Dumb Donald and the Foxconn con. Thursday, Feb 6 2020 

Regular readers of this blog may remember our post of more than two years ago, Who put the “con” in WisCONsin? Foxconn, that’s who Friday, Sep 15, 2017.

It was followed many months later by our post, How Trump got outfoxed and conned by Foxconn, Thursday, Jan 31,  2019.

And it was followed by our post, Oh, Wisconsin. The Foxconn, GOP con continues. Friday, Oct 25, 2019.

Well, here’s the latest part of the story:

CRONY CAPITALISM
Study Says Foxconn Deal Cost Wisconsin $20 Billion in Lost Economic Growth
Once again, government-subsidized projects fail to deliver
VERONIQUE DE RUGY | January 9, 2020

In June 2018, President Donald Trump attended the groundbreaking ceremony for a Foxconn factory in Wisconsin.

Ever exuberant in his comments, he called the project the “eighth wonder of the world” and “one of the great deals, ever.”

Always a bragger, his praise was directed at himself for orchestrating the use of state subsidies and tax credits to bring the Taiwanese multinational electronics company to Wisconsin for it to manufacture high-resolution LCD screens.

You should know that the author, Veronique de Rugy, according to her own biography:

“Veronique de Rugy is a Senior Research Fellow at the Mercatus Center at George Mason University and a nationally syndicated columnist.

“Her primary research interests include the US economy, the federal budget, homeland security, taxation, tax competition, and financial privacy.

“Her popular weekly charts, published by the Mercatus Center, address economic issues ranging from lessons on creating sustainable economic growth to the implications of government tax and fiscal policies.

She has testified numerous times in front of Congress on the effects of fiscal stimulus, debt and deficits, and regulation on the economy.” 

And like the rest of the people at the Mercatus Center, she has zero understanding of Monetary Sovereignty, the financial differences between state vs. federal deficits and debt.

Further, Trump is a lousy business operator, who has destroyed many businesses, with numerous bankruptcies, and has made most of his money passively, by lending his name to businesses run by people who actually know how.

Image result for trump foxconn

February 1, 2019: Foxconn says it is returning to its plan to build a new plant in Wisconsin following an appeal from President  Trump.

To make this deal happen, the state legislature offered a subsidy package of $4.5 billion, mostly in direct cash payments, and lower-priced land acquired through eminent domain.

In exchange, Foxconn promised to create more than 13,000 middle-class manufacturing jobs, a revived manufacturing sector and loads of tax revenue—the combination of which was projected to produce economic returns ranging from $39 billion to $78 billion over the next 15 years.

If these returns sound like a great deal, you’ve been conned.

You had read all of the above in the above-mentioned posts, as early as September, 2017.

A year and a half after Trump paraded at the site with his golden shovel, the reality isn’t as bright.

Before the ceremony, Foxconn announced that the factory would ultimately be smaller than the one initially promised.

It would also be highly automated, with almost all of the assembly work done by robots, and would only require 3,000 employees—90 percent of them “knowledge workers” such as engineers, programmers, and designers.

There’s nothing wrong with such a modern factory, except that it’s not what Trump and other government officials thought they were buying with taxpayers’ money.

Unlike federal spending, the dollars for which are created out of thin air, at the touch of a computer key, state and local spending is indeed funded by taxpayers.

All things considered, the Foxconn fiasco cost every man, woman, and child in Wisconsin something like $4 thousand each, and about $100,000 per new job –assuming even those relatively few jobs materialize.

An by the way, Wisconsinites, the citizens of Illinois thank you, because a large percentage of the jobs will be taken by residents of nearby Chicago. And it didn’t cost Illinois one cent.

And what about the promised economic growth? Even under the deal’s original terms, there’s no way it would have produced much growth.

That’s because, as is often the case, the original projections offered by economic development consultants only considered the expected benefits from the subsidies; the costs were ignored.

In the real world, however, these subsidies don’t fall from the sky. Every single cent comes from additional taxes paid by actual people. When you consider these costs, the economic outlook for the project dims quite a bit.

And that is why you will see Donald Trump nowhere in the vicinity of the site. He is very big on taking credit, even for things he hasn’t done, but he never, ever will admit to being wrong.

