Update appended, 6/13 at 12:42 p.m.
“It should not take longer to start a business in America than it does in Canada or France. But that is the fact.”
— Hillary Clinton, during a small business discussion, Cedar Falls, Iowa, May 19, 2015
Our antenna always goes up when a politician asserts a “fact.” Clinton made this remark in the midst of a discussion about the “perfect storm of crisis” that she said small businesses face in the United States.
She made a similar point in an article she posted on LinkedIn on May 21, but with an additional country added: “It should not take longer to start a business in the U.S. than it does in Canada, Korea, or France.”
— Clinton’s claim that it takes longer to start a business in the U.S. than in Canada or France, Glenn Kessler, Washington Post, May 22
My own antenna always goes up when I hear a politician assert as fact a generic statement that is intended to imply what I know is a falsity or that patently makes no sense. In this instance, it was both, and, stunningly, was intended to imply a false fact that supports a key line in the Republican playbook: that federal regulation is keeping middle-class folks from starting or expanding a small business.
Marco Rubio claimed something similar in April—to which Martin O’Malley famously responded, when asked about it in an interview, “It is not true that regulation holds poor people down or regulation keeps the middle class from advancing. That’s kind of patently bulls—.” And Jeb Bush hinted at it a couple of months earlier.
When I read about Clinton’s statements before I read Kessler’s post (I didn’t see the post until about a week after it was posted), I was absolutely dumbfounded. As Kessler notes, Clinton complains about “red tape” in starting small businesses and says that the length of time in starting a business, caused by red tape, keeps people from starting businesses. The claim startled me; most red tape in starting businesses is state and local red tape, not federal, and the amount and type of red tape depends almost entirely upon the type of business and factors such as whether it requires a trade license of some sort (e.g., beautician), or a liquor license, and whether a permit of some sort must be obtained.
Opening a restaurant, for example, requires local health department permits and adherence to health department rules. It also requires procuring a physical space in which to have the restaurant, and usually also means obtaining a business loan. Starting a home-based web-design business requires none of those things. The incorporation process involves filing a short filled-out form with the state Secretary of State’s office and paying a fee.
Clinton doesn’t know these things? Really?
So the generic breadth of her statement was stupefying. She holds a law degree from Yale, was a partner in a corporate law firm, an active First Lady of a state and then of the country. Did she really not know that most red tape in starting a business does not touch upon anything that the federal government regulates? Or did she have something accurate and specific in mind, but rather than identifying it, indulged her penchant for talking in incoherencies apparently in order to avoid ever saying anything specific about, well, anything?
Kessler’s post answered that question. She did indeed have something specific in question: average statistics for businesses that employ between 10 and 50 people within one month, having five owners, using start-up capital equivalent to 10 times income per capita and being engaged in industrial or commercial activities and owning no real estate. In Los Angeles, where it takes an average of eight days to start such a business. Whereas in Paris it takes only 4.5 days and in Toronto five days. In New York City, though, it takes only four days.
Clinton lives near New York City and represented New York state as a senator. She knows that New York City is in this country.
This information was taken from the World Bank website, which, Kessler says, provides statistics that “lets you compare the individual cities to countries, so New York ends up tied for 6th place — with Belgium, Iceland, South Korea, the Netherlands and Sao Tome.” Los Angeles, he says, is in 15th place, tied with Cyprus, Egypt, Madagascar and the Kyrgyz Republic, among others. Oh, dear. But he points to another World Bank report that notes that “the differences are so large because, in the United States, ‘company law is under state jurisdiction and there are measurable differences between the California and New York company law.’”
I knew that! I should run for president in the Democratic primary. Every small-business owner and aspiring small-business owner knows that, so I’d have a natural constituency. And I have the advantage of actually recognizing problems that do affect many small businesses and that the federal government can address, by regulation. Including ones that recent Democratic congresses, together with a Democratic president, actually enacted.
Kessler comments, “So what does data about starting a business in the largest city have to do with small businesses in Iowa? Beats us.” It surely also beats small-business owners and people who are seriously considering becoming one. Including those who are fairly recent immigrants to this country and who don’t hold a law degree from Yale.
Kessler notes that even if Clinton were accurate in her claim that it takes longer, on average, throughout this country than in the other countries she mentioned to start small businesses generally, the difference would be a matter of a day or two. He writes:
The World Bank’s database lists 189 countries in terms of the time required to start a business. For 2014, in first place is New Zealand, with one day. In France and Canada, along with eight other countries, it takes five days. (South Korea, along with six other countries, is listed as four days.) The United States, with 12 other countries, is listed as six days.
First of all, one extra day does not seem like much of a hindrance — so much so that, as Clinton asserted in the LinkedIn article, the fact signified the “red tape that holds back small businesses and entrepreneurs.”
This is crazy. What, pray tell, is her point? To show that she’s too dumb to recognize distinctions between state and federal regulation, and between one type of small business and another? If you’ve seen one small business, you’ve seen ‘em all? And if you’ve seen state or local regulation, you’ve seen federal regulation?
Elsewhere in her LinkedIn letter she says that it takes longer to complete small-business federal tax forms than it is to complete multi-national corporations’ federal tax forms. Maybe so, but is that because the multi-nationals keep PricewaterhouseCoopers or Deloitte on retainer and the owners of the Thai food restaurant down the road probably don’t? She doesn’t say. She thinks the ultimate in clever political rhetoric is to make some dramatic comparison; the accuracy and even the coherence of the comparison doesn’t matter to her.
