NEW YORK – Hillary Clinton wants you to know that she loves small businesses, and that she knows what’s best for them. She’s convinced that she could do a better job of running companies than their owners can.
“I will produce ways to encourage companies to share profits with their employees,” she said in a speech she gave on the economy today. “That is good for workers and good for businesses. Studies show that profit sharing that gives everyone a stake in the company’s success can boost productivity and put money directly into employees’ pockets. It’s a win-win.”
No doubt profit-sharing can have this effect. But Clinton would have us believe that businesses are leaving money on the table, unable to see a profit opportunity or unwilling to take it, and are thus in need of a shove by the federal government, which knows their interests better than they do. Believe that if you will.
Clinton also says that businesses in the U.S. are too concerned with the short term, and that she’ll encourage them to change. Is it plausible, though, that politicians looking to the next election will be a force for farsightedness? Perhaps Clinton should explain how she would get Social Security in balance before lecturing others about the long run. In her speech, she says she’s interested in “defending and enhancing” the program, which sounds like more fun than paying for it.
Nor is it just businesses that Clinton wants to second-guess. She believes that more women should be in the paid labor force, and she wants to get them there by offering more subsidized child-care options. Never mind that most mothers of small children don’t want to work full-time or use day-care centers. And never mind that more of them have full-time positions than actually want them.
Clinton is also convinced that her immigration agenda would work wonders on the economy. “Bringing millions of hard-working people into the formal economy would increase our gross domestic product by an estimated $700 billion over 10 years,” she says. Casual listeners would conclude that most Americans will be better off as a result — after all, Clinton earlier remarked that her concern is with “people’s lives and livelihoods,” not the GDP in itself.
But this comment, too, was misleading. The source for that $700 billion figure is a Congressional Budget Office report. The report wasn’t looking merely at the effects of giving legal status to illegal immigrants, as you might think from Clinton’s description; it was looking at the effects of a bill that included a sizable increase in legal immigration. Bringing in more people increases GDP, of course. But the report found that after a decade, per capita GDP would be 0.7 percent lower with the bill than without it. It offered no estimate about whether native-born Americans and immigrants already in the U.S. would see an increase or decrease in their income and wealth.
It would be unfair to say that all of this hype is in the service of personal ambition. Clinton’s ambitions are ideological as well. She could run against President George W. Bush’s record alone; instead she wants to take on Ronald Reagan, too. Our economy, she says, has taken a wrong turn over “the past several decades,” and it all started 35 years ago.
That’s not an especially persuasive narrative: Most Americans saw their incomes grow pretty smartly for the two decades following Reagan’s election. Like President Barack Obama before her, though, Clinton would like to undo the Reagan revolution. Lucky for those of us who don’t share the left’s historical vendettas, a new President Clinton would have a Republican House and probably Senate to keep these ambitions in check. Lucky for the nation’s small-business owners, too.
Ramesh Ponnuru is a Bloomberg View columnist.