Monday, July 13, 2015

Critiquing Hillary Clinton's Economic Speech from July 12, 2015

Editor's Note: Since the economy crashed in 2008, I've become pretty much of a "newshound" when it comes to the subjects of the economy, jobs reports, wages, taxes, Social Security, (etc.) — so like many people, I tuned in and sat through Hillary Clinton's long speech yesterday; and then, I began monitoring the major cable TV news stations (Fox, CNN and MSNBC) to see what they were saying — and to see what short sound bites might have evolved.

As usual, I wasn't disappointed because, as usual, they neglected to report on some of the most pertinent aspects of her speech (being the corporate media and all), as they primarily focused on some of the more titillating details (i.e. her criticism of Jeb Bush's remarks about American workers and mentioning Marco Rubio's tax plan).

So I posted a few excerpts from her 45 minute speech (into a much shorter 9 minute video directly below) that IMHO thought were the most pertinent — with the text to those excerpts, along with some of my comments just below that. (The video of her complete speech and the full text is here — with nothing else.)

It was an economically "populist" speech of which we've never heard before from any other Third Way Democrat. Although it was delivered somewhat robotically, as though well-rehearsed, it included almost every conceivable topic that Senator Elizabeth Warren had been pushing for the last several years — and that Senator Bernie Sanders had been pushing for all his life.

On some topics, Clinton was sorely lacking details, and on other topics, she had skipped through them with only a few words — with nothing of any real substance to say (as you'll soon see).

Needless to say, both Warren's and Sanders' immense popularity with the American public have definitely pushed Clinton's comments more to the left (I'd say "the true center)". But if she were elected to be our next President, would she be much different than any other politician — or would she remain true to her words?

But more importantly, listen very carefully for all the things that she DOESN'T say.

Hillary Clinton: "For 35 years, Republicans have argued that if we give more wealth to those at the 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. [applause] I think the results speak for themselves. Under President Clinton – I like the sound of that – America saw the longest peacetime expansion in our history. Nearly 23 million jobs, a balanced budget and a surplus for the future. And most importantly, incomes rose across the board, not just for those already at the top. Eight years later, President Obama and the American people’s hard work pulled us back from the brink of Depression. President Obama saved the auto industry, imposed new rules on Wall Street, and provided health care to 16 million Americans."

Editor's Note: Just to clarify a few points she made there...

  1. According to the Economic Policy Institute, (link and link) incomes have been stagnant for the past 35 years, not just the past 20 years when Bill Clinton, George W. Bush and Obama were President. Wage stagnation goes back to the days of Jimmy Carter in 1979/80 — when labor union membership had last peaked.
  2. Since the taxpayer bailout, new auto workers now earn about half of what autoworkers were paid before 2007 — and without traditional pensions and retiree health care.
  3. Dodd-Frank has not been fully implemented; one reason (according to a 13-page letter from Senator Elizabeth Warren) was because of Obama's appointment of Mary Jo White as SEC director. And also because of stiff push back by Republicans on behalf of the banks and corporate CEOs, with a little help from a few Democrats as well.
  4. More Americans were covered because, under Obamacare, we also had the expansion of Medicaid to include single people without children.

Hillary Clinton: "I’ll also push for broader business tax reform to spur investment in America, closing those loopholes that reward companies for sending jobs and profits overseas."

Editor's Note: I mention her husband's trade deals further below in this post.

Hillary Clinton: "The movement of women into the workforce over the past 40 years was responsible for more than three and a half trillion dollars in economic growth. But that progress has stalled. The United States used to rank 7th out of 24 advanced countries in women’s labor force participation. By 2013, we had dropped to 19th."

Editor's Note: Stalled? I'm not quite sure why she mentioned this in her speech (or why I am now), but over the past 40 years the participation rate in the U.S. (Per St. Louis Fed) for men went down from 77.8% to 69.5% — while during that same time, the participation rate for women went up from 46.3% to 56.8% — so if it's "stalled", then it's mostly because of a poor job market that has been keeping both women and men from participating in the work force.

Hillary Clinton: "If you work hard, you ought to be paid fairly. So we do have to raise the minimum wage."

Editor's Note: Raise it to what — $8 an hour, $10 an hour, $15 an hour? She doesn't say. Senator Warren proposed $22 an hour as an actual "living wage", while Senator Bernie Sanders proposed a more viable $15 an hour. (Obama was considering a measly $10.10 an hour).

Hillary Clinton: "We’ll help families look forward to retirement by defending and enhancing Social Security and making it easier to save for the future."

