More Trade Deficit Craziness

Part of the mission of Manhattan Contrarian is to try to spread to the world some information about basic economic concepts.  I'm not talking here about the kind of economics expertise you would need to get a Ph.D. in the subject, or even a B.A.  Rather I'm talking about simple things that ought to be obvious to all, but somehow aren't.  Things like: that wealth is created by the hard work of the people rather than by government fiat; that the government doesn't make the people as a whole wealthier by increasing taxing and spending; that making investment more costly, difficult and risky (such as by increasing taxes and regulations) impairs economic performance; or that socialism destroys economies by undermining the virtuous incentives of the private property system.  Of course this whole project would be much easier if we didn't have the very most highly-credentialed economists on the public stage constantly spouting total nonsense and fallacy, including as to many subjects on that list.  (I'm talking about the likes of Krugman, Blanchard, et al.)

Anyway, high on the list of things that ought to be obvious is that the money-issuing prerogative of the sovereign is a great advantage, at least if used judiciously.  Certainly, the U.S. government understands this concept in the context of its dealings with its own citizens.  The economy needs money to operate, and as it grows it needs increasing amounts of money; and as long as the increasing money supply stays consonant with the growth of the economy, inflation will stay in check.  

Take a look at statistics on the deficits run by the federal government during the Obama years, and compare those numbers to the increases in debt held by the public.  Over the period 2009 to 2015, the deficits aggregated about $6.7 trillion, while the debt held by the public only went up by about $5.9 trillion.  The difference of about $800 billion (real money!) is what the government was able to spend without increasing the publicly held debt.  Who wouldn't want the ability to do that?

Translate the same concept to the international arena, and suddenly we are talking about a "trade deficit" that somehow is a huge problem.  And thus I was watching some of President-elect Trump's speech in North Carolina last night, and there he was talking about the big trade deficit and what kind of incompetent people could have "negotiated" such a thing.  Going forward, we're going to do much better "deals"!  Huh?

Of course what's going on is that the world needs money for its economy to operate, and the least-incompetent money-issuer in a big economy is the U.S. Federal Reserve.  So the world uses the dollar as its principal money, and it needs an ongoing and increasing supply of them.  To get them, they have to sell us more goods and services each year than they buy from us.  We didn't get into the position of being world money-issuer by sovereign privilege, but functionally it's the same thing.  

Now I for one am very hopeful that Trump will succeed in giving a real and immediate boost to the economy.  As just one example, the announcement today of Oklahoma Attorney General Scott Pruitt to head EPA is a terrific signal that the war on fossil fuels is about to end and the energy economy unleashed.  And the stock market took off and went up almost 300 points.

But what does this mean for the trade deficit?  Of course a rapidly expanding U.S. economy means that the trade deficit is likely to increase, and maybe by a lot.  Here is a post on the subject from yesterday by Mickey Levy of Berenberg Capital Markets.      

For now, the expectation is that the boost in economic activity from likely tax reform, infrastructure spending and an easing of burdensome regulations will stimulate stronger economic growth while increasing the demand for foreign goods and widening the US foreign trade deficit.

And really, if you think about it, Levy is highly likely to be right.  An expanding U.S. economy means more demand by us for imports, and an expanding world economy means more need by them for a growing money supply.  Month by month the trade deficit could bounce up or down, but over a time horizon of quarters or years it will be highly likely to increase, and maybe by a lot.

Relax!  This is a good thing! 

Shaking Up Washington: Ben Carson Edition

One after another, President-elect Trump's cabinet picks have been setting off outrage from the forces of progressivism.  The latest is Dr. Ben Carson, the apparent nominee to head the Department of Housing and Urban Development (HUD).  Wait a minute!  This guy is a neurosurgeon!  What "experience" does he have in the field of government subsidized housing?

And thus the people who recently thought it was no problem at all to have someone with a background as "community organizer" and two years in the Senate as President now seem to think that experience specific to subsidized housing is critical to running one little department of the government.  Here's a small sampling:

The New York Times (one of the more moderate comments):

President-elect Donald J. Trump has picked Ben Carson, a retired neurosurgeon with no housing experience, as his nominee for secretary of Housing and Urban Development — and high anxiety has set in. . . .  [Former Philadelphia Mayor Michael] Nutter, who is African-American . . . calls Mr. Trump’s characterizations of cities “a general insult. . . .”   “I’m proud that I had seven years with President Barack Obama, who actually knew about community development because he was a community organizer,” Mr. Nutter said.

