As Clinton Tries To Win Over Progressives, She Might Want To Distance Herself From This Economic Adviser

Former Secretary of State Hillary Clinton’s message ahead of her imminent presidential campaign announcement has focused on boosting the fortunes of the middle class. But to appeal to progressives with that message, Clinton may find it expedient to distance herself from the policies promulgated by Robert D. Hormats, a Clinton cheerleader and former Goldman Sachs vice chairman who served under her at the State Department.

Hormats, who was the undersecretary for economic, energy and environmental affairs from 2009 to 2013, has advocated for the deregulatory approach that was begun by the Reagan administration and continued by former President Bill Clinton. Progressives say this deregulatory strategy contributed to widening income inequality: Data collected by economists Emmanuel Saez and Thomas Piketty have shown that the top 1 percent of earners in the United States doubled their share of overall income from 1980 to 2012, whereas the share for the top 0.1 percent of earners nearly quadrupled. In the same period, the share of income for the bottom 90 percent of earners fell by 15 percent.

Now, as Clinton attempts to navigate concerns about inequality without alienating her corporate backers, she has solicited Hormats’ advice, presumably to diversify the voices contributing to the formulation of her message. The Wall Street Journal mentioned that Hormats was one of a small number of economists, professors and former policymakers who met with Clinton in December to discuss wage stagnation and economic security.

To better understand how a potential President Hillary Clinton would tackle entitlement spending, free-trade agreements and financial regulation, it’s worth considering the economic policies Hormats has espoused in his decades of government and corporate service, as there are some key areas of dissonance between what Hormats believes and what the more progressive wing of the Democratic Party hopes Clinton will pursue.

In 2009, Hormats received something of a windfall from Goldman, where he worked for more than a quarter-century before he started at the State Department. Under Clinton, he was in a new position created to push a strategy she called “economic statecraft,” or promoting American corporate interests abroad. His role was influential: Sen. Ron Wyden (D-Ore.) called him “Secretary Clinton’s go-to person on global economics” at a 2012 Senate hearing on trade.

Perhaps most troubling for Democrats was that before he served under Clinton, Hormats frequently articulated support for privatizing Social Security.

Hormats has argued that “widespread deregulation” is essential for global growth. Progressive voices within the Democratic Party, such as Sen. Elizabeth Warren (D-Mass.), have argued that such deregulation was directly responsible for the financial crisis in 2008, which in turn caused the Great Recession.

In what is expected to be the absence of a real Democratic presidential primary for Clinton, progressive groups are expected to stand in for her challengers and urge her to reject Hormats’ worldview.

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