Sean Braswell of Ozy.com recently wrote that a President Hillary Clinton will benefit an economic boom that is taking off just at the moment she enters the Oval Office, and she will have her former boss and rival, Barack Obama, to thank for it. Braswell details the five key economic and political trends that should leave Democrats “giddy” and the GOP “scared out of its mind.”
NO. 1: THE U.S. ENERGY EXPLOSION
The U.S. rode its abundant natural resources, particularly oil, to global prominence during the 19th century, and it seems primed to do so again. This time the new growth in oil and shale gas production, made possible by hydraulic “fracking” and other new, non-conventional drilling strategies, means that the U.S. is “well on its way to realizing the American dream” of energy independence, according to the International Energy Agency. The IEA predicts that the U.S. will be the world’s top oil producer by 2015, peaking around 2025 at 12 million barrels a day.
The fact that much of the technology and know-how behind shale gas production also resides in the U.S. means that countless upstream and downstream jobs could be generated as well. According to a recent analysis by Citigroup’s economic research unit, the U.S. energy boom should support between 2.2 to 3.6 million new jobs by 2020. […]
“The collateral job creation is even more important, and it’s just getting underway,” Morris argues, citing several major U.S. industries, including aluminum, chemicals, steel and paper, in which energy is a significant cost component. The American Chemistry Council, for example, estimates that the expected reduction in fuel costs in coming years will generate close to 1.2 million new jobs across eight energy-intensive industries (not including the energy sector itself).
NO. 2: THE AMERICAN MANUFACTURING RENAISSANCE
[There is] increased “reshoring” of previously outsourced jobs. As a recent report from the Boston Consulting Group (BCG) documents, China’s cost advantages are quickly being eroded by rising wages, land prices, corruption and shipping costs, making U.S. labor more competitive and prompting companies from Apple to Toyota to return operations to the U.S.
The U.S. already makes about 20 percent of the world’s goods (roughly on par with China). “Now it will make more,” says Joel Kurtzman, former editor of the Harvard Business Review and author of Unleashing the Second American Century, “as businesses move to the United States to take advantage of abundant energy and capital and tap into our vast reserves of intelligence and creativity.” [..]
NO. 3: CAPITAL AND MILLENNIALS COME OFF THE SIDELINES
The recent economic recession benched at least two major U.S. economic heavyweights for the past five or so years: the accumulated capital held by U.S. corporations and banks, and the pent-up consumer demand of the millennial generation. […]
In his book, Kurtzman estimates that U.S. corporations are holding about $4 trillion in spare cash and says that when you combine that with the approximately $1.8 trillion that the Federal Reserve says is being held by banks as “excess banking reserves,” you are talking about almost $6 trillion on the sidelines, roughly the size of Japan’s entire economy.
But even that, he insists, is “peanuts compared to where the real money lies, jangling around at the bottom of our purses and pockets.” And, as the economy improves, that money is going to pour out of the pockets of younger Americans — the 20- and 30-somethings who have been delaying buying homes, getting married and more during the financial crisis.
Households headed by younger Americans have also been paying down their debts — which have declined an average of 23.7 percent since 2007 — and they are eager to catch up. According to one recent survey, 85 percent of millennials plan to buy a home someday, and 49 percent expect to do so in the next two years. [..]
NO. 4: THIS TIME, HILLARY REALLY IS THE INEVITABLE NOMINEE
[…] Clinton will not confront many of the liabilities she faced in 2008: She won’t be hamstrung by her position on Iraq, nor will she likely have to square off with an opponent in the primary as formidable as Barack Obama[.] And as the Ghosts of Clinton Scandals Past recede further in the American memory bank, any attempt by the GOP to resurrect such ancient sins could prove more destructive to that party than to Clinton. [..]
NO. 5: THE WHITE HOUSE IS TURNING BLUE
[I] what Public Opinion Strategies, a Republican polling firm, labels “The Big Blue Wall,” the Democrats essentially will start the 2016 election with 242 of the 270 electoral votes needed to win the presidency based on the tally of the 18 states that have gone blue the last six elections in a row. Put another way, as Marc Ambinder observes in The Week, even if the GOP nominee wins all five of the key swing states (Ohio, Virginia, Michigan, Wisconsin and Pennsylvania), “he or she will need at least eight more electoral votes.” […]
In short, the next presidency has the makings of a truly landmark one — offering a rare chance to make history, precisely the sort of chance that some think Bill Clinton squandered in the 1990s.
And that is precisely why Hillary will run.