Hillary Clinton thinks quarterly earnings reports are bad. She believes something called “short termism” from activist investors like Carl Icahn is the root of all economic evil.
And therefore, according to Hillary, if we all just focused on the long term by jacking up capital-gains taxes, the country would return to those economic halcyon days when she and her husband were running things out of the White House.
At least that’s what Clinton proposed Friday in a speech at NYU, in which she strained to sound populist about Wall Street lest she get out-demagogued by Bernie Sanders or Elizabeth Warren.
She attacked financiers in the name of an “activist hedge fund” — like the one run by investment-guru Carl Icahn, who buys stakes in companies such as Apple to prod management to make decisions that boost its share price, such as stock buybacks and the sale of assets.
According to Hillary, if these economic players were around years ago, they could’ve forced AT&T to “maximize cash flow and close Bell Labs before the transistor or laser was invented there.”
Reality-check time: Does anyone really think Icahn’s relatively minor stake in Apple gave him enough stroke to prevent Tim Cook from making his latest grand innovation?
“Quarterly capitalism,” Hillary went on, distorts corporate decision making and prevents long-term thinking.
The end result, she wants us all to believe, is that instead of hiring workers for the long haul, companies spend most of their time appeasing investors.
Her remedy to make the world fair again: ramping up taxes on trades held for less than two years — to more than 40 percent under her “six-year sliding scale.”
If only life were that simple; talk to any CEO and they will tell you they face a multitude of other, more pressing issues — from massive regulations to some of the highest corporate-tax rates in the world — that do more to distort corporate decision making than any activist investor ever has.
And of course, no speech by any Democratic candidate these days, whether it be for county dog catcher or president, would be complete without calling for a hike in the minimum wage, including endorsing our very own mayor Comrade de Blasio’s plan to bring it to $15 an hour for fast-food workers.
All of which sounds good until you take into account that just about every economic study shows jacking up the minimum wage does more harm than good because it also costs jobs.
Yet, even worse than the speech’s obvious economic ignorance was its unoriginality; it was actually an amalgam of half-baked thoughts that Larry Fink, the CEO of Blackrock, has been spouting over the past year.
Fink, a longtime Wall Street Democrat, runs what is the world’s largest money management firm and has for years lusted to be appointed treasury secretary.
Associates say that was the reason he appointed Hillary confidant Cheryl Mills to the board of Blackrock in 2013 despite no discernable financial background.
And they say it’s why Fink has been railing against activist investing in speeches for the past year. More cynical observers would point out that Fink’s gripe against activists stems from the fact that they’ve successfully competed with Blackrock’s buy-and-hold investing model.
If you really want to go after Wall Street, it would make more sense to target the big banks, like those that took risks leading to the financial crisis.
But that would mean Fink would have to attack the Wall Street establishment of which he’s a part.
For Hillary, it would mean biting the hand that has fed her (all those speaking fees from Goldman), her foundation (Goldman was a big funder) and her nascent presidential campaign (Goldman has been a huge contributor).
So what better way to satisfy the bloodlust of the left wing of her party than to go after this sliver of the Wall Street fat-cat set with a gimmick that does little more than force day traders to pay higher tax rates?
One more thing worth considering: It was none other than Bill Clinton, with a huge assist from a Republican Congress, who cut capital-gains taxes in the late 1990s — a move that most mainstream economists say helped propel the mighty 1990s economy to new heights.
We can only hope Hillary really doesn’t believe the rubbish she spouts — which certainly won’t revive an economy growing at its lowest levels in decades, and may even make it worse.
Charles Gasparino is a Fox Business Network senior correspondent.