While the rules have not been aggressively applied up to this point, that does not mean that the neglect has been good for the country, or will be good. It is always wise to recall the counsel of Tom Paine at the founding of the American experiment: “A long habit of not thinking a thing wrong, gives it a superficial appearance of being right, and raises at first a formidable outcry in defense of custom.” As Paine suggested, some customs are worth reexamining.
Following the announcement of Chao’s nomination in November of 2016, the National Journal’s Josh Kraushaar tweeted about how this selection potentially “gives Trump leverage over McConnell for his infrastructure plan, which could entail more spending than GOPers [are] usually comfortable with.” Matt Lewis, the conservative author of the book Too Dumb to Fail: How the GOP Went from the Party of Reagan to the Party of Trump, wrote that, while Chao’s story was “inspirational and aspirational,” and while he had interviewed McConnell in the congenial confines of an American Enterprise Institute book-release party, he entertained some “serious concerns regarding a conflict of interest for Chao’s husband when it comes to dealing with her new boss.”
“That’s not to say that Chao isn’t qualified or experienced (she is), but if Trump were looking to find a way to influence McConnell, he might come up with precisely this scenario. The conflict of interest is as follows: McConnell should be focused on the American people, the U.S. Senate, and the Republican caucus. And, in his capacity as Senate majority leader, he should serve as a check on the executive branch,” wrote Lewis, who explained that “we currently have a president-elect who is viewed by many Americans as dangerously ambitious and overtly powerful. And one of the primary ways our system reins in the power of an executive is via a balance of power. Granted, this conflict existed when Chao served in the George W. Bush Cabinet—but Trump isn’t Bush, and McConnell wasn’t Senate majority leader then, either. As Brad Pitt’s character in ‘Oceans Eleven’ tells George Clooney’s character, ‘OK, here’s the problem: We’re stealing two things. And when push comes to shove, and you can’t have both, which are you gonna choose?’”
Lewis, to his credit, acknowledged the challenge of dealing with the intermingling of elites in the nation’s capital city. “Now, it might be unfair to suggest that the incredibly accomplished spouse of the existing Senate majority leader should not be given a certain position because of her incredibly accomplished husband. (D.C. is rife with such potential conflicts of interest.) But I think it’s fair to say that the American people have grown distrustful of the political dog and pony show. Chao’s appointment could (at the very least) raise questions regarding McConnell’s priorities, if he is accused of setting aside conservative concerns about ‘Keynesian’ stimulus spending plans that just happen to be endorsed by the Republican president—who just happens to have hired his wife.”
Unfortunately, aside from a handful of conscientious scribblers on the margins of the discussion, Chao did not face those questions. “I mean, she’s been vetted many times already because she’s held multiple roles in different administrations over the years. So I’m not sure how much there is to ask,” chirped Commerce Committee chairman John Thune, R-South Dakota, and for the most part, Democratic and Republican committee members agreed. “She’s been at our house. We’re close friends,” said another committee member, Oklahoma Republican Jim Inhofe, who did their friendship no harm by adding that “I was with her when she was secretary of Labor, and she did a great job, and she’ll do a great job this time.”
Thune, Imhofe and the rest of the Commerce Committee approved the nomination with a voice vote, despite the fact that even after her hearing, Politico reported: “Chao’s personal positions on transportation issues aren’t well known.” The Senate backed her 93–6 (with Mitch sitting out), despite the fact that, as Reuters reported: “Chao declined to take positions on a number of issues, including whether air traffic control jobs should be privatized, concerns over the safety of shipments of crude oil by rail, foreign airlines’ push to move into the U.S. market and regulation of developing technologies.”
If the Senate had vetted Chao with anywhere near the seriousness that the founders intended when they established the chamber’s “advice and consent” authority, the scrutiny would have revealed the real story of her “multiple roles in different administrations.” It is not a story that inspires confidence in Chao’s ability to stand up to Trump or to run a massive federal agency with a staff of almost sixty thousand, a budget of almost $80 billion and responsibility for managing the Federal Aviation Administration, the Federal Highway Administration, the Federal Railroad Administration and the Pipeline and Hazardous Materials Safety Administration.
When Chao ran the Department of Labor, it was a disaster for the people she was supposed to serve. The New York Times headline at the close of her tenure read: “Labor Agency Is Failing Workers.” The U.S. Government Accountability Office (GAO) produced a report on Chao’s Labor Department, which concluded that, on her watch, the agency’s Wage and Hour Division was so lax that “Labor has left thousands of actual victims of wage theft who sought federal government assistance with nowhere to turn. Unfortunately, far too often the result is unscrupulous employers’ taking advantage of our country’s low-wage workers.”
