Published on Alternet (http://www.alternet.org)
Home > Hillary's Economic Agenda Sure Looks Like Payback for Wall St Giving
Her Huge Piles of Campaign Cash
________________________________________
Hillary's Economic Agenda Sure Looks Like Payback for Wall St Giving Her
Huge Piles of Campaign Cash
By Les Leopold [1] / AlterNet [2]
March 6, 2016
Billed as a major populist economic address, Hillary Clinton recently put
forth her jobs program in Michigan.
Wall Street is smiling.
Her program fits perfectly within the neoliberal framework as she focuses on
how to use public funds and policies to promote private sector gain. There
are tax incentives to urge large and small corporations to create more jobs
in the U.S. There are tax breaks to encourage corporations to provide more
training and profit sharing plans. And there are tax breaks to promote long
term investment instead of short-term gains. To balance this equation, she
also calls for exit taxes if companies take tax breaks and then move out of
the country. Her mantra is clear: if you do right to the American people,
we'll do right by you.
Along the way, she waxes euphoric about the buoyancy of the private sector:
"New businesses are opening. Families are moving in. The streetlights are on
again. The buses and running again. There is a palpable feeling of pride and
community and we have to spread economic revitalization to all of Detroit's
neighborhoods." (See here [3] for full speech.)
Not a word is mentioned about public goods or public sector jobs. Clearly,
the only real job is a private sector job.
Hillary Sends a Signal to Wall Street
At the same time, she uses a dog whistle to let Wall Street know that she
won't be coming down hard on them: "I'm not interested in condemning whole
categories of businesses or the entire private sector" [4]
Furthermore, she dances around the perils of free-trade deals by putting the
entire blame on China, and therefore not on the Clinton and Obama
administrations who were/are gung-ho free traders..
Her silence about NAFTA, however, is deafening. And that's very good news to
corporate and financial elites because NAFTA is the trade deal that has
facilitated the financial strip-mining of the American worker. It has placed
U.S. workers into direct daily competition with much less expensive labor
south of the border.
In fact, Hillary argues all such debates are now ancient history. It's
unproductive, she claims, to be "re-fighting battles from 20 years ago...."
But those battles are not over for Michigan workers who feel the incessant
pressure from NAFTA on job security and the downward pressure on incomes and
benefits. Hillary can't rebuild the middle-class, even on her own
free-market terms, without undoing large parts of NAFTA.
Fearing to take on Financial Strip-mining
Throughout her glowing tribute to the private sector, she also duly notes
that corporations and financiers care too much about short-term stock prices
instead of the long-term health of the company. She is correct to say that
they are spending 80 to 90 percent of all corporate revenues on stock
buybacks and dividends: "That's money they're not using to train their
workers or give them a raise,"
And then there are the usual tropes about the "casino culture on Wall
Street" and the ever faithful applause line: "We need to make sure Wall
Street never wrecks Main Street again."
Amen to all that.
But the whip she hopes to crack is more like a wet noodle. She wants to
reward corporations and investors with tax incentives to encourage long-term
investment, worker training and profit sharing with employees.
But, she remains silent on two real power moves that could actually change
elite Wall Street and corporate behavior. She does not talk about outlawing
stock buybacks. And she does not mention the financial speculation tax.
It is relatively easy for a president to stop stock buybacks. All it takes
is a rule change at the SEC. Until 1982, it was considered stock
manipulation for a company to boost its price by buying back its own shares
en mass. Reagan's SEC appointee then legalized it.
But making stock buybacks illegal again would be fiercely opposed by the
very Wall Street executives and CEOs who are filling her campaign coffers.
In fact, the system of runaway inequality is built upon those buybacks
Today, the goal of virtually every large corporation is to use all of its
cash-flow to buy back its own shares to enrich its CEOs and largest Wall
Street investors.
The corruption of Stock Buybacks at GM
While noting that the "auto industry just had its best year ever," Hillary
ignores the outrageous case of financial strip-mining at GM. She couldn't
mention it because it would also show the revolving door between the Obama
administration and Wall Street.