In a recent paper on the issue, my Mercatus Center colleagues Matthew Mitchell and Michael Farren did the math and found that “the $3.6 billion in taxes needed to fund the subsidies will likely decrease Wisconsin’s long-run GDP by about $20 billion over the 15-year life of the handout.

And this estimate doesn’t include the local utility infrastructure, and federal subsidies that total another $1.4 billion.” These numbers are harder to sell to taxpayers than the la-la land ones we hear about before every big subsidy deal.

The Wisconsin Republicans, who foisted this deal on the people of Wisconsin, apparently were incapable of, or loathe to, “do the math.”

Many might have assumed that this particular deal was going to be a disaster because it was orchestrated by Trump and Scott Walker, Wisconsin’s Republican governor at the time.

Yes, it’s true that our current president believes in economic engineering and cronyism—which is another way to describe this kind of deal.

Trump has failed elsewhere when trying to spark growth with subsidies. Take, for instance, the Carrier air conditioner plant in Indianapolis, which received large state handouts under Trump’s pressure, only to end up laying off hundreds of workers.

And so, it would be a mistake to assume that this debacle is specific to Trump or to Foxconn.

It might be a mistake “to assume that this debacle is specific to Trump,” except for the fact that the creator of Trump University and Trump Foundation has the unfailing ability to surround himself with the most dishonest and incompetent people:

Health and Human Services Secretary Tom Price, EPA Administrator Scott Pruitt, HUD Secretary Ben Carson, Campaign manager Paul Manafort, Deputy campaign manager Rick Gates, National security adviser Michael Flynn, Personal lawyer Michael Cohen, Commerce Secretary Wilbur Ross, mobster Salvatore Testa, mobster Fat Tony Salerno, Roger Stone, Jeffrey Epstein, Secretary of Labor Alexander Acosta, Trump Campaign Foreign Policy Adviser George Papadopoulos, and Konstantin Kilimnik.

You might wonder how I, a relative stranger to the project, easily was able to foretell its failure, while the team of Trump/ Walker couldn’t.

Easy. Given Trump’s lack of common and business sense, and Walker’s dubious achievements, their assurances about the project were bound to be wrong.

A new paper in the Journal of Economic Perspectives by Cailin Slattery of Columbia University and Owen Zidar of Princeton University looks at state and local business tax incentives and finds yet again that narrow, firm-specific tax breaks aimed at attracting businesses and boosting employment aren’t the way to go.

The study shows that the largest deals benefit the recipients, but not the overall state economy.

Lower-income states also tend to be more generous with their handouts, only to jack up the cost per job created, sometimes up to as much as $400,000 per job.

Unfortunately, a slogan like “subsidized projects aren’t worth the money you pay for them” doesn’t make for a great sound bite at ribbon-cutting ceremonies.

Now we shall see whether the good citizens of Wisconsin, who were among those supporting Trump at the last Presidential election, are smart enough to stop supporting a man who conned them into an expensive, worthless project.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell

…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

The most important problems in economics involve:

  1. Monetary Sovereignty describes money creation and destruction.
  2. Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

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 Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and 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 the rest.

MONETARY SOVEREIGNTY

Oh, Wisconsin. The Foxconn, GOP con continues. Friday, Oct 25 2019 

Let’s say a stranger knocks on your door and tells you, “Give me lots and lots of money, and I promise to do some unspecified good things for you. Later, even if I change my mind, I’ll keep the money.” 

How quickly will you run to your wallet and toss your money at him?

Back in September, 2017, we published: Who put the “con” in Wisconsin? Foxconn, that’s who. 

Among the revelations in that post were:

Image result for trump foxconn groundbreaking

“Here’s a few billion in Wisconsin taxpayers’ money.

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.

Democrats have raised alarms about exemptions under the bill that waive requirements for Foxconn to first develop an environmental impact statement before constructing what could be a 20-million-square-foot campus.

Foxconn would also be allowed to build in wetlands and waterways.

And:

There are 2.3 million households in Wisconsin. So a $3 billion incentive package requires each household in Wisconsin to send $1,300 to Foxconn.

What do Wisconsin households get for their $1,300, their potential loss of wetlands, waterways and overall environmental degradation, plus special legal immunities?

Foxconn has said it hopes to open the plant in 2020 with 3,000 workers, but that the workforce could grow to 13,000.

