The White House this week has been touting President Trump's pledge to pour $1 trillion into the country's roads, waterways and airports through a massive infrastructure program. The idea may have just received an endorsement from a former campaign trail foil.
“Arrived in China,” Lloyd Blankfein, chief executive of Goldman Sachs, said in a tweet, “as always impressed by condition of airport, roads, cell services, etc. US needs to invest in infrastructure to keep up!”
Arrived in China, as always impressed by condition of airport, roads, cell service, etc. US needs to invest in infrastructure to keep up!
— Lloyd Blankfein (@lloydblankfein) June 6, 2017
It was just Blankfein's third tweet ever, following a vague call for the nation to assert global leadership on the environment, trade and defense. His first, sent last week, criticized Trump's decision to leave the Paris accord on climate change. “Today's decision is a setback for the environment and for the U.S.'s leadership position in the world. #ParisAgreement,” he wrote.
That followed more than a year during which Trump lambasted his opponents during the presidential campaign for their connections to the storied Wall Street bank and released a television ad that flashed an image of Blankfein as Trump warned of a “global power structure” that was robbing American workers.
But Blankfein's most recent foray into social media is particularly interesting because New York-based Goldman Sachs has become a big player in the world of funding infrastructure projects. On its website, Goldman Sachs said it “is one of the largest infrastructure fund managers globally” and has raised more than $10 billion since 2006 for such projects.
Goldman Sachs, for example, is part of a team that paid more than $1 billion in 2011 for a 40-year contract to operate two toll roads in Puerto Rico.
Trump's infrastructure plan is being developed by a task force led by Goldman alum, Gary Cohn, who now serves as director of the National Economic Council. In Trump's budget proposal, the administration called for spending $200 billion in federal funds over 10 years in hopes of attracting another $800 billion in private funding for the projects, possibly by privatizing some public assets. On Monday, Trump endorsed a proposal to privatize the nation’s air traffic controllers and upgrade the industry’s technology. The administration also has floated the idea of paying state and local governments a bonus for selling off some of their public assets to private interests. Those companies would in turn make profits by charging fees.
The world's biggest financial firms would undoubtedly have a hand in financing such large-scale projects. Like Goldman Sachs, BlackRock and Morgan Stanley also have established massive funds to back infrastructure projects. Saudi Arabia recently pledged $20 billion to Blackstone for a fund that will invest in U.S. infrastructure. Blackstone is led by Steve Schwarzman, who is close to Trump and leads the White House’s economic advisory council of CEOs.
Blankfein's tweet also appears to echo statements from another Wall Street chief executive, Jamie Dimon of JPMorgan Chase. “You might be shocked to find out, we haven't built a major airport for 20 years. China built 75 in the past 10 years,” Dimon said in an interview with Business Insider earlier this month. “It takes 10 years to get all the permits to build a bridge today. Ten years? What happened to the good old can-do America?” Dimon is a member of Trump's CEO advisory council.
Supporters argue that privatization would help the government cut through the kind of red tape that bogs down many worthy projects. But one danger in such efforts, said Marcus Stanley, policy director for Americans for Financial Reform, is that the projects may end up costing taxpayers more.
“You could very easily end up in situations that are very expensive to taxpayers because of the desire to pay Wall Street middlemen,” he said.