Election 2016

Michigan Voters Roundly Rejected Hillary's Wall St-Friendly Agenda

Hillary is trapped until she shifts positions.

Photo Credit: Joseph Sohm/Shutterstock

Hillary lost Michigan because she truly believes Wall Street, trade and runaway inequality are separate, single issues. She really has no choice. If she admitted the connections, her entire neo-liberal Wall Street-friendly edifice comes crumbling down. 

She's trapped. Bernie's job is to keep her there as she tries to change the subject to gun control or breaking all barriers.

In Michigan, she proudly put forth her economic plan to use public funds and policies to promote private sector gain. Michigan voters heard her call for tax incentives to urge large and small corporations to create more jobs in the U.S. Tax breaks to encourage corporations to provide more training and profit sharing plans. And tax breaks to promote long-term investment instead of short-term gains. 

Michigan voters rejected her most fundamental request of corporate America: if you do right to the American people, we'll do right by you. 

Michigan has heard all that before. They heard it when the Clintons championed NAFTA. They heard it when Wall Street got bailed out. They hear it every day when they are asked to provide tax breaks to keep companies from fleeing to low-wage areas. Enough already.

Hillary Sends a Signal to Wall Street and Michigan Voters heard it

She often critiques Bernie's broadsides against Wall Street by saying, “I’m not interested in condemning whole categories of businesses or the entire private sector.” But Michigan is hungry for someone who finally is willing to take on financial elites as a whole. In fact, there are very few in America besides Team Hillary who will come to the defense of Wall Street

Her dogwhistle was further amplified by her inability to face up to the trade policies she and her husband, along with the rest of the neoliberal Democrats including Obama, have championed for decades. Instead she thinks that she can get cover by placing the blame on China. 

It was laughable to watch Hillary try to duck away from NAFTA by saying all such debates are ancient history. It's unproductive, she claims, to be "refighting battles from 20 years ago."  

But Michigan workers are still being wounded in those battles as NAFTA continues to destroy jobs and incomes as they are placed in direct competition with low-wage workers in Latin America.

Blind to Wall Street's Financial Strip-mining

Hillary just doesn't have the will to attack Wall Street. She really doesn't believe the entire sector is financially stripmining the rest of us. But millions of Michigan voters and homeowners know better.

It shows up clearly when she pretends she will crack the whip on Wall Street excesses. But her whip is just another tax break. She wants to reward corporations and investors with tax incentives to encourage long-term investment, worker training and profit sharing with employees.

But she runs away from two big proposals that really could make a difference. She doesn't want to ban stock buybacks. And heaven forbid, she won't go near a financial speculation tax.

It is relatively easy for a president to stop stock buybacks. All it takes is a rule change at the SEC. Until 1982, it was considered stock manipulation for a company to boost its price by buying back its own shares en mass. Reagan's SEC appointee legalized it.

But making stock buybacks illegal again would be fiercely opposed by the very Wall Street executives and CEOs who are filling her campaign coffers. In fact, the system of runaway inequality is built upon those buybacks. Today, the goal of virtually every large corporation is to use all of its cash flow to buy back its own shares to enrich its CEOs and largest Wall Street investors.

The corruption of Stock Buybacks at GM

While Hillary was bobbing and weaving around trade and Wall Street, she had to ignore the rip-off of GM now underway. It's being led by ex-Obama official and all things Obama are beyond criticism.

Here's the story that is likely to put GM in real trouble once again. Harry J. Wilson, the Obama administrator who helped to negotiate the GM bailout, then left for a hedge fund job. The 43-year-old Wilson and his investors proceeded to buy up 34 million GM shares. Why not? By then he was a GM expert, trained at taxpayer expense.

He then demanded that GM use its cash reserves to buy back its own shares to make him and his investors tens of millions of dollars....for doing nothing at all.

The American people bailed out GM to save hundreds of thousands of jobs throughout the Midwest. Many of us hoped that once GM returned to financial health, it would use its reserves to build the most environmentally sound cars in the world, thereby helping retain U.S. jobs and helping our planet survive.

Instead, Wilson pressures GM to use its precious cash reserves to buy back its own shares in order to put money into his deep pockets and the pockets of his investors. Increase GM wages? Increase training? Increase R&D. No way.

His wish was GM's command. On January 13, GM announced a $5 billion stock buyback plan. 

Hillary couldn't talk about any of this. If she did, she would be forced to admit that her fairytale version of capitalism will never work as long as Wall Street dominates the economy.

Carefully Ignoring Public Sector Jobs

Hillary even ran into trouble with black voters. And that makes sense because Team Hillary's populist sounding plan is in harmony with the most pernicious neo-liberal principle; that the private sector, by definition, is more valuable than the public sector, and that all must be done to encourage private sector jobs while limiting public sector jobs.

Hillary makes no mention at all of the decades-old attack on public sector jobs and benefits. Not a word about the privatization that is wrecking Michigan's public sector. Not a word about the need for increases in public sector jobs to bring safe water to the people of Flint. Instead she blames the Republicans.

She discusses how to revitalize communities of color left behind, but her only way of doing so is through private sector investment. But the public sector is the best path toward the middle-class for low-income Americans, especially African Americans. She can't bring decent jobs and incomes to low-income communities without an expansion of the public sector.

Why not call for more public jobs for distressed cities? Because Wall Street and the super-rich would have to pay for those jobs. To have a robust public sector that would get the lead out of inner-city pipes, fix up dilapidated schools, increase the number of teachers, and provide free higher education for all requires the expansion of the public sector. To maintain a decent society requires an increase in public goods and the hiring of more public workers.

But doing so leads us directly to a financial speculation tax on Wall Street, as well as the end of offshore tax havens for the super-rich, neither of which are mentioned in her economic plan.

When you spend your life inside the Wall Street orbit, when you take their money for speeches and super PACs, when you believe the neoliberal lie that what's good for them is good for us, you're in trouble with the American people.

Voters are finally rejecting the neoliberal hoax. They're going right to Trump and left to Bernie as they clamor for an end to runaway inequality. Let's hope Bernie blocks Hillary's path before Trump does.

Les Leopold, the director of the Labor Institute, is currently working with unions and community organizations to build the educational infrastructure for a new anti-Wall Street movement. His new book Runaway Inequality: An Activist’s Guide to Economic Justice serves as a text for this campaign. All proceeds go to support these educational efforts.

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