Hillary Clinton's Economic Policies

Dear Friends,

I am surprised at how often a President is given credit for good economic times during his presidency or blame for bad economic times during his presidency.  In fact, the President has little impact on the economy during his time in office.  President Obama was certainly not responsible for the large number of job losses during the first part of his first term, nor was he responsible for the increase in employment, as anemic and slow as it was.  The recovery and job growth could have been much faster if we had aggressively increased government spending, but President Obama was still talking about preventing larger deficits and the Republicans would certainly have blocked any more aggressive stimulus measures.

George W. Bush bears much of the blame for Great Recession, but Bill Clinton is certainly responsible as well.  Bill Clinton is given great credit for the economic boom that occurred during his presidency, but in fact it was policies that he supported that led directly to the Great Recession. It was under his presidency that banks were deregulated with the repeal of  Glass-Steagall and that the outsourcing of many manufacturing jobs was encouraged as a result of NAFTA.

Hillary Clinton has suggested that she would use Bill as an advisor particularly on economic issues, pointing to the prosperous economic times during his administration.  She also has chosen Alan Blinder as one of her top economics advisors.  Last October the Daily Kos ran a piece entitled "Meet Alan Blinder, Hillary Clinton's Economic Advisor (and Wall St. One-Percenter)" (here).  After reading the piece, it is easy to understand why Hillary Clinton is against re-instating Glass-Steagall and is against breaking up the biggest banks.

Alan Blinder is described in the first two sentences of the piece as follows:

Hillary Clinton's economic advisor, Alan Blinder, co-founded and is Vice Chair of a super-elite Wall St financial firm, Promontory Interfinancial Network. He is a former Vice Chairman of the US Federal Reserve Bank and chair of Princeton University economics department. 

The piece goes on to discuss what Promontory Interfinancial Network does.  It quotes Reuters

Promontory is proof positive, then, of just how lucrative the revolving-door business can be. The company is full of lavishly-paid former regulators, hiring themselves out at $1,500 an hour to banks desperate for advice on how to navigate Washington’s regulatory thicket. 'the firm acts as an advocate for banks, helping draft letters that challenge crucial rules and discussing reforms with regulators'. Regulators are more likely to trust their former colleagues than they are the banks they’re trying to regulate, and by hiring Promontory, banks can co-opt those former regulators and use them to to effectively work the refs.

Among other things, Promontory provides a mechanism that permits wealthy individuals to get government insurance on deposits in excess of the FDIC limit.  In October, 2008, some in Congress wanted to insure all deposits without limit which would have destroyed this very lucrative part of Promontory's business.  Insuring all deposits would have helped to stabilize the banking industry by protecting individual deposits.  The article describes Alan Blinder's actions

Can one financial firm affect US macro-economic policy, to our detriment? You betcha, if it includes someone like Alan Blinder. In October 2008, the depths of the financial crisis, some in Congress wanted to insure all deposits (as did Germany and Ireland) to stabilize the system -- which would have undermined Promontory Interfinancial Network's business. Alan Blinder and Glenn Hubbard opined in the WSJ against this -- without mentioning their financial self-interest for opposing it. That's right, in the midst of the worst financial crisis since the Great Depression, they co-authored a WSJ op-ed advocating a public policy that would benefit them at the expense of the American (and entire world's) financial system, and they failed to disclose their conflict of interest. You can read their op-ed, on the WSJ website.

The piece continues

It would be hard to find someone more embedded in Wall Street's revolving doors with regulators/government and legalized corruption than Alan Blinder.  ...
How deeply in bed with 1% Wall St can the Clintons be? And how blind, ignorant or uncaring can some 'Democrats' be, to tolerate this?

There will be no real change in our economic system that is rigged in favor of the One-Percenters under a Hillary Clinton administration.  It took a strong challenge from Bernie Sanders to get her to tentatively reject TPP and to support an increase in the minimum wage although not to a livable level.  While she has skillfully adopted the language of fighting against income and wealth inequality, she refuses to endorse any changes that will actually address the problem.  She is an establishment candidate who will do the bidding of the One-Percenters who have funded her campaign as well as the Clinton Foundation and her lifestyle with huge speaking fees.

Thanks for reading and please comment,
The Unabashed Liberal

P.S.  After I initially published this post, I read Paul Krugman's blog post in The New York Times (here) entitled "Presidents and the Economy".  The blog post started out with this paragraph.

