Herr Trump’s ConAct with the American Voter

“We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals…. And we will put millions of our people to work as we rebuild it.”

~ President Donald Trump

 In Pete Dolack’s Feb. 25 ‘The Bait and Switch of Public-Private Partnerships’ he laughs that in these days of genteel pubic relations, the public/private trope is used instead of ‘corporate plunder, as it ain’t ‘the public’ who get the benefits.  He notes that with the massive tax cuts that Herr Trump has promised big bidness and the 1%-ers, his promised $1 trillion in new infrastructure investments is just another global  neoliberal way to shovel lucre ‘into the maws of corporate wallets’, and we’ve seen it at work, and as per Trump’s ‘putting Amerikans back to work: Jobs, Job!  Jobs!©’, Dolack reminds us that privatized (formerly public) services and infrastructure are always more expensive in the end, and workers end up as wage slaves by way of low-paying contractors in the end, and an added benefit to the privatizers is that there’s zero public accountability.

The new ‘private’ company will always seek to maximize profits by keeping ‘costs’ under control and maximizing revenues.  But wait!  If there’s nowhere else to ‘shop around’ for those private products, ya get a little older and land in debt-prison, while the parasites get a free lunch.

“To return to my use of the word parasite, any exploitation or “free lunch” implies a host. In this respect finance is a form of war, domestically as well as internationally.

At least in nature, “smart” parasites may perform helpful functions, such as helping their host find food. But as the host weakens, the parasite lays eggs, which hatch and devour thehost, killing it. That is what predatory finance is doing to today’s economies. It’s stripping assets, not permitting growth or even letting the economy replenish itself.

The most important aspect of parasitism that I emphasize is the need of parasites to control the host’s brain. In nature, a parasite first dulls the host’s awareness that it is being attacked. Then, the free luncher produces enzymes that control the host’s brain and make it think that it should protect the parasite – that the outsider is part of its own body, even like a baby to be specially protected.” 

“What this means in the most general economic terms is that finance and property ownership claims are not “factors of production.” They are external to the production process. But they extract income from the “real” economy.

They also extract property ownership. In the sphere of public infrastructure – roads, bridges and so forth – finance is moving into the foreclosure phase. Creditors are trying to privatize what remains in the public domains of debtor economies. Buyers of these assets – usually on credit – build interest and high monopoly rents into the prices they charge.”  (Michael Hudson)

So as Dolack says, the neoliberal scheme is that public assets are sold far below cost (I might say ‘value’), and the public has to pay more for crappier service.  But back to Pete:

Corporate subsidies, not $1 trillion in new spending

“The use of the word “plans” is rather loose here. No more than the barest outline of a plan has been articulated. The only direct mention of his intentions to jump-start investment in infrastructure is found in President Trump’s campaign web site. In full, it states the plan “Leverages public-private partnerships, and private investments through tax incentives, to spur $1 trillion in infrastructure investment over ten years. It is revenue neutral.” The administration’s official White House web site’s sole mention of infrastructure is an announcement approving the Keystone XL and Dakota Access pipelines without environmental reviews, and an intention to expedite environmental reviews for “high priority infrastructure projects.”

Wilbur Ross, an investment banker who buys companies and then takes away pensions and medical benefits so he can flip his companies for a big short-term profit, and who is President Trump’s pick for commerce secretary, along with a conservative economics professor, Peter Navarro, have recommended the Trump administration allocate $137 billion in tax credits for private investors who underwrite infrastructure projects. The two estimate 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.

There is a catch here — private capital is only going to invest if a steady profit can be extracted.”

He’d clipped these cautionary tales from a Sept. 2016 piece of David Dayen’s:

“Private operators will only undertake projects if they promise a revenue stream. You may end up with another bridge in New York City or another road in Los Angeles, which can be monetized. But someplace that actually needs infrastructure investment is more dicey without user fees. So the only way to entice private-sector actors into rebuilding Flint, Michigan’s water system, for example, is to give them a cut of the profits in perpetuity. That’s what Chicago did when it sold off 36,000 parking meters to a Wall Street-led investor group. Users now pay exorbitant fees to park in Chicago, and city government is helpless to alter the rates.”

He has a long, long section on Privatized Plunder’s results in Britain, Canada, really, much of Europe resulting in disasters to ordinary citizens as well as government debt.  He lists a few of the nations that have already, or are in the process of, re-municipalizing those projects in France, Germany, notably water and energy projects.  Not in Denmark yet, however, where Goldman Sucks takeover of their formerly state-owned energy company.