Kevin Drum in Mother Jones (warning: vile left-wing racism):

[Carson] has no qualifications at all. I suppose Trump finally found the one thing Carson wouldn't mind crippling.  The whole thing is kind of weird. My guess is that Trump is pretty desperate to get Carson on his team because he doesn't want the press to be able to say that his cabinet is all white. And Carson is probably the only black person Trump knows aside from Mike Tyson and Don King. But if that's the case, why not offer him HHS? That would make at least some borderline sense since Carson is a doctor. Or maybe Surgeon General. Or the Department of Commerce, since Carson has lots of grifting experience.

Melanie Carlson in The Hill, making a pitch for widespread permanent government dependency:

[The Carson nomination] continues Trump’s pattern of appointing dutiful sycophants that do not have tangible expertise for their given cabinet positions. . . .  Given my area of expertise [as a former shelter based social worker] I would never attempt to do neurosurgery without a few tips. . . .  I would like to provide Carson a little primer from my experience working in shelters and transitioning people to permanent housing.  So the truth: not everyone can even successfully complete current shelter programs; much less have the ability to transition to permanent housing.

Well people, here's the thing:  HUD operates mostly outside of the consciousness of most of the public.  But you only have to look into it for a few minutes to realize that the business of HUD is creating poverty traps to make the supposed "beneficiaries" into government dependents for life.  HUD is not merely a failure as an anti-poverty program; it is a disaster.  It operates substantially on the model of socialism ("to each according to his needs"; assets in public ownership), and it achieves results that would make Cuba or Venezuela or East Germany proud.  Readers here know that HUD's flagship, the New York City Housing Authority, is an unspeakable disaster at every level.  Its properties, housing about 7% of New York City's population, sit on vast acreage of prime real estate -- some of it (e.g., miles of Manhattan waterfront) among the most valuable in the world -- and its residents receive subsidies in many cases worth $50,000 and $100,000 per family per year, and yet the poverty rate in its projects exceeds 50%, turnover is almost non-existent as residents remain in poverty for life, the rents cover barely a third of operating costs and nothing for capital projects or property taxes, and HUD throws some $2 billion down the rathole every year only to maintain the poverty and dependency.

And then there's HUD's latest big initiative, the program known as "Affirmatively Furthering Fair Housing," by which the Obama HUD has sought to force middle-class and wealthy communities around the country to build more subsidized public housing.  Supposedly the theory is that the thing holding back the poor from entering the middle class is isolation in poor inner cities, and once such people are placed in wealthier areas they will begin to rise up.  That's right:  the geniuses at HUD seem not to have noticed that the 120,000 or so of the residents of certain existing projects, otherwise known as the NYCHA residents in Manhattan, despite living in the midst of the wealthiest county in the country, and many of them directly next door or across the street from the very most expensive condos in the country, nevertheless remain mired in poverty for life.  The glaring disproof of the whole theory behind AFFH is right in front of their eyes, and yet they refuse to look and they march forward pushing more of their disaster by force and coercion.

Well, that's what "expertise" and "experience" in the field of publicly-subsidized housing will get you.  It gets you a bureaucracy firmly committed to the socialist model, to be run by themselves of course, in which they can earn cushy life-time salaries while they keep their inferiors trapped in poverty for life.  It gets you a bureaucracy with absolutely no concern or interest whatsoever in ending dependency and getting people out of poverty, but an overriding concern for one thing and one thing only, which is growing their own budgets and staffs and empires year over year.  Are you surprised that the only head of agency they would find acceptable is one of their own -- i.e., someone with the right "experience"?

We know what the people who have "experience" with existing subsidized housing programs will inevitably achieve for us:  the same thing that they have always achieved, which is demanding more money to keep failing by doing the same thing and continuing to trap more people in poverty and dependency.

Where is Carson on any of this?  He hasn't had a whole lot to say specifically on the subject of subsidized housing, but here is a relevant statement from a 2015 speech:

Dr. Ben Carson kicked off the Conservative Political Action Conference, telling an attentive audience that the next President must "get rid of dependency" that some Americans might have on the U.S. government.  "We need to understand what true compassion is to reach out to individuals who think that being dependent is reasonable as long as they feel safe," said Carson, the first speaker to address this year's annual keynote conservative conference. "It's not compassion to pat them on the head and say, 'There, there, I'm going to take care of all your needs, your health care, your food.' That's the opposite of compassion."

You can see why The Blob would hate and fear this guy.  Sounds like a good appointment to me.