Nine of ten cases brought by a team of undercover agents posing as workers who had suffered wage theft were mishandled, according to the report on Chao’s Wage and Hour Division. Kim Bobo, the executive director of Interfaith Worker Justice, a group that advocates for low-wage workers, suggested that Chao’s Labor Department had become “the wild, wild West of wage theft.” Former House Education and Labor Committee chairman George Miller, the California Democrat who had asked the GAO to examine the crisis, observed at the time that “when you have weak penalties and weak enforcement, that’s a deadly combination for workers. It’s clear that under the existing system, employers feel they can steal workers’ wages with impunity, and that has to change.” An even more damning assessment came from Catherine Ruckelshaus, general counselor and program director at the National Employment Law Project: “The USDOL under Secretary Chao was not primarily in the business of enforcing the law.”
Under Chao, the Labor Department did not merely shirk responsibilities. It made things worse for workers. A harrowing report by the Alicia Patterson Foundation on the period when Chao oversaw workplace safety was titled “How the Bush Administration Reversed Decades of Progress on Mine Safety.” Recounting how the Mine Safety and Health Administration in Chao’s Labor Department rejected “tighter rules and stricter enforcement” and “stressed cooperating with mine operators over policing them,” the report concluded that “progress toward safer mines has lagged in places like West Virginia, where the death rate for miners has more than doubled since 1997 and increased by 50 percent in the last five years.” An examination of the details of the 2006 Sago Mine disaster in West Virginia, which killed a dozen miners, explained that “the accident might not have proved fatal had the Bush administration not stood in the way of a number of efforts to improve mine safety.”
The complaints grew so loud that, by the time Chao was finishing her stint as a Bush cabinet member, the New York Times wrote: “Secretary of Labor Elaine L. Chao, the only member of President Bush’s cabinet to serve a full eight years, has heard a flood of criticisms that her department favored business and was lax on enforcement and worker safety.” Former AFL-CIO staffer Lane Windham (now a fellow with Georgetown University’s Kalmanovitz Initiative for Labor and the Working Poor) summed up Chao as “political at every turn” and said “she saw her role as labor secretary as cooperating with corporations, rolling back overtime protections, weakening enforcement of wage and hour laws, and pursuing labor organizations—especially those that had supported Democrats.” John Sweeney, who led the AFL-CIO during Chao’s tenure, called her the “most anti-labor labor secretary he had ever seen.”
Things improved significantly at the Labor Department after Chao
left, offering a none too subtle reminder that the problem was not the department but the boss. It was for that reason that concerns about her dismal record as an agency head have dogged Chao.
When Trump tapped her for the transportation post, the American Prospect headlined its report “The Workers’ Menace Becomes the Commuters’ Threat.” In the Nation under the headline “Elaine Chao, Ruined Department of Labor, Picked to Ensure Safety of Nation’s Planes, Trains, and Automobiles,” Spencer Woodman noted that “the stakes might be even higher than they were eight years ago. As Secretary of Transportation Chao will oversee more than three times the number of employees that report to the Labor Secretary. And, in addition to helping allocate big dollars in infrastructure spending, Chao will also likely preside over the continuing rise of self-driving cars and trucks—a technology that could amount to the largest mechanization of jobs in recent history.”
She’ll even be charged with regulating drones. But don’t expect Chao, who spent her off-time between administrations as a distinguished fellow with the right-wing Heritage Foundation and a director of the Wells Fargo banking conglomerate, to crack down on transportation corporations and tech companies any more aggressively than she did on wage-stealing employers. University of Texas law professor Thomas McGarity, who titled his book about Chao’s time at the Labor Department Freedom to Harm, warns that “she’s not going to be especially inclined to second-guess the industry when they say that (some new technology) will be safe.”
Handing over the regulatory process to industry, whether it be through the lax enforcement of rules or the embrace of the even more lax concept of “self-regulation,” is not exactly a form of privatization. But it does represent a bartering off of public responsibility via what Steve Bannon refers to as the “deconstruction of the administrative state.” Chao is an old hand at that, as she is at the governmental sleight-of-hand trick that can turn what is supposedly a “job creation” program into an epic privatization scam.
During the 2016 campaign, Donald Trump seized the infrastructure issue that his fellow Republicans and too many Democrats had neglected for years. Trump made the job-creating project of rebuilding American bridges, highways and airports central to his appeal to working-class voters. He ripped Reagan-quoting Republicans for their limited-government fantasies and their lack of interest in putting Americans back to work. And he tore into Hillary Clinton for her tepid proposal to allocate $275 billion in direct spending for infrastructure projects over five years, and another $225 billion for loan-guarantee programs and loans to develop infrastructure. “Her number is a fraction of what we’re talking about,” the newly minted Republican nominee said of the Democrat in an August 2016 interview with the Fox Business Network. “We need much more money to rebuild our infrastructure. I would say at least double her numbers, and you’re going to really need a lot more than that.”
That was a “wow” commitment. Trump was talking about pouring over a trillion dollars into infrastructure projects. It resonated with working families in states that had not voted for a Republican in decades and it played a critical role in making him president. He recognized this political reality in a viscerally populist inaugural address that had the new president announcing: “We will build new roads and highways and bridges and airports and tunnels, and railways, all across our wonderful nation. We will get our people off of welfare and back to work, rebuilding our country with American hands and American labor.”
