Free Lunch: Clintonomics

Δημοσιεύθηκε: 13 Απριλίου 2015 - 11:25

Left in a haze - but definitely left

Perhaps the only way to remain relevant in electoral politics for some 35 years is to keep people guessing. We know surprisingly little about which policies a president Hillary Clinton would pursue. That, at least, is the leitmotif of The Economist's coverage, which struggles to describe her economic position more precisely than "the modern business-friendly centre-left". Just two months ago, the New York Times ran a long report on how the Clinton campaign is receiving input from literally hundreds of policy experts, which one can't help think confuses things rather than clarifying them.

We can, however, gather the most qualified guesswork. The best place to start is an occasionally gushing, but nonetheless illuminating assessment by Jared Bernstein. He emphasises Clinton's wonkiness: she has expert knowledge of policy-relevant data. He thinks she is more sceptical of free trade agreements than her husband was - which may also put her to the left of President Obama, whose trade policy she faithfully executed as his secretary of state. Albert Hunt's column also defies the conventional wisdom that Clinton is more conservative than Obama, at least on domestic policy. Both in health and financial regulation, he writes, Clinton has in the past taken the more liberal position.

On broad economic issues, most commentators join The Economist in scratching their heads, many simply referring to the recent report on inclusive prosperity from the Center for American Progress (CAP), written by Lawrence Summers (who was, of course, Bill Clinton's Treasury secretary) and UK shadow chancellor Ed Balls. Clinton has a long association with the CAP (its president Neera Tanden is a long-time Clinton adviser) and no doubt shares many of the ideas it promotes. The report advances a moderately progressive agenda with a focus on education, mobility and efforts to raise market wages for the poor, rather than redistributive tax policies. (Though it should be noted that Summers recently publicly criticised another research group close to the Clintons, the Hamilton Project, for its narrow emphasis on skills and education, arguing for more traditional demand-boosting and redistribution policies as well.) On low wages it is fair to surmise that Clinton is well aware of the overwhelming evidence that raising them is good for productivity.

What all of this points to is a Democratic candidate slightly to the left of the previous two presidents, but not one partial to Bill de Blasio-style "tales of two cities/countries/Americas", nor Elizabeth Warren-like attacks on Wall Street (though Clinton firmly supports financial regulation). It's worth noting that despite close personal links and a history of collaboration, de Blasio has for now declined to endorse Clinton, preferring to wait for more economic policy details.

On one set of issues, however, candidate Clinton is very clearly defined. That is rights and opportunities for women in general, and their role in the economy in particular. She is highly likely to work to end America's harmful exceptionalism on policies at the intersection between the workplace and the home - such as childcare subsidies, early childhood education and parental leave - where the US badly lags behind the rest of the developed world (and in many cases developing countries as well). Bernstein points out (in the piece linked above) that employment rates for women have fallen sharply whereas they've risen in other countries (see chart below). Danielle Paquette at the Washington Post writes convincingly that a focus on female- and family-friendly economic policies will stand Clinton in good stead. It's good for the economy. It's good for voters, women in particular (a woman is now the primary breadwinner in 40% of US households, and women vote in larger numbers than men). And it's popular.

Aside from all the political mind readers, what does the candidate herself say? The best reference may be her speech to the New America Foundation last year. Here is the perhaps most telling sentence: "The empirical evidence tells us that our society is healthiest and our economy grows fastest when people in the middle are working and thriving and when people at the bottom believe that they can make their way into that broad-based middle." It's pretty much all there - the wonkiness, the focus on the middle class, and opportunity rather than redistribution. Don't expect a revolution. But with the focus on women, some very significant and welcome economic reforms should not be ruled out from a Hillary Clinton White House.