No Trump Infrastructure Building Unless U.S. Joins the Silk Road
Nov. 13, 2016 (EIRNS)—The incoming Trump team emphasizes its intention to invest heavily in building modern economic infrastructure to restart the U.S. economy. But the Babel of unworkable ways to generate the credit for such a productivity boom, from Trump’s team and surrounding hedge fund operators and businessmen, shows that it will not be done except under one condition: That the United States joins the "Silk Road" development thrust of China, and its associated new credit institutions. A Hamiltonian national credit institution must be set up, and immediately link to the "Silk Road" development banks centered in China. This unavoidable path applies even to infrastructure building, such as high-speed rail corridors, in the United States.
Bloomberg News, in an editorial today, "China Trumps Trump for Infrastructure," notes that China has invested $1.2 trillion on rail, power infrastructure, telecom networks, roads, airports this year—more than Trump has proposed to invest over 5-10 years. The great majority of China’s fixed capital investment, whose 10% growth contrasts with the United States near zero, is public fixed capital creation through infrastructure building. The editorial ironically notes that "Trump’s plan for an ‘America’s Infrastructure First’ policy mirrors China’s build-it-and-they-will-come model, except on a much smaller scale."
In a much more perceptive CNN column Nov. 11, "Why Trump Should Work With China," University of Singapore Dean Kishore Mahbubani wrote,
"America’s No. 1 priority has to be economic growth. The only way to meet the expectations of the millions who voted for Trump is to deliver a booming economy with jobs growing. One easy way to do it would be to unleash a surge in infrastructure spending. Having been a builder all his life, Trump, of all people, should understand the importance of infrastructure. He has promised that under his leadership, America ‘will build the next generation of roads, bridges, railways, tunnels, seaports and airports that our country deserves. American cars will travel the roads, American planes will connect our cities, and American ships will patrol the seas. American steel will send new skyscrapers soaring. We will put new American metal into the spine of this nation.’
"But a fiscally challenged America will not be able to unleash massive infrastructure spending. America needs a strong economic partner to achieve this. And the current infrastructure-building superpower is China. As Trump has noted, ‘You know, they’ve made so much economic progress because of the United States. And in the meantime we’re becoming a Third World nation. You look at our airports, you look at our roadways, you look at our bridges are falling down. They’re building bridges all over the place, ours are falling down.’
"Former U.S. diplomat Chas Freeman notes an interesting statistic. When President Eisenhower unleashed the last big wave of road building in America in 1956, he built 41,000 miles of highways. China has built 76,000 miles since 1990. Freeman also notes that at 12,000 miles, China has the most extensive high-speed rail lines in the world, ferrying 1.1 billion passengers a year. Seven of the world’s 10 largest and busiest ports are Chinese. In 2015, China laid 1.6 million miles of fiber optic cable. It is also the world leader in long-distance ultra-high-voltage power transmission.
"Given the current condition of the global economy, a massive infrastructure collaboration project between America and China would be like an economic dream made in heaven. Both the American and Chinese peoples would benefit. In theory, America leads the world in innovation. Yet, in the critical area of high-speed rail, for example, America’s infrastructure does look distinctly Third World. U.S.-China collaboration can change this."