On November 29, 2015, Kimberly Amadeo writes on About News:
Hillary Clinton’s 2016 economic plan is focused on increasing middle-class incomes. To do this, she advocates three steps.
The first step is to boost the economy. How? Give tax cuts to the middle class and small businesses, establish an infrastructure bank, and fund more scientific research. Also, help women enter the workforce by requiring businesses to pay for family leave and give sick days to all.
Her other ideas, like making college and child care more affordable, and comprehensive immigration reform, need to be fleshed out more.
The second step is to create fair growth. Clinton would raise the minimum wage to $15 an hour, increase workers’ benefits, expand overtime, and encourage businesses to share profits with employees. She also wanted to invest in students and teachers, support unions and collective bargaining, strengthen the Affordable Care Act, expand job training, lower college and healthcare costs, and fight wage theft.(Source: “It’s Time to Raise Incomes for Hard-Working Americans,” Hillary Clinton 2016 LinkedIn page, July 13, 2015)
The third step is to support long-term economic growth. Hillary would combat “quarterly capitalism” byraising short-term capital gains taxes for those earning $400,000 or more a year, the top 0.5% of taxpayers. Investments held between one and two years would be taxed at the maximum income-tax rate of 39.6%. Assets held for longer would be taxed on a sliding scale, such as 36% for those held 2-3 years, 32% for those held three to four years, and 20% (the current rate) for those held for six years or more.
(Source: Dunstan Prial, “Hillary Clinton Would Double Taxes on Short-Term Capital Gains,” Fox Business, July 24, 2015.
Clinton would also tax high-frequency traders. She would extend the statute of limitations for financial crimes, and require CEOs personally pay part of any fines levied on their companies. These regulations were written with the help of former Congressman Barney Frank. (Source: “Clinton Proposes Wall Street Curbs,” WSJ, October 8, 2015.)
Ironically, she also thinks the Dodd-Frank Wall Street Reform Act did not go far enough to end the threat from too-big-to-fail banks. She proposes a risk fee levied on all banks with more than $50 billion in assets, high debt levels, or too much reliance on short-term funding.
(Source: “Clinton Proposes Big Bank ‘Risk Fee,” WSJ, October 9, 2015)
Clinton now opposes the Trans-Pacific Partnership. She said it should go further to produce new jobs, raise wages, and protect national security. She supported the TPP while Secretary of State. (Source: “In Shift, Clinton Opposes Trade Pact,” WSJ, October 8, 2015.)
The Former Secretary of State, Senator, and First Lady announced her candidacy for President in 2016 on April 12, 2015. She is the front-runner for the Democratic nomination. In an April 14 press conference in Monticello, Iowa, she laid out the four pillars of her platform:
- Create the economy of tomorrow, not yesterday. She recognizes that income inequality is depressing demand, and slowing economic growth. She mentioned that hedge fund managers pay lower taxes (via the capital gains tax) than most middle-class Americans. Her focus is on creating jobs, and may steal from husband Bill’s 14 job creation ideas.
- Strengthen families. This would presumably include the emphasis on “healthcare, education, and enrichment emphasized in the newly-released epilog to her book, Hard Choices. She supports Obama’s proposal to make community college free.
- Defense. She supports free trade agreements, which she’s said is more important than defense in establishing global leadership. So, you can expect her to push for a comprehensive defense solution that includes diplomacy as much as military might. (Source: The Daily Beast, Clinton Speech to Economic Club, October 14, 2011)
- Change campaign financing.
Before her announcement, Clinton used her position with the Bill, Hillary and Chelsea Clinton Foundationto outline her economic agenda. In a June 2013 speech, Clinton laid out three priorities: early childhood education, equal opportunities and pay for women, and economic development using private/ public partnerships.
To promote economic development, she advocated a program like the $4.6 million “social impact bond” issued by Goldman Sachs. The firm will only profit if the program meets its goals of reducing the need for remedial education, meaning taxpayers will only end up paying for it if it works. (Source: YahooNews, Clinton Addresses Education, Women and Economy, June 13, 2013; CBS News, Clinton to Focus on Economic Issues, June 13, 2013; ThinkProgess, Clinton Call on Business to Support Pre-school, June 14, 2013)
Clinton’s Economic Priorities as Secretary of State
Clinton was Secretary of State from 2009-2013. She lobbied for American companies within foreign countries. She drafted the Trans-Pacific Partnership, and pried open Chinese markets to U.S. companies. She lobbied for women’s and human rights. She forged major diplomatic breakthroughs with Russia (since rescinded by Putin).
