Democracy’s just fine, says Michael Thawley

Former ambassador to the US Michael Thawley has rejected ‘hysterical talk’ of a crisis in American democracy.

Michael Thawley, who was ambassador­ in Washington DC between 2000 and 2005, said Mr Biden was a ‘decent person, a consensus person and a prag­matist’.

Former ambassador to the US Michael Thawley has rejected “hysterical talk” of a crisis in American democracy, following an unexpectedly close and potentially contested US presidential election.

“Views have been heard and represented, rather than ­ignored,” he said, suggesting that close elections were “not unique” and democracies everywhere were struggling with “economic ­disruption and cultural disorient­ation”.

Mr Thawley, now vice-chairman of US fund manager giant Capital Group, told investors on Thursday that Donald Trump would remain a powerful force in US politics, even if he was ultim­ately defeated by Joe Biden, which seemed the most likely outcome after a late surge of Democrat votes in critical states.

“Don’t expect Trump to ride off into the sunset,’’ he said.

“He’s done exceptionally well, his position will be extremely strong within the Republican Party.’’

Five US states were still undecided­ on Thursday night, ahead of expected legal action and demands for recounts from Republicans, after a much stronger level of support for Mr Trump than polls had anticipated.

“There’s been a real failure to appreciate the extent of frustration in large parts of the country with DC and the political establishment, and resentment with the preoccupation of elites with what seems to many to be a self-indulgent social policy agenda,” Mr Thawley said.

“These are people who feel marginalised by big changes in the global economy: loss of jobs, changes in technology, and even more broadly loss of national identity.’’

Mr Thawley, who was ambassador­ in Washington DC between 2000 and 2005, said Mr Biden was a “decent person, a consensus person and a prag­matist”.

“But a likely Republican-­controlled Senate means Biden’s radical agenda on tax, climate change and unions is now completely off the table,” he said.

The Democratic presidential contender, former vice-president to Barack Obama, had proposed a “green new deal” built on massive spending increases to be paid for by tax increases on the rich.

“Policies now won’t be radical or populist even though US ­politics will move a bit further to the left, which is a shift that we’re seeing in all Western countries, including Australia — much more focus on income inequality, for instance,” Mr Thawley said. ­

In a research note released on the same day, Capital Group, which manages about $US1.9 trillion in assets, pointed out that sharemarket returns through histor­y tended to be higher when the president and the majority in congress were from opposing ­parties.

Mr Thawley, who was also head of the Prime Minister’s ­Department from 2014-16, also said that a Biden presidency would maintain and perhaps extend­ trade and investment restrictions on China.

“There’s no question in my mind that technology and investment restrictions will continue to be tightened,’’ he said.

You can’t have a situation where there’s major strategic competition and have financial links continue.’’