SOMETIMES relief makes triumph all the sweeter. That is how Hillary Clinton must feel after this week’s Democratic primary in New York, when she broke a losing streak by beating Bernie Sanders handily. She is now almost certain to be her party’s presidential candidate in November. After a 50-year slog through American politics, even the cautious Mrs Clinton was emboldened to declare that “Victory is in sight!”
Mrs Clinton is experienced. In an age of extremes she has remained resolutely centrist. Yet, rather than thrilling to the promise of taking the White House or of electing America’s first woman president, many Democrats seem joyless.
And America as a whole is seething with discontent. It may dodge putting a populist, an ideological extremist or a socialist in the White House in 2017. But, if voters’ anger remains unabated, it will not do so for much longer. Mrs Clinton needs a bold plan to counter this popular frustration. Alas, judging by her economic policies so far, she is more inclined to tinker.
The not-a-fan belt
To gauge Mrs Clinton’s programme, start with the Clintonomics that her husband pursued in the mid-1990s. Broadly, it got the big things right by transforming a tax-and-spend party into one that took deficits seriously. Under Bill Clinton, the Democrats made peace with Wall Street and free trade, and agreed to ambitious welfare reform. Thanks to these sensible policies, and the fortuitous tailwind of higher productivity growth, the economy boomed and prosperity was shared.
America today is more divided; its economy is weaker and beset by problems. Since 2000 most workers’ incomes have stagnated, even as those of the richest have soared. Scarred by the financial crisis, battered by technological change and globalisation, less-skilled workers have fared worst. Many have left the labour force (54% of over-25s with only a high-school education are in work, down from 63% in 2000). An opioid epidemic is lowering their life expectancy.
The Democratic Party looks different, too. Mr Sanders, victor of seven of the past nine primaries, thinks the Wall Street banks are criminal and suggests that the only solution to America’s ills would be to start a revolution. Many younger voters seem to agree with him.
Faced with all this, what are Mrs Clinton’s ideas? A lesser candidate would have veered to the left. Yet, even as Mr Sanders has proposed a top rate of tax of almost 70% and wants to scrap the trade pact with Canada and Mexico, Mrs Clinton has largely stood her ground. When she sets out to create “strong growth, fair growth, and long-term growth”, her rhetoric is hard to fault. In her plans to make college more affordable, grant paid leave to parents, introduce a $12 federal minimum wage and increase infrastructure spending, she has the rudiments of an agenda that does not stray too far to the left (see article).
But next to the ills they are supposed to correct, Mrs Clinton’s solutions too often seem feeble. A typical Clinton speech on the economy contains some reflections on the tornadoes of globalisation and automation that have torn up opportunities for less-skilled workers, then culminates in a proposal to introduce a minuscule, two-year tax credit for companies to encourage profit-sharing schemes. This risks repeating the worst parts of 1990s Clintonomics, which added a slew of micro-measures to America’s over-complicated and inefficient tax code.
Sometimes, her policies are fiddly. Rightly fearing that some Wall Street banks are too big to fail, Mrs Clinton wants an extra tax on their debt. Making sure banks hold enough capital and scaling back the tax-deductibility of interest on all firms’ debt would do the job better and be simpler. Her plans for personal income tax, which would take the top federal rate to around 45%, are equally complex, as is a proposed change to tax on the capital gains of long- and short-term investors, which looks like a solution to a non-existent problem.
America's primary agenda: our interactive 2016 election calendar
Worst of all, Mrs Clinton sometimes ignores her own diagnosis. She accepts that the main reason many American workers have seen living standards fall since the 1990s is technology and, to a lesser extent, trade with China. But she goes on to advocate policies that focus on punishing cruel bosses for screwing their workers. And, rather than rethink how to help those who lose from trade, she wants to abandon beneficial new trade deals, such as the Trans-Pacific Partnership.
Mrs Clinton can be bold when she chooses. She has proposed reforms to criminal justice that would lead to fewer non-violent offenders ending up in jail. This has attracted criticism, because it underlines how, in the 1990s, she backed her husband’s hardline views on crime. In fact, she should be willing to overturn applecarts more often.
Don’t monkey-wrench around
A bigger plan to help American workers would start by boosting competition, both by slashing unnecessary regulations for small businesses and by ensuring that big firms no longer operate in protected markets. Losers from globalisation and technological change need more ambitious support, from wage insurance to retraining and help to relocate for work. A big expansion of the earned-income tax credit—a kind of negative income tax—would be a start. More generally, Mrs Clinton should aim for a tax system that is efficient as well as progressive by stripping out deductions, including popular ones like mortgage-interest relief.
To be clear, we are holding Mrs Clinton to a higher standard than other candidates. She has released more detailed plans than anyone else and made more effort to make the sums behind them add up. But she needs a compelling pitch because, if Americans concluded that the only way to bring radical change was to elect a Trump, Cruz or Sanders, it would represent a disastrous failure of the political centre. We are also asking her to be ambitious just when Washington has been plagued by gridlock and obstruction for its own sake. Yet the mess the Republican Party has got itself into may present Mrs Clinton with a chance to reshape the nation. What a shame if her ideas were too small to seize it.