Almost a week on, the world is still coming to terms with Donald Trump’s shock US election victory. For so many people it was a demoralising result.

My own disappointment comes partly from admiring Hillary Clinton and being convinced her election would have been best for Australia and Asia.

It's also because, as someone who represents a multicultural community and spends a lot of time with disability groups, I found some of what Trump said on the campaign trail deeply disturbing.

But mostly, it’s because I have a baby daughter on the way, due four weeks after Trump’s inauguration. How will I explain to her one day that a person who speaks and thinks of women that way was President when she was born?

Of course, we’ll work with the US because we cherish the American Alliance and it’s bigger than any one person. 

But that doesn’t mean Trump’s behaviour should be excused or forgotten.  And it certainly doesn’t mean we can’t learn anything from what’s happened.

A key lesson is how we respond to people who consider themselves economic and political outsiders here in our own country, just like those in the US.

In hindsight, I wonder if candidate Clinton's fate was sealed when she spoke about putting “half of Trump's supporters into what I call the basket of deplorables”.

In going for the supporters, she showed us what not to do. It's likely she further alienated a group of people who already felt left behind and forgotten.

By demeaning them, she missed the opportunity to address the underlying economic factors that drove them to Trump’s anti-establishment style of leadership in the first place: rising inequality, stagnating wages and declining living standards.

These same kinds of economic factors are hurting people in Australia and the same kinds of extreme politicians are exploiting them for their own political ends.

Take Pauline Hanson, for instance.  Her entire political career has been built around finding scapegoats to explain people’s anxieties. In the 1990s, it was Asian immigration. Now, it’s Muslims.

But these anxieties have economic foundations.  Her political resurgence in the Senate comes from those who see no place for themselves in the modern economy.

With so many people being driven towards the political fringes, the challenge is figuring out how to respond.

I figure there are three paths.

The first is the sneering, snobby disdain for Trump and Hanson supporters we get from the far left.  This is a trap that candidate Clinton fell into with that “basket of deplorables” gaffe.  

But our problem is with Hanson, not her supporters. We can understand their frustrations and reach out to them without excusing her hatred, vitriol and racism. 

Arrogantly attacking people with real fears and real economic concerns will make things worse. And it won’t address what I consider the economic basket of deplorables: stagnant wages, rising inequality and rising underemployment.

The second path – trying to imitate or out-do the Hanson agenda on race or religion – is just as counterproductive.  

But this is the strategy the Turnbull Government adopted through its unnecessary lifetime ban on asylum-seekers who try to come to our shores by boat. They were “rewarded” for this with a Hanson tweet thanking them for mimicking her policies.

Neither of the first two choices will work because they ignore the fundamental drivers of the problem.

The third path will and it’s the one Labor is focused on.

The only reasonable and sensible response is to do more to understand and address the economic reasons behind support for Trump and Hanson and those like them.

That means listening to those who have been driven to the fringes and understanding that, until we find a genuine place for them in the modern market economy, they will continue to look for political alternatives.

That requires us to fill the leadership void left by the Turnbull Government.

It’s bad enough that the Government isn’t addressing the economic undercurrents that are driving people to One Nation. But it’s inexcusable that it is actually exacerbating and accelerating the problem.

Australians have historically been protected by a strong social safety net, decent services and fair industrial relations policies, but they are now under attack.

The alarm bells are sounding, but the Government is ignoring them by hollowing out health and education, attacking penalty rates, going soft on top-end tax avoidance, and pushing through with a $50 billion tax cut for big business that we can’t afford.

Labor’s alternative is all about underpinning the right kind of economic growth – that which is inclusive, which creates jobs, which gives people a stake in our economic successes and attacks inequality and social mobility.

It’s for us to decide how far down the American road we go – economically and politically.  

It will be difficult enough to explain to our kids how Trump and Hanson came to dominate the politics of 2016.  But harder still to say we misdiagnosed the problem, or did nothing about it, or had choices and made the wrong ones.

This opinion piece was first published in The Huffington Post on Monday 14 November 2016. It was based on a speech given to the Queensland University of Technology on the same day.