SHARMINI PERIES: Michael, the American Society of Civil Engineers agrees with you that this is inadequate in terms of funding, that the Trump plan is just not sufficient. In fact, it needs, they say, just to deal with the backlog a $4.6-trillion investment by 2025 and Trump's plan doesn't even come close. What do you make of this?
MICHAEL HUDSON: Well, to begin with, Trump's plan would triple the cost of what the engineers say to $22 trillion and the reason is that it's a Thatcherite privatization plan. Trump's plan reverses the last 150 years of public infrastructure. And in fact, it's the biggest attack on industrial capitalism in over 100 years, more serious than a socialist attack.
Now, America's first professor of economics at the first business school, Simon Patten, said public infrastructure is a fourth factor of production, but unlike labor, land, and capital, the role of public infrastructure is not to make a profit. It's to provide public services that are basic for the economy's living standards and capacity to produce at a subsidized rate. So, America got rich and came to dominate the world industrial economy by subsidizing all of the basic costs. Low-cost roads, low-cost infrastructure. The government bore these costs so that, in effect, public infrastructure subsidizes the economy to lower the cost of production.
Trump's plan is to vastly increase it because he forces all of this into the marketplace. Instead of offering, say, roads at the cost of production, he'd actually triple the cost of production by insisting that it be privately financed, probably by hedge funds and by bank credit that would add the interest charges, the capital gains charges, the management fees, the oversight charges and the fines for criminal fraud that goes with it by factoring all these prices into the cost.
