In private, paid speeches to Wall Street elites, Hillary Clinton endorsed an austerity program and trade agenda that she has repudiated in her 2016 presidential campaign.
Clinton has refused to release transcripts of her speeches at Goldman Sachs, Morgan Stanley, General Electric and other corporate heavyweights that preceded her presidential run. The whistle-blower website WikiLeaks posted the newly disclosed excerpts, which BuzzFeed’s Ruby Cramer first reported. Hackers working for the Russian government are the ultimate source of the emails, according to the FBI.
In a paid speech to Morgan Stanley in April 2013, Clinton hailed the austerity platform proposed by former Sen. Alan Simpson (R-Wyo.) and Morgan Stanley director Erskine Bowles, the co-chairs of a debt reduction commission that President Barack Obama convened in 2010.
The plan, which had Obama’s blessing, would have significantly cut Social Security benefits while raising tax revenue by closing loopholes.
Simpson and Bowles “put forth the right framework,” Clinton told Morgan Stanley during remarks she was paid $225,000 to present. “Namely, we have to restrain spending, we have to have adequate revenues, and we have to incentivize growth. It’s a three-part formula.”
Cutting benefits to the elderly is never popular on the American left, and the Simpson-Bowles plan landed at a time when the economy was particularly weak. Tax increases and spending cuts would have made the recession worse. But the elite consensus at the time declared that the problem with the economy was the budget deficit, rather than the fact that most people didn’t have enough money in their pockets. Progressives reviled Simpson-Bowles, but the Beltway chattering class was enraptured by it.
During her primary battle with Sen. Bernie Sanders (I-Vt.), however, the former secretary of state reversed her position on austerity. She came out in support of expanding Social Security and has vowed never to cut it. Her official policy platform calls to significantly expand government spending on infrastructure, paid for with higher taxes on the rich.
The newly disclosed speech excerpts do not show a corrupt Clinton willing to say one thing to private donors and another to the public. Rather, they underscore her reputation as a creature of the American political center, whose ideas and beliefs float with the elite current.
Though the idea of austerity was popular in the aftermath of the financial crisis of 2008, today it is widely acknowledged that premature spending cuts ― particularly at the state and local level ― stunted the recovery from the Great Recession. Former Federal Reserve chairman Ben Bernanke, a Republican appointee, has made that point.
In a speech last week, Jason Furman, Chair of Obama’s White House Council of Economic Advisers repudiated the deficit hawk consensus that many prominent Democrats, including the president himself, had embraced during the president’s first term in office. The current thinking among elite economists is much more in line with what progressives at the time had been calling for ― expanded government spending to bolster a weak economy. Clinton’s current policy platform largely reflects that consensus.
Liberal elite support for free trade has also eroded of late, another pro-business position that divides the Democratic Party’s donors from its rank-and-file voters. And here too, Clinton’s public views have shifted from those she presented in private to bankers just a few years ago.
In a 2013 speech to the Brazilian bank Banco Itau, Clinton called for a radical expansion of the economic vision established by the North American Free Trade Agreement and other recent trade pacts.
“My dream is a hemispheric common market, with open trade and open borders, some time in the future with energy that is as green and sustainable as we can get it, powering growth and opportunity for every person in the hemisphere,” Clinton said.
The “open borders” reference is an endorsement of unfettered migration between different nations, akin to the system currently in place in the European Union. Clinton has taken many different positions on immigration during the past decade, and even the past year. She has at times called to deport child refugees from Latin America, and at others presented herself as a champion of the undocumented. Her official 2016 platform includes a path to American citizenship for those here without proper paperwork.
But Clinton’s shift on trade has been more directed. Though she helped negotiate Obama’s Trans-Pacific Partnership pact with 11 other Pacific nations ― including many in the Western Hemisphere ― she now rejects the plan.
And she isn’t alone. For the past three decades, the prevailing view inside the Beltway held that free trade was good for American and foreign workers alike. The devastation of U.S. manufacturing communities and the inconsistent benefits to workers abroad have caused many to reevaluate their prior support, however. Clinton confidante Anne Marie Slaughter, a former State Department official who now heads the centrist New America Foundation, expressed concerns in September about the globalization status quo. She suggested that the United States had been overly sanguine about the potential foreign policy problems posed by expanding trade with rogue regimes. Prominent financial columnist Martin Wolf was even more explicit about his rethinking, suggesting that current free trade order has bolstered profits for corporate elites at the expense of democracy itself.