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Trump keeps pretending his infrastructure plan is real. It’s not.

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(Alex Wong/Getty Images)

President Trump's "$1 trillion infrastructure plan” isn't $1 trillion and it isn't a plan. It's a $200 billion plan to have a plan that hasn't advanced beyond that stage for six months now.

The administration, though, has decided that this is “infrastructure week,” so this bare outline of an actual proposal is getting touted as if it's something that required more than five minutes of thought. Which is to say that it's not that different from the rest of Trump's agenda: bullet points that seem more appropriate for a tweet than for anything else.

Now, the funny thing is how long it's taken the administration to come up with even this minimal level of detail and how much infighting it caused within Trump's often-fractious White House.

Originally, Trump's campaign had proposed giving out $137 billion worth of tax breaks that would supposedly pay for themselves and get the private sector to spend $1 trillion on toll roads and the like. But that seemed to change when Trump's ideological consigliere, Stephen K. Bannon, talked up a “trillion dollar infrastructure plan” that would take advantage of the fact that “negative interest rates throughout the world” meant it was the “greatest opportunity to rebuild everything” from “shipyards” to “ironworks” and “get them all jacked up.” It would, Bannon explained, “be as exciting as the 1930s.”

Trump's top economic adviser Gary Cohn, though, worried that the deficit-spending this implied would hurt the economy as much as it helped by forcing the Federal Reserve to raise rates, and, as a result, sending the dollar up. So instead of saying that the government would spend $1 trillion on roads and bridges and waterways itself, the Trump team said it would commit $200 billion over the next decade and offer as-of-yet unspecified incentives to get corporations to invest the other $800 billion. But even this was too much for Trump's austerian budget director Mick Mulvaney, who put together their latest plan to partially offset this $200 billion surge in infrastructure spending with a $95 billion cut in the years after that.

Trump's infrastructure plan, then, has gone from being builder-friendly to populist to Wall Street-approved and now tea party-inspired. Although that's only true to the extent that it's real, which isn't clear at all. Indeed, when it comes to tax reform, Mulvaney has staked out the rather unusual position for a budget director that he “wouldn't take what's in the budget as indicative of what our proposals are.” Perhaps that's the case with infrastructure as well? Who knows.

The administration doesn't seem to. It hasn't said how it would spend the $200 billion of its own, or how it would try to get corporations to spend the $800 billion of theirs, or how much that second part would cost in tax breaks. There's nothing to analyze, because there's nothing at all.

But it's not just that Trump doesn't have much of an infrastructure plan. It's that he doesn't have much of a legislative plan to pass it either. For a long time, you see, Trump assumed he could get Democrats to help him get it through Congress, since this kind of public investment is a priority for them.

The only problem is that was never going to happen after Trump announced he wanted to give companies tax breaks to get them to build things instead of having the government do so itself. Democrats pointed out that trying to get corporations to build the most profitable infrastructure wouldn't always mean we were building the most needed infrastructure, or even infrastructure that wasn't already going to get built.

So now Trump and his team are trying to pass it with only Republican votes he might not have — if, that is, they even have time to take it up. They might not. Between replacing Obamacare and lifting the debt ceiling and cutting taxes, which, despite Trump's claim to be “moving along in Congress,” doesn't even exist right now, there isn't a lot of time for Republicans to do things before election season is upon us.

Trump has really had a Potemkin presidency so far. He stages elaborate photo ops for executive orders that, with the exception of his stalled travel ban, don't actually do anything of substance. He hosts celebrations for bills that have only passed one chamber of Congress. And he makes a big show out of unveiling half-finished policies that have been that way for a while.

In other words, Trump isn't a successful president, but he plays one on Fox News.

This is due to Trump's 140-character attention span; to his unfamiliarity with, and indifference toward, policy, and to his apparent cable TV-style belief that ratings matter more than results. You can see all of this in his approach to filling the government. The assistant secretaries and undersecretaries who don't make headlines but do make policy are almost entirely absent from the Trump administration. He just hasn't bothered to nominate anyone for those spots. He's been too busy feuding with the mayor of a city that's just suffered a terrorist attack to worry about having a team in place in, say, the Treasury Department. Which is why an infrastructure proposal that should have been fleshed out months ago is still stuck in embryonic form, perpetually “a few weeks away” from being ready.

