Hillary's Economic Plan: All Hat, No Cattle

Hillary Clinton's web page says, "The middle class needs a raise. Here's how Hillary Clinton plans to do it."  The page is long on promises and short on tangible plans, which underscores her complete lack of substance when it comes to real issues.

1. Cut middle-class taxes. Hillary is proposing middle-class tax breaks to help families cope with the rising cost of everyday expenses, like child care and education- and she's announced new tax credits to help families caring for an ill or aging family member. She'll pay for them by raising taxes on the wealthiest Americans and closing loopholes in our tax code.

This is the only item that has even a hint of substance.  Donald Trump has also recommended the elimination of tax loopholes: "Reducing or eliminating most deductions and loopholes available to the very rich."  Trump's tax plan contains far more specific detail than Clinton's.

2. Make college affordable. We can lift American incomes by making quality education attainable for everyone. Under Hillary's college plan, students won't have to take out loans for tuition or books at in-state public colleges and universities, and Americans with student loan debt will be able to refinance their loans at a lower rate.

I recall a line from an old Gilligan's Island episode in which Gilligan campaigns to become the dictator of a banana republic and runs on the platform, "I promise you this, that, and the other thing."  This is simply more of the same, but directed at the American people rather than characters in a fictional comedy show.

3. Raise the minimum wage. At $7.25 per hour, the federal minimum wage isn't nearly enough to make ends meet. Americans who work 40 hours per week at the minimum wage earn just $15,080 a year—below the poverty threshold for a family of two or more. That's why Hillary wants to raise the federal minimum wage to $12 an hour—and why she supports city and state efforts to raise their own minimum wage even higher.

Seven dollars and a quarter is a totally inadequate wage in a modern industrialized society, and even $12 an hour is not impressive, but the problem with Hillary's empty promise is that a job cannot pay more in wages than it creates in value.  Henry Ford paid unprecedented wages by eliminating all forms of waste from jobs, but Hillary Clinton is no Henry Ford.  She is instead a lot more like Shakespeare's Jack Cade, a comic relief character whose antics were designed to appeal specifically to the least educated members of Shakespeare's audiences.  Hillary Clinton therefore thinks Americans are far less educated, and have far less competence in basic economics, than Shakespeare's groundlings.

Be brave, then; for your captain is brave, and vows reformation. There shall be in England seven halfpenny loaves sold for a penny: the three-hooped  pot; shall have ten hoops and I will make it felony to drink small beer: all the realm shall be in common; and in Cheapside shall my palfrey go to grass: and when I am king, as king I will be, –I thank you, good people: there shall be no money; all shall eat and drink on my score; and I will apparel them all in one livery, that they may agree like brothers and worship me their lord.

If the government mandates that seven halfpenny loaves of bread shall sell for a penny, bakers will simply go out of business rather than lose money, and everybody will starve.  If the government similarly decrees that a job that creates perhaps $11 in value per hour shall pay $12 (plus employment taxes) per hour, the employer will figure out how to get rid of the job or ship it offshore.  The first step is to create more value.  Henry Ford and his associates showed us how to do this more than a century ago.  Then we can have higher profits, higher wages, and lower prices simultaneously.

As but one example, Frank Gilbreth proved that bricklaying, as practiced for thousands of years, wasted almost two thirds of the worker's labor by requiring him to bend over to pick up each brick.  The issue was not "low pay for low skills," but rather a bad job design.  The same issue is easily visible in most fast food restaurants today.  Get rid of the wasted motion and wasted effort, and then you can pay wages of which you can be proud while providing better service and making more money for yourself.

I would meanwhile advise any employer in a city like New York, San Francisco, and Los Angeles to move out, because the higher wages you pay your workers are not better wages.  If I were your customer, I would have zero interest in covering the $2,000-a-month rent your workers might have to pay for studio apartments in San Francisco when $1,000 a month will rent a townhouse outside San Francisco.

4. Support unions. Hillary believes unions are critical to a strong economy—and key to a strong middle class. That's why she is fighting to protect collective bargaining rights and strengthen America's labor movement.

What Hillary means is that the kind of parasite who, per Henry Ford, "does not work in the shop, who does not work in any shop, whose sole ambition perhaps is to never again have to work in a shop" should have a government-given right to leech off the productive employees via mandatory union dues.  Ford recognized unions as necessary evils when management looked for ways to do as little as possible for the workers, but evils are nonetheless exactly that.  Ford said of them in My Life and Work:

When the union of 'union leaders' disappears, with it will go the union of blind bosses—bosses who never did a decent thing for their employees until they were compelled. If the blind boss was a disease, the selfish union leader was the antidote. When the union leader became the disease, the blind boss became the antidote. Both are misfits, both are out of place in well-organized society. And they are both disappearing together.