But as for water, the wars have already begun, haven’t they?  He notes:

“Water is big business. Suez and Veolia both reported profits of more than €400 million for 2015. Not unrelated to this is the increasing prominence of bottled water. Bottled water is dominated by three of the world’s biggest companies: Coca-Cola (Dasani), PepsiCo (Aquafina) and Nestlé (Poland Springs, Deer Park, Arrowhead and others). So it’s perhaps not surprising that Nestlé Chairman Peter Brabeck-Letmathe infamously issued a video in which he declared the idea that water is a human right “extreme” and that water should instead have a “market value.”

He’s joined, of course, by many Congressional ‘leaders’, other kleptocrats, including Donald Trump himself.  In this nation, some of the brightest attorneys wanting to make big bucks are going exclusively into water law, given that ‘the law’ effectively is…what judges say it is, down to corporations stealing or filing for water that’s been previously adjudicated.

But back to David Dayen.  He describes Trump Trade and yes, now economic advisor Peter Navarro:

“What do “public-private partnerships” and “tax incentives” mean here? This report from Peter Navarro, set to be one of Trump’s leading economists, lays out the blueprint. The government would sell $1 trillion in revenue-producing bonds, needing only to supply an equity cushion to ensure everyone gets paid. Navarro estimates around $140 billion in government funding when all is said and done, which you could easily get through repatriation.

Investors would get a tax credit to entice them to buy bonds, and Navarro claims that the tax revenue from new jobs created by the projects makes up for that cost. He also wants to contract out these projects, building in a 10 percent profit margin for the private contractor. Navarro claims that construction costs are higher when built by the government, and the private sector is more efficient.”  He’d referenced the repatriation ‘carrots’ above:

“Another funding scheme has interest from leaders of both parties. Under this plan, Congress would impose a “repatriation fee” on the $2.5 trillion corporations have stashed overseas, to avoid the 35 percent corporate tax rate. A reduced 10 percent tax on this money—which Trump formally called for in his campaign—would yield $250 billion. Trump’s pal, corporate raider Carl Icahn, is one of the country’s biggest promoters of this idea.”

Obama had touted a similar scheme; I don’t remember how well or if it ‘worked’. He also reminds readers that:

“The American Society for Civil Engineers has identified trillions of dollars worth of pressing projects in America: repairing bridges and airports, dams and levees, seaports and waterways, mass transit and freight rail. Add to that corroded water pipes, an aging electrical grid, and insufficient broadband access. We’re going to need to upgrade it all at some point; deferring maintenance just costs more later.”  [see graphic at the top from 2013]

Trump’s big infrastructure plan? It’s a trap.’ by Ronald Klain, whose bio happens to include: “…served as assistant to President Obama and oversaw the team implementing the American Recovery and Renewal Act from 2009-2011. He was an adviser to Hillary Clinton in the 2016 campaign. The views expressed here are solely his own.

He agrees with the other essayists, selling Clinton’s plans along the way, of course, but adds:

“These projects (such as electrical grid modernization or energy pipeline expansion) might already be planned or even underway. There’s no requirement that the tax breaks be used for incremental or otherwise expanded construction efforts; they could all go just to fatten the pockets of investors in previously planned projects.

Second, as a result of the above, 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. Contractors have no obligation to hire new workers, or expand workers’ hours, to collect their $85 billion. To their credit, the plan’s authors don’t call it a jobs plan; ironically, it is Democrats looking to align with Trump who have given it that name. They should not fool themselves.”

Third, 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.”

Lemon Socialism: the Rabble pay the price for any ‘socialized’ losses (subsidies, tax breaks) for the oligarchs.

And just in today, ‘Trump’s Infrastructure Boondoggle’, by Mike Whitney, March 15, 2017

He mentions most of the above, but these key bits no one else above had mentioned about the multiplier effect of actual capitalist Keynesian stimulus (3:1 is mentioned often):

“In practical terms, ‘revenue neutral’ means that every dollar of new spending has to be matched by cuts to other government programs.  So, if there are hidden costs to Trump’s plan, then they’ll have to be paid for by slashing funds for Medicare, Medicaid, Social Security, food stamps etc. But, keep in mind, these other programs are much more effective sources of stimulus since the money goes directly to the people who spend it immediately and help grow the economy. Trump’s infrastructure plan doesn’t work like that. A lot of the money will go towards management fees and operational costs leaving fewer dollars to trickle down to low-paid construction workers whose personal consumption drives the economy. Less money for workers means less spending, less activity and weaker growth.” [snip]

“If Trump was [sic] serious about raising GDP to 4 percent, (another one of his promises) he’d increase Social Security payments, beef up the food stamps program, or hire more government workers.  Any one of these would trigger an immediate uptick in activity spurring more growth and a stronger economy.  And while America’s ramshackle bridges and roads may be in dire need of a facelift, infrastructure is actually a poor way to inject fiscal stimulus which can be more easily distributed  by simply hiring government agents to stand on streetcorners and hand out 100 dollar bills to passersby. That might not fill the pothole-strewn streets in downtown Duluth, but it would sure as hell would light a fire under GDP.”

