It seems that Texas Governor George W. Bush will narrow defeat Vice-President Al Gore in the US presidential election. Many people in Australian agriculture and many business people may greet this news with some joy. The theory is that Mr Bush as president would favour more freedom of trade. That would help open US markets, particularly agriculture, to Australian and other world producers. The theory is also that as a proponent of small government Mr Bush would not be such a big spender. That should relieve pressure on interest rates in the US which in turn would relieve pressure on Australian interest rates and the Australian dollar.
However, the Australian view should not be so optimistic. On the agricultural front, the election result does not augur especially well for freedom of trade. Mr Bush won a high proportion of his vote in the mid-west farm states. He will not be wanting to upset them by withdrawing subsidies and allowing in foreign goods. On the financial front, the noises of a small spending presidential candidate will not translate into a fiscally responsible president. In fact, Mr Bush is likely to hand very large sums of money back to consumers in the form of tax cuts. That is just a risky for surplus and balanced budgets as the bigger spending by government promised by Mr Gore.
There might be a slightly bigger danger with a Bush presidency because of Mr Bush’s attitude to defence. He wants to continue with high-spending programs like the missile shield. Mr Bush has likened himself to President Ronald Reagan. Mr Reagan spent so much on the military that he turned a healthy Budget situation to large deficit, but at least Mr Reagan – faced with the Soviet threat – had some reason for his action. It is doubtful whether Mr Bush’s advocacy of bigger spending on programs like missile defence can be off-set by more isolationist defence policies. He will find huge pressure from the military, the bureaucracy and other governments for the US to continue playing a major international security role.
The closeness of the election has some disquieting elements. It is likely that Mr Bush will see that he is starting with little room for error and virtually no electoral buffer. It means he will have to start campaigning for re-election virtually from the moment he takes office. He will not be have the room to make unpopular decisions. His record as Texas Governor was populist enough. As president he will have a hard job resisting populism because of the lack of buffer. Standing up to subsidised and protected farmers will not be high on his agenda. The other trouble with the close vote is that Mr Bush will have difficulty claiming a large mandate for whatever program he puts up. The mandate will be even less convincing given the lack of specificity in his campaign. It means members of Congress from both major parties will find it easy to vote against him if their electoral chances are threatened.
Mr Bush’s divisive social policies and his obduracy over capital punishment are a major concern. However, most of his extreme views will be ameliorated when he assumes office and with it the cautionary voices of Cabinet members and advisers. He will also be constrained by the natural checks and balances in the US system. So the change will not be as great as the election campaign indicated.