Leaked Trump infrastructure plan is a plan for corporate subsidies

The Trump administration’s plans to rebuild infrastructure in the United States have been leaked, and it appears to be as bad as feared. At least three-quarters of intended funding will go toward corporate subsidies, not actual projects. It is possible that no funding will go directly toward projects.

There’s no real surprise here, given that President Donald Trump’s election promise to inject $1 trillion into infrastructure spending was a macabre joke. What is actually happening is that the Trump administration intends to push for more “public-private partnerships.” What these so-called partnerships actually are vehicles to shovel public money into private pockets. These have proven disastrous wherever they have been implemented, almost invariably making public services more expensive. Often, far more expensive. They are nothing more than a variation on straightforward schemes to sell off public assets below cost, with working people having to pay more for reduced quality of service.

That is no surprise, as corporations are only going to provide services or operate facilities if they can make a profit. And since public-private partnerships promise guaranteed big profits, at the expense of taxpayers, these are quite popular in corporate boardrooms. And when those promises don’t come true, it taxpayers who are on the hook for the failed privatization.

Panorama of Paris (photo by Benh Lieu Song)

The collapse earlier this month of Carillion PLC in Britain put 50,000 jobs at risk, both those directly employed and others working for subcontractors. The holder of a vast array of government contracts for construction, services and managing the operations of railways, hospitals, schools and much else, Carillion received contracts worth £5.7 billion just since 2011. Overall, an astonishing £120 billion was spent on outsourcing in Britain in 2015.

What did British taxpayers get for this corporate largesse? It certainly not was the promised savings. Parliament’s spending watchdog agency, the National Audit Office, found that privately financing public projects costs as much as 40 percent more than projects relying solely on government money. The office estimates that existing outsourcing contracts will cost taxpayers almost £200 billion for the next 25 years. (This report was issued before Carillion’s collapse.) In response, Labour leader Jeremy Corbyn said, “These corporations need to be shown the door. We need our public services provided by public employees with a public service ethos and a strong public oversight,” The Guardian reported.

Naturally, there was one group that did quite well from this privatization: Carillion’s shareholders, who reaped £500 billion in dividends in the past seven years. But it is the government that will have to pick up the tab if the company’s employees are to continue to be paid. On top of that, the company’s pension shortfall reached £900 billion, according to Reuters.

By no means is Carillion’s collapse the only privatization disaster in Britain. A bailout of the corporate-run East Coast rail system is expected to cost hundreds of millions of pounds. There are numerous other examples that have proven windfalls for corporate executives but expensive mistakes for the public.

Offer subsidies first, ask questions later

One of the many empty promises made by President Trump during the 2016 campaign was that his infrastructure plan would “leverage public-private partnerships, and private investments through tax incentives, to spur $1 trillion in infrastructure investment over ten years. It is revenue neutral.”

“Spur” investment, not actually spend on investment. This supposed plan originated with Wilbur Ross and Peter Navarro, a conservative economics professor. Ross, now Commerce secretary (although perhaps not for long if recent reports are to believed), was an investment banker who specialized in buying companies and then taking away pensions and medical benefits in order to quickly flip his companies for a big short-term profit. The two recommended the Trump administration allocate $137 billion in tax credits for private investors who underwrite infrastructure projects. The two claimed that over 10 years the credits could spur $1 trillion in investment.

So the new administration won’t actually spend $1 trillion to fix the country’s badly decaying infrastructure; it hopes to encourage private capital to do so through tax cuts.

That brings us to this week’s leak. The news site Axios published the Trump administration’s six-page outline for infrastructure investment on January 22. The document mentions no dollar figures. But what the document does do is to discuss where money will be sent. First up is “infrastructure incentives initiative,” which is to account for 50 percent of total appropriations. This category will provide grants to be used for “core infrastructure” projects and requires “Evidence supporting how applicant will secure and commit new, non-federal revenue to create sustainable long-term funding” and requires new sources of “revenue for operations, maintenance and operations.”

Netherlands highway (Daan Roosegaarde)

Although it is possible that local- or state-government funding could provide the required revenues, given the intentions of the Trump régime, what this means is that privatization is being counted on for these projects, with corporations taking over public facilities providing the required ongoing revenue streams.

A hint that this is intended is that the first item on a list of “Principles for Infrastructure Improvements” is an intention to make it easier for tolls to be placed on highways. That item is this: “Allow states flexibility to toll on interstates and reinvest toll revenues in infrastructure.” Again, it is possible that state governments might do this themselves. But the more likely scenario is the privatization of highways, with the corporations gaining control then installing toll booths to not only provide funds for maintenance but to hand themselves a perpetual profit. And if the profits don’t materialize, it won’t be private capital holding the bag. For example, nine privatized toll roads in Spain will cost taxpayers there €5 billion because the roads are being nationalized in the wake of the private operators’ failures.

