Hillary may be disastrously misjudging the politics of 2016

In what may be the most predictable piece of news since the last time Dick Cheney grunted something insane, Hillary Clinton is reportedly going to announce the start of her official campaign for president on Sunday. Now that we've got some Democrats alongside Rand Paul and Ted Cruz, we can let this bleakly nihilistic struggle for dominance over a crumbling empire — I mean, presidential election — commence.

The question I have for Clinton is whether she is going to play her campaign exclusively for the money seats. Barring some crazy upheaval, she will win the Democratic nomination and certainly have little trouble raising an emperor's ransom-sized campaign chest. But the general election will not be nearly so easy. And if she's going to give big donors effective veto over her campaign messaging to keep those dollars rolling in, she could end up losing — especially given the relatively low value of political spending in presidential elections.

So first, let's talk about the politics of inequality. I continue to believe that a straightforward reboot of the New Deal with a fresh coat of paint would be a big political winner, if anybody with a national profile cared to make the case consistently and strongly. That's no surprise, given my substantive preference for such policy.

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However, there is precedent for such an idea. Both our economy and our politics are eerily reminiscent of the 1920s, when most economic growth flowed immediately to the hyper-wealthy, who owned both parties wholesale. After that era collapsed, FDR won four consecutive elections with sharply anti-rich rhetoric.

I submit that for any liberal candidate, trying to run a middle-of-the-road campaign in an age of stupendous inequality is highly politically risky. The reason is that not only does this feed the (largely correct, at this point) perception that both parties are owned by the 1 percent, thus depressing left-wing turnout, but it also leaves their most powerful political weapon by the wayside. When the Democrats ran some conservative Wall Steet hack in 1924, they got crushed.

But at root, the issue of inequality is a simple one. Wages are stagnant or declining because a tiny minority is stinking rich. The hyper-wealthy and their political allies have jiggered our economic institutions to direct the entirety of income growth towards the 1 percent. Re-jiggering them to cut the rest of the population in on the fruits of productivity growth ought to be a political winner in a democracy.

Instead, so far Clinton is being utterly mealy-mouthed about the issue, talking about the need for "consensus" and equality of opportunity and other such weak tea, probably in part to keep the donor class happy. On the contrary, this is zero-sum class war, and the 1 percent has been winning for 40 years. If the rest of the country is to win, then the rich have to lose. Failing to acknowledge that obvious fact is the kind of timid conservatism that may cost Clinton the election.

But it wouldn't be the first time even in very recent history. President Obama and the Democrats made a similar mistake in 2009 when it came to macroeconomic policy. Presented with a gigantic economic collapse, they chose as a party to pass a stimulus that was conservative and small (though it contained much great policy) even by their own internal numbers, which ensured a slow and inadequate recovery.

One can litigate over precisely whose fault that was, but the point is that such a choice was extremely risky for the Democrats as a whole. If initial estimates misjudged the size of the collapse, as it later turned out they had, by a lot, then voters were going to hold them responsible for not fixing the problem. A much better tactical choice would have been a large overshoot, or perhaps a stimulus with built-in triggers dispensing more stimulus if unemployment didn't come down fast enough (which would have meant abolishing the Senate filibuster right out of the gate, to be clear).

Mike Grunwald makes a good case that it was moderates in Congress (particularly in the Senate) who insisted the stimulus be only so big — but it was those very same moderate Democrats who were absolutely obliterated in the 2010 election.

The point here is that sometimes the timid choice is also a risky one.

Politically speaking, this is especially true during a presidential election. As Paul Waldman argues, this is when the marginal campaign dollar is least useful. A huge influx of cash can easily swing a congressional or local race by altering perceptions — or by simply reminding people that a candidate exists. But in presidential races, attitudes are largely fixed, the candidates are ultra-famous, media coverage is intense and unending, and so political spending makes much less of a difference.

So it would be foolish of Clinton to hamstring her political messaging for the sake of a few hundred million bucks she doesn't even need. But if I had to guess, I'd say that's exactly what she's going to do.