Infrastructure? Not So Much

In the aftermath of the health care debacle Trump has been busying himself, so we are told, with other big projects. Tax reform is one. A huge infrastructure effort is another. Well, count me as skeptical. There are reasons to question whether either is going to see the light of day any time soon.

One is that Trump has no grasp of complex issues.

Let that settle in for a moment.

The Trump campaign was saturated with bombast, politically charged nonsense, venality of various sorts, and plenty of extravagant promises. The health care disaster gives us into insight into how to think about those promises. They have no content. It appears that none of those promises had any substance beyond being clever voter catchers. We best treat them as placeholders taking up space on a shelf of potential policy ideas that need bringing to life at a later date. They do not represent a currently existing policy, or even the skeleton of one.

This became obvious during the health care defeat. Trump left a long and very public trail of comments littered throughout the election campaign. He promised all sorts of things, sometimes in such general language that listeners with contradictory interpretations could be equally accurate in their portrayal of what he said. Nonetheless there was a general shape of a “Trump” policy discernible: low cost, universal coverage, more choice and so on. That there was no actual Trump policy became clear when, during the defeat, Trump outsourced the development of a plan to the House Republicans led by Paul Ryan. Then, when the House GOP plan was launched Trump simply advocated it as if it reflected and embodied his election promises even though it manifestly did not. Indeed in some circumstances it was a flat out rejection of those promises.

What do we make of this when we relate it to infrastructure?

First: we can conclude that Trump has no plan or policy to back up his promises. He simply threw out a lot of commentary that could have been easily overheard in any public place where voters were complaining about their commute, the state of the roads, yet another power outage, or the cancellation of their train. He was playing back to his audience well known grievances. He was not providing a solution. And he still isn’t.

Second: we can also conclude that the emergence of an actual infrastructure plan depends not on Trump but on other people. That might be someone within his administration, although who we are not sure. Or it might be someone in the Republican party, although with their longstanding opposition to government involvement in thee economy  it isn’t clear which GOP official would summon up the courage to take the lead on something like infrastructure which is most likely going to need lots of Federal spending to get it done.

Third: we can also expect lots of continued vaporware. Trump specializes in making vacuous comments that exist only to fill spaces. He has no intention of acting on all theses comments, but he fills the space nonetheless in order to reserve it for future use. This, I suspect, is a strategy he has used frequently in business: make a bold announcement about a project, wait to see what blows back, and then, only under propitious circumstances, explore the possibility of action. Action is, in other words, not contingent on his announcement, but on his subsequent analysis of the criticism of the content of that announcement. In Trump’s mind making a slew of announcements during an election is the equivalent of lining up an inventory of possible things to do. It is not a promise to do any of them.

Fourth: we can expect to hear about all the specialists and experts in the private sector Trump will somehow involve in getting infrastructure projects done. He has already mentioned two: Richard Le Frak and Steve Roth, both of whom have similar profiles to Trump. They are both scions of New York real estate development families with experience primarily in the completion of middle class housing projects. People driving into Manhattan from Queens will no doubt recognize ‘Le Frak City’. These two are supposed to be the first of a group of about twenty such developers, drawn from all over the country, who will advise on infrastructure projects. The problem is that there is no evidence at all of any others being added to the group. Nor is there any evidence of any projects being identified for such a group to consider or offer advice about.

Fifth: as elsewhere in the Trump administration, the infrastructure message is decidedly muddled. The Trump budget proposal actually reduced infrastructure spending, it did not include any allocation for spending on new and large projects, and nowhere is there any formal sign of activity of a parallel effort to consider how to fund anything. We have been told that a huge infrastructure plan might be used as an inducement to get Democratic support for a renewed health care plan — because, as we all know and according to Trump, Democrats are big about infrastructure. There has been no outreach to the Democrats to suggest this is anything but a thought. We have also been told that the original idea of involving the private sector — because as we all know developers get stuff done — is being sidelined because Trump has suddenly realized that the Federal government’s borrowing rate is very low. This must make him jealous. Imagine being Trump and seeing that the entire world is willing to lend you money at rates as low as 1% – 2%. Trump’s private businesses are unable to borrow at any rate here in the US due to his repeated use of default as a bargaining tactic. Banks learn eventually. In any case those low borrowing rates make it more attractive for Trump to use the Federal government as the agent in development, so the public/private partnership is now reduced to the private side being advisory and not actively executing development.

Lastly, and possibly most important, is Trump’s inability to process things in parallel. He has a plateful of issues each of which will consume his attention. North Korea, Syria, ISIS, and so on are all more urgent calls on his time. He will be forced to move on.

I have not mentioned that the administration is woefully undermanned, not because of Congressional opposition to proposed candidates, but due to a lack of any candidates being proposed. Only about 10% of all political appointments have been filled. Most positions remain empty. So this is not an administration equipped for any large scale policy making, let alone getting such a policy through a Congress controlled by a fractious and fractured Republican party.

All this speaks to a reality empty of infrastructure policy. At least for now.

Maybe tax reform?