Hillary Clinton and her campaign aides on Friday tried to keep the focus of her economic speech at New York University on corporate culture and “short term speculation,” but the latest chapter in the story of her private email use at the State Department unfolded as the former secretary of state took the stage.
The split-screen feeling of the event was palpable: As Clinton said it was time for U.S. companies to “break free from the tyranny of today’s earnings report so they can do what they do best, innovate, invest and build tomorrow’s prosperity,” her aides issued statements about the former first lady’s private server and said it contained classified information that was not correctly identified.
Clinton opened her event with brief remarks about the email controversy — saying she “will do my part” to cooperate with any inquiries into her email use while leading the State Department — but quickly and deliberately turned to the economy. She told the audience of students, professors and supporters that she was “going to stay focused on the issues, particularly the big issues that really matter to American families.”
“It is clear that the system is out of balance,” Clinton said of a corporate culture that stresses short-term gain over long term investment.
“It is time to start measuring value in terms of years,” not days, Clinton added.
Clinton’s speech, however, was short on rhetoric aimed directly at Wall Street and big banks, something progressives are hungry to see from the former New York senator who has deep ties to the financial industry. Clinton’s aides set expectations early, telling reporters before the speech that Friday’s event would not be chock full of the Wall Street red meat that liberals are pining for.
Instead, Clinton outlined a series of policy proposals that she hopes would rebuild “a connection between companies and their workers, so that workers are seen as assets rather than costs,” her campaign aides said.
“It’s time to return to an old-fashioned idea,” Clinton said, “that companies’ responsibility to their shareholders also encompasses a responsibility to employees, customers, communities and ultimately to our country, and yes, our planet.”
Clinton notably endorsed New York City’s plan of raising the minimum wage to $15 an hour for fast food workers, but did not go as far as endorsing a $15 federal minimum wage.
“The national minimum wage is a floor, and it needs to be raised, but let’s also remember that the cost of living in Manhattan is different than in Little Rock and in many other places, so New York or Los Angeles or Seattle are right to go higher,” Clinton said.
Clinton proposed reforming taxes on capital gains, the earnings people make when they sell stock. Instead of the current system, which defines a long-term investment as anything over a year, Clinton said as president she would define a long-term investment as six years.
The former secretary of state said she would put capital gains tax on a sliding scale: Long-term investments would be taxed at 24%, the current rate. The rate would continue to slide up until short-term investments were taxed at 39.6%, regular income to top earners.
The former secretary of state also called for reviewing securities rules to hold management accountable, altering the tax codes so that executive compensation focuses more on long-term investment and ending subsidies to “industries that are already thriving” like oil companies.
“Thirty years ago top CEOs made 50 times what a typical worker did,” Clinton said. “Today they make 300 times more. That just doesn’t make sense.”
The campaign has been working with dozens of economists to sketch out Clinton’s economic platform. Outside advisers have included a host of liberal economists, former government officials and more. Among them are the Noble Prize-winning economist Joseph Stiglitz, top Obama economic policy aides Gene Sperling, Christina Romer, David Kamin and Alan Krueger.
Austan Goolsbee, a professor of economics at the University of Chicago and a former economic advisor to President Barack Obama, heralded Clinton’s speech as “the start of an important conversation on how we can get our economy — private-sector businesses, investors and the government — more oriented toward growth.”
“Her plans to reform the capital gains tax system to encourage longer-term investment is designed to give incentives for investors and companies to focus on long-lasting value rather than just near term benefits,” he said. “This one policy alone will not solve the problem of short-termism but aligning our tax code toward long-term thinking is a worthy and important goal and it is a beginning.”
Progressive opponents take aim at Wall Street
Clinton’s speech was intended to challenge corporate culture, but it didn’t offer the direct confrontation of Wall Street that many liberals say they want.
Vermont Sen. Bernie Sanders has seized the progressive mantel, inching closer to Clinton in polls from the key early-voting Democratic primary states Iowa and New Hampshire in no small part through rhetorical swings at monied interests.
And former Maryland Gov. Martin O’Malley on Thursday, speaking at an event at the Center for National Policy, called for the reinstitution of the Glass-Steagall Act — which separated commercial and investment banks until its repeal under President Bill Clinton.
O’Malley has also called for rules that designed stop regulators from accepting jobs at top financial firms.
“We have come a long way since the financial crisis, but our economy is still vulnerable to another collapse, and we haven’t been able to rein in Wall Street misconduct,” O’Malley said Thursday. “That’s why every Democrat who is running for President needs to commit to finishing the job that Dodd-Frank started.”
Progressive Change Campaign Committee co-founder Adam Green lauded O’Malley in a statement Thursday, crediting the former Baltimore mayor and Maryland governor for leading on economic issues — even though he’s struggled to gain traction in polls of Democratic primary voters.
“Martin O’Malley was the first candidate to make criminal prosecution of Wall Street bankers a 2016 issue — and it’s been great to see a race to the top with Clinton and Sanders making bold statements in favor of accountability for bankers who break the law,” Green said.
In a speech this month, Clinton called for the prosecution of individuals — not just firms — responsible for financial misdeeds.
Her campaign didn’t say, though, whether she’ll support the reinstitution of the Glass-Steagall Act, which many liberals see as key to preventing a repeat of the 2008 financial collapse.
Clinton did not mention the Depression Era law at all during her New York speech and on Thursday in South Carolina said economic issue are “much more complicated … than pointing to any one piece of legislation and saying well if we just pass that everything would be fine.”
“If you go back and look at what happened in the great recession, it was mortgage companies, it was insurance companies, it was non-commercial banking entities, who were as big if not bigger contributors to the collapse,” Clinton said. “So I am not interested in just saying there is one answer to the too-big-to-fail problem.”
Clinton kept the press at arms length on Friday. After she finished speaking, she worked the rope line and took selfies with supporters. Clinton’s advance staff deliberately kept the press their designated area, not wanting them to approach the presidential candidate.