Robert Reich: Why the World Is Laughing at Trump’s America

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Traffic drives over an old bridge in Brooklyn on February 16, 2017 in New York City. An annual report by the American Road and Transportation Builders Association (ARTBA) notes that there are now nearly 56,000 bridges nationwide that are structurally deficient. The report revealed that over one in four bridges (173,919) are at least 50 years old and have never had major reconstruction work. Date created: 16 February, 2017 Spencer Platt/Getty

This article first appeared on RobertReich.org.

At a roundtable discussion with state transportation officials on Friday, Donald Trump said America’s aging roads, bridges, railways, and water systems were being “scoffed at and laughed” at. He pledged that they “will once again be the envy of the world.”

This seems to be a core theme for Trump: America’s greatness depends on others envying us rather than scoffing and laughing at us.

He said much the same thing last week when he announced his decision to withdraw from the Paris climate agreement. “At what point does America get demeaned? At what point do they start laughing at us, as a country? We don’t want other leaders and other countries laughing at us anymore. And they won’t be. They won’t be.”

To be sure, America is in dire need of massive investments in infrastructure. The nation suffers from overflowing sewage drains, crumbling bridges, rusting railroad tracks, outworn roads, and public transportation systems rivaling those of third-world nations.  

The American Society of Civil Engineers, giving America’s overall infrastructure a grade of D-plus, says we would need to spend $3.6 trillion by 2020 to bring it up to par.

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The problem isn’t that we’re being laughed at. It’s that we’re spending hours in traffic jams, disrupted flights, and slow-moving trains. And we’re sacrificing billions in lost productivity, avoidable public health problems, and increased carbon emissions.

But what Donald Trump is proposing won’t help. It’s nothing but a huge and unnecessary tax giveaway to the rich.

His “$1 trillion infrastructure plan,” unveiled last week, doesn’t amount to $1 trillion of new federal investment in infrastructure. It would commit $200 billion of federal dollars over ten years, combined with about $800 billion of assorted tax breaks to get developers to build things instead of the federal government doing it.

And it’s hardly a plan. It’s not much more than a page of talking points.

Worse, its underlying principle is deeply flawed.  It boils down to a giant public subsidy to developers and investors, who would receive tax generous tax credits in return for taking on the job.

Which means the rest of us would have to pay higher taxes or get fewer services in order to make up for the taxes the developers and investors would no longer pay.

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For example (in one version of the plan I’ve come across), for every dollar developers put into a project, they’d actually pay only 18 cents – after tax credits – and taxpayers would contribute the other 82 cents through their tax dollars.

No one should be surprised at this scheme. It’s what Trump knows best. After all, he was a developer who made billions, often off sweeteners like generous tax credits and other subsidies.  

The public would also pay a second time. The developers would own the roads and bridges and other pieces of infrastructure they finance. They’d then charge members of the public tolls and fees to use them.

In place of public roads and bridges, we’d have private roads and bridges. Think of America turning into giant, horizontal-like Trump Tower wherever you looked.   

These tolls and fees won’t come cheap. They’d have to be set high in order to satisfy the profit margins demanded by the developers and the investors who back them.

Worst of all, we’d get the wrong kind of infrastructure. Projects that will be most attractive to developers and investors are those whose tolls and fees bring in the biggest bucks – giant mega-projects like major new throughways and new bridges.

Developers and investors won’t be interested in the thousands of smaller bridges, airports, pipes, and water treatment facilities across the country that are most in need of repair.

They’re not likely to respond to the needs of rural communities and smaller cities and towns that are too small to generate the tolls and other user fees equity developers and investors seek.

They won’t be attracted to the most important first priority for our nation’s infrastructure: Better maintenance of what we already have. With improved maintenance, it wouldn’t be necessary to completely rebuild.

But investors and developers want to build anew. They can’t reap big rewards from maintenance.

Nor will they want to put their efforts and money into projects that don’t yet have proven financial track records, like many clean energy innovations – which, not incidentally, might have enabled us to meet our targets under the Paris climate accords, were we still part of the Paris accords.

We shouldn’t have to pay twice over for the wrong infrastructure.

To really make America great again we need the correct infrastructure in the right places – infrastructure that’s for the public , not for big developers and investors.

Sorry, Donald. The only way we get this is if big corporations and the wealthy pay their fair share of taxes to support it.

Robert Reich is the chancellor’s professor of public policy at the University of California, Berkeley, and a senior fellow at the Blum Center for Developing Economies. He served as secretary of labor in the Clinton administration, and Time magazine named him one of the 10 most effective Cabinet secretaries of the 20th century. He has written 14 books, including the best-sellers Aftershock, The Work of Nations and Beyond Outrage and, most recently, Saving Capitalism. He is also a founding editor of The American Prospect magazine, chairman of Common Cause, a member of the American Academy of Arts and Sciences and co-creator of the award-winning documentary Inequality for All.