Editor's note: This story was originally published in January. With Election Day almost here, it's worth taking another look at what the U.S. economy may look like under a President Clinton. Also, check out our Hillary Clinton Stock Portfolio, which we'll be tracking until November 8. The introduction and sections below on Wall Street regulation, taxes and corporations have been updated.
When it comes to matters of Wall Street regulation, taxes, trade and boosting wages, what would Hillary Clinton do?
Would she mirror her husband Bill, who embraced former Goldman Sachs executive Robert Rubin's vision to repeal the Glass-Steagall Act, deregulate the telecom industry and sign the Commodity Futures Modernization Act, which exempted credit-default swaps from government oversight?
Or would she follow in the footsteps of President Barack Obama, who signed the Affordable Care Act, the Dodd-Frank Wall Street Reform Act and created the Consumer Financial Protection Bureau on the way to raising taxes on the country's highest earners for the first time since the late-1990s?
Clinton's detractors warn that she'll cave in to the same bankers who hosted her lucrative speeches before their members. The former secretary of state's unwillingness to make those speeches public bolstered Vermont Sen. Bernie Sanders' presidential campaign during primary season, giving ample fodder to a movement that has won sizable support for efforts to reshape the country's banking system.
The former New York senator has sought to deflect warnings that she is loathe to upset Wall Street by touting her support for Dodd-Frank and measures such as strengthening the Volcker Rule, which imposes a "risk fee" on banks that make speculative bets with funds from their own accounts. She's also said she would seek to pass the "Buffett Rule," which would close tax loopholes by establishing a higher minimum rate for those in the highest income bracket.
Clinton appears to want to appeal to middle-class voters with retirement savings accounts as well as consumer advocates who warn that the Democratic Party has a history of Wall Street appeasement that rivals that of the Republicans.
"If she is thinking about a policy issue, she's going to want to hear from the business side, the consumer side, the labor side, and in that regard, her positions may not be starkly black-and-white," said Tracy Sefl, a Democratic strategist and former Clinton campaign staffer. "She likes to bring together multiple voices."
Here's how Clinton plans to deal with the overarching issues affecting the country's economy -- and what effects her actions will have (assuming she's able to push her agenda through Congress):
Wall Street Regulation
During the primaries, Sanders was relentless in calling for the breakup of the country's largest banks. Clinton, on the other hand, has taken a more nuanced approach. While Sanders has said he'd reinstate Glass-Steagall within his first year in office, Clinton has countered that more must be done to regulate hedge funds and other entities within the so-called "shadow banking" system.
Since clinching her party's nomination, Clinton's focus has turned away from the Democratic primary and is now on Donald Trump and the Republicans. It's a change of course that will allow Clinton to emphasize that while she wants to expand Dodd-Frank, Trump and the rest of the Republican field wants to repeal it.
Coming just seven years after unemployment spiked to 17% in the wake of the 2008 financial crisis, Clinton clearly wants to run on a platform of tougher Wall Street enforcement. And for good reason. Some 67% of the U.S. populace wants a president who favors stricter regulation of financial institutions, according to a Washington Post-ABC News poll conducted in October 2015. Even Republicans to the tune of 58% said they want a candidate willing to toughen Wall Street oversight.
"It's no surprise that people who were hurt by the crisis want to be protected from Wall Street," Dennis Kelleher, president of Better Markets, a non-profit organization that lobbies for strict enforcement of Dodd-Frank, said in a phone interview from Washington. "Given the hostility of the American people toward financial institutions, no one can get elected, saying they're going to side with Wall Street."
And that puts Clinton in a tight position. Her opponents have on numerous occasions called for Clinton to make public the transcripts of her paid speeches to many of the country's largest financial institutions. The New York Times editorial board in February wrote Clinton should "show voters those transcripts," and GOP operatives are reportedly searching high and low for indications of what she might have said. Clinton has said she will release the transcripts if and when everyone else in the race follows suit on all of their speeches, but suspicions are high that Clinton doesn't want those speeches made public for fear they would reveal a politician eager to please bankers.
For her part, Clinton has steadfastly insisted that being paid hundreds of thousands of dollars to speak to financial firms doesn't preclude her from supporting Dodd-Frank or the Consumer Protection Act, the cornerstone of Obama's financial reforms. In a Feb. 11 debate with Sanders, Clinton said she would seek to re-insert regulations that Republicans took out of the bill in exchange for passage.
First and foremost was a bank tax to help pay to implement the law. Second was the so-called Volcker Rule, aimed at discouraging banks from making risky investments.
"This would be a sensible, moderate way to address banks taking risks," Jeffrey Frankel, macro-economics professor at Harvard's Kennedy School of Government, said in a phone interview from Cambridge, Mass. "Republicans have consistently tried to limit funding on the enforcement agencies, both the Consumer Protection Bureau and existing ones. These are steps to raise a little money for enforcement and tax the riskier activities of the big banks."
Clinton has also proposed levying a "graduated risk fee every year on the liabilities of banks with more than $50 billion in assets, and other financial institutions that are designed by regulators for enhanced oversight." Those fees, Clinton says, would be scaled "higher for firms with greater amounts of debt and riskier, short-term forms of debt." Clinton likens it to a deterrent, a rainy day fund.