Americans hear a lot of bullshit from politicians. Recently, Hillary Clinton gave her first speech on the economy. The full transcript can be found here. If you decide to read through it, be prepared to find more platitudes than substantive policy proposals. In this post, I’ll dissect some of the bullshit for you.
Previous generations of Americans built the greatest economy and strongest middle class the world has ever known on the promise of a basic bargain: if you work hard and do your part, you should be able to get ahead. And when you get ahead, America gets ahead. But over the past several decades, that bargain has eroded. Our job is to make it strong again.
First, the nebulous term “middle class.” No one really knows what it is, but apparently most Americans think they belong to it. A convenient myth to avoid talking about the objective conditions that determine one’s class standing (see Section 2 of Why Do Governments Serve the Rich?).
Putting that aside, Clinton fails to mention what actually brought about better labor and living conditions for many Americans. It was not some vague “previous generations.” It was labor unions and mass workers’ struggle. This is important because while Clinton is correct that social mobility has declined from its rate from the 1950s-1980s, the causes for this decline are directly related to the kinds of neoliberal, finance capital oriented policies both parties have supported. However, even with social mobility higher in 1950s-1980s, there were obvious sex and racial disparities in who actually benefited. More importantly, the United States in the 1950s-1980s was still a widely unequal society, with the top 1% of wealthiest households controlling between 25 and 30% of total wealth.
Even though our society today is more unequal than the period between 1950 and 1980, those three decades are still far from an equitable society to which we should aspire.
Twice now in the past 20 years, a Democratic president has had to come in and clean up the mess left behind. 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.
The United States was hardly a peaceful superpower during President Bill Clinton’s time. Among other things, you have the attack in Somalia, the disastrous “humanitarian” intervention in the former Yugoslavia, the American backed coup in Haiti that overthrew the first democratically elected president in favor of a maniacal dictator, and the continued American support for the illegal occupation of Gaza and the settlements in the West Bank. Let’s not forget perhaps one of the most criminal actions of his presidency: the genocidal sanctions on Iraq that cost the country as many as 576,000 deaths, mostly children. When asked “is the price [of half a million Iraqi children] worth it?” Let’s not forget the then UN Ambassador Madaleine Albright’s response: “we think the price is worth it.”
While Clinton brags about the employment numbers under her husband’s presidency, she neglects to mention the bad consequences NAFTA had on the American labor force. An estimated 1 million jobs lost and higher income inequality is directly attributed to the enactment of NAFTA. Jeff Faux of the Economic Policy Institute (EPI) explains:
By establishing the principle that U.S. corporations could relocate production elsewhere and sell back into the United States, NAFTA undercut the bargaining power of American workers, which had driven the expansion of the middle class since the end of World War II. The result has been 20 years of stagnant wages and the upward redistribution of income, wealth and political power.
The 23 million jobs added also conceals the quality of jobs lost. While there were some job gains due to NAFTA (the number is no where near 23 million), the quality of the jobs were quite low being mostly characterized as “lower paying occupations.”
By liberalizing the flow of capital across borders, NAFTA had a disciplinary effect on the American workforce. The threat of outsourcing abroad lead to the weakening of collective bargaining, the dismantlement of unions, and the acceptance of a reduction in benefits and hourly compensation. Lower or stagnant wages means that to keep up with rising costs of living, workers had to pay with credit cards. At the same time, the balanced budget came at the cost of welfare reform that had the predictable effect of worsening the conditions of those in extreme poverty. The result was an increase in household debt, which fueled consumer spending. Debt-fueled consumer spending combined with a technology boom gave the illusion that the Clinton economy was a success. But that deceptive appearance can only be maintained if one doesn’t look to hard.
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.
It should not be surprising that we see a similar story with Barack Obama’s economic “recovery.” While the bailouts put a halt to the fall, we’ve seen nothing but stagnation since. The jobs that are being added to the economy are consistently the lowest quality, lowest paying jobs (while I don’t agree with everything on Zerohedge, the numbers here are indisputable). And his expansion of free trade deals, like the Trans-Pacific Partnership (TPP), threaten to repeat the race-to-the-bottom for American workers’ wages and more outsourcing that we see with NAFTA.