5. Rebuild our infrastructure. Hillary's $275 billion plan will not only repair America's roads and bridges, build world-class airports, and expand internet access—it will also create good-paying, middle-class jobs in the construction, building, and transportation industries.

Expansion of internet access is demand-driven by customers who pay for internet services, and world-class airports are built by demand for air travel.  The most ornate airport on earth will not increase this demand when the airline industry looks for every way possible to gouge its customers and treat them with total contempt.  Internet virtual conferencing is meanwhile reducing the demand for business travel, so Hillary's "world-class airports" are likely to become world-class white elephants.

6. Boost manufacturing jobs. Manufacturing is a vital source of good-paying jobs in our economy. Hillary's plan will spur reinvestment in communities that have lost manufacturing jobs and give more support to small manufacturers and start-ups.

Clinton is right about the importance of manufacturing to our national well-being, but she hasn't a clue as to how to actually create manufacturing jobs.  Henry Ford (D-Mich.) has been dead for almost 70 years, but we might do better to put a copy of My Life and Work in the Oval Office (it was the Bible of Aldous Huxley's Brave New World) for the next four years.  The book would do a lot more to actually create jobs, at least if anybody bothered to open and read it.

7. Invest in clean energy. Renewable energy one of America's fastest growing industries. Hillary launched two bold national goals to make the United States the world's clean energy superpower and create new jobs in areas like wind and solar.

One word: "Solyndra."  The renewable energy jobs will create themselves when the technologies become competitive with coal and natural gas.

8. Lower child care costs. In many states, child care is more expensive than college tuition, putting families in an impossible position. Along with guaranteeing paid family leave, Hillary wants to make it so that no family has to spend more than 10 percent of its income on child care.

What is she going to do – wave a magic wand and chant some mumbo-jumbo?  This is simply more "I promise you this, that, and the other thing."

Once Hillary is in office, we won't be able to do anything about her for the next four years.  We cannot return a defective president the way we can return a shoddy and defective consumer product.  Hillary Clinton's own "middle class needs a raise" web page shows how empty her platform is of anything but platitudes, slogans, and empty promises.

William A. Levinson is the author of several books on business management, the most recent of which is The Expanded and Annotated My Life and Work: Henry Ford's Universal Code for World-Class Success.

Hillary Clinton's web page says, "The middle class needs a raise. Here's how Hillary Clinton plans to do it."  The page is long on promises and short on tangible plans, which underscores her complete lack of substance when it comes to real issues.

1. Cut middle-class taxes. Hillary is proposing middle-class tax breaks to help families cope with the rising cost of everyday expenses, like child care and education- and she's announced new tax credits to help families caring for an ill or aging family member. She'll pay for them by raising taxes on the wealthiest Americans and closing loopholes in our tax code.

This is the only item that has even a hint of substance.  Donald Trump has also recommended the elimination of tax loopholes: "Reducing or eliminating most deductions and loopholes available to the very rich."  Trump's tax plan contains far more specific detail than Clinton's.

2. Make college affordable. We can lift American incomes by making quality education attainable for everyone. Under Hillary's college plan, students won't have to take out loans for tuition or books at in-state public colleges and universities, and Americans with student loan debt will be able to refinance their loans at a lower rate.

I recall a line from an old Gilligan's Island episode in which Gilligan campaigns to become the dictator of a banana republic and runs on the platform, "I promise you this, that, and the other thing."  This is simply more of the same, but directed at the American people rather than characters in a fictional comedy show.

3. Raise the minimum wage. At $7.25 per hour, the federal minimum wage isn't nearly enough to make ends meet. Americans who work 40 hours per week at the minimum wage earn just $15,080 a year—below the poverty threshold for a family of two or more. That's why Hillary wants to raise the federal minimum wage to $12 an hour—and why she supports city and state efforts to raise their own minimum wage even higher.

Seven dollars and a quarter is a totally inadequate wage in a modern industrialized society, and even $12 an hour is not impressive, but the problem with Hillary's empty promise is that a job cannot pay more in wages than it creates in value.  Henry Ford paid unprecedented wages by eliminating all forms of waste from jobs, but Hillary Clinton is no Henry Ford.  She is instead a lot more like Shakespeare's Jack Cade, a comic relief character whose antics were designed to appeal specifically to the least educated members of Shakespeare's audiences.  Hillary Clinton therefore thinks Americans are far less educated, and have far less competence in basic economics, than Shakespeare's groundlings.