Harry Wilson, the Obama administrator who helped to negotiate the GM
bailout, then left for a hedge fund job. The 43 year-old Wilson and his
investors proceeded buy up 34 million GM shares. Why not? By then he was a
GM expert, trained at taxpayer expense.
He then demanded that GM use its cash reserves to buy back its own shares
to make he and his investors tens of millions of dollars....for doing
nothing at all.
The American people bailed out GM to save hundreds of thousands of jobs
throughout the Midwest. Many of us hoped that once GM returned to financial
health, it would use its reserves to build the most environmentally sound
cars in the world, thereby helping retain U.S. jobs and help our planet
survive.
Instead, Wilson pressures GM to use its precious cash reserves to buyback
its own shares in order to put money into his deep pockets and the pockets
of his investors. Increase GM wages? Increase training? Increase R&D. No
way.
His wish was GM's command. On January 13, GM announced a $9 billion stock
buyback plan.
But Hillary couldn't talk about any of this. Because if she did, she would
be forced to admit that her fairytale version of capitalism will never work
as long as Wall Street dominates the economy.
Carefully Ignoring Public Sector Jobs
Team Hillary's populist sounding plan is in harmony with the most pernicious
neo-liberal principle -- that the private sector, by definition, is more
valuable than the public sector -- that all must be done to "encourage"
private sector jobs while limiting public sector jobs.
Hillary makes no mention at all at the decades-old attack on public sector
jobs and benefits. Not a word about the privatization that is wrecking
Michigan's public sector. Not a word about the need for increases in public
sector jobs to bring safe water to the people of Flint. Instead she just
blames the Republicans.
When she discusses how to revitalize communities of color left behind, her
only way of doing so is through private sector investment. But the public
sector is the best path towards the middle class incomes for low-income
Americans especially African Americans. She can't bring decent jobs and
incomes to low-income communities without an expansion of the public sector.
But why the knock on public sector jobs?
Because Wall Street and the super-rich would have to pay for those jobs. To
have a robust public sector that would get the lead out of inner-city pipes,
fix up dilapidated schools, increase the number of teachers, and provide
free higher education for all requires the expansion of the public sector.
To maintain a decent society requires an increase in public goods and the
hiring of more pubic workers.
But doing so, leads us directly to a financial speculation tax on Wall
Street as well as the end of off-shore tax havens for the super-rich,
neither of which are mentioned in her economic plan.
Instead Team Hillary wants to sound tough on corporate bad actors, while
providing tax breaks to most of the private sector. She wants to rein in
Wall Street's risky behavior, without damaging its financial strip-mining
operation. And she wants to let market miraculously create better paying
jobs for people of color, while remaining silent on the public sector and
20-year old trade deals.
Les Leopold is the director of the Labor Institute in New York. His latest
book is Runaway Inequality: An Activist's Guide to Economic Justice [5]
(Chelsea Green, 2015). For bulk orders contact him at LesLeopold@xxxxxxx
[6].
Share on Facebook Share
Share on Twitter Tweet
Report typos and corrections to 'corrections@xxxxxxxxxxxx'. [7]
[8]
________________________________________
Source URL:
http://www.alternet.org/election-2016/hillarys-economic-agenda-sure-looks-pa
yback-wall-st-giving-her-huge-piles-campaign
Links:
[1] http://www.alternet.org/authors/les-leopold
[2] http://alternet.org
[3]
http://www.c-span.org/video/?405998-1/hillary-clinton-remarks-detroit-michig
an
[4]
http://www.nytimes.com/2016/03/05/us/politics/hillary-clinton-offers-economi
c-plan-focused-on-jobs.html
[5] http://runawayinequality.org/
[6] mailto:LesLeopold@xxxxxxx
[7] mailto:corrections@xxxxxxxxxxxx?Subject=Typo on Hillary's Economic
Agenda Sure Looks Like Payback for Wall St Giving Her Huge Piles of Campaign
Cash
[8] http://www.alternet.org/
[9] http://www.alternet.org/%2Bnew_src%2B
Published on Alternet (http://www.alternet.org)
Home > Hillary's Economic Agenda Sure Looks Like Payback for Wall St Giving
Her Huge Piles of Campaign Cash
Hillary's Economic Agenda Sure Looks Like Payback for Wall St Giving Her
Huge Piles of Campaign Cash
By Les Leopold [1] / AlterNet [2]
March 6, 2016
Billed as a major populist economic address, Hillary Clinton recently put
forth her jobs program in Michigan.
