Director of the Centre for Policy Development Miriam Lyons writes:
Barack Obama’s victory represents a watershed in American history, but it will also have ramifications around the world. Before I head out to celebrate I thought I’d just bash out a few quick notes on some of the policy implications for Australia of this momentous turnaround in the state of US politics:
Climate change
Today’s election result heralds the rise of Green Keynesianism. The US economy is in the toilet and smart economists are advocating direct investment over a more consumer-based fiscal stimulus. Democrats in Congress got a head start last year with the Green Jobs Act, and elements of the President-elect’s energy and environment policies look a lot like a ‘Green New Deal’. This from Time Magazine:
He wants to launch an “Apollo project” to build a new alternative-energy economy. His rationale for doing so includes some hard truths about the current economic mess: “The engine of economic growth for the past 20 years is not going to be there for the next 20. That was consumer spending. Basically, we turbocharged this economy based on cheap credit.” But the days of easy credit are over, Obama said, “because there is too much deleveraging taking place, too much debt.” A new economic turbocharger is going to have to be found, and “there is no better potential driver that pervades all aspects of our economy than a new energy economy … That’s going to be my No. 1 priority when I get into office.”
Calls for a Green New Deal are also starting to gain traction in the UK – and the UN. This can only help the chances of Australia’s version of the Apollo alliance, which released the ‘Green Gold Rush’ report last week calling for investment in green-collar jobs growth.
The Obama campaign’s target for emissions cuts was 80% by 2050 – a fair way ahead of Oz Labor’s as-yet-unaltered election promise of 60% by 2050. With the Arctic ice-sheet melting rapidly even an 80% target is too low for a developed country like the US, but it should certainly give Professor Ross Garnaut reason to revise his pessimism about the likely outcome of the Copenhagen round of climate negotiations. It’s worth noting that the Obama campaign’s climate and energy platform specifically called for 100% auctioning of permits.
Afghanistan
I might leave the analysis of this point for one of our more foreign-policy inclined fellows. Suffice to say that Obama’s win means that US activity is likely to be ramped up in Afghanistan, and given that we’re still there, that will have implications for Australia.
Behavioural economics and ‘choice architecture’
Obama has quoted the ideas put forward by behavioural economists Thaler & Sunstein in Nudge, which looks at ways in which a more nuanced understanding of how humans behave in markets can enable policies which are more flexible than top-down regulation, yet better at addressing common market failures than a free-market approach. Sunstein and Thaler have both been consulted by the Obama campaign. This from the Guardian on Thaler and the Dems:
He “talks a lot” to Obama’s camp, especially the chief economics adviser, Austan Goolsbee. “We gave Goolsbee the book when it was still in proof. He read the whole thing and just lifted some parts.”
Of course, as this post argues, its important to remember that the policy tools informed by behavioural economics can be used towards either progressive or conservative ends.
Multilateralism might get inspiring again
The amazing Ben Brandzel sent an email around a few days before the election listing 43 policy proposals from the book of Obama that kept him motivated while working on the campaign in North Carolina. This was his favourite:
“Save millions of lives and win allies around the world by doubling foreign assistance to cut extreme poverty in half by 2015, and accelerate the fight against HIV/AIDS, tuberculoses and Malaria.”
I can imagine that some UN staff might feel a lot like John Robertson did after the election of the Rudd government – i.e. ‘at least this lot don’t want to kill us’. Regardless, the US’ newfound commitment to multilateral cooperation on serious global problems is about to make the lives of everyone working in international development a little more (there’s that word) hopeful. And that’s got to be a good thing.
Just as an aside, it will be interesting to follow the relationship between progressive think tanks & the new administration. Expect to see the traditional influx from conservative think tanks to Republican administrations mirrored on the Democrat side this time around. John Podesta has been put in charge of the transition phase, which means he’ll play a key role in building the new government. Former Whitehouse chief of staff under Clinton, John is the founder and CEO of DC-based think tank the Centre for American Progress. I met a bunch of very switched-on CAP people when I was in Washington earlier this year – they’re an absolute ideas-factory. Check out their policy platform for signs of things to come.
What does regime-change in the US mean for Australia, and the world? I’d love to hear your thoughts in the comments…
From a hoon eye, electric cars are awesome for daily commuting, so much torque and potentially in a chasis that can be fun. Bring on electric cars!!!
Seriously, the big car companies are currently routed. New car sales are down across the board by very large amounts from 15% (Honda) to 45% (GM light truck). GM and Chrysler are looking to merge and as I read somewhere, it is unclear how two businesses losing money are going to make one good one. In terms of the intersection of the global economic crisis and the question of alternative energy sources, a massive rejuvenation of the US automotive industry organised around sustainable energy sources would definitely be a fruitful site for such an Apollo-like project.
“there is no better potential driver that pervades all aspects of our economy than a new energy economy … That’s going to be my No. 1 priority when I get into office.”
Hallelujah.
Whoever does this first wins in 2050. Economic conservatives and coal-eating surrender monkeys are W-R-O-N-G.
And I mean wrong on the economics.
Well, personally, I guess I’ll have to stop calling the US ‘land of the formerly free, home of the once brave’.
What to replace it with? Land of hope and ‘yes we can’?
Do we all get a puppy as well?
Australia has the chance to carve out a nice niche for itself in the Green economy with sustainable energy systems – if it wants to! Money pumped into CCS is literally going to poured down the drain and there simply is no long term future for coal sales. We have it all and it is all going to waste!
Polyquats @ 3:
Land of
Joe the PlumberBob the Builder?We’ll see how much Green Keynesianism Obama actually delivers. I’m betting on rather less than some might hope.
More questions to consider; will the near-certain forthcoming bailout of the American auto industry kill two-thirds of ours in the process? Secondly, what will happen to some of America’s defence programs in which we are a partner?
Fmark,
I’m wondering ho long it takes before we get ‘Barack the Builder’
All that is very well and good, but how much will his focus shift away from our region (SE Asia) as is traditional for Democrats? We need to make sure the President stays focussed on our region — it’s the region of the next century, but it has its share of problems.
Tyro Rex: I’m not so sure. Obama spent part of his childhood in Indonesia, and his mother spent much of her life working as an anthropologist there.
However, given his personal interest in the country, he may be slightly less interested in Australian perspectives on Indonesia.
We don’t know what it’ll mean: we’ll just have to wait and see.
Shaun – did he promise you a puppy?
A couple of thoughts on foreign policy – they’re not mine, but were mentioned by some of the commentators yesterday – don’t quite remember which ones as I was channel switching madly. But people might like to discuss them.
Democratic orientation towards Europe: however much we might lament the Democrat’s lack of interest in our region, the Bush Presidency has so damaged relations with Europe that Obama is going to have to spend a lot of time there mending fences.
Afghanistan: Rudd will have more pressure on him to contribute more troops. + its a highly unpopular war with the Europeans.This could cause the ALP some sticky problems, especially if they do decide to go all the way with Bazza. And can you see Rudd’s vanity actually resisting the opportunity to become even more of a world player, even if it is at the expense of Aussie lives? I can’t.