Hil­lary Clin­ton and her eco­nomic agenda

Enterprise - - Contents -

Hil­lary Clin­ton, on, the fron­trun­ner for the Demo­cratic pres­i­den­tial nom­i­na­tion, is set to pro­pose a crack­down on Wall Street as she tried to fend off a chal­lenge from her party’s left­wing.

The former New York sen­a­tor will out­line mea­sures that in­clude tough­en­ing penal­ties on peo­ple con­victed of financial crimes, length­en­ing the statute of lim­i­ta­tions on cer­tain crimes and urg­ing prose­cu­tors to fo­cus on in­di­vid­u­als in­stead of com­pa­nies.

“Clin­ton be­lieves that the best

way to de­ter cor­po­rate wrong­do­ing is to hold in­di­vid­u­als ac­count­able for their mis­con­duct,” her cam­paign said be­fore an an­nounce­ment. “She would en­force our laws against the in­di­vid­u­als who break them — plain and sim­ple.”

Among the mea­sures, Mrs Clin­ton will pro­pose im­pos­ing a tax on high­fre­quency trad­ing. She would also try to close a loop­hole in the Vol­cker rule — in­tro­duced af­ter the financial cri­sis to re­duce spec­u­la­tive trad­ing — that al­lows banks to in­vest 3 per cent of their cap­i­tal in hedge funds. She would also try to strengthen the in­de­pen­dence of the Se­cu­ri­ties and Ex­change Com­mis­sion and the Com­mod­ity Fu­tures Trad­ing Com­mis­sion by re­duc­ing their re­liance on fund­ing from Congress.

The push by Mrs Clin­ton, who has pre­vi­ously had a closer re­la­tion­ship with financiers, to clamp down on Wall Street dove­tails with her pledge to help the mid­dle class and re­duce in­equal­ity. But her tack left comes as she faces an un­ex­pect­edly strong chal­lenge from the pro­gres­sive wing of the Demo­cratic party en­er­gised by the cam­paign of Bernie San­ders, a Ver­mont so­cial­ist.

While Mrs Clin­ton still leads Mr San­ders in na­tional polls with a 42 per cent to 24 per cent mar­gin, her ad­van­tage has shrunk over the past four months. At one point, she held a 60-point lead over the Ver­mont sen­a­tor. More wor­ry­ingly for her sec­ond bid for the White House is the fact that Mr San­ders is close to catch­ing her in Iowa, the first vot­ing state, and has sailed past her in New Hamp­shire, the sec­ond state to vote in the pri­maries, where he now has a 42 per cent to 28 per cent lead.

In a move that ap­peared to be re­spond­ing to pres­sure from the left, Mrs Clin­ton op­posed the Tran­sPa­cific Part­ner­ship, a Pa­cific Rim trade deal that she had her­alded as the “gold stan­dard” when she served as Pres­i­dent Barack Obama’s first sec­re­tary of state. “As of to­day, I am not in favour of what I have learned about it,” Mrs Clin­ton told PBS tele­vi­sion two days af­ter the trade pact was con­cluded. “I don’t be­lieve it’s go­ing to meet the high bar I have set.”

Mrs Clin­ton also broke ranks with Mr Obama in Au­gust by op­pos­ing off­shore drilling in Alaska, in an ef­fort to de­flect crit­i­cism from Mr San­ders, a staunch op­po­nent of such ac­tiv­ity on en­vi­ron­men­tal grounds. More re­cently, she came out against the “Cadil­lac tax” — a com­po­nent of Oba­macare that taxes very ex­pen­sive com­pa­nyspon­sored health­care in­sur­ance plans in an at­tempt to curb in­sur­ance in­fla­tion — in a move that was ap­plauded by labour unions.

“Af­ter the last cou­ple of weeks of ma­noeu­vres by the Clin­ton cam­paign, it is be­com­ing pretty ev­i­dent that the only thing they care about right now is shoring up their left flank with pro­gres­sives who are in­clined to go with Sen­a­tor San­ders,” said Jim Man­ley, a former top Con­gres­sional Demo­cratic aide now at the lob­by­ing firm of Quinn Gille­spie.

Mr Man­ley added that her move on TPP would also put Joe Bi­den, the vice-pres­i­dent who sup­ports the deal and is con­sid­er­ing en­ter­ing the pres­i­den­tial race, “in a bit of a box”. While Mrs Clin­ton’s strong­est chal­lenger at the mo­ment is Mr San­ders, her cam­paign is ner­vous about the pos­si­bil­ity that Mr Bi­den will make a third run for the White House.

While Mrs Clin­ton is try­ing to boost sup­port among the pro­gres­sive wing of the party where Mas­sachusetts sen­a­tor El­iz­a­beth War­ren has been lead­ing the charge against Wall Street, her move to op­pose TPP could prove risky since her cam­paign is hop­ing to ben­e­fit from the coali­tion of vot­ers who sent Mr Obama to the White House in 2008.

Her stance on TPP is a big blow to the Obama ad­min­is­tra­tion, which con­cluded five years of ne­go­ti­a­tions with Ja­pan and 10 other Pa­cific Rim na­tions that make up 40 per cent of the world econ­omy. Mr Obama wants to get TPP through Congress be­fore he leaves of­fice in Jan­uary 2017, but her move is an ex­am­ple of how pres­i­den­tial pol­i­tics will com­pli­cate those ef­forts.

Martin O’Mal­ley, the former Bal­ti­more mayor run­ning for pres­i­dent, ac­cused Mrs Clin­ton of mak­ing a U-turn ahead of their ap­pear­ance in the first tele­vised Demo­cratic pres­i­den­tial de­bate. “Wow! That’s a re­ver­sal!” said the can­di­date, who was joined by a cho­rus of Repub­li­can crit­ics.

Some ex­perts said the de­ci­sion to op­pose TPP also dealt a blow to the strate­gic “pivot” to Asia that Mrs Clin­ton had been push­ing dur­ing the Obama ad­min­is­tra­tion.

“For­get eco­nom­ics and jobs for a mo­ment. Clin­ton has just stomped all over most of the na­tional se­cu­rity es­tab­lish­ment which came out strongly for TPP as a strate­gic hedge against China in the Asia Pa­cific,” said Steve Cle­mons, a pol­i­tics and na­tional se­cu­rity ex­pert at The At­lantic. “They de­fined this trade deal as strate­gi­cally vi­tal for the US — and now the former sec­re­tary of state has de­fected from this strate­gic crowd largely be­cause of pres­sure on her from Bernie San­ders, El­iz­a­beth War­ren, and very pos­si­bly the Scran­ton, Penn­syl­va­nia-born, labour-hug­ging Joe Bi­den.”

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