Until then, make sure to compliment the emperor — I mean president! — on his new clothes.

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stefanetal
20 days ago
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Northern Virginia
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Nick Murray on Alcantara: ‘It’s Garbage’

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Interesting video by Nick Murray, discussing the merits of Alcantara, the synthetic suede-like product that Microsoft has used for their new Surface Laptop. Murray is coming from the perspective of Alcantara’s use in cars, not laptops, but he says it wears terribly on things you touch, like steering wheels and gear shifters, losing all its softness after just a few thousand miles. This might bode poorly for the Surface Laptop.

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stefanetal
26 days ago
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Comments claim you can clean it and that solves the problem.
Northern Virginia
satadru
28 days ago
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New York, NY
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Russia’s Military Is Burning Through Its High Explosives

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An air campaign requires a sprawling, complicated supply chain. Fire enough missiles and drop enough bombs, which require a heavy investment in materials and chemicals, and there will come a point when the logistics trail starts to strain. Nearly 20 months into Russia’s intervention in Syria’s civil war, the strain is starting...



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stefanetal
33 days ago
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Doesn't comport with my prior expectations...
Northern Virginia
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Money Laundering and Quant Code

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Also the fiduciary rule, worries about worries, and the return of worries about covered interest parity.
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stefanetal
35 days ago
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"On the one hand, you know, you had one job. If there's one person to hold responsible for not catching money laundering, it's the person whose job it was to catch money laundering. On the other hand, the incentives that creates are really bad! The stereotyped dynamic in any regulatorily sensitive business is:

Business unit employee: Let's do the thing.
Compliance officer: We're not supposed to do that thing.
BUE: What's the worst that could happen?
CO: You could go to jail.
BUE: Oh fine we won't do the thing.

What you don't want is this dynamic:

Business unit employee: Let's do the thing.
Compliance officer: We're not supposed to do that thing.
BUE: What's the worst that could happen?
CO: I could go to jail.
BUE: Hahaha that's what we hired you for buddy.

Compliance officers have authority at a company to the extent that people believe that their job is to keep everyone else out of jail. If it's to keep themselves out of jail, then they're just sacrificial lambs. "
Northern Virginia
stefanetal
35 days ago
And yes, people are worried since we have a new Administration.
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Val D'Ultimo in South Tyrol, Italy More than 150 years ago this...

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Val D'Ultimo in South Tyrol, Italy

More than 150 years ago this house was built on ground-level. In 1882, a rogue flood caused by a near stream swept away the surroundings, but the cabin has withstood the flood. Surprisingly a giant rock appeared under the cabin, which saved the house and its residents from being swept away.

Submitted by Stefan Mahlknecht / @stefan_mahl

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stefanetal
36 days ago
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Northern Virginia
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The fiscal future of the West, the culture that is inheritance

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Heaven forbid that people of means should pay for their own health care, what a sensible idea this was:

Last week, she [Theresa May] came up with a flawed but constructive answer to the crisis of funding in social care. The elderly would finance their care out of their own estate upon death. The upper limit on their contribution would go but they could keep £100,000 for their children. In the mixed metaphors that proliferate in politics, a floor would replace a cap.

The idea turned old age into a high-stakes game of chance — die suddenly and your estate would go untouched, contract dementia and it would shrivel over time — but it confronted voters with the principle that things must be paid for and challenged the Conservative cult of inheritance. Mrs May made it central to her election manifesto. Her self-image as a firm leader hinged on her fidelity to this brave, contentious idea.

A few days of popular disquiet and the cap is back.

That is from Janan Ganesh at the FT.  Solve for the fiscal equilibrium!

The post The fiscal future of the West, the culture that is inheritance appeared first on Marginal REVOLUTION.

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stefanetal
36 days ago
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One of the key issues of our time. Not actually clear how to do this properly. I do recall reading about the effects of Medicare introduction in the 60s, and seeing it called 'estate insurance, not health insurance' (or something similar).
Northern Virginia
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