And therein lies the challenge for Hillary Clinton: How to present herself on economic issues? The surest way she can alienate significant segments of her party — perhaps to the point of enabling a progressive populist such as Sen. Elizabeth Warren, D-Mass., to enter the race — is to surround herself with the same economic crew that led her husband to untether Wall Street and that persuaded Obama, at least in his first term, to go easy on the banks. The economy isn’t likely to be significantly better in 2016 than it is today, and Democratic voters will be looking for a more activist, less Wall Street-influenced nominee.
But betting against the Clintons’ political instincts has usually been a sucker’s game. During the debate over Summers and the Fed, Hillary maintained an appropriate, if strategic, silence. Bill felt compelled to defend his onetime Treasury secretary — but only after Summers withdrew from consideration. If this lack of support foreshadows a realization by the Clintons that they’ll have to come up with a more populist brand of economics than recycled Rubinomics, then the Hillary consensus is likely to hold.
Both the challenges facing the Democrats and the party’s constituencies have changed considerably since Bill was president. The Democratic base has many more minority voters and economically stressed young people than it did 20 years ago. America’s private sector — like that throughout the advanced industrial world — no longer creates jobs in the numbers it did 20 years ago. Even more pointedly, profits have soared largely because of the suppression of wages. Combine those new constituencies with those new challenges, and the need — both political and economic — for more public investment and a stronger safety net (and more tax revenue to support them) becomes screamingly clear. That doesn’t mean Hillary has to explicitly repudiate Bill’s declaration that “the era of big government is over.” At times, however, she will have to act as though he never said it — at least, if she’s going to be the sole serious contender for the Democratic nomination.