How Trump got outfoxed and conned by Foxconn

Is there anything much more satisfying than a nice, heaping plate of “I told you so”?

The story begins with the world’s greatest businessman and negotiator. I know he is, because he has told me so — many, many times.

Forget his multiple bankruptcies (How does anyone go bankrupt with a gambling casino?) Forget how he has put himself under the thumb of Vladimir Putin, and has been conned by Kim Jong-un.

Forget about that wonderful business, Trump University, for which he was fined $25 million.

And forget about all the indicted and found-guilty incompetents, with whom he has surrounded himself.

The story begins in September, 2017.

Wisconsin Gov. Walker to sign $3 billion incentive package for Foxconn

The Wisconsin Assembly sent a $3 billion incentive package for Taiwan-based Foxconn to Gov. Scott Walker on Thursday, signing off on a deal to lure the electronics giant to the state with the biggest subsidy to a foreign company in U.S. history.

This deal was handled with the usual Trump braggadocio and self-congratulations, which because he is the greatest businessman in history, guaranteed it would be a failure.

Here is an excerpt from a September 2017 post we published about the project, “Who put the “con” in Wisconsin? Foxconn, that’s who.”

This is what I predict:

1. 1. Foxconn never will hire 13,000 people. Not in a year, not in ten years, not ever.
   2. Many of the people it does hire, will come from neighboring Illinois, will shop in Illinois, and will pay taxes to Illinois. The Chicago commercial area is a must larger source of qualified workers than is the entire state of Wisconsin, and it is nicely convenient via road and commuter rail.
   3. Republican pols, upon receiving advance info about which land Foxconn plans to use, will buy it early, making out like bandits. They probably already have begun to acquire options.
   4. Foxconn, having demanded a direct line to a politically leveraged Wisconsin Supreme Court, easily will fend off any challenges to its sweet deal.
   5. Foxconn will pollute Wisconsin’s land and water, and if sued, will win its case in the highly political, dysfunctional, right-wing, pro-business, anti-environment Wisconsin Supreme Court.
   6. Screwed Wisconsin taxpayers, will pay big, and never will see any net benefit.

   “Walker joined President Donald Trump in announcing Foxconn’s plans to build in Wisconsin at a White House event in July, heralding it as a game-changer for American manufacturing.”

   So there it is. In addition to being a giveaway to big business and to greedy politicians, and a rip-off of the average taxpayer (the Republican standard operating procedure), the Foxconn deal provides endless bragging rights to Trump and Walker for all the non-existent jobs they will claim they brought to Wisconsin.

   Trump and Walker will be long gone from office by the time the Wisconsin taxpayers figure out they are enmeshed in this deal, forever.

Well, I was wrong about one thing. Trump still is in office, and still bragging and failing, but already the headlines are rolling in:

‘Foxconn Was a Major Con’: Backed by Trump Promises and $4 Billion in Subsidies, Company Admits Factory Jobs Not Coming
Posted on January 31, 2019 by Yves Smith

And:

TRUMP’S “INCREDIBLE” FOXCONN FACTORY DEAL WILL NO LONGER INCLUDE A FACTORY
Vanity Fair, Hive; BY BESS LEVIN
JANUARY 30, 2019 5:49 PM
The Taiwanese company, which received more than $4 billion in tax subsidies, is scrapping its initial plans, but will keep the money, thanks.

And:

Wisconsin is finally facing the reality of Foxconn’s plans
By Tim Culpan, Chicago Tribune, Jan 31, 2019

So Foxconn Technology Group may not make display panels in Wisconsin after all.

Those who’ve been following Foxconn for a long time won’t be surprised. Chairman and founder Terry Gou is as much a salesman as he is a manufacturer, having spent decades honing his pitch not just to clients but also governments.

Then-Gov. Scott Walker, backed by President Donald Trump, loved exactly what he sold: the promise of thousands of jobs to make stuff in the U.S. Walker loved it so much that he pledged as much as $3 billion in sweeteners, a deal that likely cost him his governorship.

Now, according to a Reuters interview with one of Gou’s right-hand men, such plans to manufacture display panels may be scaled back or even shelved.

Foxconn’s Wisconsin-made screens likely would have been put into televisions. Woo this week acknowledged that “in terms of TV, we have no place in the U.S. … We can’t compete.”

It’s simply a matter of economic reality. The same reality that existed when Trump was handing out red truckers’ hats and promising to Make America Great Again.

Foxconn’s U.S. panel project didn’t make sense, evidenced by a comment Gou himself made saying that such plans weren’t a promise but a wish.

Foxconn is now publicly conceding that manufacturing panels in Wisconsin isn’t viable.

In 2018, the first year of the Wisconsin experiment, the company couldn’t hit its employment target. Instead of creating a very modest 260 full-time jobs, Foxconn filled just 178 positions, Reuters reported.

And that, you folks who voted for Trump, is what $3 billion will buy you, if you have the world’s greatest negotiator working the deal and bragging about it, afterward.

I told you so.

Now, about that wall he promised, but never even asked for when he had a Republican Senate and a Republican House . . .

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereigntyFacebook: Rodger Malcolm Mitchell

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The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. Eliminate FICA

2. Federally funded medicare — parts a, b & d, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

4. Free education (including post-grad) for everyone

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

8. Tax the very rich (the “.1%) more, with higher progressive tax rates on all forms of income.

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

MONETARY SOVEREIGNTY