“…An abundance of rent-based private-equity profits will easily spring.”

^{Johann Tetzel, Indulgence Programs Office Director}

I continue to monitor what might happen to DOE’s CIFIA loan program. It is confusing, which probably reflects internal ideological battles within the Administration. Here’s a hint one way: DOE to name new loan program director Former Apollo hedgie, ‘bitcoin operator’?

On the other hand, there’s this previous hint: DOE seeks market value of clean energy loans Shuttering the office?

Ideological confusion is inevitable if federal finance for infrastructure or major production facilities is seen as some kind of ‘indulgence’ granted for either idealistic special policy objectives (e.g., saving our sinful climate souls) or to influence-wielding rent-seekers (e.g., for building cathedrals of private-sector wealth). But note that a practical result doesn’t require a resolution of this dilemma — confusion may in fact be preferred.

My pessimistic guess for the LPO is that after a bunch of the more egregious ‘green new scam’ stuff is performatively thrown overboard, the so-said ‘bitcoin operator’ (or similar individual) will get down to business — subsidizing finance for energy production for AI data centers and bitcoin mining, for enabling monetization of whatever lucrative bits of the green new deal remain, and for transmission and pipeline infrastructure that can make it all profitable, likely with some form of federal eminent domain. On the surface, it looks like ‘Making America Great Again’ — but in reality, it’s just a continuation of debt-fueled neoliberal misallocation, albeit with new & improved neo-narrative packaging. In such a milieu, the CIFIA program may well survive and even prosper.

For real change, a ‘reformation’ is required in federal infrastructure finance. First, its national-level social & economic policy objectives must be made limited and explicit. Second, though equally important, there must be a brutally realistic assessment of federal financing strengths and weakness in the context of achieving those objectives.

Such a reformation is a daunting prospect. It likely won’t happen until it has to. But in the meantime, there’s plenty of groundwork to be laid — when real change comes, history suggests that it tends to move very fast.