2016 US Election - November 2016
Extraordinary things happened in the countdown to an extraordinary US presidential election. Last week, 20 economic Nobel laureates released a jointly signed 'open letter to the American people' - a veritable 'dream-team' of living legends in the world of economic sciences.
The letter concludes:
"We do not all agree with every one of Secretary Clinton's proposals, but in this election, the choice is clear: Hillary Clinton is by far the superior presidential candidate for our economy and our country."
These extraordinary times called for an extraordinarily agile poll of the National Economic Panel. We sought the Panel's opinion on the following:
Proposition: "Hillary Clinton is likely to be the superior US presidential candidate for the Australian economy and for Australia."
Thirty-six (75%) of our panellists responded and an overwhelming majority (83%) agreed or strongly agreed with this statement.
In the media
Clinton presidency better for Australian economists (The Australian) (9 November 2016)
The consequences of a Donald Trump win are disastrous for the Australian economy (The Sydney Morning Herald) (9 November)
US election 2016 live blog: ‘World collapsing before our eyes (news.com.au) (9 November 2016)
Poll responses
Responses (35)
Peter AbelsonStrongly agree
10
Kym AndersonStrongly agree
10
Garry BarrettStrongly agree
10
It is challenging to distil a coherent economic plan from Trump's public announcements during the election campaign. Clinton's stated plan and public policy experience make her the compelling candidate.
Harry BlochStrongly agree
8
Australian exports to the US are exposed to the threat of protectionist policies promised by Trump to say nothing of the potential for unsettling world financial markets.
David ButlerStrongly agree
8
My strong agreement reflects vehement opposition to the republican nominee more than it reflects vehement agreement with the democratic nominee.
Lisa CameronStrongly agree
10
I am sick of reading that both presidential candidates are weak candidates and seriously flawed. Hillary Clinton is one of the most experienced candidates to run for office. You need not agree with all of her policies but she is super smart, driven, and has accomplished a great deal. Just look at her CV. Donald Trump is a dangerous, unpredictable ego maniac who knows very little about public policy. Clinton will be a steady foreign policy hand whereas Trump may wreak havoc. The gender bias in the coverage of this election and in the reactions from the general public is seriously depressing.
Fabrizio CarmignaniAgree
9
Even if the effects of US economic policy on Australia are indirect and probably less strong than the effects of Chinese and (possibly) Japanese economic policy, I think that the question is relevant. The answer is unambiguous: Hillary Clinton is the superior candidate. Period. Donald Trump's economic policy plan (at least for what we have seen and heard in this campaign) is a mix of autarchy and tax cuts which will damage the US economy, increase inequality, and ultimately send a disrupting shock wave across the global economy. Australia (or the rest of the world, for that matter) certainly does not need that.
Deborah Cobb-Clark2Strongly agree
10
Max CordenAgree
10
Trump would be a disaster for the world. Do we want another Hitler? Or Mussolini? No, No. Hillary is Ok.
Lin CraseStrongly agree
10
Kevin DavisStrongly agree
10
Uwe DulleckAgree
10
I do feel that a Trump presidency will have a strong impact on the world, and maybe most importantly for Australia, the Chinese economy. Given the role trade has for Australia, this Has to have direct effects on the Australian economy. In the long term one may argue that a Trump presidency may bring us to the end on the American hegemony, with China likely to taking the lead next. In the long term, this may be beneficial for the Australian economy (but there is a lot of uncertainty with regards to China's rise and what would be the impact of China's rise).
Chris EdmondStrongly agree
9
I believe that Trump would be an unmitigated disaster for the US and the global economy. I can't see any realistic scenario by which Australia would benefit from such a calamity. I truly hope that Trump is resoundingly defeated on Nov 8. That this dangerous, appalling, unstable individual has won the Republican primary and has come so close to winning the presidency fills me with dread.
ALLAN FELSStrongly agree
10
I am concerned at her attitudes to trade. Having said that, the major trade agreements under discussion now have many limitations.
Gigi FosterAgree
9
Clinton provides superior stability and policy certainty, and she is also a bigger supporter of free trade policies, and these aspects of a Clinton presidency would both work in Australia's favour. Also, if Trump were to become president, the political influence of the USA on the world stage would likely decline at least temporarily, and this would indirectly affect Australia as an ally of the USA.
john FreebairnAgree
8
It is very hard to know what Trump really proposes, and then what he might activate if elected and what economic policies Congress would support. Therefore much uncertainty. His anti-trade and immigration views would put a brake on international trade. His incoherent budget strategy is likely to become an adverse global economic shock. On the other hand, the very-much more of the same Clinton economic strategy if followed seems unlikely to overcome the many economic challenges facing the US and world economies, with adverse flow on-effects to the Australian economy.
Paul FrijtersDisagree
6
Much as Trump-bashing is all the rage at the moment, I just don't think the outcome of the US elections matters that much to Australia or its economy. Both candidates will be our ally if elected. What is happening in China is far more important to us on all counts (trade, tourists, students, capital flight). I can't see much effect of either Trump or Clinton on US-Australia trade. So the difference would have to come from far-fetched scenarios, such as the likelihood of costly wars begun by the winner, and I on balance don't think Trump is more likely than Clinton to drag us into costly wars that we should not be in.
Lata GangadharanStrongly agree
8
Stephen KingAgree
6
I only agree because the alternative is so awful. If the Republicans had put up a half decent candidate then they would be a shoe-in by now. Will Clinton be 'good' for Australia? Probably not given her campaign rhetoric. Will she be better than Trump? That is a low bar to hurdle!
