Sunday, November 20, 2016

Is Trump's Infrastructure Plan a "Trap"?

I'm not sure of what to make of this article, which describes Donald Trump’s infrastructure plan as "a trap."
"[It's] not really an infrastructure plan. It’s a tax-cut plan for utility-industry and construction-sector investors, and a massive corporate welfare plan for contractors. The Trump plan doesn’t directly fund new roads, bridges, water systems or airports, as did Hillary Clinton’s 2016 infrastructure proposal. Instead, Trump’s plan provides tax breaks to private-sector investors who back profitable construction projects."
"Trump’s plan isn’t really a jobs plan, either. Because the plan subsidizes investors, not projects; because it funds tax breaks, not bridges; because there’s no requirement that the projects be otherwise unfunded, there is simply no guarantee that the plan will produce any net new hiring. Investors may simply shift capital from unsubsidized projects to subsidized ones and pocket the tax breaks on projects they would have funded anyway"
And, worse yet,
"because there is no proposed funding mechanism for Trump’s tax breaks, they will add to the deficit — perhaps as much as $137 billion. Yes, some economists think more deficit spending will boost growth. But you can be sure of this: In Trump’s hands, rising deficits will be weaponized to justify future cuts in health care, education and social programs. Just as David Stockman used deficits caused by the Reagan tax cuts as a rationale to slash social programs three decades ago (the “starve the beast” theory), the deficits caused by Trump’s infrastructure tax cuts will be used to justify cuts in programs."
The writer's fourth point seems entirely speculative (and weaselly so, if you'll read the whole piece):
"Buried inside the plan will be provisions to weaken prevailing wage protections on construction projects, undermining unions and ultimately eroding workers’ earnings. Environmental rules are almost certain to be gutted in the name of accelerating projects."
My reactions:

1. The writer, Ronald A. Klain, is, according to the history I was able to find for him, more of a political guy than a policy guy. He does have policy experience, but he's drawn fire for being a political messaging operative known for wading into policy work without real qualifications (e.g. his gig as Obama's "Ebola response coordinator", without prior public health experience). I may be wrong, and I don't doubt that he's a very intelligent and astute observer. But there's an awful lot of conjecture in this article which strikes me, as a writer, as artfully inserted to push buttons.

2. The article keeps singling out "contractors" as the primary fat-cat recipients of the plan's largesse. Maybe I'm misunderstanding, but I'm pretty sure most contractors aren't plutocrats or moguls. So what's wrong with supporting middle-class contractors? I realize they're the dudes who vote Trump, but they only support Trump because the Dems neglected them.

3. I supported Obama's Jobs Bill because the extraordinary conditions of the Great Recession warranted Keynesian spending. A consensus of non-extreme economists consider conservative's beloved austerity an outmoded countermeasure to severe economic distress, so I'm persuaded that governmental spending is good to do when economic cycles crater. But while I still think we need jobs, and that we need infrastructure repair, I would not support Obama's original approach at this time. You don't do New Deal-style undertakings at non-dire moments; that's similarly discredited liberal thinking. So I'd actually lean, at this point, toward an approach using tax credits, incentives, and one-notch trickle down (contractors-to-workers, rather than billionaires-to-everyone). That said, I'd certainly want to ensure that an infrastructure bill really does improve infrastructure, and, of course, that this isn't just "starving the beast" toward some nefarious end.

But here's the thing. Beyond my broad viewpoints, I'm beyond my competence. I'm not experienced enough to study policy first-hand; to grok the language and see clearly through to repercussions and consequences. I'm stuck here! But who do I go to for convincing explanation in such a bifurcated society, where absolutely everyone's angry, everyone's spinning, and where even the most sincere, sober analysis can't help but be colored by assumption and emotion?

If I were a liberal or a conservative, I'd have my cozy nest of experts who speak my language and stoke my confirmation bias. Sometimes I feel like the last American not wanting his assumptions stroked and his anger justified. Going it alone means losing certain perqs of tribal membership.


Richard Stanford said...

You make a lot of sense. Most contractors at that level though are in fact privately owned by multi-millionaires, when they're not massive corporations. You simply can't run an infrastructure-level project with too many small contractors - the individual workers like dump truck operators are often independent, but beyond that you get really big really fast.

Jim Leff said...

Makes sense. Thanks.

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