The Trump Infrastructure Scam

Whoever controls the countryside controls the cities.

Mao Zedong

It was one of my first city council meetings in 1968, when we reviewed a subdivision plat and the debate turned to the water and the sanitary and storm sewers.  Chairman Mao's Little Red Book was in vogue. As the city council debate unfolded, one thing became clear: whoever controls the water and the sewers controls everything.

Now a debate is unfolding on Donald Trump's infrastructure plan, and its financing, practicality, and control.

Paul Krugman, writing in the New York Times, raised the right question this week:  Infrastructure Build or Privatization Scam?

The economist notes the Trump plan means that:

• The public will lose significant future income that is not justified by private financing. For an example of privatization that is a total ripoff, look at the City of Chicago giving away its parking system.
• The Trump plan is financing "with much less transparency, and hence greater opportunities for giveaways to favored interests."  Can you say "Goldman Sachs, Lehman Brothers, and Wells Fargo?"
• Finally, Trump is determined to privatize public assets.  What that means is you and I pay, and his buddies own.

Not to be left out of the discussion, Tim Worstall writes in Forbes: Paul Krugman's Terrible Misunderstanding of Trump's Infrastructure Plans.  Worstall launches into an argument that privatization of water systems in Europe demonstrates the benefits of privatization.

Rubbish. Or more appropriately, sewage.

Twenty years ago I encountered a candidate for mayor of Madison who argued that a suburban community's private garbage collections system was cheaper (true) than Madison's. A classical sprawling series of developments with single family homes, no on street parking, and no morning rush hour, the suburb's collection cost per ton was lower that ours. While they sped along their vacant streets, our sanitation workers were navigating city traffic (they do start at 5:00 am) and parked cars.

A comparison has to go deeper than the hollow chant of privatization.

When it comes to water, the greatest cost is not labor, it is the cost of energy. Local utility electrical rates are the most critical cost. But there are other factors that determine your water, and the complimentary sewer bill:

• Environmental demands using pricing mechanisms designed to conserve water such as watering of lawns.
• Attacks on the water system, such as salt applied to city streets which infiltrate deep wells, raising chloride levels, posing a health threat and expensive to remediate.
• Magnesium and other elements that must be filtered to insure a healthy water supply - expensive to remediate.
• Postponed maintenance resulting in a massive backlog of repairs that will cost this nation billions.
• Faulty systems that did not have a long enough useful life.  In the 1950's and 60's, as new subdivisions spread across the United States, many cities allowed - under pressure from the private developers - the installation of untested piping, which is now failing at a rapid rate. Expected to last 100 years or longer, it is showing a life of sixty years.
• The need to drill new wells and build new pumping stations as a result of industrial pollution during an era of no EPA regulations.
• The need to replace lead pipe.

Notice that many of the costs associated with the rising cost of water and the disposal of waste are a result of either environmental failures, or Donald Trump's friends in the Republican Party pressuring government to reduce expenses and cut costs.

The great irony is that by pressuring government to cut spending, Grover Norquist and his ilk ("Shrink government to a size where you can drown it in a bathtub.") have ultimately driven up costs, created inefficiencies, and left us with the horrid conclusion that the private sector is the solution.

 

 

 

 

Comments

[Joel Neuberg]

Mr. Trump bids fair to become the Warren G. Harding of the 21st Century.