Foxconn is Confusing the Hell Out of Wisconsin (theverge.com)

Josh Dzieza, writing for The Verge: The secrecy and vagueness are frustrating to critics. How do you prove that Foxconn won't build an enormous LCD factory during an industry glut or create a research campus larger than MIT in rural Wisconsin other than by pointing out that experts -- and even, occasionally, Foxconn executives -- say it makes no sense? State House Minority Leader Gordon Hintz recently appointed himself to the board of WEDC, and Foxconn's continued promises of 13,000 jobs make him palpably furious. Speaking in slow, measured tones in his Madison office as he packed for a trip, he said the state needs to "right-size" the project to something realistic, likely a few hundred research jobs, and that Foxconn needs to be honest about its plans. "For something that had a 25-year payback, building a factory because the president wants you to for reasons that have nothing to do with market viability is insane." Hintz believes Foxconn is trying to slow-walk the project until 2020, continuing to use it to win Trump's goodwill in the trade war and waiting to see who's elected. Foxconn has responded. Nilay Patel, writing for The Verge: Today, Foxconn responded to that piece by... announcing another innovation center in Wisconsin, this one in Madison, the state's capital. The building, which currently houses a bank, actually sits directly across the street from the Capitol building, and it will continue to house the bank because Foxconn did not announce when it would be moving in. Here are some other things Foxconn did not announce: how much it had paid for the building, how many floors of the building it would occupy, how many people would work there, or what those people would be doing. It did announce that it would be rebranding the building "Foxconn Place Madison," however.

Comments

Re:Orange Man Bad

[arglebargle_xiv]

Hintz believes Foxconn is trying to slow-walk the project until 2020, continuing to use it to win Trump's goodwill in the trade war and waiting to see who's elected.

He's got it exactly right. And this was obvious right from the start, their move never made any business sense whatsoever, but it was a brilliant piece of politics. Just look at what's happened to Huawei, who didn't have the foresight to pull a Foxconn on Trump.

Re:Political mess

[Solandri]

Only insomuch as Evers is unable to immediately rescind Walker's deal ($4.5 billion in incentives and subsidies according to TFA).

You see, when you raise taxes, you're making a trade-off. You're deciding that the programs you need to fund with those taxes will benefit your society and economy more than the businesses that you're going to scare away with your tax increase. That is, the tax increase has the benefit of improving government services. But has the negative of hurting your economy by scaring away businesses from setting up or expanding in your jurisdiction. By supporting the tax increase, you are making a tacit admission that you believe the benefit of improved services outweighs the loss of business caused by the higher taxes.

So either you believe the tax increase is justified and thus should apply to all companies. Or you look at the possibility of a company like Amazon or Foxconn setting up shop in your jurisdiction, and decide the tax increase does more harm than good, and you keep taxes lower for all companies. You don't get to pick and choose who has to pay a high tax rate and who gets to pay a lower tax rate. Scaring off one Amazon with your tax increase has the same economic effect as scaring off several hundred small businesses with your tax increase. So it's all or nothing - either the tax increase is worth it, or it isn't.

So unless you believe all companies should get a similar tax break, supporting these one-company deals expose you as a hypocrite. If you truly believe that your economy can be improved by offering a company such a deal, then you are implicitly admitting that your current level of taxation is too high, and your economy could be improved by lower taxes for all companies. Offering such a deal to attract a single company, while refusing lower taxes for all other companies means you are a hypocrite. That's the situation New York City found themselves in with Amazon, and whether deliberately or by accident, they ended up making the philosophically self-consistent choice and scaring Amazon away from the deal.

Walker is (was) in a different position though. He likely felt the state's current level of taxation was too high, and genuinely believed the state's economy could be improved by offering a lower tax rate to attract more business. He probably wanted a more broader tax decrease but was unable to get enough support for it; but was able to get enough support for the Foxconn deal. So his offering Foxcon tn the deal was likely consistent with his economy philosophy. And tucking control over it into the WEDC was just a way for him to keep it alive for 9 more months after he left office.

Evers' position is more untenable. If he thinks the state's current level of taxation is the right amount or too low, then philosophically there is only one justifiable choice for him to make - kill the Foxconn deal and rescind all the tax breaks and incentives (basically what NYC did to Amazon). So he shouldn't care at all Foxconn says it'll do, since in all likelihood they'll pull out when he kills the deal. Attempting to keep the deal fully or partly alive just exposes him as a hypocrite. You can only support such a deal while remaining philosophically self-consistent if you also support similar tax breaks and incentives for everyone.

And this ladies and gentlemen

[rsilvergun]

is why New York told Amazon to go pound sand. This is what happens when you just make it rain cash to get a company to bring some jobs. Once they've got you over a barrel like that they can keep pushing and pushing.

For one thing the politicians are going to be dependent on bribes^XCampaign Contributions to win since they just borrowed several billion dollars that'll have to be paid back for jobs that will probably never materialize (or pay less if they do). Now you're gonna have to stop investing in roads and schools to pay for all that, making your state less desirable for other employers.... and skilled employees who leave your state in droves. It's a race to the bottom.

States that tax their wealthy and use the money to invest in the working class do better because they've got the infrastructure and skilled employees companies need. Skilled Employees aren't going going to move to a shit hole just because they can have a decent house. What good does that do if there's no schools, no amenities, nothing to do and the water's full of lead? You can't raise kids in a place like that and you can't have a good single time. The only thing you do in a place like that is try to get out of it.