And last, but certainly not least: Michael Hudson’s ‘Alluring Infrastructure Income’, part of his Junk Economics series on TRNN

(the transcript)  One day Hudson may just flat out come out as being a Marxist-socialist economist.  but: some out-takes:

HUDSON: 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.

If a country does what the United States did, and finances a vast public school system, public extension system for agricultural education, and provides low cost roads, low cost transportation, water and sewers, parks and communications – if you provide all of this either freely or at least at a subsidized price – then you’re going to be able to undersell economies that don’t socialize the means of production.

“…the purpose of public investment for 100 years in the United States was to prevent such monopolies. That’s why we had anti-monopoly regulations. That’s what made America so much more competitive in the late 19th century and early 20th century. It was able to undersell European and other countries that followed the private-sector emphasis.

The public-private partnership isn’t really a partnership at all. It “socializes” the losses, while privatizing the profits. Instead of society – consumers and also business – being the beneficiary of roads, schools, cable TV systems and communication systems, they are victimized. Instead of providing gains in technology to society at a low cost or even freely, so that people don’t have to earn high enough wages to pay these higher privatized costs, you raise costs. The effect is to squeeze family budgets.

By privatizing healthcare, for instance, people have to pay much higher health insurance in America than anywhere else. You have to pay the insurance companies, and you don’t enforce monopoly rules against the pharmaceutical companies. You don’t even bargain with them or buy in the cheapest market. You buy in the most expensive market, because they’re your largest campaign contributors and that’s what you’ve promised to do.

SHARMINI PERIES: Why are you so apprehensive? I mean, when Trump talks about the cost of pharmaceuticals, he says the problem is that we don’t negotiate the price with the pharmaceutical companies, and he’s a negotiator. He’s a businessman. So, why shouldn’t we believe him?

Booyah!  From March 13th’s Investing.com: ‘Dow To Go Higher On Trump’s Infrastructure Plan’

“On Friday, U.S. President Donald Trump announced that he would be starting to create his $1 trillion infrastructure plan with his administration that would encourage states to start building and renovating more highways and prioritize new projects.” et cetera.

Ha; why indeed?  Hudson’s answer is exactly right; the rest is here.

2007 Minnesota bridge collapse.  Almost miraculously, given that there were about 150 cars, trucks, and buses on the bridge, only 12 people lost their lives.

Crossposted from café babylon

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Thanks. Thought it was just me that is disgusted with stupid governance.

Accountability needs to flow both ways.

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Fighting for democratic principles,... well, since forever

wendy davis's picture

@fight2bfree 'accountability' is so old-school, isn't it? as is 'transparency', given obama's complete opaqueness (and worse). some site said he'd spent $32 million to keep his junk out of foia requests hands. but at least he f'ed us over w/ a smile and good diction.

but miz the-roosians-hacked everything maddow was giddy all all giddy-up showing two, count 'em TWO pages of herr hair's 2005 1040 forms. what a country. so sad that this was the neo-liberal, security state and police state lovin', austerity lovin' trajection we've been on for a long time.

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Big Al's picture

I read Whitney's article today, wow, we're talking major boondoggle. This is all getting to be like a sick black comedy with Trump. Those that supported him and still believe in him are looking thru some strange glasses.

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@Big Al
maybe then, they'll gett the hint. Paying for their own highly inflated infrastructure. Fools would let an opportunity like this pass. Let the Lemming March begin!

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Fighting for democratic principles,... well, since forever

wendy davis's picture


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wendy davis's picture

@Big Al almost too many fitting terms, but oddly, not many have weighed in on the ppp's save for the reporters for Mr. Market. and man, when this present bubble bursts, where will ordinary people be? will it hasten an anti-capitalist revolution? i did a bit of a series about that possibility, but oh, no: the time ain't ripe...yet. too many still either want a kewl new Dem for prez, or the Bern, who can't even manage to offer a single payer bill so he touts 'reforming' obamaDontCare.

still, while i could never vote for him, at least he's not the Ovien Queen. cold comfort, but still. there seems to be a lot of dissension in the R ranks, let's see who wins (while we lose).

lots of metrics about tipping points for revolution exist, but in the end one key one seems to be hunger, and 'nothing left to lose'.

