Is Clinton bad for business?

On the face of it, the plan does not look like a strongly pro-business platform. "Broadly speaking, a Clinton presidency would hurt the economy," says Dan Clifton, an analyst for Strategas Research in Washington. Clifton says business' worries include a possible increase in taxes on income, capital gains and dividends.

On a recent campaign stop in Wisconsin, Clinton said she'd institute a "fair tax system" that eliminated loopholes for "hedge fund dealers." In other words, she'd raise taxes on hedge fund managers' investment gains from the current 15% to regular income rates of up to 35%.

Business is also worried about limits to trade. In a debate on Feb. 26, Clinton pledged, when pressed, that she would tell Canada and Mexico the U.S. is pulling out of NAFTA if the countries were not willing to renegotiate the deal within six months to better protect workers and the environment.

"She's talking about reworking NAFTA, but most larger companies need trade to expand," says Clifton.

• Talk back: Would Hillary Clinton be bad for business?

The oil and gas industry also is not happy to be the target of Clinton's populist rhetoric, which calls for new taxes on its profits. The industry has been lobbying Congress to oppose new taxes and will continue to fight the battle if Clinton wins the presidency.

"We're not at all opposing renewable-energy incentives," says Mark Kibbe, senior tax-policy analyst for the American Petroleum Institute, a trade organization for the oil industry. "But if the goal is energy independence, imposing a new tax on oil and gas is a bad idea."

What is there for business to like? In its most recent analysis of Senate voting records, the Chamber of Commerce gave Clinton a 67% favorable rating, compared with 55% for Obama. McCain rated 80% favorable. Many business leaders recall the success of the economy of the late 1990s, during Bill Clinton's presidency, when workers' wages were rising across the board as the economy grew.

Like her husband, whose term marked the rise of the "new left," Clinton is championing not radical wealth redistribution but what she calls a "balanced" agenda that will keep the fundamentals of U.S. commerce and free trade intact even as it offers more protections for middle- and lower-income Americans.

Wall Street is fairly comfortable with Clinton. "(She) has been a New York senator for seven years, and New York is the financial capital of the U.S. and the world," says Roger Altman, senior Clinton economic adviser and co-founder of Evercore Partners (EVR, news, msgs), an investment and advisory company in New York. "CEOs and other business leaders have had the chance to work with her at very close quarters. If you ask leaders of the financial community if there's anything to be afraid of, 80% or more would say no."

Indeed, some industries would gain considerably if Clinton were elected. Her "economic blueprint" calls for the creation of a $50 billion Strategic Energy Fund to support alternative-energy industries.

"With her record and proposals, there is great visibility in terms of what you get with Hillary Clinton," says Bryan Sherbacow, 39, co-chief operating officer of Ethanex Energy, an ethanol producer. "With George Bush, a lot of people didn't know what they were voting for and aren't willing to take that chance again." Sherbacow and his wife have contributed the maximum of $2,300 each to Clinton for the primaries.

Whether the Democratic nominee is Clinton or Obama, voters can expect the candidate to cater economic messages to the audience.

"Any Democratic candidate for president walks a fine line between policy approaches that will strengthen the middle class and at same time retain a good and credible working relationship with business," says Altman. "It's always a complex dynamic."

This article was reported and written by Moira Herbst for BusinessWeek.

< previous |  1 | 2 |