I finally got a hold of Hillary Clinton’s ballyhooed economics speech! It’s a little too late in the day for a really deep dive, but here are some preliminary observations.
First, the speech was incredibly wide ranging, and was described by the candidate as “about my economic proposals.” But it was more a detailed laundry list of goals sprinkled with calls for a few specific initiatives and knit together by a (loose) narrative about how a series of historical developments that are (supposedly) unrelated to human decisions (like globalization), and a series of big mistakes (like regressive tax hikes and ill-considered regulatory rollback), have undermined the nation’s ability to generate both adequate economic growth and adequately rising wages for most workers.
Second, it’s hard to identify much of significance that’s genuinely new even in the catalog of objectives. Not that that’s necessarily bad, especially if you’re on the left of center, for much of the agenda adopted by Democrats since the turn of the century simply hasn’t been put into effect, or not to an especially great extent. So perhaps not surprisingly, Clinton’s speech was filled with material about boosting green energy’s role in the economy, closing tax loopholes that allegedly excessively reward much Wall Street pay and that supposedly encourage job and production offshoring, creating more incentives for longer-term and more productive investment by financiers, establishing an infrastructure bank, mandating more family-friendly workplace policies, raising the minimum wage (nation-wide), raising taxes on the wealthy, reversing the decline of unions, improving education for everyone from toddlers to displaced workers, encouraging job-creating investment in inner cities – I could go on.
Third, some of the most crucial aspects of the “vision thing” Clinton was trying to present clashed pretty loudly with each other. For example, one of her main themes is “For 35 years, Republicans have argued that if we give more wealth to those at the top – by cutting their taxes and letting big corporations write their own rules – it will trickle down, it will trickle down to everyone else.” The only results, she claimed: “[E]very time they have a chance to try that approach, it explodes the national debt, concentrates wealth even more, and does practically nothing to help hard-working Americans.”
At the same time, Clinton stated that “More growth means more jobs and more new businesses. More jobs give people choices about where to work. And employers have to offer higher wages and better benefits in order to compete with each other to hire new workers and keep the productive ones. That’s why economists tell us that getting closer to full employment is crucial for raising incomes.” That sounds an awful lot like at least some version of “trickle down” to me.
And you don’t have to be a Wall Street shill to be troubled by her attempt to square this circle: “The truth is, the current rules for our economy reward some work – like financial trading – much more than other work, like actually building and selling things the work that’s always been the backbone of our economy.” When has a free market economy not “rewarded some work…much more than other work”?
Her treatment of trade and immigration issues featured still more contradictory statements. It was heartening to see Clinton repeat her determination to “set a high bar for trade agreements” and to specify once again that “We should support them if they create jobs, raise wages, and advance our national security. And we should be prepared to walk away if they don’t.”
But her broader understanding of trade’s impact on the economy – or at least the kind of trade generated by American policies – shouldn’t inspire much confidence. According to Clinton, “The Greek crisis as well as the Chinese stock market have reminded us that growth here at home and growth an ocean away are linked in a common global economy. Trade has been a major driver of the economy over recent decades but it has also contributed to hollowing out our manufacturing base and many hard-working communities.”
But as should be common knowledge by now, the relentless rise of America’s trade deficits over any significant stretch of time you’d care to examine, shows that the U.S. economy has grown despite its trade performance, not because of it. Moreover, if trade flows have indeed contributed to manufacturing’s hollowing out, that strongly indicates that whatever economic activity trade has spurred has been of the borrowing and spending kind that’s way too dangerous if unaccompanied by enough investment and production.
In addition, what the latest problems of Greece and China really remind us of is that America’s integration into the global economy is a double-edged sword at best. And especially since the nation has such ample scope for self-sufficiency, as I’ve written, the very idea of trade expansion as a top policy priority needs a thoroughgoing reexamination.
As for immigration, Clinton reiterates the increasingly common claim of Open Borders advocates that “Bringing millions of hard-working people into the formal economy would increase our gross domestic product….” There’s no doubt that immigration policies have been a major growth booster in the past, and could be in the future. But as she also noted, the nation can’t “just replay previous successes. Today is not 1993 or 2009.”
She might have added that it’s not 1850 or 1900, either. As I’ve pointed out, an economy that – as Clinton emphasizes – is struggling to generate both adequate growth and inclusive growth isn’t an economy that any time soon needs the kind of massive labor influxes that Clinton and the rest of the Democratic party mainstream clearly favor. And the low-income Americans whose plight Clinton spotlights need it least of all.
Despite these flaws, the lack of specifics, and the paucity of insights regarding how she’ll move the nation from here to there, Clinton deserves credit for giving voters a great deal to chew on. Previewing the speech, she said she “looks forward to the debate” they’ll spark. So should we all!