Hillary Clinton on Monday singled out three of her top Republican rivals—Bush, Rubio and Walker--for criticism of their economic policies, but didn’t say a word about the other Democrats running for the Party’s nomination. Nonetheless, Vermont Sen. Bernie Sanders, though not mentioned by name, arguably had as large an effect on Clinton’s economic speech as any of her rivals in the GOP.
Sanders, the Independent who describes himself as democratic socialist, is trailing Clinton by a large margin in the Democratic primary. Yet he is drawing large crowds and getting considerable media attention for his unabashedly left-wing stance on taxes, regulation, and income inequality.
In her remarks, delivered at the New School in New York City, Clinton said addressing income inequality would be her chief mission as president. She also criticized business leaders’ focus on short-term gain at the expense of long-term investment in workers, saying that companies’ goals are increasingly to hit “arbitrary growth targets untethered to peoples’ lives and livelihoods.”
Clinton assailed the increasingly frequent replacement of full-time employees with independent contractors who receive no benefits or steady work. She also pointed out that U.S. corporations are enjoying record profits as average wages remain stagnant, and promised to put forward policies that would encourage companies to share profits with their workers.
Liberal commentators praised the speech for the breadth of its scope and the depth of its analysis.
“I thought it was a speech that embodied a very accurate diagnosis of our core economic challenges and gave smart prescriptions as well,” said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities.
“I thought the speech did a great and really quite granular job of getting to the disconnect between growth and middle class prosperity,” continued Bernstein, who was also the former chief economist to Vice President Joe Biden. “She covered every dimension of the problem from the inequalities embedded in our trading system to the lack of collective bargaining coverage, to the skills side of the equation and the importance of financial market regulation as well.”
But it wasn’t just Liberals who saw some value in Clinton’s speech. Jim Pethokoukis, a fellow at the American Enterprise Institute and the editor of the blog AEIdeas, said that he felt Clinton had given a thorough and accurate description of the challenges facing the U.S. economy.
“She did a really good job diagnosing some of the problems we’re facing,” he said. “She raised the issue of what it means to be a worker in the 21st century. Some of us are going to have to become more entrepreneurial…I think that’s something Republicans are going to have to talk about.”
Of course, Pethokoukis pointed out, agreeing on what the problems are is not the same as agreeing on solutions.
“I think there were some themes there that some Republicans could hit,” he said. “She talked a lot about the middle class, but there might also be a problem with the way the gains from economic growth are distributed.”
While Clinton might attack the problem by demanding wage increases, he said, Republicans would almost certainly come at the issue from an angle that doesn’t risk the loss of jobs, perhaps via tax cuts or credits to benefit low income workers.
One of the centerpieces of Clinton’s speech was a promise to push for profit-sharing in order to get companies, currently posting record profits, to let workers as well as shareholders benefit from the good times.
“Hard-working Americans deserve to benefit from the record corporate earnings they helped produce,” Clinton said.
“That is a bad idea and it comes with a lot of risk,” said Chris Edwards, an economist with the Cato Institute. “If you are saying employees should have more of the profit, then they will have more of the risk. It is the entrepreneurs who take the risk and the employees who get the steady paycheck.”
Edwards said, “Does she expect workers to take a share of the losses when there’s a downturn as well? It’s a problematic idea. At a superficial level it might incentivize them to work harder.” However, he said, if their compensation is tied to company profit, “Workers are going to share more risk, I don’t think that’s what we want. In some past downturn it became an issue, such as for employees who held share in high tech companies.”
Pethokoukis said that in general, he thinks profit-sharing plans, properly structured, can be beneficial for both workers and the companies that employ them.
Not surprisingly, Clinton’s rival on the Republican side were dismissive of her remarks.
A representative sample, from the campaign of former Florida governor Jeb Bush, said in part, “Hillary Clinton is proposing the same failed policies we have seen in the Obama economy, where the typical American household’s income has declined and it's harder for businesses to hire and the middle class to achieve rising incomes. Americans want to work and want the opportunity to achieve earned success for their families, but Secretary Clinton’s antiquated proposals protect the special interests that want to stifle American ingenuity and 21st Century companies like Uber that are creating jobs.”
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