Hillary and the economy: She's not Bill

On economics, Hillary Clinton so far looks like she's positioning herself significantly to the left of her husband.

Her husband partnered with Republicans to balance the federal budget, declared that the “era of big government is over,” and repealed a law banning traditional banks from the stock brokerage business. He also supported the controversial free-trade deal called NAFTA.

Hillary Clinton’s economic agenda as a presidential candidate is substantially different.

While Bill Clinton moved the Democratic Party toward the political center as a candidate and president in the 1990s, Mrs. Clinton’s policies so far are looking closer to those of President Obama than to her husband’s. In fact, after being beaten for the nomination in 2008 as Mr. Obama ran to her left, she’s now edging left of him in some cases.

Hillary’s Clintonomics isn’t Bill’s. Not in this presidential campaign, anyway.

That fact was punctuated Wednesday when candidate Clinton announced her opposition to the Trans-Pacific Partnership (TPP), an accord to
expand commercial ties among a dozen nations Pacific Rim nations heralded by the Obama administration as a signature trade deal.

But the shift is also evident in other policy arenas. Clinton is calling for higher taxes on the wealthy, exhibiting little worry about the federal deficit, and urging tighter regulatory reins on Wall Street.

The leftward shift coincides with significant changes in the political and economic climate since she was a United States senator from New York before the Great Recession.

"The party’s left-wing champions – Elizabeth Warren, Bernie Sanders and Bill de Blasio – are increasingly setting its agenda, with relative centrists like Hillary Clinton having to court the party’s left-wing voters," writes Ramesh Ponnuru, a visiting fellow at the conservative American Enterprise Institute, in a recent Politico magazine article.

Bill Palmer at the politics website Daily Newsbin opines that "even as Barack Obama has ultimately emerged as the logical progressive successor to JFK and FDR, we’re now seeing Hillary emerge as the logical successor to Obama. Except somehow, she’s landed to the left of him."

Pressure from the left

And in the very present tense, her campaign themes are unfolding against mounting pressure from the surprisingly strong candidacy of Sen. Bernie Sanders, the Vermont independent who is seeking the Democratic nomination.

A late-September NBC News/Wall Street Journal poll found 42 percent of Democratic primary voters supporting Clinton, 35 percent backing Senator Sanders, and another 17 percent favoring Vice President Joe Biden, who has not formally entered the race.

Even as Clinton offers policies that appeal to liberal Democrats, retaining some of the moderate label could help her in the general election or in fending off a possible Biden challenge in the primaries.
"You know, I get accused of being kind of moderate and center," Clinton said at an Ohio appearance last month, according to CNN. "I plead guilty."

Compared with Sanders, Clinton retains some important strands of 1990s Clintonomics.

His campaign centers on income inequality. She hits populist notes on that topic, but puts more emphasis on boosting economic growth. Fiscal hawks have criticized him for proposing as much as $18 trillion in new federal spending. She has some plans to expand government, too, but those are more modest in scale, like spending $350 billion over 10 years to ease college costs for families.

By those gauges, she still represents the centrist side of her party. That side just appears to be getting pushed leftward as average Americans have been hit by a long stretch of hard economic times – and are showing it in their distrust of politics as usual.

In the signature economic speech of her campaign so far, Clinton in July described stagnating worker pay as the “defining economic challenge of our time.” She put the goal this way: “We must raise incomes for hard-working Americans so they can afford a middle-class life.”

Obama has used very similar phrasing, saying in 2013 that the “defining challenge of our time” is “Making sure our economy works for every working American.” One important twist: Where Obama framed this as essentially identical to the challenge of growing income inequality, Clinton mentioned inequality in a separate part of her speech. This can be read as a sign of how the new Clintonomics carries important elements of the old.

How would she get wages growing? Clinton described a strategy led by “strong growth,” fueled by business tax reform, creation of a public-private infrastructure bank to fund needed investments, and helping more women stay in the work force through policies such as paid family leave and tax breaks to pay for child care. And immigration reform, to bring “millions of hard-working people into the formal economy,” would boost the economy by $700 billion over 10 years, she said.

Those specifics sound very similar to things Obama has championed.

What Hillary wants

Beyond that, Clinton has her own inequality agenda. It’s not as bold as Sanders’ proposals, which includes universal health care. But like Obama, she supports the “Buffett rule,” the idea that tax law should ensure that millionaires or billionaires like Warren Buffett don’t pay at a lower rate than average people. She has proposed other policies  – such as boosting capital-gains taxes – that would also raise taxes on the wealthy.

And she is calling for policies aimed at making lower-income Americans more upwardly mobile – policies to strengthen labor unions and give every 4-year-old access to preschool. “High quality early learning … can set children on the course for future success and raise lifetime incomes by 25 percent,” she said.

Her position on trade cuts to the left of Obama, not to mention the North American Free Trade Agreement championed by her husband in the 1990s.
The move scored Clinton some quick points with labor unions, who say past trade deals have often sold out workers at the expense of business interests.

She included a hedge in her announcement, saying Wednesday that “based on what I know so far, I can’t support this agreement.”

On federal deficits, she has given some nods to fiscal sustainability, but isn’t veering anywhere near Republican rhetoric about runaway federal debt.
And with the memories of the 2008 financial crisis still fresh for many voters (and Sanders railing on Wall Street), Clinton has proposed a slate of additional reforms beyond the Dodd-Frank Act signed by Obama in 2010.

She wants to extend the statute of limitations for major financial crimes and boost resources for federal prosecutions of them. In a Thursday op-ed, she called for a “tax on the high-frequency trading that makes our markets less stable and less fair.” She also supported new fees on banks that take on excessive leverage (borrowing), and a “skin in the game” ding on banker bonuses, in some cases.