She also led the U.S. response to the Arab Spring, especially in Libya. However, she was investigated for not preventing the attack on a U.S. diplomatic post in Benghazi, Libya that killed U.S. ambassador Christopher Stevens and three others on September 11, 2012. An independent panel found “systematic failures and leadership and management deficiencies” at the State Department. (Source: Businessweek,Clinton’s Business Legacy, January 10, 2013; Biography.com, Hillary Clinton)
Clinton’s 2008 Economic Platform
While running for President in 2008, Clinton’s economic platform included the following:
- Create a balanced budget by developing budget rules that require new expenditures be funded with revenues or cuts.
- Provide health plan tax credits. Expand private plans used by Congress, or Medicare to all.
- A $50 billion Strategic Energy Fund to fund an alternative energy agency and provide incentives for alternative energy use.
- Double the size of the enforcement unit in U.S. Trade Representative’s Office to increase compliance with trade agreements.
- Expand the Trade Adjustment Assistance agency to help workers displaced by outsourcing.
- Tax relief including child tax credit, Earned Income Tax Credit and marriage penalty relief. Reform theAMT to protect middle class earners.
- Provide a $3,500 tuition tax credit and other education incentives totaling $8 billion per year. It will be funded by repealing the estate tax only for those with assets below $7 million.
- Allow states’ Mortgage Revenue Bond programs to address refinancing. Increase cap an additional $2.5 billion.
- Allow Fannie Mae and Freddie Mac to insure jumbo loans.
- Create the American Retirement Account to allow tax-deferred contributions of up to $5,000 per year. The first $1000 contributed into any retirement account will be eligible for dollar-to-dollar tax credits. (Source: HillaryClinton.com, Issues)
Clinton’s plan was well-thought out and detailed. She was the only 2008 candidate to advocate a balanced budget. The tax credit, health insurance and retirement plans would have added dollars to consumers’ pockets, strengthening the economy. Many of her proposals would have increased the power of existing agencies, such as Fannie Mae and state Mortgage Revenue Bond programs, without increasing federal spending.
Her retirement plan would have gone a long way towards helping with the looming Social Security crisis. Her proposal to fix the Alternative Minimum Tax has been a problem long overdue. In short, this platform would have definitely benefited the U.S. economy.
Clinton’s 2008 Economic Stimulus Plan
Clinton proposed these steps to resolve the 2008 financial crisis:
- A $30 billion housing crisis fund to help local governments prevent foreclosures.
- A 90-day moratorium on foreclosures.
- A rate freeze on subprime mortgages for five years or until banks convert them into affordable loans.
- More power to state housing financing agencies to help families refinance.
- Increased portfolio caps at Fannie Mae and Freddie Mac.
- $25 billion in emergency home heating assistance.
- $5 billion for various energy efficiency measures.
- $10 billion in additional unemployment insurance.
- $40 billion in tax rebates if the economy gets worse.
- Convene the Working Group on Financial Markets, coordinating with regulators around the world.
- Provide relief for mortgage holders.
- Liberalize the 2005 bankruptcy law. (Sources: HillaryClinton.com, Remarks on the Global Economic Crisis, January 22, 2008; Aggressive Economic Plan, January 11, 2008)
Clinton’s Economic Priorities as Senator and First Lady
Clinton was the U.S. Senator from New York from 2000-2008. She served on the Armed Services Committee, the Health, Education, Labor and Pensions Committee, the Environment and Public Works Committee, the Budget Committee and the Select Committee on Aging. She was a member of the Commission on Security and Cooperation in Europe. She worked across party lines to build support for the expansion of economic opportunity and access to quality, affordable health care.
After 9/11, she supported funding to rebuild New York, and addressed the health concerns of the first responders at Ground Zero. She fought for better healthcare and benefits for wounded service members, veterans and members of the National Guard and Reserves.
Clinton was First Lady from 1993-2001. While there, she was Chair of the Task Force on National Healthcare Reform. She continued to be a leading advocate for expanding health insurance coverage, ensuring children are properly immunized, and raising public awareness of health issues.
