Jonathan Swan — Trump's dream is to spend close to $2 trillion on infrastructure

Behind the scenes: Trump came into office imagining a presidency in which new projects — "built by the Trump administration" — would be erected all over the country, sources close to him tell me.

• "There was a genuine naïveté about the prospect of Democrats and Republicans coming together to do something on a grand scale with infrastructure," a former White House official told me. "It was one of those things where Trump said it was gonna be easy. He really thought so."
• In an early 2017 infrastructure meeting at the White House with his friend, New York real estate billionaire Richard LeFrak, Trump laid out his grand Trumpian vision. "They say Eisenhower was the greatest infrastructure president. They named the highway system after him," Trump said, per a source who was in the room. "But we're going to do double, triple, quadruple, what Eisenhower did."

Now that would be something. So far though, politics has gotten in the way, as it did in uncutting President Trump's desire to improve relations with Russia ("Putin"). POTUS may be the most powerful man in the world, but he still can't get what he wants.

Axios
Trump's dream is to spend close to $2 trillion on infrastructure

Jonathan Swan

Felipe Rezende — Banks, Capital Markets, and Institutional Investors as Providers of Long-Term Finance

This is the second in a series of blog posts on financing infrastructure assets.

Multiplier Effect
Banks, Capital Markets, and Institutional Investors as Providers of Long-Term Finance

Felipe Rezende | Director, Economics and Finance Program, Bard College and Research Fellow, The Levy Economics Institute

Felipe Rezende — The Massive Need for Infrastructure in the Emerging and Developed World

This is the first in a series of blog posts on financing infrastructure assets.

Multiplier Effect
The Massive Need for Infrastructure in the Emerging and Developed World

Felipe Rezende | Director, Finance program and Associate Professor of Economics & Finance, Bard College and Levy Economics Institute

Michel Hudson — Tollbooth Trump

Shamini Peries interviews Michael Hudson. Video and transcript.

Michel Hudson
Tollbooth Trump
Michael Hudson | President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, and Guest Professor at Peking University

Hunter Blair — The Trump administration’s infrastructure plan remains empty talk and will be paid for by cuts to programs that help working people

"Smoke and mirrors."

Economic Policy Institute
The Trump administration’s infrastructure plan remains empty talk and will be paid for by cuts to programs that help working people
Hunter Blair

PoliticalDog101 — Congress Won’t Pay Infrastructure Bill…So Trump Wants State’s To Tax Their Own People For It

The way states pay for large capital projects in America since the 1930s is to recoup their tax dollars BACK from the Federal government….

Donald Trump ran of a BIG program to help states get people to work by fixing roadways, airports and other mass transit project with infrastructure program….Democrats were happy to agree to this…..

Conservatives in Trump’s party want no part of it.

Trump now thinks he can sell the states and localities paying for this thru RAISING TAXES on their citizens?...

PoliticalDog101
Congress Won’t Pay Infrastructure Bill…So Trump Wants State’s To Tax Their Own People For It

Michael Hudson — Alluring Infrastructure Income

Well, everybody is in favor of infrastructure. Since the beginning of civilization – starting with the Pyramids, temples and city walls – most of the capital investment in every country of the world, even today, is in infrastructure. That’s why banks, corporations and wealthy investors want to privatize it, because privatizing it is like conquering a new country and being able to take its income.

You can take into your own hands, for your own profit, the largest capital investment there is – what used to be in the public domain. The roads, railroads, airline companies, water and sewer systems and everything that people need, including now the schools can be privatized and instead of providing them to the economy, to make the economy operate at a lower cost, you can make people pay two or three times as much as they were doing. 

Operating this infrastructure for profit (with high-interest credit) will vastly increase the cost of the economy, without increasing wages or the ability to pay for these privatized services. This will squeeze the living standards while sucking up more and more money to the top of the economic pyramid....

Privatization of public assets is a pillar of neoliberalism along with deregulation of finance and business. This is called "liberalization of the economy" in the name of "increasing freedom" by reducing government control of the private sector, which is "socialism."

This was first imposed on Third World countries and then Second World countries after the fall of the Berlin Wall and the subsequent collapse of the USSR. Now it is being applied with a vengeance to the First World.

Michael Hudson
Alluring Infrastructure Income
Michael Hudson | President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, and Guest Professor at Peking University

Adam Kredo — U.S. Government Computers Still Not Safe From Cyber Attacks

Can't afford it, I guess.

