South Beach-Based Author Michael Grunwald Is Changing D.C.'s Mind About the Stimulus

Obama's always clearly believed that good policy ultimately equals good politics. Does the stimulus' reception prove he's wrong?
Even Obama would tell you he overestimated how true that is. So yeah, there's some truth to that. But I would push back in a couple ways, though. This was a really unusual situation. Larry Summers says that FDR was lucky by comparison because things had hit bottom under (Herbert) Hoover, so there was never any doubt about who's fault this was.

So that's one thing I'd push back on, that this was an extraordinary situation when they passed the stimulus. Also, I'd point out that when you think about it, Obama isn't in that horrible a shape going into the election, considering how many straight months of however high the unemployment has been. People don't want to string him up, and he's still a heck of a lot more popular than Democrats or Republicans in Congress. To some extent, people aren't thrilled with how things are going but it seems like in general they think Obama's done the best he could. I always hear people talking about how Obama messed up the politics but it's also possible that the black guy who won the White House even though his middle name is Hussein didn't suddenly become a political idiot on January 20, 2009.

Let's get a little Florida-centric -- can you talk about some of the more subtle changes the stimulus has wrought in the state? The smart utility readers installed by FDLE are a good example. There's a particularly interesting incident where the last Orange Bowl was seconds away from blacking out but was saved by these new grids.
The smart grid is a perfect example of the stimulus, and in a way is a little microcosm of the entire stimulus package. It was something that Obama wanted go huge on at first. He and Biden had talked about spending $100 billion and just doing it, just building an entire national smart grid. For complicated policy reasons, you can't just go build a smart grid. You want to put in policies and seed money and have the utilities do it. There's a quote from (economist) Peter Orszag about the sense of frustration: "Here's the first African-American president with this big mandate, the economy has fallen off a cliff, history is calling, and I can't just go build a smart grid?"

So instead they put $11 billion into the smart grid, which compared to the $10 million or so the feds had spent before, is still an enormous amount. It really provides a huge jump start, and the first jump start is these smart meters. FPL got $200 million.

But the program got off to this incredibly slow start, to the point where Rahm (Emanuel) is just flipping out because no money is being spent. He just wants the utilities to hurry up and just give everyone a fucking smart meter already. There are these dorks form the DOE who have to come tell him, well, we can do it, but there are limits to when grid is able to handle and we need to update the synchrophasers and these other technical terms. I think it's a hilarious, because Rahm eventually backs down and says, "OK, do it your way, but hurry up and I never want to hear the word 'synchrophaser' ever again." 

So they go ahead and do it, and the smart meters, they're one of the most visible ways the stimulus touches ordinary lives. But with a dumb grid and dumb pricing that has yet to catch up, they're really limited. You can go online now and see how much energy you're using, but not how much each appliance uses. Most of the good things they're doing, you don't see directly. Things like that Orange Bowl story, where the transformers that used to be checked once a year to see if they're in danger of blowing instead get checked every couple of minutes under a smart grid. It sniffed out the problem and fixed it before this big embarrassing blackout. But people don't know that. The only tangible impact is that don't need meter readers anymore, which will lower costs but it also means meter readers are getting laid off. So it's a beautiful microcosm of the stimulus: good policy, making incremental but really important changes that can be a tough sell to the public.

Reading the section about Gov. Rick Scott floundering about what to do with the stimulus' high speed rail money made me want to punch a wall. Why did he turn it down?
Well, putting the best possible spin on what happened, Scott just doesn't believe in high speed rail. He doesn't believe in trains. So he went looking for a study, any study, that would say that rail deal was bogus, and he found one and ignored the tons of actual studies that showed it wouldn't be bogus. He got this joke of a study from a libertarian think tank. Then he said that, well, his real concern was that Florida would have to foot the bill for the project. In reality, the Obama people had bent over backward to make sure Florida wouldn't pay a dime for this project. They even had rail companies set to cover any cost overruns. There was no risk to the state. This was the most shovel-ready project in the whole country, because they had land along Interstate already set, they had permits, and this thing was going to be good to go.

But he just didn't want to do it. This was right when the new governors of Wisconsin and Ohio had just killed their own train projects under the stimulus. Scott knew these things are really popular among the business community in Tampa and Orlando, so he was always a little leaving wiggle room before his election on the issue. I did an interview with Ron Klain after the Wisconsin project and the Ohio project had both been killed. He was spinning the story, saying, can you imagine how this is going to play in a couple years, when they're building this thing in Florida and they can run ads saying, "Thanks for the jobs, Wisconsin!" In the end, it ended up being California's gain and the Midwest's gain. It's going to be a real change in the Midwest and it's being underplayed. They're building a train network there that's eventually going to be better than cars. They're already slicing off an hour on the Chicago to St. Louis route.