US Policy Changes Vol.28 (Infrastructure/Economy Vol.3 – Housing, Construction, Immigration, Finance, Key posts)

Here are articles on infrastructure including housing, and related immigration and finance. Excerpts are on our own.

What Economists Expect from a Donald Trump Economy (11/14/2016) | @JoshZumbrun @WSJ
Inflation Rate
2017: 2.2%; 2018: 2.4%
…higher than a month ago, as the potential for fiscal stimulus with an already low unemployment rate could lead to the first sustained bout of more than 2% inflation since before the 2007-09 recession. A trade war, in which countries apply tariffs to each other’s goods, could also potentially make the price of imports more expensive.
Interest Rate on 10-Year Treasury Bonds
End of 2017: 2.35%; end of 2018: 3%
The possibility of higher inflation and more government borrowing suggests that interest rates on 10-year Treasury bonds may be poised to rise. Yields have already jumped about 0.3% since the election. …
Housing Construction and Home Prices
2017 change in prices: 4.3%; 2017 housing starts: 1.3 million
…steady gains of about 5.5% over the past three years. …
Odds of Recession
In the next 12 months: 19%

How The Trump Administration Will Impact Housing (11/14/2016) | Ingo Winzer @Forbes
… Throughout most of the Rust Belt, where Donald Trump won strong support, prices for homes remain very low – partly because the local economic situation has for years been very poor. If government money is routed towards these most visible areas of economic stagnation, local home values will rise for years, as will demand for single-family rentals. …

How Trump’s Presidency Could Impact Real Estate (11/10/2016) | Lawrence Yun @Forbes
1. … A combination of tax cuts and government spending in the form of upgrading nation’s infrastructure and for national defense will provide a short boost to the economy in the first half of 2017. … Should the faster GDP growth be sustained and arise out of higher productivity, then inflation will be manageable. Moreover, more jobs will automatically mean more tax revenue, which will lessen budget deficit. …
2. … Should tariffs be raised to lessen the trade deficit, consumers will face higher prices. If exports and imports significantly decline, then history has repeatedly shown that recession…
3. … Wall Street will cheer because of less government regulation but will frown on restrictive international trade policies. … But the rise of uncertainty in the financial market will hold back corporate investment spending decisions. …
4. … the lifting of compliance costs imposed on small-sized banks. Around 10,000 local and community banks have traditionally been the source of funding for construction and land development loans. With less regulatory burden, …more loans…
5. … Credit is still tight for mortgages as evidenced by very high credit scores among those who are getting approved. …the exposure of random lawsuits by the government on lending institutions…
6. …less regulatory land-use and zoning burden for home construction, and thereby lower the cost of building. … Homebuilders say that is due to all the extra cost of regulation and not necessarily from higher input cost of lumber, cement, and worker wages. …
7. … Fortunately, after management changes Fannie and Freddie today are led by technicians providing a government guarantee on soundly-written mortgages. As a result, they have repaid all the taxpayer bailout money. Moreover, they are doing so well financially given the very low mortgage default rates, that the U.S. Treasury is getting added revenue on the backs of responsible homeowners. …
8., 9., 10.

Why Bond Markets Hate Donald Trump (11/15/2016) | @crobmatthews @Fortune
…prices have fallen a big for the bond market 1.4% in past week…
…theoretical backing: If financial assets’ value is determined by the present value of future income, then it makes sense that both stocks and bonds will be worth more if the economy is doing well…
…bond investors will receive fixed payments regardless of the level of inflation, which erodes the real value of those payments over time…
…@osullivanEcon High Frequency Economics “prospects of new stimulus has clearly been a driver of the bond market,” since last week’s presidential election. …
… The Republican Congress has been pushing for tax cuts, sure, but it’s also believes in cuts in entitlement and other spending, with the goal of balancing the federal budget within 10 years. That would necessitate deep cuts to programs that benefit poor and middle-class Americans, sapping their spending power. …
…higher inflation could cause the Fed to move to raise rates, which won’t be good for bonds, but shouldn’t be good for stocks either. …@pboockvar @TheLindseyGroup…
… Trump Administration could usher in an era of “stagflation” where the economy sees rising prices but slow growth to go along with. …