Geoffrey KingstonUncertain (neither agree nor disagree)
5
Hillary Clinton looks like a more responsible individual than Donald Trump. She is less likely to institute damaging barriers to international trade. On the other hand, she did not shine as Secretary of State, looks as if she will retain the growth-sapping company tax rate in the United States (39 per cent), and could waste public money on the kind of politicised and low-productivity infrastructure we saw here in Australia during the Rudd-Gillard era.
Michael KnoxDisagree
8
We should recall that both candidates reject the Trans Pacific Partnership, so to make a comparison of the candidates we should look at there fiscal programs. A non partisan analysis can be found on the website of The Committee for a Responsible Federal budget.In a newsletter published for our clients on 5 November. We find that the Republican program expands the US budget deficit expands the US budget deficit from 3.3 % of GDP now to 4.5 % in 2018. This compared to a Democrat budget deficit of 3.5% of GDP in 2018. Hence the Republican budget provides more stimulus to world trade and hence the Australian economy. The most important feature of the Republican program seems to be the reduction in the headline corporate tax rate from 35% to 15% together with the elimination of almost all corporate tax deductions. We note that the effective US corporate is now only 18 %. We estimate that this corporate tax reform would increase after tax corporate earnings by 20% This should increase US private fixed capital investment both in the US and in Australia. Our news letter is on our website
Rodney MaddockAgree
7
I expect Clinton to be badly hamstrung by Congress so we are likely to see a lot of disruption and widespread unease during her presidency. I think she is likely to be a much more predictable leader so we an foresee more clearly what she might do but the US seems very uncertain about where it is going, and what its role in the world might be so times will be volatile.
Tony MakinUncertain (neither agree nor disagree)
7
On the basis of Donald Trump's attacks on international trade in particular, the statement is most likely true. But what he says and what he would do if elected could be quite different.
Warwick McKibbinStrongly agree
9
"Superior" is the key word. She may not be a good President for Australia's interests especially if the Democrats in the Congress swing her even further to the left particularly in damaging trade policy and further threatening the fragile global economy.
Doug McTaggartUncertain (neither agree nor disagree)
5
Flavio MenezesStrongly agree
10
James MorleyStrongly agree
10
Margaret NowakStrongly agree
10
Premised on Trump actually doing what he said he will if elected.
John PiggottStrongly agree
10
John QuigginAgree
7
Trump would be immensely damaging to US economy and society. The flow-on effects to Australia would mostly be negative. However, it's hard to predict the economic outcomes given the difficulty of knowing what Trump will do and the complexity of general equilibrium effects.
Rana RoyDisagree
7
Enlightenment, said Kant, is the capacity to use one’s reason without the guidance of another. Notwithstanding the guidance of the signatories to the “US Nobel Laureates for Hillary Clinton” Open Letter, my reason dictates an answer in the negative. I may be wrong and I hope I am wrong; but I fear I am right and I think it right to share my fears. If Hillary Clinton were to be elected President, I expect the following to obtain pari passu: she will win the Electoral College with considerably less than 50% of the popular vote; the Republican Party will retain control of the House and very likely the Senate; the Republican-led Congress will make the fullest use of the findings of recent and continuing FBI investigations (see the statements in response to the FBI Director’s letter of 6 November by Speaker Paul Ryan and by the Chairman of the RNC); the Republican leadership will do so armed with opinion polls showing the majority of Americans believe that Clinton acted “illegally” and/or “unethically” (McClatchyMarist poll) and that she is not “honest and trustworthy” (New York Times poll). In consequence, there is a serious risk of a re-run of the Richard Nixon Presidency à la 1973-1974 and, with it, a resulting policy paralysis across the key economic portfolios, including international economic relations – just at a time when bold policy responses are required to meet the mounting economic challenges facing American and global society. At the same time, I agree with the US Nobel Laureates where they identify Donald Trump’s proposals on trade, immigration, tax cuts and debt default as serious risks to the global economy. Thus, irrespective of who wins the Presidential election, I believe the result of the election will deliver a worse economic outcome for the US and for the world, including especially trade-intensive economies such as Australia, in the years immediately ahead of us – at least, over the calendar years 2017 and 2018 – than obtains as at today, 7 November 2016. In the context of this prognosis, the question of which of the candidates would deliver the worst variety of this worse outcome is a secondary issue and depends on too many unknowns to be answered with confidence: what matters is that we are likely heading for choppy waters and need to plan accordingly.
Peter SheehanStrongly agree
8
Jeffrey SheenStrongly agree
8
I have to agree. The outcomes for Australia in the event of a Trump victory are much more uncertain, and are expected to be much more negative.
Nigel StapledonAgree
3
In terms of temperament, Hilary Clinton is clearly the better candidate. But she is also divisive and will have a very weak mandate. In terms of policies, not clear exactly what Hilary Clinton will do. Will she also close down the TPP free trade agreement which would be good for Australia (and also good for the US). Beyond all the rhetoric and heat, how much will actually change in the US? I suspect not much.
Joaquin VespignaniStrongly agree
9
Yes, because the economic agenda proposed by Mr. Trump is not clear. So far Trump’s proposed economic policies are based on economic outcomes without clear economic foundations. Poor economic outcomes for the US economy would be bad for the global economy (including for Australia).