The laughable healthcare reform hardly needs to be mentioned. For 70 years, most Americans have supported a single payer healthcare system (a “Medicare for all” system) that most of the grown-up industrial countries have. Instead, Obama refused to even put a public option on the table, choosing rather to staff his healthcare reform committee with advisers friendly to the health insurance agencies.
Clinton’s remark about how Obama “imposed new rules on Wall Street” is just an outright lie. In 2012, I wrote an article examining among other things the pathetic financial regulations passed under Obama. Even Kevin Marsh, the former member of the Board of Governors of the Federal Reserve, admitted that “the Dodd-Frank Act has only reinforced the view that big and troubled banks will receive special government assistance. … By sanctioning some list of too-big-to-fail firms — and treating them different than the rest — policy makers are signaling to markets that the government is vested in their survival.”
A key part of the Dodd-Frank Act was the regulation of financial derivatives. A federal judge — appointed by Obama — gutted that part of the Act, ensuring that the Dodd-Frank Act, limited as it was originally, would become virtually useless. None of this should be surprising given that the Obama campaign was largely financed by Goldman Sachs, Citigroup, and JPMorgan & Chase. Obama rewarded them with key positions as economic policy advisers (in the cases of Robert Rubin and Larry Summers) and governmental positions (Timothy Geithner as Secretary of Treasury), which allowed them to craft the policies that favor finance capital at the expense of the working class.
The rest of Clinton’s speech is filled with substanceless platitudes about building a “fairness economy” and how we need “more jobs” and less “financial trading.” At the same time she speaks about fairness, she praises the model of Uber — what Robert Reich has rightly called the “share-the-scraps economy.” It’s worth quoting the former Secretary of Labor:
This [Uber, the share-the-scraps economy] is the logical culmination of a process that began thirty years ago when corporations began turning over full-time jobs to temporary workers, independent contractors, free-lancers, and consultants.
It was a way to shift risks and uncertainties onto the workers – work that might entail more hours than planned for, or was more stressful than expected.
And a way to circumvent labor laws that set minimal standards for wages, hours, and working conditions. And that enabled employees to join together to bargain for better pay and benefits
How out of touch is Hillary Clinton? Does she really think that Americans will believe she is the “people’s champion” when she openly praises a company whose business model consists of reducing full-time occupations with decent pay and benefits to a state of precariousness? There is no mention of raising the minimum wage to at least $15 an hour. Vague promises of “raising the minimum wage” don’t count. Give us the number Clinton.
There is no mention of reinstating Glass-Steagal — a key financial regulation act whose dismantlement happened under her husband’s presidency and whose chief architect in its revocation was Robert Rubin. Yes, that some one mentioned above.
There is no mention of single-payer healthcare.
She says “we have to get serious about supporting union workers.” And yet she supports free trade agreements like NAFTA and the TPP, which directly harm not just union workers, but all workers. In 2011, she even went so far as to say that the TPP will
create not just more growth, but better growth. We believe the TPP needs to include strong protections for workers, the environment, intellectual property, and innovation, …It should also promote the free flow of information technology and the spread of green technology, as well as the coherence of our regulatory system and the efficiency of supply chains.
Higher quality growth, strong protections for workers, better environmental regulations, increased “coherence” of our regulatory system — none of those things are compatible with free trade agreements.
Here’s the answer to the question of how out of touch Clinton is: not very. She’s very much in touch not with the working class, but with financial institutions that provide monetary support for her campaign. Take a look at the figure below comparing the source of contributions to Hillary Clinton vs Bernie Sanders’s campaigns:
Don’t be fooled by Clinton’s rhetoric about being a champion of the people or supporting working class families. Clinton is just as much a servant of Wall Street as the rest of them in the Democratic and Republican parties.