Editor's Note: That's all she said on Social Security — one sentence in her entire speech. She could have proposed eliminating the current $118,500 income "cap" for Social Security taxes, thereby taxing everybody's wages equally on their earnings. She could have also suggested taxing capital gains income for Social Security, which is currently exempt. And she doesn't say how we can "enhance" Social Security. We just had that one simple sentence about the biggest part of our budget in her 45 minute long speech. Both Senators Elizabeth Warren and Bernie Sanders support expanding Social Security; Bernie has a plan and introduced legislation. What's Hillary's plan?

Hillary Clinton: "Those at the top have to pay their fair share. That’s why I support the Buffett Rule, which makes sure that millionaires don’t pay lower rates than their secretaries. I have also called for closing the carried interest loophole, which lets wealthy financiers pay an artificially low rate."

Editor's Note: The Buffett Rule would only apply a minimum tax rate of 30% on individuals making more than a million dollars a year. This is a big tax scheme. Currently a single person is taxed at 36.9% on regular wages over $413,201 — whereas, the very top tax rate for capital gains income is a mere 23.8%. At the very most, that would only raise Warren Buffett's tax rate from 23.8% to 30% — when the top tax rate for regular wages is 36.9%. Plain and simple, just tax capital gains as regular wages are taxed. (Jimmy Carter had lowered the capital gains tax rate from 40% to 28%).

So with Hillary's proposed Buffett Rule, Warren's secretary could still be paying a higher tax rate than her boss. Most voters support the Buffett Rule because they don't know the whole truth about it. And she didn't mention the "step-up-basis" in capital gains — or the $10.86 million tax exemption for wealthy parents in the estate tax either. (More details about capital gains tax strategies are here — and more details about the Buffett Rule are here).

Hillary Clinton: "Alongside tax reform, it’s time to stand up to efforts across our country to undermine worker bargaining power, which has been proven again and again to drive up wages. Republicans governors like Scott Walker have made their names stomping on workers’ rights. And practically all the Republican candidates hope to do the same as President. I will fight back against these mean-spirited, misguided attacks."

Editor's Note: She didn't say anything about supporting the Employee Free Choice Act (card check) — a huge omission.

Hillary Clinton: "And let me just say a word here about trade. The Greek crisis, as well as the Chinese stock market, have reminded us that growth here at home and growth an ocean away are linked in a common global economy. Trade has been a major driver of the economy over recent decades but it has also contributed to hollowing out our manufacturing base and many hard-working communities. So we do need to set a high bar for trade agreements. We should support them if they create jobs, raise wages, and advance our national security. And we should be prepared to walk away if they don’t."

Editor's Note: That's all folks, that's all she said about trade. Nothing was said about repealing PNTR with China and NAFTA (thanks to Bill Clinton), whose trade deals have offshored millions of our better-paying jobs to low-wage countries. Hillary supported those trade deals in the past, and recently she supported fast-tracking for more pending trade deals like TTP, TTIP and TiSA (The triple trade treaty threat). Nothing about this was ever mentioned by her in her speech on "the economy". Why was nothing ever said about these very controversial and very heatedly debated trade deals? Not once did she utter "TPP". Another huge and glaring omission.

Hillary Clinton: "Net business investment — which includes things like factories, machines, and research labs — has declined as a share of the economy. In recent years, some of our biggest companies have spent more than half their earnings to buy back their own stock, and another third or more to pay dividends. That doesn’t leave a lot left to raise pay or invest in the workers who made those profits possible or to make the new investments necessary to insure a company’s future success."

Editor's Note: 1) We have 67,161 less factories since Bill Clinton sighed NAFTA and gave PNTR to China 2) Bloomberg reported that S&P 500 companies spent almost 95% of their profits on stock buybacks — $914 billion worth. (More here): Stock buybacks were once illegal, because it manipulated stock prices.

Hillary Clinton: "Workers are assets. Investing in them pays off. Higher wages pay off. Training pays off. To help more companies do that, I’ve proposed a new $1,500 tax credit for every worker they train and hire. And I will soon be proposing a new plan to reform capital gains taxes to reward longer-term investments that create jobs more than just quick trades."

Editor's Note: Now we have to pay employers (aka "job creators") to hire people with tax incentives? That is just plum crazy! Where will the tax revenue shortfalls come from, cuts to other programs? As for reforming capital gains taxes — I can't wait for those details, because there is no way that a Republican Congress will do anything she has proposed so far.

Hillary Clinton: "As we all know, in the years before the crash, financial firms piled risk upon risk. And regulators in Washington either couldn’t or wouldn’t keep up. I was alarmed by this gathering storm and called for addressing the risks of derivatives, cracking down on subprime mortgages, and improving financial oversight. Under President Obama’s leadership, we’ve imposed tough new rules that deal with some of the challenges on Wall Street. But those rules have been under assault by Republicans in Congress and those running for President. I will fight back against these attacks and protect the reforms we’ve made ...

