WASHINGTON, May 2016 — Hillary Clinton says that, if elected, she will enlist the help of her husband, former president Bill Clinton, to fix the economy.
The Sanders wing of the Democratic Party will oppose Bill’s policy ideas, but the Republicans should welcome them. Bill Clinton’s economic policies are exactly opposite to those of Hillary Clinton.
A theme of the Hillary Clinton and Bernie Sanders campaigns, along with much of the Democratic Party is the reduction of economic inequality. To that end, Hillary would raise marginal income tax rates on the highest earners and raise capital gains rates.
She would also increase the federal minimum wage to $15 per hour, increase spending on social programs, infrastructure and education, and reject new trade agreements.
Hillary believes that government, not the private sector, is the main engine of job creation. In October 2014, she said, “Don’t let anybody, don’t let anybody tell you that, ah, you know, it’s corporations and businesses that create jobs.” She wants to increase the size of government, which she believes will fix the economy. She is not concerned with budget deficits or the public debt, which now exceeds $19 trillion.
Those policies are not Bill Clinton’s.
In 1996, while running for a second term, President Clinton proposed economic policies that were consistent with the will of the majority of the people. In 1994, for the first time in 40 years, Americans had elected a Republican House of Representatives. House Republicans chose representative Newt Gingrich as speaker. Gingrich had led the Republicans to victory by making the local House campaigns national.
He did this with his “Contract with America,” which was overwhelmingly supported by voters. The Contract with America called for reductions in government spending and making it more difficult to raise taxes. In response, President Clinton pivoted to the right. He supported a reduction in the capital gains tax from 28 to 20 percent, took action to reduce government spending, and finally declared, “The era of big government is over.”
Clinton understood the benefits that free trade brings. While some manufacturing jobs would be lost, free trade meant increased employment in America’s export industries. Free trade would significantly reduced cost of production, hence product prices, boosting real incomes even if wages stayed constant. This meant that consumers could maintain their current lifestyle while spending less money, giving them more money to spend on other goods and services. The economy would grow.
Clinton accordingly signed the North America Free Trade Agreement which, regardless of the negative rhetoric, has had positive overall effects on the economy. Nearly every independent economic study reaches that conclusion.
The result of Clinton’s economic policies was that economic growth accelerated to more than a 4 percent annual rate, unemployment fell, inflation was low, government spending was held down, tax revenue increased, and for the first time in more than 35 years, the federal government had an annual budget surplus instead of a large deficit. The public debt fell.
Hillary Clinton is having a hard time wrapping up the Democratic nomination. Bernie Sanders has won a number of recent primaries and is ready to win more. If the super delegates hold for Hillary, there is no way that Sanders can win the nomination, but he has strong support from people who want government to take a larger role in the economy.
Hillary must believe that if she brings in the still popular Bill Clinton, she will ease her path to the nomination. Most people middle aged and older remember how good the economy was during the Clinton years, especially the second term.
But Hillary has moved her positions further to the left. Pledging to bring in her husband to fix the economy may sound good politically, but his economic policy views are far too Republican for today’s Democratic Party. Bill may appeal to voters over 45 years old, but Hillary already does well with that group. She needs help with the younger vote.
Bill Clinton is either unknown to the younger voters or they see him negatively because of his treatment of women. Bill won’t help Hillary, who will need her own economic policy. And given the Sanders threat, she won’t want to follow Bill’s advice anyway.