Hillary Clinton’s Economic Story: Stuff Happens

Robert Borosage

Campaign aides billed Hillary Clinton’s economic address as a demonstration of her populist commitments. And as she trudged through her text, she assiduously touched virtually every base in the progressive economic agenda.

Invest in infrastructure, check. Raise the minimum wage, check. Day care, paid sick leave, paid family leave, wage theft, overtime, check. Protect “and enhance” Social Security, check. “More affordable college,” check. Invest in preschool and education, check. Trade, check. Wall Street, check. New energy, check. Comprehensive immigration reform, pay equity for women, investment zones for urban poor, check. Progressive tax reform, check. And she also included emerging ideas on curbing “quarterly capitalism:” tax credits for training workers, restrictions on stock buybacks and incentives for long-term investment rather than short-term trading.

All this paid tribute to the victory of progressives in the Democratic policy debates about economics – and was rightly applauded as such. Joseph Stiglitz, the Economic Policy Institute and Democrats for America all released statements praising the speech, while claiming a bit of credit for it.

The speech was billed as a framing speech, details to follow. So while it checked off each reform topic, it was virtually devoid of detail. No sense of the scale of the infrastructure investment, the scope of tax reform, the level of the minimum wage, how affordable college would be, and so on. On trade, Clinton rigorously asserted her commitment to remain uncommitted: trade accords have major benefits, but have hollowed out our manufacturing. We should embrace good ones and walk away from bad ones. But no hint to what distinguishes one from the other. As to Wall Street, crimes and criminals should be prosecuted. Excesses curbed. Dodd Frank reforms defended. A pledge to appoint “regulators who understand that “too big to fail is still too big a problem,” without a clue about what they should do about it. She got most of the subjects right, but chose not to provide us with her answers.

Two points about the subjects that deserve attention: Clinton argues that we need more growth and more fairness, and lays out an agenda designed to achieve that. But this seems to miss the thrust of the argument made most forcefully by Joseph Stiglitz that extreme inequality cripples growth, that more equitable distribution of the rewards is essential to sustaining growth. Clinton scorned those (Jeb Bush) who make “arbitrary growth targets” the goal rather than rising incomes. But the real critique is that the growth is impossible without greater sharing of the rewards.

Second, while Clinton calls for investing in renewable energy and making America “the clean energy superpower,” the threat posed by catastrophic climate change and the opportunity unleashed by the coming green industrial revolution get remarkably little play. It’s essentially an add-on to the infrastructure argument, not a centerpiece of a strategy to meet a clear and present danger and to grasp a clear and remarkable opportunity.

The Big Frame: Stuff Happens

A framing speech can’t and shouldn’t go into policy details, and Clinton pledged a series of speeches would fill in the missing text. But a framing speech should tell a clear story: about how we got in the hole we are in, who drove us there, how do we get out, and what leaders and movements will lead the way.

Here, Clinton’s speech was disappointing. The problem, she argued, is most Americans see “an economy that still isn’t delivering for them… It still seems, to most Americans that I have spoken with, that it is stacked for those at the top.” The “basic bargain” – work hard and get ahead – “has been eroded.” Note the passive voice.

So why did this happen? Who did it to us? Clinton’s answer is partial and partisan: “For 35 years, Republicans have argued that if we give more wealth to those at top by cutting their taxes and letting big corporations write their own rules, it will trickle down, it will trickle down to everyone else. Yet every 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.Twice now in the past 20 years, a Democratic president has had to come in and clean up the mess left behind.” (Emphasis added.)

But even she understands that isn’t an adequate answer. Now after six years of President Obama cleaning up President Bush’s mess, “as the shadow of crisis recedes and longer-term challenges come into focus.” Incomes continue to stagnate. Profits and CEO pay soar; wages “barely budge.”

Why? There are “major changes in our economy and the global economy that did not start with the Recession and will not end with the recovery.”

What are they? “Advances in technology and expanding global trade have created new areas of commercial activity and opened new markets” but are too often “polarizing our economy, benefiting high skilled workers, but displacing and downgrading blue-collar jobs and other mid-level jobs that used to provide solid incomes for millions of Americans.”

We have been victimized by inexorable economic forces – technology, global trade. Better ideas and policy can fix it. Completely absent from the frame is any sense of the systematic war waged by corporations and the right wing to win the battle of ideas, flood money into our politics and rig the rules of the economy to their benefit. They rigged monetary policy and fiscal policy, global trade rules, labor and wage laws, government investment, deregulation, privatization, global policing – all reinforcing the effort to weaken workers, drive down wages, and capture more of the profits at the top. And then they invested a minute portion of those profits to buy both parties and corrupt our democracy.

Clinton’s story is instead that Democrats have been right all along. But inexorable forces have hit us. We didn’t get shafted, we just have to deal with powerful forces. And now we need better ideas, based on “evidence” rather than “ideology” more activist government, with a commendable focus on “the defining economic challenge of our time:” We must raise incomes for hard-working Americans, so they can afford a middle-class life.

Omitting the reality that our policies have been systematically and purposefully rigged to favor the few – and that our politics have been corrupted in that pursuit – both misleads Americans, and weakens that agenda’s appeal.

Voters sensibly doubt whether politicians represent them, believe Washington is corrupted and that it wastes resources. They’d like government to do a bunch of things, but doubt whether it can. The promises of politicians are a degraded currency. As Stan Greenberg has argued forcefully, an activist reform agenda gains needed credibility when it is presented as part of an effort to take back our government, clean it up and challenge the interests that corrupted it.

For Clinton, the problem is exacerbated by the Obama presidency. Obama has proposed many of the ideas on her agenda, but they have gone nowhere. Clinton argues that in contrast to Obama, she’s a fighter who can get things done. But without a dramatic frame that makes the real stakes clear, this agenda can be and will be assailed as more of the same, which is already the Republican mantra on Clinton.

Progressives are winning the economic argument among Democrats. As Clinton shows, the era of small government is over. Every Democratic candidate summons us to a new era of activist government. But the question of this populist moment is who will speak truth not to power, but to the American people. Clinton is calling people to a policy discussion. Sanders is rousing them for a political revolution. She’s one of the best qualified candidates in the history of the Republic and an overwhelming favorite to win the nomination. But he is telling a far clearer story of why working people are struggling in this wealthy country and what they must do to take it back.

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