At the Manhattan Institute's City Journal Online, Howard Husock calls Carson "just the man for that job," and lays out a program for Carson to implement on taking office.  The program includes things like time limits for living in public housing, bringing private management to projects, and ending the ridiculous AFFH.  Fair enough, as far as it goes.  But even Husock stops short of calling for radical surgery.  How about just giving away the projects to the residents and getting out of the business? 

"Saving The Jobs": Nobody Volunteers To Move Into A Prison

Back in the 1960s and 70s, the UK economy was known as the "sick man of Europe."  The big industries like steel, automobiles, coal -- much of them in state ownership -- were all losing money and threatening plant closures and massive layoffs.  Successive Labour and Conservative governments struggled to "save the jobs" of workers in these and other industries by refusing to let the factories, mills and mines close, and by throwing ever-increasing taxpayer subsidies at them.  Nevertheless, unemployment crept up year by year, and economic growth was stuck right around zero.

Then in 1979 came Margaret Thatcher.  Most nationalized industries were promptly privatized, taxpayer subsidies ended, and plants were allowed to close.  The immediate result looked terrible:  Unemployment spiked to 12% by 1984, and a substantial part of Britain's industrial capacity shuttered:

In the words of one eminent British historian [Marxist Eric Hobsbawm], Thatcher oversaw an "industrial holocaust", which saw Britain's industrial capacity decrease by fully one quarter during the years 1980–84.  

But by the late 1980s Britain was experiencing economic growth of 4+% per year and people were calling it an "economic miracle."  Today, the steel and coal industries are almost entirely gone from the UK, and the auto industry has been totally transformed from a mass market business to one dominated by high-end specialty brands like Bentley, Aston Martin and Jaguar.  Yet the UK economy is one of the strongest in Europe.  Is there a single person alive today who thinks that "saving the jobs" of the steel workers and coal miners of the UK from the 1970s up to the present would have been a good idea?  (Hint: Hobsbawm died in 2012.)

Meanwhile, over in France, they have taken a different approach to "saving the jobs":  they have made it virtually impossible to fire anyone.  And how is that working out in creating robust employment opportunities for the people?  According to an article in the New York Times Business Section on Friday:

Since France emerged from a recession in 2010 after Europe’s debt crisis, growth has languished below 2 percent annually. Unemployment is stuck around 10 percent, more than twice the rate in Germany. Nearly a quarter of young people are without work, and many of the new jobs being created are on precarious temporary contracts. 

The Times article, by Liz Alderman and headlined "A Leading Candidate in France Is Intent on a Conservative Overhaul," reports that a guy named Francois Fillon has leapt to the forefront of the presidential race in France by essentially proposing a Thatcherite "shock therapy" for the country's economy.  Alderman relates the story of one Philippe Plantier, owner of a midsize industrial cleaning company:

In the sluggish economy, his orders fell this summer for cleaning big industrial structures, like bridges and cement factories. Mr. Plantier moved to lay off several of his more than 50 employees to adjust for declining income.  But the workers sued to block the layoffs and sought more than €100,000 in damages. “When you hire someone in France, it’s for life,” he said.

The point:  Under these circumstances, why would Plantier hire anyone new or expand his business?  A similar principle is that no one volunteers for life imprisonment.  But Alderman's article reports on how protests break out in France any time anyone proposes to roll back by even a little the raft of "labor protections" that France is known for. 

Back here in the U.S., we have just seen our first big exercise in government "saving the jobs" in many years, namely Donald Trump's jawboning of Carrier to keep about 1000 air conditioner manufacturing jobs in Indiana, rather than moving them to Mexico.  No details have been released as to exactly what combination of threats, promises, sweet talk or handouts convinced Carrier to change its decision.  According to an interview with Mike Pence on Fox News, the key factor in persuading Carrier was a promise of rollback of senseless regulations of the Obama era.  Fine.  But then there was this "Tweetstorm" issued by Trump this morning:

The U.S. is going to substantialy reduce taxes and regulations on businesses, but any business that leaves our country for another country,

— Donald J. Trump (@realDonaldTrump) December 4, 2016

fires its employees, builds a new factory or plant in the other country, and then thinks it will sell its product back into the U.S. ......

— Donald J. Trump (@realDonaldTrump) December 4, 2016

without retribution or consequence, is WRONG! There will be a tax on our soon to be strong border of 35% for these companies ......

— Donald J. Trump (@realDonaldTrump) December 4, 2016

wanting to sell their product, cars, A.C. units etc., back across the border. This tax will make leaving financially difficult, but.....

