While Clinton can attest to being far more politically experienced than Trump, it’s a claim already proving to be both a blessing and a curse.
Sanders was the first to highlight how many of Clinton’s current campaign promises are undermined by high-profile positions she’s taken throughout her political career. Trump has made a point of seizing on the same line of attack. Her policies are, he claims, designed to pick up the disillusioned but unlikely to ever actually be implemented.
Accurate or not, Trump’s accusations benefit from a convenient narrative. Take Clinton’s position on trade: she came out in opposition to the Trans-Pacific Partnership – which is bound to have a negative impact on domestic manufacturing and investment – as soon as negotiations came to a close late last year. Only in 2012, however, did she refer to the TPP as ‘the gold standard in trade agreements’.
Such uncertainty on the legitimacy of her position means her trade policy could be detrimental to the markets, or it could be entirely beneficial. For traders, then, this is likely to stave off any major fluctuations as they wait for her to show her hand and commit one way another.
For Trump, meanwhile, it’s a fish-in-a-barrel opportunity: former allegiances could conflict with the hard-line negotiation tactics she promises.
Still, it is Clinton, not Trump, emphatically endorsing regulatory laws that will prevent Wall Street from taking excessive risk – despite having been treated favourably by the big banks in the past. More stringent regulatory measures and tax hikes will be reflected in the Dow and other indices, as well as public companies likely to be most affected by a hard-line approach.
With this stance likely to ruffle the feathers of a few prospective backers, she’ll argue that it’s an oversimplification to suggest she can’t be divorced from old loyalties.
Clinton’s tax plan certainly gestures towards a conscious effort to appeal to the underdog. Top-tier earners and corporations will be on the receiving end of a cumulative $1.2 trillion tax increase over the next decade, and those in lower brackets will purportedly be protected from any hikes. Expect some nerves in the markets if her plans to crack down begin to take hold.
But that’s a big ‘if’. Clinton, like Trump, has refused to address restructuring arguably unsustainable entitlement costs. Between this and a potentially overenthusiastic spending plan (which, though largely covered by her tax plans, is still projected to see a $250 billion increase in federal debt), it may not be a question of where her loyalties lie, but one of fiscal feasibility.
Unless she addresses the real expenses in the federal budget, her policies are likely to be written off as idealism. While a government at a standstill may not be ideal for the president herself, it could certainly encourage more bullish sentiment in the financial markets.