Be brave, then; for your captain is brave, and vows reformation. There shall be in England seven halfpenny loaves sold for a penny: the three-hooped  pot; shall have ten hoops and I will make it felony to drink small beer: all the realm shall be in common; and in Cheapside shall my palfrey go to grass: and when I am king, as king I will be, –I thank you, good people: there shall be no money; all shall eat and drink on my score; and I will apparel them all in one livery, that they may agree like brothers and worship me their lord.

If the government mandates that seven halfpenny loaves of bread shall sell for a penny, bakers will simply go out of business rather than lose money, and everybody will starve.  If the government similarly decrees that a job that creates perhaps $11 in value per hour shall pay $12 (plus employment taxes) per hour, the employer will figure out how to get rid of the job or ship it offshore.  The first step is to create more value.  Henry Ford and his associates showed us how to do this more than a century ago.  Then we can have higher profits, higher wages, and lower prices simultaneously.

As but one example, Frank Gilbreth proved that bricklaying, as practiced for thousands of years, wasted almost two thirds of the worker's labor by requiring him to bend over to pick up each brick.  The issue was not "low pay for low skills," but rather a bad job design.  The same issue is easily visible in most fast food restaurants today.  Get rid of the wasted motion and wasted effort, and then you can pay wages of which you can be proud while providing better service and making more money for yourself.

I would meanwhile advise any employer in a city like New York, San Francisco, and Los Angeles to move out, because the higher wages you pay your workers are not better wages.  If I were your customer, I would have zero interest in covering the $2,000-a-month rent your workers might have to pay for studio apartments in San Francisco when $1,000 a month will rent a townhouse outside San Francisco.

4. Support unions. Hillary believes unions are critical to a strong economy—and key to a strong middle class. That's why she is fighting to protect collective bargaining rights and strengthen America's labor movement.

What Hillary means is that the kind of parasite who, per Henry Ford, "does not work in the shop, who does not work in any shop, whose sole ambition perhaps is to never again have to work in a shop" should have a government-given right to leech off the productive employees via mandatory union dues.  Ford recognized unions as necessary evils when management looked for ways to do as little as possible for the workers, but evils are nonetheless exactly that.  Ford said of them in My Life and Work:

When the union of 'union leaders' disappears, with it will go the union of blind bosses—bosses who never did a decent thing for their employees until they were compelled. If the blind boss was a disease, the selfish union leader was the antidote. When the union leader became the disease, the blind boss became the antidote. Both are misfits, both are out of place in well-organized society. And they are both disappearing together.

5. Rebuild our infrastructure. Hillary's $275 billion plan will not only repair America's roads and bridges, build world-class airports, and expand internet access—it will also create good-paying, middle-class jobs in the construction, building, and transportation industries.

Expansion of internet access is demand-driven by customers who pay for internet services, and world-class airports are built by demand for air travel.  The most ornate airport on earth will not increase this demand when the airline industry looks for every way possible to gouge its customers and treat them with total contempt.  Internet virtual conferencing is meanwhile reducing the demand for business travel, so Hillary's "world-class airports" are likely to become world-class white elephants.

6. Boost manufacturing jobs. Manufacturing is a vital source of good-paying jobs in our economy. Hillary's plan will spur reinvestment in communities that have lost manufacturing jobs and give more support to small manufacturers and start-ups.

Clinton is right about the importance of manufacturing to our national well-being, but she hasn't a clue as to how to actually create manufacturing jobs.  Henry Ford (D-Mich.) has been dead for almost 70 years, but we might do better to put a copy of My Life and Work in the Oval Office (it was the Bible of Aldous Huxley's Brave New World) for the next four years.  The book would do a lot more to actually create jobs, at least if anybody bothered to open and read it.

7. Invest in clean energy. Renewable energy one of America's fastest growing industries. Hillary launched two bold national goals to make the United States the world's clean energy superpower and create new jobs in areas like wind and solar.

One word: "Solyndra."  The renewable energy jobs will create themselves when the technologies become competitive with coal and natural gas.

8. Lower child care costs. In many states, child care is more expensive than college tuition, putting families in an impossible position. Along with guaranteeing paid family leave, Hillary wants to make it so that no family has to spend more than 10 percent of its income on child care.

What is she going to do – wave a magic wand and chant some mumbo-jumbo?  This is simply more "I promise you this, that, and the other thing."

Once Hillary is in office, we won't be able to do anything about her for the next four years.  We cannot return a defective president the way we can return a shoddy and defective consumer product.  Hillary Clinton's own "middle class needs a raise" web page shows how empty her platform is of anything but platitudes, slogans, and empty promises.

William A. Levinson is the author of several books on business management, the most recent of which is The Expanded and Annotated My Life and Work: Henry Ford's Universal Code for World-Class Success.