Democrats who had opposed Trump’s candidacy suggested that the one area of agreement with the new president was on the need for a great big investment in jobs, jobs, jobs. And why not? Investment in infrastructure has historically had bipartisan support. Republican Dwight Eisenhower built the interstate highway system. Democrat Franklin Roosevelt gave the country a Works Progress Administration (WPA) and the Civilian Conservation Corps (CCC) and rural electrification. Everybody loves infrastructure! It’s what we remember from great presidencies. Indeed, the Roosevelt Institute reminds us that FDR’s New Deal “literally built the infrastructure of modern America, including 572,000 miles of rural roads, 67,000 miles of urban streets, 122,000 bridges, 1,000 tunnels, 1,050 airfields, and 4,000 airport buildings. It also constructed 500 water treatment plants, 1,800 pumping stations, 19,700 miles of water mains, 1,500 sewage treatment plants, 24,000 miles of sewers and storm drains, 36,900 schools, 2,552 hospitals, 2,700 firehouses, and nearly 20,000 county, state, and local government buildings.”
FDR referred to all of the work that was done by the Public Works Administration, by the WPA and the CCC, to all of those roads and streets and bridges and pumping stations and firehouses and schools that were constructed in the 1930s, as “national possessions” that yield “national benefits.” They were public works, built with public dollars, intended for public use and owned by the public.
The United States could use a lot more public works. The American Society of Civil Engineers estimates that, in order to meet basic demands, $3.6 trillion in infrastructure investment is needed by 2020.
Unfortunately, Donald Trump is not exactly proposing public works. Trump seemed to lose interest in infrastructure as his presidency got rolling, but when he did eventually propose a plan, it quickly became clear that this is not going to be your father’s New Deal.
The primary point of Trump’s infrastructure agenda has never been to do more building with American hands. The primary purpose has been to grease the palms of corporate CEOs, billionaire developers, real-estate investors and all the other Donald Trump wannabes of the private sector.
Former secretary of labor Robert Reich calls it “Trump’s Infrastructure Scam.” What the president is proposing, Reich explains, “is nothing more than a huge tax giveaway for the rich.” To wit:
1. It’s a giant public subsidy to developers and investors. Rather than taxing the wealthy and then using the money to fix our dangerously outdated roads, bridges, airports and water systems, Trump wants to give rich developers and Wall Street investors tax credits to encourage them to do it. That means that for every dollar they put into a project, they’d actually pay only 18 cents and we would contribute the other 82 cents through our tax dollars.
2. We’d be turning over public roads and bridges to private corporations who will charge us expensive tolls and earn big profits. These tolls will be set high in order to satisfy the profit margins demanded by elite Wall Street investors. So—essentially—we pay twice—once when we subsidize the developers and investors with our tax dollars, and then secondly when we pay the tolls and user fees that also go into their pockets.
3. We get the wrong kind of infrastructure. Projects that will be most attractive to Wall Street investors are those whose tolls and fees bring in the biggest bucks—giant mega-projects like major new throughways and new bridges. Not the thousands of smaller bridges, airports, pipes, and water treatment facilities most in need of repair. Not the needs of rural communities and smaller cities and towns too small to generate the tolls and other user fees equity investors want. Not clean energy.
Reich’s criticism is echoed by Nobel Prize–winning economist Paul Krugman, who argues that Trump’s “big infrastructure build” proposal “is not a plan to borrow $1 trillion and spend it on much-needed projects, which would be the straightforward, obvious thing to do. It is, instead, supposed to involve having private investors do the work both of raising money and building the projects—with the aid of a huge tax credit that gives them back 82 percent of the equity they put in. To compensate for the small sliver of additional equity and the interest on their borrowing, the private investors then have to somehow make profits on the assets they end up owning.”
“In that case we haven’t promoted investment at all,” explains Krugman, “we’ve just in effect privatized a public asset—and given the buyers 82 percent of the purchase price in the form of a tax credit.” That’s the opposite of what FDR did. Instead of creating public works projects, Trump’s plan is to have American taxpayers, via ta
x credits, pay for private works projects. It’s a redistribution of the wealth upward that may create some transitory jobs but that effectively privatizes the most vital infrastructure of the United States.
This is why Elaine Chao, an old-school corporate conservative who used to warn Conservative Political Action Conferences about “the same old tax-and-spend crowd” that “is implementing policies that will turn our country into Europe,” has had no problem aligning her future with the supposedly populist Donald Trump. This is also why Mitch McConnell, who led the opposition to a far less ambitious Obama stimulus plan in 2009, will work to get Republican senators on board for Trump’s scheme. Trump’s not proposing to renew the same old “tax and spend” approach to job creation, even though that approach has historically worked well for America. Instead, the president is hatching a “Robin Hood in reverse” scheme to use the government to take from the poor and give to the rich.