John Roskam
Australian Financial Review 7th November, 2014
Abbott's big win in Washington DC
The results of the midterm elections in the United States on Tuesday are good for Australia and good for Tony Abbott.
The Republicans gained control of the Senate, increased their majority in the House of Representatives, and won additional governorships.
In the Senate there will be at least 52 Republicans to 45 Democrats, in the House 243 Republicans to 179 Democrats, and 32 governors will be Republican against 17 Democrats. Six years ago the Democrats controlled both houses of Congress and most governorships.
On energy, on climate change, on trade, and on foreign policy the new US Congress will take positions closer to those held by Australia. If any Democrat could be said to be a winner, it's Hillary Clinton - and even that's good for Australia.
Clinton's position as a centrist Democrat and as a potential presidential candidate has been strengthened against the liberal left of her party, whose policies were repudiated at the election.
If a Democrat were to be elected president in 2016 by any measure Clinton would be the best for Australia - she knows this country and she's not as protectionist and not as left-wing as other likely Democrat nominees.
There's a multitude of explanations for Tuesday's election outcome. The excuse Democrats themselves are giving is they were defending a greater number of marginal seats than Republicans. That's true but doesn't explain Republican victories in states that, at the presidential election, had solid pro-Obama majorities.
The one undeniable message from the midterm election is the message that nearly every election sends - it's all about the economy. At exit polls 50 per cent believe the next generation of Americans will have a lower standard of living than the current one, 70 per cent believe the economy is in bad shape, and 78 per cent are worried about the direction of the economy over the next twelve months.
Unemployment in the US might have fallen to less than 6 per cent, but Americans remain fearful for their jobs and fearful for the future.
JOBS AND ENERGY
During the election campaign, while the Obama administration talked more regulations on business to limit greenhouse gases, the Republicans talked about "America's energy renaissance".
Republicans unashamedly talked of the benefits of more energy from more coal, more gas, and more oil. The Republicans deliberately and explicitly connected the benefits of more and cheaper energy to jobs and the revival of the manufacturing industry in the US.
In the US, there's nothing controversial about Abbott's comment that coal is "good for humanity".
Republican senator James Inhofe, from Oklahoma, is likely to be the next chairman of the Senate Committee on Environment and Public Works.
He's compared the United Nations' climate change deliberations to a "Soviet-style trial" where "ideological purity trumps technical and scientific rigour".
The chances of the US adopting an emissions trading scheme or carbon tax any time in the foreseeable future are nil.
(It's often forgotten that even when the Democrats controlled both houses of Congress, Obama did not attempt to impose a ‘price on carbon'.)
The new Republican-controlled Congress is more likely to support the US taking a global leadership role on free trade than was a Congress dominated by Democrats beholden to labour unions.
If Obama were to embark on a new round of negotiations to encourage free trade (not that he shows any signs of doing so) he could still leave a significant, positive foreign policy legacy.
After Tuesday, while the White House will remain in control of foreign policy, there'll be in Congress a growing number of Republicans impatient with seeming reluctance of the Obama administration to deal with the threat of Islamic fundamentalism.
A more assertive American presence in the Middle East especially in dealing with Islamic State would be welcomed by the Abbott government.
Probably the only negative for Australia from Tuesday's US midterms is the impact they will have on next week's G20 meeting in Brisbane. The visit of a lame-duck American president is not that exciting and his speech on American leadership in the Asia-Pacific risks being a non-event.
Because of the drubbing Obama received this week, unfortunately, the G20 will now be a little less glamorous - and a little less relevant.
http://ipa.org.au/news/3199/abbott's-big-win-in-washington-dc