“3 billion dollars” of taxpayer’s money given for “hopes” and “could”?

What we learned subsequently was not good:

Foxconn’s history of broken promises casts a shadow on Wisconsin news
By Ciara Linnane
Foxconn has reneged on promised deals in many countries and regions, including the U.S.

The details are important, given (their) history of making and breaking promises in numerous countries and regions over the years, including in the U.S.

A pledge to invest $30 million in a factory in central Pennsylvania in 2013 was also greeted with much ballyhoo.

Four years later, the factory has still not been built, to the disappointment of state officials.

They are not alone. In 2014, Foxconn promised a $1 billion investment in Indonesia, which has still not happened, according to the Washington Post.

A pledge to invest $5 billion in Vietnam in 2007 has also failed to materialize, nor has the company met its promises for India.

Foxconn has also been under fire over the widely reported issues of working conditions at its existing plants. Foxconn’s China plants have been the scenes of protest and periods of high suicide rates over the years.

Pennsylvania, Indonesia, Vietnam, India —  Foxconn repeatedly breaks its promises and also is a horrible employer, whose working conditions are so bad, employees are at a high risk for suicide.

And none of these things were considered by the Wisconsin GOP?

The great negotiator, Donald Trump, who is loath to risk his own money on most of his projects (he rents his name), boasted numerous times about this “incredible” deal:

Trump calls Foxconn “8th wonder of the world” despite its cost

Related image

Trump inspects the “8th wonder of the world” that never will be built.


By Blair Guild, June 28, 2018 / CBS NEWS

Speaking at a ceremonial groundbreaker for a new Foxconn plant in Wisconsin, President Trump called the new facility “the 8th wonder of the world,” despite the fact that Foxconn has cost the state at least $3.5 billion in tax breaks and grants, according to calculations from Wisconsin’s nonpartisan legislative fiscal bureau.

At that rate it would take the state 25 years to break even on its investment, the bureau calculated. In other words, each job Foxconn has promised to create costs the taxpayers $263,000. The company has said at least 13,000 direct jobs would be created, paying an average of $53,000 a year.

“As Foxconn has discovered there is no better place to build, hire, and grow than right here in the United States,” Mr. Trump said.

Actually, as Foxconn has discovered, there is no better place to steal billions of dollars from conned taxpayers, than right here in Wisconsin.

LEVIN REPORT
TRUMP’S “INCREDIBLE” FOXCONN FACTORY DEAL WILL NO LONGER INCLUDE A FACTORY

Donald Trump  speaks  as Wisconsin Gov. Scott Walker  and Foxconn CEO Terry Gou look on at the groundbreaking for the...

“This is an incredible deal.”

The Taiwanese company, which received more than $4 billion in tax subsidies, is scrapping its initial plans, but will keep the money, thanks.
BY Bess Levin, January 30, 2019

From the moment Wisconsin struck a deal to pay Foxconn more than $4 billion in taxpayer subsidies to build a plant in the Badger State, critics decried the plan as a total scam that had Donald Trump and Paul Ryan’s fingerprints all over it.

And they weren’t wrong! Writing for The New Yorker last year, Dan Kaufman laid out the many ways Trump’s “incredible” deal was poised to screw Wisconsin locals for years to come

— from the billions in “direct cash payments from taxpayers” that they wouldn’t recoup for about a minimum of 2.5 decades,
— to forcing homeowners to sell their properties “at a price determined by the village,”
— to granting the company special court privileges (like the ability to make numerous appeals of unfavorable rulings in a single case),
— to serious concerns about the factory’s impact on the water supply,
— to the fact that all those billions could be better used on things like the state’s crumbling roads or understaffed rural schools.

When a guy, who has taken six businesses into bankruptcy, tells you he has a great deal for you with a company having a history of screwing its investors, would you really trust him?

Foxconn to go ahead with Wisconsin plant after Trump call, FEBRUARY 02, 2019 08:30
Taiwanese company promises 13,000 jobs but mum on LCD production details

TAIPEI — Foxconn Technology Group said on Friday that it will go ahead with the construction of a plant in the American state of Wisconsin, following direct communication between Chairman Terry Gou and U.S. President Donald Trump.

The announcement came just days after reports that parts of the $10 billion project would be suspended.

“Great news on Foxconn in Wisconsin after my conversation with Terry Gou!” Trump tweeted Friday afternoon.”

