Although President Bush will officially remain in office until January 20, there is a widespread recognition in Washington that the three-month power vacuum envisaged by the constitution will be unacceptable in the present financial crisis. If Mr Obama is elected, therefore, he will name a new Treasury Secretary almost immediately — the leading contenders being Tim Geithner, the New York Fed President; Larry Summers, President Clinton's last Treasury Secretary, and Paul Volcker, who chaired the Fed from 1980 to 1987. Offices have already been set aside for the new Secretary's team in the Treasury building in Washington and they should start shadowing their Bush counterparts before the end of this week.

How, then, will America's new economic leadership change the world? Rather than speculating about long-term shifts in economic ideology, I will focus on four reforms that the Democrats will probably try to implement even before the new President officially takes power.

First, an avowedly Keynesian fiscal stimulus worth at least $150 billion (£92.8billion) will be pushed immediately through the retiring Congress. In contrast to last spring's stimulus, this one will focus on infrastructure spending and support for local government budgets, rather than tax cuts. Democrat economists say they have identified at least $100 billion worth of road, bridge and sewer programmes “ready to go” within three months — and these projects would re-employ many thousands of construction workers laid off by the housing slump. Another emergency fiscal measure could be the $10 billion to $20 billion loan that General Motors needs to stave off bankruptcy and merge with Chrysler, which the Bush Administration has so far refused to grant. Beyond that, the new fiscal policy will involve huge long-term infrastructure investment, especially in electricity transmission and subsidies for renewable energy. Energy independence, which Mr Obama has highlighted as his top long-term priority, ahead even of health, education and tax reform, could ultimately play a stabilising role in the new Administration's fiscal programme, since the higher energy taxes or tradeable carbon permits required to achieve its energy and environmental objectives would raise trillions of dollars in revenues over the next decade.

Second, the new Treasury team is likely to decide very quickly on a plan to stabilise house prices. Recent statistics suggest that the US property market may be on the point of recovering without any government help, since housing values have already fallen near an all-time low. But be that as it may, there is now almost unanimous consensus in Washington and Wall Street that government measures to stabilise the housing market are a necessary condition for achieving any economic recovery. Numerous detailed plans to stop foreclosures by forcing lenders to write down mortgages and then backing them with government guarantees have been suggested in the past few weeks, but strongly opposed by the Bush Treasury team and also by Mr McCain. One of these plans, proposed by Sheila Bair, a Republican now running the Federal Deposit Insurance Corporation, will probably be adopted in the next few weeks over the objections of Henry Paulson, President Bush's Treasury Secretary, who will be technically responsible for implementing it until January 20.

A third set of urgent decisions may be even more objectionable to Mr Paulson. These will involve his $700 billion bank bailout, which is now viewed as far too generous to the banks by a broad swath of public opinion, including politicians of both parties. The most important will be to impose specific commitments on participating banks to maintain or increase lending, enforcing these if necessary with regulatory or tax changes. In addition, after widespread outrage at announcements of multi-billion dollar bonuses last week by most of the banks in the bailout, the new Administration is likely to impose restrictions on bankers' pay, again backed up by regulatory pressure. This is another reform Mr Paulson has resisted, perhaps because he himself made $700 million as chairman of Goldman Sachs.

Which brings me to the fourth, and probably most important, economic transformation which is about to occur - the transformation in personal leadership. Suppose you believe, as I do, that the financial meltdown triggered by the bankruptcy of Lehman Brothers was not a divinely-ordained retribution for decades of greed and profligacy, but simply a bizarre accident, caused by the incompetence of the Bush Administration, particularly of Mr Paulson. In that case, the arrival of a credible new economic team in Washington, led by respected figures such as Messrs Volcker, Summers and Geithner, could transform psychology in global financial markets. With house prices stabilising and an inspiring new leader replacing the doltish President Bush, American consumer and business confidence could enjoy a similar resurgence.

If tomorrow's election delivers a clear economic mandate to a competent new Administration, the financial markets will soon stabilise — and the US economy could recover surprisingly quickly from the blundering incompetence of Henry Paulson and George W. Bush.

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