“Rise like Lions after slumber
In unvanquishable number
Shake your chains to earth like dew
Which in sleep had fallen on you
Ye are many-they are few.”

~Percy Bysshe Shelley

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I don't care who gets mad that I said it. It's the model.

Couple this with a massive reduction in non defense payroll. The Great Recession was nothing compared to what's coming.

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wendy davis's picture

but my memory had it that it the model that the IMF cajoled the bear into, post Chicago Boys economics in chile. this disputes that(and yes, strange bedfellows):

from august 11, 2016: ‘Will Russia Reject Neoliberalism?’ by Paul Craig Roberts – Michael Hudson

maybe washington had more power over the IMF even then than i'd suspected, but yes, putin is a great statesman, as is lavrov, but the former does have to answer to his fellow oligarchs, doesn't he?

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MarilynW's picture

especially care homes for the elderly. The right wing Provincial government when elected shut down government care homes moved residents even as old as 90 into new PPP homes. They fired registered nurses and replaced them with inexperienced workers at minimum wage. Now, after 8 years in power, they just sold a care home to a Chinese billionaire. What a world.

PPP is just another way for rich people to get richer using tax payers' money.

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wendy davis's picture

@MarilynW remind me of the phrase: 'death panels'. but how tragic for the old ones; i'm so sorry to hear it, Marilyn W. and sad to hear that trudeau seems to be another obama. the two pipelines he approved recently 'to make money to fund 'renewable' energy. not 'sustainable', mind you.

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Song of the lark's picture

its finest or worstest depending on your situation. I have also noticed this kind of extractive behavior in the public sphere alone. Loosely described as "Agenda 21" by RWNJ's. Local governments take it on themselves to raise fees, zone, and contain areas, institute arbitrary planning of various sorts. Some of this is good, and sensible but non-the-less extractive. Our whole world is being bought up and contained for both preservation and profit by TPTB. I'm starting to think Proudhon was right when he said "property is theft."

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wendy davis's picture

@Song of the lark
but oh, my, i'd had to look up RWNJs; thanks for that. i'd also had to look up 'agenda 21', and wooof, there are a lot of fringe detractors of that, but there would be, given the UN, right?

but along the way i had a nagging feeling about the UN and sustainability, and lo and behold, i'd covered the one in rio in 2012. what a scam that was: 'green capitalism', (as if), and a separate one on the Indigenous summit forced to have their own side meetings. in fact, it was the SA indigenous who tied all of the worst practices together and caused me to see that at the root of all of the planetary plunder and ruin, land grabs of the commons, genetically modified foods and bigAg factory farming by chemistry...was capitalism itself.

yes to proudhon's notion, but almost comically purist, apparently 'Karl Marx, although initially favourable to Proudhon's work, later criticised, among other things, the expression "property is theft" as self-refuting and unnecessarily confusing, writing that 'theft' as a forcible violation of property presupposes the existence of property..."

i need to go take care of chores here, and i'll be back later. thank you all for interest in reading another example of 'the end point of capitalism'.

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@wendy davis

... the expression "property is theft" as self-refuting and unnecessarily confusing, writing that 'theft' as a forcible violation of property presupposes the existence of property..." ...

I suspect that this would, at least nowadays, refer to 'commons'/public property, being seized by the 'might makes right' powerful (even if via complicit government representatives) for profiteering and control, as is occurring with infrastructure and everything else belonging to the people, since public property is owned by the public in perpetuity (as is democracy,) rather than by transient government officials who have no right to dispose of everyone's shared property or rights as they/their corporate/billionaire cronies/masters please.

At the least, it's certainly snappier, lol, and illustrative of the fact of the above theft depriving the people as a whole from what collectively is shared property belonging to the entire public.

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Psychopathy is not a political position, whether labeled 'conservatism', 'centrism' or 'left'.

A tin labeled 'coffee' may be a can of worms or pathology identified by a lack of empathy/willingness to harm others to achieve personal desires.

@3 The words "Great Recessions" are just a way of avoiding saying that it was a Depression, IMO. Blum 3


and now the reply became number 7 to the main essay.

