One of the little amusements of this post election period, along with seeing all those special snowflake heads explode with outrage, is the insistence that America really doesn’t need a big infrastructure building program after all. Or at least, absolutely not the type that Donald Trump is proposing. Because, you know, that’s different and, well, that’s different.
That both Trump and Clinton went into the election promising to spend more on infrastructure seems to be escaping some people. The only major difference between the two plans is that Trump would use the private sector, Clinton’s would have used the public. And it does seem to be that which is making some people spit tacks. Larry Summers for example:
I have long been a strong advocate of debt-financed public investment in the context of low interest rates and a decaying US infrastructure, so I was glad to see Mr Trump emphasise it. Unfortunately, the plan presented by his advisers, Peter Navarro and Wilbur Ross, suggests an approach based on tax credits for equity investment and total private sector participation that will not cover the most important projects, not reach many of the most important investors, and involve substantial mis-targeting of public resources.
You do have to wonder whether there’s an element here of it just ain’t my plan so I’ll oppose it. The same sort of thought has occurred to Clive Crook:
Trump has said he wants to cut taxes and increase spending on infrastructure. A big fiscal stimulus is exactly what many liberal economists have been calling for these past several years. Today, as you might expect, they’re no longer so sure. Some damn-the-torpedoes Keynesians now see the merit in fiscal conservatism. They’re right about the need to make fiscal policy sustainable and get value for public money in infrastructure programs, points not hitherto emphasized. In the short run, though, a Trump presidency could give them a macroeconomic policy that’s closer to the one they’ve been advocating than anything they’ve seen so far. And in the short run, it would boost growth.
The vehemence of some of the opposition though is surprising me. Which has made me ponder why–they wanted infrastructure building, they’re going to get infrastructure building. And I think it’s possible (note, possible, I cannot see into hearts and minds) that this is about two major differences.

The first is that a program fired by tax reliefs builds what it is that investors think is a good idea. What might they be able to make a profit from? One fired by government loans builds whatever it is that government thinks should be built. My faith in government’s ability to decide which bridge should be built being low Trump’s version of this sounds like a good idea to me. And I can imagine at least some Democrats being most unhappy at the idea that they don’t get to decide what will be built. Do note that “making a profit” is the same thing as “adding value” and it’s adding value that makes the economy grow and makes us all richer. We do in fact want people to build infrastructure which makes a profit–because it means they’ve added value and thus we’re richer.
But it’s the second thing which I think might be more important. Unions, especially the construction unions, are an important part of the Democrat coalition. And things which are built with government money, even just government backed loans, have to obey certain laws about how they get built. Davis Bacon for example, which mandates prevailing wages, or as this usually turns out union shops on union wages. An infrastructure plan fired by tax reliefs does not fall under these various laws–thus no nice high paid jobs for Democrat friendly unions.
Yes, that is a bit cynical but when the government money is being handed out then it’s right to be cynical. This also means that we get cheaper infrastructure–because we have to pay less to get it built. This also makes us richer. We either get the same infrastructure and we have money left over for other things, or we can have more infrastructure for the same price.
All in all therefore I prefer Trump’s version of the infrastructure plan. We get only that infrastructure which really does add value and we also get it cheaper as a result of doing it with tax credits rather than borrowing.