Hillary Clinton’s Call for Smart Growth Puts Republicans in the Corner
As Goldy already mentioned, Hillary Clinton’s speech this morning was an impressive push against trickle down economics and for a new system of growth.
Clinton delivered an impressive speech on many levels. First of all, her delivery was excellent. As the speech went on she became more animated, convincingly adopting many of Elizabeth Warren’s best speaking tics—an ability to explain a complex issue clearly alongside a fiery populist delivery that puts the speaker and the audience on the same team—while playing to her own oratorical strengths. It was one of her best performances, and she clearly displayed a lot of passion for the material.
And the substance of the speech was surprising. Clinton touched a whole bunch of supposed economic third rails, talking about subjects that most political candidates would be afraid to bring up. Anyone nursing a suspicion that Clinton is in business’s back pocket needs to reevaluate their opinion after hearing this speech.
Clinton attacked the Ubers and TaskRabbits of the world by pointing out the downside to the sharing economy:
…many Americans are making extra money renting out a spare room, designing websites, selling products they design themselves at home, or even driving their own car. This “on demand” or so-called “gig economy” is creating exciting opportunities and unleashing innovation but it’s also raising hard questions about workplace protections and what a good job will look like in the future.
Of course, this is a problem that’s near and dear to our hearts here at Civic Ventures. Our co-founder Nick Hanauer even co-authored a piece that floated one solution to the sharing economy problem not so very long ago.
And then Clinton reappraised the very idea of what economic growth should be. Lots of Americans understand that Wall Street’s unyielding thirst for consistent record-breaking growth quarter after quarter is unsustainable, but Clinton actually said it out loud. Ten years ago, this would have been an unthinkable statement for a presidential candidate to make; you’ll certainly never see a Republican presidential candidate say something like this:
Too many pressures in our economy today push us toward short-termism. Many business leaders see this. They’ve talked to me about it. One has called it the problem of “quarterly capitalism.” They say everything’s focused on the next earnings report or the short-term share price. The result is too little attention on the sources of long-term growth: research and development, physical capital, and talent.
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. These trends need to change. And I believe that many business leaders are eager to embrace their responsibilities, not just to today’s share price but also to workers, communities, and ultimately to our country and indeed our planet.
I’m not talking about charity – I’m talking about clear-eyed capitalism. Many companies have prospered by improving wages and training their workers that then yield higher productivity, better service, and larger profits.
Now it’s easy to try to cut costs by holding down or decreasing pay and other investments to inflate quarterly stock prices, but I would argue that’s bad for business in the long run.
And, it’s really bad for our country.
This is a big deal. Clinton rightly suggests that certain kinds of growth are good and other kinds are bad. This is an argument that makes Republican candidates, who are perennially in favor of any kind of growth, whether it comes from offshoring jobs or laying off employees, look dumb. It’s a complex argument that, if delivered incorrectly, could earn charges of “socialism” from the far right wing. Clinton hit the notes perfectly; she explained the problem, offered examples, and still came out hard in favor of growth. I was particularly impressed with how she hit the stock buyback issue, which most politicians are afraid to bring up; if you’d like to read more about how stock buybacks are artificially inflating the top one percent of the economy while simultaneously strangling the other 99 percent, Nick Hanauer has written about them at length in the Atlantic.
In sum, this is a meaningful speech. Sure, Clinton doesn’t offer all the policy prescriptions to solve these problems in the speech, but she correctly identifies the problems. That’s a first for a major presidential candidate.
More impressively, Clinton manages to identify all the problems while still keeping growth in her crosshairs. It’s easy for Democrats to sound anti-business when they agitate for the middle class. But Clinton argued for the middle class while still keeping in mind how important business is. She made a case for profits, but the good kind of profits. She called for small business growth and for a sharing economy that doesn’t regard its workers as disposable.
What Clinton did here was nothing short of remarkable: she called for intelligent growth, which immediately corrals the Republican candidates into a difficult position. If Republicans keep calling for mindless four percent growth at the expense of American workers, they’ll look like lackeys to CEOs and the one percent. Clinton staked her claim for the growth of American business and against harmful blind expansion. Republicans are going to have a difficult time countering that perspective without seeming anti-worker, anti-business, or both.