Washington Free Beacon
U.S. Government Computers Still Not Safe From Cyber Attacks
Adam Kredo

Michael Stephens — “Stimulus” Isn’t the Best Reason to Support (or Oppose) Infrastructure Spending

Pavlina Tcherneva on Bloomberg with Joe Weisenthal.

Multiplier Effect
“Stimulus” Isn’t the Best Reason to Support (or Oppose) Infrastructure Spending

Michael Stephens

Peter Cooper — Not Investing in Infrastructure, Culture and Knowledge IS the Burden We Place on Future Generations

If we were to believe most politicians, we’d be under the mistaken impression that government not investing today does future generations a favor. Leaving communications systems underdeveloped, road and transport networks crumbling, education and public health systems deteriorating, our cultural institutions eroding, developments in science and technology stagnating, and so on, will supposedly free future generations of any burden that might otherwise be imposed upon them.
If we set aside the politicians’ Orwellian Newspeak, it is obvious that investing in infrastructure today helps future generations, and not investing in it leaves future generations in a worse state. It is also clear that this investment for the benefit of future generations requires no reduction in our own current levels of consumption when, as now, many unemployed and part-time workers want full-time jobs and there are plant, machines and other equipment being left unused....

heteconomist
Not Investing in Infrastructure, Culture and Knowledge IS the Burden We Place on Future Generations
Peter Cooper

Robert Skidelsky — Slouching Toward Trump

Strip away the campaign talk and Trump's mandate is to reform a broken and corrupt system created by elites, dominated by elites, and operated for elites.

That's something that progressives can get behind. They need to cooperate with President-elect Trump where they can to effect change and offer competing proposals for reform where they cannot.

Certainly, progressives can get behind infrastructure rehabilitation. Reaganomics was paid for in part by taking depreciation without spending on repair or improvement. That policy has been in place since.

Project Syndicate
Slouching Toward Trump

Robert Skidelsky | Professor Emeritus of Political Economy at Warwick University, a fellow of the British Academy in history and economics, and a member of the British House of Lords

Francis Fukuyama — Exporting the Chinese Model

As 2016 begins, an historic contest is underway, largely hidden from public view, over competing Chinese and Western strategies to promote economic growth. The outcome of this struggle will determine the fate of much of Eurasia in the decades to come.…

Project Syndicate
Exporting the Chinese Model
Francis Fukuyama | senior fellow at Stanford University and Director of the Center on Democracy, Development and the Rule of Law.

Roger Farmer — A Bridge Too Far?

Closing in. Roger Farmer weighs the options and their consequences.

Roger Farmer's Economic Window
A Bridge Too Far?
Roger Farmer | Distinguished Professor of Economics at UCLA

China proves that nations don't need big stock markets.

China's stock market is a fraction of the size of the U.S. stock market. One-sixth or something like that. Yet China's economy is nearly as large or even bigger by some  measures than the U.S. economy.

Check out stock market capitalization comparisons here.

China is building high speed trains, new airports, power plants, buildings and all kinds of infrastructure while the U.S. is looking more and more like a Third World Country by comparison.

But...the U.S. has a HUGE stock market. Big deal. What's it give us? A casino for financial speculators to play in? Yeah, that's about it.

No need to have a huge stock market or huge financial sector. It's just a source of financial speculation and risk and it brings very little real return to the broader citizenry.

David Dayen — Why a $1 trillion DC spending spree is just what America needs

Russia raids infrastructure fund to save the banks

I have never seen such disastrous, ill-conceived policy. (Well, maybe with the exception of the Eurozone austerity, but we know that is solely to benefit the plutocrats.)

Russia is taking money away from infrastructure investments and giving it to the banks to "save" them.

First of all the banks don't need to be saved. They can still function in the role of clearing and settlement as long as the central bank makes sure their liabilities are met. No problem there--the libabilities are in rubles.

Did anyone over there ever have a look at Japan? Those banks have been zombies for decades thanks to loads of really bad investments, but no problem...people deposit money, checks get cashed, cleared...all the usual banking stuff happens without a hitch. They even make loans; the ones that are solvent at least.

Russia's in dire need of infrastructure investment. In fact that would be a great way to immunize the entire Russian economy against Western sanctions: boost infrastructure investment, massively.

But instead their new finance minister (excuse me, I meant to say, finance idiot) is imposing austerity as a way to "fix" the economy. Russia apparently ran out of rubles(?) and the ones they got left they're giving to the banks? Why this is happening I am not sure? I can only chalk it up to idiocy at the top levels of leadership.