Is it me? What am I doing wrong? I clicked on the blue reply button in Cassandrus' comment to reply to that twice and it keeps taking me here.

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Yaldabaoth, Saklas I'm calling you. Samael. You're not alone. I said, you're not alone, in your darkness. You're not alone, baby. You're not alone. "Original Sinsuality" Tori Amos

wendy davis's picture

@Dark UltraValia but it's pretty goofy that the 'official definition' of a recession is two consecutive quarters of negative growth in gdp, since as we know, those numbers are quite er...malleable.

even the vaunted 'unemployment figures' are skewed to reflect only the numbers who are filing unemployment compensation, and don't include those who've given up even trying to find work.

the 'jobs' added report seems to be stacked against the truth as well, given so many seasonal and part-time work, those w/ no benefits at all, etc. how many kids go to bed hungry at night, or to school w/o breakfast? hidden statistics you won't see in the msm.

and it takes alternative websites to promote facts like this:

"More than 20 million people face imminent starvation in four countries, United Nations officials warned over the weekend, the largest humanitarian crisis since the end of World War II. All four countries—Yemen, Somalia, South Sudan, and Nigeria—are wracked by civil wars in which the US government is implicated in funding and arming one of the contending sides."

thank you u.s., nato, and our partners in peace: the saudis.

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wendy davis's picture

for posting this. (i'd sent it to johnny asking if he might be able to do anything with it as i just don't seem to have the wherewithal to cross-post or answer comments in such a large venue.) but in case no one here had covered it yet, i thought it might be good for readers here to see some takes on what the scheme is really about.

remember newtie's 'contract with america'? ay: another ConAct! at least for ordinary amurrikans.

i'd added this section to my OP at the café in edit; my lamus brainus memory had forgotten to edit in once i'd poked around for the content. but this is akin to: "forget the pitchforks!"

“Oddly, Dolack hadn’t mentioned the epic privatizations of the commons forced (Tsipras detractors might disagree with that verb choice) on the Syriza government by the Troika in Greece: 14 airports bought by the Germans, the sale of ports, including Piraeus, and coming soon before the next ‘bailout’ tranche: stakes in state controlled Public Power Corporation (PPC), in oil refiner Hellenic Petroleum , and gas distributor DEPA, according to the Fiscal Times. Zeus knows where it will all lead, but one of the farmers from Crete rioting in Athens last week said that the PTB have looted everything, and...’we want it all back’. The farmers fought the police with shepherd’s crooks, smashing windows and throwing rocks.”

i have some things to tend to here, and then i'll come back to try to respond to comments; gettin' old, slow, and in the way any more. but i do hope you're all well as you possibly can be in these weirding and dark days.

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The job I just left dealt almost exclusively with construction of medical facilities. As I learned soon after hiring on, there had been a big downsizing several years prior. It took me a while to put two and two together, but once I did, the reason why was pretty clear. Obamacare seemed to be a bust, at least as far as investment in new medical facilities was concerned. Unfortunately I don't have any stats or articles I can share with you, but I did speak to a few professionals in the medical field (not at my company) who confirmed that building projects during the time of Obamacare pretty much slowed to a trickle. One person went so far as to describe the situation as a bubble bursting. When I left, the scuttlebutt around the office was that the higher ups were concerned about having enough work to last to the end of the year. That wasn't the only reason I got out, but it sure didn't hurt. (And with the current clowns running the show, why would anyone want to hitch their wagon to a field so related to healthcare as ours was?)

My point being, that you're 100% right, at least from what I've seen in my very own place of employment. We all know healthcare costs are going up, but all that extra money is doing is padding someone's bank account. It doesn't take a genius to figure if this is what's happening here, it's likely happening elsewhere too. And it will keep happening because this is how the system is designed now.

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Just another Bozo on the bus.

wendy davis's picture

@Dr. John Carpenter it's good you got out when you did. obamaDontcare had very little to do w/ 'health care' per se, just health insurance. funny how so many who hated it are now extolling its virtues, isn't it?

but yes, exactly right: the system was designed to be ruled by capital, and both legacy parties support the oligarchy/kelptocracy, just w/ a few social differences. it's going to be interest to see not only what trump's final budget will look like, but how many Ds cross the aisle to vote for it (oh, so grudgingly, after railing against it). ha, chuckie schumer said that it's horrid for 'the middle class', never acknowledging what it does to the precarious lower classes. here's wsws.org's initial take. oh, my yes: a larger step than O's in the class wars. jeebus.

best to you, doc.

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