Last month, Hillary Clinton offered a glimpse at the populist economic platform with which she hopes to fend off a Democratic primary challenge from the socialist Bernie Sanders while convincing moderates—and her Wall Street donors—that she has what it takes to beat a Republican nominee in 2016. Most of the substance of her proposal was soon obscured by the mania over Donald Trump’s stubbornly high poll numbers and the FBI’s investigation of the unorthodox, homebrew e-mail server she used while secretary of state. But one element of her platform broke through the noise: a pledge to combat what she called corporate “short termism.”
Clinton shares the not uncommon view that the American economy is being strangled by short-term strategies “like second-to-second financial trading, and quarterly earnings reports.” She feels that more farsighted investments get short shrift and that the little guy is always on the losing end. In Clinton’s opinion, building a “growth and fairness economy” will require “a new generation of committed, long-term investors to provide a counterweight to the hit-and-run activists.”
The substance of Clinton’s claims may be partly true—smart people agree that corporate short-termism is an area of possible concern—but her emphasis on the craven appetites of opportunistic “hit-and-run activists” invites a delicious comparison. No profession more richly rewards short-termism than politics. Short-termism in government is the root cause of nearly all our fiscal problems.
The Keynesian imperative to spend, spend, spend, because “in the long run we’ll all be dead” has been the cri de couer of liberal politicians for close to a century. FDR’s hyperkinetic short-termism arguably made the Great Depression longer than it needed to be. We’re still paying for the New Deal—literally. President Obama’s cool-as-a-cucumber short-termism gave us the 2009 stimulus, meant to launch $830 billion worth of “shovel-ready projects.” Six years later, the money is gone, but we’re still reading about how our vital infrastructure—roads, bridges, and public transportation—is falling apart.
How could nearly $1 trillion go missing with nothing to show for it? Blame short-termism. The stimulus wasn’t about jump-starting recovery, fixing the highways, or even testing Keynesian economic theory—it was about rewarding political allies, recruiting future constituencies, and showing how much Big Government cares.
Political short-termism’s pernicious effects are not limited to the national stage. Short-termism also brought us the public-pension crisis in America’s blue-leaning states and cities. In places like New York, California, and Illinois, insatiable public-employee unions have captured the political process. Policymakers have made an art of granting long-term benefits to their union masters in exchange for votes. Lucrative pay and pension packages and increasingly generous retiree health-care benefits are goodies that can be promised now and paid for later. When the bill finally comes due, the politicians always seem to be long gone. That’s short-termism.
Republicans are just as guilty. Look how eager the GOP presidential candidates are to distance themselves from previously held positions on immigration and education. Does anyone truly believe that each of them wouldn’t shift—and shift again—if it meant he (or she) could secure the nomination? Thus ambition does make short-termists of us all.
Hillary Clinton isn’t against short-termism; she’s in favor of it, and in fact her political survival depends on it. All summer and for the foreseeable future, she will desperately audition positions, policies, and messages that she hopes will help her weather political storms. Can she convince left-wing Democrats that she’s one of them? What can she promise them that will secure their loyalty—at least for as long as it takes to get through the primary? When primary season ends, a new round of short-term thinking begins. How can she sell herself to general-election voters, when six out of ten Americans think she’s dishonest and untrustworthy?
She’ll have to devise short-termist answers to these questions. She’ll do what she needs to do and say what she needs to say. She’ll cross that bridge when she gets to it—and once she’s over, she’ll never look back.