I admit I wasn’t prepared to be open-minded to the ideas laid out in the two economic speeches Hillary Clinton has given in the last couple of weeks, but was surprised at how irked I’d already become before she was even done running through her warmup, tear-jerker anecdotes: “The single mom who talked to me about juggling a job and classes . . . The grandmother who works around the clock providing childcare other people’s kids . . . The young entrepreneur whose dream of buying a bowling alley . . . was nearly derailed by student debt.”
Wait. If these people’s problems are the kind that Hillary Clinton thinks can be solved by mere economic reforms, she’s more delusional than I had imagined. Not to sound too hard-hearted, but the best way to avoid the burden of student debt is—are you ready?–to not borrow a lot of money in the first place. The best way to ease the strain of having to work during your golden years (and what ever happened to Social Security, by the way?) is to save enough for retirement ahead of time. And the best way to avoid becoming a single mother is . . . well, I’ll bet you know the answer to that one, already.
Hillary Clinton’s economic “program,” if it can be called that, isn’t so much about enacting policies that would speed up economic growth as it is about doling government cash and perks to preferred groups, all as if accounting—or even arithmetic—didn’t exist. Thus she ends up with a laundry list of expensive, dumb ideas: an “infrastructure bank” to pay for the construction of public boondoggles, as a sop to the construction unions; tax breaks on “green” energy investments, as a thank-you to her deep-pocketed environmentalist donors; subsidized pre-K as a payoff to the teachers unions; subsidized child care as a salute to the Democratic Party’s ever-loyal constituency of single mothers. The list goes on and on. This isn’t a coherent set of economic ideas. It’s a coherent (to Hillary’s self-interest, anyway) set of political payoffs.
More broadly, Hillary says she’ll get the economy going by facilitating “convening, connecting, and collaborating” by the economy’s key players. She puts it this way because, “I’ll expand the crony capitalism initiative my predecessor began” doesn’t test well in focus groups. In any event, big business will be expected to be part of the mix. Hillary will reward companies her administration prefers, and punish companies in industries it doesn’t like. We’ve already seen a lot of this in the Obama years, and the result has been instructive. Thus, for instance, the big banks are still being pilloried for being “too big to fail,” while the auto industry is apparently also too big to fail–and yet the administration was more than happy to shovel money its way. Do you mine coal for a living? We’ll do what we can to put you out of business. Is solar energy your game? Here’s a tax credit!
It’s the classic progressive game of the government trying to pick winners and losers. How’s that going so far, would you say? Under a Hillary presidency expect more of it. Meanwhile, her understanding of how the free-enterprise system actually works, and how large organizations are run, seems surprisingly limited. For as long as I’ve been in the investing business, critics have harped about companies being run for short-term results at the expense of long-term investment. If there’s any scientific literature that backs up this assertion, I have yet to see it. Real-world experience, meanwhile, says it can’t possibly be true. Within the past twenty or so years, real brutal competitive pressures have had the effect of upending the structure of industries ranging from automaking, computer technology, and retailing to newspaper publishing and the brewing of beer. Moral of story: if you seriously stint on long-term investment for the sake of near-term results. You’re going to lose. Badly. Hillary’s carping about “quarterly capitalism” is a bunch of nonsense.
She knows it’s nonsense, of course. Perhaps the most discouraging thing about Hillary’s two speeches, in fact, is that it’s obvious that she doesn’t believe a word of what she said in either of them. Infrastructure spending, free child care, and a higher minimum wage? If that’s what the voters want to hear. Hillary Clinton just wants to be president.
What do you think? Let me know!