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Infrastructure Plan Is Dominated by Profits for Wall Street

PHOTO: Overdrive Magazine

Private equity tail wagging the public infrastructure dog?

By Leonard Hyman and Willian Tilles | 14 February 2018

WOLF STREET — About two years [ago], we came across an article discussing infrastructure in a relatively obscure engineering journal. The authors of the piece were Wilbur Ross, now Commerce Secretary in the Trump cabinet, and Peter Navarro, a Trump economic adviser.

What struck us about the piece, supposedly elaborating their infrastructure plan, was that there was really nothing in particular that they wanted to build – nothing that would excite the imagination: no space race, or federal highway initiative, and heaven forbid certainly no new deal.

Thinking about it in accounting terms, the asset side of their infrastructure balance sheet was a compete blank. But the liability side of the ledger was the real focus of the Ross/Navarro exercise. They provided an answer to a question that almost no one was asking: How much leverage can one get away with and still control a federal infrastructure project? Their answer was 6-to-1.

On Monday, the White House released its long awaited “Legislative Outline for Rebuilding Infrastructure in America.” It boils down to this: The federal government claims it can facilitate a $1.5-trillion program with only $200 billion of federal money. That’s a leverage ratio of 7.5-to-1. That’s it. […]

1 Comment on Infrastructure Plan Is Dominated by Profits for Wall Street

  1. Ever increasing toll roads, increasing fuel taxes, with the implementation of mileage taxes with little or no infrastructure improvement. “Murka” baby!!

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