Monday, May 22, 2017

The Wall Street Journal — Saudi Arabia’s $20 billion wager with Blackstone is record-sized bet on U.S. infrastructure

President Donald Trump’s $1 trillion infrastructure plan is promised to be introduced sometime in May. However, Trump and the Republican-led Congress refuse to raise money for infrastructure projects that rely on direct federal spending, but rather on tax breaks for wealthy investors, partnerships with private enterprise, and other incentives for investors to put money into projects.

The latest deal with Saudi Arabia is a good example of just how Trump envisions his infrastructure plan internationally and domestically will work. But did Trump make a quid-pro-quo deal for investments in America’s infrastructure in exchange for the $110 billion arms deal he signed with the Saudi government . . . an agreement he signed on his very first day to Riyadh, negotiated by his son-in-law Jared Kushner, in a country he accused of being behind the 9/11 terrorist attack on the World Trade Center's Twin Towers.

Since it’s a key part of Trump’s infrastructure plan, capitalist perceive infrastructure as promising a very good return on their investment.

Robert Reich’s opinion on Trump’s investor-based infrastructure plan:

Saudi Arabia just joined the parade of investors into U.S. public works by pledging a record $20 billion investment with Blackstone Group’s new infrastructure fund.

It’s the latest push around the world by large investors to buy up U.S. airports, roads, bridges, water systems, and other public projects.

Rather than taxing the wealthy and then using the money to fix our dangerously outdated infrastructure, the states and the federal government increasingly are giving rich investors tax credits to encourage them to do it.

The investors then charge tolls and user fees, and earn big profits.

So the public pays twice – once when we subsidize the investors with our tax dollars, and then again when we pay the tolls and user fees that also go into their pockets.

We don’t even get the infrastructure that’s most needed. Projects most attractive to investors are those whose tolls and fees bring in the biggest bucks – giant mega-projects like major new throughways and new bridges.

Not the thousands of smaller bridges, airports, pipes, and water treatment facilities most in need of repair. Not the needs of rural communities and smaller cities and towns too small to generate the tolls and other user fees equity investors want. Not clean energy.

To really make America great again we need more and better infrastructure that’s for the public – not for big developers and investors. And the only way we get that is if corporations and the wealthy pay their fair share of taxes.

CEO and co-founder of Blackstone
Stephen Schwarzman participates in
a U.S.-Africa leaders summit in 2014.
Blackstone has created a new
infrastructure fund that just drew
Saudi Arabian investment.
Saudi Arabia’s $20 billion wager with Blackstone is record-sized bet on U.S. infrastructure

By Ryan Dezember