Let’s face it: July has been a bad news month. It’s also about to get worse, as two historically unpopular candidates become the official presidential nominees for their respective parties.
It does not really matter whether you think Clinton is the worst case scenario and Trump is the second worst, or vice versa. Most Americans aren’t excited about either candidate, and after July, it will be all but certain that one of them occupy the White House come 2017.
This is cause for concern, of course. But the downside is not nearly as great as many believe. I can’t remember the last election that didn’t occur at a “historic” and “pivotal” moment in the nation’s history. And yet, here we are. America survived the foreign and domestic interventions of George W. Bush, and it survived the foreign and domestic interventions of Barack Obama. It will survive Trump or Clinton too. And there’s good reason to believe our politics will emerge in much better shape in four years. This is the case for political optimism.
The Upside of Hillary Clinton
From a libertarian perspective, there’s not much to like about Hillary Clinton. Her particular form of centrism is opposed to libertarian principles on nearly every count–drugs (mostly pro-prohibition), war (for it), minimum wage (screw poor people), and so on. Thus, the upside to Hillary lies primarily not in what she will try to do, but in what she will fail to do.
Before getting there, though, it’s worth noting there is one area where the winds of political pragmatism may call Clinton to do something helpful intentionally. As we discussed yesterday, Campaign Zero has proposed a slate of generally useful reforms for stopping police brutality. They have also compared the candidates’ policy proposals to their core recommendations to identify areas of common ground / obstruction. Clinton comes out favorably on this score. Granted, she supports items that, in our view, are the most watered down and among the least important reforms. And of course, all she’s doing is undoing some of the harm caused by the 1994 crime bill that was signed in to law (with her help) by her husband. (Don’t worry, the harm was only directed at child “super predators”, whom she also likened to dogs.) But with all that said, there’s a chance some good will come of it. And given that the police brutality is liable to get worse before it gets better, she may consider more drastic (and hopefully helpful) reforms if and when she actually is president.
That good news aside, it must be acknowledged that Hillary Clinton is an unmitigated disaster on foreign policy. This doesn’t make her all that unique, but she’s far worse than most of her party in this area. In essence, she’s bad on the same things that President Obama is bad on. She just takes them to new extremes and throws in a few extras for good measure. Some choice examples:
- Vehemently advocated for the disastrous overthrow of Libya
- Called for a no-fly zone over Syria (which also implies regime change)
- Is determined to strengthen US relations with Israel’s belligerent prime minister
- Called for new sanctions on Iran immediately after the first sanctions were lifted
- Voted for the Iraq War
While there’s a chance of positive political effect from foreign policy, the biggest upside to a Clinton Presidency lies in the sphere of economics.
As we have noted previously, the US and global economies are ripe for their next collapse. There are many different indicators that would lead us to believe the current expansion is coming to a close, and there’s good reason to believe that the next collapse will be even worse than 2008-2009. Moreover, even if you don’t buy these ideas, there’s also just the simple matter of time. The current expansionary period, as judged by the stock market, is the second longest on record in the post-World War II period. If it were to survive through the next presidential term, it would be the longest expansion of the era by nearly two years. Given the numerous signs of cracking already, this is unlikely to happen. It’s a safe bet that the US economy will undergo some kind of recession under the next president.
This won’t actually be Clinton’s fault–most of the blame ought to lie with the Federal Reserve. Nevertheless, Clinton, and possibly President Obama, will receive most of the blame for it.
This may not be fair, but it will have great ramifications for US political discourse. It will finally put to bed the claim that Democrats know how to “manage the economy” better than Republicans. The point here is not that the Republicans are better; it’s that the very idea of either party knowing how to manage the economy is absurd.
Even if the general public fails to grasp this particular point, many other things will still become clear. Most importantly, the next recession is likely to come with at least a few bank failures. From an educational perspective, this will be very useful. When banking failures or economic issues arise under a period of Republican control, the blame is always placed on the excesses greed and capitalism. But when it occurs under a prolonged period of Democratic control, this will be a difficult pivot to make. After all, some Democrats (and the Fed) have claimed that we have implemented the essential regulations needed to keep capitalism, and especially the financial sector, stable and secure. If some of these firms fail in spite of such useful regulation, only a few conclusions are possible:
- The market still wasn’t regulated enough–which would be awkward since Dodd-Frank was hailed as such a major accomplishment,
- Maybe regulation isn’t the solution after all, and/or
- Maybe, as libertarians have argued all this time, government regulations and interventions are actually the source of our economic problems, not the solution.
Clinton’s response to the economic crisis will be bullish for option #3.
After all, economist Paul Krugman is angling to be her chief economic adviser, and his remedy in the crisis will be more of the usual Keynesian stimulus prescription. An authoritarian Clinton may even take things further. Borrowing inspiration from the Democratic legend of FDR, she may make more detailed interventions in the economy–raising wages, implementing price controls, etc. None of the proposals will prove helpful, and most will actively make matters worse, just as they did during the Great Depression under Hoover and FDR.
In other words, a Clinton Presidency will offer the kind of natural economic experiment that economists are usually denied. She is not an avowed socialist like Bernie Sanders, and in some ways, that’s actually better. Domestically, she is the opposite of radical. She is the embodiment of centrist conventional wisdom, so she will pursue the orthodox solutions. When they fail–and they will–it will create an unprecedented opportunity.
Twelve continuous years of Democratic rule means that when the next crisis hits, for once, the free market might not be blamed for the follies of government.
America faces many difficult problems right now and many of them will come to a head in the next four years, regardless of who gets elected. But while the short-term outlook looks bleak, there are real reasons to be excited about the state of US politics on the other side. It may be angrier and more jaded than ever, but it will also be smarter. That is worth looking forward to.
Also, look for our post tomorrow when we discuss the unlikely upside of Donald Trump.