WASHINGTON, October 25, 2014 – In Boston for a campaign rally – calm down; not for herself, but for Martha Coakley – Hillary Clinton channeled her inner Obama.
Recalling President Obama’s “you didn’t build that” refrain to business, Hillary told an enthusiastic crowd of supporters, “Don’t let anybody tell you it’s corporations and businesses create jobs.” We can assume that none of her audience have ever been employed by a business.
In the course of a campaign it is easy for candidates to toss out careless and stupid remarks that they wish they could take back later. An eternal game of “gotcha” with the press and the blogosphere is a depressing prospect. Sometimes we should just ignore the stupidity.
And sometimes not, especially when it seems congenital or deliberate.
In the case of Massachusetts Senator Elizabeth Warren, it seems congenital. Warren has set liberal hearts aflutter as a possible liberal alternative to Hillary. Hillary is a war hawk who only badmouths business, goes their narrative, but is just another crony capitalist. Warren is the real deal.
Except when she’s not. Warren announced last month her enthusiastic intention to vote to reauthorize the Export-Import Bank, a 1934 creation designed to promote trade with the Soviet Union. The Bank has been described as a corporate slush fund, a cesspool of corruption, and “the Bank of Boeing.” President Obama has called the Bank “corporate welfare.” Boeing receives 30 percent of the bank’s largesse, and just a few firms receive 75 percent of the total. In 80 years, the Bank has yet to figure out how to help politically unconnected businesses to expand their export markets.
What the Ex-Im Bank is not described as is an engine to create jobs. It claims that its $27 billion in loans last year supported 205,000 export-related jobs. Its methodology has been rejected by academics and even the Government Accountability Office, though on its own terms it would be difficult to take comfort in that number. If it created or supported all 205,000 jobs that it claims, each job would have cost $131,000.
With her support of the Ex-Im Bank, Warren clearly wants to court the business crowd that she usually loves to despise. She was almost coquettish with Bank President Fred Hochberg during Senate reauthorization hearings, throwing him one softball after another. But no one is pure. To claim shock at Warren’s hypocrisy would be like feigning shock that people are gambling at the casino.
The senator has no clue where jobs come from and doesn’t pretend to. She’s a collection of categories, not a thoughtfully realized human being – a (pseudo) Native-American, feminist, populist, Harvard law professor. She no more knows where jobs come from than first-graders know where babies come from. She only knows that they exist and that something icky happened to make it so.
Hillary, however, is supposedly much more sophisticated. Her husband was the leader of a new brand of conservative Democrats who knew how to work with Wall Street and Main Street to make things happen. And Hillary was supposedly the real brains behind the phallus. If she’s saying something stupid, it’s probably deliberate.
Where do jobs come from? We might rephrase that to, who do people work for? Some work for Government, as do the legions of bureaucrats who make the Washington area the most affluent in the country. Some work for government, as do teachers, city trash pickup crews, and college professors.
But most still work for Apple, Exxon, the Dallas Cowboys, and the corner bakery. They work for businesses whose owners and managers would be surprised to learn that they don’t create jobs.
Hillary does not believe for an instant that businesses don’t create jobs. That wasn’t really her point. “You know that old theory, ‘trickle-down economics,’” she said. “That has been tried, that has failed. It has failed rather spectacularly.”
What she might have meant was that cutting taxes doesn’t induce businesses to create jobs. That isn’t what she said, and deliberately: She was in Massachusetts.
Hillary has a point if, generously, we grant that she was speaking in code to a crowd that thinks businesses are a blight on our economy and that corporations are Ebola. Businesses don’t create jobs because we cut their taxes. If creating a job will add to the bottom line, a business will create it. If it doesn’t add to the bottom line, cutting the firm’s taxes or its owners’ taxes won’t change that.
There are other things more important to making the job-creating activity profitable than the corporate tax rate. The regulatory environment is probably the most important of those. New York is less likely to attract new businesses and new jobs by cutting business taxes than it is by making it easier to start or expand a business, easier to hire new employees if there’s a chance of a bigger profit, and not making it hard to get rid of those employees if the hoped-for profit doesn’t materialize.
There is a great deal that our elected officials could do to make America a more vibrant business environment and American job markets more robust. The first step is honesty: Recognize where jobs come from, and where they don’t. Businesses aren’t the grit in our economic engine; they are the engine.
Taxes are the shibboleth that political parties and members of Congress use to identify enemies and avoid doing anything useful. It is impossible to be pro-consumer and pro-worker without being pro-business, yet Hillary wants to beat the horse of tax rates. Republicans are happy to go along.
The French say, “when you’re stupid, it’s for life.” Schiller said, “Against stupidity, the gods themselves contend in vain.” Stupid has become a way of life in American politics. Don’t ask Hillary Clinton or Elizabeth Warren where your job came from or who built your business. It would be like getting your sex education in a middle-school locker room.