Editor's Note: Before we go any further, remember, Hillary Clinton's top donors are big banks and big corporations who want the TPP trade deal, while Bernie Sanders' top donors are labor unions, who like Bernie, are against trade deals like TPP — and like Senator Warren, wants to break up the "Too big to Fail" banks.

Hillary Clinton: "We also have to go beyond Dodd-Frank. Too many of our major financial institutions are still too complex and too risky. And the problems are not limited to the big banks that get all the headlines. Serious risks are emerging from institutions in the so-called “shadow banking” system — including hedge funds, high frequency traders, non-bank finance companies — so many new kinds of entities which receive little oversight at all. Stories of misconduct by individuals and institutions in the financial industry are shocking. HSBC allowing drug cartels to launder money. Five major banks pleading guilty to felony charges for conspiring to manipulate currency exchange and interest rates. There can be no justification or tolerance for this kind of criminal behavior. [applause] And while institutions have paid large fines, and in some cases admitted guilt, too often it has seemed that the human beings responsible get off with limited consequences — or none at all, even when they’ve already pocketed the gains. This is wrong and, on my watch, it will change. Over the course of this campaign, I will offer plans to rein in excessive risks on Wall Street and ensure that stock markets work for everyday investors, not just high frequency traders and those with the best or fastest connections. I will appoint and empower regulators who understand that Too Big To Fail is still too big a problem. We’ll ensure that no firm is too complex to manage or oversee. And we will prosecute individuals as well as firms when they commit fraud or other criminal wrongdoing."

Editor's Note: It was Bill Clinton who signed the The Gramm-Leach-Bliley Act in 1999, the law repealing the 1933 Glass–Steagall Act, allowing these banks to gamble in the first place. And she will not reinstate Glass-Steagall, let alone fully enforce Dodd-Frank. This entire part of her speech was totally absurd!

Hillary Clinton: "I just want to leave you with one more thought. I want every child, every child in our country — not just the granddaughter of a former President or a Former Secretary of State — but every child to have the chance to live up to his or her God-given potential. Please join me in that mission. Let’s do it all together. Thank you all so much.

According to the Washington Post, as Hillary Clinton concluded her speech, one man stood in the auditorium and shouted repeatedly, “Senator Clinton, will you restore Glass-Steagall?” He was referring to a 1990s-era law that restricted banking activities. Clinton gave no answer as Secret Service agents encircled the man and others in the crowd applauded loudly to drown him out. (Those poor stupid people.)

A spokeswoman for Democratic challenger Martin O’Malley said of Hilllary's speech: “Rebuilding the American Dream will take more than vague promises."

Editor's Note: Bernie! Bernie! Bernie!


  1. The Nation: "Hillary Clinton’s speech today was the most progressive address on economics by a major-party presidential candidate in a generation."

    NOT TRUE! Senator Bernie Sanders has made many more!

    The Nation: "It called for “enhancing” Social Security."

    Big deal. Hillary mentioned Social Security only ONCE -- in one sentence -- that's all!

    The Nation: "The obvious progressive rejoinder to this is that Hillary—negotiator of the Trans-Pacific Partnership, onetime member of Walmart’s board—is simply saying what she feels she needs to in order to get elected. To which I’d say: exactly!"

    And I would say, "Exactly! Just saying what we want to hear to get herself elected."

  2. The Huffington Post: "Her message echoed themes espoused by Sen. Elizabeth Warren (D-Mass.), who has made her mark on the Democratic Party by arguing that the economy is rigged against the middle class."

    And now Warren's supporters are supporting Bernie Sanders, not Hillary Clinton.

    The Huffington Post: "Progressives [like Warren and Sanders] have criticized the former secretary of state for not coming out against the Trans-Pacific Partnership being pushed by the Obama administration. While Monday's speech did not add to the remarks Clinton has already made on the subject, she did say that the expansion in global trade has hollowed out America's manufacturing industry."

    Hillary SHOULD HAVE mentioned TPP in her speech, but she dodged that the same way the rich dodge taxes.

    The Huffington Post: "Clinton said she'd support an apprenticeship tax credit as an incentive for companies to hire and train new workers."

    Why should taxpayers pick up the expense of training workers, and not the corporations, who profit from well-trained workers? Again, like the Nation, this was a "puff piece".

  3. From Naked Capitalism: "Clinton’s Speech on The Economy: Where’s the Beef?"

    This post REALLY breaks down her speech ... word for word ... and concludes:

    when Clinton speaks, watch for:

    1) Haziness: What does this mean?

    2) Lack of agency: Who’s responsible?

    3) Unclear constituencies: Who benefits?

    4) Kicking the can: What’s the program?