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Andrew Ross Sorkin: Hillary Clinton's Comment on Jobs Raises Eyebrows on Wall St.

"Hillary said what?"

That was the question whispered among some of Wall Street's most prominent Democratic supporters over the weekend after Hillary Rodham Clinton spoke on the campaign trail for Martha Coakley, the Democratic candidate for governor of Massachusetts.

"Don't let anybody tell you that it's corporations and businesses that create jobs," Mrs. Clinton said on Friday in Boston. "You know that old theory, trickle-down economics. That has been tried, that has failed. It has failed rather spectacularly. One of the things my husband says when people say, 'What did you bring to Washington?' He says, 'I brought arithmetic.' "

It was the first part of the quotation that some on Wall Street focused on, comparing it to a phrase uttered by President Obama in 2012 — "If you've got a business, you didn't build that" — that, similarly stripped of its context, provided Republicans with fodder to rally their base.

On Monday, Mrs. Clinton seemed to backpedal on her earlier comment, perhaps after some of her Wall Street supporters had telephoned.

She made her initial remarks at a rally on Friday, where Senator Elizabeth Warren of Massachusetts appeared as well. She also declared at the time, "I love watching Elizabeth give it to those who deserve to get it."

Mrs. Clinton didn't explicitly say who deserved to get it, but she appeared to be directing her ire at Ms. Warren's favorite target, Wall Street banks. Within the world of finance, Mrs. Clinton has long been seen as a friend of Wall Street — or at least not an enemy. She has rarely engaged in the kind of vitriol that has made Senator Warren a hero of the progressive left. She has accepted $200,000 fees for speeches and has spoken at firms like Goldman Sachs and JPMorgan Chase. In some cases she has praised and defended firms like these.

Ms. Warren has criticized Mrs. Clinton in the past for being too cozy with Wall Street.

So Mrs. Clinton's harsh words about the business world had tongues wagging, especially among some of her supporters who seemed nervous that someone perceived as a friend might be moving away from them.

Some on Wall Street had already noticed that Mrs. Clinton, while campaigning for Senator Al Franken of Minnesota last week, had singled out the financial industry. "Al has pushed for more and better oversight of the big banks and risky financial activity, and there's more work for him to do," she said. "There's a lot of unfinished business to make sure we don't end up once again with big banks taking big risks and leaving taxpayers holding the bag."

The main question was whether Mrs. Clinton's words were more about political maneuvering than reshaping her beliefs.

One senior banker, who has long supported Mrs. Clinton, said: "The reality is that she might have to tack left a little for the party. What I don't know is whether she will stay there or double back."

Another banker said of her comment: "I doubt she meant that."

Ari Fleischer, a press secretary for President George W. Bush, took to Twitter: "Sometimes you have to wonder if Hillary really believes in anything, except appealing to whatever is current. Iraq war? Yes. Business? No."

While Mrs. Clinton has yet to declare that she is running for president in 2016, she is widely seen as the presumptive Democratic nominee, and an army of Wall Street bankers has been angling for roles in her campaign in hopes of clinching spots in her administration. (Another set of bankers is cozying up to Jeb Bush in hopes that he runs on the Republican ticket.)

A series of right-leaning blogs trumpeted Mrs. Clinton's comments over the weekend, seemingly as a way of highlighting the inconsistency in some of her positions.

What Mrs. Clinton's supporters within the business world want to know is whether she plans to govern the way her husband did as a moderate, center-left president or whether she will be pressed to take more so-called progressive stances — code for anti-business within the business world — as the Democratic Party, in the wake of the financial crisis, appears to have shifted leftward since Mr. Clinton left office.

Mr. Clinton, whose Clinton Global Initiative and other ties to business have made him appear friendlier to the financial world, found himself offending some of the Democratic base when he appeared to sympathize with corporations seeking to reincorporate overseas to lower their tax rates in so-called inversion deals. "Like it or not, this inversion, this is their money," he said.

On Monday at a campaign rally in New York, Mrs. Clinton said she had misspoken.

"I shorthanded this point the other day, so let me be absolutely clear about what I've been saying for a couple of decades," Mrs. Clinton said.

"Our economy grows when businesses and entrepreneurs create good-paying jobs here in an America where workers and families are empowered to build from the bottom up and the middle out — not when we hand out tax breaks for corporations that outsource jobs or stash their profits overseas," she said.

Still, whatever position Mrs. Clinton takes on Wall Street, she will most likely face a continuing struggle to win over the most progressive members of her party: "The neo-liberal capture of the Democratic Party narrowed the range of policy alternatives available to American voters, and what excites voters about Warren is that she represents a break from that sordid history," Luke Brinker, deputy politics editor at Salon, wrote. "And Clinton's inextricable link with that history — not some clumsy campaign stump gaffe — is the real problem," he added.

That view takes for granted that it is not a good idea for a Democrat to be a friend of Wall Street. But certainly there is a place for a candidate at the crossroads of Wall Street and Main Street.

Andrew Ross Sorkin is the editor at large of DealBook. Twitter: @andrewrsorkin


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Posted: October 27, 2014 Monday 09:33 PM