A further hint is found buried in the section on water infrastructure, where we find this passage: “Remove the application of Federal requirements for de minimis Federal involvement.” This is likely intended to provide a green light to privatization of water systems. That has been done in France and Germany, with disastrous results. For example, water prices in Paris doubled over 25 years before the city took back its water system, saving €35 million in the first year and cutting rates. The German city of Bergkamen reduced costs by as much as 30 percent after returning its basic utilities to the public sector.

No details for a plan not based in reality

Another 25 percent of the total appropriations for the White House infrastructure investment plan is a “rural infrastructure program,” under which state governments are “incentivized to partner” with “private investment.” Various other programs constitute the remainder of the plan, none of which are clear as to who or what will be eligible.

The official unveiling of the plan will likely not be released until after the January 30 State of the Union address, according to a report in The Hill. A further sign of the lack of specifics is that the White House has had nothing substantial to say on the topic. The most recent statement on infrastructure that a search of the official White House web page could find was an August announcement that the president had signed an executive order making the “environmental and permitting processes more efficient.”

Channeling the president’s usual disregard for reality, the announcement claimed that “delays” in infrastructure projects cost “trillions” of dollars. The only actual projects mentioned are three pipelines, including the Keystone XL and Dakota Access lines, of which the announcement claims will “create over 42,000 jobs and $2 billion in earnings.” (Those figures appear directly copied from a widely discredited State Department environmental impact statement issued in 2014, when the Obama administration was supporting them.) In reality, a study by the Cornell Global Labor Institute found that, when all effects are calculated, there may be a net loss of jobs. Additional fuel costs in the Midwest, pipeline spills, pollution and the rising costs of climate change would contribute to job losses.

Of course, environmental damages are not considered in Trump administration projections, putting them even more in the realm of fantasy. Consider two World Health Organization studies that concluded polluted environments cause 1.7 million children age five or younger to die per year. The U.S. Environmental Protection Agency estimated a year ago that 230,000 lives would be saved and 120,000 emergency-room visits saved in 2020 if the Clean Air Act is left intact. Globally, air pollution could lead to nine million premature deaths and US$2.6 trillion in economic damage from the costs of sick days, medical bills and reduced agricultural output by 2060, according to an Organisation for Economic Cooperation and Development study.

This doesn’t come cheap, either — a study of energy subsidies estimates the totality of subsidies given to fossil fuels for 2015 was $5.6 trillion. Lest you think some “anti-oil” group made that calculation, that figure comes to us courtesy of the International Monetary Fund! The Trump administration will only add to this mind-boggling total as it has made clear its intentions to further subsidize gas, oil and especially coal, no matter the lack of rational economics. And the cost of global warming? Incalculable. What would be the future cost of hundreds of millions displaced from drowned cities? Or, in the long term, of destroying the Earth’s ability to maintain a stable environment?

Although Donald Trump is the worst yet of a long line of disastrous U.S. presidents, let’s forgo the easy idea that he alone is responsible for facilitating corporate plunder at the cost of all other human considerations. He is highly useful to the plutocrats who control the Republican Party, so much so that talk of a Trump impeachment should be relegated to the level of fantasy for the foreseeable future, barring an all-time wipeout in the 2018 midterms despite the Democratic Party’s uncanny ability to blow elections. The greater question is if sufficient numbers of Trump voters come to realize the degree they were hoodwinked for believing that a billionaire who built his fortune by screwing working people would somehow come to their rescue.

That’s the short term. For the longer term, humanity finding its way out of the dead end it is speeding toward depends on freeing itself from the grips of a system that repeatedly throws up Trumps, Bushes, Harpers, Thatchers and the like. The Trump administration is a symptom, not a cause, of morbid decay.

8 comments on “Leaked Trump infrastructure plan is a plan for corporate subsidies

  1. Joel Meyers says:

    Very enlightening article about what to expect, or prepare to battle against, if there is any of that kind of energy around.

    From the gigantic numbers of the women-oriented demonstrations, the energy is there as a potential, but under Democratic Party domination, it is likely to be taken off the streets at least for another year, and the discussion kept in a within-the-system limit.

    I believe the job of revolutionaries and other seriously principled people is to attend these actions with a view towards raising consciousness about the Democrats being in a tag-team with the Repubicans to enforce capitalist exploitation and oppression on the bulk of the people, and consequently systemically failing to offer any real solutions to the rape and pillage inherently intensifying.