Victory for Trump could be a boost to US infrastructure (11/18/2016) | @Construction_IC
… “at least double” Hillary Clinton’s spending proposals.
The defeated Democrat Party presidential candidate had revealed plans to deliver a $275bn, five-year program for investment in transportation, water, energy and other projects, as well as launch a federal infrastructure bank. …
… According to the American Society of Civil Engineers, the backlog of infrastructure projects is expected to cost $3.6trn by 2020. Under the outgoing administration of Barack Obama, total public capital investment (which includes infrastructure) stood at $611bn in 2015, the equivalent of just 3.4% of GDP, and the lowest in more than 60 years, according to data from the president’s Council of Economic Advisers. …
… How the longer term forecast will be adjusted depends on whether Mr Trump sticks with some of the more controversial polices that could greatly undermine economic growth, notably plans to impose severe trade protection measures and to place strict controls on immigration.
On the one hand, if his administration proceeds with plans to enact trade controls… could quickly escalate to a global trade war with dire consequences, not just for the US economy, while tighter controls in immigration… could slow population and productivity growth. …
On the other hand…toned down… …unlikely to be any major downturn in the US economy… Moreover, if his administration pushes ahead swiftly with infrastructure development spending, there is scope for an upward adjustment to the forecast growth in construction output.

The problem with Clinton and Trump’s infrastructure plans (8/8/2016) | @DannyVinik @PoliticoAgenda

Trump’s mass deportation plans would cripple the construction industry (11/18/2016) | Jake Flanagin @qz
…@nberpubs…
The working paper, released Nov. 14 by two economics professors at Queens College and titled “The Economic Contribution of Unauthorized Workers: An Industry Analysis,” estimates an immediate drop of $30.9 billion (5%) in the industry’s GDP, and a long-term decline of $47.6 billion from a 2013 industry total output of $619.87 billion. The same report estimates that legalization of undocumented construction workers could precipitate an immediate 1.2% jump (about $7.7 billion annually) and a long-term rise of 1.9% ($12.1 billion annually).
… “But over the longer term, you’re going to have to pay workers more,” Randy Capps @MigrationPolicy…

Why Ben Carson’s medical experience matters at HUD (12/6/2016) | @ikeswetlitz @statnews
… The responsibilities of the job — running a federal agency whose budget in 2016 neared $50 billion and that is responsible for helping local housing authorities manage over a million households…
…medical lens to the job — pushing for quality housing for low-income people and improving people’s health conditions within public housing.
“Not having access to safe, affordable housing is one of the least healthy situations you can find yourself in,” said Mariana Arcaya @MITdusp. …

Ben Carson’s Warped View of Housing (12/19/2016) | @nytimes

Ben Carson’s “life” in public housing qualifies him to be HUD secretary, supporters say (12/6/2016) | @SophiaTesfaye @salon

Trump’s pick for transportation secretary could be good for companies with self-driving ambitions (11/30/2016) | @JMBOOYAH @Recode
… First and foremost, Donald Trump’s priority — and perhaps by extension Chao’s — is his $1 trillion infrastructure plan to repair the country’s roads, bridges and tunnels.
That could mean two things: Self-driving regulations may not be at the top of Chao’s agenda but the DOT and Chao have the opportunity to work with the tech and transportation industries to create roads and infrastructure that are friendly to autonomous tech. …

Trump picks Elaine Chao, former labor secretary, to lead Department of Transportation (11/29/2016) | @jlgolson @verge

Trump’s Pick For Transportation Secretary Could Shape His Infrastructure Plan (11/29/2016) | @DianaBudds @FastCoDesign
… As Transportation Secretary, Chao — who is married to Senate Majority leader Mitch McConnell (R-KY) and whose family earned its wealth in the shipping industry — will oversee eleven agencies that manage air, ground, rail, and maritime travel. …
…vocally opposed government regulation, like carbon-emissions taxes, which is sure to impact how she leads the DOT. (Chao was on the Bloomberg Philanthropies board, but resigned in 2015 after the organization boosted funding to its Beyond Coal initiative.) Judging from her track record, fossil fuel alternatives are unlikely to be a priority…