Oh, sure. You can believe that a phone call from Donald Trump has restarted the project. And if you believe that, you can believe his other 13,000+ lies.

Sadly, you taxpayers in Wisconsin learned a bitter lesson too late, and now you will pay, pay, endlessly pay for your expensive education.

How Trump’s FoxConn Deal Conned Wisconsin Out Of Billions
Lisa Needham August 9, 2019

Wisconsin agreed to give the company $4 billion in tax credits in return for Foxconn building a factory in the state.

The whole deal was a GOP invention. Trump bragged that the deal was only happening because he got elected.

The deal almost immediately fell apart, with Foxconn Chair Terry Gou admitting the company had no intention of building the promised LCD panels in the United States.

The square footage of the proposed factory drastically decreased, dropping from 20 million to under 1 million. The promised jobs plummeted from 13,000 to 1500.

And then Foxconn decided it might not be a factory at all, which means it wouldn’t provide the blue-collar jobs Walker and his cronies promised.

At the end of 2018, Foxconn employed 156 people in the entire state.

With that, the deal no longer seems viable for Wisconsin, so they’re hoping to get Foxconn back to the bargaining table and hammer out a different deal. A Foxconn representative met with current Democratic Gov. Tony Evers to talk about possible adjustments.

However, Foxconn can’t help itself from asking for more: They’re hoping to have a longer time to qualify for capital investment tax credits.

In the end, this is just another Trump-related deal gone horribly wrong. Trump and Walker made flashy promises, gave away billions of dollars, and left the taxpayers holding the bag.

This whole charade leaves Wisconsin taxpayers with a couple of sad truths:

  1. Trump’s GOP never has been concerned about the welfare of the middle and lower economic classes. It strictly is a rich man’s (emphasis on “rich” and emphasis on “man’s”) club.
  2. When Donald Trump speaks, he either is lying or at best, doesn’t know what he is talking about.
  3. None of this will cost Trump or his GOP one penny. You Wisconsinites will pay the full cost.

Ironically, even in the unlikely event that Foxconn did as promised, the benefits you Wisconsinites funded mostly would have accrued to the citizens of Illinois who live in the north Chicago population corridor. So thank you for trying, though it didn’t work out.

But, don’t be angry. In the immortal words of one Greville Janner, “If you are going to get raped, you might as well lie back and enjoy it!”

Lastly, having predicted that the Foxconn project would prove to be a gigantic con perpetrated on you folks in Wisconson, I have one more prediction:

You will vote for Trump and the Republicans in 2020.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell

…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

The most important problems in economics involve:

  1. Monetary Sovereignty describes money creation and destruction.
  2. Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

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 Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and 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 the rest.

MONETARY SOVEREIGNTY

How Trump got outfoxed and conned by Foxconn Thursday, Jan 31 2019 

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

Image result for trump foxconn

Trump shovels 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. 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

…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

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

Who put the “con” in WisCONsin? Foxconn, that’s who. Friday, Sep 15 2017 

Image result for breaking chains

It takes only two things to keep people in chains:
The ignorance of the oppressed and the treachery of their leaders.

————————————————————————————————————————————————————-

Who put the “con” in Wisconsin? Foxconn, that’s who.

Today, I read an article that I find rather mysterious.  Here are a few excerpts:

Wisconsin Legislature passes $3 billion Foxconn incentive package, sends to Walker
September 14, 2017

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.

Democrats have raised alarms about exemptions under the bill that waive requirements for Foxconn to first develop an environmental impact statement before constructing what could be a 20-million-square-foot campus.

Foxconn would also be allowed to build in wetland and waterways.

Opponents objected to a provision that would allow the Wisconsin Supreme Court to take appeals of certain lawsuits related to Foxconn, skipping the appeals court. No other business in the state is provided such an expedited route to the Supreme Court.

Unlike the federal government, which is Monetarily Sovereign, Wisconsin is monetarily non-sovereign. Unlike federal spending, which is funded by federal money creation, not by taxes, Wisconsin spending is funded by taxpayers.

That is a fundamental difference between the finances of a Monetarily Sovereign government and the finances of a state or of people like you and me.

Image result for wisconsin sends money to illinois

Wisconson to welcome workers who live and pay taxes in Illinois?

