Hillary Clinton and her economic agenda
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.”