The Mercatus Center's "Economics of a Targeted Economic Development Subsidy" study, which looks at the economic case for and against targeted economic development subsidies, focused on Wisconsin's pledge of $3.6 billion in incentives to Taiwan-based electronics manufacturer Foxconn Technology Group.
"The weight of economic theory suggests that these subsidies do not work and may even depress economic activity," according to the study. "We show that under realistic scenarios the subsidy may depress state economic activity by tens of billions of dollars over the next 15 years."
The report argues that tax cuts or subsidies for Foxconn come at a cost of higher taxes for other individuals or businesses, or reduced investment in public services. In addition, that uneven taxation is more likely to discourage economic activity, per the report.
"In short, the net effect of targeted economic development subsidies is likely to be negative," according to the study.
The company originally was going to build large flat screens with a so-called Gen 10.5 plant. Foxconn said market changes prompted the company to shift to a smaller Gen 6 facility.Speaking of Foxconn continuing to try things that aren’t going to happen, the company (as it tends to do) followed this bad news with another PR release claiming they’d finally start work on their Green Bay facility.
In early 2019, Foxconn executives hedged briefly on whether they would be doing any manufacturing in the state at all. Now, they say the Gen 6 facility will begin operating in late 2020.
"If it doesn’t make sense to build LCD displays in the U.S. or even in southeastern Wisconsin, then it shouldn’t be done," Farren said. "And if you try to force something to happen, then you are going to end up with more economic waste."
ISG and DeLeers Construction, Inc., together with Foxconn Technology Group (Foxconn), today announced that work will begin for the design and construction of Foxconn Place Green Bay’s 4,800 square-foot second floor located at the WaterMark Building in downtown Green Bay. After a stringent review of competitive bid submissions, Foxconn awarded ISG, a nationally recognized architecture, engineering, environmental and planning firm, and DeLeers Construction, Inc., the contracts. Both firms were chosen for their wealth of experience and understanding of the local Green Bay area…Foxconn Place Green Bay was announced more than a year ago when the company bought the WaterMark structure, but has resulted in nothing more than an empty building so far, as Channel 2 in Green Bay noted last month.
Both firms will start with the conceptualization of the design for Foxconn, followed by a submission to the City of Green Bay for their approvals. Foxconn will then begin construction on the interior build upon approval. The building will house Foxconn events, including upcoming Foxconn Tech Talks and recruitment drives, and be a space for community engagement.
“From the start, the establishment of Foxconn Place Green Bay has been a key part of Foxconn’s long-term strategic initiatives, underscoring our continued commitment to the local communities in Wisconsin,” said Dr. Alan Yeung, Director of U.S. Strategic Initiatives, Foxconn. “It is important that Foxconn’s partners be not only from Wisconsin but situated in the Green Bay area. Both ISG and DeLeers Construction, Inc. stood out in both aspects, and we are looking forward to working with them for the design-build of the Foxconn Place Green Bay.”
It’s notable that even the Green Bay Press-Gazette expressed skepticism about today’s Foxconn remodeling announcement.
The company announced plans to buy the building in late June 2018 and set out to complete the building purchase and select a contractor to start renovations by the end of 2018. It expected to begin hiring staff shortly thereafter.So it’s a fraction of the original plans in Green Bay, and if it ever opens, seems more likely to serve as a site for PR BS for Foxconn rather than any kind of actual work being done.
It anticipated having as many as 200 employees work out of a 16,000-square-foot office space that would take up all of the building's second floor.
The plans ISG and DeLeers will develop call for a 4,800-square-foot space.
In addition to housing employees who will develop next-generation uses for its technology, Foxconn also plans to use the space to host events, Foxconn Tech Talks, recruitment drives and community engagement events.
Enough of the bait-and-switch routines from these guys, which you know is going to continue between now and the 2020 elections. The Evers Administration needs to PULL THE PLUG before the Fox-con sinks us even further into the ditch that we’re already in.
The FoxCon Fiasco is emblematic of just how durably ignorant the GOP-legislative majority, and Walker, were and still are.
ReplyDeleteWisconsinites need to remember the GOP tried this same magical-bean method before, with Kestrel Aviation and Gogebic Taconite. Anyone remember how those two strokes-of-genius, taxpayer-money giveaways to private sector "job-creators" fared?
Complete failures. Complete wastes of time and money.
These fiascos are prime examples of showy, big-idea failures, easy to sell to the public, especially in regions of the state that lost major employers to Rust-Belt era migration.
But as genuine economic stimulus measures, these lunacies suck. They're worthless. They are fabricated with ideological fallacies, not sound economic principles.
But the ideologically-constipated GOP majority in the legislature, beholden with boundless arrogance to one-percent whims, continues to ignore the investments and strategies that have already proven to stimulate broadly-shared economic growth.
Invest in education and infrastructure, raise taxes on the wealthiest Wisconsinites and on large corporations, put the real needs of ordinary citizens first.
Do your jobs, GOP legislators. Stop being such blatant suckups to one-percenters and corporations.
A representative from the Mercatus Center was on CNBC speaking about this study and there were several references to Wisconsin’s Foxconn project. The segment started with a quote from then Governor Scott Walker explaining why it is a great deal for Wisconsin. My bet is the whole thing folds after 2020 election.
ReplyDeleteWith Wisconsin consistently near the bottom of all fifty states (!) in the number of business startups, i.e., the activities of energetic and willfully industrious innovators whose products and services create demand in new niches of the market, and whose businesses create the jobs that grow an economy, it is no wonder the Badger State is embarrassed by the economic recovery of a state like Minnesota.
ReplyDeleteThe GOP legislative majority is clueless about how to spur robust economic development...but to be fair, they're not much interested either. Their masters are quite comfortable, and instruct their legislator puppets to legislate new ways to rob ordinary citizens.
No, the GOP idiots do nothing to make Wisconsin the kind of place people want to live. They do nothing to make the state attractive to actual investors and genuine entrepreneurs. And the idiots studiously ignore the economic success story called Madison, the very place in which they convene to supposedly conduct the peoples' affairs.
Ideological idiots.
Wisconsin needed economic stimulus. What did Walker and the GOP legislative majority do?
ReplyDeleteThey went "shopping."
Check that mindset. The idiots approached the problem as if it could be solved by purchasing a commodity, already completely assembled, off the shelf.
To be sure, they broadcast their shopping list, made it clear they didn't care about details, just wanted a "turn-key" solution that would make them look good for election season, details to be sorted out, uh, maybe afterward, any price reasonable, but solution must have bright, shiny parts and bells, whistles and, like any trickle-down economic strip tease act, it must hold back a little, leave a bit to the imagination...like exactly HOW it could ever, ever, actually succeed.
Walker and the GOP legislative majority conned the ordinary Wisconsinite. These supposed public servants serve other masters, and they pawned snake oil onto the uninformed, easily-led citizen.
And the majority of the state media outlets let it happen. Some even aided and abetted this theft, cheerleaded the lies and the liars, or underreported the process and the fraudulent details.
This is Dairyland Greyhound racing all over again, foisted on a new generation of rubes.