank, a Democratic government-in-exile that was assembling a fifty-six-chapter blueprint advising the next