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Clintonomics, Hillary-style: facts, impressions, policy, and politics

Thoughts and impressions of what candidate Clinton's economic agenda might look like.

Former Secretary of State Hillary Clinton participates in a roundtable discussion on expanding opportunities in America’€™s urban areas, at the Center for American Progress,with Lee Saunders at left, in Washington DC Monday March 23, 2015. (Photo by Melina Mara/The Washington Post)
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Hillary Clinton is launching her campaign for president on Sunday?! Really? Who knew?!

When this sort of thing happens, econo-pundits like myself often get asked: what can you tell me about the candidate’s economic agenda?

Fair question, but in Secretary Clinton’s case, not an easy one (I had a similar post here on Jeb Bush’onomics a while back). She’s largely kept those cards close to her vest though surely that will have to change in the near future. Still, FWIW, here’s what I can tell you, based on a loose combination of facts, discussions, and impressions:

She’s very well informed. On the few occasions I’ve talked economics with Clinton, she was deeply knowledgeable about many different aspects of both the U.S. and other economies. At one point, we were talking about the U.S. labor force participation rate, and as I was starting to explain its significance, she cited the actual number…then she cited the number for women. Then she gave a trenchant analysis of its recent movements.

Now, I’ve interacted with a few smart politicians in my time, but that’s unusual.

–She’s committed to some important work/life policies that exist at the intersection of good policy and good politics. Compared to other advanced economies, ones in which Clinton has spent some time, we do far too little in areas like paid sick leave, maternal and paternal leave policies, worker-centered scheduling, help with child care for working parents, and tax policies that don’t penalize second earners.

Though businesses often oppose some of these ideas because they add to labor costs, the politics around them are both very strong and intersect with inequality in an important way.

But first, a note on the economics. If you compare women’s employment rates across countries, you see a pretty compelling and somewhat startling result. In almost every country except the U.S., the employment rates of women have gone up since 2000, while in the U.S. they’ve fallen sharply, from about 74 percent to around 69 percent. Working age women in Britain, France, Germany, and Canada all used to have lower employment rates than we do. Now they’re all higher. That’s bad micro—those who want and/or need to work in the paid labor market should be able to do so—and it’s bad macro—our economy grows more slowly when working-age people drop out of the market.

Moreover, there’s solid evidence that part of that decline in women’s labor ­force participation here as compared to Europe is due to their commitment to the type of policies noted above. According to one study, “had the United States had the same policies [as Europe]…women’s labor force participation rate would have been seven percentage points higher by 2010.”

Importantly, the research from which that finding is drawn shows that the largest impacts would be among middle- and lower-wage women. That doesn’t surprise me—or Clinton either, I suspect—for two reasons. First, child care is just really damn expensive. Second, the flexibility of scheduling in the American workplace is basically upside-down from this perspective. Those with the least resources have the least flexibility and vice versa. A law partner or an economist—or a first lady or secretary of state—with a family emergency can often leave work more freely than the guy or gal running the fryer.

So what we have a here is a great cause, a strong policy, and one that can tilt toward the least advantaged.

–She’s to the left of her husband on trade: Pure impressionism on my part, but while Bill Clinton just plain loves him some “free trade” agreements, my sense is that Hillary Clinton, perhaps from all her travels, takes a more realistic view as to what these trade agreements are really about, which is rules by which multinational corporations, investors, intellectually property and patent holders, and financial market traders agree to do business. That’s a very different perspective than “TPP will boost jobs, innovation, and prevent tooth decay!”

My impression is that part of this is driven by her interactions with oppressed women in developing countries, for whom expanded trade can be a source of income growth and improved living standards or, just as likely depending on the institutional structures within which expanded trade occurs, crushing exploitation.

–At the corner of Hillary and Wall St.: Here I must admit that I just don’t know how this plays out. She was a senator from New York and while that doesn’t make her Chuck Schumer (who’s often quite friendly to financial markets), neither does it make her Elizabeth Warren (who…um…isn’t so friendly). I’ve written that it will be essential for the next president to help break the shampoo cycle (“bubble, bust, repeat”) that’s bedeviled recent U.S. expansions (my new book—out very soon!—devotes a chapter to concrete steps in this area). At the same time, financial investors tend to want a return on their investment, whether it’s in a real estate venture or a politician. So’s all I can say is that this one bears watching.

–What about jobs (full employment!), poverty, taxes, budgets, etc.?!  Right…all of that stuff. We’ll see, and again, it’s interesting that she’s somewhat of a blank slate on these issues. I mean, she’s a Democrat, so we’re not talking supply-side tax cuts, deregulate industry, and shutter the EPA. One could reference her 2008 run on some of these issues, but I don’t think you’d find much to go on.

Still, there’s this: a pretty detailed, smart, and progressive policy document recently out from the “Democrats-in-waiting” at the Center for American Progress, with many good ideas in the area of taxing, spending, inequality, mobility, education, and trade policy. I’ve heard people suggest that the document is a blueprint for Clinton’s campaign, and while I doubt that’s accurate, based on her connections with CAP, I’m sure she’s well aware of it.

Anyway, that’s what I’ve got for now. As I learn more, you’ll learn more.