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This is our best look at Hillary Clinton's economic agenda

Hillary Rodham Clinton speaks onstage at the RFK Ripple Of Hope Gala.
Hillary Rodham Clinton speaks onstage at the RFK Ripple Of Hope Gala.
Mike Coppola/Getty Images

Hillary Clinton has not yet released much in the way of specific policy ideas as an element of her 2016 presidential campaign. Given the relatively weak opposition to her in the primary, she'll probably continue on that trajectory — rolling out ideas slowly and likely staying on the vaguer side of things. But if you're interested in the thinking that animates her likely approach to governing, your best guide is to look at a summary statement released earlier this year by top wonks with close ties to the Clinton operation.

A 160-page white paper from a think tank titled "Report of the Commission on Inclusive Prosperity" is not exactly designed to set the world ablaze. But the timing and circumstance of its authorship in January make it the best guide to what Hillarynomics is likely to look like.

In some ways, it defies stereotypes of the Clintons as standard-bearers for neoliberal centrism by endorsing fiscal stimulus and a strong pro-labor union agenda while downplaying the strong education-reform streak of the Obama administration. But it's also notable for the Obama-era liberal ambitions it pushes aside. In the main recommendations for the United States, there's no cap-and-trade or carbon tax in here, no public option for health care, and no effort to break up or shrink the largest banks. Nor is there an ambitious agenda to tackle poverty.

Instead, you get a multi-pronged push to boost middle-class incomes. After an extended period in which Democratic Party politics has been dominated by health care for the poor, environmental regulation, and internecine fights about Wall Street, Hillarynomics looks like back-to-basics middle-class populism. It should in many ways further infuriate Clinton's left-wing intellectual critics — and then further infuriate them by turning out to be an agenda that makes the party's voting base perfectly happy.

Why the Commission on Inclusive Prosperity matters

Ed Balls (WPA/Getty)

White papers are released in Washington all the time. But this one came out under the aegis of the Center for American Progress (where, full disclosure, I once worked), a think tank that has a unique relationship to Hillaryland. Its founder, John Podesta, has already been announced as the chair of her not-yet-extant campaign. Its president, Neera Tanden, was policy director of Clinton's previous presidential campaign.

One of the co-chairs of the Commission is Lawrence Summers. Summers ran the Treasury Department at the end of the Clinton administration, and ran the National Economic Council at the beginning of the Obama administration; only liberal opposition stopped him from chairing the Federal Reserve. He is, in other words, Democrats' go-to guy for economic policy. The other co-chair is even more telling — Ed Balls, who led the UK Labour Party's economic policy team until the most recent election.

The central challenge of Hillarynomics

(Center for American Progress)

The chart above exemplifies the report's framing of the central economic challenge of the era. Across a variety of wealthy countries, incomes for the bottom 90 percent of the population have not kept up with productivity or per capita GDP growth. But there is also considerable variation. The experiences of Canada, Australia, and Sweden show that there is nothing inevitable about income stagnation.

The list of proposed solutions for the US is long, ranging from more infrastructure spending (with new measures to improve project management on federal infrastructure deals), more preschool, closing corporate tax and inheritance tax loopholes, curbing the deductibility of executive pay, a tax cut for middle class workers, more FHA subsidies for riskier loans, and a reiteration of the merits of comprehensive immigration reform.

But the report is especially striking for its endorsement of labor market regulations not normally associated with the Summers wing of Democratic thinking. As David Leonhardt put it, "one theme is that the countries where the middle class has fared better are countries where workers have more power." The document endorses a variety of regulatory changes that would make union organizing easier, and calls for the creation of German-style works councils outside the context of traditional union organizing. It also endorses more favorable tax treatment for worker-owned firms, and proposing "estate tax relief" for corporate founders who convert their companies to worker-owned enterprises when they retire or die.

On the non-wage front, inclusive growth calls for paid (gender-neutral) parental leave, expanded Family and Medical Leave Act eligibility, and universal paid sick days and paid vacation days — all loosely under the banner of increasing women's labor force participation. Clinton has, in the past, field-tested feminist frames as a means of selling big government.

Put it all together, and you see the sketch of a Clinton economic agenda. It has a lot to offer Americans who are employed and not impoverished, but nonetheless struggling with stagnant incomes and a sense of pervasive economic insecurity. Yet many thinkers on the left will find a great deal missing.

On the cutting room floor

Now much about crushing banks (Win McNamee/Getty)

What Hillarynomics does not include is anything like an Elizabeth Warren-style effort to dethrone giant banks from the commanding heights of the American economic system. The authors suggest that the practice of settling bank misconduct claims without an admission of guilt should be "severely curtailed," and offers support for requiring banks to borrow less. But there's no talk of breaking up or shrinking the biggest banks, and no support for the Financial Transaction Tax that House Democrats are lining up behind. Nor is there much of an anti-poverty agenda here — low-income Americans would be helped by some of these proposals, but they are very much not front and center.

Conversely, though the report speaks at length about the value of education, it does so primarily in the frame of liberal-friendly proposals for subsidizing preschool and college. The Obama administration's focus on improving K-12 teacher quality, through moves that are often hostile to the interests of teachers' unions, is nowhere to be found.

Two important leftover items from the Obama-era progressive agenda — charging fees for carbon dioxide emissions and adding a "public option" to the Affordable Care Act — are absent. Both the introduction and the body text note the value of carbon pricing as an environmental sustainability measure, but the official policy recommendations for the US doesn't count on raising any revenue in this way. One could simply plead political realism on these points. But there's frankly no indication that Congress is poised to enact a paid parental leave bill, or a sweeping array of changes to the union organizing process, either. The practical realities of the modern Congress and the contemporary House map mean that almost anything liberals get done for the foreseeable future will have to come through executive action.

You can't get there from here

Clinton is going to have major difficulty engaging her supporters on an emotional level over economic issues. This is in some respects an exciting plan, but lacks a realistic path for enacting it. So who is actually going to feel excited about it?

The Hillarynomics blueprint offers none of the Obama administration's recent emphasis on creative uses of executive power. The text hews very much to a path of policy literalism, and offers no real political theory about how to achieve any of this. Some of that is a matter of focus, but some follows naturally from the heavy emphasis on labor market policy and the de-emphasis on financial and environmental regulation. The core of the agenda is a laser focus on middle-class income, a subject that simply doesn't seem amenable to redress through executive unilateralism.

Figuring out how to craft an economic message that's largely built out of politically unrealistic proposals is outside the scope of this commission's work. But it's a big, difficult question the Clinton camp is going to have to address. Clinton is already more accepted than loved by liberal activists, and there's nothing in this economic plan to change this. So while a crowded Republican primary field gets ready to entertain America and deliver a winner who manages to find a way to stand out from the pack, Clinton is counting more on her iconic status than her agenda to power her forward.

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