In 1994, she also helped create the Department of Justice’s Office on Violence Against Women. In 1997, she supported the passage of the State Children’s Health Insurance Program (SCHIP), which expanded health insurance for children in lower-income families. She helped pass the Adoption and Safe Families Act, which eased the removal of children from abusive situations.(Sources: White House.gov, Hillary Clinton; NPR, Hillary Clinton; U.S. Department of State, Hillary Clinton)
Clinton’s Early Career
Secretary Clinton has a B.A. from Wellesley College (1969) and J.D. from Yale Law School (1973). She was an assistant professor at the University of Arkansas School of Law, and worked for the Rose Law firm. She was appointed by President Carter in 1977 to chair the board of the Legal Services Corporation. She was First Lady of the State of Arkansas from 1979-1981 and 1983-1992. During that time, she chaired the Arkansas Education Standards Committee, co-founded the Arkansas Advocates for Children and Families, and served on the boards of the Arkansas Children’s Hospital, and Legal Services and the Children’s Defense Fund, as well as TCBY and Wal-Mart.
There are a lot of economic policy positions to sort through that are presented in this article.
The first step, which includes some tax relief for the middle class and small businesses, an infrastructure bank, and expanded scientific research, sounds encouraging but the specifics are not revealed. Lower taxes result in less revenue to fund necessary governmental functions. Will this gap be made up with higher taxes on the wealthy capital ownership class? An infrastructure bank MUST provide interest-free capital credit to companies with the requirement that they be fully employee-owned and pay out fully their earnings to their owners, who then would be taxed at the personal income rates. Scientific research, which ultimately benefits product development by businesses, must carry stipulations that those businesses by fully employee owned and pay out fully their earnings to their owners.
The second step, which includes raising the minimum wage, is a redistribution policy forcing employers (the capital asset ownership class) to pay more in wages for the same degree of work or less, as well as to automate further or shift production to other countries with far lower wage rates and less or no restrictive regulations.
Clinton would encourage businesses to share profits with employees. Bernie Sanders advocates that employees OWN the businesses they are employed by using worker cooperative and Employee Stock Ownership Plan (ESOP) structures. This is a far more effective means to broaden OWNERSHIP of businesses simultaneously with their growth.
Clinton advocates supporting unions and collective bargaining, but how would she reform the labor union movement so as not to continue the division between the ownership class and the working class. The real need is to advocate that the labor union movement transform to a producers’ ownership union movement and embrace and fight for workers, as individuals, to become OWNERS of the companies that employ them.
Step three has to do with the tax rates on capital gains, both short-term and long-term gains. What is really needed is to eliminate all tax loopholes and subsidies and create a tax incentive that encourages corporations to pay out all their profits to their owners as taxable personal incomes to avoid paying corporate income taxes and to finance their growth by issuing new full-voting, full-dividend payout shares for broad-based citizen ownership, which would be financed with insured, interest-free capital credit, repayable out of the future earnings of the investments in their growth. With far greater tax revenue generated at the personal level, we need to eliminate the payroll tax on workers and their employers, but pay out of general revenues for all promises for Social Security, Medicare, government pensions, health, education, rent and subsistence vouchers for the poor until their new jobs and ownership accumulations provide new incomes to substitute for the taxpayer dollars to fill these needs.
As part of the overall tax reforms, there should be, as a substitute for inheritance and gift taxes, a transfer tax imposeded on the recipients whose holdings exceed $1 million, thus encouraging the super-rich to spread out their monopoly-sized estates to all members of their family, friends, servants and workers who helped create their fortunes, teachers, health workers, police, other public servants, military veterans, artists, the poor and the disabled.
Also the Federal Reserve needs to stop monetizing unproductive debt, including bailouts of banks “too big to fail” and Wall Street derivatives speculators, and begin creating an asset-backed currency that could enable every child, woman and man to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to purposely acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income. The CHA would process an equal allocation of productive credit to every citizen exclusively for purchasing full-dividend payout shares in companies needing funds for growing the economy and private sector jobs for local, national and global markets. The shares would be purchased using interest-free credit wholly backed by projected “future savings” in the form of new productive capital assets as well as the future marketable goods and services produced by the added technology, renewable energy systems, manufacturing factories, rentable space for entrepreneurial endeavor and infrastructure, both repair and new, added to the economy. Risk of default on each stock acquisition loan would be covered by private sector capital credit risk insurance and reinsurance, but would not require citizens to reduce their funds for consumption to purchase shares.