Wall Street is smiling.
Her program fits perfectly within the neoliberal framework as she focuses on
how to use public funds and policies to promote private sector gain. There
are tax incentives to urge large and small corporations to create more jobs
in the U.S. There are tax breaks to encourage corporations to provide more
training and profit sharing plans. And there are tax breaks to promote long
term investment instead of short-term gains. To balance this equation, she
also calls for exit taxes if companies take tax breaks and then move out of
the country. Her mantra is clear: if you do right to the American people,
we'll do right by you.
Along the way, she waxes euphoric about the buoyancy of the private sector:
"New businesses are opening. Families are moving in. The streetlights are on
again. The buses and running again. There is a palpable feeling of pride and
community and we have to spread economic revitalization to all of Detroit's
neighborhoods." (See here [3] for full speech.)
Not a word is mentioned about public goods or public sector jobs. Clearly,
the only real job is a private sector job.
Hillary Sends a Signal to Wall Street
At the same time, she uses a dog whistle to let Wall Street know that she
won't be coming down hard on them: "I'm not interested in condemning whole
categories of businesses or the entire private
sector"http://www.nytimes.com/2016/03/05/us/politics/hillary-clinton-offers-
economic-plan-focused-on-jobs.html [4]
Furthermore, she dances around the perils of free-trade deals by putting the
entire blame on China, and therefore not on the Clinton and Obama
administrations who were/are gung-ho free traders..
Her silence about NAFTA, however, is deafening. And that's very good news to
corporate and financial elites because NAFTA is the trade deal that has
facilitated the financial strip-mining of the American worker. It has placed
U.S. workers into direct daily competition with much less expensive labor
south of the border.
In fact, Hillary argues all such debates are now ancient history. It's
unproductive, she claims, to be "re-fighting battles from 20 years ago...."
But those battles are not over for Michigan workers who feel the incessant
pressure from NAFTA on job security and the downward pressure on incomes and
benefits. Hillary can't rebuild the middle-class, even on her own
free-market terms, without undoing large parts of NAFTA.
Fearing to take on Financial Strip-mining
Throughout her glowing tribute to the private sector, she also duly notes
that corporations and financiers care too much about short-term stock prices
instead of the long-term health of the company. She is correct to say that
they are spending 80 to 90 percent of all corporate revenues on stock
buybacks and dividends: "That's money they're not using to train their
workers or give them a raise,"
And then there are the usual tropes about the "casino culture on Wall
Street" and the ever faithful applause line: "We need to make sure Wall
Street never wrecks Main Street again."
Amen to all that.
But the whip she hopes to crack is more like a wet noodle. She wants to
reward corporations and investors with tax incentives to encourage long-term
investment, worker training and profit sharing with employees.
But, she remains silent on two real power moves that could actually change
elite Wall Street and corporate behavior. She does not talk about outlawing
stock buybacks. And she does not mention the financial speculation tax.
It is relatively easy for a president to stop stock buybacks. All it takes
is a rule change at the SEC. Until 1982, it was considered stock
manipulation for a company to boost its price by buying back its own shares
en mass. Reagan's SEC appointee then legalized it.
But making stock buybacks illegal again would be fiercely opposed by the
very Wall Street executives and CEOs who are filling her campaign coffers.
In fact, the system of runaway inequality is built upon those buybacks
Today, the goal of virtually every large corporation is to use all of its
cash-flow to buy back its own shares to enrich its CEOs and largest Wall
Street investors.
The corruption of Stock Buybacks at GM
While noting that the "auto industry just had its best year ever," Hillary
ignores the outrageous case of financial strip-mining at GM. She couldn't
mention it because it would also show the revolving door between the Obama
administration and Wall Street.
