Since it’s very likely that Hillary Clinton will be our next President, I’m mentally preparing myself for upcoming fights over her agenda of bigger government and class warfare. But the silver lining to this dark cloud is that I don’t think I’ll be distracted by also having to fight against protectionist policies.
My tiny bit of optimism is based on the fact that hackers at Wikileaks got access to the secret speeches she gave to Wall Street and other corporate bigwigs and we learned that, when she can speak freely with no cameras and outside observers, she believes in “open trade.”
In other words, I was right when I said on TV that she was lying about being in favor of protectionism.
Since I don’t think bureaucrats and politicians should have the power to interfere with our buying decisions, I’m glad Hillary is a secret supporter of free trade.
That’s the good news.
The bad news is that she also is a genuine and sincere supporter of the perpetual motion machine of Keynesian economics (i.e., the theory that more government spending is a form of “stimulus” notwithstanding all the evidence of failure from the spending binges of Obama, Hoover and Roosevelt, and Japan).
Here’s what the Daily Caller is reporting about one of her secret speeches to a corporate audience.
Hillary Clinton argued that expanding food stamps and other safety net programs is essential to fuel economic growth at a speech to General Electric executives, according to an excerpt of the transcript made public by WikiLeaks Friday. “Economic growth will take off when people in the middle feel more secure again and start spending again,” Clinton said in her speech at General Electric’s Global Leadership Meeting in January, 2014. …Giving people income assistance, like the food stamps program, would help the economy because families on food stamps will have more money to spend, Clinton argued.
Wow, this is depressing. If this was an off-the-record speech to the Democratic National Committee, a George Soros group, or some other left-leaning outfit, I’d be tempted to dismiss her remarks as rhetoric.
But GE executives presumably aren’t big fans of income redistribution (other than to themselves, of course). So Hillary’s comments were not a form of pandering. She presumably really believes that Keynesian economics is some sort of elixir, that you actually can boost economic performance by taking money out of the economy’s right pocket and putting it in the economy’s left pocket.
Not only is this wrong, it’s backwards.
- When the crowd in Washington spends money, much of it is lost to bureaucracy and waste. This may not matter to Keynesians since they just want there to be spending (no joke, Keynes actually did write that it would be good policy to bury money in the ground so that people would get paid to dig it out). Sensible people, by contrast, understand that it matters for the economy whether money is spent wisely.
- Moreover, redistribution spending tends to be especially harmful since it subsidizes people for not working or for having low levels of income, which is why research has shown that policies such as Obamacare, jobless benefits, and food stamps are associated with lower levels of employment. In other words, redistribution is bad for economic performance.
The bottom line is that we shouldn’t expect any sort of economic renaissance if Hillary is our next president. Just another four years of the kind of anemic performance we’ve experienced under Obama.
P.S. Click here to learn more about the failure of Keynesian economics.
P.S. If you want both substance and entertainment, here’s the famous video showing the Keynes v. Hayek rap contest, followed by the equally entertaining sequel, which features a boxing match between Keynes and Hayek. And even though it’s not the right time of year, here’s the satirical commercial for Keynesian Christmas carols.