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:
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 Artic sea-ice 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.
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 inform 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 mulitlateral 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.