— Donald J. Trump (@realDonaldTrump) December 4, 2016

these companies are able to move between all 50 states, with no tax or tariff being charged. Please be forewarned prior to making a very ...

— Donald J. Trump (@realDonaldTrump) December 4, 2016


— Donald J. Trump (@realDonaldTrump) December 4, 2016

It looks like he's talking there about a new punitive tariff that would have to be enacted by Congress.  With any luck, Congress will be sensible and not do it.  Still, it's discouraging that our new President understands so little about basic economics, and is willing to follow the road that has led to economic stagnation for England, France and many others.  As a businessman, he should know better.  Nobody volunteers to move into a prison.

Government Statistics: The Ridiculous, The More Ridiculous, And The Completely Preposterous

If President-elect Trump really wants to "drain the swamp" in Washington, one thing that seriously needs to be addressed is the state of the data and statistics on the economy that come out of places like the Commerce Department and the Labor Department.  Serious people every day try to figure out how the American economy and people are doing, and what kinds of policies might make things better or worse.  And all they have to rely on are data and statistics put out by the government, nearly all of which are not suited to the purpose at hand, and most of which are intentionally deceptive in ways that are mostly obvious but overlooked by nearly everyone who uses them, who are mostly in the media and academia.  The deceptiveness is always oriented toward the same goal, namely to support advocacy for increase in the size of the government and the budgets of government programs, and, even more disgracefully, in the context of elections, to support the election of Democrats over Republicans.  

Other than myself, the one guy I have found in American journalism who hammers repeatedly on this issue is John Crudele of the New York Post.  Today Crudele is on the issue once again, in an article headlined "Here's how Trump can easily get the economy humming again."  First point:

The Trump administration should audit all economic data coming out of the Commerce Department, Labor Department and, especially, the Census Bureau.

Amen to that!  Among the more important issues that Crudele has identified in government economic statistics over the years, we have, for example:

  • Just this past September 16, Crudele was immediately on it when Census suddenly reported, in the run-up to the recent election, impossibly large gains in household income and declines in the poverty rate.  (See also my post on the same subject here.)  How could household income have suddenly gone up 5% and the poverty rate declined 3% in a period when GDP was only up 2.4% -- all reported in the final stretch of the campaign, just in time to make it look like President Obama's economic policies were suddenly "working" and to give a last-minute boost to Hillary?  Crudele identified certain methodological changes in how Census was treating answers to certain questions on its surveys as the source of the sudden upticks.
  • Looking back to 2012, Crudele reported another version of about the exact same thing.  In October 2012, in its last reports before the 2012 election, the government stated that the unemployment rate had had a relatively sharp one-month drop from 8.1% in August 2012 to 7.8% in September.  According to a Crudele story from November 2013, those numbers had been "faked" by the fabrication of data: "The Census employee caught faking the results is Julius Buckmon, according to confidential Census documents obtained by The Post. Buckmon told me in an interview this past weekend that he was told to make up information by higher-ups at Census."  
  • Then there are Crudele's many reports on so-called "seasonal adjustments" to economic data, which are essentially made up out of whole cloth and can be manipulated to make the numbers look better when the government wants them to look better and worse when the government wants them to look worse.  From a Crudele article on August 10, 2016:  "The US economy lost 1.03 million jobs in July [2016].  That’s a fact.  But John, didn’t the Labor Department announce last Friday [August 5] that July had a gain of 255,000 new jobs? . . .  [T]he discrepancy . . . was caused by seasonal adjustments. . . .  Were the seasonal adjustments applied fairly and consistently in July?  There’s evidence that they were not."  Plenty more details about the gamesmanship at the link.

These things run from the ridiculous to the even more ridiculous.  You are trying to use the government numbers to get a handle on whether economic conditions are getting a little better or a little worse, and now you find out that the bureaucrats can and do regularly manipulate the numbers in amounts larger than any real underlying changes in order to support favored narratives and help preferred political candidates in upcoming elections.  

