Posted April 01, 2021
By Byron King
President Proposes Prodigious Package in Pittsburgh
Yesterday, President Biden traveled to Pittsburgh to announce a massive $2.3 trillion infrastructure spending plan.
Build Back Better! Party like its 1902.1Were going to rebuild this country, and not a moment too soon some might say.The president laid out a prodigious, multi-year roadmap to build back Americas roads, bridges, tunnels, electric grid, water lines, sewer pipes, public transit, Amtrak passenger rail, Internet broadband and much more.Who can possibly be against that? Its about time.After all, even a casual visit to pretty much any part of this vast Republic reveals that the place is a smoking wreck.And when you really get into the weeds of how bad things are Well, thats right up my alley.Over the past 15 years, my editorial job here has turned me into something of a road warrior. And I can attest to how far America has fallen. Its a sad tale scary even.On my end, Ive spent many years driving over bad roads and bridges, through hollowed-out cities and towns, past crumbling buildings and decrepit industrial and municipal facilities. From Maine to California, the decay and decline are evident.Its the result of decades-long neglect, poor maintenance and underinvestment. We truly do dwell in the United States of Rusty Iron and Crumbling Concrete.And under the Biden Plan its time to fix it, right?Oh wait Ha! You fell for it.April Fools!Lets dig into thisOkay, yes. Some of what I just told you is absolutely true. On March 31, President Biden flew to Pittsburghs airport in the big blue jet.
When the Man comes around: Air Force 1 in Pittsburgh.
From his parking spot on the Air Force side of the ramp, next to a haze-gray array of KC-135s and C-17s, Bidens motorcade took him just a few short miles down I-376 to Collier Township, west of the city, to a large building owned by the carpenters union.
There, against a nicely staged backdrop of two-by-fours and American flags, Biden spoke to one of his trademark audiences, a small, well-screened crowd of Democrat politicians and union members.
Who is that masked man?Through the miracle of modern technology, I watched a live feed. I saw the security guys do their thing, the handlers handle, the politicians politick. And I watched the speech, from beginning to end.Biden looked every bit of his 78 years old. And I mean that as a matter of fact and appearance, not gratuitous criticism. He is who he is.And indeed, he is.Early in Bidens speech, in a tone resonant with sincerity if not self-delusion, he said, Im a union guy.Yeah, right. April Fools anyone? Because Cmon, man.In November 1972, aged 29, Biden was elected to the Senate. He hit the Constitutionally required 30-year mark just in time (Nov. 20 is his birthday) and served in the upper chamber of national government continuously for 36 more years, his entire adult life.Then at age 66, Biden became Vice President in 2009 and spent eight years in that office, traveling the world in Air Force 2.Now in 2021, hes the U.S. President.Is this the biography of a union man? Think about it. Ill waitIf Biden is a union guy at all, hes a lifetime member of the Washington, D.C. Lodge of the Brotherhood of Beltway Bigshots. And currently hes the business agent of all business agents.If you enjoy political fairy tales, I suppose you could view it in the sense that Biden cashed many a donation check from union members and their PACs over all those years. So perhaps hes the unions man in that respect.But really. Here we have someone who lived for many years in a mansion on the DuPont Estate in Delaware, namely this humble abode:
Long-time home of Joe (Union Guy) Biden.2
All on the meager salary of a U.S. Senator.
So yes, we should all be such union guys, eh?
But enough of the past. Lets get back to the nuts and bolts of Biden rebuilding America.
The Washington Post summarized the speech: President Joe Biden outlined a huge $2.3 trillion plan Wednesday to reengineer the nations infrastructure in what he billed as a once in a generation investment in America.3
But that same newspaper also gave away a key element of Bidens plot, which is to undo his predecessors signature legislative achievement of giant tax cuts for corporations. (Hold that thought and see below.)
In all fairness, Biden laid out broad contours of an ambitious, national-scale program to fix a long list of broken things. Roads, bridges, etc. It was all in the speech.
Biden praised unions and union members at every opportunity, which is fine. Although it rang a bit hollow considering how (and not to put too fine a point on it) he totally screwed tens of thousands of union members on Day One of his presidency when he summarily terminated the Keystone XL Pipeline.
Biden also explained how his infrastructure program leans heavily towards projects to remediate the environment and combat climate change. Again, thats how he rolls, policy-wise.
For example, under Bidens plan many fossil fuel workers can look forward to a future career of plugging and capping old oil wells, versus drilling new ones. And theyll earn union wages and benefits along the way. Thats quite a promise, no? Well, he said it with a straight face.
This is all part of the new war on barrels.
Meanwhile per Biden, America will reindustrialize via solar and wind development. Somehow these low-density gathering systems will feed economy-driving power across the land through a rebuilt electric grid. Well store the energy at utility scale in novel batteries that will come from factories yet to be constructed.