    It should be remembered that the Obama regime, in its first two years enjoying Democratic control of both Houses of Congress, sis nothing but cave in to the Republican minority of every issue, an issue being an area where the duopoly parties agree to disagree.

    The Democratic Party controllers must have been relieved when in 2010, the Republican Party took control of Congress. Now they could blame the Republicans for blocking them from doing what they never intended to do in the first place.

    Even before Obama was elected, when the banking crisis hit, he temporarily suspended his campaign to stand openly with Bush in bipartisan unity for the bank bailout, the giveaway of ordinary people’s tax money to bilolionaire bankers who, incredibly, ran their own super-rich businesses into the ground. Whatever happened to the idea that “taxation without representation is tyranny.”

    This was coupled, on Obama’s watch, with the imperialist destruction of Libya, and the Pinochet-style coup in Honduras, for which Hillary Clinton as Obama’s Secretary of State had a lot to do with,. One of the reasons the Democrats lost the election is that the antiwar wing of the Democratic rank-and-file, in large measure, could not bring itself to endorse the war criminal with fresh, blood on her hands, and proud of it.

    Obama was elected as a reaction to the militarism and war expansion of the prior Republican Bush regime.The expectation was an antiwar president. Instead we got more regime change we could believe in. Then, the Obama administration kept the Bush-Cheney-Rumsfeld-Project for a New American Century wars going at fever pitch, and started a few more on top of those, notably Libya and Syria, not to mention the still unresolved, nuclear-dangerous political aggression in the Ukraine.

    It gets worse. The current Democratic “criticism” of Trump is that he is basically ‘’soft on Russia,” a “Putin Puppet” in the words of Hillary Clinton. Robert Mueller, a Former FBI chief, is being called in to conduct a Russophobic investigation, after presidential campaign debates in which the war-criminal Democratic Candidate calling for a no-fly-zone over Syria and a reclaiming of the Crimea, after a Nazi-Zionist coup that overthrew the elected Ukrainian government, an imperialist takeover, the kind of stuff that could lead to a nuclear exchange between the two super-powers.

    A simple removal by impeachment of Trump would result in Pense, no is not only more fanatically rightwing on domestic issues, but not aboard at all on raprochment with Russia. Don’t forget, he is the one who ratted out Flynn, who he alleged lied to him about discussions with Russian officials.

    Of course, we can have no confidence that Trump will continue any encumbrance of the U.S. war drive, and we should acknowledge that even to the extent that he may slow it down, he is motivated for corrupt reasons, uniting the mafias of the world, and hoping to neutralize Russia and China while the U.S. gets more involved in wars against the colonial world, especially the Muslim world, in a growingly tighter alliance with the Zionist entity “Israel.:

    While some say that the barking Trump, anyway, would be more likely to get us into World War III than the cool-headed Hillary Clinton, her proposals and her record as Secretary of State, and her vote for the Bush aggression in Iraq, are anything but cool-headed. I’m sorry, but one cannot be blamed for speculating that had Hillary Clinton reached the White House, we might be in World War III already.

    So, it is true as you say that Trump is more a symptom than the central disease, which is the capitalist system, which is a war against the general population by banks and corporations, finance capital, in which 1% of 1% of 1%, a few hundred super-rich and their political servants, call all the shots, and call that Democracy, regardless of which titular “leader” from the politicianry they nominate and induce the electorate to vote for, or otherwise, as in Bush’s case clearly, jimmy the election, be it a Trump, a Bush, or an Obama, a Clinton, or whatever figurehead is on TV.

    • There is the argument that there would be more space for maneuver had Clinton won, simply because Democrats have to, once in a while, give something to their base, whereas with Republicans it’s billionaires über alles without mercy. So, although I too could not vote for Clinton nor for any other Democrat, we’d have fewer battles to fight than we now do, with an all-out assault on every social gain of the past century.

      Having said all that, you are of course correct in pointing out that imperialism and government for the one percent stays intact regardless of whether a Republican or a Democrat is in power, and that the system is the problem. Until enough of us accept this, and act on it, our conditions will only get worse. Republican and Democrat office-holders govern, but it is industrialists and financiers who rule.

  2. tubularsock says:

    Well it appears to Tubularsock that Orange-Tweet is just a composite of America at its worst. He is just a reflection of just how low the American citizen has gone.

    And Step-en-fetch-it Obummer and his sidekick Killery with Shrub and Orange Tweet and this is the “cream of the fucking crop” for leadership!

    Almost makes Little Putin and Rocket Man look like liberators!

    • It’s as the guy at the bar sitting a couple of barstools down who endlessly spouts off on everything but knows nothing of what he is talking about, a real ignoramus, somehow got elected president. When an ignoramus has billions of dollars and a television show …

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