Yeah, doesn’t sound right, does it? Well, whoever sets The Donald’s agenda has put this number one from the beginning. This was the only actual policy item DJT cited in his acceptance speech on election day and it’s likely the first (and maybe only) policy he will succeed in fully implementing. That effort starts this week.
Here are excerpts from yesterday’s Journal article on the subject and my two-cents.
Focus on infrastructure could help Mr. Trump find common ground with members of Congress
President Donald Trump will launch a new campaign this week aimed at fulfilling his pledge for $1 trillion of infrastructure investment, hoping to capitalize on lawmakers’ support for rebuilding the nation’s transportation systems at a time when his tax and health legislation are in flux.
Mr. Trump will begin with a White House event Monday announcing a push to privatize air-traffic control across the U.S., in what backers say could be a catalyst for improving speed and fuel efficiency across the aviation industry.
Buyer beware – all I care about is safety, and transitions contain inherent risk. “Nobody died in a crash of a United States-certificated scheduled airline operating anywhere in the world in 2016 [for the] seventh straight year.” Don’t fix it if it ain’t broke.
The White House still hasn’t said how it plans to pay for the federal government’s share of the projects, and officials said a more detailed proposal will come at an unspecified later date. But Mr. Trump’s top economic adviser said the administration aims to encourage states and cities to bear much of the burden.
“We want to talk to them and make sure we’re partnering with them to make sure that they can use their tax dollars as efficiently,” White House National Economic Council Director Gary Cohn told reporters Friday. “We can be a good partner with them in helping them to enhance their infrastructure projects.”
This is actually an old ploy on getting more bang for your buck. The feds can get their agenda through–whatever that might be–using state and local funding while keeping their own powder dry for other items. In addition, this will increase the influence and inter-connectedness of federal and state and local governments more generally – not a good thing. And let’s not forget, construction generates debt, banks love debt and Gary Cohn is first and foremost a banker.
Shifting the discussion to infrastructure could mean the best chance for Mr. Trump to find common ground with members of Congress who object to other elements of his agenda, given the broad agreement that the nation’s roads, bridges, rails and water facilities are in disrepair. It would, however, mean finding a way to live up to campaign pledges that many believe are irreconcilable—investing $1 trillion in infrastructure, but doing so with funds raised almost entirely from the private sector.
I thought they just said they were getting the state and local governments to pay for it? In any case, the reason this is something everyone can get behind is that it is the essence of big government cronyism–what DC pol doesn’t love that?!
[Scott] Rechler, a Democrat whose own real-estate company has financed infrastructure like sewers and utilities in public-private partnerships with local government, said the administration’s plans should recognize that private financing won’t be able to replace federal funding in fixing some critical areas—from railroads to crumbling dams—where investors can’t turn a profit.
“It’s not free,” Mr. Rechler said. “At some point or another someone’s going to have to pay for this.”
For a taste of the true nature of public-private partnerships, watch this (at 1.5x speed):
Just like the IMF demands a country’s natural resources to repay the debt generously offered countries that can’t afford it, so too will public-private partnerships gain control of the resources that don’t offer the promised return on investment.
And in case you missed the contradiction in this article from one paragraph to the next, it’s not going to be “almost entirely” financed with private funds, unless you consider all taxpayer money private funds (which ultimately it is, post-coercion.)
In remarks to reporters last week, presidential advisers made clear they will be attempting to pair the president’s (sic) pledge to renew critical infrastructure with a shift of responsibility for some of the costs from federally funded grant programs to state and municipal taxpayers.
For more, check out my perhaps surprising thoughts on the public-private partnership.
Lest you think the infrastructure plan isn’t all about lining the pockets of bankers, here’s a clue from last week’s Journal:
Firm taps Sean Klimczak to lead its new infrastructure business
Now Mr. Klimczak is ascending to a position in which he should be able to write many more 10-figure checks. Blackstone has tapped the 40-year-old to lead its new infrastructure business, which is aiming to raise $40 billion in a fund focused on building and buying U.S. public works.
Blackstone said that it expects the fund to have buying power of about $100 billion once debt is added to the mix, and that it will have a broad mandate to invest in assets ranging from power plants and pipelines, to water systems, roads, bridges, airports and hospitals.
The firm’s plans were unveiled Saturday after officials with Saudi Arabia’s Public Investment Fund disclosed in Riyadh as part of President Donald Trump’s visit that they have agreed to seed the fund with $20 billion….
Also, Mr. Klimczak and other Blackstone executives now have to raise the other $20 billion they seek. While Blackstone has shown the ability to raise huge amounts of capital, it will be competing with more than 100 other fund managers who are collectively seeking to raise more than $100 billion for other infrastructure funds, according to industry tracker Preqin….
Mr. Klimczak began meeting with Saudi officials in April 2016 about an infrastructure fund that would never expire, allowing Blackstone to take on projects that took years to come to fruition and sometimes had lower returns than private-equity fund investors sought. Blackstone executives say that strong political support for infrastructure spending from both U.S. political parties during last year’s presidential campaign made it an attractive time to launch a dedicated fund, which it had tried and failed to do a decade earlier.
Here are excerpts from two more articles on the plan to privatize air traffic control from The Journal today:
Trump’s air-traffic spinoff would be a great flight forward.
…Mr. Trump announced principles for converting air-traffic control into a nonprofit. The new entity would be governed by a board of directors, including representatives for airlines, unions, airports and others. Instead of taxes, the outfit would be funded by user fees, which is how Canada has financed air-traffic services since 1996. The outline makes small tweaks to House Transportation Chairman Bill Shuster’s proposal that stalled last year….
FAA regulates itself, so a separation would end this conflict-of-interest and allow the agency to focus on safety and certification. This reform is endorsed by the International Civil Aviation Organization, and only the most cynical on the left could claim a spinoff threatens passenger safety. Democrats will say Mr. Trump is auctioning off air traffic to big business, but the principles are explicit that the entity must be a nonprofit. The outline gives airlines only two seats on the 13-member board.
GOP-controlled Senate opted not to pass similar measure last year
WASHINGTON—Promising fewer delays on the tarmac and cheaper fares for airline passengers, President Donald Trump on Monday endorsed a plan to transfer control of the nation’s air-traffic control system to a private nonprofit.
The idea is a longstanding goal of some Republican lawmakers and one that the White House hopes will spark a broader plan for $1 trillion in new infrastructure spending….
The proposal would end the need for some federal taxes that would likely be replaced by user fees to pay for the new system, which would include updated GPS technology. Supporters, including many Republican lawmakers, say more than 50 countries have implemented similar systems, which may mean more efficient landing patterns and routes for planes and could allow air-traffic controllers to move more planes per hour through busy air corridors.