Yet even Crudele can sometimes miss the forest for the trees.  So now let's move from the merely ridiculous to the completely preposterous.  I'm referring, of course, to the government's two fundamental counting conventions that underlie all of its most important statistics.  These two conventions are well known, and are there for all to see, but have somehow faded into the background such that nobody really notices them any more.  And yet these two conventions are what fundamentally undermine the usefulness of the statistics and render them deceptive in most of the uses to which they are put.  The two conventions at issue are:  (1) the convention that, in measuring the size of the economy, all government spending on goods and services is counted toward GDP at 100 cents on the dollar, as if each dollar of government spending is as valuable toward creating wealth as a dollar of private spending; and (2) the convention that, in measuring what is called "poverty" and "income inequality," nearly all government spending to benefit low-income people is counted at zero cents on the dollar toward increasing income or reducing measured poverty, as if government spending in massive amounts is completely worthless for the supposed beneficiaries.

Let's start with the poverty convention.  I can't even think how anyone can try to justify what the government does.  When the measure of poverty was created back in the 60s, there barely existed any of the vast array of means-tested support programs on which governments now spend about $1 trillion per year.  As "anti-poverty" spending and programs were created and added by the dozens over the years, the bureaucracy came up with one excuse after another why the spending should not be added to the income or resources of the beneficiaries in measuring poverty.  Medicaid?  It's counted at zero, although to buy your own private insurance you have to earn the money as income first.  Perhaps that one could be argued either way (I'm being generous).  How about a slot in a public housing project?  That's also counted at zero.  In my home county of Manhattan, many slots in public housing are worth $100,000 per year and up if measured by the price others are paying to live in the building next door.  Food stamps?  Other nutrition assistance?  Also counted at zero, although exactly how these things differ in any meaningful way from cash income is difficult to articulate.  EITC?  That one is paid in actual cash.  Many uninformed writers who are not attuned to the obscene level of government duplicity in measuring poverty laughably argue that the EITC is the best program for "reducing poverty."  I'll bet you can't even guess the excuse the bureaucrats offer to justify not counting the EITC against the measure of poverty.  To find out, go to this link.  Out of the approximately $1 trillion in annual means-tested and anti-poverty spending by governments at all levels, essentially the only thing that counts against the measure of poverty is TANF.  That's less than $20 billion per year, or less than 2% of total anti-poverty spending.  TANF alone is never enough to raise a single person out of poverty.  

And then there's the GDP convention.  What it means is that the most crazily wasteful government spending always looks like it adds to economic growth.  The Pentagon buys a $1000 toilet seat?  It adds $1000 to GDP!  Bridges to nowhere?  They add their full cost of construction to measured GDP!  A $4 billion structure as the entrance to a subway station?  It adds $4 billion to GDP!  No wonder politicians are always proposing more "infrastructure spending"!  And even worse, this convention always provides the rationale to oppose cutting any and all government spending, even the most completely wasteful.  GDP will go down!  Not real GDP, of course, but GDP as measured by the duplicitous government bureaucrats.

It doesn't take much deep thinking to figure out why government functionaries like these conventions.  If you want to advocate for more money for anti-poverty programs, you need a high rate of measured poverty to play on the heartstrings of the gullible public.  If you want more government spending and government growth generally, it is enormously useful that increases in government spending count as "economic growth" in all circumstances, and that spending cuts count as "economic shrinkage" in all circumstances, without anyone ever even looking or applying any critical thinking to see if the government is wasting the money.  With several trillion dollars of fake counting now occurring every year under these conventions, this game has gone well past the ridiculous and deep into the preposterous.  Drain the swamp!


Risks In Trumpian Economic Policy: Government Spending

There are many reasons at this point to be encouraged about the prospects for the national economy under President Trump.  As examples, EPA fossil fuel restrictions and Obamacare mandates are serious drags on economic performance, and Trump is promising to roll both back.  Stock market gains since the election reflect widespread optimism.  On the other hand, from what our President-elect has said both before and since the election, there are important areas where his proposed policy changes pose major risks.  Topping the list is the question of whether major new restrictions will be imposed on international trade.  I have previously covered that subject here and here, and will not discuss it further today.  Another area of significant risk is government spending.  Will there be massive increases in spending on wasteful and unproductive projects?

As discussed here last week, in the late stages of the campaign and the period since the election, Trump has gone in big for the idea of a major increase in federal "infrastructure" initiatives.  He has talked of a $1 trillion plan, covering ten years, which would be $100 billion per year.  His website on the subject, as usual, has many generalities and few specifics.  In particular, it is unclear how much of the trillion would be direct federal spending, since there is talk about things like "[l]everag[ing] new revenues and work[ing] with financing authorities, public-private partnerships, and other prudent funding opportunities."  Still, there is every reason to be concerned that Trump may be buying into the fallacy that blowout government spending, particularly (for some reason) on big construction projects, is the way to speed up economic growth.

