Income inequality is clearly going to be the key economic rallying issue of the 2016 presidential campaign. If you have any doubt, consider that both Hillary Clinton and Marco Rubio, who declared their candidacies over the last week, are already speaking out about their positions on the issue. Clinton billed herself as the candidate for the “everyday Americans,” criticizing CEOs’ swollen salaries. She also tweeted: “Every American deserves a fair shot at success. Fast food & child care workers shouldn’t have to march in the streets for living wages.” Meanwhile, Rubio told NPR he wants the Republican Party—which, he said, is portrayed unfairly as “a party that doesn’t care about people who are trying to make it”—to transform into “the champion of the working class.”
So will the rhetoric turn into real policy? Certainly, the pressure will be on Clinton to declare her position on minimum wage—she’s said she wants to have “a conversation” about the topic, but when so many states have already passed hikes, it will be hard for her to argue that there shouldn’t be a higher federal minimum wage. But as I’ve written before, that doesn’t solve the inequality problem. Clinton has said it’s unfair when “CEO are making 300 times the salary of their average workers,” but there’s an uncomfortable truth there, which is that many of the compensation and tax policies that allow those types of salaries were structured by economic advisers from her husband Bill Clinton’s administration—people like Robert Rubin and Larry Summers. Is she taking her own economic marching directions from that camp? Or will she go more toward the left-leaning economic ideas that people like Massachusetts Senator Elizabeth Warren have been pushing for.
Hiring former CFTC chair Gary Gensler as financial head of her campaign is a smart move: He’s the only regulator who’s ever been seriously tough on Wall Street. But I’m betting Clinton will remain a centrist Democrat on the economy, and as Politico reported, her Wall Street backers aren’t too worried.
As for Rubio, whatever he might say about helping the working class, when it comes to real policy, he appears to be mouthing the same old Republican “tax cut, balanced budget” line. I really think the Right is going to have to come up with something beyond trickle-down economic logic, which most of the population now realizes is broken, in order to justify the fact that American wages have been stagnant since 2000, no matter which party was in charge, in the face of many a tax cut. How about some trickle-up ideas, guys?
For more on the economic positions of both candidates and how they might play out in 2016, listen to me discuss the topic with the FT’s Cardiff Garcia, and Bloomberg’s Joe Weisenthal on this week’s WNYC Money Talking.