And were going to do all this rebuilding and rewiring in a country where the current cultural vector is that math is racist, and other such non-scientific, imbecile nonsense.4
Obviously, Bidens program is ambitious. Its a swing-for-the-fence, reach-for-the-stars kind of thing.
Then again, one might wonder who will be the Babe Ruth of this home run derby? Who will be Bidens Werner von Braun in this industrial moonshot?
In things like this, an old Washington adage pertains, that people are policy in terms of making government programs work.
So if this is Bidens Manhattan Project, who is the Leslie Groves? Who is Bidens Oppenhsimer?
Which raises another question, do Bidens dreams exceed his grasp? (Im asking for a friend.)
Of course, in some respects Biden may already be benefitting from that famous luck of the Irish. A few really big, bold things are already on track to happen, like a significant industrial shift to electric vehicles (EVs) in the auto business. Biden can check that off the list.
When it comes to EVs, the writing is on the wall. Globally, gasoline demand has already peaked according to no less than the Wall Street Journal.5
Related to that, Ive discussed the demise of the internal combustion engine (ICE) age, and how that will doubtless lead to boom times for copper.
Then again, we have to be real here. Vast, national-scale programs entail vast, national-scale risks. And Biden is laying out a program not just chock-full of risk but of fanciful desire.
Biden wants the country to do things without due regard for fundamental industrial and geological realities. Last fall I discussed how we may be staring at a green new disaster.
Biden sees great days ahead, to be sure. His hardhat, union guy proposals are meant to transform the U.S. economy in ways similar to what we saw from the space race of the 1960s, if not New Deal mega-projects of the 1930s like the Grand Coulee Dam or Tennessee Valley Authority.
Its not a plan that tinkers around the edges, Biden said, according to my notes of the speech.
Its a once-in-a-generation investment in America, he said, unlike anything weve seen or done since we built the interstate highway system and the space race decades ago. In fact, its the largest American jobs investment since World War II. It will create millions of jobs, good-paying jobs.
And do you know what? I think Biden actually believes that.
Now the issue arises, what about the money?
Oh You mean we have to pay for this. Ugh.
And here we are, after spending a year wrecking wide swaths of the economy and blowing a hole in the creditworthiness of the U.S. government.
Its not the time to spend money you dont have.
But go back to that Washington Post quote, above. The one about raising taxes and undoing the work of Bidens predecessor, Donald Trump whose name the Post obviously is loath to spell out in print.
This gives the game away. Bidens plan is as much about raising taxes as it is patching even the smallest pothole.
And to be sure, everything has to go through Congress where all bets are off. Anything can happen and, in all likelihood, will. Expect another of those several-thousand-page bills, where, we have to pass it to see whats in it, in the immortal words of Speaker Nancy Pelosi.
In his opening gambit Biden proposes to pay for his massive array of nation-rebuilding via higher taxes on big, bad business, with other unspoken tax hits buried deep in the deck of policy cards.
Specifically, Biden discussed raising the corporate tax rate to 28% from the 21% level which was established in the 2017 tax system overhaul.
Biden pointed out that several large, name brand companies currently pay no corporate tax, and in a populist sense hes square on target. Dont you just hate it when you see high corporate earnings, but the companies pay a pittance? Looking at you, Amazon.
Then again, theres a reason why these companies pay so little in tax. It has to do with how they lobby like hell and control the Congressional law-writing. Plus, they have really good lawyers and accountants. Well see how it plays out.
Reassuringly, Biden said that if you make under $400,000 per year, your taxes wont go up. Not a penny, he promised.
Dont count on it. The unspoken part Bidens proposal is to change things like the federal estate tax; specifically, to eliminate whats called step-up basis.
Long story, but that alone is a plan to confiscate large amounts of money from Baby Boomers as they die off in the next decade or two.
I wont get into the details of tax law. But rest assured, to pay for this Biden program the tax-law-writers are coming for your money, whether youre alive or definitely after you pass away.
Of course, all of this has yet to go through the sausage-factory on Capitol hill.
For now, its enough to know that Biden wants to pour a lot of concrete, erect a lot of steel, string a lot of copper and more. And therein lies your opportunity.
That is, Bidens plan involves many metals and materials that we simply do not produce in the U.S., and which we import. Ive previously discussed a few industrial angles of Bidens rebuild ideas in terms of basic materials here and here.
For now, just follow the news and keep in mind that this prodigious package is big, bold, vast, ambitious and investable, if you know where to look. All this from President Union Guy.
On that note, I rest my case.
Thats all for now Thank you for subscribing and reading.
Byron KingManaging Editor, Whiskey & Gunpowder
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5 Gasoline Demand Has Peaked, Global Forecaster Says, Wall Street Journal