A Clinton presidency will revitalise the US economy

Clinton’s economic agenda looks set to turbocharge US economic activity but she’ll be tested by major power politics.

Democratic presidential nominee Hillary Clinton speaks during a campaign rally at Saint Anselm College in Manchester, New Hampshire. (Justin Sullivan/Getty Images/AFP)

Barring some totally unforeseen event, Hillary Clinton is set to be the 45th President of the US.

Markets are now beginning to make the adjustments and last night we saw the US 10-year bond rate edge higher in anticipation of the Federal Reserve lifting US interest rates. As I look through some of Hillary Clinton’s policies, I can smell a bit of looming inflation. However, while US interest rates will rise, they are not set to go into the stratosphere.

While the world has been looking at what Trump will do, we have largely ignored the incredible revolution Hillary Clinton has on the agenda for the US. Her plan includes some of the things that Malcolm Turnbull said he would do but failed to deliver on.

If she actually carries out her plan, she may get a second term and, in the process, teach the Coalition a thing or two about what a modern government needs to do.

She has woken up to the fact that America needs better paid and more rewarding jobs and that these jobs will not come via large enterprises, so those groups are in for higher taxes (the reverse of Trump and Turnbull) and the introduction of clamps on the export of US jobs.

The US jobs will come from small enterprises, so she undertakes to make sure government agencies and private enterprises pay promptly and on time — small enterprises need the cash if they are to create jobs — in Australia we delay payments, especially from Canberra.

Clinton wants to make it easier to operate and deal with government (in Australia our bizarre anti-small business public servants go out of their way to prevent small enterprises starting by blocking them getting an ABN).

But there are a few areas where we are on the same page or are ahead of Clinton. Australia’s unfair contracts legislation, which comes into operation on November 12, is a historic change (The unfair contract legislation is a big deal, August 10). Clinton has her own version but it is not as good.

Clinton plans a massive investment in US infrastructure — it is the linchpin of her policy. Both Turnbull and Abbott made similar policies but the bloated Canberra public service turned them into a war with the states.

Clinton will not make that mistake and plans to make sure small enterprises get a share of the US infrastructure bonanza. We do have our own version of that Clinton policy. If the Australian Building and Construction Commission legislation can pass the Parliament, it will stop unions selecting who can be tenderers.

We need the ACCC to recognise that modern day ‘cartels’ to exclude efficient small enterprises are run by unions in collaboration with their big company mates who in turn pay big sums to the unions for favourable treatment. Clinton has nothing like that sort of blatant job-destroying corruption in the US — indeed it’s rare in the developed world.

Clinton’s proposed massive infrastructure investment and her plan to lift the minimum wage plus the requirement that employers pay workers for health benefits and other measures will boost the US cost of labour, so Clinton really needs her small business measures to stimulate job creation.

And she also plans to lift the US working population via more refugees.

This all adds up to a rise in economic activity in the US, which will underpin the demand for our commodities.

Her biggest problem is that Russia, China and much of the rest of the world now believes that the Joint Strike Fighter disaster and other US defence mistakes mean that during the Clinton presidency the US will lose military superiority (Markets can’t afford to ignore the resurgence of major power politics, August 30).

Whether the view is right or wrong is academic because countries are acting on the technical data and assume that is what we have ahead.

And, so, the new President of the Philippines is moving closer to China (as he must) while China is emboldened to take control of the South China Sea giving it the power to block Japanese trade routes.

Trump understood the consequences of the Joint Strike Fighter disaster better than Clinton but the fallout from the loss of US airpower will be a big issue in the Clinton presidency.