The end result is that citizens would become empowered as owners to meet their own consumption needs and government would become more dependent on economically independent citizens, thus reversing current global trends where all citizens will eventually become dependent for their economic well-being on the State and whatever elite controls the coercive powers of government.
As part of the third step, in addition to stricter regulations on banks, the Dodd-Frank Wall Street Reform Act needs to be reinstated.
Not supporting the Trans Pacific Partnership (TPP) is wise. If enacted, the agreement will promote the interests of giant, multinational corporations over the interests of labor, environmental, consumer, human rights, or other stakeholders in democracy, AND FURTHER CONCENTRATE OWNERSHIP OF THE NON-HUMAN PRODUCTIVE CAPITAL MEANS OF PRODUCTION!
The REAL STORY is a story about the collusion among a globally wealthy ownership class to further concentrate private sector ownership in ALL FUTURE wealth-creating, income-generating productive capital asset creation on a global scale. A sorta FREE TRADE ON STEROIDS!
We need to re-embrace the 1976 discussion by The Joint Economic Committee of Congress that called for endorsing a policy to broaden capital ownership as an economic goal for America. The 1976 Joint Economic Report stated: “To provide a realistic opportunity for more U.S. citizens to become owners of capital, and to provide an expanded source of equity financing for corporations, it should be made national policy to pursue the goal of broadened capital ownership. Congress also should request from the Administration a quadrennial report on the ownership of wealth in this country, which would assist in evaluating how successfully the base of wealth was being broadened over time.” Unfortunately the Congress has never paid any attention to this policy, and the goal has subsequently been unacknowledged and unheeded by our plutocratic political leaders. We need new leadership that will fight for this policy direction.
The stark reality is that we are in a depression reflected in rising “real” (not statistical) unemployment and underemployment and instability that we will never escape from until we change our economic policy. Increasingly, more Americans will not be able to ever purchase a home, due to the packed inflationary wage and welfare base factored into the cost of building homes, which inflate prices, and will be forced to rent their entire life or depend on government living assistance––not able to accumulate equity that can help to sustain them in their retirement years. And this is the new reality now facing people in the middle class. The uncertainty of holding onto a good job is frightening to an increasingly wider base of middle-class working citizens. When you factor in the average non-salaried worker, even with a government-mandated minimum labor wage rate of $10.00+ per hour in some states and cities, the outcome is grim. Never mind that consumer demand continues to dwindle because of insufficient income, solely tied to labor worker wages. The impact of the decline in consumer demand due to declining labor worker wages is that production will decline or desist without sustainable consumer demand. Furthermore, those corporations growing the economy, both nationally and globally, will expand globally with investment in new productive capital projects and seek “customers with money” abroad.
This is all coming about because we have severely mismatched the power to produce with the possession of unsatisfied needs and wants. Those capital owners who have unsatisfied needs and wants have ready access through conventional finance to get as much or more productive capital as they want. Our tax laws are designed to further benefit the 1 percent by providing enormous write-offs and credits to producers (corporations) who are owned by the few, who already produce more than they can consume. Those who have only their labor power and its precarious value held up by coercive rigging and who desperately need capital ownership to enable them to be capital workers as well as labor workers to have a way to earn more income, cannot satisfy their unsatisfied needs and wants. With only access to labor wages, the 99 percenters will continue, in desperation, to demand more and more pay for the same or less work, as their input is exponentially replaced by productive capital.
But if we change direction and systematically build earning power into consumers, we have the opportunity to reverse the depression perpetrated by systematically limiting the 99 percent to labor wages alone and through technology eliminating their jobs. We need solutions to grow the economy in ways that create productive jobs and widespread equity sharing. We need to systematically make insured, interest-free capital credit to purchase capital accessible to economically underpowered people (the 99 percent) in which the income from the capital investment is isolated until it pays for itself, and then begins to produce a stream of dividend income to the new capitalists. This can only be accomplished by enabling every person to have access to capital ownership and purchase the capital, and pay for it out of what the capital produces. It’s time good and well-intentioned people woke up and adopted a Just Third Way paradigm (http://cesj.org/learn/just-third-way/) beyond the greed model of monopoly, “hoggist” capitalism and the envy model of the traditional welfare state. This will promote peace, prosperity, and freedom through harmonious justice.