Hillary Clinton’s formal announcement of her presidential candidacy yesterday has triggered so much reaction and commentary – on top of what’s been written during her prolonged run-up – that it’s legitimate to wonder if much of value can be added before she actually starts campaigning. But this point seems worth making about the core claims in her declaration.
According to Clinton, “Americans have fought their way back from tough economic times. But the deck is still stacked in favor of those at the top. Everyday Americans need a champion, and I want to be that champion – so you can do more than just get by. You can get ahead – and stay ahead. Because when families are strong, America is strong.”
Of course, these words were hardly chosen at random. To me, they signal the Clinton strategy for embracing the economic record of an Obama administration in which she served, while spotlighting urgent national needs that remain unmet. In fact, they closely resemble the president’s position (as most recently voiced in his latest State of the Union): “[T]onight, we turn the page [on a “vicious recession”]. Tonight, after a breakthrough year for America, our economy is growing and creating jobs at the fastest pace since 1999…. It’s now up to us to choose who we want to be over the next 15 years and for decades to come. Will we accept an economy where only a few of us do spectacularly well?”
No one can reasonably doubt that this message is astute politically. It enables Democrats to claim vital accomplishments while demonstrating their awareness how narrowly distributed the economic recovery’s benefits have been. This message also dovetails nicely with the idea that government assistance of various types, ranging from minimum wage hikes to more worker-friendly regulations on business, is mainly what’s needed to broaden prosperity.
Economically, however, the message could not be more misleading. For the bulk of the evidence clearly shows that whatever recovery America has experienced is overwhelmingly due to monetary steroids provided by the Federal Reserve. The Fed itself admits this. Largely as a result, the crucial quality of the nation’s recent growth remains as low – and therefore as dangerous – as it was during the previous decade’s dangerous bubble inflation.
Interestingly, during his first Inaugural Address, Mr. Obama blamed the economy’s woes on “greed and irresponsibility on the part of some but also our collective failure to make hard choices and prepare the nation for a new age. “ Subsequently, he’s repeatedly, and rightly, emphasized the imperative of creating “an economy built to last.” It’s bad enough that the president is now suggesting that even much of the job of structural reform is already done. It would be even worse if his likeliest Democratic successor perpetuated this myth.