Harry Wilson, the Obama administrator who helped to negotiate the GM
bailout, then left for a hedge fund job. The 43 year-old Wilson and his
investors proceeded buy up 34 million GM shares. Why not? By then he was a
GM expert, trained at taxpayer expense.
He then demanded that GM use its cash reserves to buy back its own shares to
make he and his investors tens of millions of dollars....for doing nothing
at all.
The American people bailed out GM to save hundreds of thousands of jobs
throughout the Midwest. Many of us hoped that once GM returned to financial
health, it would use its reserves to build the most environmentally sound
cars in the world, thereby helping retain U.S. jobs and help our planet
survive.
Instead, Wilson pressures GM to use its precious cash reserves to buyback
its own shares in order to put money into his deep pockets and the pockets
of his investors. Increase GM wages? Increase training? Increase R&D. No
way.
His wish was GM's command. On January 13, GM announced a $9 billion stock
buyback plan.
But Hillary couldn't talk about any of this. Because if she did, she would
be forced to admit that her fairytale version of capitalism will never work
as long as Wall Street dominates the economy.
Carefully Ignoring Public Sector Jobs
Team Hillary's populist sounding plan is in harmony with the most pernicious
neo-liberal principle -- that the private sector, by definition, is more
valuable than the public sector -- that all must be done to "encourage"
private sector jobs while limiting public sector jobs.
Hillary makes no mention at all at the decades-old attack on public sector
jobs and benefits. Not a word about the privatization that is wrecking
Michigan's public sector. Not a word about the need for increases in public
sector jobs to bring safe water to the people of Flint. Instead she just
blames the Republicans.
When she discusses how to revitalize communities of color left behind, her
only way of doing so is through private sector investment. But the public
sector is the best path towards the middle class incomes for low-income
Americans especially African Americans. She can't bring decent jobs and
incomes to low-income communities without an expansion of the public sector.
But why the knock on public sector jobs?
Because Wall Street and the super-rich would have to pay for those jobs. To
have a robust public sector that would get the lead out of inner-city pipes,
fix up dilapidated schools, increase the number of teachers, and provide
free higher education for all requires the expansion of the public sector.
To maintain a decent society requires an increase in public goods and the
hiring of more pubic workers.
But doing so, leads us directly to a financial speculation tax on Wall
Street as well as the end of off-shore tax havens for the super-rich,
neither of which are mentioned in her economic plan.
Instead Team Hillary wants to sound tough on corporate bad actors, while
providing tax breaks to most of the private sector. She wants to rein in
Wall Street's risky behavior, without damaging its financial strip-mining
operation. And she wants to let market miraculously create better paying
jobs for people of color, while remaining silent on the public sector and
20-year old trade deals.
Les Leopold is the director of the Labor Institute in New York. His latest
book is Runaway Inequality: An Activist's Guide to Economic Justice [5]
(Chelsea Green, 2015). For bulk orders contact him at LesLeopold@xxxxxxx
[6].
Error! Hyperlink reference not valid.
Error! Hyperlink reference not valid.
Report typos and corrections to 'corrections@xxxxxxxxxxxx'. [7]
Error! Hyperlink reference not valid.[8]
Source URL:
http://www.alternet.org/election-2016/hillarys-economic-agenda-sure-looks-pa
yback-wall-st-giving-her-huge-piles-campaign
Links:
[1] http://www.alternet.org/authors/les-leopold
[2] http://alternet.org
[3]
http://www.c-span.org/video/?405998-1/hillary-clinton-remarks-detroit-michig
an
[4]
http://www.nytimes.com/2016/03/05/us/politics/hillary-clinton-offers-economi
c-plan-focused-on-jobs.html
[5] http://runawayinequality.org/
[6] mailto:LesLeopold@xxxxxxx
[7] mailto:corrections@xxxxxxxxxxxx?Subject=Typo on Hillary's Economic
Agenda Sure Looks Like Payback for Wall St Giving Her Huge Piles of Campaign
Cash
[8] http://www.alternet.org/
[9] http://www.alternet.org/%2Bnew_src%2B