I was bullish on Russia. I even bought some Russian ETF's recently. But now I think it's a dumb move. So much stupidity going on. So much. I really feel bad for the Russian people. They're good people. They deserve better.

Jason Easley — Bernie Sanders Flexes His Muscles By Introducing Bill To Create 13 Million New Jobs

Sen. Bernie Sanders is using his new position as the top Democratic caucus member on the Senate Budget Committee to push a new bill that he will introduce to the new Congress that will create 13 million jobs by rebuilding the nation’s bridges and roads.
Here are the details via Sen. Sanders…

And Bernie has Stephanie Kelton there as the chief economist for the minority Senate budget committee to say that affordability is no problem.

Politics USA
Bernie Sanders Flexes His Muscles By Introducing Bill To Create 13 Million New Jobs
Jason Easley

Peter Cooper — It Doesn’t Have To Be This Way

There is really only one other employer capable of stepping up to the plate when the private sector is in the doldrums: the government. And there is really only one entity that can gift us extra spending money: the government. As far as large customers go, there are two that can partly take our place in the market. One is the government through public consumption and investment. The other is the “rest of the world”. Foreigners provide a market for our exports. This looks promising until it is realized that not every country can rely on export demand to trade themselves out of trouble. The exports of one country are the imports of another. For the world as a whole, there is no net impact on demand or employment.

heteconomist
It Doesn’t Have To Be This Way
Peter Cooper

Yves Smith — Obama Plans to Sacrifice Ordinary Americans Yet Again in “Public/Private Partnership” Infrastructure Scam

Apparently Obama’s idea of a Holy Week sacrifice is to feed American citizens to rapacious bankers, this time through the device of “public/private partnerships” to support infrastructure spending. Some NC readers were correctly alarmed by a speech by Obama on Friday on using public/private partnerships to fund infrastructure spending. This is not a new idea; Obama first unveiled it in his Statue of the Union address. But it is a singularly bad idea, that is, if you are anyone other than a promoter of or investor in these deals.

As we’ve discussed at length earlier, these schemes are simply exercises in extraction. Investors in mature infrastructure deals expect 15% to 20% returns on their investment. And that also includes the payment of all the (considerable) fees and costs of putting these transactions together. The result is tantamount to selling the family china and then renting it back in order to eat. There is no way that adding unnecessary middlemen with high return expectations improves the results to the public. In fact, the evidence is overwhelmingly the reverse: investors jack up usage fees and skimp on maintenance. And their deals are full of sneaky features to guarantee their returns.

Naked Capitalism
Obama Plans to Sacrifice Ordinary Americans Yet Again in “Public/Private Partnership” Infrastructure Scam
Yves Smith

Piling on more rent instead of government funding "in order to advance democracy and the free market." Neoliberalism aka crony capitalism at work.

Katelyn Fossett — U.S. Eyes Pension Funds to Renew Crumbling Infrastructure

On Friday, President Obama outlined a new plan that, he said, would seek to attract private investment for public infrastructure, while also creating new bonds and offering more loans for similar projects. 

1.3 trillion dollars needed

A think-tank in Washington has one idea for leveraging private investment toward infrastructure: encourage the investment of labour union pension funds in infrastructure projects.

“Couple [our poor state of infrastructure] with pension funds, which are long-term, patient investors, with stable, risk-adjusted returns, and this fits well with our fiduciary duty,” Dan Pedrotty, managing director of benefits and pensions at the American Federation of Teachers, said Thursday at the release of a report on the topic at the Center for American Progress (CAP).

Pension funds present a viable alternative to traditional public financing because their large-scale assets and long-term nature give them the ability to put up a large amount of capital and see projects through to their payoff—obstacles typically thought to be too large for any investor except the federal government.

The report also suggests the time is ripe, both economically and politically, for this kind of change.

Inter Press Service
U.S. Eyes Pension Funds to Renew Crumbling Infrastructure
Katelyn Fossett

This is incoherent from the point of view of monetary economics given the existing monetary system. However, there is actually a rationale to it that works. In providing infrastructure bonds, the federal government is providing safe asset and an interest subsidy for future pensioners, similar to the Social Security trust fund.

While neither taxation nor borrowing are necessary operationally, they are apparently necessary politically in order to elicit the bipartisan support required to pass legislation. The difference is that the Social Security trust fund is "funded" by taxes, while the infrastructure improvements would be "funded by borrowing."

Whatever it takes, I guess, given the prevailing level of asininity in policy making. But it would be simpler to just cut to the chase and use the available policy space to deploy the available resources that are not being requisitioned by the private sector.