FORBES: A LARGE INFRASTRUCTURE MONUMENT TO HIS EGO IS NOT WHAT WE NEED FROM TRUMP’S ECONOMIC POLICY
Tim Worstall, Contributor
This is a really very strange indeed suggestion from the pages of the New York Times. The idea is that Donald Trump should make his mark on American economic life by getting some vast piece of infrastructure built. Of course there’s at least a fig leaf of economic consideration in front of this proposal, that we all know that infrastructure does have to be built so why shouldn’t Trump be the one to lead the charge to build it?
However, there’re more than just the one problem with this idea. Starting with the fact that, as far as we know at least, the economy is at about full employment. We are thus entirely not in the situation that FDR was in during the Depression. We simply do not have 25% of the adult males wandering the country looking for a square and a shovel to call their own–a situation in which providing them with a shovel and those three squares a day in return for their using it to build something makes sense.
So all of the standard points about infrastructure spending being stimulatory simply do not apply–we don’t need the stimulus.
Then there’s this:
Mr. Trump will also need to be hands-on. Roosevelt asked states and cities for proposals, but he made nearly all the final decisions himself. “F.D.R. was a fanatic about infrastructure, roads, planning,” Mr. McNichol said. “As a commissioner in New York, he helped lay out the Taconic Parkway. He even helped design the picnic tables.”
I would not regard the suggestion as a good idea myself. Indeed, one of the more general pieces of advice that people are proffering at present is that Trump is going have to be a lot less detail orientated given the myriad problems that do end up on that desk in the Oval Office. And there’s enough bleating over there on the left about the incoming fascism without the President-elect trying to personally make sure that the trains do run on time.
There’s also that little point about the oft repeated $3.2 trillion that needs to be spent on infrastructure. This comes from the American Association of Civil Engineers. Yup, we’ve just asked our barber whether we need a haircut.
However, the real problem with this proposal is in the list of the projects that Trump is being urged to advance. Here’s just the first two:
- Hudson River rail tunnel: The Northeast Corridor desperately needs another rail link connecting Manhattan and northern New Jersey. The current overcrowded tunnel is over 100 years old and was severely damaged by Hurricane Sandy. Cost: $23.9 billion.
- California high-speed rail: America’s first modern high-speed rail project would connect San Francisco and Los Angeles, about 400 miles apart, in under three hours. Cost: $65 billion.
These both fall foul of different economic rules. A tunnel between New Jersey and New York? Even Manhattan? That’s rather something that the people of New Jersey and New York can deal with themselves, isn’t it? After all, we do rather think that the people who will benefit from something should be the ones who pay for it, no? Most certainly, there really are things called public goods but even they don’t magically benefit the entire country. If we cannot devise a scheme whereby passengers on trains going through such a tunnel pay for it (and I can think of absolutely no reason why we cannot) then perhaps, just maybe, it might be right that there’s a call on the local taxpayers to provide a local piece of infrastructure like this. And I’m led to believe that there are various Port and transport authorities around in that area which already do exactly that. That is, even if the Hudson tunnel needs to be redone, and it cannot be directly charged for, there’s absolutely no reason whatever that it should become a Federal project, with taxpayers in Anchorage and Austin having to kick in to get commuter trains into Manhattan.
California’s high-speed rail project suffers from a different problem. It will make us poorer so it shouldn’t be built at all. Other than the people making a living from the project there’s just no one paying attention who thinks that it will ever make back its cost of production. And that’s before we start to talk about running and maintenance costs. And the case in favour of building infrastructure, however we build or finance it, is that it makes us richer. But something that loses money is something that produces less value than the cost of doing it. That is, it makes us poorer, not richer.
Thus, of course, we shouldn’t do it.
Donald Trump does of course have experience of actually building things. And we might hope that exactly that experience will lead him to dismantle all of the restrictive rules about who gets to build government contracts at what wages–that would do more to get infrastructure built than anything else anyone else or Trump himself could do.
However, this idea just does not convince:
Here’s how President-elect Trump could unify a bitterly divided America, provide well-paying jobs to many of the millions of disaffected workers who voted for him, and lift the economy, stock market and tax rolls.
All he needs to do is what he presumably does best: build something.
And I don’t mean a few miles of asphalt or a paint job on a rusting bridge.
Build something awe-inspiring. Something Americans can be proud of. Something that will repay the investment many times over for generations to come.
Donald Trump should unite Americans by putting up some monstrously egotistical building that people can gawp at? Have these people been paying attention recently?