There are 2.3 million households in Wisconsin. So a $3 billion incentive package requires each household in Wisconsin to send $1,300 to Foxconn.

Warm up your checkbooks, folks.

What do Wisconsin households get for their $1,300, their potential loss of wetlands, waterways and overall environmental degradation, plus special legal immunities?

Foxconn has said it hopes to open the plant in 2020 with 3,000 workers, but that the workforce could grow to 13,000.

IF the plant opens with only 3,000 workers, taxpayers would have paid $1 million for each worker.

In the theoretical, best-case scenario (“best case” = “highly unlikely”) scenario of 13,000 new workers, Wisconsin taxpayers would have paid each worker $230,000.

One wonders whether Wisconsin taxpayers merely should have given 13,000 workers $230,000 each and eliminated the Foxconn middleman.

Assembly Democrats slammed the proposal Thursday as being unfairly rigged to benefit Foxconn at the expense of taxpayers.

Rigged? You think?

But Republican Assembly Speaker Robin Vos (said) “What’s rigged is the deal for the taxpayer, the workers, the families and ultimately those of us who have the good foresight to realize when a good deal is put in front of you,” Vos said.

The total incentive package is 10 times larger than anything ever approved in Wisconsin and would be the biggest state subsidy to a foreign company in the United States.

The Assembly passed the bill with all Republicans and four Democrats in support. Two Republicans joined all other Democrats against.

Doesn’t it seem odd, that the Republican Party, the anti-tax party, should be so willing to raise taxes by $3 billion dollars, with so few guarantees about the results?

Any wonder why the Democrats, who traditionally support factory workers, are so suspicious of a deal that only purports to add factory workers?

Critics have warned that there aren’t enough protections for taxpayers to recover payments to Foxconn if it automates production and fires workers.

Image result for foxconnFoxconn is a high-tech company.

Can there be any doubt that this high-company absolutely will automate to the best of its high-tech ability?

That long line of Chinese women doing tedious, boring, mind-numbing hands-on labor at ridiculously low wages, will not be duplicated in Wisconsin.

Instead, I predict you will see a long line of robots working for zero wages.

In short, without having any inside knowledge, I predict there never will be 13,000 workers and that Wisconsin taxpayers never will see a return on their investment.

So what is going on here?

They’ve also said more needs to be done to guarantee that Wisconsin workers and businesses get preference during the construction phase of the plant, and once it’s up and running.

The Walker administration is charged with negotiating minimum hiring numbers to trigger the payments in the contract with Foxconn which has not been finalized.

Foxconn has also not selected the exact location for the plant, but it has focused on property in Racine County in between Milwaukee and Chicago.

The city of Racine, Wisconsin is only a half hour’s drive from Illinois and “greater Chicago,” and only an hour from Chicago’s city limits.

If the plant is built in Racine County, but south of the city of Racine, it will be even closer to Illinois’s rich source of labor.

Not only is there no guarantee that “Wisconsin workers and businesses will get preference during the construction phase,” but there is no guarantee about how many current Wisconson residents will be hired after the plant is built.

The Walker administration, who championed the deal, will negotiate the hiring numbers that trigger payments. That sure seems like a “fox-guarding-the-hen-house” type of arrangement.

In summary, the Republican anti-tax party votes to increase taxes on the citizens of Wisconsin, for a nebulous return that will be overseen by the Republican who sponsored the deal.

So what the heck really is going on?

This is what I predict:

  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 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, who will receive 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 Supreme Court.
  6. Screwed Wisconsin taxpayers, will pay big, and never will see any net benefit — and here’s the big one:

 
“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.

Illinois stands to benefit from a plant just across the Wisconsin border, as O’Hare Airport could get more traffic, workers living in Lake County, IL could make the commute and small businesses could step up to cater to workers’ needs.

Most important is the potential for Foxcomm’s suppliers to set up shop in the (Illinois) vicinity.

As a resident of Illinois, I would like to thank our generous neighbors to the north. Illinois taxpayers sure could use the money.

Wisconsin taxpayers will sing a new tune: ♫ “Who put the ‘con‘ in Wisconsin? Foxconn, that’s who” ♫

On Wisconsin!

Rodger Malcolm Mitchell
Monetary Sovereignty

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MONETARY SOVEREIGNTY

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