Clinton does this conflation/sweeping-two-or-more-things-together-that-need-to-be-recognizated-as-separate-things thing regularly. In her brief comment in Iowa in April in which she said she would support a constitutional amendment, if necessary, to reverse Citizens United and get “unaccountable” money out of politics, she misrepresented that Citizens United bars election laws that would require super PACs to identify their donors, and corporations to report the recipients of their political largesse. It doesn’t. No constitutional amendment is needed to permit such statutes and SEC, IRS and FEC regulations.
I had planned to post on all this earlier but didn’t get around to it. But two articles published in recent days, one in the Washington Post last weekend about the 2008 Clinton campaign’s gift of snow shovels to supporters in Iowa before the caucuses, the other a Washington Post column yesterday by Katrina vanden Heuvel, prompted this post. The snow shovels article, by David Fahrenthold, begins:
AMES, Iowa — In Phyllis Peters’s garage, there is a snow shovel. A nice one: green, shiny, with an ergonomic steel handle. It came from Hillary Rodham Clinton.
And it plays a part in a modern-day political legend, about some of the strangest money a candidate has ever spent.
Eight years ago, Peters was a volunteer for Clinton’s first presidential run. She had been an admirer of Clinton since her time as first lady. But just before Clinton lost the Iowa caucuses, her staffers did something odd: They bought shovels for Peters and the hundreds of other volunteers.
“If you’re in Iowa, you [already] have a snow shovel,” the article quotes Peters as saying. But she accepted the gift so as not to be rude. “For both those who gave out the shovels and those who received them,” the article says, “they came to symbolize a candidate who never quite got their home state.”
Clinton grew up in a suburb of Chicago, then spent four winters in Wellesley, MA. That was decades ago. But, geeez. She didn’t get cold-climate folks?
Vanden Heuvel’s column, titled “A new definition of freedom in America,” argues that the term “freedom” has had different meanings in different political eras, and that it’s imperative now that the Democratic presidential nominee, presumably Clinton, move aggressively away from the Conservative Movement definition of freedom as economic laisse faire, and reinstitute and expand upon FDR’s famous Four Freedoms. She writes:
This is Hillary Clinton’s historic opportunity. The greatest threat to freedom now is posed by the entrenched few that use their resources and influence to rig the rules to protect their privileges. She would do a great service for the country — and for her own political prospects — by offering a far more expansive American view of what freedom requires, and what threatens it.
Clinton should make it clear to Americans that in a modern, globalized world, we are in the midst of a fierce struggle between economic royalists and a democratic citizenry. If we are to protect our freedoms, citizens must mobilize to take back government from the few, to clean out the corruption and to curb the oppressive power of the modern day economic royalists.
But this requires a candidate who is both mentally quick enough and willing to respond, accurately and in specifics, to the Republican anti-regulation, supply-side-economics nonsense. Clinton doesn’t seem like she has either of these attributes.
Clinton appears to think that all that matters is the generic ideas people have about what she stands for, and a few specific policy proposals all in good time. She’s wrong. She needs to respond, in full oral statements, using clear fact-based arguments, to the anti-government policy cant of the Republican sheep herd, from which her opponent eventually will come. But I don’t think she can.
ADDENDUM: I posted a comment in response to a comment by Mark Jamison that says in part:
One thing that comes through loud and clear from her attempt to Sister Souljah small-business owners and aspirants, Mark, is that she thinks Democrats NEED a Sister Souljah moment for small-business owners and aspirants. Dick Durbin could educate her on that, simply by referring her to what’s known as the Durbin Amendment.
Another thing that comes across is that, just as she didn’t realize in 2008 that Iowans all have snow shovels, she apparently doesn’t recognize that small-business owners and aspirants want solutions to problems that they actually have, and that that requires knowing the specifics of the problem, including the cause.
I want to make clear that I think the concerns of small-business owners are very much appropriate issues for progressive Democratic politicians to address. And that progressive Democratic elected officials do address them–the Durbin amendment to the Dodd-Frank Act being an example. What Democratic candidates and officeholders should not do is create straw men for them to swat down.
Added. 6/10 at 5:41 p.m.
UPDATE: Naked Capitalism’s Yves Smith yesterday linked to this post (thanks, Yves!), and the link spawned a surprisingly long exchange of comments there, started by reader Carolinian, who noted and linked to a Harpers piece from last year that makes similar or complementary arguments.
Carolinian notes in one of her comments in that thread that Clinton’s campaign is hellbent on getting across the claim that Clinton is a wonk–something that I’d planned to post on here at AB. A day or two after I read the articles about Clinton’s federal-red-tape-is-discouraging-people-from-starting-small-businesses tack, I read two articles, one by Peter Beinart on The Atlantic website (I can’t remember where I read the other, or who wrote it), assuring readers that Clinton is a wonk. I remember thinking, “OK, got it. Clinton is a wonk. It’s just that she’s a wonk who thinks most small businesses need permits or licenses from the federal government in order to open. And just this morning I read two more along that line, one of them (in Politico, I think), which says that her staff is pushing the “wonk” moniker because it’s accurate: that’s what she is.
The gist of these articles is that she really cares about policy–the nitty-gritty of policy, especially how best to achieve a policy goal. One problem with that, though, is that she keeps making sing-songy soundbite statements that are either inaccurate or misleading or irrelevant or downright incoherent.
Clinton and her staff seem to be misconstruing the meaning of “wonk,” which does including within it the ability to understand the meaning and implications of the statistics and other facts–and recognize the actual sources of those facts, as distinguished from the cliches that the Republicans are selling. The problems that people have in trying to start a business almost never involve federal red tape. By saying otherwise, Clinton’s now made clear that she’s no wonk.
Updated 6/13 at 12:42 p.m.