Clinton Will Unveil Aggressive Economic Agenda That Targets Wall Street, High Earners
By Evan Halper, Tribune Washington Bureau (TNS)
WASHINGTON — After months of running on broad themes backed by little in the way of actual policy proposals, Hillary Rodham Clinton will announce Monday what aides call a far-reaching plan to restructure the economy to move more of the nation’s wealth to middle- and low-wage earners.
In what the campaign bills as a landmark speech at the New School in New York City, Clinton will offer a vision for growth that is notably different from the one her husband, Bill Clinton, pursued when he was in the White House and pivots off some of the policies of President Barack Obama.
The agenda, written with input from some of the country’s most liberal economists, reflects not just Hillary Clinton’s effort to appeal to a Democratic Party that has drifted leftward, but also disenchantment with the centrist economic policies she once favored.
It seeks to address what has become one of the key concerns of voters this election season: the failure of the economy to raise middle-class income. The problem has consumed policy advisers for Republicans and Democrats, and strategies for solving it are emerging at the center of every campaign.
“The moment we are in today is unique,” said Neera Tanden, an adviser on the Clinton plan who runs the Center for American Progress, a think tank influential in the campaign. “The old rule of economic growth that when workers are more productive, companies reward them with wage increases no longer applies.”
After decades in which virtually all working Americans saw their paychecks increase, growth became uneven in the 1980s, and over the past 15 years, it stopped altogether for most families. Clinton is seeking to draw a distinction from Republicans — and Jeb Bush in particular — who are focusing their message on more general economic growth. Bush set his central economic goal as boosting the rate at which the gross domestic product increases.
Clinton will frame the election as taking place in the dawn of a new and troubling economic era, which bears little resemblance to the one Bill Clinton ushered in before the internet revolution and globalization took hold. She will note how her challenge differs from that of Obama, whose actions were shaped largely around fixing the immediate financial crisis he inherited.
At the center of Hillary Clinton’s agenda will be tax proposals that push the financial burden of government away from the middle class and small businesses toward higher earners, as well as new rules for the financial sector. Campaign aides say Clinton will begin previewing some of those proposals Monday, followed by a rollout of the details in weeks to come.
“Income inequality has become a bigger part of the national discussion,” said Alan Blinder, an economist at Princeton who is advising the campaign. “People have the correct feeling that the system is not fair. … Hillary will dispute the notion that the only thing we need to care about is getting the economy growing faster. It’s not just that the pie gets bigger, but how that pie is shared.”
Amid concerns by progressives that Clinton, who represented New York in the Senate and has deep political ties to the financial industry, would be reluctant to interfere with the business of investment companies, the candidate will promise to do exactly that. She will target what the campaign calls a mindset of “quarterly capitalism” on Wall Street — a focus on making a quick return with little regard for how it is being generated — that she says has pushed the economy too far away from creating things of real value.
The speech is a prelude to specific taxes and shareholder engagement rules Clinton will later propose that her advisers say would have the effect of redeploying Wall Street capital toward more durable sources of economic growth, such as research and development and infrastructure. Clinton will argue Wall Street is failing the middle class by not keeping its focus on those investments that help generate jobs and upward mobility within companies. Economists who worked on the plan say she will target “excessive risk taking” and churn of investments, as well as what Democrats argue are loopholes in the tax code that reward such behavior.
“These will be areas where she inevitably will be more robust than President Obama was able to be, with the crisis he inherited,” said Gene Sperling, an economic adviser to Bill Clinton and Barack Obama who worked on the Hillary Clinton plan.
Clinton will try to frame the policies favored by all the GOP candidates as ultimately rooted in outdated trickle-down economics, which she says have helped fuel growth but also inequality. Clinton is embracing an argument that so-called New Democrats like she and her husband had long resisted: that income inequality is actually slowing growth, and even policies that boost the earnings of lower earners can be harmful to the economy if they result in the gap between the wealthy and everyone else growing.
What that means for her agenda is that it will include provisions aimed squarely at reducing the share of earnings kept by the richest Americans. They are the kind of policies being demanded by the increasingly influential wing of the Democratic Party led by Massachusetts Sen. Elizabeth Warren and Vermont Sen. Bernie Sanders, the self-described democratic socialist running against Clinton — though Warren and Sanders would push the economy much further in the direction Clinton is now pointing toward.
Embedded within the Clinton agenda will be many of the specific programs restive progressives have been demanding she embrace. Although Clinton will not reveal any specifics Monday, aides say the plan includes an increase in the minimum wage, a lowering of the debt burden on college students and new rules for corporate accountability.
There also will be provisions to strengthen unions, such as expanded collective bargaining rights. Clinton has had an uneasy relationship with labor of late. Her reluctance to take a position on the massive free trade agreement Obama is negotiating with Pacific nations has been a sore point. Union leaders warn the trade deal will cost American jobs and hurt workers.
Boosting paid family leave and availability of child care, two signature Clinton issues, also will be part of her plan, as will the establishment of an “infrastructure bank” to fund the construction of public works projects. Boosting government investment in clean energy is also included.
The proposal comes as Clinton’s standing in the polls in early voting states, while still strong, has slipped notably. Sanders has gained considerable support in Iowa and New Hampshire as he rails against Wall Street, calls for expanding Social Security, and unapologetically pushes to boost a variety of taxes on the wealthy.
Clinton’s plan comes with a major shift in thinking among some of the country’s elite economists. Centrists like Lawrence Summers, who helped guide the economic policies of Bill Clinton’s administration, have recast their advice in the face of statistics showing Americans are not sharing equally in growth.
The economists are increasingly concerned by the way technology, automation, and globalization may be creating new opportunities but are also stripping away the job protections and wage growth that long existed.
“There are a number of new forces leading to the stagnation,” said David Kamin, a law professor at New York University who helped craft Hillary Clinton’s plan. “But they don’t make it inevitable. She plans to lay out real policy choices we can make to raise incomes.”
The unveiling of Clinton’s economic strategy is not just welcome by Democratic primary voters. Clinton’s GOP rivals are eager to dig into the details, which they will frame as a costly burden on the country. The kinds of changes Clinton envisions ultimately could involve billions of dollars in new taxes on certain segments of the economy, even as tax relief is directed toward small businesses and low-wage earners.
Photo: Hillary Clinton via Facebook