After I put up my post comparing private-sector jobs under Obama and Bush, a number of people asked me whether I believe that presidents have a large effect on economic performance. My answer is no — but conservatives believe that they do, which is why this kind of comparison is useful.

So you see a Nobel Prize winning economist agrees with me.

Moving Hillary Clinton to the Left

Dear Friends,

There are two interesting articles at Time.com by Rana Foroochar.  One is entitled "How Elizabeth Warren is Yanking Hillary Clinton to the Left" (here) and another entitled, "This Could be Hillary Clinton's Economic Policy" (here).  MSNBC also published an article by Alex Seitz-Weld and Suzy Khimm entitled "Is this Hillary Clinton's Economic Policy" (here).  Both the articles about Secretary Clinton's economic policy discuss a recent report by the Center For American Progress, a pro-Clinton think tank.

Interestingly enough in the last weeks during which there have been terrorist attacks in Nigeria by Boko Haram, terrorist attacks on Charlie Hebdo and the Jewish community in Paris, Republican congressional efforts to make cuts in Social Security, Republican congressional efforts to push the Keystone XL Pipeline, the initiation of an inquiry by the International Criminal Court into potential war crimes in the most recent Israeli/Palestinian conflict, and the Republican efforts to dilute the impact of the Dodd-Frank regulations on Wall Street, Hillary Clinton has been completely absent from the news and has only made one public statement.  That statement was in the form of a tweet. "Attacking financial reform is risky and wrong.  Better for Congress to focus on jobs and wages for middle class families."

First, it is clear that Secretary Clinton is steering clear from taking a position on anything that is or may be in the future controversial.  The national media and virtually all politicians are refusing to talk about the terrorist attacks by Boka Haram or the victims of the latest violence between Israel and Palestine, even though in both cases far more innocent people were killed.  I cannot help but think that the lack of outrage in the United States and other western countries over the deaths of innocent Nigerians and Palestinians has a lot to do with the otherness attached to those people.  How can you explain the incredible difference in response to those atrocities and what just happened in Paris?  In any case, that is a question too hot for Secretary Clinton to deal with.

Of course the issues of freedom of speech raised by the attack on Charlie Hebdo raise a lot of difficult questions as well.  Secretary Clinton,  a hawk who voted for the Iraq war and for the Patriot Act twice and a member of the Obama administration that has attacked freedom of the press with a vigour normally only seen in Republican administrations, has not been a strong advocate for freedom of expression and would have great difficulty navigating the difficult issues raised by the recent Paris attacks to say nothing of the crack down on freedom of expression following the Charlie Hebdo attack.

I am actually surprised that she has not made a statement condemning the opening of an investigation by the International Criminal Court into the latest Israeli/Palestinian violence.  Normally she defends Israel regardless of what it has done.  I am at a loss to explain her silence on this issue although one might posit that there are more and more Democrats that want to hold both the Palestinians and the Israelis responsible for their violent actions, so perhaps she thinks her silence will not offend anybody.

Of course, Secretary Clinton is maintaining her silence on the Keystone XL Pipeline.  This issue is a symbolic one pitting the environment against short term profits for giant oil companies.  Secretary Clinton's ties to big business and Wall Street make it difficult if not impossible for her to oppose the pipeline.  I should note she has not commented on the fact that 2014 was the warmest year on record either.

Secretary Clinton chose, as her only public comment, to tweet about the Republican efforts to dilute the regulations imposed on Wall Street by the Dodd-Frank legislation.  Her comment was limited to a tweet and hence could not contain any real substance.  What a perfect way to try to walk the fine line between her Wall Street backers and Elizabeth Warren.

It is the issue of Secretary Clinton's closeness to Wall Street that made the articles about a report by the Center for American Progress, a think tank full of friends of Hillary and Bill, so interesting to me.   The two articles about the report cited above were clear about the ties of the think tank to the Clintons and their advisors and the fine line that the report walks to not offend Wall Street while trying to sound like Elizabeth Warren.  The report was written by a group of Clinton loyalists lead by Larry Summers.  This group are deregulators and people that supported NAFTA and other "free trade" agreements.  They share in the blame for the great recession and the ever increasing gap in wealth and income in the United States.  In light of the popularity of Elizabeth Warren, they and Secretary Clinton are trying to reinvent themselves as populists.

I am not yet convinced that Secretary Clinton can actually reinvent herself as a populist and true liberal.

Thanks for reading and please comment,
The Unabashed Liberal