Layoffs, Tolls, and Trickle-down Economics

Ten days ago Trump gave his first State of the Union address. An important but little discussed point involves the proposed public-private partnerships in his infrastructure plan. None of this should be a surprise as Trump talked about such public-private partnerships during his campaign. The Trump administration expects that by providing 15-20% of the funding state governments or private companies will be encouraged to provide the rest of the funds needed to construct roads and bridges as well as other projects. He claims that $200 million of federal money will drive construction of up to $1.5 trillion in infrastructure.

Regarding state government projects such a partnership is not unusual, think of interstate highways as an example. What Trump failed to mention is that private companies have no incentive to build a road and let people drive on it unless they can charge them to use it, that means a toll road. Every other project a private company might be willing to build involves that company charging the public to use it.

Most folks I know regardless of political persuasion hate toll roads. Trump thinks they’re just dandy as do his servants in congress. Remember that when elections roll around in November.

Of course, Trump also touted his big “accomplishment” the tax cut that mostly benefits the top 10% and multi-billion dollar corporations. Yes, a few companies will give bonuses, a few others will give small raises. Mostly the tax cuts will end up in stock buy-backs, stock dividends and CEO pay. Worse than that are the companies that are hiding large layoffs behind small bonuses. That list includes:

Kimberly-Clark, manufacturer of consumer products like Kleenex, Viva paper towels, and Huggies diapers, announced it will use its tax cut windfall to pay the costs of closing 10 factories and laying off as many as 5,500 employees.

AT&T was the first to announce one-time bonuses as a result of the tax bill. Just days later, it reported plans to lay off more than 1,000 employees in early 2018.

Walmart announced it would raise the minimum wage for its workers to $11 per hour on January 11 but, that same day, announced the closure of 63 Sam’s Club stores and that about 10,000 workers will be laid off. Walmart also laid off between 400 and 500 corporate employees at its headquarters last week.

Comcast announced 100,000 bonuses of $1,000, while around 500 managers, supervisors, and salespeople were fired.

Of the Fortune 500 only 29 (5.8%) report giving one-time bonuses and just 17 (3.4%) report providing wage increases.

I’d be remiss if I didn’t also mention that Carrier, the company Trump claimed kept jobs in Indiana because he negotiated a deal, announced another 200+ employees will be laid off in addition to the 340 laid off last summer.

It’s nice that some folks are getting one time bonuses, but considering that the tax breaks their employers are getting are permanent shouldn’t the employees be getting raises instead so they can share in the benefits of the tax cut?

If you never understood the term trickle-down economics before, now you do, especially if you or a loved one is on the laid off list even though corporate profits are at record levels.

One time bonuses instead of raises, layoffs and tolls, this is what Trump and his minions in congress expect us to accept. This November you’ll have a chance to let them know just how wrong they are.

Republicans should know you can't have it both ways

As traffic and the number of school age children increase cities all over Texas struggle to address the needs of their citizens. Down the road in Cibolo the elected leaders believe that in order for the city to develop in an economically sustainable way it needs extend FM 1103 which currently runs from I-35 to FM 78 so it goes all the way to I-10. In fact this idea has been around since at least 2006 but state funding hasn’t been available and city leaders have been told it will be at least another 20 years if then before money might be available.

Rather than give up and wait a generation or more for the state to find the money Cibolo’s city council decided to investigate the possibility of partnering with a toll road operation to build the extension. Now some members of the community are up in arms over the idea of tolls and spurious claims of using eminent domain to allow an outside company to as they claim “take property a bargain basement prices”.

I was a member of the Blue Ribbon Commission that reviewed the cities options for financing the extension and recommended that working with a toll operator be explored. I was one of the skeptics on the committee and while I’m no fan of toll roads we agreed that there aren’t many options to finance this project. I reluctantly agreed that the city council should explore a toll road so it can be built.

Now here’s what I have trouble making sense out of, many of the folks objecting the loudest to the idea of a toll road are also staunch low tax Republican voters. When you are a low tax state you must also be a low service state in order to balance the budget. In Texas the city can’t even legally raise taxes to the level necessary to pay for the road and still maintain its other responsibilities. Rather than blaming city council members for taking an action they don’t like; these folks ought to be calling our state representative John Kuempel and state senator Donna Campbell to tell them to raise taxes enough to do the job that state governments are supposed to do.

While they’re at it they should also remind our state legislators that funding public education is required by the Texas constitution and they’re doing a pitiful job of that too. The legislature still hasn’t fully restored the funding cuts from they made in 2011 when thousands of Texas teachers were fired and more kids were jammed into each classroom.

Republicans are funny; they don’t want to pay taxes but they expect to get high quality services like good roads and great teachers. Most of us know that you get what you pay for; I just wish Republicans understood that.