It's not just Paul Krugman and the Keynesians who keep up the incessant drumbeat that further increases in government spending are the cure-all for every economic ill.  Recent weeks and months have seen remarkable repetition in Democrat-side sources of the theme that the economy performs better under Democrat presidents than Republican.  (It's almost as if they speak from a set of common approved talking points!)  Of course the idea is to promote increased government spending, since everybody knows that Democrats are for more spending, and that's the explanation for the difference.  Hillary Clinton used this theme throughout her campaign.  For example, here is a statement from Hillary at an early stage of the campaign (October 2015):

There’s a lot of evidence that when we have a Democrat in the White House, unemployment is lower, income is higher, and even the stock market is higher. But when you have a Republican in the White House you are four times more likely to have a recession.

Asked by to support the statement, Clinton cited to a study by Blinder and Watson, "Presidents and the Economy: An Economic Exploration."  You will recognize Blinder and Watson as partisan Democrats (Blinder was on the CEA during the presidency of Bill Clinton).  You won't be surprised to learn that there is a gigantic starting-point fallacy in their study:

The analysis consider[s] a 64-year period beginning with President Harry Truman and ending with President Barack Obama.

In other words, Blinder and Watson:

  • Leave out the FDR presidency, when an intentional war against capital prolonged the depression for eight years from 1933 to 1940.
  • Then start with Truman, whose first important act as president was to cut federal spending by well more than half in the World War II demobilization, in the face of dire warnings from the Keynesians that this would lead to an immediate and prolonged depression.  Of course, the economy then boomed.

For some more recent repetitions of the talking points, see Paul Waldman in the Washington Post on November 4 ("The economy is better under Democratic presidents"), or David Leonhart in the New York Times on November 29 ("'Big Marco' Or His Own Presidency").  From Leonhart:

All told, economic growth under Democratic presidents over the last half-century has been 25 percent faster than under Republicans. Private-sector job growth has been more than twice as fast. Republicans even have a worse record running up the deficit. (These comparisons hold no matter when precisely you start the clock on a president’s legacy.)

Well, OK.  But can we recognize that the best economic times in this period were (1) the six latter years of the Reagan administration, a time of both tax cuts and serious spending restraint, and (2) the six latter years of the Clinton administration, when serious spending restraint was imposed on the president by a Republican Congress?  In other words, the talking points are used as an argument for big spending increases, but on even a moderate inspection, that argument doesn't hold up.

If you still think that blowout spending, particularly on infrastructure, is the route to faster economic growth, I would highly urge you to look at the case of Japan.  Their economy has been in a funk since about 1989 -- going on 28 years now.  In that time they have somehow gone for one after another massive infrastructure "stimulus" spending program.  They have the fanciest and fastest trains anywhere, and top-notch roads and highways.  They also have national debt now at about 240% of GDP.  And the economy somehow never gets out of the funk.  See my detailed 2014 post here.  Only the private sector can create real economic growth, and that requires restrained government spending and taxes.

In the U.S., the gradually improving economy and spending restraint (under a Republican Congress) of the past few years have led to declining deficits -- but at $500 billion per year, we are still talking numbers that are way too big.  Going forward, even with spending restraint, automatic increases in entitlements promise to take the annual deficits to $1 trillion and above by the 2020s.  Adding massive new "infrastructure" spending to the mix is far likelier to be a negative -- and a major negative -- than anything positive.

I've been feeling like a lonely voice on this issue so far.  But Michael Tanner of the Cato Institute chimes in today at the National Review:

Stephen Moore, a Trump economic advisor and a man I know and respect, recently told congressional Republicans that, since Donald Trump won the election, it is their duty to deliver on his agenda — even if his policies are bad ideas. Umm, no. Bad ideas are bad ideas, even when voters choose them. . . .  Infrastructure spending is not likely to deliver the bang for the buck that Trump supporters expect in terms of either job creation or economic growth. . . .  [S]tudies show that, while infrastructure spending may provide a short-term boost to GDP, it can actually reduce economic growth over the long-term by diverting resources and creativity to less innovative and productive uses.     

I would only add that the supposed "short-term boost to GDP" from government infrastructure spending is likely to be completely fake -- an artifact of the unjustifiable convention of counting all government spending on goods and services as a 100 cents on the dollar addition to GDP, no matter how wasteful and unproductive the spending may be.  If counted in GDP at a more realistic rate like 50%, wasteful government infrastructure spending would be recorded as a reduction in GDP, which it is, rather than an increase.